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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

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FORM 10-K

(Mark One)

|ý | Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2001
|- | --------------------------------------------------------------------------------------------------------------------------------

or

|o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from
 to
|- | ---------------------------------------------------------------------------------------------------------------------------

Commission File Number 0-25041

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Ticketmaster

(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction of
incorporation or organization)

95-4546874(IRS Employer
Identification Number)3701 Wilshire Boulevard
Los Angeles, California(Address of principal executive offices)

90010(Zip code)


(213) 639-6100(Registrant's telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class:

Name of Each Exchange
on Which Registered:None


Securities Registered Pursuant to Section 12(g) of the Act:
Class B Common Stock, par value $.01 per share (Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
    Yes ý No o

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. o

The
aggregate market value of the voting stock of the registrant held by non-affiliates of the registrant, based upon the closing price of the Class B Common Stock on
March 21, 2002, as reported by Nasdaq, was approximately $1,181,471,878. Shares of voting stock held by each officer and director and by each person who owns 5% or more of the registrant's outstanding
voting stock have been excluded in that such persons may be deemed to be affiliates. This calculation similarly excludes 92,740,544 shares of the registrant's voting stock that are held by
Ticketmaster Group, Inc. and its subsidiaries (collectively, "TGI"), which are wholly-owned subsidiaries of the registrant. The determinations of affiliate status set forth in the preceding two
sentences are not necessarily conclusive determinations for other purposes.

The
number of shares of the registrant's Common Stock outstanding on February 28, 2002 was 43,507,492 shares of Class A Common Stock and 98,955,056 shares of Class B
Common Stock. The number of shares outstanding does not include 42,480,143 shares of Class A Common Stock and 50,260,401 shares of Class B Common Stock held by TGI, as such shares are
indirectly held by the registrant.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for the registrant's 2002 Annual Stockholders Meeting are incorporated by reference into Part III herein.

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TICKETMASTER    INDEX TO ANNUAL REPORT ON FORM 10-K    For The Fiscal Year Ended December 31, 2001

|         |          |    |                                                                                       | Page
|-------- | -------- | -- | ------------------------------------------------------------------------------------- | ----
|PART I   |          | 1 
|         | ITEM 1.  |    | BUSINESS                                                                              |     
|         | ITEM 2.  |    | PROPERTIES                                                                            |     
|         | ITEM 3.  |    | LEGAL PROCEEDINGS                                                                     |     
|         | ITEM 4.  |    | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                   |     
|PART II  |          | 23
|         | ITEM 5.  |    | MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                 |     
|         | ITEM 6.  |    | SELECTED FINANCIAL DATA                                                               |     
|         | ITEM 7.  |    | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |     
|         | ITEM 7A. |    | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                            |     
|         | ITEM 8.  |    | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                           |     
|         | ITEM 9.  |    | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE  |     
|PART III |          | 40
|         | ITEM 10. |    | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                    |     
|         | ITEM 11. |    | EXECUTIVE COMPENSATION                                                                |     
|         | ITEM 12. |    | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                        |     
|         | ITEM 13. |    | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                        |     
|PART IV  |          | 40
|         | ITEM 14. |    | EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K                       |     

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PART I

ITEM I.BUSINESS

Unless
the context otherwise requires, references to "Ticketmaster" or the "Company" include Ticketmaster (the company formerly known as Ticketmaster Online-Citysearch, Inc.;
"TMCS") and Ticketmaster Group, Inc. ("TGI") and their predecessors, wholly-owned subsidiaries, majority-owned or controlled subsidiaries and ventures and their licensees.

Ticketmaster
as currently organized was formed in January 2001, pursuant to the consummation of the provisions of a contribution agreement, under which TMCS, the predecessor to
Ticketmaster, acquired TGI's businesses from USA Networks, Inc. ("USA Networks") in exchange for 52,000,000 new shares of TMCS's Class B common stock (the "Combination"). As a result of
the Combination, TGI and the former subsidiaries of Ticketmaster Corporation ("TM Corp") whose equity interests were contributed to TMCS became direct subsidiaries of TMCS and TM Corp became an
indirect subsidiary of TMCS.

Upon
the closing of the Combination on January 31, 2001, TMCS changed its name to "Ticketmaster."

General

Ticketmaster is a leading provider of automated ticketing services with over 7,000 domestic and foreign clients, including many of the foremost entertainment
facilities, promoters and professional sports franchises. Ticketmaster is also a leading local portal and electronic commerce company that provides in-depth local content and services to
help people get things done online. Ticketmaster's principal online businesses are ticketing, personals, city guide and camping reservations. Ticketmaster's family of websites includes
ticketmaster.com, Match.com, citysearch.com, reserveamerica.com, museumtix.com, ticketweb.com, evite.com and livedaily.com, among others. Ticketmaster's businesses are operated in three segments:
(1) ticketing, (2) personals and (3) city guide. Ticketing includes both online and offline
ticketing and camping reservations operations, personals includes online personals, and city guide includes all of Ticketmaster's other online properties.

Ticketing

General

Ticketmaster provides its clients with comprehensive ticket inventory control and management, a broad distribution network and dedicated marketing and support
services. Ticket orders are received and fulfilled through operator-staffed call centers, independent sales outlets remote to the facility box office and through the ticketmaster.com website and
related international websites. Ticketing revenue is generated principally from convenience charges and order processing fees received by Ticketmaster for tickets sold on its clients' behalf.
Ticketmaster generally serves as an exclusive agent for its clients and typically has no financial risk for unsold tickets.

Ticketmaster
sold 86.7 million tickets in fiscal 2001, generating revenues of $579.7 million. Gross transaction value for fiscal 2001 was $3.6 billion.

Based
upon recent trends in the entertainment, sporting and leisure industries, Ticketmaster believes that its principal business, live entertainment ticketing, will continue to
experience increased revenues under existing venue contracts. Ticketmaster believes that significant opportunities also exist to increase penetration of this principal market. Additionally,
Ticketmaster believes that further ticketing opportunities will arise from an increase in the number of concerts and theatrical and family shows, the construction of new and larger facilities, an
increase in the number of professional sports teams and the development of new sports leagues. Furthermore, Ticketmaster plans to continue to

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broaden its client base to include such venues as museums, amusement parks and state and county fairs. In addition, Ticketmaster intends to continue to grow its online businesses and to acquire
additional online and offline businesses when appropriate opportunities become available.

Ticketmaster
has continued to expand its ticketing operations into territories outside of the United States, and has experienced growth in these markets, with international ticket sales
increasing from 14.2 million in fiscal 2000 to 17.8 million in fiscal 2001, and revenues from international ticket sales increasing from $47.0 million to $61.4 million for
the same periods. Ticket sales and revenues from international markets represented approximately 21% and 11%, respectively, of total ticket sales and revenues in fiscal 2001 (convenience fees are
typically lower outside of the United States).

Ticketmaster
believes that significant additional opportunities exist in international markets to attract existing and new venues in a historically under-penetrated market for automated
ticketing services for live entertainment events. In addition, Ticketmaster believes that the continued enthusiasm for music, theatre, family and arts touring shows, as well as for soccer, rugby and
cricket, coupled with the growing popularity of major American sports such as football, baseball and basketball, will lead to increased use of international venues and provide additional revenue
opportunities for Ticketmaster. Ticketmaster is seeking to enhance its ability to capitalize on these trends by expanding its existing operations in Canada, the United Kingdom, Ireland, Norway,
Australia and Mexico and exploring further opportunities in Europe and Asia.

Ticketmaster
also has expanded its ticket distribution capabilities through the continued development of the ticketmaster.com website and related international websites, which are
designed to promote ticket sales for live events and disseminate event information. Ticketmaster has experienced significant growth in ticket sales through its websites in recent years and this trend
is expected to continue during the next several years. For the year ended December 31, 2001, online ticket sales through ticketmaster.com and related websites accounted for approximately 32.1%
of Ticketmaster's ticketing business, with ticket sales of approximately 27.8 million tickets having a gross dollar value of over $1.3 billion. Online ticket sales accounted for
approximately 35.4% of the Company's domestic ticketing business, with ticket sales of approximately 24.4 million tickets having a gross dollar value of over $1.2 billion in 2001.

Ticketmaster
is continuing to use its widely recognized brand name and extensive distribution capabilities to develop new opportunities in related areas, such as entertainment
information, advertising, promotional services and direct marketing. Examples of these efforts include offering integrated brand management and marketing services to strategic partners through
sponsorship and advertising opportunities during live events, during telephone ticketing services, on its ticket stock and envelopes, on event promotional material and in additional media outlets that
Ticketmaster is developing.

Ticketmaster
believes that its proprietary operating system and software, which is referred to as the Ticketmaster System, and its extensive distribution capabilities provide it with
benefits that enhances Ticketmaster's ability to attract new clients and maintain its existing client base. The Ticketmaster System, which includes both hardware and software, is typically located in
a data center that is managed by Ticketmaster staff. The Ticketmaster System provides a single, centralized inventory control and management system capable of tracking total ticket inventory for all
events, whether sales are made on a season, subscription, group or individual ticket basis. All necessary hardware and software required for the use of the Ticketmaster System is installed in a
client's facility box office, call centers or remote sales outlets. The Ticketmaster System is capable of processing over 100,000 tickets per hour, and each of its 26 regional computer systems can
support 32,000 users, of which as many as 5,000 can theoretically be actively using the system at any one time.

In
addition, Ticketmaster has developed or acquired a number of ticketing products that provide clients with an integrated ticketing and access solution as a complement to the
Ticketmaster System. In

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October 2000, Ticketmaster introducedticketfast to customers using ticketmaster.com as a new ticket
delivery option. This technology allows Ticketmaster to deliver tickets instantly to customers via e-mails that enable ticket purchasers to print secure, uniquely bar-coded
tickets on plain paper using their home or office printer.ticketfast tickets (and other tickets that are
bar-coded) can be used for admission at any venue that uses Ticketmaster's FanTM access control technology. In January 2002, Ticketmaster launched Ticketmaster
Marketplace. Ticketmaster Marketplace is a way for ticketing clients (currently sports teams) to allow their season ticket holders to forward and sell their tickets to other
fans over the Internet and deliver "virtual" tickets safely and securely using Ticketmaster'sticketfast service.

The
backbone of these new ticketing and access solutions is a grouping of software and hardware systems developed or acquired by Ticketmaster. Specifically, Ticketmaster offers its
clients the ARCHTICS system, which is a database software product that allows clients to manage their season ticket sales and accounts, and that allows clients and their fans to
participate in the Ticketmaster Marketplace. Ticketmaster AccountManager works in conjunction with ARCHTICS and allows season ticket fans to conduct a variety of
transactions on their accounts via the Internet. FanTM (Facility Access Network by Ticketmaster) provides venues with access control through wireless scanning devices that read the
barcodes onticketfast and other tickets and are located at the venues' entrances. Finally, TM Ultimate
Fan is a venue-based, card data collection system that works much like a "frequent flyer program", designed to track fans' loyalty and to reward them for their support by accumulating
points they can redeem in various team-designed promotions. Ticketmaster also has acquired several other systems, such as its Synchro division's Venuemaster client server relational
database ticketing system targeted for clients abroad, the Microflex ticketing system offered through the Company's Admission Network USA Inc. subsidiary to clients in the United States and in
Canada, notably used by Cirque du Soleil, among other clients, and the Company's Pacer Cats subsidiary's concessions and movie ticketing inventory management system. Ticketmaster believes that its
continued commitment to expanding its technology systems and capabilities in response to its clients' needs is a critical component to its growth.

In
addition, Ticketmaster's ticketing segment includes its other ticketing companies, TM VISTA, Inc. (formerly known as 2b Technology, Inc.) and TicketWeb Inc.,
which were acquired by Ticketmaster in June 2000 and May 2000, respectively. TM VISTA is a Richmond, Virginia-based visitor management software developer and offline and online ticketing
company. In 2001, TM VISTA changed its name from 2b Technology to reflect the focus on its core software product, the VISTA ticketing system. TM VISTA targets venues such as museums, cultural
institutions and historic sites through its websites tmvista.com and museumtix.com. Representative clients include the Guggenheim Museum and the Los Angeles County Art Museum.

Ticketmaster
has a comprehensive ticket distribution system that includes approximately 3,300 retail Ticket Center outlets and 20 worldwide call centers with approximately 1,750 operator
and customer service positions. Ticketmaster provides the public with convenient access to tickets and information regarding live entertainment events. Ticket purchasers are assessed a convenience
charge for each ticket sold outside of the venue box office by Ticketmaster on behalf of its clients. These charges are negotiated and included in Ticketmaster's contracts with its clients. The
versatility of the Ticketmaster System allows it to be customized to satisfy a full range of client requirements.

