Post on 14-Jan-2016
description
transcript
Howard Jonas, Chairman
Jim Courter, Chief Executive Officer
Ira Greenstein, President
Steve Brown, Chief Financial Officer
Marcelo Fischer, Chief Accounting Officer
IDT Corporation
December 2003Confidential
2
Market Cap: $1.6 BillionFiscal 2003 Revenues: $1.8 BillionCash Balance: $1 BillionExchange: NYSEHeadquarters: Newark, NJEmployees: 3,800Offices: 17 Countries On 5 ContinentsState Of Incorporation: Delaware
Equity Research: Wm Smith Securities, Janco PartnersAttorneys: McDermott Will & EmeryAuditors: Ernst & YoungBoard Representation: 8 Outside Directors, 6 Inside DirectorsTickers: IDT IDT.C Class A
Price As Of 12/12/03: $20.00 $19.25 Not Traded52 Week High: $20.50 $19.5052 Week Low: $13.75 $13.70Shares Outstanding: 51.2 Mil. 22.1 Mil. 9.8 Mil. 83.1 Mil Total
As Of 10/20/03
Summary Market Information
IDT Corporation
3
IDT Revenue Run Rate Q4 2003
Media(94% owned)$23 million
Solutions(100% owned)
$85 million
Entertainment(94% owned)$48 million
Digital ProductionSolutions
(90% owned)
Film Roman(82% owned)
Vanguard Anim.(12.5% owned)
OTV
Liberty Broadcasting
WMET
CTMBrochure Display
Net2Phone Global Services
Net2Phone Cable Telephony
Telecom(95% owned)$1.8 billion
Net2Phone(controlled, 22% owned)
$76 million
ConsumerPhone Services
$149 million
Callback $0.5 million
Retail$1.3 billion
Calling Cards$1.17 billion
Domestic$955 million
International$165 million
Wholesale$502 million
IDT Corporation
IDT CorporationRevenue $2.1 billion
MainFrameEntertainment(62% owned)
Anchor BayEnt. (100% owned
upon closing)
4
Economic Interest: Voting Interest:
Retail Holders 20.6%
Howard Jonas 21.4%
Liberty Media 12.3%
AT&T 1.6%
Institutional Holders 43.9%
Institutional Holders 33.0%
Retail Holders 8.6%
Howard Jonas 56.3%
AT&T 0.2%
Liberty Media 1.8%
Class B 51.2 Million Shares NYSE: IDT 1/10 Vote/Share
Common 22.1 Million Shares NYSE: IDT.C 1 Vote/Share
Class A 9.8 Million Shares 3 Votes/Share
Class A Convert To Common Upon Sale
Ownership & Control Of IDT Corporation
IDT Corporation
5
IDT History
IDT Corporation
0
100
200
300
400
500
600
2Q95 4Q95 2Q96 4Q96 2Q97 4Q97 2Q98 4Q98 2Q99 4Q99 2Q00 4Q00 2Q01 4Q01 2Q02 4Q02 2Q03 4Q03
International Retail Serv ices Wholesale Carrier Serv icesInternet/Media Net2PhonePrepaid Calling Cards Consumer Phone Serv icesSolutions Entertainment
July 1997Begin Marketing
Prepaid CardsJuly 1996
Launch Net2Phone
October 2001Reacquire NTOP
Control
December 2001Acquire Winstar
Assets
March 1996IPO
February 2001List on NYSEAcquire PT1August 2000
Sell NTOP Shares To AT&T
July 1999Net2Phone IPO
April 1995 IntroduceCarrier Service
6
IDT Telecom
7
Overview Telecom Fast Facts
Provides retail and wholesale telecommunications services worldwide
Telecom minutes-of-use run-rate in excess of 1.5 billion minutes per month, 19 billion annually
Fiscal 2003 revenue of $1.6 billion
Operating Income ($ millions) Telecom Minutes Of Use (millions)
Revenue ($ millions)
IDT Telecom
0
5
10
15
20
25
Q1 03 Q2 03 Q3 03 Q4 03 Q1 04
0
100
200
300
400
500
Q1 03 Q2 03 Q3 03 Q4 03 Q1 04
0200400600800
1,0001,2001,4001,600
Aug
-02
Sep
-02
Oct
-02
Nov
-02
Dec
-02
Jan-
03
Feb
-03
Mar
-03
Apr
-03
May
-03
Jun-
03
Jul-0
3
Aug
-03
Sep
-03
Oct
-03
8
Telecom Major Services
Calling cards– Monthly sales exceed 18 million cards– Over 350,000 global points of distribution– Access to 230 countries– Private label - high margin business
• Walgreens – Largest major retail private label customer• Also sell corporate cards and promotional cards
Consumer phone services– Five cents-a-minute plan has over 525,000 customers– America Unlimited Flat Rate Service roll out began in August 2003– America Unlimited customer count 70,000 and growing about 8,000 per week– Currently offered in NY, NJ, PA, MD, DE, WV, MA and NH
Wholesale carriers
IDT Telecom
9
Wholesale Carrier
Our customers include most of the largest, most important Telecom companies in the world.
