Slide 1: Company Overview Q2 2011
Exhibit 99.2 Company Overview Q2 2011 EXPEDIA, INC.
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance. These forward-looking statements are based on management’s expectations as of July
Slide 3: Global Opportunity
Sources: U.S. Online Travel Overview 10th Edition (November 2010); U.S. Online Travel Overview 8th Edition Update: 2009 – 2010 (April 2009); U.S. Corporate Travel Distribution 4th Edition (July 2009); US Online figure for 2011 assumes ~$40 million in online corporate travel bookings; European Online
Slide 4: World's Largest & Most Intelligent Travel Marketplace
World’s Largest & Most Intelligent Travel Marketplace Suppliers Customers Hotels Leisure travelers Travel Airlines products Corporate travelers Car rental companies Travel service providers Cruise lines Travel info (“white label”) Global distribution system (GDS) partners Offline retail travel agent
Slide 5: Expedia: The Travel Sector Leader
1 Sources: comScore MediaMetrix, June 2011 & company data; ² See Appendix B for reconciliation of non-GAAP to GAAP numbers. Adjusted EBITDA is calculated as Expedia: The Travel Sector Leader operating income plus depreciation, restructuring charges, intangibles amortization, stock-based compensation
Slide 6: Largest Worldwide Audience
Largest Worldwide Audience U.S. Worldwide 1,500 30 80 1,400 1 1,300 1 +88% 70 +85% 1 1,200 25 +129% 1,100 60 1,000 20 50 900 800 1 15 40 +104% 700 1 700 600 +125% 600 30 1 500 10 +161% 500 400 400 20 300 300 5 200 10 200 100 100 0 0 0 0 UV's Min Spent Online Page Views UV's Min Spent Online Page Vie
Slide 7: Expedia's Virtuous Cycle
Expedia’s Virtuous Cycle Cash flow to invest in Compelling More ad supplier & revenue advertising channel Growth/ User- Scale Better generated supplier content economics Improved More traveler travelers experience Scale drives opportunity to enhance supplier, traveler & advertiser value propositions
Slide 8: Revenue by Product & Geography
Revenue by Product & Geography Product Categories (TTM 6.30.2011) Geographic Split (TTM 6.30.2011) Revenue Revenue Car, Cruise & Other International 13% 41% Advertising & Media 13% Air 11% Domestic Hotel 64% 59% * Hotel & Advertising – >75% of revenue base * Europe & other international markets bene
Slide 9: Product Category - Hotel
Product Category - Hotel Business Overview •Merchant hotel Expediamerchant of record with no inventoryrisk Expediareceivescash upfront from travelers,pays hoteliers severalweeks later Somecontrol over pricing, higher margins & ability to package with other products 1 - 3 year contracts with major ch
Slide 10: Trended Worldwide Hotel Growth Statistics (y/y)
Trended Worldwide Hotel Growth Statistics (y/y) 30% 20% 10% 0% - 10% -20% -30% Hotel Revenue ADRs Room Nights Stayed Source: Company financial reports. 2005-2007 data is for merchant hotel only; 2008-2011 data is for both agency and merchant hotel. EXPEDIA, INC. Q211 Company Overview 10
Slide 11: Product Category – Advertising & Media
Product Category – Advertising & Media Business Overview Revenue Drivers •Two primary businesses – •Offer advertisers targeted audiences •TripAdvisor Media Group(leading global collection of •CPC, CPM & subscription based ad models user-generated content sites) •TripAdvisor leverages industry-leadin
Slide 12: Product Category – Air
Product Category – Air Business Overview • Air revenue = 11% of Expedia’s worldwide trailing twelve months revenue - ~95% of airplane tickets sold over Expedia’s online properties are agency transactions, in which Expedia acts as an agent on behalf of a supplier and collects a commission - Customer
Slide 13: Trended Worldwide Air Growth Statistics (y/y)
Trended Worldwide Air Growth Statistics (y/y) Source: Company financial reports EXPEDIA, INC. Q211 Company Overview 13
Slide 14: Stable Supplier Relationships & Economics
Stable Supplier Relationships & Economics Trended Revenue Margin (TTM) Reductions driven by traveler fee cuts & rising air ticket prices Supplier margins largely stable driven by: Long-term agreements with airlines and GDS providers Better hotel relationships through PSG investment Growth in adverti
Slide 15: Q211 Results
* Excludes stock-based compensation. ** OIBA includes realized gain/(loss) from revenue hedges *** Adjusted EBITDA is calculated as operating income plus depreciation, restructuring charges, intangibles amortization, stock-based compensation, any impairments and certain legal reserves and occupancy
Slide 16: Trended Free Cash Flow (TTM)
Trended Free Cash Flow (TTM) Figures in $millions ‘10 cash flows improved due ‘08 cash flows down due to to higher earnings, lower taxes, slowing merchant occupancy tax assessment hotel & one-time cap ex payments and lower cash tax ‘09 cash flows improved due payments to higher earnings, merchant ho
Slide 17: Efficiently Managing Dilution
Efficiently Managing Dilution Millions of adjusted diluted shares 2007 repurchased 55mm shares for $1.4b 2010 repurchased 20.6mm shares for $489mm 15% reduction in share base since Q107 Source: Company financial reports EXPEDIA, INC. Q211 Company Overview 17
