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[GRAPHIC OMITTED]
USA
NETWORKS
INC
FOR IMMEDIATE RELEASE JANUARY 29, 2002
25% Q4 PRO FORMA EBITDA GROWTH FROM USA'S OPERATING BUSINESSES
34% EBITDA GROWTH BUDGETED FOR OPERATING BUSINESSES FOR FULL YEAR 2002
NEW YORK, January 29, 2002 - USA Networks, Inc. (NASDAQ: USAI), to be renamed
USA Interactive upon closing of the contribution of USA Entertainment to a joint
venture to be controlled by Vivendi Universal, reported results today for its
quarter ended December 31, 2001. Highlights are presented on a pro forma
comparative Q4 basis, reflecting the pending Expedia and Vivendi transactions.
o USA'S INTERACTIVE OPERATING BUSINESSES increased revenue by 17% to $937.8
million and EBITDA by 25% to $149.0 million. Total revenue increased by 14%
to $1,030 million and total EBITDA increased by 33% to $120.3 million.
o HSN increased its U.S. revenue by 9% to $495.3 million and EBITDA by 3% to
$75.7 million, as expected, while reducing inventory levels by $30.1
million, or 14%, to $156.5 million, during the year. As evidenced that HSN
is on track for a strong year, its U.S. revenue in January 2002 is up
approximately 20% versus January 2001.
o HOTEL RESERVATIONS NETWORK increased revenue by 42% to $141.7 million and
EBITDA by 30% to $22.9 million. HRN added a record number of properties,
667, and increased its number of affiliates to over 23,800 during Q4. HRN
is already having an outstanding 2002, having sold a record $2.5 million in
hotel rooms on January 9th.
o TICKETMASTER increased ticketing revenue by 7% to $131.8 million although
EBITDA declined by 12%, primarily due to reduced profitability in selected
international operations; declines in software sales which are sensitive to
economic conditions; and the inclusion of Reserve America, a seasonal
business. Ticketmaster also launched TICKETFAST -TM-, for print-at-home
ticketing, and Ticketmaster Marketplace -TM-, a service for buying,
selling and forwarding tickets.
o EXPEDIA (transaction pending) increased revenue by 84% to $81.8 million and
reversed an EBITDA loss of $2.9 million in Q4 2000 to an EBITDA profit of
$22.2 million. Expedia took the lead among online travel agencies, with
$704 million in gross bookings in Q4.
o MATCH, one of the company's fastest-growing assets, increased revenue by
145% to $17.6 million and EBITDA by 451% to $7.6 million. Match ended Q4
with total paid subscribers of 382,150, an increase of 51% over Q3.
o USA is filing its REVISED BUDGET with the SEC, based on its strong fourth
quarter results and additional information regarding the state of the
travel and leisure markets. The revised budget projects EBITDA for USA's
Interactive Operating Businesses to grow by 34% to $648 million and total
EBITDA to grow by 69% to $607 million in 2002.
o USA also today reiterated its goal of reaching 20% OF INTERACTIVE COMMERCE
over the next several years through a combination of organic growth,
investing in new initiatives, and significant acquisition activity. USA is
filing material with the SEC, pursuant to Reg FD, which contains more
detail on its strategy and goals.
o USA ENTERTAINMENT (which is not reflected in the comparative pro forma
results due to its pending contribution to a joint venture to be controlled
by Vivendi Universal) Operating Businesses decreased revenue by 15% to
$357.0 million and EBITDA by 16% to $126.8 million, due largely to a
continuing weak advertising market.
SEE IMPORTANT FOOTNOTES AT END OF THIS RELEASE.
M E D I A R E L E A S E
152 West 57th Street, 42nd Floor New York,
New York 10019 212.314.7300 Fax 212.314.7309
2 of 9
FINANCIAL RESULTS
On a comparative pro forma basis reflecting pending transactions, USA reported
the following:
PRO FORMA PRO FORMA
($ IN MILLIONS) Q4 01 Q4 00 GROWTH
------ ------ -----
REVENUES - OPERATING BUSINESSES
HSN - U.S.............................. $495.3 $455.8 9%
Ticketing.............................. 131.8 122.7 7%
Hotel Reservations Network............. 141.7 100.0 42%
Expedia (TRANSACTION PENDING).......... 81.8 44.4 84%
Precision Response..................... 69.8 72.1 (3%)
Match.com.............................. 17.6 7.2 145%
-------- ------ ----
SUB-TOTAL - OPERATING.............. 937.8 802.2 17%
REVENUES - EMERGING BUSINESSES
Citysearch and related................. 10.3 14.0
ECS / Styleclick....................... 12.5 13.5
HSN - International and other (d)...... 82.2 83.4
-------- ------
SUB-TOTAL - EMERGING............... 104.9 110.9
-------- ------
Foreign exchange conversion (a)........ (10.2) (11.8)
Disengaged HSN homes (c)............... -- 6.2
Intersegment elimination............... (2.2) --
-------- ------
TOTAL.............................. $1,030.3 $907.5 14%
======== ====== ====
EBITDA - OPERATING BUSINESSES
HSN - U.S................................... $75.7 $73.8 3%
Ticketing.............................. 21.5 24.4 (12%)
Hotel Reservations Network............. 22.9 17.6 30%
Expedia (TRANSACTION PENDING).......... 22.2 (2.9) NM
Precision Response..................... 6.2 11.0 (44%)
Match.com.............................. 7.6 1.4 451%
Corporate and other.................... (7.0) (6.0) NM
-------- ------ -----
SUB-TOTAL - OPERATING.............. 149.0 119.4 25%
EBITDA - EMERGING BUSINESSES
Citysearch and related................. (9.9) (12.4)
ECS / Styleclick....................... (7.8) (16.7)
HSN - International and other (d)...... (7.7) 4.1
-------- ------
SUB-TOTAL - EMERGING............... (25.4) (25.1)
Non-recurring items (b)................ (3.1) (3.2)
Foreign exchange conversion (a)........ (0.2) (1.5)
Disengaged HSN homes (c)............... -- 0.9
-------- ------
TOTAL.............................. $120.3 $90.5 33%
======== ====== ====
o Includes pro forma results for Expedia, the acquisition of which is
expected to close in February 2002. Does not include results for USA
Entertainment, the contribution of which to a joint venture with Vivendi
Universal is expected to close by Q2 2002. Excludes results from USA
Broadcasting, the sale of which to Univision was completed in August 2001.
o EBITDA is defined as operating income plus (1) depreciation and
amortization, (2) amortization of cable distribution fees ($14.6 million &
$11.0 million, respectively), (3) amortization of non-cash distribution,
marketing, and compensation expense, and (4) disengagement related payments
to cable operators and marketing expenses ($4.1 million) related to the
transfer of HSN's distribution to cable (which has been accomplished).
(a) In order to present comparable results for HSN Germany, the results have
been translated from Euros to U.S. dollars at a constant exchange rate.
(b) Represents non-recurring costs related to restructuring operations at HSN,
HSN International and PRC, including costs for employee terminations.
(c) Reflects estimated results generated by homes lost by HSN following
the sale of USA Broadcasting to
Univision.
(d) HSN - International and other includes primarily Home Shopping Espanol and
HSN Germany. USA was premature in its inclusion previously of HSN Germany
as an Operating Business. Although we believe that HSN Germany will be
profitable this year (and exceed its performance from last year), it
continues to experience significant growing pains and is not close to
operating at a stable, consistent basis (although there could be future
variations in results). We, therefore, intend to include HSN Germany as
part of HSN International and other for the foreseeable future, and we do
not intend to move it back to an Operating Business based on any short-term
improvement in results. For the fourth quarter, HSN Germany's sales and
EBITDA were $75.2 million and $1.7 million, respectively, as compared to
$74.0 million and $9.0 million, respectively, in the year ago period. We
believe this change will result in a better understanding of the results of
our Operating Businesses taken as a whole.
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CASH NET INCOME AND EARNINGS PER SHARE
PRO FORMA FOR VIVENDI CURRENT STRUCTURE (b)
AND EXPEDIA TRANSACTIONS (A) (C) ACTUAL PRO FORMA
-------------------------------- ------ ---------
Q4 01 Q4 00 Q4 01 Q4 00 (D)
----- ----- ----- ---------
Cash net income per share - diluted.................. 0.10 0.09 0.04 0.13
Basic loss per share................................. (0.06) (0.16) (0.13) (0.09)
(a) Excluding one-time income / (expense) of ($17.6 million), pre-tax in Q4
'01, and ($184.4 million), pre-tax, in Q4 '00, including the write-down of
Styleclick goodwill in Q4 '00 of ($145.6 million), pre-tax.
(b) Excluding one-time income / (expense) of ($25.7 million), pre-tax in Q4
'01, including $8.1 million related to the Entertainment operations, and
($184.4 million), pre-tax, in Q4 '00, including the write-down of
Styleclick goodwill in Q4 '00 of ($145.6 million), pre-tax.
(c) Presented based upon net income available to common shareholders, giving
effect to the preferred dividend related to the Expedia transaction.
(d) Amounts based on net income before loss from discontinued operations in
Q4 '00 of $18.0 million.
Cash net income ("CNI") is defined as net income plus (1) amortization of
non-cash distribution, marketing, and compensation expense (2) amortization of
goodwill and intangibles and (3) minority interest related to Holdco, minus the
1.4% PIK dividend on the $1.75 billion preferred security ($24.5 million,
pre-tax). Shares outstanding to compute CNI EPS is defined as actual shares
outstanding plus 33.2 million shares of Holdco that are exchangeable into USA
common stock minus 56.6 million shares of common stock held by Vivendi, as the
Company believes these shares should be viewed as treasury, although the amount
of shares treated as treasury will be lower at stock prices greater than $40.82,
as discussed in USA's 8-K filing with the SEC dated December 17, 2001. Related
to Holdco, the Company intends to issue common stock for all remaining
exchangeable shares upon completion of the Vivendi transaction. CNI EPS amounts
are shown on a diluted basis, including the impact of dilutive securities.
ADOPTION OF NEW ACCOUNTING RULES FOR GOODWILL
Effective January 1, 2002, all calendar year companies will be required to adopt
FAS 142, the new accounting rules for goodwill. The new rules eliminate
amortization of goodwill and other intangible assets with indefinite lives and
establish new measurement criterion for these assets. Although it has not
completed its assessment, the Company anticipates a write-off of $325 million to
$425 million primarily related to the Citysearch and Precision Response (PRC)
businesses. Although Citysearch and PRC are expected to generate positive cash
flows in the future, due to cash flow discounting techniques required by the new
rules, the future cash flows do not support current carrying values. The
expected range for the Citysearch write-off is $75 million to $125 million and
for PRC $250 million to $300 million. The rules are expected to reduce USA's
annual amortization expense by approximately $230 million.
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ELECTRONIC RETAILING HIGHLIGHTS
HSN's EBITDA increased by 3% to $75.7 million on 9% higher revenue of $495.3
million in the United States.
o In a challenging environment, HSN continues to grow faster than virtually
every major traditional retailer. In fact, HSN had one of its best
quarters ever in terms of new business, adding approximately 735,000
new customers during Q4.
o As compared to Q4 2000, EBITDA grew slower than revenue due to the build
out its new California fulfillment facility to reduce shipping times to
west coast customers, investments in alternative distribution channels, and
continuing technology investments in HSN.com as the business scales.
o HSN.com, which now represents approximately 10% of HSN's U.S. sales, grew
revenue by 125% in Q4, generating more sales than in all of 2000. Its
affiliate program, which began in August, now includes more than 3,000
affiliates.
o Off-air sales (including continuity, upsells, waitlist, and SHOP THE
SOAPS), which require little or no HSN TV airtime, generated more than $100
million in sales during 2001, and are expected to grow by more than 25% in
2002.
o In partnership with Carnival Cruise Lines and celebrity host Suzanne
Somers, HSN's GODDESS CRUISE event generated 1,100 cabin bookings in 36
hours, becoming the fastest selling cruise in Carnival's history. And
during the cruise, travelers placed more than 2,000 orders with HSN.
o HSN recently announced deals with star personalities. Christopher Lowell,
noted home authority and Emmy-winning host of the Discovery Channel's THE
CHRISTOPHER LOWELL SHOW, will debut an exclusive line of home makeover
items; Christine Alt, celebrity plus-size fashion model, will introduce an
exclusive new collection of clothing for women of all sizes; and Michael
Corbett, host of the syndicated television programs EXTRA! And EXTRA!'S
MANSIONS AND MILLIONAIRES, is launching a new line of indoor and outdoor
home essentials.
o HSN has also expanded its exclusive product line offerings in conjunction
with Betty Crocker, Serta, Coleman, Hewlett Packard, Panasonic, Major
League Baseball, Hoover, RCA, and Cosmopolitan, which will launch an
exclusive line of personal care products featuring guest appearances by the
magazine's beauty editors.
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ELECTRONIC RETAILING HIGHLIGHTS (CONTINUED)
Q4 01 Q4 00 GROWTH
----- ----- ------
Units shipped (IN MILLIONS).......................... 11.4 10.0 14%
Gross profit % *................................ 33.9% 33.6%
Return rate..................................... 17.9% 18.8%
Average price point............................. $47.36 $51.59
Product mix:
Homegoods................................... 53% 54%
Jewelry..................................... 25% 24%
Health / Beauty............................. 10% 10%
Apparel / Accessories....................... 12% 12%
* Gross margin increase is due to the inclusion of a small catalogue
operation in Q4 2001. Without the catalogue business, HSN's gross margins
would have been 33.2%.