IDT Telecom
10
Calling Cards $1,080.0 $240.0 292.0 66.27.9%
Wholesale Carrier 405.5 45.6 125.6 13.8 50.5%
Consumer Phone Services 152.0 85.8 37.2 19.44.4%
Callback 1.3 0.7 0.1 ––
Total $1,638.7 $372.2 455.0 99.616.6%
Contribution Of Telecom Services
22.2%
11.2%
56.5%
59.3%
22.7%
IDT Telecom
$ MillionsFiscal 2003
Revenue Gross ProfitsQ1 2004
Revenue Gross Profits
22.7%
11.0%
52.2%
57.4%
21.9%
RevenueGrowth
11
U.S. Calling Card OperationsDark blue shaded areas represent states where significant numbers of IDT calling cards are distributed.
IDT Telecom
12
IDT Solutions
Services provided by Winstar Communications L.L.C., an IDT Company
13
The Winstar Network
Hybrid fixed-wireless and fiber infrastructure
“Last Mile” wireless connectivity to customer using licensed commercial spectrum – Spectrum holdings cover 100% of U.S.
Rights to 1,200 intra-city fiber miles and 250 interstate fiber miles
Access to nationwide fiber network
Customer building to hub to switch– 4800 Buildings with access rights– 2300 Provisioned (wired) buildings– 154 Hubs– 5 Data POPs– 21 Voice switches– 54 Data switches
Two network operating centers– Herndon, VA– Seattle, WA
IDT Solutions
14
Service Offerings
IDT Solutions provides a full range of broadband and telephony services to commercial and governmental customers.
– Voice services• Local • Long distance (dedicated & switched) • International
– Internet & data services• High Speed Internet• Dedicated internet• Private lines• WAN
– Other services• Conferencing• Web hosting• Calling cards
IDT Solutions
Winstar Central Office
Customer Location
15
IDT Solutions Unique Value Proposition
One of few carriers that can deliver a bundled suite of local, long distance and data services
Provide true network diversity and redundancy to fiber-based networks
Competitive pricing
Service reliability, performance and security – multi-layered fault tolerant architecture
IDT Solutions
16
IDT Solutions Acquisition
December 19, 2001, – April 17, 2002
Cash $ 30.0 millionIDT Class B Shares 25.8 millionPurchase $ 55.8 million
Working Capital* 150.0 million
Total $205.8 million
IDT Solutions
*Amount funded as of July 2003
17
AtlantaBaltimoreBostonChicago*CincinnatiDallas/Ft. Worth*DenverDetroitHoustonLos Angeles*MiamiMinneapolis/St PaulNew York City* Newark (NJ)Orange County (CA)PhiladelphiaPhoenixSan FranciscoSeattleStamford (CT) TampaWashington DC*
22 Cities Of IDT Solutions
IDT Solutions
*Top 5 cities (account for 45% of on-net revenue)
17 Offices
12,500 Customer accounts
18
IDT Solutions Burn Reduction Plan
Interim Goal – $2.5 Million Maximum Monthly Cash Burn
Reduce excess capacity on network
Terminate leases on buildings with limited revenue potential
Measure and enforce productivity targets for sales
Eliminate underused hubs, thereby further reducing real estate and capacity costs without sacrificing current or future revenue
Reduce headcount
Burn Reduction Plan
Preserves current revenue
Does not prevent future growth
Does not destroy asset value
IDT Solutions
19
Leadership In …
High Quality 3D Computer Animation And 2D Cel Animation
Developing/Acquiring Libraries Of Animated Intellectual Properties
Distribution Of Owned And Licensed Intellectual Properties To Retail
IDT Entertainment
20
Global Animation Studios
4 production hubs in Newark, LA, Toronto, Israel linking 2500 global animators Highest quality animation at low costs, high speed and improved management control Recent productions: Monster Monster Trucks, Cabbage Patch Kids – JUMP!, Hip Hop & Hamilton Currently in development: Starpoint Academy, Happily N’ever After, one other film Requires credibility and recognition to gain access to better project flow