TicketWeb
is a leading provider of self-service, Internet-based box-office ticketing operations. TicketWeb revenue is generated principally from convenience
charges and order processing fees received by TicketWeb for tickets sold in its clients' behalf. TicketWeb's primary clients are small- to medium-sized venues and event promoters that generally sell
fewer than 5,000 tickets per year. In exchange for a license fee, TicketWeb provides its clients with password-protected access to TicketWeb's proprietary system, TicketWeb 2.0. Using a standard
Internet Web browser, TicketWeb

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clients can perform a full range of box-office operations, such as create and edit events, monitor ticket sales, download will-call lists and take advantage of TicketWeb's
sales and marketing tools.

Also
included in the ticketing segment is Ticketmaster's wholly-owned subsidiary, ReserveAmerica Holdings, Inc., a campground reservation services company acquired in
February 2001. ReserveAmerica is a leading provider of outdoor recreation reservation services and software to United States federal and state agencies for camping activities, recreation
ticketing and other access privileges to public land attractions. ReserveAmerica also offers its software and services to private campgrounds. The ReserveAmerica system permits the general public to
make camping reservations and obtain access to public recreation attractions over the Internet, by telephone or in person. ReserveAmerica's Internet sites (www.reserveamerica.com and
www.reserveusa.com) service up to 30,000 visitors daily, and its three telephone call centers are located in New York, California and Wisconsin. ReserveAmerica also utilizes a portion of
Ticketmaster's call center located in Orlando, Florida.

Client Relationships

Ticketmaster's ticketing clients include many of the most well known arenas, stadiums, theaters, sports teams and promoters in the United States and abroad.
Ticketmaster currently provides service to ticketing clients ranging in size from large stadiums with more than 100,000 seats to smaller theaters with seating in the hundreds, and from multi-event
promoters to one-time single event promoters.

Ticketmaster's
clients also include professional sports leagues and franchises in the United States, including the National Basketball Association and most of its member teams, National
Hockey League teams, Major League Baseball teams, National Football League teams, Major League Soccer teams, Women's National Basketball Association teams, PGA Tour, Inc. and numerous
participating PGA Tour events, European football clubs, International sports clubs and special events such as the Commonwealth Games.

In
2001, Clear Channel Entertainment, a promoter and marketer of live entertainment, accounted for approximately 17% of the revenues of Ticketmaster's ticketing segment and approximately
15% of Ticketmaster's consolidated revenues. Clear Channel Entertainment, formerly known as SFX, is a subsidiary of Clear Channel Communication.

Ticketmaster
generally enters into written agreements with its clients pursuant to which it agrees to provide the Ticketmaster System and related systems purchased by the client, and to
serve as the client's exclusive ticket sales agent for all sales of individual tickets sold to the general public outside of the facility's box office, including any tickets sold at remote sales
outlets, over the phone or via the Internet, for a specified period, typically three to five years. Pursuant to an agreement with a facility, Ticketmaster generally is granted the right to sell
tickets for all events presented at that facility, and as part of such arrangement Ticketmaster installs the necessary ticketing equipment in the facility's box office. An agreement with a promoter
generally grants Ticketmaster the right to sell tickets for all events presented by that promoter at any facility, unless the facility is covered by an exclusive agreement with Ticketmaster or another
automated ticketing service company. The terms of Ticketmaster's agreements with its clients are generally negotiated on a contract-by-contract basis, except in the case of
contracts subject to public bid (e.g., for facilities owned or managed by municipalities or governmental agencies), the terms of which are largely defined by the specifications and conditions set
forth in the formal requests for bids.

Clients
are routinely required by contract to include the Ticketmaster name in print, radio and television advertisements for entertainment events sponsored by such clients. The
Ticketmaster name and logo are also prominently displayed on printed tickets and ticket envelopes.

Ticketmaster
generally does not buy tickets from its clients for resale to the public and typically has no financial risk for unsold tickets. All ticket prices are determined by
Ticketmaster's clients.

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Ticketmaster's clients also generally determine the scheduling of when tickets go on sale to the public and what tickets will be available for sale through Ticketmaster. Facilities and promoters, for
example, often handle group sales and season tickets in-house. Ticketmaster only sells a portion of its clients' tickets, the amount of which varies from client to client and varies as to
any single client from year to year.

Ticketmaster
believes that the Ticketmaster System provides its clients with numerous benefits, including (1) broader and expedited distribution of tickets, (2) centralized
control of total ticket inventory as well as accounting information and market research data, (3) centralized accountability for ticket proceeds, (4) manageable and predictable
transaction costs, (5) wide dissemination of information about upcoming events through Ticketmaster's call centers, ticketmaster.com and other media platforms, (6) the ability quickly
and easily to add additional performances if warranted by demand and (7) marketing and promotional support.

The
Ticketmaster System and related systems such as ARCHTICS, FanTM, PCI (a personal computer interface which provides a Windows-like interface to
the Ticketmaster System) and TM Ultimate Fan also provide Ticketmaster's clients with flexibility in processing season, subscription and group ticketing, database management, access
control and fan loyalty programs. For example, using the Ticketmaster System, a sports team can choose to give priority to season tickets, mini-ticket plans and group sales, permitting
those ticket purchasers to have first choice of tickets before their sale to the general public.
In addition, Ticketmaster's clients have the ability to structure single or multiple events, including seasonal events, in almost any number and type of pricing and discount plans. Ticketmaster
believes that its clients also place high value on the ability to integrate their on-site networks with the Ticketmaster System, enhance access control with the FanTM system,
and offerticketfast at home and various fan loyalty programs through the TM Ultimate Fan system.

Pursuant
to its contracts with clients, Ticketmaster is granted the right to collect from ticket purchasers a per ticket convenience charge on all tickets sold at remote sales outlets,
by telephone, through ticketmaster.com and other media. There is an additional per order "order processing" fee on all tickets sold by Ticketmaster at other than remote sales outlets. Generally, the
amount of the convenience charge is determined during the contract negotiation process, and typically varies based upon numerous factors, including the services to be rendered to the client, the
amount and cost of equipment to be installed at the client's box office and the amount of advertising and/or promotional allowances to be provided, as well as the type of event and whether the ticket
is purchased at a remote sales outlet, by telephone, through ticketmaster.com or otherwise. Any deviations from those amounts for any event are negotiated and agreed upon by Ticketmaster and its
client prior to the commencement of ticket sales. During fiscal 2001, the convenience charges generally ranged from $1.50 to $8.25 per ticket. Average revenue per ticket (which includes convenience
charges and order processing fees and other revenue sources directly related to the sale of tickets) was $6.11 in fiscal 2001. Generally, the agreement between Ticketmaster and a client will also
establish the amounts and frequency of any increases in the convenience charge and order processing fees during the term of the agreement.

The
agreements with certain of Ticketmaster's clients may also provide for a client to participate in the convenience charges and/or order processing fees paid by ticket purchasers for
tickets bought through Ticketmaster for that client's events. The amount of such participation, if any, is determined by negotiation between Ticketmaster and the client. Some agreements also may
provide for Ticketmaster to make participation advances to the client, generally recoupable by Ticketmaster out of the client's future right to participations. In isolated instances, the client may
negotiate the right to receive an upfront, non-recoupable payment from Ticketmaster as an incentive to enter into the ticketing service agreement. The agreements also specify the
additional systems, if any, that may be used and purchased by clients.

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If
an event is canceled, Ticketmaster's current policy is to refund the per ticket convenience charges (but not the order processing fee that is payable with respect to transactions by
telephone and online orders). Refunds of the ticket price for a canceled event are funded by the client. To the extent that funds then being held by Ticketmaster on behalf of the client are
insufficient to cover all refunds, the client is obligated to provide Ticketmaster with additional amounts within a specified period of time (typically 24 to 72 hours) after request by
Ticketmaster. Clients have historically fulfilled these obligations.

Distribution System

Ticketmaster's ticketing distribution system is principally comprised of remote sales outlets, call centers and the ticketmaster.com website. During fiscal 2001,
ticket sales at the remote sales outlets, at call centers and on ticketmaster.com and related international websites accounted for approximately 34.1%, 33.8% and 32.1%, respectively, of Ticketmaster's
ticket sales.



At the end of fiscal 2001, Ticketmaster had approximately 3,300 retail Ticket Center outlets worldwide, approximately 2,800 of which were located in the United
States and approximately 500 of which were in foreign territories, compared to approximately 3,460 retail Ticket Center outlets worldwide at the end of fiscal 2000. Ticketmaster has emphasized the
establishment of retail outlets in high visibility chain stores with existing name recognition, significant customer traffic and customer profiles consistent with the type of events sold through the
Ticketmaster System. The majority of Ticketmaster's remote sales outlets are located in major department, grocery and music stores. Among the retailers that serve as remote sales outlets are May
Company (Filene's, Foley's, Hecht's, Kaufmann's, Robinsons-May), Saks Incorporated (Carson Pirie Scott, Boston Store, Bergner's, Younkers), Target Corporation (Marshall Field's), Kroger
(Kroger, Fred Meyer, Fry's Marketplace, Smith's Food and Drug), Publix grocery and drug stores and music stores, Wherehouse Music, Tower Records and Trans World Entertainment (Camelot Music, Coconuts,
Record Town, Spec's Music, For Your Entertainment). The specific stores within each chain that serve as remote sales outlets are negotiated by Ticketmaster with each chain.

Ticketmaster
is responsible for installation and maintenance of the hardware and software necessary to sell tickets through the Ticketmaster System at the remote sales outlets.
Ticketmaster also trains the remote sales outlet's employees in the use of the Ticketmaster System and related systems, provides support and oversight in connection with the sale of tickets and
furnishes the remote sales outlets with promotional materials related to the Ticketmaster System and events for which tickets are available. The remote sales outlets are responsible for the staffing
of the stores and their daily operation. The remote sales outlets are generally paid a commission of approximately 17% to 20% of the convenience charge (approximately 30% in the United Kingdom),
typically subject to a maximum amount per ticket. Since February 1997, Ticketmaster has accepted credit cards in addition to cash at the outlets. Ticket purchasers receive their tickets at the
point of sale. The remote sales outlets generally deliver sales proceeds and convenience charges to Ticketmaster on a schedule ranging from daily to weekly depending on the financial condition of the
particular remote sales outlets and other factors. Ticketmaster has not suffered any material loss with respect to funds collected by its remote sales outlets for remittance to Ticketmaster.



As of December 31, 2001, Ticketmaster operated 20 call centers worldwide. Ticket purchasers seeking a greater degree of convenience than is afforded at
facility box offices or remote sales outlets can purchase tickets by telephone seven days a week, up to 14 hours per day, using a major credit card. Sales agents, staffing up to approximately
1,100 telephone and customer service positions domestically

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and approximately 650 in foreign markets, take the caller's credit card order and mail the tickets directly to the ticket purchasers. Tickets that are purchased by telephone can also be picked up at
the appropriate facility's "will call" ticket window. Ticketmaster typically assesses a per order "order processing" fee in addition to the per ticket convenience charge. Ticketmaster generally
receives the ticket sales proceeds and convenience charge and order processing fees from telephone credit card transactions within two business days after submission to the credit card company. The
call centers also respond to large numbers of informational calls related to events, including requests for facility characteristics, directions, telephone numbers, disability access and seating and
local hotels and restaurants. Concurrently with the sale of tickets to entertainment events, Ticketmaster's call centers may offer other products for sale related or unrelated to the events for which
tickets are being sold. Ticketmaster generally fulfills these sales by ordering the products from a third party.

An
important feature of Ticketmaster's domestic telephone system is the ability to channel all or a portion of incoming calls from any city to a selected call center. Accordingly, the
number of telephone positions available to receive telephone orders in a given region is capable of being increased in advance of the commencement of sales activity for a major event. Similarly, the
ability to network call centers affords Ticketmaster back-up capabilities in the event that a call center experiences operating difficulties.

In
addition, Ticketmaster has effectively handled a number of ticket orders through its interactive voice response system, which processes ticket orders on the phone without operator
assistance. In 2001, approximately 16.4% of its call center sales (representing 5.6% of all of Ticketmaster's ticket sales) were processed through the interactive voice response system.



Online services permit consumers to purchase tickets and access information about events on their personal computers via the Internet. Ticketmaster's ticketing
transactions are processed primarily through ticketmaster.com and, to a lesser extent, through ticketweb.com, museumtix.com and various international versions of these websites. Ticketmaster expects
online sales to continue to expand as more consumers engage in transactions over the Internet. Additionally, this medium provides Ticketmaster with a cost efficient way to disseminate information and
cross-promote, which may help reduce costs for these services across Ticketmaster's other distribution channels. From September 1998
until the Combination, Ticketmaster's online ticketing operations were conducted exclusively by TMCS; since the Combination, they are conducted by Ticketmaster.

