UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): February 1, 2001 USA NETWORKS, INC. (Exact Name of Registration business as Specified in Its Charter) Delaware 0-20570 59-2712887 (State or other Jurisdiction (Commission File (I.R.S. Employer of incorporation) Number) Identification Number) 152 West 57th Street, New York, New York 10019 (Address, including zip code, of Principal Executive Offices) (212) 314-7300 (Registrant's telephone number including area code)
Item 7(c). Exhibits. 99.1 Press Release dated February 1, 2001 99.2 Forward-Looking Financial Information 99.3 Supplemental Information Item 9. Regulation FD Disclosure On February 1, 2001, the Registrant issued a press release announcing its results for the quarter ended December 31, 2000. The full text of this press release, appearing in Exhibit 99.1 hereto, the forward-looking financial information, appearing in Exhibit 99.2 hereto, and the supplemental information, appearing in Exhibit 99.3 hereto, are furnished and not filed pursuant to Regulation FD. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: February 1, 2001 USA NETWORKS, INC. By: /s/ Julius Genachowski ------------------------------------------ Name: Julius Genachowski Title: Senior Vice President and General Counsel
EXHIBIT INDEX 99.1 Press Release dated February 1, 2001 99.2 Forward-Looking Financial Information 99.3 Supplemental Information
Exhibit 99.1 [GRAPHIC OMITTED] USA NETWORKS INC FOR IMMEDIATE RELEASE FEBRUARY 1, 2001 16% GROWTH IN Q4 AND 25% GROWTH IN 2000 AT USAI BEST-EVER EBITDA QUARTER FOR USA NETWORK, SCI FI, HSN AND HRN 26% AVERAGE EBITDA GROWTH FOR OPERATING BUSINESSES DURING COMPANY'S FIRST 5 YEARS NEW YORK, February 1, 2001 - USA Networks, Inc. (NASDAQ: USAI) announced today its financial results for the quarter and year ended December 31, 2000. On a pro forma comparative basis from its operating businesses, USAi generated 16% higher EBITDA on 22% higher revenue in the fourth quarter, and 25% higher EBITDA on 23% higher revenue for the full year. Recent operating highlights include: USA NETWORK had its best quarter in history, growing EBITDA to $105.6 million. o Counter-programming helped increase USA's ratings sequentially each month of the quarter. Since October, USA's primetime is up 27% to an average 1.9 rating in January. o Delivery of targeted adults 25-54 is up 25% in Early Prime for the recent period. JAG, the highest-rated non-kids stripped series on cable, is up 13%. WALKER, TEXAS RANGER has improved the 6pm time period by 71%. o Female-targeted movies have increased delivery to women 25-54 by 77% on Saturday afternoons. o USA's original movies averaged a 3.5 rating in 2000, best among all cable networks. o New programs in 2001 will include Mark Burnett's ECO-CHALLENGE: BORNEO and COMBAT MISSIONS. SCI FI had its best quarter in history, growing EBITDA to $30.2 million. o For the first time in its eight years, SCI FI ended the year as a top-10 cable network in primetime. o Original programming lifted SCI FI's average primetime delivery by 12% in Q4, matching its record rating of 0.9. o December was SCI FI's all-time best month, with an average 1.1 rating and delivery of 760,000 households. o The epic miniseries DUNE was the most-watched program in SCI FI history, averaging a 4.4 rating and 2.9 million households, double the network's previous record. o SCI FI is the #1 provider of original scripted series in cable primetime, and has a higher concentration of adult viewers 25-54 than any other network on television. STUDIOS USA had its best Q4 in history, growing net EBITDA to $15.4 million. o Among viewers 18-49: LAW & ORDER is the season's #1 show on Wednesday, spin-off LAW & ORDER: SVU is #1 on Friday, and ARREST & TRIAL is the #1 new first-run series. ARREST & TRIAL'S ratings are up 25% since its October premiere. o THE DISTRICT is the #1 program in Saturday primetime and among CBS's top performing new shows. o MAURY is up 16% since '98, more than any other talk show, and is delivering its highest ratings in four years. o Studios USA is the #3 producer of primetime and first-run syndicated programming, including 2 of the top 4 talk shows.
HSN had its best quarter in history, growing U.S. EBITDA to $74.5 million and Germany EBITDA to $9.0 million. o HSN's U.S. revenue increased by 16% to $462.1 million. HSN TV added 650,000 new customers in Q4, 13% more than the year-ago period, and HSN.com nearly doubled its customer base during Q4, adding 115,000 new buyers. o With virtually no incremental customer acquisition costs, HSN is expanding its customer base and driving incremental sales across multiple channels. 38% of HSN.com's customers are new to HSN, and those who shop both on air and online spend 25% more than they had on HSN TV alone. HSN.com's $21 million in sales was ten times Q4 99. o Leveraging its global merchandising expertise and infrastructure, HSN launched the first GLOBAL TODAY'S SPECIAL across every HSN household in the U.S., Germany, France / Belgium, Japan, and China. More than 10,000 units of exclusively designed jewelry sold out simultaneously around the world. o HSN shipped 33.4 million units during the year and 9.2 million during the fourth quarter, including a record 220,000 packages in a single day. 99.9% of customer's orders were delivered on time during the holidays. o More than 80% of HSN's products are exclusive and cannot be found anywhere else. o HSN is the world's #1 distributed television retailer, reaching 141 million households. HOTEL RESERVATIONS NETWORK had its best quarter in history, growing EBITDA to $17.6 million in Q4. o HRN expanded into 14 new markets, added 800 new web affiliates, and sold 699,900 room nights during Q4. o HRN is one of the most profitable independent Internet companies, earning $52.6 million in EBITDA in 2000. o HRN is the Internet's #1 provider of discount hotel accommodations worldwide. TICKETMASTER generated ticketing EBITDA of $24.4 million before non-recurring merger charges. o Ticketmaster Online accounted for 26.2% of the tickets sold by Ticketmaster, versus 18.4% in Q4 1999. o Ticketmaster is the world's #1 ticketing service and Ticketmaster.com was the #2 U.S. Web retailer in 2000. PRECISION RESPONSE had its best Q4 in history, growing EBITDA to $11.0 million. PRC's new clients added during Q4 included Chase Metlife, AT&T Customer Care, and AOL. PRC is a world leader in teleservices and integrated customer care. USA FILMS' TRAFFIC was named film of the year by New York Film Critics Circle and combined with NURSE BETTY for 3 Golden Globes. NEW YORK YANKEES WORLD SERIES 2000 became the best selling sports video ever for USA Home Entertainment in Q4. CROSS-COMPANY highlights include: o ECS's Short Shopping contextual direct selling spots generated merchandise sales of $450,000 immediately following the final World Series game on Fox, and $320,000 after the two NFL Conference Championship games. o ECS has announced long-term e-commerce and services partnerships with AOL's Turner Sports Interactive to create and manage NASCAR.com, and with CBS SportsLine.com to operate the sports media company's online store. o Studios USA, the pioneer in dual-platforming, has nearly doubled SCI FI's rating for INVISIBLE MAN through first-run syndication. For fall `01, Studios has already cleared 80% in syndication for SCI FI's CROSSING OVER WITH JOHN EDWARD. o TMCS has become Hotel Reservation Network's 7th largest Web affiliate. One year ago, TMCS did not rank among HRN's top 150 affiliates.
FINANCIAL RESULTS On a comparative pro forma basis, USAi reported the following, excluding discontinued operations: ACTUAL PRO FORMA Q4 00 Q4 99 GROWTH ----- ----- ------ ($ IN MILLIONS) REVENUES - OPERATING BUSINESSES Cable and studios ..................... $ 424.8 $ 349.7 21% (a) Electronic retailing - U.S. ........... 462.1 397.7 16% Electronic retailing - Germany ........ 74.0 50.5 46% Ticketing ............................. 122.7 118.1 4% (c) Hotel reservations .................... 100.0 53.4 87% Teleservices .......................... 72.1 62.6 15% ---------- ---------- -- SUB-TOTAL - OPERATING ............. 1,255.6 1,032.0 22% German DM exchange rate fluctuation (f) (11.8) -- REVENUES - EMERGING BUSINESSES Citysearch, Match.com, and related .... 21.2 14.0 Styleclick ............................ 4.8 8.5 Electronic Commerce Solutions ......... 8.7 5.8 HSN - other international ............. 9.4 2.7 USA Films ............................. 20.5 25.1 Trio, NWI, SCIFI.com, USA Network.com . 7.5 0.5 ---------- ---------- SUB-TOTAL - EMERGING .............. 72.1 56.5 ---------- ---------- -- TOTAL ............................. $ 1,315.9 $ 1,088.5 21% ========== ========== == EBITDA - OPERATING BUSINESSES Cable and studios ..................... $ 151.1 $ 125.9 20% (b) Electronic retailing - U.S. ........... 74.5 74.3 0% (d) Electronic retailing - Germany ........ 9.0 7.0 28% Ticketing ............................. 24.4 25.4 (4%)(c) Hotel reservations .................... 17.6 8.7 102% Teleservices .......................... 11.0 9.8 13% Corporate and other ................... (10.0) (10.7) ---------- ---------- -- SUB-TOTAL - OPERATING ............. 277.7 240.4 16% German DM exchange rate fluctuation (f) (1.5) -- Nonrecurring charges (e) .............. (4.1) -- EBITDA - EMERGING BUSINESSES Citysearch, Match.com, and related .... (11.4) (20.4) Styleclick ............................ (8.2) (18.4) Electronic Commerce Solutions ......... (8.5) (3.2) HSN - other international ............. (5.0) (0.5) USA Films ............................. (0.6) 4.5 Trio, NWI, SCIFI.com, USA Network.com . (2.5) (1.1) ---------- ---------- SUB-TOTAL - EMERGING .............. (36.2) (39.1) ---------- ---------- -- TOTAL ............................. $ 236.0 $ 201.3 17% ========== ========== == o Excludes results from USA Broadcasting, the sale of which to Univision was announced in December, 2000. o Presented as if the acquisitions of Precision Response and Styleclick and the consolidation of HOT Germany had occurred at the beginning of the periods presented. o EBITDA is defined as net income plus, (1) provision for income taxes, (2) minority interest, (3) interest income and expense, (4) depreciation and amortization, (5) amortization of cable distribution fees ($11.0 million and $7.5 million, respectively), and (6) amortization of non-cash distribution and marketing expense. (a) USA Network revenue decreased by 1% due to the weak advertising market. (b) SCI FI EBITDA increased by only 1% primarily due to marketing expenses in connection with the mini-series event DUNE. (c) Ticketing growth was limited due to strong comparable results from millennium-related events in 1999 and costs related to TicketWeb and 2b Technology in 2000. (d) HSN's EBITDA growth was impacted by higher spending to enhance the customer experience in Q4, and by $4 million in non-recurring credits taken in Q4 99. (e) Represents one-time expenses related to the merger between Ticketmaster and Ticketmaster Online-Citysearch. (f) In order to present comparable results for Germany, the results have been translated from Deutschemarks to U.S. dollars at the 1999 exchange rate.