HSN cable / DBS homes (IN MILLIONS @ 12/31).......... 73.4 65.9 11%
HSN total homes (IN MILLIONS @ 12/31)................ 83.0 77.1 8%
HSN total homes pro forma disengagement (IN MILLIONS) 72.6
HSN - INTERNATIONAL AND OTHER
o HSN - International and other includes primarily Home Shopping Espanol
and HSN Germany.
o System integration and operational challenges continued to adversely
impact revenue and EBITDA growth at HSN Germany, which generated
$1.7 million in EBITDA during Q4, down from $9 million in the year-ago
period.
o During 2001, HSN expanded its global leadership, launching new services
in the United Kingdom, Belgium, the Netherlands, and Mexico.
TV HOUSEHOLDS AVG. LIVE HRS.
---------------------------------
12/01 12/00 GROWTH DAILY 12/01 STAKE
----- ----- ------ ----------- -----
(IN MILLIONS @ 12/31)
Consolidated Services:
HSE - Germany (includes Austria / Switzerland)........ 29.7 29.3 0.4 16 hours 42%
Home Shopping Espanol (U.S. / Puerto Rico)............ 5.8 5.1 0.7 18 hours 100%
Home Shopping Espanol (Mexico)........................ 2.4 -- 2.4 4 hours 100%
Unconsolidated Services:
TVSN (China) -- HH airing at least 14 hours per week.. 28.9 18.9 10.0 10 hours 21%
Shop Channel (Japan) ................................. 11.6 9.2 2.4 16 hours 30%
HSE - Italy........................................... 9.4 6.0 3.4 11 hours 41%
HSE - Netherlands (includes Belgium).................. 3.5 -- 3.5 8 hours 47%
HSE - France (includes Belgium / Luxembourg).......... 3.5 1.4 2.1 5 hours 47%
HSE - U.K............................................. 5.8 -- 5.8 12 hours 47%
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INFORMATION & SERVICES HIGHLIGHTS
TICKETMASTER increased ticketing revenue by 7% to $131.8 million as EBITDA
declined by 12%, primarily due to reduced profitability in selected
international operations; declines in software sales which are more sensitive to
economic conditions; and the inclusion of Reserve America, which was profitable
on an EBITDA basis for the year, but due to seasonality loses money in the
fourth quarter.
o Ticketmaster launched TICKETFAST -TM-, for print-at-home ticketing, and
Ticketmaster Marketplace -TM-, a ticket exchange service for buying,
selling and forwarding tickets.
o Online ticket sales accounted for 33.9% of total tickets sold by
Ticketmaster, compared to 27.9% in Q4 '00.
o MATCH.COM increased the number of paying subscribers to 382,150, a 144%
increase from one year ago, and a 51% increase over Q3. Match.com earned
$7.6 million in EBITDA in Q4.
o CITYSEARCH was named the Best Cityguide 2002 by Yahoo! Internet Life and
was ranked among the Top 100 Websites by PC Magazine.
Q4 01 Q4 00 GROWTH
----- ----- ------
Number of tickets sold (IN MILLIONS)............ 20.3 18.7 8.6%
Gross value of tickets sold (IN MILLIONS)....... $870.3 $781.8 11.3%
Revenue per ticket.............................. $6.00 $5.87 2.2%
Share of tickets sold online.................... 33.9% 27.9%
Top-selling events in Q4 '01.................... NUTCRACKER, RINGLING BROTHERS, RADIO CITY
CHRISTMAS SPECTACULAR, DISNEY ON ICE and WWF.
EXPEDIA (transaction pending) increased EBITDA to $22.2 million, on 84% higher
revenue of $81.8 million.
o Expedia led all online travel agencies for the first time with $704
million in gross bookings in Q4.
o Expedia was named Best Overall Travel Site by Yahoo! Internet Life.
o Expedia announced the acquisition of Classic Custom Vacations, the biggest
high-end vacation packager to Hawaii.
o Expedia introduced visa and passport service for travelers and opened the
"Travel Right" Cafe in LAX.
Q4 01 Q4 00 GROWTH
----- ----- ------
Gross bookings (IN 000S)........................ $704 $475 48%
Total transactions (IN 000S).................... 2,229 1,318 69%
Average Media Metrix reach (IN 000S)............ 9,238 5,417 70%
Expedia.com conversion.......................... 5.2% 6.0%
New purchasing customers (IN 000S).............. 870 504 73%
Unique purchasing customers (IN 000S)........... 1,383 790 75%
Cumulative purchasing customers (IN 000S)....... 6,294 2,932 115%
SEE IMPORTANT FOOTNOTES AT END OF THIS RELEASE.
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7 of 9
INFORMATION & SERVICES HIGHLIGHTS (CONTINUED)
HOTEL RESERVATIONS NETWORK increased EBITDA by 30% to $22.9 million on 42%
higher revenue of $141.7 million.
o HRN added a record number of hotel properties, 667, to total over
4,500 properties.
o HRN completed the acquisition of AceNet, a leading hotel consolidator
in Atlantic City.
o HRN now has over 23,800 mostly-exclusive affiliates under contract.
Q4 01 Q4 00 GROWTH
----- ----- ------
Hotel room nights sold....................... 1,187,000 699,900 70%
Affiliates (including TravelNow)............. 23,808 16,200 47%
Properties................................... 4,567 2,600 76%
Cities served (AS OF 12/31).................. 178 97 84%
PRECISION RESPONSE decreased EBITDA by 44% to $6.2 million on 3% lower revenue
of $69.8 million.
o PRC's business continued to be adversely affected by an economy-related
slowdown in the outsourcing of customer care programs, particularly in
the telecom and financial services industries. In addressing this,
the Company engaged in cost reduction initiatives during Q4 to better
position itself for 2002.
o PRC signed consumer service deals with Schwan's and Household Credit, both
of which will commence in 2002.
ENTERTAINMENT HIGHLIGHTS
USA NETWORK decreased EBITDA by 20% to $84.9 million on 7% lower revenue of
$184.7 million.
o USA finished the year tied for second place among all basic cable networks
in primetime with a 1.7 rating.
o USA averaged a 1.5 primetime rating in Q4 '01.
o The PRIMETIME MOVIE increased delivery of Adults 18-34 by 18%.
o PRANCER RETURNS earned a 3.0 rating as USA's highest rated Original Movie
in Q4 '01.
SCI FI decreased EBITDA by 13% to $26.1 million on 8% lower revenue
of $71.4 million.
o SCI FI averaged a 0.7 rating in primetime and its average household
delivery decreased by 8% to 524,000. Excluding the effects in Q4 `00 of SCI
FI's hit mini-series DUNE, SCI FI's average household delivery decreased by
2%.
o SCI FI continues to have the highest concentration of adult viewers 25-54
of any network on TV, while ranking in the top 10 among basic cable
networks in its delivery of Adults, Women and Men 25-54 and Adults and Men
18-49.
STUDIOS USA, net, increased EBITDA by 3% to $15.8 million on 30% lower revenue
of $100.9 million.
o LAW & ORDER is generating the highest ratings in its 12-year history,
averaging 18.9 million viewers weekly on NBC this season, ranking
as the fifth highest rated television series.
o LAW & ORDER: CRIMINAL INTENT, airing on NBC, was the most watched new
primetime series in the November sweeps.
o LAW & ORDER: SPECIAL VICTIMS UNIT, airing on NBC, is the most watched
show in Friday primetime.
o THE DISTRICT, airing on CBS, continues as the most watched show in
Saturday primetime.
o MAURY is the #2 talk show among Women 18-49, averaging a 2.3 rating in
this demographic during the sweeps.
o CROSSING OVER WITH JOHN EDWARD is this season's highest rated new daily
first-run syndicated series.
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ENTERTAINMENT HIGHLIGHTS (CONTINUED)
CABLE AND STUDIOS: Q4 01 Q4 00 GROWTH
----- ----- ------
Revenue ($ IN MILLIONS):
USA Network................................. $184.7 $199.4 (7%)
SCI FI...................................... 71.4 77.8 (8%)
Studios, net................................ 100.9 145.0 (30%)
------ ------ -----
Total................................. $357.0 $422.2 (15%)
====== ====== =====
EBITDA ($ IN MILLIONS):
USA Network................................. $84.9 $105.6 (20%)
SCI FI...................................... 26.1 30.2 (13%)
Studios, net................................ 15.8 15.3 3%
------ ------ -----
Total................................. $126.8 $151.1 (16%)
====== ====== =====
Households (IN MILLIONS @ 12/31):
USA Network................................. 85.2 79.9 7%
SCI FI...................................... 76.4 66.7 15%
Advertising and other revenue / affiliate revenue:
USA Network mix............................. 48:52 57:43
SCI FI mix.................................. 59:41 67:33
USA FILMS
USA Films' theatrical releases in Q4 were THE MAN WHO WASN'T THERE and GOSFORD
PARK. THE MAN WHO WASN'T THERE was nominated for three GOLDEN GLOBES, including
Best Picture (Drama) and Best Actor (Drama). GOSFORD PARK was nominated for five
GOLDEN GLOBES, including Best Picture (Comedy or Musical), and was awarded Best
Director. USA Home Entertainment's release ULTIMATE JORDAN is its best selling
sports DVD to date, shipping over 200,000 units.
SHARES OUTSTANDING, MARKET CAPITALIZATION, NET DEBT
As of January 23, 2002, USA has outstanding 764.7 million shares, including
exchangeable securities and treasury method options, with an aggregate market
capitalization of $19.9 billion. Pro forma for the Expedia and Vivendi
transactions, USA has outstanding 414.3 million shares, including exchangeable
securities and treasury method options, with an aggregate market capitalization
of $10.8 billion. Pro forma shares outstanding excludes Vivendi's remaining 56.6
million shares, as the Company believes these shares should be viewed as
treasury, although the amount of shares treated as treasury will be lower at
stock prices greater than $40.82, as discussed in USA's 8-K filing with the SEC
dated December 17, 2001.
USA has no net debt and $550 million in consolidated net cash, including that of
its public subsidiaries and an advance receivable to Universal. This excludes
the final cash payment on the sale of USA Broadcasting of $214 million, net of
tax, and $1.6 billion related to the pending Vivendi transaction and Expedia's
cash balance of $250 million.
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ANALYST CONFERENCE CALL
USA Networks, Inc. will audiocast its conference call with analysts and
investors discussing the company's fourth quarter financial results on Tuesday,
January 29, 2002, at 11:00 a.m. Eastern Time (ET). The live audiocast is open to
the public, and a replay will be available approximately one hour after its
completion, at WWW.USANETWORKS.COM/INVESTOR.RELATIONS.
IMPORTANT DISCLOSURES / LEGEND AND FORWARD LOOKING STATEMENTS / FOOTNOTES
USA and Expedia have filed a joint prospectus/proxy statement and will file
other relevant documents concerning USA's acquisition of Expedia with the
Securities and Exchange Commission ("SEC"). INVESTORS ARE URGED TO READ THE
JOINT PROSPECTUS/PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE
FILED IN THE FUTURE WITH THE SEC BECAUSE THOSE DOCUMENTS CONTAIN IMPORTANT
INFORMATION. Investors will be able to obtain such documents free of charge at
the SEC's website at www.sec.gov. In addition, such documents may also be
obtained free of charge by contacting USA Networks, Inc., 152 West 57th Street,
New York, New York, 10019, Attention: Investor Relations, or Expedia, Inc.,
13810 SE Eastgate Way, Suite 400, Bellevue, WA 98005, Attention: Investor
Relations.
USA has filed a preliminary proxy statement and will file other relevant
documents concerning USA's contribution of its Entertainment Group to a joint
venture with Vivendi Universal and certain related transactions with the
Securities and Exchange Commission ("SEC"). INVESTORS ARE URGED TO READ THE
PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED IN THE
FUTURE WITH THE SEC BECAUSE THOSE DOCUMENTS CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION. Investors will be able to obtain such documents free of charge at
the SEC's website at www.sec.gov. In addition, such documents may also be
obtained free of charge by contacting USA Networks, Inc., 152 West 57th Street,
New York, NY, 10019, Attn: Investor Relations.
INVESTORS SHOULD READ THE PROXY STATEMENT CAREFULLY WHEN AVAILABE BEFORE MAKING
ANY VOTING OR INVESTMENT DECISION CONCERNING THE PROPOSED TRANSACTIONS.
USA and its directors and officers may be deemed to be participants in the
solicitation of proxies from USA shareholders to adopt the agreement providing
for USA's contribution of its Entertainment Group to a joint venture with
Vivendi Universal and the other related transactions described therein. A
detailed list of the names and interests of USA's directors and executive
officers is contained in the definitive proxy statement on Schedule 14A filed by
SUA with the SEC on April 9, 2001. Copies of USA filings may be obtained free of
charge at the SEC's website at www.sec.gov.