Ticketmaster.com,
Ticketmaster's primary online ticketing website, is a leading online ticketing service. The service enables consumers to purchase tickets for live music, sports, arts
and family entertainment events presented by Ticketmaster's clients and related merchandise over the Web. Consumers can access the ticketmaster.com service at www.ticketmaster.com, from Ticketmaster's
other owned and operated websites, including citysearch.com, and through numerous direct links from banners and event profiles hosted by third party websites. In addition to these services, the
ticketmaster.com website and related international websites provide local information and original content regarding live events for Ticketmaster clients throughout the United States, Canada, Norway,
Ireland and the United Kingdom.

Since
the commencement of online ticket sales in November 1996, ticketmaster.com has experienced significant growth in the volume of tickets sold through its website. Gross
transaction dollars for ticket sales through its website increased from approximately $223,000 in November 1996 to $115.1 million in December 2001. Similarly, tickets sold on the
ticketmaster.com website in November 1996 represented less than 1% of total tickets sold by Ticketmaster, while tickets sold online in the quarter ended December 31, 2001 represented
approximately 33.9% of tickets sold.

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The
ticketmaster.com ticketing system interfaces on a real-time basis with the host ticketing systems developed by Ticketmaster. This process is designed to ensure that,
except in limited circumstances, the inventory of tickets available online is identical to that which is available through Ticketmaster's other distribution methods (e.g., telephone call centers and
remote sales outlets) and to enable consumers to order tickets on a "best available seat" basis. Ticketmaster has taken various measures designed to prevent system failure in Ticketmaster's computer
center. Each system has a live back-up available in the event of a primary system failure. Rooms housing computer-related equipment are protected by computer-safe fire
protection systems. To guard against power outages, uninterruptable power supplies are utilized. High capacity back-up generators eliminate dependency on public electric sources and all
data is continually recorded to multiple back-up systems. In addition, the ticketmaster.com website is mirrored in three separate co-location facilities across the United
States.

Ticketmaster
uses Secure Sockets Layer encryption technology, which is designed to allow users to transmit their personal information securely over the ticketmaster.com website. The
decrypted data is then passed through two levels of firewalls, using an internally developed communications protocol, to the Ticketmaster host systems where credit cards are processed and customer
accounts are created. The host systems communicate directly with bank processing centers for instantaneous online credit card authorization and electronic deposit of credit card receipts. Essentially,
all order processing, credit card billing, order fulfillment and consumer service functions for online ticketing orders are handled by Ticketmaster in the same manner as orders which are placed by
telephone.

Ticketmaster.com
has an extensive database of live event information, with event information updated 20 times every hour and more than 200 times daily. This database contains information
on more than 30,000 events and over 3,000 clients and is designed to support an easy-to-use and reliable dynamic event calendar and ticket-buying interface to the Ticketmaster
System.

The
ticketmaster.com system is deployed as a multi-tiered system of servers that separate database functions, Web page serving functions, transaction processing functions and ticketing
system interfacing functions. The system is built using a combination of commercial and proprietary software and hardware and is integrated into the Ticketmaster System. All ticketmaster.com ticket
sales occur on one of 26 geographically dispersed host systems. Credit card authorization and deposit, inventory control for events, customer account management and ticket printing and distribution
are all handled on the Ticketmaster System. Internet users interact with various Web servers to find an event using various criteria including event location, event type or performer name. Once an
event is located, users interact with forms-based HTML pages to guide them through the ticket-buying process. The Web servers communicate via a proprietary gateway to the host ticketing systems where
the transaction actually takes place.

The Ticketmaster System

Ticketmaster specifically developed its proprietary operating system, application software and its computer and telephone systems for the live event ticketing
industry. The Ticketmaster System provides clients with the means to maintain and control their ticket inventory efficiently. Users of the Ticketmaster System can effect a range of functions from the
most basic to the most complex, including individual advanced ticket sales, season and subscription ticketing, day of show walk-up ticket sales and group ticket sales.

The
Ticketmaster System software is maintained in-house, eliminating any reliance upon outside software companies. Ticketmaster believes that this allows it to more readily
adapt to its clients' needs, changing market conditions and advances in hardware and other technologies. The Ticketmaster System communicates directly with bank processing centers for instantaneous
online credit card authorization and electronic deposit of credit card receipts. All of the Ticketmaster System's online terminals at the call centers and outlets and at selected facility box offices
have access to the authorization network.

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Significant
measures are taken to prevent system failure in each computer center. Each system has a live back-up standing ready in the event of a primary system failure.
Rooms housing computer-related equipment are protected by computer-safe fire protection systems. Dual custom air conditioning units provide constant climate control. To guard against power
outages, Ticketmaster employs uninterruptable power supplies. High capacity back-up generators eliminate the dependency on public electric sources. Moreover, all data are continually
recorded to multiple back-up systems. Ticketmaster
maintains an online disaster recovery site in one of its principal offices. Historically, the Ticketmaster System has experienced minimal downtime.

Ticketmaster's
proprietary software and system is the product of over 20 years of innovation and continual enhancement by a team of in-house software and system
professionals currently numbering over 80. Ticketmaster's research and development staff has produced significant enhancements to the Ticketmaster System, including proprietary ticket printers and
data telecommunications multiplexors, and regularly upgrades Ticketmaster's software. In order to further expand its product line and offer specialized products to its clients, Ticketmaster has
acquired a number of system and software development companies. For example, in January 1998, Ticketmaster acquired the software capabilities of Distributed System Architects, Inc.,
which provides ARCHTICS software and services for professional sports teams. Similarly, other acquisitions have facilitated Ticketmaster's expansion of its development team and the
integration of related products and services, including FanTM, PCI, TM Ultimate Fan, Synchro and Pacer Cats.

In
April 2000, Ticketmaster further expanded its product line and development team by acquiring the Microflex Ticketing System used by Admission Network USA Inc. in North
America and by Cirque du Soleil, among other clients. In October 2000, Ticketmaster also began to implement its ticketfast program, which is currently only
available through ticketmaster.com. This technology allows Ticketmaster
to deliver tickets instantly to customers by allowing them to print their own safe and secure bar-coded tickets on their home or office printers. Using Ticketmaster FanTM
access control technology, facilities can accept and verify tickets created usingticketfast as well as other
bar-coded Ticketmaster tickets.

Ticketing Industry Overview

Ticketmaster believes that, although a material percentage of all tickets for live entertainment events sold in the United States during fiscal 2001 were sold
through retail outlet networks, call centers and online services operated by automated ticketing service companies, the domestic market represents a growth opportunity as consumers increasingly use
the Internet and seek the convenience offered by ticket locations away from the facility box office.

The
use of automated ticketing is generally in an earlier stage of development outside of the United States, although the actual level of use varies greatly from country to country.
While Ticketmaster believes that there is substantial potential for international growth, the timing and rate of penetration within each international market will vary.

The
supply of tickets, both domestically and internationally, has increased in recent years due to, among other factors, increases in the number of concerts and family shows, the number
of facilities (e.g., construction of new arenas and amphitheaters) and facility size and seating capacity, event expansion into new market areas (e.g., the increase in the number of professional
sports teams and the development of new sports leagues) and increases in the number of performances of a particular event
(e.g., expanded post-season play by sports leagues and associations). Ticket supply has also been enhanced by the facilities' desire to present as many revenue-producing events as possible
in order to meet their financial and other obligations. In recent years, the public's increased demand for tickets to certain live entertainment events has been evidenced by its willingness to pay
higher ticket prices to attend these events and the spread of public interest in certain types of events beyond historical levels

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(e.g., increased worldwide interest in football, baseball and basketball). In addition to live entertainment events held at arenas, amphitheaters, stadiums and performing arts venues, automated
ticketing for live events has expanded into servicing ticket issuing facilities that do not generally have seats (e.g., museums, amusement parks and state and county fairs).

The
success of automated ticket service companies depends on their ability to develop and maintain relationships with facilities, sports teams and promoters by providing high quality
service as well as the availability of, and public demand for, tickets for all types of events, including sports, family entertainment, concerts, fine arts and cultural attractions.

Personals

Service

Match.com is a leading online matchmaking and dating service that offers single adults a safe, convenient and private environment for meeting other singles.
Match.com, in combination with the One & Only Network, another online personals company operated by Match.com, features more than 2.5 million members with profiles. As of
December 31, 2001, the personals operations had 382,150 paying subscribers.

Match.com
is designed to provide adults with a secure, fun environment for meeting other single adults. Match.com provides users with access to other users' personal profiles and enables
a user interested in meeting another user to send email messages to that user through Match.com's double-blind anonymous email system. Email recipients can respond, or not, depending on their interest
in the sender. Match.com offers users a free service that includes searching, matching and responding to emails from Match.com users; should the user elect to initiate email contact with another
Match.com user, Match.com charges a subscription fee, starting with a single-month term, with discounts for longer term subscriptions. Match.com seeks to maintain a balanced number of male and female
users by, among other things, forming relationships with women-oriented Internet sites. Match.com also has implemented a number of measures designed to keep the site secure for use by single women.

In
September 1999, Ticketmaster purchased One & Only Network, another Internet personals company, which also operates an online affiliate program focused on online
matchmaking. These affiliates are able to join the One & Only Network for free, and earn commissions on each customer subscription they sell into One & Only Network's online matchmaking
service. One & Only Network is operated as part of the Match.com network, and Ticketmaster is focusing its partnership and advertising efforts on building the Match.com system and brand.

Strategic Alliances; Sales and Marketing

Match.com has entered into partnerships and strategic alliances with third parties in order to increase subscriptions in general as well as to target particular
segments of its potential subscriber base. Typically, these partners earn a commission on each customer subscription they sell into the Match.com service. Match.com expects to continue to pursue
strategic alliances and partnerships domestically and in foreign markets, both through its affiliate program and through agreements with third parties, in an effort to expand its overall subscriber
base and to encourage subscriptions from targeted audiences. Match.com purchases advertising on websites, including strategic placement of ads on Web pages related to romance and personals, and
television in an effort to increase subscriptions and promote the Match.com brand name.

Technology

Match.com and One & Only Network have developed and implemented several technologies to support their matchmaking services and affiliate marketing network.

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The
Match.com personals service is deployed as a tiered system consisting of Web servers, database servers, customer support applications and transaction processing applications. These
technologies are based on commercial application servers, databases and hardware. Internet users interact with forms-based HTML pages to specify their desired match. Match.com's database is then
searched to provide the results to the user. User transactions and customer support are accomplished with custom-built applications.

The
affiliate marketing service provides registration, customization, transaction tracking and reporting services to independent Web masters allowing them to participate in the personals
service or any other service which Ticketmaster may make available to the affiliate network from time to time. Match.com technology provides near real-time reporting capabilities on the
subscription performance of affiliated sites.

City Guide

General

Citysearch.com is a network of local city guide sites that offer primarily original local content for major cities in the United States and abroad, as well as
practical transactional tools to get things done online. The city guides provide up-to-date, locally produced information about a city's arts and entertainment events, bars and
restaurants, recreation, community activities and businesses (shopping and professional services), real estate related information, as well as local sports and weather updates. Citysearch also
features a comprehensive directory listing, similar to a yellow pages directory, of local businesses in over 3,000 zip codes in the United States. In addition, Citysearch city guides let people act on
what they learn by supporting online business transactions, including ticketing, hotel and restaurant reservations, and matchmaking through affiliations with leading ecommerce websites providing these
products.

Ticketmaster
has citysearch.com sites in 106 cities in the United States, 103 of which are owned and operated by Ticketmaster and the remaining three of which are
partner-led. During 2001, Ticketmaster reduced the number of domestic markets in which Ticketmaster maintains local sales and content staff for from 33 to 16, reflecting a realignment of
the city guide focus to a more regionally-based structure. During 2001, Ticketmaster has also increased the number of its partner-led international citysearch.com sites from 21 to 43.
Ticketmaster's international media partners bring capital, brand recognition, promotional strength and local knowledge to their city guides and allow Ticketmaster to build out its international
network of sites faster than it could solely through owned and operated sites.

City
guide revenues are generated through the sale of online advertising, both local and national, product licensing and consulting services and to a smaller extent, transaction fees
from affiliate partners. Local advertising revenues are derived primarily from targeted media placement, sale of self-enrollment enhanced listings in search results, in context advertising
and targeted sponsorship packages. In addition, while becoming a smaller part of the total revenue stream, Ticketmaster continues to generate local advertising income from Web site development,
hosting and placement in Citysearch's directory listings.

Business-to-Consumer Products

Citysearch provides local, regional and national businesses with a wide range of Web advertising options designed to reach growing local audiences. Throughout
2001, Citysearch shifted focus from comprehensive Web site design and hosting, toward advertising solutions that are more targeted and client driven, including those solutions described below.