BUSINESS MIX 64% of the company's Q4 revenue came from direct consumer transactions, 21% was derived from production and affiliate fees, and 15% was advertising-related. On a comparative pro forma basis for its three organizational units, USAi reported the following for its operating business: ACTUAL PRO FORMA Q4 00 Q4 99 GROWTH MIX ----- ----- ------ --- ($ IN MILLIONS) REVENUES - OPERATING BUSINESSES Entertainment ............... $ 424.8 $ 349.7 21% 34% Electronic retailing ........ 524.2 448.2 17% 42% Information and Services .... 294.8 234.1 26% 24% ---------- ---------- -- --- TOTAL ................... $ 1,243.8 $ 1,032.0 21% 100% ========== ========== == === EBITDA - OPERATING BUSINESSES Entertainment ............... $ 151.1 $ 125.9 20% 55% Electronic retailing ........ 82.1 81.3 1% 30% Information and Services .... 51.5 43.9 17% 19% Corporate and other ......... (10.0) (10.7) (4%) ---------- ---------- -- --- TOTAL ................... $ 274.7 $ 240.4 14% 100% ======== ======== === === CASH NET INCOME AND EARNINGS PER SHARE FROM CONTINUING OPERATIONS ACTUAL ADJUSTED* PRO FORMA Q4 00 Q4 00 Q4 99 ----- ----- ----- Fully converted cash net income per share 0.12 0.15 0.12 Fully converted earnings per share ...... 0.00 0.03 0.02 Cash net income per share .............. 0.16 0.21 0.09 Basic loss per share ................... (0.08) (0.03) (0.01) *Excluding non-recurring merger and other costs ($4 million, pre-tax) and one-time non-operating losses ($34.8 million, pre-tax). Due to regulatory restrictions, Universal and Liberty own a significant portion of their interests in USAi through USAi subsidiaries. This structure causes USAi to record net losses in situations where net income would otherwise have been recorded if their ownership were entirely in USAi common stock. Fully converted earnings and fully converted cash net income reflect the impact as if all shares exchangeable into common stock had been exchanged during the period. Fully converted cash net income per share, fully converted earnings per share, and basic loss per share were impacted by higher losses in unconsolidated investments, higher depreciation charges, and higher non-cash marketing expenses. Fully converted earnings per share and basic loss per share were also impacted by higher amortization of goodwill in connection with various acquisitions.
OPERATING METRICS USA CABLE / STUDIOS USA Q4 00 Q4 99 GROWTH ----- ----- ------ Revenue ($ IN MILLIONS): USA Network .......................... $ 201.4 $ 202.7 (1%)(a) SCI FI ............................... 78.4 63.8 23% Studios, net ......................... 144.9 83.2 74% -------- -------- -- Total ................................ $ 424.8 $ 349.7 21% ======== ======== == EBITDA ($ IN MILLIONS): USA Network .......................... $ 105.6 $ 87.0 21% SCI FI ............................... 30.2 30.0 1% (b) Studios, net ......................... 15.4 9.0 70% -------- -------- -- Total ............................... $ 151.1 $ 125.9 20% ======== ======== == Households (IN MILLIONS @ 12/31): USA Network .......................... 79.9 77.2 4% SCI FI ............................... 66.7 59.7 12% Advertising revenue / affiliate revenue mix: USA Network ............................. 55:45 58:42 SCI FI ....... 67:33 62:38 (a) 1% decrease attributable to the weak advertising market. (b) Only 1% increase primarily due to marketing expenses in connection with the mini-series event DUNE. HSN - U.S. Q4 00 Q4 99 GROWTH ----- ----- ------ On air services: Units shipped (IN MILLIONS) ................... 9.2 8.7 6% Gross profit %* ............................ 32.7% 34.0% Return rate ................................ 19.2% 19.1% U.S. cable / DBS homes (IN MILLIONS @ 12/31) 65.6 60.6 8% U.S. total homes (IN MILLIONS @ 12/31) ..... 76.8 73.7 4% Product mix: Homegoods ............................... 55% 54% Jewelry ................................. 25% 23% Health / Beauty ......................... 8% 10% Apparel / Accessories ................... 12% 13% *In connection with accounting regulations effective in Q3 00, HSN reclassified shipping and handling revenue from cost of goods sold to revenue. This reclassification had no effect on HSN's reported EBITDA and no significant effect on revenue growth.
HSN - INTERNATIONAL TV HOUSEHOLDS -------------------- LIVE HOURS 12/00 12/99 GROWTH DAILY 12/00 STAKE ----- ----- ------ ----------- ----- Consolidated Services: (IN MILLIONS @ 12/31) HOT Germany (includes Austria and Switzerland) 29.3 26.7 2.6 16 hours 42% Home Shopping en Espanol (U.S.) .............. 5.1 2.7 2.4 12 hours 100% Unconsolidated Services: TVSN (China) ................................. 18.9 -- 18.9 5 hours 21% Shop Channel (Japan) ......................... 9.2 6.8 2.4 12 hours 30% HOT LeGrand Magasin (France and Belgium) ..... 1.4 -- 1.4 8 hours 47% TICKETING Q4 00 Q4 99 GROWTH ----- ----- ------ Number of tickets sold (IN MILLIONS) ......... 18.7 18.4 2% Gross value of tickets sold (IN MILLIONS) .... $781.8 $759.3 3% Revenue per ticket - combined ................ $ 5.87 $ 5.62 4% Revenue per ticket - online .................. $ 6.75 $ 6.46 5% Share of tickets sold online (U.S., Canada, U.K.) 26.2% 18.4% Top-selling events in Q4 `00.................. Backstreet Boys, WWF, New York Yankees, Radio City Christmas Spectacular, Nutcracker HOTEL RESERVATIONS NETWORK Q4 00 Q4 99 GROWTH ----- ----- ------ Hotel room nights sold ................... 699,900 383,000 83% Portion of total revenues generated online 96% 87% Affiliate revenues as % of total revenue . 56% 43% Cities served (AS OF 12/31) .............. 97 40 143% SHARES OUTSTANDING, MARKET CAPITALIZATION, AND NET DEBT As of January 29, 2001, USAi had outstanding 729.7 million shares, including exchangeable securities, with an aggregate market capitalization of approximately $14.2 billion. USAi's net debt, including that of its public subsidiaries, offset by an advance receivable to Universal, was approximately $160 million as of December 31, 2000. Net debt is expected to be reduced further using net cash proceeds from the sale of USA Broadcasting to Univision.
