EX-99.2 4 a2069044zex-99_2.txt EXHIBIT 99.2 Exhibit 99.2 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. 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. 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 $0.75 Average weighted average diluted shares outstanding 438 438 438 Average cash net income shares outstanding 415 415 414 RECONCILIATION OF SHARES Shares outstanding 438 Holdco exchangeable shares 33 Vivendi remaining shares (57) ----- 415
READ IMPORTANT FOOTNOTES AND DISCLAIMER As filed with the Securities and Exchange Commission on January 29, 2002. USA NETWORKS, INC. (to be renamed USA Interactive) REVISED BUDGET ($ 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.