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Media Products.Citysearch offers businesses an opportunity to target interested users through one of two bundled packages, a
"targeted sponsorship package" and a "traffic builder package". A "targeted sponsorship package" includes a premium placement advertisement on the citysearch.com search results pages; a cover
advertisement on the front page of city guide content section; and a priority listing advertisement on a user initiated search return. The "traffic builder package" features both the premium placement
advertisement and the cover advertisement, but does not include a priority listing.

Self-Enrollment Listings.Businesses can choose from a variety of listing options on citysearch.com, including an
enhanced listing that allows a business to boost its presence in citysearch.com search results by ensuring that its ad will be placed above the standard alphabetical listings in its category. As of
September 2001, Citysearch automated the enrollment process for directory listings so that a business can now self-enroll and manage its enhanced listing without reliance on
Citysearch personnel.

Web Site Design and Hosting.Citysearch offers several options for businesses seeking to create a Web presence, from a basic
Web site to a multi-page site with additional features and functionality. Citysearch charges between $75 and $150 per month for its Web site hosting and maintenance services. In addition,
Citysearch charges an upfront development and design fee between $900 and $1,500 in connection with all its Web site design services.

Banners and Sponsorships.Citysearch offers local, regional and national businesses opportunities to gain exposure through
Citysearch's banner, sponsorship and promotion products. A business can promote its message by sponsoring one of Citysearch's four major editorial guides. Citysearch also sells sponsorships of various
sections within its city guides on a local and national basis.

Promotional Opportunities.Elements of Citysearch's marketing programs include online sweepstakes and fulfillment/database
building, consumer incentive programs and offline marketing programs such as point-of-purchase, employee incentives and special event sponsorships.

Strategic Alliances

Citysearch has entered into partnerships and strategic alliances with third parties in order to:



Newspaper and Telephony Partnerships.Citysearch has entered into strategic partnerships with major newspapers and media
companies in the United States and other countries, including Australia, Sweden, Denmark, Canada, Korea and Japan. In these partner-led markets, the partner provides capital and
management, while Citysearch contributes technology, a business model, consulting services, business systems and processes and network participation. Citysearch typically receives up-front
and ongoing license fees, fees for consulting services and, in many cases, royalties based on partner-generated revenues. Citysearch believes these arrangements allow it to expand its international
network of cities in a more rapid and cost-effective manner than an exclusively owned and operated network would allow. Citysearch does not expect to enter into additional domestic
partnerships to launch city guides.

Marketing Agreements.Citysearch has entered into both local and national marketing agreements. For example, Citysearch
entered into an extensive distribution and marketing agreement with Microsoft

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as part of the transaction involving Citysearch's purchase of the Sidewalk assets from Microsoft. The agreement, which was recently extended for an additional three years, provides promotion and
linking arrangements for Citysearch's various Web sites and promotion of its advertising customers on the Microsoft online yellow pages. Citysearch intends to continue to pursue such marketing
agreements in order to attract additional business customers and increase usage of citysearch.com sites by consumers.

Content Distribution Alliances.Citysearch has entered into agreements with a number of companies to distribute its content
and drive traffic to its Web sites. Citysearch has recently begun to syndicate its citysearch.com content to non-competitive third party Web sites in exchange for cash payments and/or
branding and promotional consideration.

Marketing and Sales

Citysearch emphasizes marketing activities in its owned and operated markets aimed at increasing awareness of its local city guides by both consumers and business
customers.

In
partner-led markets, Citysearch's marketing efforts rely substantially on the partner's existing franchise and resources in the community.

In
connection with its transition from a locally-based structure to a regionally-based structure, Citysearch has been able to reduce its reliance on a large local direct sales force.
Citysearch has effectively reduced its sales force from approximately 111 account managers as of December 31, 2000, to approximately 94 account managers as of March 1, 2002.

Operations

Though no longer focused on the aggressive roll-out of additional local city guides, Citysearch continues to license its roll-out
capabilities to media companies in its partner-led markets. Citysearch has analyzed and documented the most successful practices associated with its early city launches to refine and
standardize its field and home office production processes. Citysearch's software systems monitor much of the sales and customer care functions. Additionally, Citysearch has built custom systems that
streamline the site creation and maintenance process.

City
guide customer service operations are located in Citysearch's central city guide production site in the Los Angeles, California area. Citysearch's enterprise management systems
enable customer service staff members to view a customer's full profile, including billing and interactive history, as they take such customer's call, and to use Citysearch's software tools to make
changes to a business customer's site in real time.

Technology

Citysearch has developed and implemented a number of technologies to support its local city guide service and business operations, including an online city guide
application and a suite of integrated enterprise management systems.

Local Search Functionality.Citysearch launched its local search functionality in September, 2001. This feature allows users
to conduct free form keyword searches for businesses and information in any of over 3,000 zip codes in the country by exact address, airport code, zip code, neighborhood, city or state.

Citysearch Online Application.Citysearch's online application provides a simple and intuitive user interface for finding
local information online. Citysearch employs a multi-tiered architecture, separating a standard relational database from business rules and presentation logic. Citysearch's tiered architecture is
designed to provide for rapid development cycles and code reuse.

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Enterprise Management Systems.Citysearch has developed and implemented a suite of integrated enterprise management systems
consisting of third-party and internally developed applications covering sales force automation and telemarketing, production management and tracking systems and customer service, accounting, billing
and commissions systems.

Additional Web Sites

Ticketmaster's city guide segment also includes a number of other Web sites operated by Ticketmaster that have their own following on the Internet and that round
out its citysearch.com, ticketmaster.com and online personals offerings. These Web sites include:



Evite, Inc. is a free online invitation service acquired by Ticketmaster in March 2001. In addition to its invitation service, Evite offers a
reminder service, polling, payments collection, restaurant and concert
listings, event shopping and local resources. Evite now averages more than 3.6 million sent invitations a month.



Livedaily.com is Ticketmaster's online daily entertainment news webzine. Ticketmaster has integrated livedaily.com with its citysearch.com and ticketmaster.com
Web sites, providing music fans with access to news about event tickets and promotions as well as local music and event information.



In March 1999, Ticketmaster purchased CityAuction, Inc., which provides person-to-person online auctions through its
cityauction.com Web site. In addition to national and regional auctions, cityauction.com lets users post and search in their own locality, allowing them to trade items that would be considered too
valuable or difficult to transport over long distances, such as electronic equipment, office equipment, furniture and automobiles. In September 1999, in connection with Ticketmaster's
investment in FairMarket, Inc., another online auction company, Ticketmaster integrated the cityauction.com services into the FairMarket network allowing cityauction.com users to access a
greater number of users and listings. Ticketmaster also licensed the cityauction.com technology systems to FairMarket as part of the investment.

Company History

Ticketmaster Group, Inc. and its principal operating subsidiaries, Ticketmaster Corporation, which was organized in 1976, and Ticketmaster LLC, the entity
into which certain subsidiaries of Ticketmaster were merged as of December 31, 1998, were organized for the primary purpose of developing stand-alone automated ticketing systems for sale to
individual facilities. Ticketmaster Online-Citysearch, Inc. was the result of the September 1998 combination of CitySearch, Inc. and Ticketmaster Multimedia Holdings, Inc.
(Ticketmaster.com), then a wholly-owned online subsidiary of TM Corp. CitySearch, Inc. was incorporated in September 1995 and launched its first local city guide in May 1996.
Ticketmaster.com was formed in 1993 to administer the online business of TM Corp and began selling live event tickets and related merchandise online in November 1996.

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During the 1990s, Ticketmaster continued to expand both through acquisitions and strategic alliances with joint venture partners, including, in 1991, the acquisition of certain assets
(principally client contracts) of Ticketron, which previously had been one of Ticketmaster's major competitors; in 1997, when it acquired its licensee, Ticketmaster Canada; in 1997, when it acquired
its 50% interest in Ticketmaster Ireland; and in 2000, when it acquired Réseau Admission Inc. in Canada, and certain contracts formerly serviced by ETM Entertainment
Network, Inc. and Dillard Ticketing System, Inc. (collectively, "ETM") when ETM ceased operations in June 2000. During the past six years, Ticketmaster reacquired the rights to
use its name and the Ticketmaster System that had previously been granted to joint ventures and to licensees such that, as of December 31, 2001, in the United States Ticketmaster had only two
remaining licensees: the University of Texas and in the Washington, D.C./Baltimore area.

In
1999, TMCS acquired CityAuction, Inc. (cityauction.com), an online auction company, and Match.com, Inc. (Match.com) and Web Media Ventures, LLC (d/b/a One & Only
Network), which are both online personals services. In addition, in 1999, TMCS acquired the arts and entertainment portion of The Microsoft Network (MSN) Sidewalk (sidewalk.com) city guides,
significantly expanding the reach of its citysearch.com city guides. In January 2000, TMCS acquired 2b Technology, Inc., a Richmond, Virginia based visitor management software developer
and offline and online ticketing company targeted at venues such as higher volume museums, cultural institutions and historic sites. In May 2000, TMCS acquired TicketWeb Inc., a
ticketing company whose Web-based ticketing software allows venues and event promoters, including symphony concerts, clubs, museum exhibitions, amusement parks and film festivals, to
perform box-office operations remotely, over the Internet. In February 2001, Ticketmaster (the combined company) acquired ReserveAmerica Holdings, Inc., an online and offline
camping and outdoor activity reservations company. In March 2001, Ticketmaster acquired Evite, Inc., a free online invitation service.

Ticketing Joint Ventures and Licensees

As summarized above, in addition to the ticketing operations performed directly by Ticketmaster, the Ticketmaster System is operated in certain territories
through joint ventures and licensees. Included among Ticketmaster's current joint ventures and strategic alliances are the following:

Australian Joint Ventures

On December 1, 1995, Ticketmaster and the Victorian Arts Centre Trust ("VACT") formed joint ventures (the "Australian Joint Ventures") for the purpose of
conducting Ticketmaster's live entertainment ticketing business in Australia and, possibly, in New Zealand. In September 1999, VACT sold its interest in the venture to Seven Pty Limited. As a
result of this transaction, Ticketmaster has a 50.1% interest in, Ticketmaster 7 Pty Limited ("Ticketmaster Australia"). Through June 2001 the Company exercised control over the Australian
Joint Ventures and its assets, liabilities and results of operations were consolidated. In the third quarter of 2001, certain rights were relinquished and the Company no longer exercised control over
the Australian Joint Ventures and accordingly, the entity was deconsolidated and effective the third quarter of 2001 has been accounted for under the equity method of accounting. Some of Ticketmaster
Australia's clients include the Victorian Arts Centre, the Australian Football League, the Melbourne Cricket Grounds and the Australian Chamber Orchestra.

Ireland Joint Venture

On July 31, 1997, Ticketmaster acquired 50% of the capital stock of Ticket Shop Limited, the entity through which Ticketmaster conducts its live
entertainment ticketing business in Ireland. In December 2000, Ticketmaster acquired an additional 10% of the capital stock of Ticket Shop Limited and therefore, the accounts of Ticket Shop
Limited are included in the consolidated financial statements. Ticketmaster serves as the managing partner of the joint venture.

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Latin American License Arrangement

Ticketmaster and Corporacion Interamericana de Entretenimiento, S.A. de C.V. ("CIE") entered into a license arrangement (the "Latin American License") for the
purpose of marketing and operating the Ticketmaster System throughout Central and South America. Accordingly, Ticketmaster is licensor to CIE's operating ventures, which are currently operating in
Brazil, Argentina and Chile. CIE is currently the owner of a 50.01% equity interest in Ticketmaster's Mexico licensee with Ticketmaster owning the remaining 49.99% equity interest in this licensee.

Domestic Licensees

Ticketmaster has selectively licensed its name and technology to third parties for use in the Washington, D.C./Baltimore area and to the University of Texas.
Ticketmaster derives revenues from its licensees in the form of license fees and/or ongoing per ticket royalties. Less than 1% of Ticketmaster's
total revenues during fiscal 2001 were derived from these license arrangements. On December 18, 2000, Ticketmaster acquired its Oregon licensee.

City Guide Investments

Active.com

In December 1999, TMCS completed the purchase of approximately 19% of the fully-diluted equity of Active.com, Inc. in the form of preferred stock
which, as of December 31, 2001, had been diluted to approximately 6%. Active.com is an online participatory sports registration and information company. Active.com is the company resulting from
the merger of RaceGate.com and ActiveUSA.com, which were each in the same business category. The total consideration paid to Active.com for the preferred stock was valued at $15.5 million. In
November 2000 and November 2001, TMCS invested an additional $1 million and $750,000, respectively, in Active.com in follow-on investment rounds.

Competition

Ticketing Operations

Ticketmaster's ticketing business, including ticketmaster.com, faces competition and potential competition from other national and regional ticketing service
companies, entertainment organizations with ticketing capabilities, as well as from its clients who may elect to fulfill ticketing distribution and management functions through their own systems. Not
all facilities, promoters and other potential clients use the services of an automated ticketing company, choosing instead to distribute their tickets through their own internal box offices or other
distribution channels. Accordingly, Ticketmaster competes with the facilities, promoters and other potential clients for the right to distribute their tickets at retail outlets, by telephone and on
the Internet.