STATEMENTS OF OPERATIONS The actual quarterly results are not comparable due to: 1) TMCS's acquisition of Sidewalk.com, Match.Com, One and Only Network, 2b Technology, and TicketWeb; 2) the consolidation of Home Order Television as of January 1, 2000; 3) the acquisition of Precision Response in April, 2000; and 4) the acquisition of Styleclick.com in August 2000. IMPORTANT DISCLOSURES This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include the information relating to possible or assumed future results of operations of USAi, including those preceded by, followed by or that include the words "believes," "projects," "expects," "anticipates" or similar expressions. These statements reflect the current views of USAi with respect to future events. The following important factors, in addition to those described in USAi's filings with the Securities and Exchange Commission, could affect the future results of USAi, and could cause those results to differ materially from those expressed in the forward-looking statements: material adverse changes in economic conditions in the markets served by our businesses; future regulatory actions and conditions in our businesses' operating areas; competition from others; successful integration of our divisions, including recently acquired businesses; product demand and market acceptance; the ability to protect proprietary information and technology or to obtain necessary licenses on commercially reasonable terms; and obtaining and retaining key executives and employees. These forward-looking statements are made as of the date of this press release, and USAi undertakes no obligation to update or revise them, whether as a result of new information, future events or any other reason. The financial, statistical and other information contained in this press release and its attachments is unaudited. USA Network and SCI FI ratings and household delivery data per NMR Galaxy Explorer for NHI defined periods versus comparable periods. Subscriber counts based on Nielsen People Meter Installed Sample, December `00 vs. `99. All ratings within each network's coverage area. Studios' syndicated program ratings per NSS (GAA % where applicable), and broadcast network data per NTI for comparable time periods. TMCS and competitor unique users and national reach data per Media Metrix (Digital Media Universe) Key Measures Report, December 2000. Ticketmaster.com Web retailer ranking is among U.S. home users based on average monthly transactions per PC Data Online for the period stated. Subject to qualifications. USA Networks, Inc. (NASDAQ: USAI) is focused on the new convergence of entertainment, information and direct selling. Formed in February 1998, the Company is organized into three distinct but interrelated units which include the following assets: USA Entertainment's USA Network, SCI FI Channel, TRIO, NWI, Studios USA, USA Films, and Interactive Entertainment; USA Electronic Retailing's HSN, HSN International, HSN Interactive; and USA Information and Services' Ticketmaster, (NASDAQ: TMCS), Citysearch,com, Match.com, Hotel Reservations Network (NASDAQ: ROOM), Electronic Commerce Solutions, Styleclick, Inc. (NASDAQ: IBUY) and Precision Response Corporation. CONTACTS: MEDIA RELATIONS: INVESTOR RELATIONS: Adrienne Becker Roger Clark 212-314-7254 212-314-7400
USA NETWORKS, INC. AND SUBSIDIARIES BUSINESS SEGMENT INFORMATION - CONTINUING OPERATIONS UNAUDITED ($ IN THOUSANDS) THREE MONTHS ENDED DECEMBER 31, ACTUAL PRO FORMA (a) ACTUAL ------------------ --------------------- --------------------- 2000 1999 1999 ------------------ --------------------- --------------------- REVENUES - OPERATING BUSINESSES Cable and studios $ 424,776 $ 349,651 $ 349,651 Electronic retailing - U.S. 462,069 397,711 397,711 Electronic retailing - Germany 73,968 50,519 - Ticketing 122,656 118,128 118,128 Hotel reservations 100,014 53,443 53,443 Teleservices 72,097 62,576 - ------------------ --------------------- --------------------- SUB-TOTAL 1,255,580 1,032,028 918,933 German DM exchange rate fluctuation (d) (11,814) - - REVENUES - EMERGING BUSINESSES Citysearch, Match.com and related 21,236 13,967 13,967 Styleclick 4,753 8,495 7,473 Electronic Commerce Solutions 8,659 5,769 5,769 HSN - other international 9,439 2,650 2,650 USA Films 20,536 25,079 25,079 Trio, NWI, SCIFI.com, USA Network.com 7,470 495 495 ------------------ --------------------- --------------------- SUB-TOTAL 72,093 56,455 55,433 ------------------ --------------------- --------------------- TOTAL $ 1,315,859 $ 1,088,483 $ 974,366 ================== ===================== ===================== EBITDA - OPERATING BUSINESSES (b) Cable and studios $ 151,102 $ 125,887 $ 125,887 Electronic retailing - U.S. 74,530 74,261 74,261 Electronic retailing - Germany 9,001 7,006 - Ticketing 24,420 25,419 25,419 Hotel reservations 17,637 8,715 8,715 Teleservices 11,048 9,790 - Corporate and other (9,991) (10,687) (10,687) ------------------ --------------------- --------------------- SUB-TOTAL 277,747 240,391 223,595 German DM exchange rate fluctuation (d) (1,454) - - Nonrecurring charges (c) (4,103) - - EBITDA - EMERGING BUSINESSES Citysearch, Match.com and related (11,390) (20,426) (20,426) Styleclick (8,246) (18,400) (13,230) Electronic Commerce Solutions (8,508) (3,180) (3,180) HSN - other international (4,950) (531) (531) USA Films (621) 4,534 4,534 Trio, NWI, SCIFI.com, USA Network.com (2,518) (1,104) (1,104) ------------------ --------------------- --------------------- SUB-TOTAL (36,233) (39,107) (33,937) ------------------ --------------------- --------------------- TOTAL $ 235,957 $ 201,284 $ 189,658 ================== ===================== ===================== (a) Presented as if the acquisitions of Styleclick and Precision Response Corp. had occurred at the beginning of the period presented. (b) EBITDA is defined as net income plus, (1) provision for income taxes, (2) interest income and expense, (3) depreciation and amortization, (4) amortization of cable distribution fees of $10,987 and $7,466, (5) amortization of non-cash distribution and marketing expense, and (6) minority interest. (c) Represents one-time expenses primarily related to the merger between Ticketmaster and Ticketmaster Online-Citysearch. (d) In order to present comparable results for Germany, the results have been translated from Deutschemarks to U.S. dollars at the 1999 exchange rate.
USA NETWORKS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED ($ IN THOUSANDS, EXCEPT PER SHARE DATA) THREE MONTHS ENDED DECEMBER 31, ACTUAL (b) PRO FORMA (a)(b) ACTUAL (b) ----------------- -------------------------------------- 2000 1999 1999 ----------------- --------------------- ---------------- Revenues, net $ 1,315,859 $ 1,088,483 $ 974,366 Operating costs and expenses: Costs related to revenues 801,302 657,816 579,706 Other costs and expenses 278,600 229,383 205,002 Amortization of non cash distribution and marketing expense (c) 7,099 - - Amortization of cable distribution fees 10,987 7,466 7,466 Depreciation and amortization 178,078 131,082 100,167 ----------------- --------------------- ---------------- Total operating costs and expenses 1,276,066 1,025,747 892,341 ----------------- --------------------- ---------------- Operating income 39,793 62,736 82,025 Interest expense, net (10,263) (10,831) (10,461) Other, net (18,063) 633 3,736 ----------------- --------------------- ---------------- (28,326) (10,198) (6,725) ----------------- --------------------- ---------------- Earnings from continuing operations before income taxes and minority interest 11,467 52,538 75,300 Income tax expense (26,346) (28,129) (32,191) Minority interest (14,360) (28,752) (46,715) ----------------- --------------------- ---------------- ----------------- --------------------- ---------------- Net loss from continuing operations (e) $ (29,239) $ (4,343) $ (3,606) ================= ===================== ================ Net loss from continuing operations, excluding one-time charges and non-operating gains $ (11,170) $ (4,343) $ (3,606) ================= ===================== ================ Fully converted net earnings from continuing operations, excluding one-time charges and non-operating gains $ 22,120 $ 17,638 $ 36,371 ================= ===================== ================ Weighted average diluted shares 368,264 360,698 336,353 ================= ===================== ================ Weighted average fully converted shares 752,603 763,702 739,357 ================= ===================== ================ EPS FROM CONTINUING OPERATIONS: Basic loss per share $ (.08) $ (.01) $ (.01) ================= ===================== ================ Basic loss per share, excluding one-time charges and non-operating gains $ (.03) $ (.01) $ (.01) ================= ===================== ================ Fully converted earnings per share, excluding one-time charges $ .03 $ .02 $ .05 ================= ===================== ================ EBITDA (d) $ 235,957 $ 201,284 $ 189,658 ================= ===================== ================ (a) Presented as if the acquisitions of Styleclick and Precision Response Corp. had occurred at the beginning of the period presented. (b) Earnings (loss) per common share data and shares outstanding retroactively reflect the impact of two-for-one common stock and Class B common stock split paid on February 24, 2000. (c) Amortization of warrants and stock issued in exchange for distribution and marketing services. (d) EBITDA is defined as net income plus, (1) provision for income taxes, (2) interest income and expense, (3) depreciation and amortization, (4) amortization of cable distribution fees of $10,987 and $7,466, (5) amortization of non-cash distribution and marketing expense, and (6) minority interest. (e) Excludes the results of USA Broadcasting, the sale of which to Univision was announced in December 2000. The results for the discontinued operations were a loss of $17,016 and $14,172 in 2000 and 1999, respectively.
