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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 12, 2003

USA INTERACTIVE
(Exact name of Registrant as specified in charter)

Delaware
(State or other jurisdiction
of incorporation)		   0-20570
(Commission File
Number)		   59-2712887
(IRS Employer
Identification No.)
152 West 57th Street, New York, NY
(Address of principal executive offices)		   10019
(Zip Code)

Registrant's telephone number, including area code:
(212) 314-7300


ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE

        On January 17, 2003, USA Interactive ("USA") completed its acquisition of the outstanding shares of Ticketmaster that it did not already own through the merger of a wholly owned subsidiary of USA with Ticketmaster, with Ticketmaster surviving as a wholly owned subsidiary of USA. In the merger, each outstanding share of Ticketmaster Class A common stock and Ticketmaster Class B common stock (other than shares held by USA, Ticketmaster and their subsidiaries) was converted into the right to receive 0.935 of a share of USA common stock. Attached hereto as exhibit 99.1 is Unaudited Pro Forma Combined Condensed Financial Information related to the transaction.


ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS

        (c) Exhibits.

        99.1    Unaudited Pro Forma Combined Condensed Financial Information

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 thereunto duly authorized.

    USA INTERACTIVE

 
 
By:
/s/  DARA KHOSROWSHAHI      
Name: Dara Khosrowshahi
Title: Executive Vice President and
          Chief Financial Officer

Date: February 12, 2003



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Exhibit 99.1

UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS

        The following tables present unaudited pro forma combined condensed financial information for USA giving effect to the following transactions:

The results of the USA Entertainment Group are presented as discontinued operations in the historical financial statements of USA and therefore have been excluded from the unaudited pro forma combined condensed financial statements of USA.

        Unaudited pro forma combined condensed financial information for Expedia, Inc. for the year ended December 31, 2001 is also presented.

        The unaudited pro forma combined condensed financial statements of USA reflect some assumptions regarding the transactions and are based on the historical financial statements of USA. The unaudited pro forma combined condensed financial statements of USA, including the notes accompanying them, are qualified in their entirety by reference to, and should be read in conjunction with, USA's audited financial statements, including the notes accompanying them, which have been filed with the Securities and Exchange Commission.

        The unaudited pro forma combined condensed balance sheet as of September 30, 2002 gives effect to the Ticketmaster merger as if it occurred on September 30, 2002. All other transactions described above have been reflected in the historical balance sheet as of September 30, 2002.

        The unaudited pro forma combined condensed statement of operations for the year ended December 31, 2001 reflects USA's audited statements of operations for the year ended December 31, 2001 and Expedia's results for the twelve months ended December 31, 2001, adjusted for the pro forma effects of the Ticketmaster combination, the Expedia transaction, the VUE transaction, the Home Shopping Network, Inc. exchange and the Ticketmaster merger, as if those transactions had occurred as of the beginning of the periods presented.

        The unaudited pro forma combined condensed statement of operations for the nine months ended September 30, 2002 reflects USA's unaudited statements of operations for the nine months ended September 30, 2002, adjusted for the pro forma effects of the Expedia transaction, the VUE transaction, the Home Shopping Network, Inc. exchange and the Ticketmaster merger as if those transactions had occurred on January 1, 2002. The Ticketmaster combination has been reflected in the historical statement of operations for the nine months ended September 30, 2002.

        USA is in the process of evaluating the fair value of the additional interest acquired in Ticketmaster's assets and liabilities as a result of the Ticketmaster merger as well as the additional interest acquired in HSN's assets as a result of the VUE transaction and the Home Shopping Network, Inc. exchange, including the allocation of intangibles other than goodwill. USA has received preliminary estimates of the value of intangible assets and has provided pro forma adjustments to amortization of intangibles based on these estimates. However, the purchase accounting information is preliminary and has been made solely for the purpose of developing the unaudited pro forma combined condensed financial information contained in the following pages.

        The unaudited pro forma combined condensed statement of operations is neither necessarily indicative of the results of operations that would have been reported had these transactions occurred on January 1, 2001 nor necessarily indicative of USA's future financial results of operations.

