EX-99.3 2 a2037103zex-99_3.txt EXHIBIT 99.3 EXHIBIT 99.3 UNAUDITED PRO FORMA FINANCIAL STATEMENTS OF TICKETMASTER ONLINE-CITYSEARCH The following unaudited pro forma condensed consolidated financial statements have been prepared to give effect to the combination. In the combination, USA Networks will receive 52,000,000 new shares of our Class B common stock in exchange for contributing the Ticketmaster businesses to us. The assets and liabilities so transferred between entities under common control before and after the combination will be accounted for at historical cost in a manner similar to that in pooling-of-interests accounting. The unaudited pro forma condensed consolidated financial statements reflect certain assumptions regarding the proposed transaction and are based on the historical financial statements of our company. The consolidated financial statements of Ticketmaster Group include the financial statements of our company, the effect of which has been adjusted in the column titled Elimination of Ticketmaster Online-Citysearch. The unaudited pro forma condensed consolidated financial statements, including the notes accompanying them, are qualified in their entirety by reference to, and should be read in conjunction with, our audited consolidated financial statements and the notes thereto, and the audited consolidated financial statements of Ticketmaster Group, including the notes thereto, which have been previously incorporated by reference in this Report. The unaudited pro forma condensed consolidated balance sheet as September 30, 2000 gives effect to the combination as if the combination had occurred on that date. The unaudited pro forma consolidated condensed statement of operations for the nine months ended September 30, 2000, the year ended December 31, 1999, the eleven months ended December 31, 1998 and the year ended January 31, 1998 give effect to the combination as if the combination had occurred at the beginning of the periods presented. The unaudited pro forma condensed consolidated statements of operations are presented for illustrative purposes only. The unaudited pro forma statements of operations are indicative of the accounting for the combination at historical cost in a manner similar to that in pooling-of-interests accounting. These statements are not necessarily indicative of the results of operations or financial position that actually would have been reported had these transactions occurred on the dates indicated above, nor are they necessarily indicative of future financial results of operations. 1 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET OF TICKETMASTER ONLINE-CITYSEARCH AS OF SEPTEMBER 30, 2000 (IN THOUSANDS)
HISTORICAL ELIMINATION OF PRO FORMA TICKETMASTER HISTORICAL TICKETMASTER TICKETMASTER ONLINE- TICKETMASTER ONLINE- PRO FORMA ONLINE- CITYSEARCH GROUP, INC. CITYSEARCH(1) ADJUSTMENTS CITYSEARCH ------------ ------------ -------------- ----------- ------------ ASSETS Current assets: Cash and cash equivalents.............. $ 30,297 $ 113,114 $ (30,297) $ 7,559 (3) $ 120,673 Marketable securities.................. 17,583 17,902 (17,583) -- 17,902 Accounts receivable, net............... 8,896 -- (8,896) -- -- Accounts receivable, ticket sales...... -- 37,408 -- -- 37,408 Accounts receivable, trade............. -- 27,742 -- -- 27,742 Due from licensees..................... 1,500 -- (1,500) -- -- Contract advances...................... -- 12,552 -- -- 12,552 Prepaid expenses and other current assets............................... 5,225 14,718 (5,225) -- 14,718 --------- ---------- --------- --------- ---------- Total current assets................. 63,501 223,436 (63,501) 7,559 230,995 Investments.............................. 20,028 -- (20,028) -- -- Property, equipment and leasehold improvements, net...................... 23,788 76,685 (23,788) -- 76,685 Goodwill and other intangibles, net...... 613,607 1,231,782 (613,607) -- 1,231,782 Other assets............................. 3,833 66,070 (3,833) -- 66,070 Deferred income taxes.................... -- 10,604 -- -- 10,604 --------- ---------- --------- --------- ---------- Total assets......................... $ 724,757 $1,608,577 $(724,757) $ 7,559 $1,616,136 ========= ========== ========= ========= ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt...... $ 481 $ 5,236 $ (481) $ -- $ 5,236 Accounts payable....................... 2,822 -- (2,822) -- -- Accounts payable, trade................ -- 9,514 -- -- 9,514 Accounts payable, clients.............. -- 102,442 -- -- 102,442 Accrued expenses....................... 14,279 61,981 (14,279) -- 61,981 Related party payable.................. 840 -- (840) -- -- Deferred revenue and other............. 8,836 15,072 (8,836) -- 15,072 --------- ---------- --------- --------- ---------- Total current liabilities............ 27,258 194,245 (27,258) -- 194,245 Long-term debt, net of current portion... 96 12,854 (96) -- 12,854 Due to USAi and affiliates............... -- 164,724 -- (161,454)(4) 3,270 Deferred income taxes.................... -- 45,030 -- (44,901)(5) 129 Other long term liabilities.............. 1,050 14,590 (1,050) -- 14,590 Minority interest........................ -- 509,187 (503,062) -- 6,125 Stockholders' equity: Preferred stock, $0.01 par value....... -- -- -- -- -- Class A Common Stock, $0.01 par value................................ 480 -- -- -- 480 Class B Common Stock, $0.01 par value................................ 406 -- -- 520 (6) 926 Class C Common Stock, $0.01 par value................................ -- -- -- -- -- Additional paid-in capital............. 976,072 763,465 (344,192) 277,460 (7) 1,672,805 Accumulated other comprehensive loss... (124) (3,291) 124 -- (3,291) Accumulated deficit.................... (280,481) (92,227) 150,777 (64,066)(5) (285,997) --------- ---------- --------- --------- ---------- Total stockholders' equity........... 696,353 667,947 (193,291) 213,914 1,384,923 --------- ---------- --------- --------- ---------- Total liabilities and stockholders' equity............................. $ 724,757 $1,608,577 $(724,757) $ 7,559 $1,616,136 ========= ========== ========= ========= ==========
2 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS OF TICKETMASTER ONLINE-CITYSEARCH FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 (IN THOUSANDS, EXCEPT PER SHARE DATA)
HISTORICAL ELIMINATION OF PRO FORMA TICKETMASTER HISTORICAL TICKETMASTER TICKETMASTER ONLINE- TICKETMASTER ONLINE- PRO FORMA ONLINE- CITYSEARCH GROUP, INC. CITYSEARCH(1) ADJUSTMENTS CITYSEARCH ------------ ------------ -------------- ----------- ------------ Revenues: Ticketing operations............ $ 102,745 $ 395,909 $(102,745) $ -- $ 395,909 City guide and classifieds...... 49,174 58,776 (49,174) -- 58,776 Sponsorship and advertising..... 13,064 -- (13,064) -- -- Other........................... -- 7,639 -- -- 7,639 --------- --------- --------- ------- --------- Total revenues................ 164,983 462,324 (164,983) -- 462,324 --------- --------- --------- ------- --------- Operating costs and other expenses: Ticketing operations............ 77,568 253,436 (77,568) -- 253,436 City guide and classifieds...... 39,015 40,505 (39,015) -- 40,505 Other........................... -- 11,614 -- -- 11,614 Sales and marketing............. 57,007 63,355 (57,007) -- 63,355 Research and development........ 4,641 -- (4,641) -- -- General and administrative...... 19,808 71,306 (19,808) -- 71,306 Depreciation and amortization... 107,265 150,600 (107,265) -- 150,600 --------- --------- --------- ------- --------- Total operating costs and other expenses.............. 305,304 590,816 (305,304) -- 590,816 --------- --------- --------- ------- --------- Loss from operations.............. (140,321) (128,492) 140,321 -- (128,492) Other (income) expenses: Interest income................. (2,346) (3,081) 2,346 -- (3,081) Interest expense................ -- 6,168 -- -- 6,168 Other expenses.................. 289 -- (289) -- -- Equity in net loss of unconsolidated affiliates..... 3,774 2,636 (3,774) -- 2,636 --------- --------- --------- ------- --------- Total other (income) expenses.................... 1,717 5,723 (1,717) -- 5,723 --------- --------- --------- ------- --------- Loss before income taxes and minority interest............... (142,038) (134,215) 142,038 -- (134,215) Minority interest in loss......... -- (70,906) 70,120 -- (786) Income tax provision.............. 1,033 11,734 (1,033) -- 11,734 --------- --------- --------- ------- --------- Net loss.......................... $(143,071) $ (75,043) $ 72,951 $ -- $(145,163) ========= ========= ========= ======= ========= Basic and diluted loss per share(3)........................ $ (1.05) ========= Weighted average shares outstanding for basic and diluted loss per share(3)....... 138,909 =========
3 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS OF TICKETMASTER ONLINE-CITYSEARCH FOR THE YEAR ENDED DECEMBER 31, 1999 (IN THOUSANDS, EXCEPT PER SHARE DATA)