USA NETWORKS, INC. AND SUBSIDIARIES EPS AND CASH NET INCOME RECONCILIATION INFORMATION - CONTINUING OPERATIONS UNAUDITED ($ IN THOUSANDS, EXCEPT PER SHARE DATA) THREE MONTHS ENDED DECEMBER 31, ACTUAL(b) PRO FORMA(a)(b) ACTUAL(b) --------------- ----------------- ----------- 2000 1999 1999 --------------- ----------------- ----------- BASIC LOSS PER SHARE: Net loss ($29,239) ($4,343) ($3,606) Impact of unusual items, net of tax and minority interest (c) 18,069 - - --------------- ------------------- ------------- BASIC LOSS, EXCLUDING UNUSUAL ITEMS (C) $ (11,170) $ (4,343) $ (3,606) =============== =================== ============= Weighted average basic shares 368,264 360,698 336,353 =============== =================== ============= Basic loss per share: $ (.08) $ (.01) $ (.01) =============== =================== ============= Basic loss per share excluding unusual items (c) $ (.03) $ (.01) $ (.01) =============== =================== ============= CASH NET INCOME: Net loss $ (29,239) $ (4,343) $ (3,606) Impact of goodwill amortization, net of tax and minority interest 88,839 37,512 53,084 --------------- -------------------- ------------ CASH NET INCOME 59,600 33,169 49,478 Impact of unusual items, net of tax and minority interest (c) 18,069 - - --------------- --------------------- ----------- CASH NET INCOME, EXCLUDING UNUSUAL ITEMS (C) $ 77,669 $ 33,169 $ 49,478 =============== ====================== ========== Weighted average basic shares 368,264 360,698 336,353 =============== ====================== ========== Cash net income per share $ .16 $ .09 $ .15 =============== ====================== ========== Cash net income per share, excluding unusual items (c) $ .21 $ .09 $ .15 =============== ====================== ========== FULLY CONVERTED NET EARNINGS: Net loss ($29,239) ($4,343) ($3,606) Impact of minority interest, net of tax 31,385 21,981 39,977 --------------- ---------------------- ---------- FULLY CONVERTED NET EARNINGS 2,146 17,638 36,371 Impact of unusual items, net of tax and minority interest (c) 19,974 - - --------------- ---------------------- ---------- FULLY CONVERTED CASH EARNINGS, EXCLUDING UNUSUAL ITEMS (C) $ 22,120 $ 17,638 $ 36,371 =============== ====================== ========== Weighted average fully converted shares 752,603 763,702 739,357 =============== ====================== ========== Fully converted earnings per share $ - $ .02 $ .05 =============== ====================== ========== Fully converted earnings per share, excluding unusual items (c) $ .03 $ .02 $ .05 =============== ====================== ========== FULLY CONVERTED CASH NET INCOME: Net loss $ (29,239) $ (4,343) $ (3,606) Impact of minority interest, net of tax 19,974 - - Impact of goodwill amortization, net of tax and minority interest 100,250 96,005 93,061 --------------- ---------------------- ---------- FULLY CONVERTED CASH NET INCOME 90,985 91,662 89,455 Impact of unusual items, net of tax and minority interest (c) 19,974 - - --------------- ---------------------- ---------- FULLY CONVERTED CASH NET INCOME, EXCLUDING UNUSUAL ITEMS (C) $ 110,959 $ 91,662 $ 89,455 =============== ====================== ========== Weighted average fully converted shares 752,603 763,702 739,357 =============== ====================== ========== Fully converted cash net income per share $ .12 $ .12 $ .12 =============== ====================== ========== Fully converted cash net income per share, excluding unusual items (c) $ .15 $ .12 $ .12 =============== ====================== ========== (a) Presented as if the acquisitions of Styleclick and Precision Response Corp. had occurred at the beginning of the period presented. (b) Earnings (loss) per common share data and shares outstanding retroactively reflect the impact of two-for-one common stock and Class B common stock split paid on February 24, 2000. (c) Excludes one time charges and non-operating gains
USA NETWORKS, INC. AND SUBSIDIARIES BUSINESS SEGMENT INFORMATION - CONTINUING OPERATIONS UNAUDITED ($ IN THOUSANDS) TWELVE MONTHS ENDED DECEMBER 31, PRO FORMA(a) ACTUAL PRO FORMA(a) ACTUAL ------------ ------------- ------------ ------------ 2000 2000 1999 1999 ------------ -------------- ------------ ------------ REVENUES - OPERATING BUSINESSES Cable and studios $ 1,530,464 $ 1,530,464 $ 1,304,683 $ 1,304,683 Electronic retailing - U.S. 1,533,272 1,533,272 1,332,903 1,332,903 Electronic retailing - Germany 259,645 259,645 166,735 - Ticketing 518,565 518,565 442,742 442,742 Hotel reservations 327,977 327,977 161,814 124,113 Teleservices 282,120 212,471 215,920 - Other - - 6,894 6,894 -------------- -------------- ------------ ------------ SUB-TOTAL 4,452,043 4,382,394 3,631,691 3,211,335 German DM exchange rate fluctuation (d) (35,271) (35,271) - - REVENUES - EMERGING BUSINESSES Citysearch, Match.com and related 80,012 80,012 36,329 36,329 Styleclick 24,197 22,308 35,136 28,962 Electronic Commerce Solutions 24,293 24,293 20,240 20,240 HSN - other international 21,340 21,340 8,925 8,925 USA Films 86,084 86,084 82,053 64,766 Trio, NWI, SCIFI.com, USA Network.com 20,332 20,332 1,188 1,188 -------------- -------------- ------------ ------------ SUB-TOTAL 256,258 254,369 183,871 160,410 -------------- -------------- ------------ ------------ TOTAL $ 4,673,030 $ 4,601,492 $ 3,815,562 $ 3,371,745 ============== ============== ============ ============ EBITDA - OPERATING BUSINESSES (b) Cable and studios $ 547,682 $ 547,682 $ 433,912 $ 433,912 Electronic retailing - U.S. 236,495 236,495 214,669 214,669 Electronic retailing - Germany 28,199 28,199 16,270 - Ticketing 100,026 100,026 93,349 93,349 Hotel reservations 52,641 52,641 24,175 18,891 Teleservices 43,556 34,095 30,375 - Corporate and other (35,069) (35,069) (36,141) (36,227) -------------- -------------- ------------ ------------ SUB-TOTAL 973,530 964,069 776,609 724,594 German DM exchange rate fluctuation (d) (3,939) (3,939) - - Nonrecurring charges (c) (15,703) (15,703) - - EBITDA - EMERGING BUSINESSES Citysearch, Match.com and related (59,164) (59,164) (60,844) (60,844) Styleclick (42,839) (31,874) (53,555) (39,240) Electronic Commerce Solutions (28,355) (28,355) (2,412) (2,412) HSN - other international (13,520) (13,520) (4,506) (4,506) USA Films (6,592) (6,592) 6,384 6,497 Trio, NWI, SCIFI.com, USA Network.com (7,120) (7,120) (2,989) (2,989) -------------- -------------- ------------ ------------ SUB-TOTAL (157,590) (146,625) (117,922) (103,494) -------------- -------------- ------------ ------------ -------------- -------------- ------------ ------------ TOTAL $ 796,298 $ 797,802 $ 658,687 $ 621,100 ============== ============== ============ ============ (a) Presented as if the acquisitions of Styleclick, Precision Response Corp., Hotel Reservations Network and October Films and the consolidation of HOT Germany had occurred at the beginning of the period presented. (b) EBITDA is defined as net income plus, (1) provision for income taxes, (2) interest income and expense, (3) depreciation and amortization, (4) amortization of cable distribution fees of $36,322 and $26,680, (5) amortization of non-cash distribution and marketing expense, and (6) minority interest. (c) Represents one -time expenses primarily related to the merger between Ticketmaster and Ticketmaster Online-Citysearch; and as part of a resignation agreement with a senior executive, the company recorded one-time compensation expense of $11,600 related to a consulting arrangement. (d) In order to present comparable results for Germany, the results have been translated from Deutschemarks to U.S. dollars at the 1999 exchange rate.
USA NETWORKS, INC. AND SUBSIDIARIES EPS AND CASH NET INCOME RECONCILIATION INFORMATION - CONTINUING OPERATIONS UNAUDITED ($ IN THOUSANDS, EXCEPT PER SHARE DATA) TWELVE MONTHS ENDED DECEMBER 31, PRO FORMA(a)(b) ACTUAL(b) PRO FORMA(a)(b) ACTUAL(b) --------------- ------------ --------------- ---------- 2000 2000 1999 1999 ----------- ------------ ----------- --------- BASIC LOSS PER SHARE: Net (loss) earnings ($ 75,908) ($ 55,530) ($ 20,515) $ 16,515 Impact of unusual items, net of tax and minority interest (c) 6,210 6,210 (19,765) (19,765) ----------- ------------ ----------- --------- BASIC LOSS, EXCLUDING UNUSUAL ITEMS (C) $ (69,698) $ (49,320) $ (40,280) $ (3,250) =========== ============ =========== ========= Weighted average basic shares 366,045 359,688 352,643 327,816 =========== ============ =========== ========= Weighted average diluted shares 366,045 359,688 352,643 367,927 =========== ============ =========== ========= =========== ============ =========== ========= Basic (loss) earnings per share: $ (.21) $ (.15) $ (.06) $ .05 =========== ============ =========== ========= Diluted (loss) earnings per share: $ (.21) $ (.15) $ (.06) $ .04 =========== ============ =========== ========= Basic loss per share excluding unusual items (c) $ (.19) $ (.14) $ (.11) $ (.01) =========== ============ =========== ========= FULLY CONVERTED NET EARNINGS: Net (loss) earnings ($ 75,908) ($ 55,530) ($ 20,515) $ 16,515 Impact of minority interest, net of tax 115,559 135,392 111,043 142,222 ----------- ------------ ----------- --------- ----------- ------------ ----------- --------- FULLY CONVERTED NET EARNINGS 39,651 79,862 90,528 158,737 Impact of unusual items, net of tax and minority interest (c) (18,327) (18,327) (52,039) (52,039) ----------- ------------ ----------- --------- ----------- ------------ ----------- --------- FULLY CONVERTED NET EARNINGS, EXCLUDING UNUSUAL ITEMS (C) $ 21,324 $ 61,535 $ 38,489 $ 106,698 =========== ============ =========== ========= Weighted average fully converted shares 747,403 747,403 745,808 720,981 =========== ============ =========== ========= Fully converted earnings per share $ .05 $ .11 $ .12 $ .22 =========== ============ =========== ========= Fully converted earnings per share, excluding unusual items (c) $ .03 $ .08 $ .05 $ .15 =========== ============ =========== ========= (a) Presented as if the acquisitions of Styleclick, Precision Response Corp., Hotel Reservations Network and October Films and the consolidation of HOT Germany had occurred at the beginning of the period presented. (b) Earnings (loss) per common share data and shares outstanding retroactively reflect the impact of two-for-one common stock and Class B common stock split paid on February 24, 2000. (c) Excludes one time charges and non-operating gains