Film Roman, Inc. Controlling interest acquired May 2003 Leading 2-D animation producer of primetime series (Simpsons™, King of the Hill™) Creative strength and credibility in the television industry
IDT Entertainment
21
Vanguard Films, Inc. Minority stake purchased in July 2003 Feature film industry powerhouse known for creativity, discipline, efficiency Relationships with Disney, Dreamworks, Warner Brothers, Sony, Nickelodeon
Mainframe Entertainment Inc. Controlling interest acquired September 2003 Leading 3-D animation producer for TV and direct-to-video products Canadian animation hub Relationships with Hasbro, Mattel, Sony
Anchor Bay Entertainment Group A leading independent video distributor of licensed intellectual properties to retailers such as Wal-Mart, K-
Mart and Target Specializes in horror and children genres; #1 distributor of fitness home-video titles Relationships with proven Hollywood directors including Sam Raimi, Werner Herzog and George Romero Distributes titles such as Thomas the Tank Engine and Crunch fitness videos
IDT Entertainment
22
IDT Entertainment
Film Roman(85% owned)
Anchor Bay(100% owned)
Starpoint Academy
Monster Monster Trucks
Happily N’Ever After
Hip Hop & Hamilton
Valiant Thomas The Tank Engine
IDT Entertainment
Film Roman(82% owned)
DPS(90% owned)
MainFrame(62% owned)
Vanguard(12.5% owned)
The Simpsons
King Of The Hill
X-Men: Evolutions
Tripping The Rift
Barbie
Spider-Man
Alien Legion
Tony Hawks SHADE
Thomas The TankEngine
Crunch
Halloween
Evil Dead
23
IDT Entertainment Acquisitions
IDT Entertainment
$ Millions DatesFilm Roman, Inc. 2.1 May-03 Sep-03Vanguard Films, Inc. 2.0 Jul. 2003MainFrame Entertainment, Inc. 14.0 Sept. 2003Anchor Bay Entertainment Group 60.0 Dec. 2003
Total 78.1
24
Executive Bios
John Hyde, President and CEO, Film Roman – extensive experience in entertainment production and distribution, as well as management consulting and restructuring of entertainment companies. CEO of Crossroads V Communications and Starbound Records, Chairman and CEO of MCEG Sterling.
John Williams, CEO, Vanguard Animation – originating producer of Shrek, other credits include “The Tuxedo” and “Seven Years in Tibet.”
Neil Braun, President, Vanguard Animation - President of the NBC Television Network, Chairman and CEO of Viacom Entertainment, President of Imagine Entertainment, and Senior Vice President of HBO
Rick Mischel, CEO, Mainframe Entertainment - President and Chief Operating Officer at The Harvey Entertainment Company, Senior Vice President of Live Entertainment.
IDT Entertainment
25
Innovative, Technologically Advanced Communications Platforms
IDT Media
26
Liberty Broadcasting Systems
Barter syndication networks 5 Million+ listeners Long Form programs + features CY 2003 Revenue exceeds CY2002 by about 50% Intelligent product includes current hosts William Kristol and Linda Chavez; Charles Krauthammer
to begin in March
WMET Building out station to 50K watts daytime DC will serve as a distribution point for the new “Intelligent Talk” format Liberty Broadcasting System)
IDT Media
27
Delivering Video To The Office Desktop
Broadcast quality 24/7 news delivered to the office desktop via high speed IP
Research indicates demand for news product at significant markup exists
Content agreements reached
Ops tests completed / Microsoft endorsed
Patent pending “plug-ins” in development
Subscription / advertising financial model
– 1MM desktops = $90MM in annual revenue
Will be marketed via IDT Solutions, private internet and direct to fortune 1000 companies
IDT Media
28
CTM Achieves Record Sales / EBITDA
Primarily distributes brochures to hotels, travel hubs and corporations
10,000+ racks, estimated 70% market share east of the Mississippi in the U.S. and Canada
Recently entered Puerto Rico market
FY 2003 revenue exceeds $15MM
