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 26, 2003 USA INTERACIVE (Exact name of Registrant as specified in charter) Delaware 0-20570 59-2712887 (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) 152 West 57th Street, New York, NY 10019 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (212) 314-7300
ITEM 9. REGULATION FD DISCLOSURE On February 26, 2003, the Registrant presented at the CIBC Gaming, Lodging, Travel & Leisure Conference. A copy of the Registrant's investor presentation materials for such conference, appearing in Exhibit 99.1, is 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 thereunto duly authorized. USA INTERACTIVE By: /s/ DARA KHOSROWSHAHI ------------------------------- Name: Dara Khosrowshahi Title: Executive Vice President and Chief Financial Officer Date: February 26, 2003 EXHIBIT INDEX Exhibit No. Description 99.1 Investor Presentation Materials.
EXHIBIT 99.1 Slide 1 (logo): USA Interactive Dara Khosrowshahi, Executive Vice President & Chief Financial Officer CIBC Gaming, Lodging, Travel & Leisure Conference February 26th, 2003 Prepared 2/26/03 - Read important disclaimer(s) Slide 2: Important This presentation contains forward looking statements relating to possible or assumed future results of USA. It reflects the views of USA with respect to future events, and is subject to risks that could cause future results to materially differ. These risks are described in USA's Securities and Exchange Commission filings. Information contained herein about entities other than USA has been obtained from sources believed to be reliable, but no independent verification has been made and no representation is made as to its accuracy or completeness. Any statements non-factual in nature constitute opinions, which are subject to change without notice. The forward looking statements and opinions in this presentation are made as of the date of this presentation unless otherwise noted, and USA undertakes no obligation to update or revise them for any reason. These statements do not include the potential impact of any mergers, acquisitions or other business combinations that may be completed in the future other than as noted. This presentation refers to budgeted data from the USA 2003 budget released on February 6, 2003. The budgeted data is as of February 6, 2003 and is not being updated or confirmed as of the date hereof. Pro forma financial information includes the results from Expedia as of January 1, 2001, and is pro forma for the exchange of Holdco shares by Liberty, the Vivendi transaction and the Ticketmaster merger as if they had occurred on January 1, 2001. Free Cash Flow is defined as Net Cash Provided by Operating Activities from continuing operations, less capital expenditures, investments to fund HSN International unconsolidated operations and preferred dividends paid. EBITA is defined as defined as operating income plus amortization of (1) non-cash compensation, (2) non-cash distribution and marketing and (3) other intangibles (and goodwill in 2001), (4) non-recurring items and (5) HSN disengagement costs. Adjusted Net Income generally captures all income statement items that have been, or will ultimately be, settled in cash and is defined as net income available to common shareholders plus: (1) amortization of non-cash distribution and marketing expense, (2) amortization of non-cash compensation expense, (3) amortization of intangibles (and goodwill in 2001), net of related tax and minority interest expense, (4) equity income or loss from USA's 5.44% interest in VUE, and (5) non-recurring items and/or restructuring charges. Adjusted EPS is defined as Adjusted Net Income divided by fully diluted shares outstanding for Adjusted EPS purposes. For reconciliations from non-GAAP to GAAP metrics, please refer to www.usainteractive.com. Prepared 2/26/03 - Read important disclaimer(s)