USA NETWORKS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED ($ IN THOUSANDS, EXCEPT PER SHARE DATA) TWELVE MONTHS ENDED DECEMBER 31, FORMA(a)(b) ACTUAL(b) PRO FORMA(a)(b) ACTUAL(b) -------------------------------- --------------- -------------- 2000 2000 1999 1999 --------------- ---------------- --------------- -------------- Revenues, net $ 4,673,030 $ 4,601,492 $ 3,815,562 $ 3,371,745 Operating costs and expenses: Costs related to revenues 2,812,382 2,757,893 2,301,730 1,995,901 Other costs and expenses 1,064,350 1,045,797 855,145 754,744 Amortization of non cash distribution and marketing expense (c) 11,512 11,512 - - Amortization of cable distribution fees 36,322 36,322 26,680 26,680 Depreciation and amortization 597,142 548,048 466,561 324,506 --------------- ---------------- --------------- -------------- Total operating costs and expenses 4,521,708 4,399,572 3,650,116 3,101,831 --------------- ---------------- --------------- -------------- Operating income 151,322 201,920 165,446 269,914 Interest expense, net (34,958) (34,218) (50,195) (48,544) Gain on sale of securities - - 89,721 89,721 Other, net (e) 49,295 49,297 (4,897) 5,771 --------------- ---------------- --------------- -------------- 14,337 15,079 34,629 46,948 --------------- ---------------- --------------- -------------- Earnings from continuing operations before income taxes and minority interest 165,659 216,999 200,075 316,862 Income tax expense (113,027) (112,869) (83,922) (103,050) Minority interest (128,540) (159,660) (136,668) (197,297) --------------- ---------------- --------------- -------------- --------------- ---------------- --------------- -------------- Net loss from continuing operations (f) $ (75,908) $ (55,530) $ (20,515) $ 16,515 =============== ================ =============== ============== Net loss from continuing operations, excluding one-time charges and non-operating gains $ (69,698) $ (49,320) $ (40,280) $ (3,250) =============== ================ =============== ============== Fully converted net earnings from continuing operations, excluding one-time charges and non-operating gains $ 21,324 $ 61,535 $ 38,489 $ 106,698 =============== ================ =============== ============== Weighted average shares 366,045 359,688 352,643 327,816 =============== ================ =============== ============== Weighted average diluted shares 366,045 359,688 352,643 367,927 =============== ================ =============== ============== Weighted average fully converted shares 747,403 747,403 745,808 720,981 =============== ================ =============== ============== EPS FROM CONTINUING OPERATIONS: Basic (loss) earnings per share $ (.21) $ (.15) $ (.06) $ .05 =============== ================ =============== ============== Diluted (loss) earnings per share $ (.21) $ (.15) $ (.06) $ .04 =============== ================ =============== ============== Basic loss per share, excluding one-time charges and non-operating gains $ (.19) $ (.14) $ (.11) $ (.01) =============== ================ =============== ============== Fully converted earnings per share, excluding one-time charges and non-operating gains $ .03 $ .08 $ .05 $ .15 =============== ================ =============== ============== EBITDA (d) $ 796,298 $ 797,802 $ 658,687 $ 621,100 =============== ================ =============== ============== (a) Presented as if the acquisitions of Styleclick, Precision Response Corp., Hotel Reservations Network and October Films and the consolidation of HOT Germany had occurred at the beginning of the period presented. (b) Earnings (loss) per common share data and shares outstanding retroactively reflect the impact of two-for-one common stock and Class B common stock split paid on February 24, 2000. (c) Amortization of warrants and stock issued in exchange for distribution and marketing services. (d) EBITDA is defined as net income plus, (1) provision for income taxes, (2) interest income and expense, (3) depreciation and amortization, (4) amortization of cable distribution fees of $36,322 and $26,680, (5) amortization of non-cash distribution and marketing expense, and (6) minority interest. (e) Includes non-operating gain related to Styleclick merger of $104.6 million and non-operating losses related to equity investments of $46.1 million (f) Excludes the results of USA Broadcasting, the sale of which to Univision was announced in December 2000. The results for the discontinued operations were a loss of $58,423 and $44,146 in 2000 and 1999, respectively.
Exhibit 99.2 USA NETWORKS, INC. ($ IN MILLIONS) 2001 (a) Q1 '01 Q2 '01 Q3 '01 Q4 '01 2001 (a) ------------------ ------------------ ------------------- ------------------ ------------------- Guidance Growth Guidance Growth Guidance Growth Guidance Growth Guidance Growth --------- -------- --------- -------- --------- -------- --------- -------- --------- --------- (b, c, d) b e Revenue - operating $1,150 9% $1,220 13% $1,270 20% $1,435 14% $5,075 14% Revenue - emerging 75 17% 90 54% 100 63% 145 100% 410 60% --------- -------- --------- -------- --------- -------- --------- -------- --------- --------- Total Revenue $1,225 10% $1,310 15% $1,370 23% $1,580 20% $5,485 17% ========= ======== ========= ======== ========= ======== ========= ======== ========= ========= EBITDA - operating $ 262 10% $ 283 15% $ 265 25% $ 330 18% $1,140 17% EBITDA - emerging (42) -18% (38) 13% (30) 28% (15) 65% (125) 24% --------- -------- --------- -------- --------- -------- --------- -------- --------- --------- Total EBITDA $ 220 10% $ 245 29% $ 235 38% $ 315 36% $1,015 28% ========= ======== ========= ======== ========= ======== ========= ======== ========= ========= Basic EPS (0.15) (0.16) (0.18) (0.14) (0.61) Fully converted cash EPS 0.08 0.10 0.07 0.09 0.35 FREE CASH FLOW Estimated Guidance 2000 2001 -------- --------- EBITDA, net $ 791 $1,015 Capital expenditures (203) (160) Programming payments in excess of amortization (153) (90) Taxes, including distributions to LLC partners (102) (200) Cable distribution fees (79) (65) Interest (47) (35) Other, net (312)f (115) -------- --------- Total Free Cash Flow (105) 350 g ======== ========= FOOTNOTES a The Company's overall 2001 guidance is unchanged from its filing on October 26, 2000, except to remove guidance for USA Broadcasting, the sale of which was announced in December, 2000. Growth rates for total revenue and total EBITDA also account for non-recurring charges and German Deutschemark currency fluctuations recognized during 2000. b A weak advertising market is anticipated to continue for the first half of 2001, and is expected to have a greater impact on USA Network revenue than on SCI FI revenue. c HSN's EBITDA growth in Q1 '01 will be tempered by a one-time $4.7 million income credit recognized as the result of a lawsuit settlement in Q1 '00. d Ticketmaster's growth in Q1 will be impacted by costs related to the acquired operations of TicketWeb and 2b Technology, which are expected to be EBITDA profitable by the second half of 2001. e Studios USA Q3 revenue and EBITDA growth will be favorably impacted by the syndication sale of Law & Order to TNT. f Includes investments, acquisitions, changes in working capital, and other items in 2000. g 2001 free cash flow excludes the anticipated proceeds from the sale of USA Broadcasting. IMPORTANT This guidance reflects estimates that USAi is comfortable releasing to analysts and the public, and contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include the information relating to possible or assumed future results of operations of USAi. This guidance reflects the current views of USAi with respect to future events. The following important factors, in addition to those described in USAi's filings with the Securities and Exchange Commission, could affect the future results of USAi, and could cause those results to differ materially from those expressed in the forward-looking statements: material adverse changes in economic conditions in the markets served by our businesses; future regulatory actions and conditions in our businesses' operating areas; competition from others; successful integration of our divisions, including recently acquired businesses; product demand and market acceptance; the ability to protect proprietary information and technology or to obtain necessary licenses on commercially reasonable terms; and obtaining and retaining key executives and employees. These forward-looking statements are made as of the date hereof and USAi undertakes no obligation to update or revise them, whether as a result of new information, future events or any other reason. These statements do not include the potential impact of any mergers, acquisitions or other business combinations that may be completed in the future.