This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements are necessarily estimates reflecting the best judgment of the senior
management of USA and involve a number of risks and uncertainties that could
cause actual results to differ materially from those suggested by the
forward-looking statements. These forward-looking statements should, therefore,
be considered in light of various important factors, including those set forth
herein and in the documents USA files with the Securities and Exchange
Commission. Important factors that could cause actual results to differ
materially from estimates or projections contained in the forward-looking
statements include, without limitation: material adverse changes in economic
conditions generally or in the markets served by USA, material changes in
inflation, future regulatory and legislative actions affecting USA's operating
areas, competition from others, product demand and market acceptance, the
ability to protect proprietary information and technology or to obtain necessary
licenses on commercially reasonable terms, the ability to expand into and
successfully operate in foreign markets, and obtaining and retaining skilled
workers and key executives. The words "estimate," "project," "intend," "expect,"
"believe" and similar expressions are intended to identify forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. USA does not
undertake any obligation to update or revise these forward-looking statements,
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 `01 vs. `00. 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. Subject to qualifications.
Operating metrics in this press release are pro forma for pending Expedia
transaction. For operating metrics relating to Expedia, gross bookings represent
the total value of travel booked through the Expedia, VacationSpot, and WWTE
sites. Transactions represents the number of reservations and purchases
transacted through the Expedia and WWTE sites. Average monthly Media Metrix
reach represents the unduplicated reach for the Expedia and VacationSpot sites.
Conversion represents the monthly average Expedia.com unique monthly purchasers
divided by the monthly average Media Metrix reach for the Expedia.com site.
Expedia new purchasing customers represents the number of new customers
transacting through the Expedia sites in a quarter. Expedia cumulative
purchasing customers represents the cumulative number of customers that have
ever transacted through the Expedia sites as of the end of a quarter. Expedia
quarterly unique purchasing customers represents the number of unique customers
transacting through the Expedia sites over the course of a quarter.
ABOUT USA NETWORKS, INC.
USA Networks, Inc. (Nasdaq: USAI), to be renamed USA Interactive upon close of
its pending transaction with Vivendi Universal, is organized into two groups,
the Interactive Group and the Entertainment Group. The Interactive Group
consists of Home Shopping Network (including HSN International and HSN
Interactive); Ticketmaster (Nasdaq: TMCS), which operates CitySearch and
Match.com; Hotel Reservations Network (Nasdaq: ROOM); Electronic Commerce
Solutions; Styleclick; Precision Response Corporation; and Expedia, Inc.
(Nasdaq: EXPE) upon the close of USA's previously announced transaction. The
Entertainment Group consists of USA Cable, including USA Network, SCI FI
Channel, TRIO, Newsworld International, and Crime; Studios USA, which produces
and distributes television programming; and USA Films, which produces and
distributes films. On December 17, 2001, USA and Vivendi Universal announced a
transaction in which the assets of the Entertainment Group would be contributed
to Vivendi Universal Entertainment, a new joint venture.
CONTACTS: USA COMMUNICATIONS: USA INVESTOR RELATIONS:
Ron Sato Roger Clark / Lauren Rosenfield
212-314-7254 212-314-7400
USA INTERACTIVE AND SUBSIDIARIES
PRO FORMA FOR THE PENDING EXPEDIA AND VIVENDI TRANSACTIONS
UNAUDITED BUSINESS SEGMENT INFORMATION
($ IN THOUSANDS)
THREE MONTHS ENDED DECEMBER 31,
PRO FORMA PRO FORMA
---------- ----------
2001 2000
---------- ----------
REVENUES - OPERATING BUSINESSES
Electronic retailing - U.S. $ 495,275 $ 455,840
Ticketing 131,776 122,656
Hotel reservations 141,668 100,014
Online travel (transaction pending) 81,762 44,419
Teleservices 69,752 72,097
Personals 17,561 7,173
---------- ----------
SUB-TOTAL 937,794 802,199
REVENUES - EMERGING BUSINESSES
Citysearch and related 10,256 14,062
Electronic Commerce Solutions/Styleclick 12,448 13,413
HSN - all consolidated international and other 82,192 83,407
---------- ----------
SUB-TOTAL 104,896 110,882
---------- ----------
Euro's exchange rate fluctuation (a) (10,242) (11,814)
Disengaged HSN homes (b) -- 6,229
Intersegment Elimination (2,180) --
---------- ----------
TOTAL $1,030,268 $ 907,496
========================
EBITDA - OPERATING BUSINESSES (c)
Electronic retailing - U.S. $ 75,667 $ 73,758
Ticketing 21,473 24,419
Hotel reservations 22,858 17,637
Online Travel (transaction pending) 22,205 (2,872)
Teleservices 6,221 11,048
Personals 7,604 1,379
Corporate and other (7,027) (5,988)
---------- ----------
SUB-TOTAL 149,001 119,381
EBITDA - EMERGING BUSINESSES (c)
Citysearch (9,853) (12,426)
Electronic Commerce Solutions/Styleclick (7,803) (16,752)
HSN - all consolidated international and other (7,745) 4,051
---------- ----------
SUB-TOTAL (25,401) (25,127)
---------- ----------
Restructuring charge and one-time items (d) (3,075) (3,187)
Euro's exchange rate fluctuation (a) (218) (1,454)
Disengaged HSN homes (b) -- 856
---------- ----------
TOTAL $ 120,307 $ 90,469
========================
(a) In order to present comparable results for HSN Germany, the results have
been translated from Euros to U.S. dollars at a constant exchange rate.
(b) Reflects estimated results generated by homes lost by HSN following
disengagement of USA Broadcasting to Univision.
(c) EBITDA is defined as operating income plus, (1) depreciation and
amortization, (2) amortization of cable distribution fees of $14,591 and
$10,987, respectively, (3) amortization of non-cash distribution and
marketing expense and non-cash compensation expense and (4) disengagement
expense of $4.1 million in Q4 '01.
(d) Represents non-recurring costs related to restructuring operations and
employee terminations.
13
USA INTERACTIVE AND SUBSIDIARIES
PRO FORMA FOR THE PENDING EXPEDIA AND VIVENDI TRANSACTIONS
UNAUDITED BUSINESS SEGMENT INFORMATION
($ IN THOUSANDS)
TWELVE MONTHS ENDED DECEMBER 31,
ACTUAL PRO FORMA (a)
----------- -------------
2001 2000
----------- -------------
REVENUES - OPERATING BUSINESSES
Electronic retailing - U.S. $ 1,658,904 $ 1,527,042
Ticketing 579,679 518,565
Hotel reservations 536,497 327,977
Online Travel (transaction pending) 296,936 156,656
Teleservices 298,678 282,120
Personals 49,249 29,122
----------- -----------
SUB-TOTAL 3,419,943 2,841,482
REVENUES - EMERGING BUSINESSES
Citysearch 46,107 50,889
Electronic Commerce Solutions/Styleclick 34,230 48,492
HSN - all consolidated international and
other 319,424 280,985
--------------------------
SUB-TOTAL 399,761 380,366
--------------------------
Euro's exchange rate fluctuation (b) (46,855) (35,271)
Disengaged HSN homes (c) -- 6,229
Intersegment Elimination (7,053) --
--------------------------
TOTAL $ 3,765,796 $ 3,192,806
==========================
EBITDA - OPERATING BUSINESSES (d)
Electronic retailing - U.S. $ 231,507 $ 229,582
Ticketing 106,248 100,025
Hotel reservations 81,449 52,641
Online Travel (transaction pending) 60,864 (38,770)
Teleservices 34,299 44,626
Personals 16,512 6,241
Corporate and other (31,203) (29,879)
--------------------------
SUB-TOTAL 499,676 364,466
EBITDA - EMERGING BUSINESSES (d)
Citysearch (43,441) (63,879)
Electronic Commerce Solutions/Styleclick (53,591) (71,193)
HSN - all consolidated international and
other (22,555) 14,679
--------------------------
SUB-TOTAL (119,587) (120,393)
--------------------------
Restructuring charge and one-time items (e) (20,098) (4,685)
Euro's exchange rate fluctuation (b) (1,200) (3,939)
Disengaged HSN homes (c) -- 856
--------------------------
TOTAL $ 358,791 $ 236,305
==========================
(a) Presented as if the acquisitions of Precision Response and Styleclick had
occurred at the beginning of the period presented.
(b) In order to present comparable results for HSN Germany, the results have
been translated from Euros to U.S. dollars at a constant exchange rate.
(c) Reflects estimated results generated by homes lost by HSN following
disengagement of USA Broadcasting to Univision.
(d) EBITDA is defined as operating income plus, (1) depreciation and
amortization, (2) amortization of cable distribution fees of $43,975 and
$36,322, respectively, (3) amortization of non-cash distribution and
marketing expense and non-cash compensation expense and (4) disengagement
expense of $4.1 million in Q4 '01.
(e) Represents non-recurring costs related to restructuring operations and
employee terminations and benefits.
14
USA INTERACTIVE AND SUBSIDIARIES
PRO FORMA FOR THE PENDING EXPEDIA AND VIVENDI TRANSACTIONS
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED DECEMBER 31,
PRO FORMA PRO FORMA
----------- -----------
2001 2000
----------- -----------
Revenues, net $ 1,030,268 $ 907,496
Operating costs and expenses:
Costs related to revenues 667,944 602,673
Other costs and expenses 242,017 214,354
Disengagement costs (a) 4,052 --
Amortization of non cash distribution and marketing expense (b) 6,518 7,099
Amortization of non cash compensation expense (c) 4,793 12,497
Amortization of cable distribution fees 14,591 10,987
Depreciation and amortization 119,502 306,498
----------- -----------
Total operating costs and expenses 1,059,417 1,154,108
----------- -----------
Operating income (29,149) (246,612)
Interest expense, net (4,017) 1,418
Other, net 8,940 19,149
----------- -----------
Earnings before income taxes and minority interest (24,226) (226,045)
Income tax expense (18,671) (20,564)
Minority interest 12,663 82,572
----------- -----------
Loss before preferred dividend $ (30,234) $ (164,037)
Preferred dividend (d) (3,265) (3,265)
----------- -----------
Net loss available to common shareholders $ (33,499) $ (167,302)
=========== ===========
Net loss available to common shareholders ex.
one time charges (e) $ (25,145) $ (63,627)
=========== ===========
Cash net income available to common
shareholders, excluding one-time charges $ 40,514 $ 37,644
=========== ===========
Weighted average basic shares 412,753 403,878
=========== ===========
Weighted average CNI shares 410,485 401,400
=========== ===========
EPS AVAILABLE TO COMMON SHAREHOLDERS
Basic and diluted loss per share $ (.08) $ (.41)
=========== ===========
Basic loss per share, excluding one-time charges $ (.06) $ (.16)
=========== ===========
Cash net income per share, excluding
one-time charges $ .10 $ .09
=========== ===========
EBITDA (F) $ 120,307 $ 90,469
=========== ===========
(a) Represents costs incurred related to the disengagement of HSN from the USA
Broadcasting stations. Amounts primarily relate to payments to cable
operators and related marketing expenses in the disengaged markets.
(b) Amortization of warrants and stock issued in exchange for distribution and
marketing services.
(c) Expense relates to the Company's bonus stock purchase program, restricted
stock awards and certain stock option grants. (d) In relation to the
pending Expedia transaction, the Company will issue preferred stock with a
dividend of 1.99%, payable in cash or stock.
(e) Represents non-recurring costs related to restructuring operations at HSN,
HSN International and PRC, including costs for employee terminations.
(f) EBITDA is defined as operating income plus, (1) depreciation and
amortization, (2) amortization of cable distribution fees of $14,591 and
$10,987, respectively, (3) amortization of non-cash distribution and
marketing expense and non-cash compensation expense and (4) disengagement
expense of $4.1 million in Q4 '01.
15
USA INTERACTIVE AND SUBSIDIARIES
PRO FORMA FOR THE PENDING EXPEDIA AND VIVENDI TRANSACTIONS
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
TWELVE MONTHS ENDED DECEMBER 31,
PRO FORMA (a) PRO FORMA (a) (b)
------------- -----------------
2001 2000
------------- -----------------
Revenues, net $ 3,765,796 $ 3,192,806
Operating costs and expenses:
Costs related to revenues 2,424,580 2,117,995
Other costs and expenses 982,425 838,506
Disengagement costs (c) 4,052 --
Amortization of non cash distribution and marketing expense (d) 26,384 11,665
Amortization of non cash compensation expense (e) 24,204 76,941
Amortization of cable distribution fees 43,975 36,322
Depreciation and amortization 493,959 648,408
----------- -----------
Total operating costs and expenses 3,999,579 3,729,837
----------- -----------
Operating income (233,783) (537,031)
Interest expense, net (8,902) (2,504)
Other, net 92,664 174,145
----------- -----------
Earnings before income taxes and minority interest (150,021) (365,390)
Income tax expense (65,182) (120,217)
Minority interest 69,285 161,642
----------- -----------
Loss before preferred dividend $ (145,918) $ (323,965)
Preferred dividend (f) $ (13,059) (13,059)
----------- -----------
Net loss available to common shareholders $ (158,977) $ (337,024)
=========== ===========
Net loss available to common shareholders ex.
one time charges (g) ($ 131,556) ($ 275,337)
=========== ===========
Cash net income available to common
shareholders, excluding one-time charges $ 137,939 $ 51,581
=========== ===========
Weighted average basic shares 409,715 395,302
=========== ===========
Weighted average CNI shares 414,962 403,379
=========== ===========
EPS AVAILABLE TO COMMON SHAREHOLDERS
Basic and diluted loss per share $ (.39) $ (.85)
----------- -----------
Basic loss per share, excluding one-time charges $ (.32) $ (.70)
=========== ===========
Cash net income per share, excluding
one-time charges $ .33 $ .13
=========== ===========
EBITDA (h) $ 358,791 $ 236,305
=========== ===========
(a) Presented as if the merger of Ticketmaster and TMCS had occurred at the
beginning of the period presented. The merger has no impact on revenues or
EBITDA. Pro forma results reflect the impact of the merger on minority
interest and income taxes.