EBITDA approaches 25%
Growth will come from expansion of delivery areas, printing and diversification into collateral distribution
IDT Media
29
Communication Without Borders
Net2Phone
30
Net2Phone Key Points
Interim goal – $2.5 million maximum monthly cash burn
Cable telephony subscribers expected to grow almost 30% annually through 2006, exceeding 22MM subscribers
– Telecom providers in the U.S. projected to lose over $10bn in revenues to cable VoIP by 2012
Net2phone the only fully outsourced, proven “PSTN” quality cable telephony solution for MSOS
Proven ability to develop and deploy VoIP services
Profitable core business, which earned $1.8 million in FY 2003 on revenues of $91 million
Conservative capital structure and strong liquidity. Recent secondary offering netted $63 million, raising liquid assets to $157 million
Net2Phone
31
Net2Phone Voice Over IP Offerings
International Communication Services (ICS) – 55% of NGS revenue– Channel sales
• Integrated sale of VoIP hardware and minutes through distribution channels worldwide• Emerging markets are a significant growth opportunity
– PC-to-phone service– Wholesale Services to Carriers using VoIP technology– Big market opportunities on the horizon as telecommunication markets deregulate, including Latin America and the Middle East
Calling card services – 45% of NGS revenue– Disposable– Rechargeable
Net2Phone cable telephony targeting a sizeable, immediate market– Complete suite of NCT services allow cable companies to deliver residential phone service– Only fully outsourced, proven “PSTN” telecom solution for cable operators– Leverage existing technology– Tailored to meet MSO’s strategic and financial needs– Conforms to CableLabs’ PacketCable standards– Initial contract signed in October
Net2Phone
32
Cable Market Opportunity
Cable telephony a likely replacement for traditional phone– Users spend just as much on cable telephony as they do on regular telephony ($53/month) (FCC and ATT Broadband)– When a cable provider adds telephony services to their suite, penetration rates increase 25-30% (DB Alex. Brown)– Cox reports cable telephony bundle has 30% penetration of homes passed in mature markets– AT&T Broadband reports a 40-50% churn reduction by offering triple play; Cox reports 53% churn reduction among triple play
subs, vs. 25% among video and data only subs– By outsourcing IP telephony, cable operators can reduce their incremental deployment costs for telephony by 90%– Primary line cable telephony revenue to hit $4.4 billion by 2006 (JP Morgan)
Net2Phone’s opportunity: Second tier cable – Internal estimate of Net2Phone’s cable market opportunity is 82 million homes– Competitive edge by offering “triple play”– Second tier companies need incremental revenue– 20% of MSO’s revenue will come from telephony services by 2007 (Goldman Sachs) – Can’t spend the Cap Ex– Have regulatory commitments to deliver telephony– Cable companies do not have telecom expertise
Net2Phone cable business model– Licensing fees– Per minute recurring revenue– Annual maintenance and support fees
Net2Phone
33
Economic Interest: Voting Interest:
NTOP Holdings, LLC 38.8%
Other 61.2%
Net2Phone Investment Breakout
NTOP Holdings, LLC 55.9%
Other 44.1%
As of 11/25/2003 NTOP Holdings, LLC is a group consisting of IDT Corp. and Liberty Media. IDT controls the right to vote for the LLC in most matters, and is the managing member of the LLC. IDT and Liberty Media each also hold 1,250,000 shares of Net2Phone outside the LLC.
Additionally, Net2Phone is obliged to issue 6.9 million shares of restricted Class A Common Stock to IDT upon signing a telecom services agreement which has been negotiated. There are a total of 74.4 million NTOP shares outstanding.