USA NETWORKS, INC. PRO FORMA SEGMENT RESULTS $ IN MILLIONS; ROUNDING DIFFERENCES MAY EXIST. UNAUDITED. ----------- -------------------------------------------------------- REVENUE 1998* 1999 ----------- -------------------------------------------------------- YE 12/31 Q1 Q2 Q3 Q4 YE 12/31 ----------- ------- ------- ------- ------- ------------- OPERATING BUSINESSES Cable and studios 1,243.0 331.5 316.4 307.1 349.7 1,304.7 Electronic retailing - U.S. 1,080.7 307.3 315.7 312.3 397.7 1,332.9 Electronic retailing - Germany 97.7 39.3 37.5 39.5 50.5 166.7 Ticketing 386.4 99.7 119.7 105.2 118.1 442.7 Hotel reservations 66.6 22.9 37.8 47.7 53.4 161.8 Teleservices 175.3 46.2 50.1 57.0 62.6 215.9 Other 15.1 4.1 2.8 0.0 0.0 6.9 ------- ----- ----- ----- ----- ------- SUB-TOTAL 3,064.8 851.0 880.0 868.7 1,032.0 3,631.7 German DM exchange rate fluctuation EMERGING BUSINESSES Citysearch, Match.com and related 16.8 5.8 6.9 9.7 14.0 36.3 Styleclick 21.1 11.2 8.0 7.4 8.5 35.1 Electronic Commerce Solutions 0.7 3.2 5.1 6.2 5.8 20.2 HSN - other international 2.8 1.5 2.3 2.5 2.7 8.9 USA Films 44.8 6.7 22.4 27.9 25.1 82.1 Trio, NWI, SCIFI.com, USA Network.com 0.0 0.2 0.2 0.3 0.5 1.2 ------- ----- ----- ----- ------- ------- SUB-TOTAL 86.2 28.7 44.8 53.9 56.5 183.9 ------- ----- ----- ----- ------- ------- TOTAL 3,151.0 879.7 924.8 922.6 1,088.5 3,815.6 ======= ===== ===== ===== ======= ======= USA Network 676.8 175.0 184.7 195.3 202.7 757.7 SCI FI 148.0 40.5 48.2 46.0 63.8 198.5 Studios, net 418.2 116.1 83.5 65.8 83.2 348.6 ------- ----- ----- ----- ----- ------- Cable and studios 1,243.0 331.5 316.4 307.1 349.7 1,304.7 ------- ----- ----- ----- ----- ------- OPERATING BUSINESSES Entertainment 1,243.0 331.5 316.4 307.1 349.7 1,304.7 Electronic retailing 1,178.4 346.5 353.1 351.7 448.2 1,499.6 Information and services 628.3 168.9 207.6 209.8 234.1 820.5 Corporate and other 15.1 4.1 2.8 0.0 0.0 6.9 ------- ----- ----- ----- ------- ------- SUB-TOTAL 3,064.8 851.0 880.0 868.7 1,032.0 3,631.7 ------- ----- ----- ----- ------- ------- -------------------------------------------------------- 2000 -------------------------------------------------------- Q1 Q2 Q3 Q4 YE 12/31 ------- ------- ------- ------- ------------- OPERATING BUSINESSES Cable and studios 379.0 390.7 336.0 424.8 1,530.5 Electronic retailing - U.S. 358.5 344.0 368.8 462.1 1,533.3 Electronic retailing - Germany 65.8 57.1 62.7 74.0 259.6 Ticketing 128.0 143.0 124.9 122.7 518.6 Hotel reservations 55.3 78.1 94.6 100.0 328.0 Teleservices 69.6 70.2 70.2 72.1 282.1 Other 0.0 0.0 0.0 0.0 0.0 ------- ------- ------- ------- ------- SUB-TOTAL 1,056.1 1,083.1 1,057.3 1,255.6 4,452.0 German DM exchange rate fluctuation (7.9) (6.7) (8.9) (11.8) (35.3) Emerging Businesses Citysearch, Match.com and related 17.0 20.2 21.6 21.2 80.0 Styleclick 7.9 6.3 5.3 4.8 24.2 Electronic Commerce Solutions 4.7 3.8 7.2 8.7 24.3 HSN - other international 3.8 3.6 4.4 9.4 21.3 USA Films 30.3 20.8 14.5 20.5 86.1 Trio, NWI, SCIFI.com, USA Network.com 0.6 3.7 8.6 7.5 20.3 ------- ------- ------- ------- ------- SUB-TOTAL 64.2 58.4 61.5 72.1 256.3 ------- ------- ------- ------- ------- TOTAL 1,112.4 1,134.8 1,109.9 1,315.9 4,673.0 ======= ======= ======= ======= ======= USA Network 196.9 208.9 200.5 201.4 807.8 SCI FI 62.4 71.3 64.6 78.4 276.7 Studios, net 119.6 110.5 71.0 144.9 446.0 ------- ------- ------- ------- ------- Cable and studios 379.0 390.7 336.0 424.8 1,530.5 ------- ------- ------- ------- ------- OPERATING BUSINESSES Entertainment 379.0 390.7 336.0 424.8 1,530.5 Electronic retailing 424.3 401.1 431.5 536.0 1,792.9 Information and services 252.9 291.3 289.7 294.8 1,128.7 Corporate and other 0.0 0.0 0.0 0.0 0.0 ------- ------- ------- ------- ------- SUB-TOTAL 1,056.1 1,083.1 1,057.3 1,255.6 4,452.0 ------- ------- ------- ------- ------- * 1998 has not been adjusted to include shipping and handling revenue for HSN. THE FINANCIAL, STATISTICAL AND OTHER INFORMATION CONTAINED HEREIN IS UNAUDITED. As filed with the Securities and Exchange Commission on February 1, 2001.
USA NETWORKS, INC. PRO FORMA SEGMENT RESULTS $ IN MILLIONS; ROUNDING DIFFERENCES MAY EXIST. UNAUDITED. -------- -------------------------------------------- EBITDA 1998 1999 -------- -------------------------------------------- YE 12/31 Q1 Q2 Q3 Q4 YE 12/31 -------- -- -- -- -- -------- OPERATING BUSINESSES Cable and studios 330.3 109.1 106.1 92.8 125.9 433.9 Electronic retailing - U.S. 180.2 42.1 48.2 50.1 74.3 214.7 Electronic retailing - Germany (10.7) 3.6 1.9 3.7 7.0 16.3 Ticketing 61.3 19.5 27.2 21.3 25.4 93.3 Hotel reservations 10.9 3.4 5.6 6.4 8.7 24.2 Teleservices 19.6 5.8 6.5 8.3 9.8 30.4 Corporate and other (21.6) (7.2) (12.0) (6.2) (10.7) (36.1) ----- ----- ----- ---- ----- ----- SUB-TOTAL 570.0 176.4 183.4 176.4 240.4 776.6 German DM exchange rate fluctuation Nonrecurring charges EMERGING BUSINESSES Citysearch, Match.com and related (29.0) (8.9) (13.9) (17.7) (20.4) (60.8) Styleclick (15.8) (6.9) (15.4) (12.8) (18.4) (53.6) Electronic Commerce Solutions (1.0) (0.2) 0.4 0.5 (3.2) (2.4) HSN - other international (3.0) (0.7) (1.6) (1.7) (0.5) (4.5) USA Films 2.6 (1.0) 1.2 1.7 4.5 6.4 Trio, NWI, SCIFI.com, USA Network.com 0.0 (0.6) (0.5) (0.8) (1.1) (3.0) ----- ----- ----- ---- ----- ----- SUB-TOTAL (46.2) (18.2) (29.8) (30.8) (39.1) (117.9) ----- ----- ----- ---- ----- ----- TOTAL 523.8 158.2 153.6 145.6 201.3 658.7 ===== ===== ===== ===== ===== ===== USA Network 237.3 70.7 84.9 69.5 87.0 312.1 SCI FI 44.6 15.7 9.9 13.4 29.9 68.9 Studios, net 48.4 22.8 11.2 9.9 9.0 52.9 ----- ----- ----- ---- ----- ----- Cable and studios 330.3 109.1 106.1 92.8 125.9 433.9 ----- ----- ----- ---- ----- ----- OPERATING BUSINESSES Entertainment 330.3 109.1 106.1 92.8 125.9 433.9 Electronic retailing 169.5 45.7 50.1 53.9 81.3 230.9 Information and services 91.8 28.8 39.3 35.9 43.9 147.9 Corporate and other (21.6) (7.2) (12.0) (6.2) (10.7) (36.1) ----- ----- ----- ---- ----- ----- TOTAL 570.0 176.4 183.4 176.4 240.4 776.6 ----- ----- ----- ---- ----- ----- ------------------------------------------- EBITDA 2000 ------------------------------------------- Q1 Q2 Q3 Q4 YE 12/31 -- -- -- -- -------- OPERATING BUSINESSES Cable and studios 138.8 139.4 118.5 151.1 547.7 Electronic retailing - U.S. 55.7 52.5 53.8 74.5 236.5 Electronic retailing - Germany 8.7 4.7 5.8 9.0 28.2 Ticketing 27.4 31.6 16.7 24.4 100.0 Hotel reservations 8.2 12.9 13.9 17.6 52.6 Teleservices 9.5 11.9 11.1 11.0 43.6 Corporate and other (10.6) (7.4) (7.1) (10.0) (35.1) ----- ----- ----- ----- ----- SUB-TOTAL 237.6 245.6 212.6 277.7 973.5 German DM exchange rate fluctuation (1.0) (0.6) (0.9) (1.5) (3.9) Nonrecurring charges (11.6) (4.1) (15.7) Emerging Businesses Citysearch, Match.com and related (17.9) (15.6) (14.3) (11.4) (59.2) Styleclick (10.7) (15.2) (8.7) (8.2) (42.8) Electronic Commerce Solutions (5.6) (6.3) (8.0) (8.5) (28.4) HSN - other international (1.5) (2.5) (4.6) (5.0) (13.5) USA Films 2.2 (2.3) (5.8) (0.6) (6.6) Trio, NWI, SCIFI.com, USA Network.com (2.3) (2.0) (0.3) (2.5) (7.1) ----- ----- ----- ----- ----- SUB-TOTAL (35.7) (43.8) (41.8) (36.2) (157.6) ----- ----- ----- ----- ----- TOTAL 200.8 189.6 169.9 236.0 796.3 ===== ===== ===== ===== ===== USA Network 97.1 105.4 87.2 105.6 395.2 SCI FI 24.2 24.9 22.4 30.2 101.7 Studios, net 17.5 9.1 8.8 15.4 50.8 ----- ----- ----- ----- ----- Cable and studios 138.8 139.4 118.5 151.1 547.7 ----- ----- ----- ----- ----- OPERATING BUSINESSES Entertainment 138.8 139.4 118.5 151.1 547.7 Electronic retailing 64.4 57.2 59.6 83.5 264.7 Information and services 45.0 56.4 41.7 53.1 196.2 Corporate and other (10.6) (7.4) (7.1) (10.0) (35.1) ----- ----- ----- ----- ----- TOTAL 237.6 245.6 212.6 277.7 973.5 ----- ----- ----- ----- ----- THE FINANCIAL, STATISTICAL AND OTHER INFORMATION CONTAINED HEREIN IS UNAUDITED. As filed with the Securities and Exchange Commission on February 1, 2001.