HISTORICAL ELIMINATION OF PRO FORMA TICKETMASTER HISTORICAL TICKETMASTER TICKETMASTER ONLINE- TICKETMASTER ONLINE- PRO FORMA ONLINE- CITYSEARCH GROUP, INC. CITYSEARCH(1) ADJUSTMENTS CITYSEARCH ------------ ------------ -------------- ----------- ------------ Revenues: Ticketing operations............ $ 64,787 $442,743 $ (64,787) $ -- $ 442,743 City guide and classifieds...... 33,915 36,329 (33,915) -- 36,329 Sponsorship and advertising..... 6,601 -- (6,601) -- -- Other........................... -- 19,458 -- -- 19,458 --------- -------- --------- ------- --------- Total revenues................ 105,303 498,530 (105,303) -- 498,530 --------- -------- --------- ------- --------- Operating costs and other expenses: Ticketing operations............ 47,870 269,315 (47,870) -- 269,315 City guide and classifieds...... 30,288 35,642 (30,288) -- 35,642 Other........................... -- 17,841 -- -- 17,841 Sales and marketing............. 47,263 56,499 (47,263) -- 56,499 Research and development........ 7,455 -- (7,455) -- -- General and administrative...... 15,242 78,521 (15,242) -- 78,521 Depreciation and amortization... 77,744 127,921 (77,744) -- 127,921 Merger and other transaction costs......................... 4,236 4,236 (4,236) -- 4,236 --------- -------- --------- ------- --------- Total operating costs and other expenses.............. 230,098 589,975 (230,098) -- 589,975 --------- -------- --------- ------- --------- Loss from operations.............. (124,795) (91,445) 124,795 -- (91,445) Other (income) expenses: Interest income................. (4,428) (5,645) 4,428 -- (5,645) Interest expense................ 265 8,108 (265) -- 8,108 Equity in net (income) loss of unconsolidated affiliates..... 272 (1,225) (272) -- (1,225) --------- -------- --------- ------- --------- Total other (income) expenses.................... (3,891) 1,238 3,891 -- 1,238 --------- -------- --------- ------- --------- Loss before income taxes and minority interest............... (120,904) (92,683) 120,904 -- (92,683) Minority interest in loss......... -- (56,139) 54,765 -- (1,374) Income tax provision.............. 464 23,975 (464) -- 23,975 --------- -------- --------- ------- --------- Net loss.......................... $(121,368) $(60,519) $ 66,603 $ -- $(115,284) ========= ======== ========= ======= ========= Basic and diluted loss per share(3)........................ $ (0.90) ========= Weighted average shares outstanding for basic and diluted loss per share(3)....... 128,097 =========
4 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS OF TICKETMASTER ONLINE-CITYSEARCH FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 1998 (IN THOUSANDS, EXCEPT PER SHARE DATA)
HISTORICAL ELIMINATION OF PRO FORMA TICKETMASTER HISTORICAL TICKETMASTER TICKETMASTER ONLINE- TICKETMASTER ONLINE- PRO FORMA ONLINE- CITYSEARCH GROUP, INC. CITYSEARCH(1) ADJUSTMENTS CITYSEARCH ------------ ------------ -------------- ----------- ------------ Revenues: Ticketing operations........... $ 15,743 $ 348,103 $(15,743) $ -- $348,103 City guide and classifieds..... 5,376 5,568 (5,376) -- 5,568 Sponsorship and advertising.... 6,754 -- (6,754) -- -- Other.......................... -- -- -- -- -------- --------- -------- --------- -------- Total revenues............... 27,873 353,671 (27,873) -- 353,671 -------- --------- -------- --------- -------- Operating costs and other expenses: Ticketing operations........... 9,842 217,839 (9,842) -- 217,839 City guide and classifieds..... 4,021 5,268 (4,021) -- 5,268 Other.......................... -- -- -- Sales and marketing............ 6,834 17,116 (6,834) -- 17,116 Research and development....... 1,728 -- (1,728) -- -- General and administrative..... 3,495 64,840 (3,495) -- 64,840 Depreciation and amortization................. 16,275 52,450 (16,275) -- 52,450 -------- --------- -------- --------- -------- Total operating costs and other expenses............. 42,195 357,513 (42,195) -- 357,513 -------- --------- -------- --------- -------- Income (loss) from operations.... (14,322) (3,842) 14,322 -- (3,842) Other (income) expenses: Interest income................ (867) (2,555) 867 -- (2,555) Interest expense............... 813 11,455 (813) -- 11,455 Gain on sale of subsidiary stock........................ -- (108,967) -- 108,967 (5) -- Equity in net (income) loss of unconsolidated affiliates.... -- (477) -- -- (477) -------- --------- -------- --------- -------- Total other (income) expenses................... (54) (100,544) 54 108,967 8,423 -------- --------- -------- --------- -------- Income before income taxes and minority interest.............. (14,268) 96,702 14,268 (108,967) (12,265) Minority interest in loss........ -- (4,829) 4,819 -- (10) Income tax provision............. 2,951 58,196 (2,951) (44,901)(5) 13,295 -------- --------- -------- --------- -------- Net income (loss)................ $(17,219) $ 43,335 $ 12,400 $ (64,066) $(25,550) ======== ========= ======== ========= ======== Basic and diluted loss per share(3)....................... $ (0.26) ======== Weighted average shares outstanding for basic and diluted loss per share(3)...... 97,201 ========