Slide 3: $13 Billion in Transactions Electronic Retailing (logos) HSN, America's Store, Shop Channel, TVSN, HOT, Nuen Live Travel (logos) Expedia, Hotels.com, Interval International, TV Travel Shop Information & Services (logos) Ticketmaster, Match.com, uDate.com (transaction pending),evite Citysearch, PRC, EPI (transaction pending) Note: Includes some companies majority or partially owned by USA. Prepared 2/26/03 - Read important disclaimer(s) Slide 4: 2002 Financial Highlights $ in millions. Pro forma adjusted. Gross Transaction Value 2001: $9,033 Growth=43% 2002: $12,903 Revenue 2001: $3,766 Growth=24% 2002: $4,657 Gross Profit 2001: $1,341 Growth=37% 2002: $1,834 Operating Expenses (a) 2001: $1,431 Growth=17% 2002: $1,684 Operating Income 2001: (90) Growth=N/A 2002: $150 EBITA Growth=133% 2001: $193 2002: $448 Adjusted Net Income: 2001: $123 Growth=93% 2002: $236 (a) Not including One-time items of $26 million and $121 million in 2001 and 2002, respectively. Source: USA 2003 budget released on 2/26/03. Prepared 2/26/03 - Read important disclaimer(s)
Slide 5: Transactions Through the Screen 2000 Subscriptions/Fees: 15% Transactions: 44% Advertising: 41% 2005 Subscriptions/Fees: 13% Transactions: 65% Advertising: 22% CAGR: '00-'05 Advertising 3% Subscriptions / Fees 13% Transactions 26% Transactions "through the screen" represent consumer related interactive transactions through television and the personal computer compiled as of 1/29/02. Includes financial services and online classifieds compiled estimates per MSDW, Jupiter, Shop.org, McCann Erickson, Zenith Media, Paul Kagan, Prudential, Furman Selz, PaineWebber, SSB, and Forrester. Prepared 2/26/03 - Read important disclaimer(s)
Slide 6: Strategic Priorities Drive Online Migration Grow Preeminent Brands Maximize Customer Value Invest in World Class Technologies Expand Internationally USA's goal is to become the world's largest and most profitable interactive commerce company Prepared 2/26/03 - Read important disclaimer(s) Slide 7: Electronic Retailing (screen shots from HSN) Prepared 2/26/03 - Read important disclaimer(s) Slide 8: EBITA- Electronic Retailing $ in millions 2001: $101 million Q1 01: $24 Q2 01: $24 Q3 01: $13 Q4 01: $41 2002: $151 million Q1 02: $27 Q2 02: $30 Q3 02: $39 Q4 02: $55 2003B: $200 million Q1 03B: $38 Q2 03B: $46 Q3 03B: $46 Q4 03B: $70 Source: USA 2003 budget released on February 6, 2003 and other SEC Prepared 2/26/03 - Read important disclaimer(s)
Slide 9: Gross Profit- HSN U.S. (graph) 2001 average: 34.0% Q1 01: 33.5% Q2 01: 34.5% Q3 01: 34.3% Q4 01: 33.9% 2002 average: 37.1% Q1 02: 35.5% Q2 02: 38.4% Q3 02: 38.1% Q4 02: 36.7% Source: USA SEC filings. Prepared 2/26/03 - Read important disclaimer(s) Slide 10: Product Mix- HSN U.S. 2001 2002 Gross Profit Home & Licensing 38% 31% 20-30% Home Fashions 4% 7% 30-40% Jewelry 25% 25% 40-50% Health / Beauty 19% 23% 40-50% Apparel / Accessories 14% 14% 30-40% Source: USA SEC filings and HSN estimates. Prepared 2/26/03 - Read important disclaimer(s)
Slide 11: EBITA- HSN International (graph) $ in millions 2001: ($26) million loss Q1 01: ($2) Q2 01: ($4) Q3 01: ($12) Q4 01: ($8) 2002: ($12) million loss Q1 02: ($6) Q2 02: ($6) Q3 02: ($1) Q4 02: $1 2003B: $8 million Q1 03B: $2 Q2 03B: $1 Q3 03B: $0 Q4 03B: $5 Source: USA 2003 budget released on February 6, 2003 and other SEC filings. Prepared 2/26/03 - Read important disclaimer(s) Slide 12: Growth Drivers- Electronic Retailing o Merchandising / New Brands o Raquel Welch, Stephanie Seymour, Lauren Hutton, Kathy Levine, Rita Wilson/Cathy Waterman, Burt Wolf, Michael Chiarello, Wei East o HSN.com o International o Off-Air Prepared 2/26/03 - Read important disclaimer(s)
