MASTER IDT by qingyunliuliu


									IDT Corporation
                         December 2003

                Howard Jonas, Chairman
     Jim Courter, Chief Executive Officer
                Ira Greenstein, President
     Steve Brown, Chief Financial Officer
Marcelo Fischer, Chief Accounting Officer
IDT Corporation

      Summary Market Information
      Market Cap:               $1.6 Billion
      Fiscal 2003 Revenues:     $1.8 Billion
      Cash Balance:             $1 Billion
      Exchange:                 NYSE
      Headquarters:             Newark, NJ
      Employees:                3,800
      Offices:                  17 Countries On 5 Continents
      State Of Incorporation:   Delaware
      Equity Research:          Wm Smith Securities, Janco Partners
      Attorneys:                McDermott Will & Emery
      Auditors:                 Ernst & Young
      Board Representation:     8 Outside Directors, 6 Inside Directors
      Tickers:                  IDT            IDT.C       Class A
      Price As Of 12/12/03:     $20.00         $19.25      Not Traded
      52 Week High:             $20.50         $19.50
      52 Week Low:              $13.75         $13.70
      Shares Outstanding:       51.2 Mil.      22.1 Mil.    9.8 Mil.    83.1 Mil Total
       As Of 10/20/03
  IDT Corporation

  IDT Revenue Run Rate
  Q4 2003
                                                    IDT Corporation
                                                    Revenue $2.1 billion

     Telecom                        Solutions        Entertainment                Media           Net2Phone
     (95% owned)                    (100% owned)          (94% owned)           (94% owned)    (controlled, 22% owned)
      $1.8 billion                   $85 million           $48 million           $23 million          $76 million

                                                   Digital Production         Liberty
     Retail           Wholesale                                                                Net2Phone Global
  $1.3 billion       $502 million                                           Broadcasting           Services
                                                     (90% owned)

Calling Cards                                         Film Roman                               Net2Phone Cable
$1.17 billion                                        (82% owned)                                  Telephony

     Domestic                                      Vanguard Anim.               CTM
    $955 million                                    (12.5% owned)          Brochure Display
    $165 million                                      MainFrame
                                                     Entertainment              OTV
  Consumer                                           (62% owned)
Phone Services
 $149 million                                         Anchor Bay
                                                   Ent. (100% owned
                                                    upon closing)
 $0.5 million
IDT Corporation

      Ownership & Control Of IDT Corporation

      Economic Interest:              Voting Interest:

      Institutional Holders 43.9%     Howard Jonas 56.3%
      Howard Jonas 21.4%              Institutional Holders 33.0%
      Retail Holders 20.6%            Retail Holders 8.6%
      Liberty Media 12.3%             Liberty Media 1.8%
      AT&T 1.6%                       AT&T 0.2%

                                      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
IDT Corporation

       IDT History

                                                                                                      December 2001
                                                                                                      Acquire Winstar
                                                                                               October 2001
                                                                                            Reacquire NTOP
                                                                                 February 2001      Control
                                                                                  List on NYSE
                                                                       August 2000 Acquire PT1
                                                                 Sell NTOP Shares
                                                                          To AT&T

                                                             July 1999
                                                        Net2Phone IPO
                                            July 1997
                                      Begin Marketing
                                       Prepaid Cards
                          July 1996
                  Launch Net2Phone
     April 1995      March 1996
     Introduce       IPO
     Carrier Service

IDT Telecom

IDT Telecom

      Overview Telecom Fast Facts

       Provides retail and wholesale telecommunications   Revenue ($ millions)
        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)

IDT Telecom

      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

      Wholesale Carrier
      Our customers include most of the largest, most important Telecom companies in the world.

IDT Telecom

      Contribution Of Telecom Services

                                 Fiscal 2003                   Q1 2004              Revenue
      $ Millions            Revenue      Gross Profits   Revenue    Gross Profits   Growth

      Calling Cards         $1,080.0           $240.0      292.0           66.2      7.9%
                                               22.2%                      22.7%

      Wholesale Carrier         405.5            45.6      125.6           13.8     50.5%
                                               11.2%                      11.0%

      Consumer Phone Services   152.0            85.8       37.2           19.4      4.4%
                                               56.5%                      52.2%

      Callback                    1.3             0.7        0.1              –          –
                                               59.3%                      57.4%

      Total                 $1,638.7           $372.2      455.0           99.6     16.6%
                                               22.7%                      21.9%

IDT Telecom

      U.S. Calling Card Operations
      Dark blue shaded areas represent states where significant numbers of IDT calling cards are distributed.