Net2Phone
34
Financial Information
Services provided by Winstar Communications L.L.C., an IDT Company
35
Consolidated Balance Sheet
Financial Information
In Thousands 10-31-01 1-31-02 4-30-02 7-31-02 10-31-02 1-31-03 4-30-03 7-31-03 10-31-03AssetsCurrent assets:Cash and cash equivalents 1,180,350 1,075,882 830,849 415,464 315,830 162,010 243,415 99,046 141,465 Marketable securities 26,709 117,516 294,222 684,502 798,642 916,465 794,259 921,669 859,206 Trade accounts receivable, net 118,628 147,836 133,893 129,308 119,905 123,393 133,127 126,303 134,871 Other current assets 54,664 66,267 60,477 78,796 77,901 85,302 88,199 81,304 80,893
Total current assets 1,380,351 1,407,501 1,319,441 1,308,070 1,312,278 1,287,170 1,259,000 1,228,322 1,216,435
Property, plant and equipment, net 347,048 377,769 296,303 283,506 271,429 281,974 288,070 286,807 291,941
Licenses and other intangibles,net 21,982 27,242 24,826 25,974 24,310 23,503 22,777
Restricted cash 21,290 23,064 23,485
Goodwill 48,984 52,023 35,812 34,411 34,689 34,302 34,424 41,651 41,859
Investments 25,186 34,209 41,838 44,085 43,639 39,194 39,471 41,628 50,749
Other noncurrent assets 200,281 196,839 194,114 80,348 44,581 47,771 54,928 87,367 64,616
Total assets 2,001,850 2,068,341 1,909,490 1,777,662 1,731,442 1,716,385 1,721,493 1,732,342 1,711,862
Liabilities and stockholders' equityCurrent liabilities:Trade accounts payable 139,610 137,725 123,811 128,863 125,537 122,335 97,760 106,836 70,046 Accrued expenses 75,612 125,287 155,806 160,159 138,302 142,599 173,601 179,665 207,477 Deferred revenue 92,884 98,227 106,137 120,206 119,111 122,073 120,836 145,343 146,509 Notes payable - current 7,439 6,955 7,873 Capital lease obligations - current 24,937 27,515 26,116 25,963 26,186 26,324 25,318 27,862 24,989 Other current liabilities 21,824 19,034 12,576 19,491 19,473 34,122 33,412 8,061 7,426
Total current liabilities 362,306 414,743 432,319 454,682 428,609 447,453 450,927 467,767 456,447
Deferred tax liability, net 380,764 344,332 314,573 233,518 227,908 205,420 191,436 150,131 150,131
Notes payable - long term 8,752 8,729
Capital lease obligations - long term 58,642 55,444 51,016 48,068 42,883 41,540 38,502 45,084 46,548
Other Long Term Liabilities 566 2,168 2,142 5,060 5,332 6,565 14,299 24,486 22,630
Total liabilities 811,030 825,416 800,050 741,328 704,732 700,978 695,164 687,468 675,756
Minority Interest 294,162 301,960 180,625 166,564 168,355 162,585 162,184 147,347 135,581
Stockholders' equity:Common stock at par value 698 759 780 794 795 799 805 820 833Additional paid-in capital 496,082 555,393 589,327 606,387 609,371 615,250 636,445 654,170 666,259 Treasury stock (153,375) (153,713) (153,713) (153,713) (153,713) (153,713) (153,713) (150,603) (149,067) Other comprehensive income (10,662) (8,166) (4,678) (2,435) (1,837) (2,397) (4,369) (8,080) (4,754) Deferred compensation (10,907) (9,304) (7,907) Retained earnings 563,904 546,692 497,099 418,737 414,646 402,187 392,884 401,220 387,254
Total stockholders' equity 896,658 940,965 928,815 869,770 858,355 852,822 864,145 897,527 900,525 Total liabilities & equity 2,001,850 2,068,341 1,909,490 1,777,662 1,731,442 1,716,385 1,721,493 1,732,342 1,711,862
Shares outstanding 70,918,604 75,845,492 78,031,042 79,466,303 79,496,690 79,954,255 80,570,054 81,986,556 83,266,466
Note: Net2Phone consolidated starting 10/31/02
36
Years Ending July 31
$ Million 1999 2000 2001 2002 2003
Revenues
Telecommunications
Wholesale 289.0 520.5 388.1 289.3 405.5
Retail 395.5 502.5 816.4 1,121.7 1,233.2
Total Telecom 684.5 1,023.0 1,204.5 1,411.0 1,638.7
Winstar 0.0 0.0 0.0 79.6 87.6
Net2Phone * 30.7 56.1 0.0 71.9 80.8
Internet/Ventures/Media 16.9 14.8 26.4 21.3 27.5
Total Revenues 732.1 1,093.9 1,230.9 1,583.8 1,834.5
Costs and Expenses
Direct Costs 575.0 918.2 1,066.8 1,214.8 1,409.5
Selling, G & A 128.5 342.7 334.0 451.5 421.8
Depreciation & Amortization 36.4 48.6 60.4 83.9 89.3
Non-cash compensation 1.0 3.1 16.4 32.3
Settlement by Net2Phone of litigation (58.0)
Impairment Charges 0.0 0.0 199.4 257.5 13.3
Total Costs and Expenses 739.9 1,310.5 1,663.7 2,024.1 1,908.2
Income (Loss) from Operations (7.8) (216.6) (432.7) (440.3) (73.7)
Minority Interest (3.3) 59.3 (5.7) 151.4 (43.0)
Net Income before Interest and Taxes (11.1) (157.3) (438.4) (288.9) (116.7)
Interest and Other (net) (3.3) 609.5 1,180.2 8.2 28.8
Income (Loss) before Taxes (14.3) 452.2 741.8 (280.7) (87.9)
Taxes 7.3 218.4 209.4 (124.3) (70.4)
Net Income (Loss) before Extraordinary Item (21.6) 233.8 532.4 (156.4) (17.6)
Extraordinary Items (3.3) (3.0) 0.0 (147.0) 0.0
Net Income (Loss) (18.2) 230.9 532.4 (303.4) (17.6)
Adjusted EBITDA 28.6 (167.1) (169.9) (82.5) 61.2
* Net2Phone not consolidated in Fiscal Year 2001; it was reconsolidated on Oct. 23, 2002.