USA INTERACTIVE
Unaudited Pro Forma Combined Condensed Balance Sheet
September 30, 2002
(Dollars in thousands)

 
   USA
Historical
   Ticketmaster
Merger(1)
   Pro Forma
Combined
ASSETS                  
Current Assets:                  
Cash and cash equivalents   $ 675,413   $ —   $ 675,413
Restricted cash     13,931     —     13,931
Marketable securities     2,470,615     —     2,470,615
Accounts and notes receivable, net     316,615     —     316,615
Inventories, net     216,909     —     216,909
Other     180,891     —     180,891
   
 
 
Total current assets     3,874,374     —     3,874,374

Property, plant and equipment, net
 
 
434,264
 
 
—
 
 
434,264
Intangible assets including goodwill, net     7,009,378     482,884     7,492,262
Cable distributions fees, net     173,800     —     173,800
Long-term investments     1,605,605     —     1,605,605
Preferred interest exchangeable for common stock     1,428,530     —     1,428,530
Deferred charges and other     176,197     —     176,197
   
 
 
  Total assets   $ 14,702,148   $ 482,884   $ 15,185,032
   
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY                  
Current Liabilities:                  
Current maturities of long-term debt   $ 36,231   $ —   $ 36,231
Accounts payable, accrued and other current liabilities     383,307     —     383,307
Accounts payable, client accounts     182,860     —     182,860
Cable distribution fees payable     65,852     —     65,852
Deferred revenue     307,832     —     307,832
Other accrued liabilities     711,481     —     711,481
   
 
 
Total current liabilities     1,687,563     —     1,687,563

Long-term obligations, net of current maturities
 
 
508,237
 
 
—
 
 
508,237
Other long-term liabilities     84,405     —     84,405
Deferred income taxes     2,207,243     —     2,207,243
Minority interest     1,009,953     (435,383 )(13)   574,570
Common stock exchangeable for preferred interest     1,428,530     —     1,428,530
Stockholders' equity     7,776,217     918,267     8,694,484
   
 
 
  Total liabilities and stockholders' equity   $ 14,702,148   $ 482,884   $ 15,185,032
   
 
 

See accompanying notes to Unaudited Pro Forma Combined Condensed Financial Statements of USA.

USA INTERACTIVE
Unaudited Pro Forma Combined Condensed Statement of Operations
Nine Months Ended September 30, 2002
(Dollars in thousands, except per share data)

 
   USA
Historical
   Expedia
Historical(2)
   Expedia
Pro Forma
Adjustments
   VUE
Pro Forma
Adjustments
   Home Shopping
Network, Inc.
Exchange
   Ticketmaster
Merger
   Pro Forma
Combined
  
NET REVENUES:                                            
HSN-US   $ 1,141,270   $ —   $ —   $ —   $ —   $ —   $ 1,141,270  
Ticketing     490,925     —     —     —     —     —     490,925  
Match.com     88,182     —     —     —     —     —     88,182  
Hotels.com     672,814     —     —     —     —     —     672,814  
Expedia     389,865     35,487     —     —     —     —     425,352  
Interval     2,319     —     —     —     —     —     2,319  
PRC     217,212     —     —     —     —     —     217,212  
Citysearch and related     22,479     —     —     —     —     —     22,479  
International TV Shopping & other     234,557     —     —     —     —     —     234,557  
USA Electronic Commerce Solutions LLC/Styleclick     30,386     —     —     —     —     —     30,386  
Intersegment elimination     (7,773 )   —     —     —     —     —     (7,773 )
   
 
 
 
 
 
 
 
  Total net revenues     3,282,236     35,487     —     —     —     —     3,317,723  
   
 
 
 
 
 
 
 
Operating costs and expenses                                            
Cost of sales     2,014,532     10,586     —     —     —     —     2,025,118  
Other costs     899,199     15,723     —     —     —     —     914,922  
Amortization of cable distribution fees     38,679     —     —     —     —     —     38,679  
Amortization of non-cash compensation     10,199     930     —     —     —     10,586   (11)   21,715  
Non-cash distribution and marketing expense     27,485     —     —     4,059   (5)   —     —     31,544  
Depreciation and amortization     241,917     5,238     (6,632 )(3)   10,023   (12)   —     22,245   (1)   272,791  
Goodwill impairment     22,247     —     —     —     —     —     22,247  
   