Other
companies compete with Ticketmaster by selling stand-alone automated ticketing systems to enable the facilities to do their own ticketing. Several of Ticketmaster's competitors
have operations in multiple locations, while others compete principally in one specific geographic location. Ticketmaster experiences substantial competition for potential client accounts and renewals
of contracts on a regular basis. Accordingly, there can be no assurance that prospective or renewal clients will enter into contracts with Ticketmaster rather than Ticketmaster's competitors
(including clients that choose to
self-distribute with, or without, the assistance of the numerous companies that support self-distribution). Ticketmaster competes on the basis of products and service provided,
capability of the ticketing system, its distribution network, reliability and price.

As
an alternative to purchasing tickets through Ticketmaster, ticket purchasers generally may purchase tickets from the facility's box office at which an event will be held or by season,
subscription or group sales directly from the venue or promoter of the event. Although Ticketmaster's clients may

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process sales of these tickets through the Ticketmaster System, Ticketmaster derives no convenience charge revenue from the ticket purchasers with respect to those ticket purchases.

Personals

The dating services business is very competitive. Match.com's and One & Only Network's primary competitors include the personals sections of newspapers and
weeklies, free online dating services, other online-pay-dating services, including local online offerings from stand-alone dating websites or local media.

City Guide

The markets for local content and services are highly competitive and diverse. Citysearch's primary competitors include online providers of local content,
numerous search engines and other site aggregation companies, media, telecommunications and cable companies, Internet service providers and niche competitors which focus on a specific category or
geography and compete with specific content offerings provided by Citysearch, paper city guides and listings contained in various newspapers and magazines. Many of Ticketmaster's city guide
competitors have greater financial and marketing resources than it has and may have significant competitive advantages through other lines of business and existing business relationships. Furthermore,
additional major media and other companies with financial and other resources greater than Ticketmaster may introduce new Internet products addressing the local interactive content and service market
in the future.

General

Ticketmaster believes that the principal competitive factors for all its services, including its ticketing, personals and city guide businesses, include: depth,
quality and comprehensiveness of content; ease of use; distribution; search capability; and brand recognition. Ticketmaster cannot ensure that it will be able to successfully compete against its
current or future competitors or that competition will not have a material adverse effect on its business, financial condition and results of operations. Furthermore, as
a strategic response to changes in the competitive environment, Ticketmaster may make certain pricing, servicing or marketing decisions or enter into acquisitions or new ventures that could have a
material adverse effect on its business, financial condition and results of operations.

Trademarks and Patents

Ticketmaster owns a number of registered trademarks in various countries relating to, among other things, the names Ticketmaster, Match.com, Evite, ReserveAmerica
and their related logos. Ticketmaster believes that such trademarks are widely recognized throughout North America and other parts of the world and have considerable value. Ticketmaster is not aware
of any actions against its trademarks used in its businesses domestically and has not received any notice or claim of infringement in respect of such trademarks.

Ticketmaster
presently has no patents pertaining to the Ticketmaster System or any of its other business operations. Although Ticketmaster may in the future file for patent protection on
products developed or to be developed by it, there can be no assurance that any patents will be issued or, if issued, that such patents will provide Ticketmaster with meaningful protection.
Furthermore, the technology used by Ticketmaster in many of its products is likely to be within the state-of-the-art and may not be more advanced than the
technology used by or available to certain of its present or potential competitors. Ticketmaster may be unable to prevent its competitors and others from incorporating features of Ticketmaster's
products into their own products.

Ticketmaster
regards its copyrights, service marks, trademarks, trade dress, trade secrets, proprietary software and similar intellectual property as critical to its success, and rely on
trademark

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and copyright law, trade secret protection and confidentiality and/or license agreements with employees, customers, partners and others to protect its proprietary rights.

Effective
trademark, service mark, copyright and trade secret protection may not be available or sought by Ticketmaster in every country in which its products and services are made
available, or in any particular country, with regard to all of its products or services which are available in that country. Ticketmaster has licensed in the past, and expects that it may license in
the future, certain proprietary rights, such as trademarks or copyrighted material, to third parties. In addition, Ticketmaster has licensed in the past, and expects to license in the future, certain
content, including trademarks and copyrighted material, from third parties. While Ticketmaster attempts to ensure that the quality of its brands is maintained by such licensees, there can be no
assurance that such licensees will not take actions that might materially adversely affect the value of Ticketmaster's proprietary rights or reputation, which could have a material adverse effect on
its business, financial condition and results of operations.

Ticketmaster
licenses the registered trademark "Citysearch" from a third party, and there can be no assurance that Ticketmaster will be able to continue to license the trademark on terms
acceptable to it. The initial term of the license expired in March 2001, and is subject to indefinite annual renewals at Ticketmaster's option. Ticketmaster exercised its renewal rights in
March 2001 and 2002 and intends to continue to do so in the future. Ticketmaster may be subject to legal proceedings and claims of alleged infringement of the trademarks and other intellectual
property rights of third parties by Ticketmaster and its licensees or licensors. Such claims, even if not meritorious, could result in the expenditure of significant financial and managerial resources
which could result in a material adverse effect on Ticketmaster's business, financial condition and results of operations.

Regulation

Ticketmaster is regulated by certain state and local regulations, including, but not limited to, a law in Georgia, that establishes maximum convenience charges on
tickets for certain sporting events. Other legislation that could affect the way Ticketmaster does business, including legislation that would regulate the amount of convenience charges and order
processing fees, are introduced from time to time in federal, state and local legislative bodies. Ticketmaster is unable to predict whether any such legislation will be adopted and, if so, the impact
thereof on its business.

Ticketmaster
has recently introduced, and intends to continue to introduce in the future, new products and services. Many of these products and services, such as Ticketmaster
Marketplace, have either never previously existed or have developed rapidly due to the fast rate of change in Internet-based business models. As a result, the impact of existing laws and
regulations on these new products and services is uncertain. Ticketmaster believes that its new products and services comply with existing laws and regulations, but there can be no assurance that such
laws and regulations will not in the future be applied to these new products and services in unforeseen ways. As such, the impact of the application of such laws and regulations on certain of
Ticketmaster's businesses cannot be foreseen and may have a material adverse effect on such businesses and the applicable products and services.

Ticketmaster's
products and services are subject to various sales and use tax provisions under applicable State and local law. The application of such tax provisions to Ticketmaster's
historical and new products and services is subject to interpretations by the applicable taxing authority. Ticketmaster believes it is compliant with these tax provisions, but there can be no
assurance that taxing authorities will not take a contrary position and that such position will not result in a material adverse effect to Ticketmaster's business, financial condition and results of
operations.

Ticketmaster
posts privacy policies for most of its Internet websites concerning Ticketmaster's use and disclosure of user data. In addition, Ticketmaster is subject to Federal, State
and local laws relating to Internet commerce generally and privacy of Internet user data specifically. While there are currently

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relatively few laws specifically directed to online commerce, the Federal Trade Commission and State and local legislative bodies are debating many proposed new Internet related laws and regulations
designed, among other things, to impose new obligations and restrictions with respect to user data collected on Internet sites. Failure by Ticketmaster to comply with its posted privacy policies or
with existing or new privacy-related laws and regulations could result in regulatory proceedings or private party litigation. Any such proceeding or litigation could have a material adverse effect on
Ticketmaster's business, results of operations or financial condition, if not resolved in Ticketmaster's favor.

In
addition, increasing concern over consumer privacy has led to the introduction from time to time of proposed legislation that could impact the direct marketing and market research
industries. Ticketmaster does not know when or whether any such proposed legislation may pass or whether any such legislation would relate to the types of services currently provided by Ticketmaster
or which Ticketmaster intends to develop. Accordingly, Ticketmaster cannot predict the effect, if any, that any such future regulation may have on its business.

Ticketmaster
is subject to certain laws and regulations in the foreign markets in which it operates but does not believe that such laws or regulations will materially impact its ability
do business in such markets.

Furthermore,
there may be additional federal or state legislation or changes in regulation implementation that would limit the activities of Ticketmaster or its clients in the future or
significantly increase the cost of compliance.

Relationship with USA

Ticketmaster is currently a direct, majority-owned subsidiary of USA Networks, Inc. ("USA"). As of December 31, 2001, USA beneficially owned shares
of Ticketmaster's Class A and Class B Common Stock representing approximately 92% of the total voting power of its total outstanding Common Stock. As a result, USA generally has the
ability to control the outcome of any matter submitted for the vote or consent of Ticketmaster's stockholders. Subject to applicable Delaware law, USA is generally not restricted with regard to its
ability to control the election of Ticketmaster's directors, to cause the amendment of its Amended and Restated Certificate of Incorporation, or generally to exercise a controlling influence over
Ticketmaster's business and affairs. This control relationship may have the effect of delaying or preventing a change in control of Ticketmaster and might adversely affect the market price of its
Class B Common Stock.

Conflicts
of interest may arise between Ticketmaster and USA and its affiliates in areas relating to past, ongoing and future relationships and other matters. These include corporate
opportunities; indemnity arrangements; tax and intellectual property matters; potential acquisitions or financing transactions; sales or other dispositions by USA of shares of Ticketmaster's
Class A and Class B Common Stock held by it; and the exercise by USA of its ability to control Ticketmaster's management and affairs. Ownership interests of Ticketmaster's directors or
officers in USA common stock, or service as both a director or officer of Ticketmaster and a director, officer or employee of USA, could
create or appear to create potential conflicts of interest when directors and officers are faced with decisions that could have different implications for Ticketmaster and USA. Several of the members
of Ticketmaster's board of directors are also directors, officers or employees of USA. In addition, USA is engaged in a diverse range of media, electronic and online commerce businesses. These
businesses may have interests that conflict or compete in some manner with Ticketmaster's business. Subject to applicable Delaware law, USA is under no obligation, and has not indicated any intention,
to share any future business opportunities available to it with Ticketmaster.

Ticketmaster's
Amended and Restated Certificate of Incorporation also includes provisions which provide that: USA shall have no duty to refrain from engaging in the same or similar
activities or lines

19

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of Ticketmaster's business, thereby competing with Ticketmaster; USA, its officers, directors and employees shall not be liable to Ticketmaster or its stockholders for breach of any fiduciary duty by
reason of any activities of USA in competition with Ticketmaster; and USA shall have no duty to communicate or offer corporate opportunities to Ticketmaster and shall not be liable for breach of any
fiduciary duty as a stockholder of Ticketmaster in connection with these opportunities, provided that the relevant procedures set forth in Ticketmaster's Amended and Restated Certificate of
Incorporation are followed.

There
can be no assurance that any conflicts that may arise between Ticketmaster and USA, any loss of a corporate opportunity to USA that might otherwise be available to Ticketmaster, or
any engagement by USA in any activity that is similar to Ticketmaster's business will not have a material adverse effect on Ticketmaster's business, financial condition and results of operations or
its other stockholders.

Employees

As of December 31, 2001, Ticketmaster employed approximately 3,800 domestic and 800 foreign employees, determined on a full-time equivalent basis.

Ticketmaster's
telephone sales agents in Toronto and Montreal, Canada are the only employees of Ticketmaster covered by collective bargaining agreements. The collective bargaining
agreement covering the telephone sales agents in Toronto, Canada is scheduled to expire on March 31, 2003. The collective bargaining agreement covering the telephone sales agents in Montreal,
Canada expires on October 31, 2006. Ticketmaster believes that its relations with its employees are good.

ITEM 2.PROPERTIES

Ticketmaster's
corporate offices are located at 3701 Wilshire Boulevard, Los Angeles, California, where it currently leases approximately 73,700 square feet under leases expiring in 2003
and 2006. Ticketmaster leases office space in various cities throughout the United States, the United Kingdom, Ireland, Canada, Norway, Germany and France. As of December 31, 2001, Ticketmaster
had approximately 835,500 square feet of space under lease, with scheduled expirations ranging from April 2002 to June 2014. In addition, Ticketmaster owns a small office in Vancouver,
Canada.

Ticketmaster's
personals businesses are located in Richardson, Texas, where it currently leases approximately 31,300 square feet under a lease expiring in 2005.

Ticketmaster's
city guide headquarters are located in Pasadena, California, where it currently leases approximately 48,200 square feet under a lease expiring on March 31, 2002.
Ticketmaster has recently leased approximately 36,900 square feet at 3731 Wilshire Blvd., Los Angeles, California, under a lease expiring 2006 and intends to move its city guide headquarters to such
space in the first and second quarters of 2002. Ticketmaster also leases local office space for its city guide business in approximately 14 cities throughout the United States. Local offices range in
size from less than 2,000 square feet to 7,500 square feet and have lease terms that range from month-to month to seven years. None of such leases expires later than 2005, except for the
San Francisco lease which expires in 2006.