Slide 13: Information & Services (graphic from website) Prepared 2/26/03 - Read important disclaimer(s) Slide 14: EBITA- Information & Services (graph) $ in millions 2001: ($10) million loss Q1 01: ($5) Q2 01: $7 Q3 01: ($12) Q4 01: $0 2002: $75 million Q1 02: $7 Q2 02: $27 Q3 02: $18 Q4 02: $23 2003B: $186 million Q1 03B: $24 Q2 03B: $41 Q3 03B: $22 Q4 03B: $99 Source: USA 2003 budget released on 2/6/03. Prepared 2/26/03 - Read important disclaimer(s)
Slide 15: Online Migration- Ticketmaster (graph) Today: 41% Source: USA SEC filings. Prepared 2/26/03 - Read important disclaimer(s) Slide 16: Subscribers- Match.com in thousands 2000 Q1 190 Q2 217 Q3 253 Q4 382 2001 Q1 528 Q2 604 Q3 653 Q4 725 Source: USA SEC filings. Prepared 2/26/03 - Read important disclaimer(s) Slide 17: World's Leading Merchant Discount Marketer o 8 million customers o 65,000 merchants o 250,000 locations o 160 markets o $10 B generated for merchants Transaction pending. Source: EPI Prepared 2/26/03 - Read important disclaimer(s)
Slide 18: Size of the Opportunity Couponing: $180 Billion 80% of US Households Use Coupons 8% Use EPI Today o Distribution: 50,000 schools / community groups o Direct relationship with only 12% of members o $10B total annual merchant sales o Avg. member redeems 25+ offers/year o Avg. merchant receives 2-3K/year Electronic Discount Program Will: o Add web distribution via USA and portals o Increase registrations, renewals, subscriptions o Enable EPI to capture % of transaction o~$300 million opportunity Transaction pending. Pie chart depicts US households. Source: NCH NuWorld Marketing Prepared 2/26/03 - Read important disclaimer(s) Slide 19: Growth Drivers-Information & Services o Continued online penetration o New technologies o Ticketmaster: ticketAlerts, AccountManager, GroupManager, teamExchange, LoyaltyManager, MailManager, ticketExchange, dynamic pricing o Match: Instant messenger, video, voice, mobile, personality test, MatchLive o Local services: client self-enrollment, online discounts, bundling offers and discounts, credit cards o Integration of local services o Digitized offers Prepared 2/26/03 - Read important disclaimer(s)
Slide 20: Travel Services (graphic from website) Prepared 2/26/03 - Read important disclaimer(s) Slide 21: EBITA - Travel Services $ in millions. 2001: $129 million Q1 01: $18 Q2 01: $35 Q3 01: $35 Q4 01: $41 2002: $281 million Q1 02: $57 Q2 02: $70 Q3 02: $83 Q4 02: $71 2003B: $448 million Q1 03B: $83 Q2 03B: $108 Q3 03B: $135 Q4 03B: $122 Source: USA 2003 budget released on February 6, 2003 and other SEC filings. Prepared 2/26/03 - Read important disclaimer(s)
Slide 22: Online Travel Gross Bookings- U.S. (graph) $ in millions (logos) Expedia & Hotels.com Travelocity Orbitz Source: Company reports, Expedia estimates. ROOM figure is gross sales as ROOM does not report gross bookings. Prepared 2/26/03 - Read important disclaimer(s) Slide 23: Revenue- Hotels.com $ in millions 2001: $536 million Q1 01: $105 Q2 01: $138 Q3 01: $151 Q4 01: $142 2002: $945 million Q1 02: $166 Q2 02: $230 Q3 02: $277 Q4 02: $273 2003B: $1.25 billion Q1 03B: $245 Q2 03B: $305 Q3 03B: $355 Q4 03B: $345 Hotels.com direct Q2 02: 10% Q3 02: 20% Q4 02: 30% Source: USA 2003 budget released on February 6, 2003 and other SEC filings. Prepared 2/26/03 - Read important disclaimer(s)