 
 
 
 
 
 
 
Total operating costs and expenses     3,254,258     32,477     (6,632 )   14,082     —     32,831     3,327,016  
   
 
 
 
 
 
 
 
  Operating income (loss)     27,978     3,010     6,632     (14,082 )   —     (32,831 )   (9,293 )
Interest and other, net     (92,346 )   324     —     34,335   (6)   —     —     (57,687 )
   
 
 
 
 
 
 
 
Earnings (loss) before income taxes and minority interest     (64,368 )   3,334     6,632     20,253     —     (32,831 )   (66,980 )
Income tax expense     (58,407 )   (1,424 )   (2,601 )   (7,452 )(7)   —     4,152   (11)   (65,732 )
Minority interest     (17,964 )   —     (692 )(4)   (12,855 )(8)   (8,249 )(9)   4,813   (13)   (34,947 )
   
 
 
 
 
 
 
 
EARNINGS (LOSS) FROM CONTINUING OPERATIONS   $ (140,739 ) $ 1,910   $ 3,339   $ (54 ) $ (8,249 ) $ (23,866 ) $ (167,659 )
   
 
 
 
 
 
 
 
Loss per common share from continuing operations                                            
  Basic and diluted   $ (0.34 )                               $ (0.34 )
   
                               
 
Weighted average shares outstanding     418,559                                   491,620  
   
                               
 
Weighted average diluted shares outstanding     418,559                                   491,620  
   
                               
 

See accompanying notes to Unaudited Pro Forma Combined Condensed Financial Statements of USA.

USA INTERACTIVE
Unaudited Pro Forma Combined Condensed Statement of Operations
Year Ended December 31, 2001
(Dollars in thousands, except per share data)

 
   USA
Historical
   Ticketmaster
Combination
   Expedia
Historical(2)
   Expedia
Pro Forma
Adjustments
   VUE
Pro Forma
Adjustments
   Home
Shopping
Network, Inc.
Exchange
   Ticketmaster
Merger(1)
   Pro Forma
Combined
  
NET REVENUES:                                                  
HSN—U.S.   $ 1,658,904   $ —   $ —   $ —   $ —   $ —   $ —   $ 1,658,904  
Ticketing     579,679     —     —     —     —     —     —     579,679  
Match.com     49,249     —     —     —     —     —     —     49,249  
Hotels.com     536,497     —     —     —     —     —     —     536,497  
Expedia     —     —     296,936     —     —     —     —     296,936  
PRC     298,678     —     —     —     —     —     —     298,678  
CitySearch and related     46,108     —     —     —     —     —     —     46,108  
International TV Shopping and other     272,569     —     —     —     —     —     —     272,569  
USA Electronic Commerce Solutions LLC/Styleclick     34,229     —     —     —     —     —     —     34,229  
Intersegment elimination     (7,053 )   —     —     —     —     —     —     (7,053 )
   
 
 
 
 
 
 
 
 
  Total net revenues     3,468,860     —     296,936     —     —     —     —     3,765,796  
   
 
 
 
 
 
 
 
 

Operating costs and expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of sales     2,331,297     —     93,142     —     —     —     —     2,424,439  
Other costs     843,688     —     142,930     —     —     —     —     986,618  
Amortization of cable distribution fees     43,975     —     —     —     —     —     —     43,975  
Amortization of non-cash compensation     7,800     —     16,404     —     —     —     14,115   (11)   38,319  
Non-cash distribution and marketing expense     26,384     —     —     —     8,307   (5)   —     —     34,691  
Depreciation and amortization     432,139     —     61,820     6,712   (3)   49,364   (12)   —     29,660   (1)   579,695  
   
 
 
 
 
 
 
 
 
Total operating costs and expenses     3,685,283     —     314,296     6,712     57,671     —     43,775     4,107,737  
  Operating income (loss)     (216,423 )   —     (17,360 )   (6,712 )   (57,671 )   —     (43,775 )   (341,941 )
Interest and other, net     (71,034 )   —     (4,136 )   —     99,323   (6)   —     —     24,153  
   