IDT Solutions

                Services provided by Winstar Communications L.L.C., an IDT Company

IDT Solutions

      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

      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
                                                                    Winstar Central Office
               • Web hosting
               • Calling cards

                                                                                             Customer Location
IDT Solutions

      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

      IDT Solutions Acquisition

        December 19, 2001, – April 17, 2002

        Cash                            $ 30.0 million
        IDT Class B Shares                 25.8 million
        Purchase                         $ 55.8 million

        Working Capital*                  150.0 million

        Total                           $205.8 million

       *Amount funded as of July 2003
IDT Solutions

      22 Cities Of IDT Solutions                         Baltimore
                                                         Dallas/Ft. Worth*
                                                         Los Angeles*
                                                         Minneapolis/St Paul
                                                         New York City*
                                                         Newark (NJ)
                                                         Orange County (CA)
                                                         San Francisco
                                                         Stamford (CT)
     17 Offices                                          Tampa
     12,500 Customer accounts                            Washington DC*
     *Top 5 cities (account for 45% of on-net revenue)
IDT Solutions

      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 Entertainment

                                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

             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

             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

                                         IDT Entertainment

     DPS             Film Roman
                    Film Roman               MainFrame         Vanguard      Anchor Bay
 (90% owned)         (85% owned)
                    (82%owned)              (62% owned)      (12.5% owned)   (100% owned)

     Starpoint                                                                 Thomas The
                      The Simpsons                                           Thomas The Tank
     Academy                                     Barbie          Valiant       Tank Engine

  Monster Monster
      Trucks          King Of The Hill         Spider-Man                        Crunch

  Happily N’Ever
                     X-Men: Evolutions        Alien Legion                      Halloween

    Hip Hop &                                  Tony Hawks
                     Tripping The Rift                                          Evil Dead
    Hamilton                                     SHADE

IDT Entertainment

      IDT Entertainment Acquisitions

IDT Entertainment

      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 Media

              Innovative, Technologically
            Advanced Communications Platforms

IDT Media

            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

             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

            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

            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


            Communication Without Borders


   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 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


   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 Investment Breakout

   Economic Interest:                                                       Voting Interest:

    NTOP Holdings, LLC 38.8%                                                 NTOP Holdings, LLC 55.9%
    Other 61.2%                                                              Other 44.1%

    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.

    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.                                                                                                                           33
Financial Information

         Services provided by Winstar Communications L.L.C., an IDT Company

Financial Information

         Consolidated Balance Sheet

Financial Information

         Consolidated Income Statement

Financial Information

         Consolidated Quarterly Income Statement

Financial Information

         Telecom Quarterly Operating Statement

Financial Information

         IDT Solutions Quarterly Operating Statement

Financial Information

         Media Quarterly Operating Statement

Financial Information

         Entertainment Operating Statement

Financial Information

         Corporate Quarterly Operating Statement

Financial Information

         Net2Phone Quarterly Operating Statement

Financial Information

            Corporate Governance Independent Directors

                                           IDT Corporation
                                               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

        Telecom                Solutions                       Media &             Net2Phone
    Secretary William Cohen     Claire Calandra             Entertainment          Stephen Goldsmith
         Muni Figueres        Director Jacob Lew                Merv Adelson            Jesse King
          Vito Spitaleri         George Rupp                 Rev. Eric Cosentino    Harry McPherson
                                 Howard Safir                Rabbi Irwin Katsof     James R. Mellor
                                Herbert H. Tate                Roberto Muller      Marc J. Openheimer
                                                               Harvey Schiller       Dan Schulman
                                                            Governor Pete Wilson    Dr. Michael Weiss
                                                                                       Tony Werner

Financial Information

         Corporate Governance IDT Corp.

         Independent Directors
         J. Warren Blaker             Professor, Fairleigh Dickinson University
                                      Former CEO of University Optical Products, Inc.