Slide 18: Capitalization
Capitalization 6.30.2011 Cash and Cash Equivalents 1 $1,409 Revolving Credit Facility2 - 5.950% Notes due 2020 750 3 debt issues with long- 7.456% Notes due 2018 500 term maturities (2018 Notes have 2013 8.500% Notes due 2016 395 investor put) Total Debt $1,645 Net Debt 236 3 Market Value of Equity
Slide 19: Trended Credit Metrics
Trended Credit Metrics TTM 12.31.07 12.31.08 12.31.09 12.31.10 6.30.11 Leverage Measures Total Debt / TTM Adjusted 1.5 2.0 1.0 1.7 1.7 EBITDA1 1 Net Debt / TTM Adjusted EBITDA 0.6 1.1 0.3 1.0 0.2 Coverage Measures TTM Adj. EBITDA / TTM Interest 13.8 10.8 10.3 9.4 7.9 Expense1 TTM Free Cash Flow / TT
Slide 20: Rating Agency Snapshot
Rating Agency Snapshot S&P (Analyst: Andy Liu) Rating ‘BBB-’on CreditWatch with negative implications April 7, 2011 and July 11, 2011 Research Updates: “The CreditWatch placement is based on the company’s plan to split off its TripAdvisor unit…we believe it will reduce Expedia’s growth rate, EBITDA
Slide 21: Summary
Summary • Attractive macro tailwind as travel industry shifts online • World’s #1 online provider of travel-related services oLeading traffic, supply, scale, bookings, revenue and cash flows oStrong and complementary portfolio of brands and products oImportant partner to airlines, hotels, and other
Slide 22: Appendix A
Appendix A EXPEDIA, INC. Q211 Company Overview 22
Slide 23: Business Model – Income Statement (FY 2010)
Business Model – Income Statement (FY 2010) Customer books travel product or service; total retail value (incl taxes $ in millions and fees) constitutes “Gross Bookings.” Gross bookings $25,962 • Customer operations Expedia’s portion of the gross Revenue 3,348 • Credit card & fraud expense booking g
Slide 24: Trended Historical Results
Trended Historical Results Figures in $millions Growth 2006 2007 2008 2009 2010 2007 2008 2009 2010 Gross Bookings $16,882 $19,632 $21,269 $21,811 $25,962 16% 8% 3% 19% Revenue 2,238 2,665 2,937 2,955 3,348 19% 10% 1% 13% Cost & Expenses * 1,639 1,996 2,239 2,183 2,514 22% 12% (3%) 15% OIBA*** 599 6
Slide 25: Appendix B
Appendix B EXPEDIA, INC. Q211 Company Overview 25
Slide 26: Tabular Reconciliations for Non-GAAP Data
Tabular Reconciliations for Non-GAAP Data Operating Income Before Amortization (all figures in $000s) 3 Months Ended 3 Months Ended June 30, 2010 June 30, 2011 OIBA $ 219,472 $ 243,284 Amortization of intangible assets (8,344) (7,046) Stock-based compensation (14,651) (13,481) Legal reserves and occ
Slide 27: Tabular Reconciliations for Non-GAAP Data
Tabular Reconciliations for Non-GAAP Data Operating Income Before Amortization (all figures in $000s) Year Ended Year Ended Year Ended Year Ended Year Ended Dec. 31, 2006 Dec. 31, 2007 Dec. 31, 2008 Dec. 31, 2009 Dec. 31, 2010 OIBA $ 599,018 $ 669,487 $ 697,774 $ 761,532 $ 830,721 OIBA margin 27% 25
Slide 28: Tabular Reconciliations for Non-GAAP Data
Tabular Reconciliations for Non-GAAP Data Costs & Expenses (all figures in $000s) Year Ended Year Ended Year Ended Year Ended Year Ended Dec. 31, 2006 Dec. 31, 2007 Dec. 31, 2008 Dec. 31, 2009 Dec. 31, 2010 Total costs and expenses* $ 1,718,853 $ 2,058,694 $ 2,300,530 $ 2,244,505 $ 2,573,529 Less: s
Slide 29: Tabular Reconciliations for Non-GAAP Data
Tabular Reconciliations for Non-GAAP Data Adjusted Earnings Before Interest, Taxes, Depreciation & Amortization (all figures in $000s) Year Ended Year Ended Year Ended Year Ended Year Ended Dec. 31, 2006 Dec. 31, 2007 Dec. 31, 2008 Dec. 31, 2009 Dec. 31 , 2010 Adjusted EBITDA 647,797 729,013 774,574
Slide 30: Tabular Reconciliations for Non-GAAP Data
Tabular Reconciliations for Non-GAAP Data Costs & Expenses (all figures in $000s) 12 Months 12 Months 3 Months 3 Months Ended Ended Ended Ended Dec. 31, 2009 Dec. 31, 2010 June 30, 2010 June 30, 2011 Cost of revenue 607,251 692,832 168,571 198,544 Less: stock-based compensation (2,285) (2,401) (487)
Slide 31: Tabular Reconciliations for Non-GAAP Data
Tabular Reconciliations for Non-GAAP Data Free Cash Flow (all figures in $000s) 3 months ended 3 months ended June 30, 2010 June 30, 2011 Net cash used in operating activities 313,806 490,701 Less: capital expenditures (43,453) (57,961) Free cash flow 270,353 432,740 Source: Company financial report
Slide 32: Tabular Reconciliations for Non-GAAP Data
Tabular Reconciliations for Non-GAAP Data Free Cash Flow (all figures in $000s) TTM* 9.07 TTM12.07 TTM3.08 TTM6.08 TTM9.08 TTM12.08 TTM3.09 TTM6.09 Net cash provided by operating activities 859,228 712,069 737,792 660,510 514,242 520,688 458,913 494,184 Less: capital expenditures (82,671) (86,658) (
Slide 33: Additional Information about the TripAdvisor Spin-Off
Additional Information about the TripAdvisor Spin-Off As previously announced, Expedia intends to spin-off its TripAdvisor Media Group businesses into a separate publicly-traded company. In connection with the proposed spin-off, Expedia has filed a preliminary proxy statement/prospectus with the SEC