(b) Presented as if the acquisitions of Precision Response and Styleclick had
occurred at the beginning of the period presented.
(c) Represents costs incurred related to the disengagement of HSN from the USA
Broadcasting stations. Amounts primarily relate to payments to cable
operators and related marketing expenses in the disengaged markets.
(d) Amortization of warrants and stock issued in exchange for distribution and
marketing services.
(e) Expense relates to the Company's bonus stock purchase program, restricted
stock awards and certain stock option grants.
(f) In relation to the pending Expedia transaction, the Company will issue
preferred stock with a dividend of 1.99%, payable in cash or stock.
(g) Represents non-recurring costs related to restructuring operations at HSN,
HSN International and PRC, including costs for employee terminations.
(h) EBITDA is defined as operating income plus, (1) depreciation and
amortization, (2) amortization of cable distribution fees of $43,975 and
$36,322, respectively, (3) amortization of non-cash distribution and
marketing expense and non-cash compensation expense and (4) disengagement
expense of $4.1 million in Q4 '01.
16
USA INTERACTIVE AND SUBSIDIARIES
EPS AND CASH NET INCOME RECONCILIATION INFORMATION
UNAUDITED
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED DECEMBER 31,
PRO FORMA PRO FORMA
--------- ---------
2001 2000
--------- ---------
BASIC LOSS PER SHARE:
Net loss before preferred dividend $ (30,234) $(164,037)
Preferred Dividend (3,265) (3,265)
--------- ---------
Net loss available to common shareholders ($ 33,499) ($167,302)
Impact of unusual items, net of tax and minority interest (a) 8,354 103,675
--------- ---------
BASIC LOSS, EXCLUDING UNUSUAL ITEMS (a) $ (25,145) $ (63,627)
========= =========
Weighted average basic shares 412,753 403,878
========= =========
Basic loss per share before preferred dividend $ (.07) $ (.41)
--------- ---------
Basic loss per share before preferred dividend, ex. one-time items $ (.05) $ (.15)
========= =========
--------- ---------
Basic loss per share available to common shareholders $ (.08) $ (.41)
========= =========
Basic loss per share available to common shareholders, ex. one-time items $ (.06) $ (.16)
========= =========
=========================================================================================================
CASH NET INCOME:
Net loss available to common shareholders ($ 33,499) ($167,302)
Impact of non-cash items, net of tax and minority interest 68,743 208,525
1.4% PIK dividend (b) (3,721) (3,721)
Minority Interest (843) (9,018)
--------- ---------
CASH NET INCOME 30,680 28,484
Impact of unusual items, net of tax and minority interest (a) 9,834 9,159
--------- ---------
CASH NET INCOME, EXCLUDING UNUSUAL ITEMS (a) $ 40,514 $ 37,644
========= =========
Weighted average CNI shares 410,485 401,400
========= =========
Cash net income per share $ .07 $ .07
========= =========
Cash net income per share, excluding unusual items (a) $ .10 $ .09
========= =========
=========================================================================================================
RECONCILIATION OF BASIC AND CASH NET INCOME OUTSTANDING SHARES
Basic weighted average shares 412,753 403,878
Exchangeable Holdco shares 33,217 33,217
Treasury Method Stock Options 21,126 20,916
Vivendi shares treated as treasury (b) (56,611) (56,611)
--------- ---------
410,485 401,400
========= =========
=========================================================================================================
(a) Excludes one time charges and non-operating gains.
(b) Cash net income shares exclude Vivendi's remaining 56.6 million shares, as
the Company believes these shares should be viewed as treasury, although
the amount of treasury shares will be lower at stock prices greater than
$40.82, as discussed in the Company's 8-K filing with the SEC dated
December 17, 2001. The 1.4% PIK dividend on the preferred security that
relates to these shares has been deducted from net income.
================================================================================
17
USA INTERACTIVE AND SUBSIDIARIES
EPS AND CASH NET INCOME RECONCILIATION INFORMATION
UNAUDITED
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
TWELVE MONTHS ENDED DECEMBER 31,
PRO FORMA PRO FORMA
--------- ---------
2001 2000
--------- ---------
BASIC LOSS PER SHARE:
Net loss before preferred dividend $(145,918) $(323,965)
Preferred Dividend (13,059) (13,059)
--------- ---------
Net loss available to common shareholders ($158,977) ($337,024)
Impact of unusual items, net of tax and minority interest (a) 27,421 61,687
--------- ---------
BASIC LOSS, EXCLUDING UNUSUAL ITEMS (a) $(131,556) $(275,337)
========= =========
Weighted average basic shares 409,715 395,302
========= =========
Basic loss per share before preferred dividend $ (.36) $ (.82)
--------- ---------
Basic loss per share before preferred dividend, ex. one-time items $ (.29) $ (.66)
========= =========
--------- ---------
Basic loss per share available to common shareholders $ (.39) $ (.85)
========= =========
Basic loss per share available to common shareholders, ex. one-time items $ (.32) $ (.70)
========= =========
=========================================================================================================
CASH NET INCOME:
Net loss available to common shareholders ($158,977) ($337,024)
Impact of non-cash items, net of tax and minority interest 286,925 441,402
1.4% PIK dividend (b) (14,884) (14,884)
Minority Interest (4,937) (2,171)
--------- ---------
CASH NET INCOME 108,127 87,323
Impact of unusual items, net of tax and minority interest (a) 29,812 (35,742)
--------- ---------
CASH NET INCOME, EXCLUDING UNUSUAL ITEMS (b) $ 137,939 $ 51,581
========= =========
Weighted average CNI shares 414,962 403,379
========= =========
Cash net income per share $ .26 $ .22
========= =========
Cash net income per share, excluding unusual items (a) $ .33 $ .13
========= =========
=========================================================================================================
RECONCILIATION OF BASIC AND CASH NET INCOME OUTSTANDING SHARES
Basic weighted average shares 409,715 395,302
Exchangeable Holdco shares 33,217 33,217
Treasury Method Stock Options 28,641 31,471
Vivendi shares treated as treasury (b) (56,611) (56,611)
--------- ---------
414,962 403,379
========= =========
=========================================================================================================
(a) Excludes one time charges and non-operating gains.
(b) Cash net income shares exclude Vivendi's remaining 56.6 million shares, as
the Company believes these shares should be viewed as treasury, although
the amount of treasury shares will be lower at stock prices greater than
$40.82, as discussed in the Company's 8-K filing with the SEC dated
December 17, 2001. The 1.4% PIK dividend on the preferred security that
relates to these shares has been deducted from net income.
================================================================================
18
USA NETWORKS, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION - CONTINUING OPERATIONS
UNAUDITED
($ IN THOUSANDS)
THREE MONTHS ENDED DECEMBER 31,
ACTUAL ACTUAL
----------- -----------
2001 2000
----------- -----------
REVENUES - OPERATING BUSINESSES
Cable and studios $ 357,053 $ 422,133
Electronic retailing - U.S. 495,275 455,840
Ticketing 131,776 122,656
Hotel reservations 141,668 100,014
Teleservices 69,752 72,097
Personals 17,561 7,173
----------- -----------
SUB-TOTAL 1,213,085 1,179,913
REVENUES - EMERGING BUSINESSES
Citysearch and related 10,256 14,062
Electronic Commerce Solutions/Styleclick 12,448 13,413
HSN - all consolidated international and other 82,192 83,407
USA Films 37,476 20,536
Trio, NWI, Crime, other emerging media 5,961 7,470
----------- -----------
SUB-TOTAL 148,333 138,888
----------- -----------
Euro's exchange rate fluctuation (a) (10,242) (11,814)
Disengaged HSN homes (b) -- 6,229
Intersegment Elimination (4,701) --
----------- -----------
TOTAL $ 1,346,475 $ 1,313,216
=========== ===========
EBITDA - OPERATING BUSINESSES (c)
Cable and studios $ 126,855 $ 151,102
Electronic retailing - U.S. 75,667 73,758
Ticketing 21,473 24,419
Hotel reservations 22,858 17,637
Teleservices 6,221 11,048
Personals 7,604 1,379
Corporate and other (7,027) (5,988)
----------- -----------
SUB-TOTAL 253,651 273,355
EBITDA - EMERGING BUSINESSES (c)
Citysearch (9,853) (12,426)
Electronic Commerce Solutions/Styleclick (7,803) (16,752)
HSN - all consolidated international and other (7,745) 4,051
USA Films 1,930 (621)
Trio, NWI, Crime, other emerging media (4,359) (2,518)
----------- -----------
SUB-TOTAL (27,830) (28,266)
----------- -----------
Restructuring charge and one-time items (d) (6,249) (3,187)
Euro's exchange rate fluctuation (a) (218) (1,454)
Disengaged HSN Homes (b) -- 856
Intersegment Elimination (2,521) --
----------- -----------
TOTAL $ 216,833 $ 241,304
==========================
(a) In order to present comparable results for HSN Germany, the results have
been translated from Euros to U.S. dollars at a constant exchange rate.
(b) Reflects estimated results generated by homes lost by HSN following
disengagement of USA Broadcasting to Univision.
(c) EBITDA is defined as operating income plus, (1) depreciation and
amortization, (2) amortization of cable distribution fees of $14,591 and
$10,987, respectively, (3) amortization of non-cash distribution and
marketing expense and non-cash compensation expense and (4) disengagement
expense of $4.1 million in Q4 '01.
(d) Represents non-recurring costs related to restructuring operations and
employee terminations.
19
USA NETWORKS, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION - CONTINUING OPERATIONS
UNAUDITED
($ IN THOUSANDS)
TWELVE MONTHS ENDED DECEMBER 31,
ACTUAL PRO FORMA (a) ACTUAL
----------- ------------- -----------
2001 2000 2000
----------- ------------- -----------
REVENUES - OPERATING BUSINESSES
Cable and studios $ 1,633,130 $ 1,525,124 $ 1,525,124
Electronic retailing - U.S. 1,658,904 1,527,042 1,527,042
Ticketing 579,679 518,565 518,565
Hotel reservations 536,497 327,977 327,977
Teleservices 298,678 282,120 212,471
Personals 49,249 29,122 29,122
----------- ------------- -----------
SUB-TOTAL 4,756,137 4,209,950 4,140,301
REVENUES - EMERGING BUSINESSES
Citysearch 46,107 50,889 50,889
Electronic Commerce Solutions/Styleclick 34,230 48,492 46,603
HSN - all consolidated international and other 319,424 280,985 280,985
USA Films 167,038 86,084 86,084
Trio, NWI, Crime, other emerging media 24,086 20,332 20,332
----------- ------------- -----------
SUB-TOTAL 590,885 486,782 484,893
----------- ------------- -----------
Euro's exchange rate fluctuation (b) (46,855) (35,271) (35,271)
Disengaged HSN homes (c) -- 6,229 6,229
Intersegment Elimination (15,360) -- --
----------- ------------- -----------
TOTAL $ 5,284,807 $ 4,667,690 $ 4,596,152
=========== ============= ===========
EBITDA - OPERATING BUSINESSES (d)
Cable and studios $ 616,761 $ 547,684 $ 547,684
Electronic retailing - U.S. 231,507 229,582 229,582
Ticketing 106,248 100,025 100,025
Hotel reservations 81,449 52,641 52,641
Teleservices 34,299 44,626 35,165
Personals 16,512 6,241 6,241
Corporate and other (31,203) (29,879) (29,736)
----------- ------------- -----------
SUB-TOTAL 1,055,573 950,920 941,602
EBITDA - EMERGING BUSINESSES (d)
Citysearch (43,441) (63,879) (63,879)
Electronic Commerce Solutions/Styleclick (53,591) (71,193) (60,227)
HSN - all consolidated international and other (22,555) 14,679 14,679
USA Films 1,973 (6,592) (6,592)
Trio, NWI, Crime, other emerging media (11,467) (7,120) (7,120)
----------- ------------- -----------
SUB-TOTAL (129,081) (134,105) (123,139)
----------- ------------- -----------
Restructuring charge and one-time items (e) (23,272) (4,685) (4,685)
Euro's exchange rate fluctuation (b) (1,200) (3,939) (3,939)
Disengaged HSN homes (c) -- 856 856
Intersegment Elimination (8,307) -- --
----------- ------------- -----------
TOTAL $ 893,713 $ 809,047 $ 810,695
=========== ============= ===========
(a) Presented as if the acquisitions of Precision Response and Styleclick had
occurred at the beginning of the period presented.
(b) In order to present comparable results for HSN Germany, the results have
been translated from Euros to U.S. dollars at a constant exchange rate.
(c) Reflects estimated results generated by homes lost by HSN following
disengagement of USA Broadcasting to Univision.
(d) EBITDA is defined as operating income plus, (1) depreciation and
amortization, (2) amortization of cable distribution fees of $43,975 and
$36,322, respectively, (3) amortization of non-cash distribution and
marketing expense and non-cash compensation expense and (4) disengagement
expense of $4.1 million in Q4 '01.