         Senator Rudy Boschwitz       Chairman of the Advisory Committee of the Center for Global Food Issues
                                      Former U.S. Senator

         Saul K. Fenster              President of NJ Institute of Technology

         Governor James S. Gilmore Partner at Kelley Drye and Warren LLP, practicing homeland security, corporate and technology
                                   law Sixty-eighth Governor of the Commonwealth of Virginia

         The Honorable Jack Kemp      Former 9-term U.S. Congressman and former Secretary of Housing & Urban Development

         Michael J. Levitt            Chairman of Ilios Capital LLC
                                      Former partner, Hicks,Muse, Tate & Furst, Inc.
                                      Former Deputy Head of Investment Banking, Smith Barney

         Admiral William Owens        Vice Chairman and Co-Chief Executive Officer of Teledisic LLC
                                      Former Vice Chairman of the Joint Chiefs of Staff

         Governor William Weld        Principal, Leeds Weld & Co. Former Governor of Massachusetts
Financial Information

         Corporate Governance IDT Telecom

         Independent Directors
         Secretary William Cohen   Chairman and CEO of The Cohen Group
                                   Former Secretary of Defense and former 3-term U.S. Senator

         Muni Figueres             Writer on Economics and Politics
                                   Former External Relations Advisor of the Inter-American Development Bank
                                   Former Costa Rican Minster of Foreign Trade

         Vito Spitaleri            Financial Advisor
                                   Former Vice President and Treasurer of Mars, Inc.

Financial Information

         Corporate Governance IDT Solutions Division

         Independent Directors
         Claire Calandra           President of the CLC Group
                                   Former executive with TyCom Ltd and AT&T

         Director Jacob Lew        Executive Vice President and Professor of Public Administration at New
                                   York University
                                   Former Director of the U.S. Office of Management and Budget, and also a
                                   former member of the National Security Council

         George Rupp               President of the International Rescue Committee
                                   Prior President of Columbia and Rice Universities

         Howard Safir              Chairman and CEO of SafirRosetti
                                   Former New York City Police Commissioner

         Herbert H. Tate           Professor, N.J. Institute of Technology
                                   Former President of the N.J. Board of Public Utilities

Financial Information

         Corporate Governance Media & Entertainment

         Independent Directors
         Merv Adelson            Co-founder of Lorimar Telepictures, where he served as Chairman and CEO

         Rev. Eric Cosentino     Rector of the Episcopal Church of the Divine Love in Montrose, New York

         Rabbi Irwin Katsof      Executive Director of the Jerusalem Fund of Aish HaTorah
                                 Co-author with Larry King of Powerful Prayers and
                                 How to Get Your Prayers Answered

         Roberto Muller          President and CEO of The Muller Sports Group
                                 Former president of International
                                 Founder of PONY Sports and Leisure

         Harvey Schiller         Chairman and CEO of YankeeNets

         Governor Pete Wilson    Former Governor of the State of California
                                 Former U.S. Senator
                                 Former Mayor of San Diego

Financial Information

         Corporate Governance Net2Phone

         Independent Directors
         Stephen Goldsmith      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.

         Jesse King             COO, Daniels Fund. Former Operations Manager for Rockefeller Foundation's Next Generation
                                Leadership Program and The Philanthropy Workshop.

         Harry McPherson        Chairman, Verner, Liipfert, Bernhard, McPherson and Hand. Former Chairman of the U.S.
                                International Cultural and Trade Center Commission.

         James R. Mellor        Chairman, USEC, Inc. Former Chairman and CEO of General Dynamics.

         Marc J. Oppenheimer President and CEO of Crystallex International Corporation. Former Director of Trade and Merchant
                             Banking with Midlantic National Bank.

         Dan Schulman           CEO, Virgin Mobile USA, LLC. Former President and COO of Former President of the
                                AT&T Consumer Markets Division and of AT&T WorldNet Service.

         Dr. Michael Weiss      Associate Clinical Professor of Ophthalmology at Columbia College of Physicians and Surgeons and
                                Director of Uveitis Service at the Edward S. Harkness Eye Institute.

         Tony Werner            Chief Technology Officer, Liberty Media. Former CEO of Aurora Networks & CTO for AT&T broadband.     49

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