Consolidated Income Statement
Financial Information
37
Consolidated Quarterly Income Statement
Financial Information
$ Millions 10-31-01 01-31-02 04-30-02 07-31-02 10-31-02 01-31-03 04-30-03 07-31-03 10-31-03 % of
Revenues Revenue
Telecommunications
Wholesale 67.5 65.9 73.2 82.7 83.4 95.6 109.2 117.3 125.6 24.5%
Retail 265.3 274.7 285.4 296.2 306.8 308.2 299.9 318.3 329.4 64.2%
Total Telecom 332.8 340.6 358.7 378.9 390.2 403.8 409.0 435.6 455.0 88.7%
Entertainment 0.1 0.3 0.2 4.4 12.1 2.3%
Internet/Solutions 19.2 33.1 27.3 24.5 20.7 20.8 21.6 21.3 4.2%
Net2Phone 3.0 26.4 23.5 18.9 22.6 21.1 19.6 17.4 19.0 3.7%
Ventures/Media 5.7 5.7 4.2 5.7 5.6 4.9 5.3 6.7 5.8 1.1%
Total Revenues 341.6 391.9 419.4 430.8 443.2 450.8 454.9 485.7 513.1 100.0%
Costs and Expenses
Direct Costs 267.1 296.6 323.1 328.0 340.1 349.0 347.1 373.3 394.2 76.8%
Selling, G & A 70.9 129.4 131.5 119.7 105.3 106.6 105.0 105.0 106.6 20.8%20.7% 33.0% 31.4% 27.8% 23.8% 23.6% 23.1% 21.6% 20.8% 0.0%
Non-cash Compensation 0.5 6.3 9.1 0.6 3.9 3.2 16.6 8.5 3.6 0.7%
Depreciation & Amortization 15.9 22.2 23.8 22.0 21.3 21.6 22.3 24.0 22.7 4.4%
Impairment & Other Charges 8.7 15.3 114.4 119.1 (51.8) 1.0 1.7 4.3 4.4 0.9%
Total Costs and Expenses 363.1 469.7 601.9 589.5 418.8 481.5 492.8 515.1 531.5 103.6%
Income (Loss) from Operations (21.5) (77.8) (182.4) (158.6) 24.3 (30.7) (37.9) (29.4) (18.4) -3.6%
Minority Interest 3.3 32.6 111.5 4.1 (46.5) 0.5 (1.0) 3.9 (12.9) -2.5%Net Income before Interest and Taxes (18.2) (45.2) (70.9) (154.6) (22.1) (30.2) (38.9) (25.5) (31.3) -6.1%
Interest and Other (net) (11.3) 12.2 0.1 7.2 4.4 1.4 18.8 4.2 22.1 4.3%
Income (Loss) before Taxes (29.6) (32.9) (70.8) (147.4) (17.7) (28.8) (20.1) (21.3) (9.2) -1.8%
Taxes (18.2) (15.7) (21.2) (69.2) (13.6) (16.3) (10.8) (29.6) 4.7 0.9%Net Income (Loss) before Ex traordinary Item (11.3) (17.2) (49.6) (78.2) (4.1) (12.5) (9.3) 8.3 (14.0) -2.7%
Extraordinary Items (147.0) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0%
Net Income (Loss) (158.3) (17.2) (49.6) (78.2) (4.1) (12.5) (9.3) 8.3 (14.0) -2.7%
38
Financial Information
Telecom Quarterly Operating Statement
39
Financial Information
IDT Solutions Quarterly Operating Statement
40
Financial Information
Media Quarterly Operating Statement$ Millions 10-31-02 01-31-03 04-30-03 07-31-03 10-31-03
Total Revenues 5.6 4.9 5.3 6.7 5.8
Direct Costs 0.6 0.5 0.3 2.2 0.1
Gross Profit 5.1 4.4 4.9 4.5 5.7
Costs & Expenses
S G & A 5.6 6.2 6.1 5.8 6.4
Depreciation 0.3 0.4 0.6 0.7 0.6
Total Costs & Expenses 5.8 6.6 6.6 6.5 7.0
Loss from Operations (0.8) (2.2) (1.7) (2.1) (1.3)
EBITDA (0.5) (1.8) (1.1) (1.3) (0.7)
Notes: Quarter Ended 7-31-02 omits an impairment charge of $111.1 million due to the write-down of undersea fiber assets.