(e) Represents non-recurring costs related to restructuring operations and
employee terminations and benefits.
20
USA NETWORKS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED DECEMBER 31,
ACTUAL PRO FORMA (a) ACTUAL
----------- ------------- -----------
2001 2000 2000
----------- ------------- -----------
Revenues, net $ 1,346,475 $ 1,313,216 $ 1,313,216
Operating costs and expenses:
Costs related to revenues 831,335 801,302 801,302
Other costs and expenses 298,307 270,610 270,610
Disengagement costs (b) 4,052 -- --
Amortization of non cash distribution and marketing expense (c) 6,518 7,099 7,099
Amortization of non cash compensation expense (d) 7,281 5,347 5,347
Amortization of cable distribution fees 14,591 10,987 10,987
Depreciation and amortization 138,275 323,672 323,672
----------- ------------- -----------
Total operating costs and expenses 1,300,359 1,419,017 1,419,017
----------- ------------- -----------
Operating income 46,116 (105,801) (105,801)
Interest expense, net (13,973) (10,263) (10,263)
Other, net (26,440) (18,063) (18,063)
----------- ------------- -----------
Earnings before income taxes and minority interest 5,703 (134,127) (134,127)
Income tax expense (37,686) (26,346) (26,346)
Minority interest (24,965) 82,933 98,176
----------- ------------- -----------
Net loss from continuing operations (e) $ (56,948) $ (77,540) $ (62,297)
=========== ============= ===========
Loss from continuing operations, excluding one-time
charges and non-operating gains (f) ($49,441) ($32,901) ($11,170)
=========== ============= ===========
Cash net income, excluding one-time charges
and non-operating gains $ 33,440 $ 100,112 $ 111,776
=========== ============= ===========
Weighted average basic shares 377,139 368,264 368,264
=========== ============= ===========
Weighted average cash net income shares 760,866 751,781 751,781
=========== ============= ===========
EPS FROM CONTINUING OPERATIONS
Basic loss per share $ (.15) $ (.21) $ (.17)
=========== ============= ===========
Basic loss per share, excluding one-time charges
and non-operating gains $ (.13) $ (.09) $ (.03)
=========== ============= ===========
Cash net income per share, excluding
one-time charges $ .04 $ .13 $ .15
=========== ============= ===========
EBITDA (g) $ 216,833 $ 241,304 $ 241,304
=========== ============= ===========
(a) Presented as if the merger of Ticketmaster and TMCS had occurred at the
beginning of the period presented. The merger has no impact on revenues or
EBITDA. Pro forma results reflect the impact of the merger on minority
interest and income taxes.
(b) Represents costs incurred related to the disengagement of HSN from the USA
Broadcasting stations. Amounts primarily relate to payments to cable
operators and related marketing expenses in the disengaged markets.
(c) Amortization of warrants and stock issued in exchange for distribution and
marketing services.
(d) Expense relates to the Company's bonus stock purchase program, restricted
stock awards and certain stock option grants.
(e) Q4 ' 00 excludes the results of USA Broadcasting. The results for the
discontinued operations was an after tax loss of $17,988.
(f) Represents non-recurring costs related to restructuring operations at HSN,
HSN International and PRC, including costs for employee terminations.
(g) EBITDA is defined as operating income plus, (1) depreciation and
amortization, (2) amortization of cable distribution fees of $14,591 and
$10,987, respectively, (3) amortization of non-cash distribution and
marketing expense and non-cash compensation expense and (4) disengagement
expense of $4.1 million in Q4 '01.
21
USA NETWORKS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
TWELVE MONTHS ENDED DECEMBER 31,
PRO FORMA (a) ACTUAL PRO FORMA (a) (b) ACTUAL
------------- ----------- ----------------- -----------
2001 2001 2000 2000
------------- ----------- ----------------- -----------
Revenues, net $ 5,284,807 $ 5,284,807 $ 4,667,690 $ 4,596,152
Operating costs and expenses:
Costs related to revenues 3,208,430 3,208,430 2,812,382 2,757,893
Other costs and expenses 1,182,664 1,182,664 1,046,261 1,027,564
Disengagement costs (c) 4,052 4,052 -- --
Amortization of non cash distribution and marketing expense (d) 26,384 26,384 11,665 11,665
Amortization of non cash compensation expense (e) 12,712 12,712 12,738 12,738
Amortization of cable distribution fees 43,975 43,975 36,322 36,322
Depreciation and amortization 565,352 565,352 709,775 693,642
------------ ----------- ------------ -----------
Total operating costs and expenses 5,043,569 5,043,569 4,629,143 4,539,824
------------ ----------- ------------ -----------
Operating income 241,238 241,238 38,547 56,328
Interest expense, net (48,438) (48,438) (34,812) (34,218)
Other, net (59,636) (59,636) 49,291 49,297
------------ ----------- ------------ -----------
Earnings before income taxes and minority interest 133,164 133,164 53,026 71,407
Income tax expense (107,265) (108,877) (102,921) (112,869)
Minority interest (152,487) (149,339) (81,275) (47,124)
------------ ----------- ------------ -----------
Loss from continuing operations (f) $ (126,588) $ (125,052) $ (131,170) $ (88,586)
============ =========== ============ ===========
Loss from continuing operations, excluding one-time charges and
non-operating gains (g) ($105,516) ($103,980) ($99,248) ($50,177)
============ =========== ============ ===========
Cash net income, excluding one-time charges
and non-operating gains $ 309,500 $ 311,036 $ 331,312 $ 379,134
============ =========== ============ ===========
Weighted average basic shares 374,101 374,101 366,045 359,688
============ =========== ============ ===========
Weighted average cash net income shares 765,343 765,343 753,760 747,403
============ =========== ============ ===========
EPS FROM CONTINUING OPERATIONS
Basic loss per share $ (.34) $ (.33) $ (.36) $ (.25)
============ =========== ============ ===========
Basic loss per share, excluding one-time charges
and non-operating gains $ (.28) $ (.28) $ (.27) $ (.14)
============ =========== ============ ===========
Cash net income per share, excluding
one-time charges $ .40 $ .41 $ .44 $ .51
============ =========== ============ ===========
EBITDA (h) $ 893,713 $ 893,713 $ 809,047 $ 810,695
============ =========== ============ ===========
(a) Presented as if the merger of Ticketmaster and TMCS had occurred at the
beginning of the period presented. The merger has no impact on revenues or
EBITDA. Pro forma results reflect the impact of the merger on minority
interest and income taxes.
(b) Presented as if the acquisitions of Precision Response and Styleclick had
occurred at the beginning of the period presented.
(c) Represents estimated costs incurred related to the disengagement of HSN
from the USA Broadcasting stations. Amounts primarily relate to payments
to cable operators and related marketing expenses in the disengaged
markets.
(d) Amortization of warrants and stock issued in exchange for distribution and
marketing services.
(e) Expense relates to the Company's bonus stock purchase program, restricted
stock awards and certain stock option grants.
(f) 2001 loss from continuing operations is calculated before the impact of
the cumulative effect of adoption of SOP 00-2, "Accounting by Producers
and Distributors of Films", of $9.2 million and the gain on sale of of
broadcasting stations, the sale of which to Univision was announced in
December 2000. The Company recorded a gain of $517.8 million in 2001
related to the sale. 2000 excludes the results of USA Broadcasting. The
results for the discontinued operations in 2000 was an after tax loss of
$59.4 million.
(g) Represents non-recurring costs related to restructuring operations at HSN,
HSN International and PRC, including costs for employee terminations.
(h) EBITDA is defined as operating income plus, (1) depreciation and
amortization, (2) amortization of cable distribution fees of $43,975 and
$36,322, respectively, (3) amortization of non-cash distribution and
marketing expense and non-cash compensation expense and (4) disengagement
expense of $4.1 million in Q4 '01.
22
USA NETWORKS AND SUBSIDIARIES
EPS AND CASH NET INCOME RECONCILIATION INFORMATION - CONTINUING OPERATIONS
UNAUDITED
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED DECEMBER 31,
PRO FORMA PRO FORMA ACTUAL
--------- --------- ---------
2001 2000 (a) 2000
--------- --------- ---------
BASIC LOSS PER SHARE:
Net loss $ (56,948) $ (77,540) $ (62,297)
Impact of unusual items, net of tax and minority interest (b) 7,507 44,639 51,127
--------- --------- ---------
BASIC LOSS, EXCLUDING UNUSUAL ITEMS (b) $ (49,441) $ (32,901) $ (11,170)
========= ========= =========
Weighted average basic shares 377,139 368,264 368,264
========= ========= =========
Basic loss per share before preferred dividend $ (.15) $ (.21) $ (.17)
--------- --------- ---------
Basic loss per share before preferred dividend, ex. one-time items $ (.13) $ (.09) $ (.03)
========= ========= =========
==============================================================================================================
CASH NET INCOME:
Net loss $ (56,948) $ (77,540) $ (62,297)
Impact of non-cash items, net of tax and minority interest 90,130 226,159 226,159
Minority Interest (15,033) (61,473) (61,473)
--------- --------- ---------
CASH NET INCOME 18,149 87,146 102,389
Impact of unusual items, net of tax and minority interest (b) 15,291 12,966 9,387
--------- --------- ---------
CASH NET INCOME, EXCLUDING UNUSUAL ITEMS (b) $ 33,440 $ 100,112 $ 111,776
========= ========= =========
Weighted average CNI shares 760,866 751,781 751,781
========= ========= =========
Cash net income per share $ .02 $ .12 $ .14
========= ========= =========
Cash net income per share, excluding unusual items (b) $ .04 $ .13 $ .15
========= ========= =========
==============================================================================================================
RECONCILIATION OF BASIC AND CASH NET INCOME OUTSTANDING SHARES
Basic weighted average shares 377,139 368,264 368,264
Exchangeable LLC and Holdco shares 361,153 361,153 361,153
Treasury Method Stock Options 22,574 22,364 22,364
--------- --------- ---------
760,866 751,781 751,781
========= ========= =========
==============================================================================================================
(a) Presented as if the Ticketmaster and TMCS merger had occurred as of the
beginning of the period. The merger had no impact on EBITDA, but did
impact minority interest.
(b) Excludes one time charges and non-operating gains.
================================================================================
23
USA NETWORKS AND SUBSIDIARIES
EPS AND CASH NET INCOME RECONCILIATION INFORMATION - CONTINUING OPERATIONS,
BEFORE CUM. EFFECT OF ACCOUNTING CHANGE
UNAUDITED
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
TWELVE MONTHS ENDED DECEMBER 31,
PRO FORMA ACTUAL PRO FORMA ACTUAL
--------- --------- --------- ---------
2001 (a) 2001 2000 (a) 2000
--------- --------- --------- ---------
BASIC LOSS PER SHARE:
Net loss $(126,588) $(125,052) $(131,170) $ (88,586)
Impact of unusual items, net of tax and minority interest (b) 21,072 21,072 31,922 38,409
--------- --------- --------- ---------
BASIC LOSS, EXCLUDING UNUSUAL ITEMS (b) $(105,516) $(103,980) $ (99,248) $ (50,177)
========= ========= ========= =========
Weighted average basic shares 374,101 374,101 366,045 359,688
========= ========= ========= =========
Basic loss per share before preferred dividend $ (.34) $ (.33) $ (.36) $ (.25)
--------- --------- --------- ---------
Basic loss per share before preferred dividend, ex. one-time items $ (.28) $ (.28) $ (.27) $ (.14)
========= ========= ========= =========
============================================================================================================================
CASH NET INCOME:
Net loss $(126,588) $(125,052) $(131,170) $ (88,586)
Impact of non-cash items, net of tax and minority interest 198,951 198,951 305,237 305,237
Minority Interest 211,471 211,471 194,002 199,240
--------- --------- --------- ---------
CASH NET INCOME 283,834 285,370 368,069 415,891
Impact of unusual items, net of tax and minority interest (b) 25,666 25,666 (36,757) (36,757)
--------- --------- --------- ---------
CASH NET INCOME, EXCLUDING UNUSUAL ITEMS (b) $ 309,500 $ 311,036 $ 331,312 $ 379,134
========= ========= ========= =========
Weighted average CNI shares 765,343 765,343 753,760 747,403
========= ========= ========= =========
Cash net income per share $ .37 $ .37 $ .49 $ .56
========= ========= ========= =========
Cash net income per share, excluding unusual items (b) $ .40 $ .41 $ .44 $ .51
========= ========= ========= =========
============================================================================================================================
RECONCILIATION OF BASIC AND CASH NET INCOME OUTSTANDING SHARES
Basic weighted average shares 374,101 374,101 366,045 359,688
Exchangeable LLC and Holdco shares 361,153 361,153 361,153 361,153
Treasury Method Stock Options 30,089 30,089 26,562 26,562
--------- --------- --------- ---------
765,343 765,343 753,760 747,403
========= ========= ========= =========
============================================================================================================================
(a) Presented as if the Ticketmaster and TMCS merger had occurred as of the
beginning of the period. The merger had no impact on EBITDA, but did
impact minority interest. Also, 2000 includes the results of PRC and
Styleclick for the entire period.
(b) Excludes one time charges and non-operating gains.