 
 
 
 
 
 
 
 
Earnings (loss) before income taxes and minority interest     (287,457 )   —     (21,496 )   (6,712 )   41,652     —     (43,775 )   (317,788 )
Income tax (expense) benefit     (2,450 )   1,005  (10)   —     2,633     (24,112 )(7)   —     5,537  (11)   (17,387 )
Minority interest     103,108     (3,568 )(10)   —     7,696   (4)   (35,619 )(8)   (5,423 )(9)   (52,284 )(13)   13,910  
   
 
 
 
 
 
 
 
 
EARNINGS (LOSS) FROM CONTINUING OPERATIONS   $ (186,799 ) $ (2,563 ) $ (21,496 ) $ 3,617   $ (18,079 ) $ (5,423 ) $ (90,522 ) $ (321,265 )
   
 
 
 
 
 
 
 
 
Loss per common share from continuing operations                                                  
  Basic and diluted   $ (0.50 )                                     $ (0.67 )
   
                                     
 
Weighted average shares outstanding     374,101                                         480,452  
   
                                     
 
Weighted average diluted shares outstanding     374,101                                         480,452  
   
                                     
 

See accompanying notes to Unaudited Pro Forma Combined Condensed Financial Statements of USA.

EXPEDIA, INC.
Unaudited Pro Forma Combined Condensed Statement of Operations
Year Ended December 31, 2001
(Dollars in thousands, except per share data)

 
   Historical(2)
   Pro Forma
  
 
   Three Months
Ended
March 31, 2001
   Three Months
Ended
June 30, 2001
   Six Months
Ended
December 31, 2001
   Twelve Months
Ended
December 31, 2001
  
Net revenues   $ 57,222   $ 78,474   $ 161,240   $ 296,936  
Operating costs and expenses:                          
  Cost of sales     18,085     22,890     52,167     93,142  
  Other costs     34,598     37,838     70,494     142,930  
  Amortization of non-cash compensation     6,477     3,939     5,988     16,404  
  Depreciation and amortization     17,246     18,372     26,202     61,820  
   
 
 
 
 
  Total operating costs and expenses     76,406     83,039     154,851     314,296  
   
 
 
 
 
Operating income (loss)     (19,184 )   (4,565 )   6,389     (17,360 )
  Interest and other, net     1,567     214     (5,917 )   (4,136 )
   
 
 
 
 
Earnings (loss) before income taxes     (17,617 )   (4,351 )   472     (21,496 )
Income tax expense     —     —     —     —  
   
 
 
 
 
Earnings (loss) from continuing operations   $ (17,617 ) $ (4,351 ) $ 472   $ (21,496 )
   
 
 
 
 

See accompanying notes to Unaudited Pro Forma Combined Condensed Financial Statements of USA.

Notes to Unaudited Pro Forma Combined Condensed Financial Statements of USA

1.
Represents the issuance of 45.5 million shares of USA common stock to Ticketmaster security holders in the Ticketmaster merger based on an exchange ratio of 0.935 of a share of USA common stock for each share of Ticketmaster common stock. Also includes options to acquire 8.9 million shares of USA common stock and warrants to acquire 4.2 million shares of USA common stock, in each case based on an exchange ratio of 0.935. The price used to value the securities is $17.918, which is the average of the closing prices of USA common stock on the two trading days prior to, the day of, and the two trading days following the announcement of the Ticketmaster merger. The amount recorded as deferred compensation in stockholders equity is the estimated impact of unvested stock options as of such merger date, at their intrinsic value. The acquisition costs and resulting goodwill are as follows:

 
   (In thousands)
  
USA common stock   $ 814,756  
Fair value of options to acquire USA common stock     94,555  
Fair value of warrants to acquire USA common stock     34,653  
Less: Intrinsic value of unvested options to acquire USA common stock recorded as deferred compensation     (25,697 )
   
 
      918,267  

Less: Minority interest acquired
 
 
(435,383
)
   
 
Unallocated excess of merger consideration over minority interest acquired and deferred compensation preliminarily allocated to goodwill and intangible assets   $ 482,884  
   