41
Entertainment Operating Statement
Financial Information
$ Millions 10-31-02 01-31-03 04-30-03 07-31-03 10-31-03
Total Revenues 0.1 0.3 0.2 4.4 12.1
Direct Costs 0.0 0.0 0.0 3.9 10.6
Gross Profit 0.1 0.3 0.2 0.5 1.5
Costs & Expenses
S G & A 0.6 0.9 0.8 1.2 2.1
Depreciation 0.0 0.0 0.0 0.0 0.1
Total Costs & Expenses 0.6 0.9 0.8 1.2 2.2
Loss from Operations (0.5) (0.6) (0.6) (0.6) (0.7)EBITDA (0.5) (0.6) (0.6) (0.6) (0.6)
42
Corporate Quarterly Operating Statement
Financial Information
$ Millions 10-31-01 01-31-02 04-30-02 07-31-02 10-31-02 01-31-03 04-30-03 07-31-02 10-31-03
Costs & Expenses
S G & A 5.5 6.2 5.9 6.5 7.9 8.2 7.9 9.0 8.9Non-cash Compensation 0.5 13.7 0.0 1.7
Depreciation 0.7 0.7 0.6 0.4 0.6 0.3 0.4 0.4 0.4Loss from Operations 6.2 6.9 6.5 6.9 8.5 9.0 22.0 9.4 11.0
Note: The 4-31-03 quarter's non-cash compensation is predominantly due to the exchange of options to purchase IDT.C shares for an identical number
of identically priced shares of IDT.
43
Net2Phone Quarterly Operating Statement
Financial Information
$ Millions 10-31-01 01-31-02 04-30-02 07-31-02 10-31-02 01-31-03 04-30-03 07-31-03 10-31-03
Total Revenues 3.0 26.4 23.5 18.9 22.6 21.1 19.6 17.4 19.0
Direct Costs 1.2 11.1 9.8 7.4 12.6 10.4 10.0 8.9 9.5
Gross Profit 1.8 15.3 13.7 11.5 10.0 10.8 9.6 8.5 9.5
60.5% 58.1% 58.4% 60.7% 44.2% 50.9% 49.2% 49.0% 49.8%
Costs & Expenses
S G & A 3.7 36.5 25.1 17.5 13.7 14.6 12.7 12.6 12.5
Non-cash Compensation 0.5 6.3 6.7 1.0 1.7 2.7 2.7 8.2 1.8
Depreciation 0.7 7.3 7.0 2.9 2.5 2.4 2.3 3.9 2.5
Restructuring, Impairment & Other 5.9 15.3 114.4 7.6 (53.3) 1.1 1.7 (0.2) 0.2
Total Costs & Expenses 10.8 65.4 153.3 29.0 (35.5) 20.7 19.5 24.5 17.1
Income (Loss) from Operations (8.9) (50.0) (139.6) (17.5) 45.5 (10.0) (9.8) (16.0) (7.6)
Adjusted EBITA (1.9) (21.1) (11.4) (6.0) (3.7) (3.8) (3.1) (4.1) (3.1)
44
TelecomSecretary William Cohen
Muni FigueresVito Spitaleri
Net2PhoneStephen Goldsmith
Jesse KingHarry McPhersonJames R. Mellor
Marc J. OpenheimerDan Schulman
Dr. Michael WeissTony Werner
Media &Entertainment
Merv AdelsonRev. Eric CosentinoRabbi Irwin Katsof
Roberto MullerHarvey Schiller
Governor Pete Wilson
SolutionsClaire Calandra
Director Jacob LewGeorge RuppHoward Safir
Herbert H. Tate
Corporate Governance Independent Directors
Financial Information
IDT CorporationJ. Warren Blaker
Senator Rudy BoschwitzSaul K. Fenster
Governor James S. GilmoreThe Honorable Jack Kemp
Michael J. LevittAdmiral William OwensGovernor William Weld
45
J. Warren Blaker
Senator Rudy Boschwitz
Saul K. Fenster
Governor James S. Gilmore
The Honorable Jack Kemp
Michael J. Levitt
Admiral William Owens
Governor William Weld
Professor, Fairleigh Dickinson UniversityFormer CEO of University Optical Products, Inc.