================================================================================
24
USA PROVIDES REVISED BUDGET TO INVESTMENT COMMUNITY
As filed with the Securities and Exchange Commission on January 29, 2002
Based on its strong fourth quarter results, additional information regarding the
state of the travel and leisure markets, and to give pro forma effect for its
pending contribution of USA Entertainment to a joint venture to be controlled by
Vivendi Universal, USA Networks, Inc. ("USA" and to be renamed USA Interactive)
has revised its 2002 budget and 2003 outlook from what it furnished to the SEC
on October 24, 2001. The revised budget, which is presented in detail on the
following pages, calls for EBITDA from Operating Businesses to increase by 34%
in 2002 on 24% higher revenue.
READ IMPORTANT FOOTNOTES AND DISCLAIMER
As filed with the Securities and Exchange Commission on January 29, 2002.
25
USA NETWORKS, INC. (to be renamed USA Interactive)
REVISED BUDGET
($ IN MILLIONS EXCEPT PER SHARE AMOUNTS)
2002 REVISED BUDGET
PRO FORMA ------------------------------------------------------
2001 Q1 Q2 Q3 Q4 FULL YEAR
--------- ----- ------- ------- ------- ---------
REVENUE -- OPERATING BUSINESSES
HSN - U.S. $ 1,550 $ 422 $ 418 $ 441 $ 561 $ 1,842
Ticketing 580 157 170 148 146 620
Hotel Reservations 536 150 197 212 216 775
Expedia 297 87 116 127 120 450
Precision Response 299 69 78 88 98 333
Match.com 49 18 22 23 25 88
------- ----- ------- ------- ------- -------
SUBTOTAL 3,311 903 1,000 1,039 1,166 4,108
REVENUE -- EMERGING BUSINESSES
Citysearch and related 46 8 9 11 13 40
HSN - other international (b) 319 87 95 99 124 404
ECS / Styleclick 34 11 18 17 29 75
------- ----- ------- ------- ------- -------
Subtotal 400 106 123 126 165 519
Foreign exchange conversion (47) (17) (15) (15) (16) (62)
Disengaged HSN homes 109 0 0 0 0 0
Intersegment elimination (7) (3) (3) (3) (3) (10)
------- ----- ------- ------- ------- -------
TOTAL REVENUE $ 3,766 $ 989 $ 1,105 $ 1,147 $ 1,313 $ 4,555
======= ===== ======= ======= ======= =======
EBITDA -- OPERATING BUSINESSES
HSN - domestic $ 216 $ 58 $ 62 $ 70 $ 95 $ 285
Ticketing 106 32 39 27 27 125
Hotel Reservations 81 18 28 29 35 110
Expedia 61 16 23 27 25 91
Precision Response 34 6 8 12 15 41
Match.com 17 3 7 9 11 30
Corporate and other (31) (9) (9) (9) (9) (34)
------- ----- ------- ------- ------- -------
SUBTOTAL 485 125 159 165 199 648
EBITDA -- EMERGING BUSINESSES
Citysearch and related (43) (10) (9) (8) (6) (32)
HSN - other international (b) (23) (1) 2 2 9 12
ECS / Styleclick (54) (8) (4) (3) (1) (16)
------- ----- ------- ------- ------- -------
Subtotal (120) (19) (11) (9) 2 (37)
Non-recurring items (19) 0 0 0 0 0
Foreign exchange conversion (1) (1) (1) (1) (2) (5)
Disengaged HSN homes 15 0 0 0 0 0
------- ----- ------- ------- ------- -------
TOTAL EBITDA $ 359 $ 105 $ 148 $ 155 $ 199 $ 607
======= ===== ======= ======= ======= =======
EARNINGS PER SHARE - ALL AMOUNTS ARE DILUTED
Basic $ 0.22 $ -- $ 0.06 $ 0.07 $ 0.12 $ 0.26
Cash net income $ 0.33 $0.04 $ 0.10 $ 0.11 $ 0.17 $ 0.43
GROWTH
OUTLOOK ---------------------
2003 '01 - '02 '02 - '03
------- --------- ---------
REVENUE -- OPERATING BUSINESSES
HSN - U.S. $ 2,070 19% 12%
Ticketing 680 7% 10%
Hotel Reservations 1,100 44% 42%
Expedia 560 51% 24%
Precision Response 416 12% 25%
Match.com 135 79% 54%
------- ----- -----
SUBTOTAL 4,961 24% 21%
REVENUE -- EMERGING BUSINESSES
Citysearch and related 70 -13% 75%
HSN - other international (b) 491 27% 21%
ECS / Styleclick 117 120% 56%
------- ----- -----
Subtotal 678 30% 31%
Foreign exchange conversion (72)
Disengaged HSN homes 0
Intersegment elimination (10)
------- ----- -----
TOTAL REVENUE $ 5,557 21% 22%
======= ===== =====
EBITDA -- OPERATING BUSINESSES
HSN - domestic $ 350 32% 23%
Ticketing 145 18% 16%
Hotel Reservations 156 35% 42%
Expedia 120 50% 31%
Precision Response 61 19% 50%
Match.com 55 82% 83%
Corporate and other (36)
------- ----- -----
SUBTOTAL 851 34% 31%
EBITDA -- EMERGING BUSINESSES
Citysearch and related (13)
HSN - other international (b) 24
ECS / Styleclick (6)
-------
Subtotal 5
Non-recurring items 0
Foreign exchange conversion (6)
Disengaged HSN homes 0
------- ----- -----
TOTAL EBITDA $ 850 69% 40%
======= ===== =====
EARNINGS PER SHARE - ALL AMOUNTS ARE DILUTED
Basic $ 0.52
Cash net income $ 0.75
READ IMPORTANT FOOTNOTES AND DISCLAIMER
As filed with the Securities and Exchange Commission on January 29, 2002.
26
USA NETWORKS, INC. (to be renamed USA Interactive)
REVISED BUDGET
($ IN MILLIONS EXCEPT PER SHARE AMOUNTS)
($ IN MILLIONS EXCEPT PER SHARE AMOUNTS)
REVISED
BUDGET OUTLOOK
FREE CASH FLOW 2002 2003
------- -------
Total EBITDA $ 607 $ 850
Capital expenditures (135) (160)
Taxes, including distributions to LLC partners (264) (249)
Cable distribution fees (67) (70)
Cash interest 93 109
HSN disengagement costs (36) (18)
Other, net (includes changes in working capital, investments, and other items) (78) (90)
----- -----
Total Free Cash Flow $ 120 $ 372
===== =====
REVISED
PRO FORMA BUDGET OUTLOOK
2001 (a) 2002 2003
--------- ------- -------
P&L
Total EBITDA $ 359 $ 607 $ 850
Depreciation and other (194) (249) (271)
Amortization of intangibles and other non-cash charges (131) (134) (142)
Disengagement costs (4) (36) (18)
Interest and other income / (expense) 129 129 159
----- ----- -----
Pre-tax net income / (loss) 159 317 579
Income tax expense (60) (137) (245)
Minority interest benefit/ (expense) 9 (54) (95)
----- ----- -----
Net income before preferred dividend $ 108 $ 126 $ 239
===== ===== =====
Preferred dividend $ (13) $ (13) $ (13)
----- ----- -----
Net income available to common shareholders $ 95 $ 113 $ 226
===== ===== =====
Holdco Minority Interest (5) 22 33
1.4% PIK dividend on $1.75 billion preferred interest, net of tax (15) (15) (15)
Amortization of intangibles and other non-cash charges , net of tax and minority interest 63 58 66
----- ----- -----
Cash net income $ 138 $ 178 $ 310
EPS
EPS - diluted $0.22 $0.26 $0.52
Cash EPS - diluted $0.33 $0.43 $0.75
Average weighted average diluted shares outstanding 438 438 438
Average cash net income shares outstanding 415 415 414
RECONCILIATION OF SHARES
Shares outstanding 438
Holdco exchangeable shares 33
Vivendi remaining shares (57)
-----
415
READ IMPORTANT FOOTNOTES AND DISCLAIMER
As filed with the Securities and Exchange Commission on January 29, 2002.
27
USA NETWORKS, INC. (to be renamed USA Interactive)
REVISED BUDGET
($ IN MILLIONS EXCEPT PER SHARE AMOUNTS)
IMPORTANT DISCLOSURES / LEGEND AND FORWARD LOOKING STATEMENTS / FOOTNOTES
(a) 2001 PRO FORMA INFORMATION PRESENTED IN ACCORDANCE WITH THE NEW ACCOUNTING
RULES, WHEREBY GOODWILL AND INTANGIBLE ASSETS WITH INDEFINITE LIVES ARE
NOT AMORTIZED. THE AMOUNT OF AMORTIZATION OF GOODWILL RECORDED IN 2001 WAS
$215 MILLION. NET INCOME ALSO EXCLUDES ONE-TIME ITEMS RELATED TO ONE-TIME
RESTRUCTURING CHARGES, EMPLOYEE TERMINATIONS AND BENEFITS AND INVESTMENT
WRITE-DOWNS.
(b) ADJUSTED EPS IS COMPUTED EXCLUDING VIVENDI'S REMAINING 56.6 MILLION SHARES
AS WELL AS THE PIK OF 1.4% EARNED ON THE $1.75 BILLION PREFERRED SECURITY
THAT RELATES TO THESE SHARES. THE PIK ($24.5 MILLION PRE-TAX) HAS BEEN
DEDUCTED FROM INCOME.
(c) THE COMPANY INTENDS TO ISSUE COMMON STOCK FOR ALL REMAINING EXCHANGEABLE
HOLDCO SHARES (33.2 MILLION) UPON COMPLETION OF THE VIVENDI TRANSACTION,
THUS ELIMINATING THE LLC AND HOLDCO STRUCTURES FOR REPORTING PURPOSES. THE
AMOUNTS DENOTED AS FULLY CONVERTED REPRESENT THIS STRUCTURE.
USA and Expedia have filed a joint prospectus/proxy statement and will file
other relevant documents concerning USA's acquisition of Expedia with the
Securities and Exchange Commission ("SEC"). INVESTORS ARE URGED TO READ THE
JOINT PROSPECTUS/PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE
FILED IN THE FUTURE WITH THE SEC BECAUSE THOSE DOCUMENTS CONTAIN IMPORTANT
INFORMATION. Investors will be able to obtain such documents free of charge at
the SEC's website at www.sec.gov. In addition, such documents may also be
obtained free of charge by contacting USA Networks, Inc., 152 West 57th Street,
New York, New York, 10019, Attention: Investor Relations, or Expedia, Inc.,
13810 SE Eastgate Way, Suite 400, Bellevue, WA 98005, Attention: Investor
Relations.
USA has filed a preliminary proxy statement and will file other relevant
documents concerning USA's contribution of its Entertainment Group to a joint
venture with Vivendi Universal and certain related transactions with the
Securities and Exchange Commission ("SEC"). INVESTORS ARE URGED TO READ THE
PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED IN THE
FUTURE WITH THE SEC BECAUSE THOSE DOCUMENTS CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION. Investors will be able to obtain such documents free of charge at
the SEC's website at www.sec.gov. In addition, such documents may also be
obtained free of charge by contacting USA Networks, Inc., 152 West 57th Street,
New York, New York, 10019, Attention: Investor Relations.
INVESTORS SHOULD READ THE PROXY STATEMENT CAREFULLY WHEN AVAILABLE BEFORE MAKING
ANY VOTING OR INVESTMENT DECISION CONCERNING THE PROPOSED TRANSACTIONS.
USA and its directors and officers may be deemed to be participants in the
solicitation of proxies from USA shareholders to adopt the agreement providing
for USA's contribution of its Entertainment Group to a joint venture with
Vivendi Universal and the other related transactions described therein. A
detailed list of the names and interests of USA's directors and executive
officers is contained in the definitive proxy statement on Schedule 14A filed by
SUA with the SEC on April 9, 2001. Copies of USA filings may be obtained free of
charge at the SEC's website at www.sec.gov.
This revised budget contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements are necessarily estimates reflecting the best judgment of the senior
management of USA and involve a number of risks and uncertainties that could
cause actual results to differ materially from those suggested by the
forward-looking statements. These forward-looking statements should, therefore,
be considered in light of various important factors, including those set forth
herein and in the documents USA files with the Securities and Exchange
Commission. Important factors that could cause actual results to differ
materially from estimates or projections contained in the forward-looking
statements include, without limitation: material adverse changes in economic
conditions generally or in the markets served by USA, material changes in
inflation, future regulatory and legislative actions affecting USA's operating
areas, competition from others, product demand and market acceptance, the
ability to protect proprietary information and technology or to obtain necessary
licenses on commercially reasonable terms, the ability to expand into and
successfully operate in foreign markets, and obtaining and retaining skilled
workers and key executives. The words "estimate," "project," "intend," "expect,"
"believe" and similar expressions are intended to identify forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. USA does not
undertake any obligation to update or revise these forward-looking statements,
whether as a result of new information, future events or any other reason.
READ IMPORTANT FOOTNOTES AND DISCLAIMER
As filed with the Securities and Exchange Commission on January 29, 2002.
28
USA NETWORKS, INC. (TO BE RENAMED USA INTERACTIVE)
PRO FORMA SEGMENT RESULTS
$ IN MILLIONS; ROUNDING DIFFERENCES MAY EXIST. UNAUDITED.