USA NETWORKS, INC. PRO FORMA RESULTS OF OPERATIONS (AS REPORTED) $ IN MILLIONS; ROUNDING DIFFERENCES MAY EXIST. UNAUDITED. ---------- ------------------------------------------------------- P&L 1998 1999 ---------- ------------------------------------------------------- YE 12/31 * Q1 * Q2* Q3* Q4 YE 12/31 ---------- ---- --- --- -- -------- Date Reported: 02/03/00 04/27/00 07/26/00 10/26/00 02/01/01 02/01/01 Revenues, net 2,879.7 793.2 889.4 924.9 1,088.5 3,815.6 Operating costs and expenses: Costs related to revenues 1,694.7 404.8 468.7 494.7 657.8 2,301.7 Other costs and expenses 693.1 244.9 274.5 293.9 229.4 855.1 Amort. of non-cash distribution and marketing expense 0.0 0.0 0.0 0.0 0.0 0.0 Depreciation 94.9 25.6 28.8 31.7 32.5 119.2 Amortization of goodwill 226.3 62.8 78.4 91.8 106.0 374.0 ------- ----- ----- ----- ------- ------- Total operating costs 2,709.0 738.0 850.3 912.1 1,025.7 3,650.1 ------- ----- ----- ----- ------- ------- Operating income 170.6 55.2 39.0 12.8 62.7 165.4 Interest expense, net (119.6) (13.0) (15.7) (12.4) (10.8) (50.2) Gain on disposition of television station 74.9 0.0 0.0 0.0 0.0 0.0 Gain on sale of securities 109.0 47.3 3.0 39.5 0.0 89.7 Other, net (23.4) 7.3 (8.8) (3.6) 0.6 (4.9) ------- ----- ----- ----- ------- ------- 40.9 41.6 (21.4) 23.4 (10.2) 34.6 ------- ----- ----- ----- ------- ------- Earnings before income taxes and minority interest 211.5 96.8 17.6 36.2 52.5 200.1 Income tax expense (118.4) (21.4) (13.7) (21.8) (28.1) (83.9) Minority interest (70.3) (74.1) (27.9) (33.9) (28.8) (136.7) ------- ----- ----- ----- ------- ------- Net income (loss) from continuing operations 22.8 1.3 (24.0) (19.5) (4.3) (20.5) ------- ----- ----- ----- ------- ------- Weighted average diluted shares 318.4 361.2 388.9 357.8 360.7 352.6 ------- ----- ----- ----- ------- ------- Weighted average fully converted shares 595.2 707.6 735.2 757.3 763.7 745.8 ------- ----- ----- ----- ------- ------- Basic earnings per share $ .07 $ .00 $ (.07) $ (.05) $ (.01) $ (.06) ------- ----- ----- ----- ------- ------- Diluted earnings per share $ .07 $ .00 $ (.07) $ (.05) $ (.01) $ (.06) ------- ----- ----- ----- ------- ------- Fully converted earnings per share $ .13 $ .07 $ (.00) $ .02 $ .02 $ .12 ------- ----- ----- ----- ------- ------- EBITDA 491.9 143.6 146.2 136.3 201.3 658.7 ------- ----- ----- ----- ------- ------- Excluding one-time charges and non-operating gains: Basic and diluted earnings per share $ (.28) $ (.03) $ (.08) $ (.08) $ (.01) $ (.11) ------- ------- ------- ------- -------- -------- Fully converted earnings per share $ (.04) $ .03 $ (.01) $ (.01) $ .02 $ .05 ======= ======= ======= ======= ======== ========
--------------------------------------------------------------- P&L 2000 --------------------------------------------------------------- Q1 * Q2 * Q3 * Q4 YE 12/31 ---- ---- ---- -- -------- Date Reported: 04/27/00 07/26/00 10/26/00 02/01/01 02/01/01 Revenues, net 1,002.8 1,098.1 1,115.2 1,315.9 4,673.0 Operating costs and expenses: Costs related to revenues 574.7 638.8 673.6 801.3 2,812.4 Other costs and expenses 243.8 280.1 281.8 278.6 1,064.4 Amort. of non-cash distribution and marketing expense 0.8 1.6 2.7 7.1 11.5 Depreciation 34.5 42.9 46.3 54.0 166.1 Amortization of goodwill 81.8 96.7 108.9 135.1 467.3 ------- ------- ------- ------- ------- Total operating costs 935.5 1,060.0 1,113.3 1,276.1 4,521.7 ------- ------- ------- ------- ------- Operating income 67.3 38.0 1.9 39.8 151.3 Interest expense, net (8.6) (8.8) (9.6) (10.3) (35.0) Gain on disposition of television station 0.0 0.0 0.0 0.0 Gain on sale of securities 0.0 0.0 0.0 0.0 0.0 Other, net (0.6) (1.9) 69.9 (18.1) 49.3 ------- ------- ------- ------- ------- (9.3) (10.7) 60.3 (28.3) 14.3 ------- ------- ------- ------- ------- Earnings before income taxes and minority interest 58.1 27.3 62.2 11.5 165.7 Income tax expense (31.5) (19.0) (23.0) (26.3) (113.0) Minority interest (45.4) (36.9) (58.6) (14.4) (128.5) ------- ------- ------- ------- ------- Net income (loss) from continuing operations (18.9) (28.6) (19.5) (29.2) (75.9) ------- ------- ------- ------- ------- Weighted average diluted shares 337.5 362.0 367.8 368.3 366.0 ------- ------- ------- ------- ------- Weighted average fully converted shares 728.1 748.5 754.8 752.6 747.4 ------- ------- ------- ------- ------- Basic earnings per share $ (.06) $ (.08) $ (.05) $ (.08) $ (.21) ------- ------- ------- ------- ------- Diluted earnings per share $ (.06) $ (.08) $ (.05) $ (.08) $ (.21) ------- ------- ------- ------- ------- Fully converted earnings per share $ .03 $ .01 $ .04 $ (.00) $ .05 ------- ------- ------- ------- ------- EBITDA 184.3 179.2 159.8 236.0 796.3 ------- ------- ------- ------- ------- Excluding one-time charges and non-operating gains: Basic and diluted earnings per share $ (.06) $ (.07) $ (.10) $ (.03) $ (.19) -------- -------- -------- -------- -------- Fully converted earnings per share $ .03 $ .01 $ (.02) $ .03 $ .03 ======== ======== ======== ======== ======== * AS REPORTED. MAY NOT AGREE WITH PROFORMA REVENUE AND EBITDA RESULTS ABOVE. THE FINANCIAL, STATISTICAL AND OTHER INFORMATION CONTAINED HEREIN IS UNAUDITED. As filed with the Securities and Exchange Commission on February 1, 2001.
USA NETWORKS, INC. OPERATING METRICS IN MILLIONS EXCEPT PERCENTAGES AND RATINGS. ---- ---- ------------------------------------ ---------------------------------- 1997 1998 1999 2000 ---- ---- ------------------------------------ ---------------------------------- YE YE Q1 Q2 Q3 Q4 YE Q1 Q2 Q3 Q4 YE -- -- -- -- -- -- -- -- -- -- -- -- USA NETWORK Advertising revenue 53% 53% 54% 56% 59% 58% 56% 57% 58% 57% 55% 58% Affiliate revenue 47% 47% 46% 44% 41% 42% 44% 43% 42% 43% 45% 42% Average primetime rating 2.0 2.3 2.6 2.6 2.3 2.2 2.4 2.4 2.2 2.0 1.7 2.1 Households (end of period) 72.4 75.1 75.3 75.7 76.9 77.2 77.2 77.4 78.2 79.4 79.9 79.9 ---- ---- ------------------------------------ ---------------------------------- 1997 1998 1999 2000 ---- ---- ------------------------------------ ---------------------------------- YE YE Q1 Q2 Q3 Q4 YE Q1 Q2 Q3 Q4 YE -- -- -- -- -- -- -- -- -- -- -- -- SCI FI CHANNEL Advertising revenue 56% 56% 55% 61% 57% 62% 59% 64% 66% 62% 67% 65% Affiliate revenue 44% 44% 45% 39% 43% 38% 41% 36% 34% 38% 33% 35% Average primetime rating 0.7 0.7 0.7 0.7 0.8 0.9 0.8 0.9 0.8 0.9 0.9 0.9 Households (end of period) 46.7 52.6 54.4 55.9 58.4 59.7 59.7 60.5 62.7 65.1 66.7 66.7 ----------------------------------- 2000 ----------------------------------- Q3 Q4 YE -- -- -- TRIO Households (end of period) 6.9 7.3 7.3 NWI Households (end of period) 6.5 6.7 6.7 USA NETWORK AND SCI FI RATINGS AND HOUSEHOLD DELIVERY DATA ARE SOURCED FROM NMR GALAXY EXPLORER. SUBSCRIBER COUNTS ARE BASED ON NIELSEN PEOPLE METER INSTALLED SAMPLES. THE FINANCIAL, STATISTICAL AND OTHER INFORMATION CONTAINED HEREIN IS UNAUDITED. As filed with the Securities and Exchange Commission on February 1, 2001.