Ticketmaster
believes that its facilities are adequate in the locations where it currently does business.

ITEM 3.LEGAL PROCEEDINGS

Ticketmaster
is from time to time party to various legal proceedings arising in the ordinary course of its business. In addition to the legal proceedings described below, Ticketmaster is
also party to various legal proceedings in which it is the plaintiff and seeks injunctive relief and/or damages from third parties for breach of contract and unauthorized use of Ticketmaster's
intellectual property.

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From
time to time, federal, state and local authorities commence investigations or inquiries with respect to Ticketmaster's compliance with applicable antitrust, consumer protection,
deceptive advertising, unfair business practice and other laws. Ticketmaster has historically cooperated in and satisfactorily resolved each such investigation or inquiry.

Ticketmaster
believes that it has conducted its business in compliance with all applicable laws, including federal and state antitrust laws. In the opinion of Ticketmaster's management,
none of Ticketmaster's legal proceedings will have a material adverse effect on Ticketmaster's financial position or results of operation, but Ticketmaster can give no assurance that it will not incur
material damages or costs in connection with such litigation. Ticketmaster has incurred significant legal expenses in connection with these and other investigations and lawsuits and may incur
additional significant legal expenses in the future should investigations or lawsuits be instituted.

Ticketmaster
or its affiliates could become the subject of future governmental investigations or inquiries or be named as a defendant in claims alleging violations of federal or state
antitrust laws or any other laws. Any adverse outcome in such litigation, investigation or proceeding against Ticketmaster or its affiliates could limit or prevent Ticketmaster from engaging in the
ticketing business or subject Ticketmaster to potential damage assessments, all of which could have a material adverse effect on Ticketmaster's business, financial condition or results of operations.
Regardless of its merit, source or outcome, any such litigation, investigation or proceeding would at a minimum be costly and could divert the efforts of our management and other personnel from
productive tasks, which could have a material adverse effect on Ticketmaster's business, financial condition or results of operations.

Tickets.com Litigation

On July 23, 1999, Ticketmaster Online-Citysearch and Ticketmaster Corporation filed a Complaint seeking damages and injunctive relief against
Tickets.com, Inc. ("Tickets.com"), entitledTicketmaster Corporation and Ticketmaster Online-Citysearch, Inc. v. Tickets.com, Inc.,Case No. 99-07654 HLH, in the United States District Court for the Central District of California. Ticketmaster claims that Tickets.com violates Ticketmaster's legal and contractual
rights by, among other things, (i) providing deep-links to Ticketmaster's internal Web pages without Ticketmaster's consent, (ii) systematically, deceptively and
intentionally accessing Ticketmaster's computers and computer systems and copying verbatim Ticketmaster event pages daily and extracting and reprinting Ticketmaster's Uniform Resource Locators
("URLs") and event data and information in complete form on Tickets.com's website and (iii) providing false and misleading information about Ticketmaster, the availability of tickets on the
Ticketmaster website, and the relationship between Ticketmaster and Tickets.com. On January 7, 2000, Ticketmaster filed a first amended complaint. Tickets.com filed a motion to dismiss
Ticketmaster's first amended complaint on or about February 23, 2000, which was denied in part and granted in part with leave to amend. Ticketmaster filed a second amended complaint on
April 21, 2000.

On
March 3, 2000, Ticketmaster filed a motion for preliminary injunction, requesting the Court to enjoin Tickets.com from, among other things, deep-linking and
"spidering" to Ticketmaster's internal Web pages, accessing Ticketmaster's computers and computer systems and copying Ticketmaster's event pages, and providing misleading and false information about
Ticketmaster, the availability of tickets on the Ticketmaster website and the relationship between Ticketmaster and Tickets.com. On July 31, 2000, the Court held a hearing. On August 11,
2000, the Court issued a ruling denying Ticketmaster's motion for preliminary injunction. On September 8, 2000, Ticketmaster filed a notice of appeal of the Court's order denying Ticketmaster's
motion for preliminary injunction. On January 11, 2001, the Ninth Circuit Court of Appeals affirmed the District Court's order denying Ticketmaster's motion for preliminary injunction.

On
May 30, 2000, Tickets.com filed its Answer to Ticketmaster's second amended complaint and counterclaims against Ticketmaster Corporation and Ticketmaster
Online-Citysearch, Inc. Tickets.com asserted claims for relief against Ticketmaster for violations of the Sherman Act, sections 1 and 2,

21

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violations of California's Cartwright Act, violations of California's Business and Professions Code section 17200, violations of common law restraint of trade and unfair competition and
business practices, interference with contract and declaratory relief. Tickets.com claimed that Ticketmaster Corporation's exclusive agreements with Ticketmaster Online-Citysearch, Inc.,
venues, promoters and other third parties injure competition, violate antitrust laws, constitute unfair competition and interfere with Tickets.com's prospective economic advantages. On July 19,
2000, Ticketmaster filed a motion to dismiss any claim based in whole or in part on Ticketmaster's alleged litigation conduct as well as Tickets.com's ninth claim for relief under California's
antitrust laws (the Cartwright Act). On September 25, 2000, the court entered an order denying Ticketmaster's motion on the ground that Tickets.com has the right to pursue discovery on the
issues raised in the motion before the issue can properly be resolved.

The
Court recently amended the pretrial schedule setting September 1, 2002 as the discovery cut-off date, January 3, 2003 as the date for the final
pre-trial conference, and has indicated that the trial will be set to commence in February 2003. The parties currently are actively engaged in document and deposition discovery in
the matter. Tickets.com seeks monetary damages which, if awarded, would have a material adverse effect on Ticketmaster. Ticketmaster is vigorously defending against the claims brought by Tickets.com.
However, Ticketmaster can give no assurances that it will not incur material damages or costs in connection with the litigation.

Class Action Litigation Related To Magazine Sales

Florida:On or about December 18, 2000, Ticketmaster Corporation and Time, Inc. were named as defendants in a
purported class action lawsuit filed in the Florida Circuit Court of the Thirteenth Judicial Circuit in Hillsborough County. The lawsuit is entitledVictoria McLean V.
Ticketmaster Corporation and Time, Inc., Case No. G0009564. The lawsuit alleges that the offering for sale by Ticketmaster Corporation of subscriptions to Entertainment Weekly
magazine, a publication of Time, Inc., as an agent of Time, Inc., involves a pattern of criminal activity, conspiracy and unfair and deceptive trade practices by allegedly disclosing
credit card account information to third parties without express written consent and unauthorized posting to credit card accounts. As the prayer for relief in the lawsuit, the plaintiff seeks to have
the Court enjoin the business practices of which the plaintiff has complained. In addition, the plaintiff seeks treble monetary damages, as well as attorneys' fees and the costs for pursuing the
action. Ticketmaster Corporation and Time, Inc. filed a motion to dismiss the complaint on various grounds.

On
or about May 30, 2001, the plaintiff filed an amended complaint which purported to add a second consumer as a plaintiff. In response to the amended complaint, Ticketmaster and
Time requested that their motion to dismiss be taken off calendar, and on July 23, 2001, Ticketmaster filed an Answer. Discovery is in its beginning stages. Ticketmaster believes the lawsuit is
without merit and expects to vigorously defend against the lawsuit.

Michigan:On or about August 17, 2001, Ticketmaster L.L.C. and Time, Inc. were named in as defendants in a
purported class action lawsuit in the Circuit Court for the County of Macomb, State of Michigan. The lawsuit is entitledGlenn R. Matecun, and all others similarly situated v.
Ticketmaster L.L.C. and Time, Inc., Case No. 01-3573 CP. On or about January 11, 2002, the plaintiff filed his First Amended Complaint,
alleging that Ticketmaster is providing credit card information to Time so that Time can sell unwanted magazine subscriptions without the consumer's knowledge or consent in violation of various
Michigan state laws. Plaintiff seeks monetary damages, treble damages, exemplary damages, attorneys' fees, and equitable relief. Discovery is in the beginning stages. Ticketmaster believes the case is
without merit and intends to vigorously defend against the lawsuit.

ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

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PART II

ITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market for Ticketmaster's Common Stock

Ticketmaster's Class B Common Stock began trading publicly on The Nasdaq National Market on December 3, 1998 under the symbol "TMCS." The following
table lists quarterly information on the price range of Ticketmaster's Class B Common Stock based on the high and low reported last sale prices for its common stock as reported on The Nasdaq
National Market for the periods indicated below. These prices do not include retail markups, markdowns or commissions.

|                                       |  | High |       | Low
|-------------------------------------- |  | ---- | ----- | ---
|Fiscal 2002:                           |  |      |       |    
|First Quarter (through March 26, 2002) |  | $    | 29.79 |    
|Fiscal 2001:                           |  |      |       |    
|Fourth Quarter                         |  | $    | 17.52 |    
|Third Quarter                          |  |      | 17.10 |    
|Second Quarter                         |  |      | 17.51 |    
|First Quarter                          |  |      | 12.88 |    
|Fiscal 2000:                           |  |      |       |    
|Fourth Quarter                         |  | $    | 16.00 |    
|Third Quarter                          |  |      | 24.25 |    
|Second Quarter                         |  |      | 24.00 |    
|First Quarter                          |  |      | 43.63 |    
|Fiscal 1999:                           |  |      |       |    
|Fourth Quarter                         |  | $    | 44.12 |    
|Third Quarter                          |  |      | 40.06 |    
|Second Quarter                         |  |      | 41.50 |    
|First Quarter                          |  |      | 71.12 |    

As
of March 21, 2002, there were approximately 304 holders of record of Ticketmaster's Class B Common Stock. Ticketmaster estimates there are more than 14,000 beneficial holders
of its Class B Common Stock. On March 26, 2002, the last reported sale price on The Nasdaq National Market for the Class B Common Stock was $28.22.

On
March 21, 2002, there were approximately 114 holders of record of Ticketmaster's Class A Common Stock. There is no public market for the Class A Common Stock, but each
share of Class A Common Stock will be automatically converted into one share of Ticketmaster Class B Common Stock upon any transfer of such share, subject to certain exceptions. In
addition, each share of Class A Common Stock may be converted at any time into one share of Class B Common Stock at the option of the holder thereof.

Ticketmaster
has not paid any dividends since its inception and does not intend to pay any dividends on its common stock in the foreseeable future.

Recent Sales of Unregistered Securities

Ticketmaster has used, and intends to continue to use, its Class B Common Stock to make tactical and strategic acquisitions and investments. In addition,
Ticketmaster has issued, and may in the future issue, shares of its Class B Common Stock to raise additional funds to fund acquisitions, investments and operations. Typically, these issuances
are not registered by Ticketmaster under the Securities Act of

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1933, as amended (the "Securities Act"); rather Ticketmaster provides the party receiving such shares with registration rights permitting the registration of the resale of such shares by such persons
under the Securities Act. In addition to issuances of shares that were not registered under the Securities Act that were reported by Ticketmaster in its previously filed Quarterly Reports on
Form 10-Q and Annual Reports on Form 10-K, Ticketmaster has made the following issuances for the following purposes.



The
sales of the securities described above were deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act, or
Regulation D promulgated thereunder, as transactions by an issuer not involving a public offering.