---------- -------------------------------------------------
REVENUE 1999 2000
---------- -------------------------------------------------
YE 12/31 Q1 Q2 Q3 Q4 YE 12/31
-------- -- -- -- -- --------
OPERATING BUSINESSES
HSN - U.S.** $ 1,332.9 $ 358.5 $ 344.0 $ 368.8 $ 455.8 $ 1,527.0
Ticketing 442.7 128.0 143.0 124.9 122.7 518.6
Hotel Reservations 161.8 55.3 78.1 94.6 100.0 328.0
Expedia (transaction pending) 73.0 33.2 37.0 42.1 44.4 156.7
Precision Response 215.9 69.6 70.2 70.2 72.1 282.1
Personals 9.0 6.9 7.5 7.6 7.2 29.2
---------- -------- -------- -------- -------- ----------
SUB-TOTAL 2,235.4 651.4 679.7 708.2 802.2 2,841.5
EMERGING BUSINESSES
Citysearch and related 27.3 10.1 12.8 14.0 14.0 50.8
HSN - international and other 175.7 69.6 60.8 67.2 83.4 281.0
ECS/Styleclick 55.4 12.5 10.1 12.5 13.4 48.5
---------- -------- -------- -------- -------- ----------
SUB-TOTAL 258.4 92.2 83.6 93.6 110.9 380.3
---------- -------- -------- -------- -------- ----------
Non-recurring items 6.9 -- -- -- -- --
Foreign exchange conversion -- (7.9) (6.7) (8.9) (11.8) (35.3)
Disengaged HSN Homes** -- 0.0 0.0 0.0 6.2 6.2
Intersegment Elimination -- -- -- -- -- --
---------- -------- -------- -------- -------- ----------
TOTAL $ 2,500.7 $ 735.8 $ 756.6 $ 792.9 $ 907.5 $ 3,192.8
========== ======== ======== ======== ======== ==========
USA ENTERTAINMENT
USA Network $ 757.7 $ 196.9 $ 207.9 $ 200.0 $ 199.4 $ 804.2
Sci-Fi Channel 198.5 62.4 70.7 64.1 77.8 274.9
Studios, net 348.6 119.6 110.5 71.0 144.9 446.0
Trio, NWI, Crime, other emerging 1.2 0.6 3.7 8.6 7.5 20.3
USA Films 82.1 30.3 20.8 14.5 20.5 86.1
---------- -------- -------- -------- -------- ----------
SUB-TOTAL 1,387.9 409.8 413.5 358.1 450.1 1,631.5
---------- -------- -------- -------- -------- ----------
----------------------------------------------------
REVENUE 2001
----------------------------------------------------
Q1 Q2 Q3 Q4 YE 12/31
-- -- -- -- --------
OPERATING BUSINESSES
HSN - U.S.** $ 385.4 $ 381.8 $ 396.4 $ 495.3 $ 1,549.9**
Ticketing 150.1 163.9 133.9 131.8 579.7
Hotel Reservations 105.3 138.3 151.2 141.7 536.5
Expedia (transaction pending) 57.2 78.5 79.5 81.8 296.9
Precision Response 80.7 75.6 72.6 69.8 298.7
Personals 8.5 10.7 12.5 17.6 49.2
-------- -------- -------- ---------- ----------
SUB-TOTAL 787.2 848.8 846.1 937.8 3,310.9
EMERGING BUSINESSES
Citysearch and related 12.4 12.4 11.1 10.3 46.1
HSN - international and other 83.4 87.7 66.1 82.2 319.4
ECS/Styleclick 8.6 7.8 5.4 12.4 34.2
-------- -------- -------- ---------- ----------
SUB-TOTAL 104.4 107.9 82.6 104.9 399.8
-------- -------- -------- ---------- ----------
Non-recurring items -- -- 0.0 0.0
Foreign exchange conversion (13.7) (13.8) (9.1) (10.2) (46.9)
Disengaged HSN Homes** 0.0 0.0 0.0 0.0 109.0**
Intersegment Elimination -- (2.6) (2.3) (2.2) (7.1)
-------- -------- -------- ---------- ----------
TOTAL $ 877.9 $ 940.3 $ 917.3 $ 1,030.3 $ 3,765.8
======== ======== ======== ========== ==========
USA ENTERTAINMENT
USA Network $ 214.1 $ 220.6 $ 213.8 $ 184.7 $ 833.3
Sci-Fi Channel 69.3 70.0 63.1 71.4 273.9
Studios, net 151.5 152.5 121.1 100.9 526.0
Trio, NWI, Crime, other emerging 6.2 6.2 5.8 6.0 24.1
USA Films 51.0 62.6 16.0 37.5 167.0
-------- -------- -------- ---------- ----------
SUB-TOTAL 492.1 511.8 419.8 400.5 1,824.3
-------- -------- -------- ---------- ----------
THE FINANCIAL, STATISTICAL AND OTHER INFORMATION CONTAINED HEREIN IS UNAUDITED.
** Quarterly HSN disengagement amounts will be pro forma'd fully beginning in
2002.
As filed with the Securities and Exchange Commission on January 29, 2002.
THESE REVENUE FIGURES ARE PRO FORMA FOR PENDING EXPEDIA AND VIVENDI
TRANSACTIONS.
29
USA NETWORKS, INC. (TO BE RENAMED USA INTERACTIVE)
PRO FORMA SEGMENT RESULTS
$ IN MILLIONS; ROUNDING DIFFERENCES MAY EXIST. UNAUDITED.
---------- ----------------------------------------------
EBITDA 1999 2000
---------- ----------------------------------------------
YE 12/31 Q1 Q2 Q3 Q4 YE 12/31
-------- -- -- -- -- --------
OPERATING BUSINESSES
HSN - U.S.** $ 214.7 $ 49.4 $ 52.6 $ 53.9 $ 73.8 $ 229.6
Ticketing 93.3 27.4 31.6 16.7 24.4 100.0
Hotel Reservations 24.2 8.2 12.9 13.9 17.6 52.6
Expedia (transaction pending) (44.3) (21.3) (12.4) (2.2) (2.9) (38.8)
Precision Response 30.4 9.5 11.9 12.2 11.0 44.6
Personals (0.4) 0.9 1.7 2.3 1.4 6.3
Corporate and other (36.1) (9.6) (6.8) (7.5) (6.0) (29.9)
-------- -------- -------- -------- -------- --------
SUB-TOTAL 281.7 64.4 91.4 89.3 119.4 364.5
EMERGING BUSINESSES
Citysearch and related (60.4) (18.3) (16.9) (16.3) (12.4) (63.9)
HSN - international and other 11.8 7.2 2.3 1.2 4.1 14.7
ECS/Styleclick (56.0) (16.3) (21.4) (16.7) (16.8) (71.2)
-------- -------- -------- -------- -------- --------
SUB-TOTAL (104.6) (27.4) (36.1) (31.8) (25.1) (120.4)
Non recurring items -- 6.3 (7.8) -- (3.2) (4.7)
Foreign exchange conversion -- (1.0) (0.6) (0.9) (1.5) (3.9)
Disengaged HSN Homes** -- 0.0 0.0 0.0 0.9 0.9
-------- -------- -------- -------- -------- --------
TOTAL $ 177.0 $ 42.3 $ 46.9 $ 56.6 $ 90.5 $ 236.3
======== ======== ======== ======== ======== ========
USA ENTERTAINMENT
USA Network $ 312.1 $ 97.2 $ 105.3 $ 87.2 $ 105.6 $ 395.2
Sci-Fi Channel 68.9 24.2 24.9 22.4 30.2 101.7
Studios, net 46.1 17.5 9.1 8.8 15.4 50.8
Trio, NWI, Crime, other emerging (3.0) (2.3) (2.0) (0.3) (2.5) (7.1)
USA Films 6.4 2.2 (2.3) (5.8) (0.6) (6.6)
-------- -------- -------- -------- -------- --------
TOTAL 430.5 138.8 134.9 112.3 148.0 534.0
------------------------------------------------
EBITDA 2001
------------------------------------------------
Q1 Q2 Q3 Q4 YE 12/31
-- -- -- -- --------
OPERATING BUSINESSES
HSN - U.S.** $ 51.7 $ 55.2 $ 48.9 $ 75.7 $ 216.5**
Ticketing 30.2 35.5 19.0 21.5 106.2
Hotel Reservations 15.8 21.0 21.8 22.9 81.5
Expedia (transaction pending) 4.5 17.7 16.4 22.2 60.9
Precision Response 10.0 10.2 7.9 6.2 34.3
Personals 0.3 2.8 5.8 7.6 16.5
Corporate and other (7.9) (8.2) (8.1) (7.0) (31.2)
-------- -------- -------- -------- --------
SUB-TOTAL 104.7 134.3 111.7 149.0 484.7
EMERGING BUSINESSES
Citysearch and related (11.8) (11.0) (10.8) (9.9) (43.4)
HSN - international and other (0.8) (1.6) (12.4) (7.7) (22.6)
ECS/Styleclick (16.9) (14.5) (14.4) (7.8) (53.6)
-------- -------- -------- -------- --------
SUB-TOTAL (29.4) (27.1) (37.6) (25.4) (119.6)
Non recurring items -- (4.8) (12.3) (3.1) (20.1)
Foreign exchange conversion (0.9) (1.0) 0.9 (0.2) (1.2)
Disengaged HSN Homes** 0.0 0.0 0.0 0.0 15.0**
-------- -------- -------- -------- --------
TOTAL $ 74.3 $ 101.5 $ 62.7 $ 120.3 $ 358.8
======== ======== ======== ======== ========
USA ENTERTAINMENT
USA Network $ 112.2 $ 119.3 $ 113.7 $ 84.9 $ 430.1
Sci-Fi Channel 29.7 27.8 23.9 26.1 107.5
Studios, net 21.5 20.2 17.6 15.9 75.2
Trio, NWI, Crime, other emerging (1.7) (2.4) (3.1) (4.4) (11.5)
USA Films (1.0) 0.6 0.4 1.9 2.0
-------- -------- -------- -------- --------
TOTAL 160.7 165.6 152.6 124.4 603.3
THE FINANCIAL, STATISTICAL AND OTHER INFORMATION CONTAINED HEREIN IS UNAUDITED.
** Quarterly HSN disengagement amounts will be pro forma'd fully beginning in
2002.
As filed with the Securities and Exchange Commission on January 29, 2002.
THESE EBITDA FIGURES ARE PRO FORMA FOR PENDING EXPEDIA AND VIVENDI
TRANSACTIONS.
30
USA NETWORKS, INC. (TO BE RENAMED USA INTERACTIVE)
PRO FORMA RESULTS OF OPERATIONS (AS REPORTED)
$ IN MILLIONS; ROUNDING DIFFERENCES MAY EXIST. UNAUDITED.