Slide 24: Online Migration- Hotel Rooms Room nights 05E: 20% Source: PhocusWright research Prepared 2/26/03 - Read important disclaimer(s) Slide 25: #1 in Online Hotel Rooms (graph) USA (Expedia & Hotels.com) 36% Marriott 18% Hilton 8% Travelocity 6% Priceline 5% Hotwire 3% Sources:Smith Travel Research, Travelclick and Thomas Weisel Partners LLC estimates. Prepared 2/26/03 - Read important disclaimer(s) Slide 26: International Travel Gross Bookings (graph) $ in millions. Excludes TV Travel Group. 2001: $236 million Q1 01: $47 Q2 01: $59 Q3 01: $66 Q4 01: $63
2002: $601 million Q1 02: $105 Q2 02: $130 Q3 02: $191 Q4 02: $175 International % of Total Travel Gross Bookings Q1 01: 6.3% Q2 01: 6.5% Q3 01: 8.1% Q4 01: 7.8% Q1 02: 8.8% Q2 02: 8.9% Q3 02: 11.9% Q4 02: 11.5% Sources: USA estimates. Prepared 2/26/03 - Read important disclaimer(s) Slide 27: Growth Drivers- Travel Services o Continued online penetration o New technologies o Expedia: corporate travel, Newtrade backend o Hotels.com: packaging, greater automation o Interval: improve online engine o TVTS: private label package engine o International o Brand spending Prepared 2/26/03 - Read important disclaimer(s)
Slide 28: 2003 Budget Highlights $ in millions. Pro forma adjusted 2002 2003B Growth Revenue $4,657 $6,008 29% Gross Profit 1,834 2,617 43% Operating Expenses (a) 1,684 2,268 35% Operating Income 150 348 132% EBITA 448 751 68% Adjusted Net Income 236 414 76% (a) Not including one-time items of $26.3 million and $121.9 million in 2001 and 2002, respectively. Source: USA 2003 budget released on 2/6/03. Prepared 2/26/03 - Read important disclaimer(s) Slide 29: Strong Balance Sheet $ in millions, as of December 31, 2002. Pro forma for recent bond issuance. Cash at USA: $2,866 + Attributable Cash at Subs: $580 + Securities in Vue: $2,203 - - Net Debt & Preferred: ($1,892) = Net Attributable Cash and Securities: $3,757 As adjusted as of 12/31/02. Pro forma for Ticketmaster merger, which closed on 1/17/03. Not pro forma for pending EPI and uDate transactions. Includes attributable cash from USA's public subsidiaries, based on the Q4 weighted average of USA's fully diluted treasury method ownership in each of its public subsidiaries, which was 66% for Hotels.com and 55% for Expedia. Excludes cash due to clients at Ticketmaster. Prepared 2/26/03 - Read important disclaimer(s)
Slide 30: Leading in Interactive Commerce $ in millions except per share amounts. 2003E 2003E 2003 E Growth Revenue Free Cash Flow Adjusted EP/AEPS 02-03 PEG ------- -------------- -------- ------- ----- --- USA $6,008 $811 $0.75 30x 67% 0.5x Amazon 4,427 375 $0.31 69x 82% 0.8x eBay 1,880 448 $1.31 59x 51% 1.2x Yahoo 1,180 298 $0.47 42x 28% 1.5x USA data per USA 2003 budget released on 2/6/03. S&P 500 per Morgan Stanley U.S. Investment Strategy dated 2/21/03. Amazon and eBay per Morgan Stanley research dated 1/03. Yahoo per Thomas Weisel research dated 2/13/03 and company guidance. Adjusted EPS for Yahoo represents After-Tax Cash Flow. Prepared 2/26/03 - Read important disclaimer(s) Slide 31: Perspective o Leading brands o Strong organic growth o Diversity of businesses o Proven track record Prepared 2/26/03 - Read important disclaimer(s) Slide 32: Stock Appreciation (USA) 12/96 - Today: 25% CAGR USA Interactive DJIA NASDAQ TIER 1 MEDIA Source: MSN Moneycentral. Tier 1 Media includes AOL Time Warner, News Corp, Viacom, Disney, Vivendi Universal and Gaylord. Prepared 2/26/03 - Read important disclaimer(s)
Slide 33 (logo): USA Interactive Engaging worldwide in the business of interactivity via the Internet, the television and the telephone. Slide 34 (logo): USA Interactive