 
2.
Represents the results of operations for Expedia based on historical information of Expedia. See separate Expedia, Inc. Unaudited Pro Forma Combined Condensed Statement of Operations for the year ended December 31, 2001 above. For additional financial information, refer to Expedia's periodic reports as of and for the periods ending March 31, 2001 and June 30, 2001, and the Transition Report on Form 10-K for the six months ended December 31, 2001, as filed with the Commission. Results for the three months ended March 31, 2001, reflect Expedia's adoption of the Emerging Issues Task Force Issue No. 99-19, "Reporting Gross as a Principal versus Net as an Agent," in the quarter ended June 30, 2001, which resulted in an adjustment to net revenues and cost of sales for such period.
3.
Represents adjustment to amortization of intangibles identified in USA's acquisition of a controlling interest in Expedia. USA's aggregate purchase price was $1.5 billion, of which $352.1 million was allocated to intangible assets other than goodwill based upon the results of an independent valuation of the assets and liabilities acquired. The pro forma adjustment is based upon the comparison of amortization of intangibles identified by USA and the amount reflected in the historical results of Expedia.

4.
Represents the minority interest in the historical results of operations of Expedia, based upon a 64.2% equity ownership by USA of Expedia.

5.
Represents adjustment for non-cash marketing related to advertising provided to Ticketmaster and its subsidiaries by USA Cable, which was contributed to VUE on May 7, 2002. As these transactions were among consolidated entities, the amount was eliminated in the consolidated historical results of USA.

6.
Reflects the cash dividends ($63 million for the 12 months ended December 31, 2001 and $22 million for the nine months ended September 30, 2002) payable quarterly with respect to USA's Class B preferred interest in VUE and the payable-in-kind dividends ($36 million for the 12 months ended December 31, 2001 and $12 million for the nine months ended September 30, 2002) due in cash (or Vivendi Universal stock, at the election of Universal) at maturity (20 years following the consummation of the VUE transaction) with respect to USA's Class A preferred interest in VUE.

7.
Represents tax impact of pro forma adjustments described under notes 5 and 6 above.

8.
Represents the adjustment to minority interest related to the cancellation of approximately 320.9 million shares of USANi, comprising all of the USANi shares not then owned by USA and its subsidiaries. The cancellation of USANi shares occurred on May 7, 2002 in conjunction with the VUE transaction. Prior to the VUE transaction, Vivendi owned approximately 47% and Liberty owned approximately 8% of USANi.

9.
Represents the adjustment to minority interest related to Liberty's exchange of its shares of Home Shopping Network, Inc. The Home Shopping Network, Inc. shares were exchanged for approximately 31.6 million shares of USA common stock and approximately 1.6 million shares of USA Class B common stock. The exchange occurred on June 27, 2002. Prior to the transaction, Liberty owned 19.9% of Home Shopping Network, Inc.

10.
Reflects decreased tax expense of approximately $1 million and increased minority interest of approximately $4 million as a result of the Ticketmaster combination. The Ticketmaster combination has been accounted for as entities under common control in a manner similar to a pooling of interests. Tax expense decreased as a result of taxable losses from Ticketmaster being used to offset taxable income of Ticketmaster Corporation. Minority interest increased principally due to the impact of a lower minority interest benefit related to the losses of Ticketmaster, as USA's economic ownership in Ticketmaster increased from 50% to 68% as a result of the Ticketmaster combination that was completed on January 31, 2001.

11.
Represents estimated amortization expense of deferred compensation and the related tax benefit related to the Ticketmaster merger. The expense is based upon the estimated intrinsic value of unvested stock options, amortized over their estimated remaining vesting period of approximately three years.

12.
Represents adjustment to amortization of intangibles identified in USA's acquisition of the minority interest of Home Shopping Network. USA's aggregate purchase price was $1.2 billion, of which $487.7 million has been preliminarily allocated to intangible assets other than goodwill, based upon the results of an independent valuation of the portion of the assets and liabilities acquired.

13.
Represents the adjustment to historical minority interest benefit/expense related to Ticketmaster.


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