Chairman of the Advisory Committee of the Center for Global Food IssuesFormer U.S. Senator
President of NJ Institute of Technology
Partner at Kelley Drye and Warren LLP, practicing homeland security, corporate and technology law Sixty-eighth Governor of the Commonwealth of Virginia
Former 9-term U.S. Congressman and former Secretary of Housing & Urban Development
Chairman of Ilios Capital LLCFormer partner, Hicks,Muse, Tate & Furst, Inc.Former Deputy Head of Investment Banking, Smith Barney
Vice Chairman and Co-Chief Executive Officer of Teledisic LLCFormer Vice Chairman of the Joint Chiefs of Staff
Principal, Leeds Weld & Co. Former Governor of Massachusetts
Independent Directors
Corporate Governance IDT Corp.
Financial Information
46
Chairman and CEO of The Cohen GroupFormer Secretary of Defense and former 3-term U.S. Senator
Writer on Economics and PoliticsFormer External Relations Advisor of the Inter-American Development BankFormer Costa Rican Minster of Foreign Trade
Financial AdvisorFormer Vice President and Treasurer of Mars, Inc.
Secretary William Cohen
Muni Figueres
Vito Spitaleri
Corporate Governance IDT Telecom
Independent Directors
Financial Information
47
Claire Calandra
Director Jacob Lew
George Rupp
Howard Safir
Herbert H. Tate
President of the CLC GroupFormer executive with TyCom Ltd and AT&T
Executive Vice President and Professor of Public Administration at New York UniversityFormer Director of the U.S. Office of Management and Budget, and also a former member of the National Security Council
President of the International Rescue CommitteePrior President of Columbia and Rice Universities
Chairman and CEO of SafirRosettiFormer New York City Police Commissioner
Professor, N.J. Institute of TechnologyFormer President of the N.J. Board of Public Utilities
Financial Information
Corporate Governance IDT Solutions Division
Independent Directors
48
Merv Adelson
Rev. Eric Cosentino
Rabbi Irwin Katsof
Roberto Muller
Harvey Schiller
Governor Pete Wilson
Co-founder of Lorimar Telepictures, where he served as Chairman and CEO
Rector of the Episcopal Church of the Divine Love in Montrose, New York
Executive Director of the Jerusalem Fund of Aish HaTorahCo-author with Larry King of Powerful Prayers and How to Get Your Prayers Answered
President and CEO of The Muller Sports GroupFormer president of InternationalFounder of PONY Sports and Leisure
Chairman and CEO of YankeeNets
Former Governor of the State of CaliforniaFormer U.S. SenatorFormer Mayor of San Diego
Financial Information
Corporate Governance Media & Entertainment
Independent Directors
49
Stephen Goldsmith
Jesse King
Harry McPherson
James R. Mellor
Marc J. Oppenheimer
Dan Schulman
Dr. Michael Weiss
Tony Werner
Special Advisor to President Bush. Also Sr. VP for e-Government and Strategic Initiatives with Affiliated Computer Services, Faculty Director for innovations in American Government at Harvard's Kennedy School of Government, and Chairman the Corporation for National and Community Service.
COO, Daniels Fund. Former Operations Manager for Rockefeller Foundation's Next Generation Leadership Program and The Philanthropy Workshop.
Chairman, Verner, Liipfert, Bernhard, McPherson and Hand. Former Chairman of the U.S. International Cultural and Trade Center Commission.
Chairman, USEC, Inc. Former Chairman and CEO of General Dynamics.
President and CEO of Crystallex International Corporation. Former Director of Trade and Merchant Banking with Midlantic National Bank.
CEO, Virgin Mobile USA, LLC. Former President and COO of priceline.com. Former President of the AT&T Consumer Markets Division and of AT&T WorldNet Service.
Associate Clinical Professor of Ophthalmology at Columbia College of Physicians and Surgeons and Director of Uveitis Service at the Edward S. Harkness Eye Institute.
Chief Technology Officer, Liberty Media. Former CEO of Aurora Networks & CTO for AT&T broadband.
Corporate Governance Net2Phone
Independent Directors
Financial Information