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ITEM 6.SELECTED FINANCIAL DATA

The
selected financial data below as of December 31, 2001, 2000, 1999 and 1998, and the years ended December 31, 2001, 2000 and 1999, the eleven months ended
December 31, 1998 and the year ended January 31, 1998 are derived from the audited financial statements of Ticketmaster and periods prior to the Combination have been restated to give
effect to the Combination. The selected financial data presented below as of January 31, 1998 is derived from audited financial statements of Ticketmaster Group, Inc. The selected
financial data are indicative of the accounting for the Combination on a historical basis in a manner similar to that in pooling-of-interests accounting. The selected
Ticketmaster financial data set forth below, including the accompanying notes, are qualified in their entirety by, and should be read in conjunction with, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Financial Statements of Ticketmaster and Notes thereto included elsewhere in this report.

|                                                                         |                                            |                                          |          |         |         |          |         | Eleven
Months
Ended
December 31,
1998(2) |          |         |        
|------------------------------------------------------------------------ | ------------------------------------------ | ---------------------------------------- | -------- | ------- | ------- | -------- | ------- | ---------------------------------------- | -------- | ------- | -------
|
|
|
|Consolidated Statements of Operations Data:                              |                                            |                                          |          |         |         |          |         |                                          |          |         |        
|Revenues:                                                                |                                            |                                          |          |         |         |          |         |                                          |          |         |        
|                                                                         | Ticketing operations                       |                                          | $        | 579,679 |         | $        | 518,565 |                                          | $        | 442,743 |        
|                                                                         | Personals                                  |                                          |          | 49,249  |         |          | 29,122  |                                          |          | 8,972   |        
|                                                                         | City guide                                 |                                          |          | 46,107  |         |          | 50,889  |                                          |          | 27,357  |        
|                                                                         | Other                                      |                                          |          | 149     |         |          | 8,144   |                                          |          | 19,458  |        
|                                                                         |                                            |                                          |          |         |         |          |         |                                          |          |         |        
|                                                                         |                                            | Total revenues                           |          |         | 675,184 |          |         | 606,720                                  |          |         | 498,530
|Operating costs and other expenses:                                      |                                            |                                          |          |         |         |          |         |                                          |          |         |        
|                                                                         | Ticketing operations                       |                                          |          | 370,976 |         |          | 330,434 |                                          |          | 269,315 |        
|                                                                         | Personals operations                       |                                          |          | 15,685  |         |          | 8,718   |                                          |          | 3,059   |        
|                                                                         | City guide operations                      |                                          |          | 40,513  |         |          | 45,345  |                                          |          | 32,583  |        
|                                                                         | Other                                      |                                          |          | 142     |         |          | 12,124  |                                          |          | 17,841  |        
|                                                                         | Sales and marketing                        |                                          |          | 82,621  |         |          | 87,772  |                                          |          | 56,499  |        
|                                                                         | General and administrative                 |                                          |          | 106,163 |         |          | 92,698  |                                          |          | 78,521  |        
|                                                                         | Depreciation and amortization              |                                          |          | 207,199 |         |          | 223,889 |                                          |          | 127,921 |        
|                                                                         | Merger and other non-recurring charges (3) |                                          |          | 976     |         |          | 4,103   |                                          |          | 4,236   |        
|                                                                         |                                            |                                          |          |         |         |          |         |                                          |          |         |        
|                                                                         |                                            | Total operating costs and other expenses |          |         | 824,275 |          |         | 805,083                                  |          |         | 589,975
|                                                                         |                                            |                                          |          |         |         |          |         |                                          |          |         |        
|Income (loss) from operations                                            |                                            |                                          | (149,091 | )       |         | (198,363 | )       |                                          | (91,445  | )       |        
|Interest income                                                          |                                            |                                          | (2,106   | )       |         | (3,879   | )       |                                          | (5,645   | )       |        
|Interest expense                                                         |                                            |                                          | 2,544    |         |         | 8,877    |         |                                          | 8,108    |         |        
|Equity in net (income) loss of unconsolidated affiliates                 |                                            |                                          | 57       |         |         | 2,174    |         |                                          | (1,225   | )       |        
|Investment losses, net                                                   |                                            |                                          | 10,764   |         |         | 8,814    |         |                                          |         |         |        
|Other expenses                                                           |                                            |                                          |         |         |         | 2,180    |         |                                          |         |         |        
|                                                                         |                                            |                                          |          |         |         |          |         |                                          |          |         |        
|                                                                         |                                            | Total other expenses                     |          |         | 11,259  |          |         | 18,166                                   |          |         | 1,238  
|                                                                         |                                            |                                          |          |         |         |          |         |                                          |          |         |        
|Income (loss) before income taxes and minority interest                  |                                            |                                          | (160,350 | )       |         | (216,529 | )       |                                          | (92,683  | )       |        
|Minority interest in loss                                                |                                            |                                          | (957     | )       |         | (1,234   | )       |                                          | (1,374   | )       |        
|Income tax provision                                                     |                                            |                                          | 5,081    |         |         | 14,728   |         |                                          | 23,975   |         |        
|                                                                         |                                            |                                          |          |         |         |          |         |                                          |          |         |        
|Net income (loss)                                                        |                                            | $                                        | (164,474 | )       | $       | (230,023 | )       | $                                        | (115,284 | )       | $      
|                                                                         |                                            |                                          |          |         |         |          |         |                                          |          |         |        
|Basic and diluted net income (loss) (4)                                  |                                            | $                                        | (1.16    | )       | $       | (1.65    | )       | $                                        | (0.90    | )       | $      
|                                                                         |                                            |                                          |          |         |         |          |         |                                          |          |         |        
|Shares used to compute basic and diluted net income (loss) per share (4) |                                            |                                          | 141,440  |         |         | 139,374  |         |                                          | 128,097  |         |        
|                                                                         |                                            |                                          |          |         |         |          |         |                                          |          |         |        
|Other Data:                                                              |                                            |                                          |          |         |         |          |         |                                          |          |         |        
|Adjusted EBITDA (5)                                                      |                                            | $                                        | 79,319   |         | $       | 38,255   |         | $                                        | 40,919   |         | $      
|                                                                         |                                            |                                          |          |         |         |          |         |                                          |          |         |        
|Net cash provided by operating activities                                |                                            | $                                        | 99,362   |         | $       | 3,999    |         | $                                        | 25,165   |         | $      
|                                                                         |                                            |                                          |          |         |         |          |         |                                          |          |         |        
|Net cash used in investing activities                                    |                                            | $                                        | (70,445  | )       | $       | (89,822  | )       | $                                        | (80,208  | )       | $      
|                                                                         |                                            |                                          |          |         |         |          |         |                                          |          |         |        
|Net cash (used in) provided by financing activities                      |                                            | $                                        | (5,283   | )       | $       | 67,345   |         | $                                        | 1,203    |         | $      
|                                                                         |                                            |                                          |          |         |         |          |         |                                          |          |         |        

|                                                 |  | December 31, |           | 
|------------------------------------------------ |  | ------------ | --------- | 
|
|
|Balance Sheet Data:                              |  |              |           | 
|Cash, cash equivalents and marketable securities |  | $            | 148,774   | 
|Working capital                                  |  |              | 18,437    | 
|Total assets (6)                                 |  |              | 1,394,355 | 
|Clients payable, net (7)                         |  |              | 72,315    | 
|Long-term debt, net of current portion (8)       |  |              | 752       | 
|Stockholders' equity                             |  |              | 1,167,766 | 

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26

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ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the
audited Consolidated Financial Statements of the Company and the related Notes thereto included elsewhere in this report. This discussion contains forward-looking statements about the Company,
including statements concerning its future product plans. These forward-looking statements involve risks and uncertainties. Forward-looking statements include information concerning possible or
assumed future results of operations, and include statements preceded by, followed by or that otherwise include the words "believes," "expects," "anticipates," "intends," "estimates" or similar
expressions. For those statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company's
actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth below and elsewhere in
this report.

The following important factors, in addition to those discussed elsewhere in this document and in the documents which may be incorporated by reference, and in
other public filings, press releases and discussions with Company management, could affect the future results and could cause these results to differ materially from those expressed in our
forward-looking statements:



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The forward-looking statements are based on the Company's expectations as of the date of this document and the Company undertakes no obligation to update these
statements. The forward-looking statements
herein do not include the potential impact of any mergers, acquisitions or other business combinations that may be completed after December 31, 2001.

Overview

Ticketmaster, as currently organized, was formed in January 2001 when Ticketmaster Online-Citysearch, Inc. acquired the equity and businesses of
Ticketmaster Group, Inc. and its subsidiaries from USA Networks, Inc. in exchange for 52,000,000 new shares of TMCS' Class B Common Stock. Upon the closing of the Combination,
TMCS changed its name to "Ticketmaster."

The
Combination was accounted for as an exchange of assets between entities under common control in a manner similar to the pooling of interests method of accounting and, accordingly,
prior periods have been restated to give effect to the Combination.

Ticketmaster
is a leading provider of automated ticketing services with domestic and foreign clients throughout the world, including many of the foremost entertainment facilities,
promoters and professional sports franchises. Ticket orders are received and fulfilled through operator-staffed call centers, independent sales outlets remote to the facility box office and through
the ticketmaster.com Web site. Revenue is generated principally from convenience and order processing charges received by Ticketmaster for tickets sold on its clients' behalf. Ticketmaster generally
serves as an exclusive agent for its clients and typically has no financial risk for unsold tickets. Ticketmaster is also a leading local portal and electronic commerce company that provides
in-depth local content and services to help people get things done online. Ticketmaster's principal online operations are ticketing, personals, city guides and camping reservations.
Ticketmaster's family of Web sites includes ticketmaster.com, match.com, citysearch.com, reserveamerica.com, museumtix.com, ticketweb.com, evite.com and livedaily.com, among others.

Recent Development

On March 27, 2002, the Company announced that it has entered into an agreement to acquire Soulmates Technology for approximately $23 million to be paid
primarily in stock. Soulmates Technology is a global online personals group providing dating and matchmaking services in nearly 30 countries worldwide.

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Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141,
"Business Combinations," effective after June 30, 2001, and No. 142, "Goodwill and Other Intangible
Assets," effective for fiscal years beginning after December 15, 2001. Under the new rules, goodwill and intangible assets deemed to have indefinite lives will no longer
be amortized but will be subject to annual impairment tests in accordance with the Statements. Other intangible assets will continue to be amortized over their useful lives.

Effective
January 1, 2002, the Company adopted the new rules on accounting for goodwill and other intangible assets. During the first quarter of 2002, the Company will perform the
first of the required impairment tests for goodwill and indefinite lived intangible assets recorded at January 1, 2002. Although it has not completed its assessment, the Company anticipates a
write-off of $75 to $125 million primarily related to the City guide segment. Although Citysearch is expected to generate positive cash flows in the future, due to cash flow
discounting techniques required by the new rules, the discounted future cash flows do not support current carrying values. The new accounting rule would reduce the Company's annual amortization of
goodwill and other intangible assets by approximately $115 million, assuming the mid-point of the range of the potential write-off.

In
October 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets", effective for fiscal years beginning after December 15, 2001. The Statement addresses financial accounting and reporting
for the impairment or disposal of long-lived assets. The Company believes that this Statement will not have a material effect on the results of operations and financial position of the
Company.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including
those related to allowance for doubtful accounts, long-term investments, goodwill and other intangible assets and income taxes. We base our estimates on historical experience and on
various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that
are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We
believe the following accounting policies and the related judgments and estimates affect the preparation of our consolidated financial statements.

Allowance for Doubtful Accounts

We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. If the financial
condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances would likely be required.

Impairment of Long-Term Investments

Our long-lived assets include long-term investments, goodwill and other intangible assets. At December 31, 2001, we had
$15.2 million of long-term investments and $1,033 million of goodwill and

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other intangible assets, accounting for approximately 75% of our total assets. Our long-term investments are accounted for using the equity and cost methods of accounting for investments
and none represent investments in publicly traded companies. The fair value of our long-term investments is dependent upon the performance of the companies in which we have invested, as
well as volatility inherent in the external markets for these investments, such as currency fluctuations. In determining when and if an investment decline in value is other than temporary, we evaluate
the market conditions, recent financings, trends of earnings and other key measures surrounding the investment in question. When a decline in value is deemed to be other than temporary, we recognize
an impairment loss in the current period operating results to the extent of the decline. For equity method investments that do not have a readily determinable market value, we compare the net carrying
amount to estimated future cash flows and recent historical performance. For cost method investments that do not have a readily determinable market value, we compare the net carrying value to recent
equity investments, recent historical performance, recent financing transactions with the investee and estimates of future profitability, if available. Although we believe our estimates reasonably
reflect the fair value of our investments, our key assumptions regarding future results of operations and other factors may not reflect those of an active market, in which case the carrying values may
have been materially different than the amounts reported. During the years ended December 31, 2001 and 2000, we recognized $10.8 million and $8.8 million of impairment losses, net
related to its long-term investments, respectively.

Goodwill and Other Intangible Assets Impairment

Effective January 1, 2002, we adopted Statement of Financial Accounting Standard No. 142 and will be required to analyze our goodwill and other
intangible assets for impairment indicators on an annual basis. In assessing the recoverability of our goodwill and other intangible assets, we must make assumptions regarding estimated future cash
flows and other factors to determine the fair value of the respective assets. Our future cash flows are based on current volume and pricing levels with an anticipated growth rate. If our estimated
future cash flow or their related assumptions were to change, we would be required to record impairment charges for these assets in which the carrying value is not
supported by the future cash flows. Although we have not completed our assessment, we anticipate a write-off of $75 to $125 million to goodwill and other intangible assets,
primarily related to the City guide segment. Although Citysearch is expected to generate positive cash flows in the future, due to cash flow discounting techniques required by the new rules, the
discounted future cash flows do not support current carrying values. During the year ended December 31, 2001, we did not record any impairment losses related to goodwill and other intangible
assets.

Income Taxes

The carrying value of our net deferred tax assets assumes that we will be able to generate sufficient future taxable income in certain tax jurisdictions, based on
estimates and assumptions. Components of our deferred tax assets, of which 96% has a valuation allowance, are principally related to domestic loss carryforwards and nondeductible goodwill and other
intangible assets. If our estimates and assumptions change in the future, we may be required to record additional valuation allowances against our deferred tax assets resulting in additional income
tax provision in our consolidated statement of operations. Management evaluates the realizability of the deferred tax assets quarterly and assesses the need for additional valuation allowances
quarterly. At December 31, 2001, we had recorded a valuation allowance of $103.1 million.