5 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS OF TICKETMASTER ONLINE-CITYSEARCH FOR THE YEAR ENDED JANUARY 31, 1998 (IN THOUSANDS, EXCEPT PER SHARE DATA)
HISTORICAL ELIMINATION OF PRO FORMA TICKETMASTER HISTORICAL TICKETMASTER TICKETMASTER ONLINE- TICKETMASTER ONLINE- PRO FORMA ONLINE- CITYSEARCH GROUP, INC. CITYSEARCH(1) ADJUSTMENTS CITYSEARCH ------------ ------------ -------------- ----------- ------------ Revenues: Ticketing operations............ $5,972 $340,980 $(5,972) $ -- $340,980 City guide and classifieds...... -- -- -- -- Sponsorship and advertising..... 3,933 -- (3,933) -- -- Other........................... -- -- -- -- ------ -------- ------- --------- -------- Total revenues................ 9,905 340,980 (9,905) -- 340,980 ------ -------- ------- --------- -------- Operating costs and other expenses: Ticketing operations............ 3,522 209,726 (3,522) -- 209,726 City guide and classifieds...... -- -- -- -- -- Other........................... -- -- -- -- -- Sales and marketing............. 490 7,249 (490) -- 7,249 General and administrative...... 1,719 71,424 (1,719) -- 71,424 Depreciation and amortization... -- 24,473 -- -- 24,473 ------ -------- ------- --------- -------- Total operating costs and other expenses.............. 5,731 312,872 (5,731) -- 312,872 ------ -------- ------- --------- -------- Income from operations............ 4,174 28,108 (4,174) -- 28,108 Other (income) expenses: Interest income................. -- (1,859) -- -- (1,859) Interest expense................ -- 11,419 -- -- 11,419 Equity in net income of unconsolidated affiliates..... -- (1,417) -- -- (1,417) ------ -------- ------- --------- -------- Total other (income) expenses.................... -- 8,143 -- -- 8,143 ------ -------- ------- --------- -------- Income before income taxes and minority interest............... 4,174 19,965 (4,174) -- 19,965 Minority interest in loss......... -- (65) -- -- (65) Income tax provision.............. 1,827 11,883 (1,827) -- 11,883 ------ -------- ------- --------- -------- Net income........................ $2,347 $ 8,147 $(2,347) $ -- $ 8,147 ====== ======== ======= ========= ======== Basic and diluted earnings per share(3)........................ $ 0.09 ======== Weighted average shares outstanding for basic and diluted earnings per share(3)... 89,238 ========
6 NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (1) Represents the elimination of the net assets and results of operations and minority interest of Ticketmaster Online-Citysearch included in the consolidated historical Ticketmaster Group financial statements. (2) The calculation of basic and diluted pro forma earnings (loss) per share adjusts the Ticketmaster Online-Citysearch historical weighted average shares outstanding to reflect the 52,000,000 shares issued to USA Networks in the combination as if issued at the beginning of the period. (3) Represents the working capital adjustment whereby USA Networks will contribute an amount such that current assets of the contributed balance sheet, as defined, equal current liabilities. (4) Represents the elimination of all intercompany amounts owed by Ticketmaster Group to USA Networks and affiliates, other than intercompany amounts owed by TMC Realty to USA Networks. (5) Represents reversal of gains totaling $109.0 million from the Citysearch merger and the sale of Ticketmaster Online-Citysearch stock in connection with its initial public offering and related income tax expense of $44.9 million. (6) Represents the issuance of 52,000,000 shares of Class B Common Stock to USA Networks for the contribution of the businesses of Ticketmaster Group. (7) Represents the contribution of capital resulting from adjustment notes (3) and (4) and the reversal of the $109 million gain per note (5) and a reclassification from additional paid in capital to common stock resulting from adjustment note (6). 7