--------- -------------------------------------------------------------
P&L 1999 2000
--------- -------------------------------------------------------------
YE 12/31* Q1* Q2* Q3* Q4 YE 12/31
--------- --------- --------- --------- --------- ---------
Date Reported: 02/01/01 04/25/01 07/25/01 10/24/01 01/29/02 01/29/02
Revenues, net 3,815.6 1,112.4 1,134.9 1,109.9 1,313.2 4,667.7
Operating costs and expenses:
Costs related to revenues 2,301.7 665.6 676.3 669.1 801.3 2,812.4
Other costs and expenses 855.1 244.9 264.1 269.6 270.6 1,046.3
Amort. of non-cash distribution
and marketing expense 0.0 1.6 1.3 2.7 7.1 11.7
Depreciation 119.2 36.5 44.6 38.3 59.3 179.8
Amortization of goodwill 374.0 108.0 110.5 113.6 280.7 579.0
--------- --------- --------- --------- --------- ---------
Total operating costs 3,650.1 1,056.5 1,096.8 1,093.2 1,419.0 4,629.1
--------- --------- --------- --------- --------- ---------
Operating income 165.4 55.9 38.0 16.7 (105.8) 38.6
Interest expense, net (50.2) (8.6) (7.9) (8.2) (10.3) (34.8)
Gain on disposition of television station 0.0 0.0 0.0 0.0 0.0 0.0
Gain on sale of securities 89.7 0.0 0.0 0.0 0.0 0.0
Other, net (4.9) (0.6) (1.9) 69.9 (18.1) 49.3
--------- --------- --------- --------- --------- ---------
34.6 (9.2) (9.8) 61.7 (28.3) 14.5
--------- --------- --------- --------- --------- ---------
Earnings before income taxes and
minority interest 200.1 46.7 28.2 78.4 (134.1) 53.1
Income tax expense (83.9) (30.3) (29.6) (25.6) (26.3) (102.9)
Minority interest (136.7) (40.4) (30.2) (66.7) 82.9 (81.3)
--------- --------- --------- --------- --------- ---------
Loss before cumulative effect of accounting change (20.5) (23.9) (31.6) (13.9) (77.5) (131.1)
========= ========= ========= ========= ========= =========
Cumulative effect of accounting change, net of tax 0.0 0.0 0.0 0.0 0.0 0.0
--------- --------- --------- --------- --------- ---------
Net loss from continuing operations (20.5) (23.9) (31.6) (13.9) (77.5) (131.1)
========= ========= =========
Weighted average diluted shares 352.6 361.9 363.6 367.8 368.3 366.0
========= ========= ========= ========= ========= =========
Weighted average fully converted shares 745.8 752.5 724.7 729.0 751.8 753.8
========= ========= ========= ========= ========= =========
Basic earnings per share $ (.06) $ .07 $ (.09) $ (.04) $ (.21) $ (.36)
========= ========= ========= ========= ========= =========
Diluted earnings per share $ (.06) $ .07 $ (.09) $ (.04)
========= ========= ========= ========= ========= =========
Fully converted earnings per share $ .12 $ .01 $ (.02) $ (.02)
========= ========= ========= ========= ========= =========
EBITDA 658.7 201.9 194.4 171.2 241.3 809.0
========= ========= ========= ========= ========= =========
Excluding one-time charges and non-operating gains:
Basic and diluted earnings per share $ (.11) $ (.07) $ (.07) $ (.08) $ (.09) $ (.36)
========= ========= ========= ========= ========= =========
Cash net income earnings per share $ .11 $ .17 $ .16 $ .13 $ (.27)
========= ========= ========= ========= ========= =========
Fully converted earnings per share $ .05 $ (.01) $ (.01) $ (.02)
========= ========= ========= ========= ========= =========
Fully converted cash net income earnings per share $ .09 $ .11 $ .10
========= ========= ========= ========= ========= =========
-------------------------------------------------------------
P&L 2001
-------------------------------------------------------------
Q1* Q2* Q3* Q4 YE 12/31
--------- --------- --------- --------- ---------
Date Reported: 04/25/01 07/25/01 10/24/01 01/29/02 01/29/02
Revenues, net 1,315.7 1,371.4 1,256.3 1,346.5 5,284.8
Operating costs and expenses:
Costs related to revenues 800.2 831.7 746.7 831.3 3,208.4
Other costs and expenses 285.4 290.5 312.5 298.3 1,182.7
Amort. of non-cash distribution
and marketing expense 8.0 6.6 5.2 6.5 26.4
Depreciation 48.7 57.6 51.2 63.4 223.0
Amortization of goodwill 100.2 100.8 103.0 100.8 403.1
--------- --------- --------- --------- ---------
Total operating costs 1,242.5 1,287.3 1,218.6 1,300.4 5,048.7
--------- --------- --------- --------- ---------
Operating income 73.2 84.2 37.7 46.1 241.2
Interest expense, net (11.4) (12.9) (10.1) (14.0) (48.4)
Gain on disposition of television station 0.0 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 (6.5) (13.7) (12.9) (26.4) (59.6)
--------- --------- --------- --------- ---------
(17.9) (26.6) (23.1) (40.4) (108.1)
--------- --------- --------- --------- ---------
Earnings before income taxes and
minority interest 55.3 57.5 14.7 5.7 133.2
Income tax expense (25.5) (22.8) (21.9) (37.7) (107.3)
Minority interest (49.3) (45.0) (33.2) (25.0) (152.5)
--------- --------- --------- --------- ---------
Loss before cumulative effect of accounting change (19.5) (10.3) (40.4) (56.9) (127.2)
Cumulative effect of accounting change, net of tax (9.2) 0.0 0.0 0.0 (9.2)
--------- --------- --------- --------- ---------
Net loss from continuing operations (28.7) (10.3) (40.4) (56.9) (136.4)
========= ========= ========= ========= =========
Weighted average diluted shares 370.2 373.8 376.4 377.1 374.1
========= ========= ========= ========= =========
Weighted average fully converted shares 758.0 763.4 737.6 760.9 765.3
========= ========= ========= ========= =========
Basic earnings per share $ (.05) $ (.03) $ (.11) $ (.15) $ (.34)
========= ========= ========= ========= =========
Diluted earnings per share $ (.05) $ (.03) $ (.08)
========= ========= ========= ========= =========
Fully converted earnings per share $ .02 $ .03 $ (.01)
========= ========= ========= ========= =========
EBITDA 230.1 249.3 197.1 216.8 893.7
========= ========= ========= ========= =========
Excluding one-time charges and non-operating gains:
Basic and diluted earnings per share $ (.05) $ (.02) $ (.08) $ (.13) $ (.34)
========= ========= ========= ========= =========
Cash net income earnings per share $ .16 $ .20 $ .13 $ .04 $ .40
========= ========= ========= ========= =========
Fully converted earnings per share $ .02 $ .04 (.01)
========= ========= ========= ========= =========
Fully converted cash net income earnings per share $ .12 $ .14 $ .10
========= ========= ========= ========= =========
* 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 January 29, 2002.
THIS P&L DOES NOT GIVE AFFECT TO PENDING EXPEDIA AND VIVENDI TRANSACTIONS.
31
USA NETWORKS, INC. (TO BE RENAMED USA INTERACTIVE)
OPERATING METRICS
IN MILLIONS EXCEPT PERCENTAGES.
--------------------------------------------- ---------------------------------------
2000 2001
--------------------------------------------- ---------------------------------------
Q1 Q2 Q3 Q4 YE Q1 Q2 Q3 Q4 YE
-- -- -- -- -- -- -- -- -- --
HSN-US
Units shipped 8.5 8.1 8.6 10.0 35.2 8.6 9.0 9.5 11.4 38.5
Gross profit % 34.9% 35.7% 35.8% 33.6% 34.9% 33.5% 34.4% 34.3% 33.9% 34.0%
Return rate 20.6% 19.4% 19.8% 18.8% 19.6% 19.6% 19.6% 19.0% 17.9% 19.0%
Product mix:
Homegoods 49% 46% 48% 54% 50% 50% 49% 52% 53% 51%
Jewelry 24% 27% 26% 24% 25% 25% 26% 24% 25% 25%
Health / Beauty 13% 15% 12% 10% 12% 11% 12% 10% 10% 11%
Apparel / Accessories 14% 12% 14% 12% 13% 14% 13% 14% 12% 13%
HSN cable / DBS HH (end of period) 62.3 63.5 64.9 65.9 65.9 68.4 69.5 71.5 73.4 73.4
HSN total HH (end of period) 75.5 76.7 76.2 77.1 77.1 80.2 82.8 82.8 83.0 83.0
America's Store FTE's (end of period) 8.5 8.8 8.9 8.8 8.8 8.4 9.4 10.8 11.6 11.6
THE FINANCIAL, STATISTICAL AND OTHER INFORMATION CONTAINED HEREIN
IS UNAUDITED.
As filed with the Securities and Exchange Commission on January 29, 2002.
32
USA NETWORKS, INC. (TO BE RENAMED USA INTERACTIVE)
OPERATING METRICS
IN MILLIONS EXCEPT REVENUE PER TICKET AND PERCENTAGES.
------ -------------------------------------- -----------------------------------------
1999 2000 2001
------ -------------------------------------- -----------------------------------------
YE Q1 Q2 Q3 Q4 YE Q1 Q2 Q3 Q4 YE
------ -------------------------------------- -----------------------------------------
TICKETMASTER
Number of tickets sold (mm) 75.0 21.8 22.3 20.2 18.7 83.0 23.6 23.5 19.3 20.3 86.7
Gross value of tickets sold (mm) $2,781 $ 812 $ 881 $ 782 $ 782 $3,256 $ 937 $1,016 $ 788 $ 870 $3,611
Share of tickets sold online 13.4% 19.6% 25.5% 25.6% 27.9% 24.5% 29.5% 33.2% 31.9% 33.9% 32.1%
Revenue per ticket $ 5.25 $5.44 $5.89 $5.67 $5.87 $ 5.71 $5.96 $ 6.29 $6.20 $6.00 $ 6.11
THE FINANCIAL, STATISTICAL AND OTHER INFORMATION CONTAINED HEREIN IS UNAUDITED.
As filed with the Securities and Exchange Commission on January 29, 2002.
33
USA NETWORKS, INC. (TO BE RENAMED USA INTERACTIVE)
OPERATING METRICS
----- --------------------------------------------- ---------------------------------------------
1999 2000 2001
----- --------------------------------------------- ---------------------------------------------
YE Q1 Q2 Q3 Q4 YE Q1 Q2 Q3 Q4 YE
----- --------------------------------------------- ---------------------------------------------
HOTEL RESERVATIONS NETWORK
Hotel room nights sold
(thousands) 1,229 429 587 717 700 2,433 799 1,030 1,227 1,187 4,243
Affiliates (including
TravelNow) 6,000 10,500 13,400 16,200 16,200 18,649 20,857 22,793 23,808 23,808
Properties 1,500 1,750 1,925 2,100 2,600 2,600 3,084 3,374 3,890 4,567 4,567
Cities served 40 49 60 83 97 97 135 146 171 178 178
THE FINANCIAL, STATISTICAL AND OTHER INFORMATION CONTAINED HEREIN IS UNAUDITED.
As filed with the Securities and Exchange Commission on January 29, 2002
34
USA NETWORKS, INC. (TO BE RENAMED USA INTERACTIVE)
OPERATING METRICS
IN THOUSANDS
-------------------------------------------- --------------------------------------------
CY 2000 (a) CY 2001 (a)
-------------------------------------------- --------------------------------------------
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
-------------------------------------------- --------------------------------------------
EXPEDIA (TRANSACTION PENDING)
Total gross bookings (b) $401,000 $450,000 $467,000 $475,000 $674,000 $802,000 $723,000 $704,000
Total transactions (c) 1,022 1,186 1,306 1,318 1,780 2,241 2,222 2,229
Average monthly Media
Metrix reach (d) 5,933 6,819 6,389 5,417 6,969 7,502 9,410 9,238
Expedia.com conversion (e) 3.8% 4.1% 4.8% 6.0% 5.7% 7.0% 5.5% 5.2%
Expedia new purchasing
customers (f) 355 447 464 504 671 904 918 870
Expedia cumulative purchasing
customers (g) 1,518 1,965 2,428 2,932 3,603 4,507 5,424 6,294
Expedia quarterly unique
purchasing customers (h) 540 670 741 790 1,007 1,336 1,393 1,383
a Expedia's fiscal year end is June 30. Presented here as Calender Year
Ended December 31.
b Gross bookings represents the total value of travel booked through the
Expedia, VacationSpot, and WWTE sites.
c Transactions represents the number of reservations and purchases
transacted through the Expedia and WWTE sites.
d Average monthly Media Metrix reach represents the unduplicated reach for
the Expedia and VacationSpot sites.
e Conversion represents the monthly average Expedia.com unique monthly
purchasers divided by the monthly average Media Metrix reach for the
Expedia.com site.
f Expedia new purchasing customers represents the number of new customers
transacting through the Expedia sites in a quarter.
g Expedia cumulative purchasing customers represents the cumulative number
of customers that have ever transacted through the Expedia sites as of the
end of a quarter.
h Expedia quarterly unique purchasing customers represents the number of
unique customers transacting through the Expedia sites over the course of
a quarter.
THE FINANCIAL, STATISTICAL AND OTHER INFORMATION CONTAINED HEREIN IS UNAUDITED.
As filed with the Securities and Exchange Commission on January 29, 2002.
35
USA NETWORKS, INC. (TO BE RENAMED USA INTERACTIVE)
OPERATING METRICS
OPERATING ESTIMATES (PRO FORMA FOR PENDING TRANSACTIONS)
FOR THE NEXT TWELVE MONTHS (ROUNDED)
Primary consumer web sites 15
Average number of new customers added daily 30,000
Active / registered customers 17 million
Customer database 65 million
Customer inbound telephone minutes 1 billion
Customer inbound telephone calls 315 million
Orders processed 75 million
Credit card transactions 60 million
Items shipped 40 million
In-house merchants 200
Merchandise SKUs processed 60,000
Telephone operator positions 10,000
Ticketing outlets 3,430
Call centers 34
Fulfillment center square feet 2.5 million
THE FINANCIAL, STATISTICAL AND OTHER INFORMATION CONTAINED HEREIN IS UNAUDITED.
As filed with the Securities and Exchange Commission on January 29, 2002.
36
USA NETWORKS, INC. (TO BE RENAMED USA
INTERACTIVE)
OPERATING METRICS
IN MILLIONS
CAPITALIZATION (pro forma for pending transactions)
(AS OF 1/23/02)
Ticker (NASDAQ) USAI
USAi Common Stock 307.5
USAi Class B 49.6
USAi Exchangeable Common Stock 31.6
USAi Exchangeable Class B 1.6
----------
Total Shares Outstanding 390.3
Estimated dilutive options (treasury 25.0
method)
----------
Fully diluted shares 415.3
==========
Outstanding equity cap $10.2 billion
Fully diluted equity cap $10.8 billion
EXCLUDES VIVENDI'S REMAINING 56.6 MILLION SHARES PRO FORMA THE PENDING
TRANSACTION, AS THE COMPANY BELIEVES THESE SHARES SHOULD BE VIEWED AS
TREASURY, ALTHOUGH THE AMOUNT OF SHARES TREATED AS TREASURY WILL BE LOWER AT
STOCK PRICES GREATER THAN $40.82, AS DISCUSSED IN USA'S 8-K FILING WITH THE
SEC DATED DECEMBER 17, 2001.
--------------------------------------------------------------------------------
BUSINESS MIX (pro forma for pending transaction)
Revenue sources (Q4 '01):
Merchandise 55%
Online travel/hotel rooms 22%
Ticketing 13%
Teleservices / ECS 8%
Personals 2%
----------
Commerce 100%
==========
Interactive (online and TV) (% of total) 85%
International (% of total) 12%
THE FINANCIAL, STATISTICAL AND OTHER INFORMATION CONTAINED HEREIN IS UNAUDITED.
As filed with the Securities and Exchange Commission on January 29, 2002.
37