USA NETWORKS, INC. OPERATING METRICS IN MILLIONS EXCEPT PERCENTAGES. --------------------------------------------- --------------------------------------- 1999 2000 --------------------------------------------- --------------------------------------- Q1 Q2 Q3 Q4 YE Q1 Q2 Q3 Q4 YE --------------------------------------------- --------------------------------------- HSN - U.S. On air services: On-air gross profit 34.0% 33.7% 35.4% 34.0% 34.3% 33.6% 34.7% 34.7% 32.7% 33.8% Product mix: Homegoods 47% 47% 47% 54% 49% 50% 46% 49% 55% 51% Jewelry 30% 28% 26% 23% 27% 25% 28% 27% 25% 26% Heath / Beauty 10% 12% 11% 10% 11% 11% 13% 9% 8% 10% Apparel / Accessories 13% 13% 16% 13% 13% 14% 13% 15% 12% 13% Units shipped 7.7 7.8 7.8 8.7 32.0 8.2 7.8 8.2 9.2 33.4 Return rate 22.8% 20.4% 19.1% 19.1% 20.3% 20.9% 19.6% 20.2% 19.2% 19.9% America's Store Total HH (end of period) 9.8 9.9 8.7 8.3 8.3 8.8 8.8 9.0 8.6 8.6 HSN cable / DBS HH (end of period) 54.8 56.8 57.6 60.6 60.6 62.0 63.2 64.6 65.6 65.6 HSN total HH (end of period) 71.0 72.7 73.0 73.7 73.7 75.2 76.4 75.9 76.8 76.8 THE FINANCIAL, STATISTICAL AND OTHER INFORMATION CONTAINED HEREIN IS UNAUDITED. As filed with the Securities and Exchange Commission on February 1, 2001.
USA NETWORKS, INC. OPERATING METRICS IN MILLIONS EXCEPT REVENUE PER TICKET AND PERCENTAGES. ----- -------- ------------------------------------------ 1997 1998 1999 ----- -------- ------------------------------------------ YE YE Q1 Q2 Q3 Q4 YE -- -- -- -- -- -- -- TICKETMASTER Number of tickets sold (mm) 65.8 68.6 19.1 19.9 17.6 18.4 75.0 Gross value of tickets sold (mm) $ 2,168 $ 2,340 $ 615 $ 756 $ 651 $ 759 $ 2,781 Share of tickets sold online 1.6% 4.3% 8.7% 13.5% 15.0% 18.4% 13.4% Revenue per ticket- Combined $ 4.50 $ 4.66 $ 4.69 $ 5.36 $ 5.34 $ 5.62 $ 5.25 Revenue per ticket- Online $ 5.06 $ 5.45 $ 5.62 $ 6.68 $ 6.45 $ 6.46 $ 6.38 ------------------------------------------- 2000 ------------------------------------------- Q1 Q2 Q3 Q4 YE -- -- -- -- -- TICKETMASTER Number of tickets sold (mm) 21.8 22.3 20.2 18.7 83.0 Gross value of tickets sold (mm) $ 812 $ 881 $ 782 $ 781 $ 3,256 Share of tickets sold online 20.5% 25.8% 25.2% 26.2% 24.3% Revenue per ticket- Combined $ 5.44 $ 5.89 $ 5.67 $ 5.87 $ 5.71 Revenue per ticket- Online $ 6.49 $ 7.08 $ 6.72 $ 6.75 $ 6.78 THE FINANCIAL, STATISTICAL AND OTHER INFORMATION CONTAINED HEREIN IS UNAUDITED.
USA NETWORKS, INC. OPERATING METRICS ------------------------------------- --------------------------------------- 1999 2000 ------------------------------------- --------------------------------------- Q1 Q2 Q3 Q4 YE Q1 Q2 Q3 Q4 YE -- -- -- -- -- -- -- -- -- -- HOTEL RESERVATIONS NETWORK Hotel room nights sold (thousands) 181 291 374 383 1,229 429 587 717 700 2,433 Portion of revenues generated online 69% 81% 85% 87% 81% 91% 92% 94% 96% 93% Affiliated revenues as % of total revenue 27% 41% 44% 43% 40% 53% 52% 53% 56% 54% Cities served 27 37 38 40 40 49 60 83 97 97 THE FINANCIAL, STATISTICAL AND OTHER INFORMATION CONTAINED HEREIN IS UNAUDITED. As filed with the Securities and Exchange Commission on February 1, 2001.
USA NETWORKS, INC. OPERATING METRICS IN MILLIONS CAPITALIZATION (AS OF 1/29/01) Ticker (NASDAQ) USAI USAi Common Stock 305.5 USAi Class B 63.0 USAi Exchangeable 361.2 ---------- Total Shares Outstanding 729.7 Estimated dilutive options (treasury method) 32.0 ---------- Fully diluted shares 761.7 ========== Outstanding equity cap $14.2 billion Fully diluted equity cap $14.8 billion BUSINESS MIX Revenue sources (Q4 '00): Merchandise 41% Ticketing 9% Teleservices / ECS 6% Hotel rooms 8% ---------- Commerce 64% ========== Advertising 15% Affiliate fees and subscriptions 10% Production and distribution 11% ---------- Media 36% ========== Online (% of total) 15% International (% of total) 6% THE FINANCIAL, STATISTICAL AND OTHER INFORMATION CONTAINED HEREIN IS UNAUDITED. As filed with the Securities and Exchange Commission on February 1, 2001.
USA Networks, Inc. (the "Company" or "USAi") is a holding company, the subsidiaries of which are engaged in diversified media and electronic commerce businesses. In the third quarter of 1997, the Company acquired a controlling interest in Ticketmaster through the issuance of Common Stock to Paul G. Allen and purchases of Ticketmaster shares in the open market for total consideration of $210.0 million (the "Ticketmaster Acquisition"). In connection with the issuance of new shares to Mr. Allen, the Company also issued shares of the Company's Class B common stock in accordance with Liberty's contingent right to receive such shares as part of the Home Shopping Merger in 1996. In connection with the Ticketmaster tax-free merger, as of June 24, 1998, the Company issued 31,934,400 shares of Common Stock to the public shareholders of Ticketmaster and converted 3.6 million options to acquire Ticketmaster common stock into options to acquire Common Stock for a total consideration of $467.7 million. The acquisition of the controlling interest in Ticketmaster and the tax-free merger are collectively referred to as the "Ticketmaster Transaction." On July 16, 1998, the Company sold the assets of SF Broadcasting, which owned and operated four television stations (the "SF Broadcasting Transaction"). On February 12, 1998, the Company acquired USA Networks, a New York general partnership, consisting of cable television networks USA Network and Sci-Fi Channel ("Networks"), as well as the domestic television production and distribution businesses of Universal Studios ("Studios USA") from Universal Studios, Inc. ("Universal"), an entity controlled by The Seagram Company Ltd. ("Seagram"), and the Company changed its name to USA Networks, Inc. (the "Universal Transaction"). On September 28, 1998, pursuant to an Amended and Restated Agreement and Plan of Reorganization among CitySearch, Inc. ("CitySearch"), the Company, Ticketmaster and certain of its subsidiaries, the Company merged the online ticketing operations of Ticketmaster (Ticketmaster.com) into a subsidiary of CitySearch, a publisher of local city guides on the Web (the "CitySearch Merger"), to create Ticketmaster Online-CitySearch, Inc. ("TMCS"). On May 10, 1999, the Company acquired substantially all of the assets and assumed substantially all of the liabilities of two entities which operate Hotel Reservations Network (the "Hotel Reservations Network Transaction"). On May 28, 1999, the Company acquired October Films, Inc. ("October Films"), in which Universal owned a majority interest, and the domestic film distribution and development business of Universal previously operated by Polygram Filmed Entertainment, Inc. ("PFE") (the "October Films/PFE Transaction"). On April 5, 2000, the Company acquired Precision Response Corporation ("PRC") (the "PRC Transaction"). On July 27, 2000 USAi and Styleclick.com Inc., a leading enabler of e-commerce for manufacturers and retailers, completed the merger of Internet Shopping Network ("ISN") and Styleclick.com (the "Styleclick Transaction"). On December 7, 2000, the Company announced that Univision Communications Inc. will acquire USA Broadcasting, the television station group of the Company. On January 31, 2001, the combination of the businesses of Ticketmaster Online-CitySearch, Inc. and Ticketmaster Corporation was completed. For additional information on each of these transactions, see the Company's filings on Form 10-K for the year ended December 31, 1999, on Form 10-Q for the three months ended September 30, 2000 and other filings that the Company and its subsidiaries have made with the Securities and Exchange Commission. The following unaudited pro forma operating results of USAi present combined results of operations as if the Universal Transaction, Ticketmaster Transaction, CitySearch Merger, the SF Broadcasting Transaction, the Hotel Reservations Network Transaction, the October Films/ PFE Transaction, the PRC Transaction and the Styleclick Transaction and the consolidation of HOT Germany all had occurred at the beginning of the periods presented. The unaudited combined condensed pro forma statements of operations of USAi are presented below for illustrative purposes only and are not necessarily indicative of the results of operations that would have actually been reported had any of the transactions occurred at the beginning of the periods presented, nor are they necessarily indicative of future results of operations. As filed with the Securities and Exchange Commission on February 1, 2000.