Related Party Transactions

USA Networks has provided advertising to us on its wholly-owned television properties, Sci-Fi Channel and USA Network, for no additional shares of
common stock or other consideration. During

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the year ended December 31, 2001, we received a total of $21.3 million from USA of which $9.7 million was provided to satisfy our obligation to a third party business partner and
$11.6 million was provided to us. USA Networks is committed to provide an additional $11.7 million to satisfy the remaining third party obligation for no additional shares or
consideration. However, there is no guarantee that USA Networks will provide any other future advertising for no additional shares of common stock or other consideration.

Revenues

Revenues are derived primarily from three sources: ticketing, online personals subscriptions, and city guide sponsorships and advertising. Ticketing operations
revenues primarily consist of convenience, order processing and delivery charges generated through ticket sales. The sale of tickets for an event often commences several months prior to the date of
the event. The Company recognizes ticketing operations revenue when the ticket is sold. Fluctuations in ticket operations revenues occur largely as a result of changes in the number of tickets sold
and change in the average revenue per ticket. The number of tickets sold can vary as a result of (i) additions or deletions to the list of client facilities
serviced by the Company; (ii) fluctuations in the scheduling of events, particularly for popular performers; (iii) overall consumer demand for live entertainment events; and
(iv) the percentage of tickets for events which are sold directly by clients and not through the Company's distribution system. The average revenue per ticket will vary as a result of the
amount of convenience, order processing and delivery charges earned on each ticket. The amount of the convenience, order processing and delivery charges typically varies based upon numerous factors,
including the type of event, whether the ticket is purchased at a retail sales outlet, through call centers or via the Internet, as well as the services to be rendered to the client. Ticketing
operations revenues also includes revenue from advertising and sponsorship agreements, computerized ticketing and concession systems sales and services, transaction fees related to reservations, and
software licensed under noncancellable license agreements including maintenance, training, installation, consulting and support services.

Personals
revenues consist of subscription fees generated from customers who subscribe to the Company's online matchmaking services for one to twelve months on Match.com and the
Company's other personals Web sites and online advertising revenue.

City
guide revenues consist of online advertising, both local and national, product licensing and consulting services and to a smaller extent, transaction fees from affiliate partners.
Local advertising revenues are derived primarily from sale of premium placement listings, in context advertising and targeted promotional packages. In addition, while becoming a smaller percentage of
the total revenue stream, the Company continues to generate local advertising income from Web site development, hosting and placement in Citysearch's directory listings.

Operations Costs

Ticketmaster records ticketing operations costs specifically associated with the distribution of tickets sold through its system. The largest components of these
costs are the clients' share of convenience and order processing charges, salaries and benefits related to ticketing operations, commissions paid on tickets distributed through outlets away from the
box office and credit card processing fees, telecommunication charges along with data communication costs, and other less material expenses including ticket stock and postage. Personals operations
costs are associated with the production and maintenance of the matchmaking Web sites, commissions paid to affiliates of the Company's online matchmaking services and network infrastructure
maintenance costs. City guide operations costs are associated with the design, development, testing, layout, photography, customer service and editorial resources used in production and maintenance of
business Web sites and editorial content, network infrastructure maintenance and the costs of consulting services.

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Adjusted EBITDA

Adjusted earnings before interest, income taxes, depreciation and amortization ("Adjusted EBITDA") is defined as the Company's earnings before interest, taxes,
depreciation, amortization, minority interest, merger and other non-recurring charges, advertising provided by USA Networks (for which no cash was paid by the Company),
non-cash compensation, equity in net income (loss) of unconsolidated affiliates, investment losses, net, and other income and expenses. Adjusted EBITDA is presented herein as a management
tool and as a valuation methodology for companies in the media, entertainment and communications industries. Adjusted EBITDA does not purport to represent cash provided by operating activities.
Adjusted EBITDA should not be considered in isolation or as a substitute for measures of performance prepared in accordance with generally accepted accounting principles.

The
following is a reconciliation of Loss from Operations to Adjusted EBITDA for 2001, 2000 and 1999 (in thousands).

|                                       |  | Year Ended December 31, |         
|-------------------------------------- |  | ----------------------- | --------
|
|Loss from operations                   |  | $                       | (149,091
|Depreciation and amortization          |  |                         | 207,199 
|Advertising provided by USA            |  |                         | 17,715  
|Non-cash compensation                  |  |                         | 2,520   
|Merger and other non-recurring charges |  |                         | 976     
|                                       |  |                         |         
|Adjusted EBITDA                        |  | $                       | 79,319  
|                                       |  |                         |         

Results of Operations

Year ended December 31, 2001 compared to the year ended December 31, 2000

Revenues.Revenues increased by $68.5 million, or 11%, to $675.2 million in the year ended December 31,
2001 from $606.7 million for the year ended December 31, 2000. The increase is primarily attributable to the increase of $61.1 million from ticketing operations and the increase
of $20.1 million from personals, offset by the decrease of $12.8 million in city guide and other revenues.

Operating Costs and Other Expenses.For the year ended December 31, 2001, operating costs and other expenses increased
by $19.2 million, or 2%, to $824.3 million from $805.1 million in the year ended December 31, 2000. The increase is primarily due to the $40.5 million increase in
ticketing operations costs to support the 12% increase in ticketing operations revenues, the $13.5 million increase in general and administrative expenses and the $7.0 million increase
in personals operations costs to support the 69% increase in personals revenues. These increases are offset by the $16.7 million decrease in depreciation and amortization, the
$12.0 million decrease in other expenses primarily due to the transfer of the Company's Electronic Commerce Service ("ECS") operations to USA Networks in June 2000, the
$5.2 million decrease in sales and marketing costs, the $4.8 million decrease in city guide operations costs and the $3.1 million decrease in merger and other
non-recurring charges.

The
increase in general and administrative expenses was primarily attributable to the acquisitions of Réseau Admission Inc., Concept Électronique
Microflex Inc. and Admission Network USA Inc. (collectively, "Admission Canada") in April 2000, TicketWeb, Inc. ("TicketWeb") in May 2000, Essential Data Customer
Systems ("EDCS") in July 2000, ReserveAmerica Holdings, Inc. ("ReserveAmerica") in February 2001 and the acquisition of an increased interest in Ticketmaster-Ireland up to
60 percent in December 2000 which required consolidation.

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The
decrease in depreciation and amortization was primarily attributed to the decrease in amortization related to the CityAuction acquisition as its goodwill was fully amortized in
December 2000, the transfer of the ECS operations in June 2000 and the decrease in amortization related to the Ticketmaster-Canada acquisition as its purchased contracts were fully
amortized in June 2000, offset by the acquisitions of TM VISTA, Inc. (formerly 2b Technology, Inc.; "TM VISTA") in January 2000, Admission
Canada in April 2000, TicketWeb in May 2000 and ReserveAmerica in February 2001 and the increased depreciation expense resulting from capital expenditures during 2000.

The
decrease in sales and marketing costs was primarily attributed to savings in compensation due to the reorganization of the city guide operations and reduced marketing expenses,
offset by an increase in personals operations.

Interest Income.Interest income decreased by $1.8 million, or 46%, to $2.1 million in the year ended
December 31, 2001 from $3.9 million in the year ended December 31, 2000, primarily due to lower interest rates and to a lesser extent, lower cash balances invested during 2001.

Interest Expense.Interest expense decreased by $6.4 million, or 71%, to $2.5 million in the year ended
December 31, 2001 from $8.9 million in the year ended December 31, 2000, primarily due to lower borrowing levels.

Equity in Net Income (Loss) of Unconsolidated Affiliates.Equity in net loss of unconsolidated affiliates for the year ended
December 31, 2001 of $0.1 million represent income from the Company's minority investment in Ticketmaster-Mexico offset by losses from Ticketmaster-Australia. Equity in net loss of
unconsolidated affiliates of $2.2 million during the year ended December 31, 2000 consisted of $3.9 million related to the Company's portion of net losses at
foodline.com, Inc. and Active.com, Inc., offset by $1.7 million in net equity income from the Company's minority investments in Ticketmaster-Mexico and Ticketmaster-Ireland. In
December 2000, foodline.com, Inc. filed for Chapter 7 bankruptcy protection and ceased operations. The Company will not recognize further losses in the operations of
foodline.com, Inc. nor Active.com, Inc. (assuming the Company's investment in the latter remains below 20%).

Investment Losses, Net.Net investment losses of $10.8 million and $8.8 million for the years ended
December 31, 2001 and 2000, respectively, represent our losses in certain equity investments that suffered declines in value that were other than temporary. We will continue to evaluate our
investments in the future to determine if there are any future impairments to fair value.

Income Tax Provision.The provision for income taxes was $5.1 million and $14.7 million for the years ended
December 31, 2001 and 2000, respectively. The provision for 2001 primarily reflects the income tax expense incurred by our foreign subsidiaries and state income taxes. Prior to the Combination,
the Company could not utilize domestic operating losses for tax purposes resulting in a higher provision for 2000. Our effective tax rate differs from the statutory federal income tax rate, primarily
due to non-deductible goodwill, foreign income taxes and operating losses not benefited. At December 31, 2001, the Company's balance sheet has a deferred tax asset of
$73.4 million related to net operating loss carryforwards which are fully offset by a valuation allowance. The Company will retain the valuation allowance until it is likely that the Company
will be able to utilize the net operating losses. Each quarter, the Company will evaluate the need for the full valuation allowance. If the valuation allowance is released, a portion of the benefit
will be reflected in the income tax provision and a portion will be
reflected through an adjustment to Citysearch goodwill. Also, approximately $13.2 million of the valuation allowance relates to stock option deductions, which if realized, would increase
additional paid-in capital.

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Ticketing Operations

Revenues from ticketing operations increased by $61.1 million, or 12%, to $579.7 million for the year ended December 31, 2001 from
$518.6 million for the year ended December 31, 2000. These increases were primarily due to an increase in average revenue per ticket (7% increase from $5.71 to $6.11), an increase in the
number of tickets sold, and the acquisition of ReserveAmerica in February 2001. These increases were offset in part by lower revenues from the Company's subsidiary that sells and services
computerized ticketing and concession systems to movie theaters as well as a decrease in phone upsell revenue. The increase in the number of tickets sold (from 83.0 million to
86.7 million) primarily resulted from increased ticket sales within existing markets including the United Kingdom, the consolidation of the results of operations of Ticketmaster-Ireland and the
acquisitions of Admission Canada in April 2000 and TicketWeb in May 2000. These increases were partially offset by changing the method of accounting for our investment in
Ticketmaster-Australia to the equity method in the third quarter of 2001 which resulted in not consolidating their ticketing results in the second half of the year.

Costs
related to ticketing operations revenues and other costs and expenses increased by $56.5 million, or 14%, to $475.0 million in the year ended December 31, 2001
from $418.5 million in the year ended December 31, 2000. Costs related to ticketing operations are primarily variable in nature and increased in accordance with the increase in ticketing
operations revenues. To a lesser extent, costs related to ticketing operations and other costs and expenses increased due to the acquisitions of Admission Canada in April 2000, TicketWeb in
May 2000, EDCS in July 2000 and ReserveAmerica in February 2001 and the consolidation of Ticketmaster Ireland, offset by the change in accounting method for
Ticketmaster-Australia.

Adjusted
EBITDA related to ticketing operations for the year ended December 31, 2001 increased by $6.2 million, or 6%, to $106.2 million from $100.0 million
in 2000. Ticketing operations Adjusted EBITDA was impacted in part by a decline in Adjusted EBITDA in selected international markets, lower sales of concession control systems, and somewhat by the
impact of September 11th.

Personals

Personals revenues increased $20.1 million, or 69%, to $49.2 million for the year ended December 31, 2001 from $29.1 million for the
year ended December 31, 2000. This increase is primarily attributable to a 69% increase in subscription revenue. The increase in subscription revenue is primarily due to a 49%
increase in the average number of personals subscriptions and a subscription price increase effective in November 2000.

Costs
related to personals revenues and other costs and expenses increased by $15.7 million, or 68%, to $38.6 million in the year ended December 31, 2001 from
$22.9 million in the year ended December 31, 2000. This increase is primarily attributable to operating costs associated with the growth in the personals business and increased fees paid
to distribution partners and additional advertising expense, including advertising provided by USA Networks for which no cash was paid by Ticketmaster.

Adjusted
EBITDA related to personals operations for the year ended December 31, 2001 increased by $10.3 million, or 166%, to $16.5 million from $6.2 million
in 2000. Adjusted EBITDA related to personals operations was positively impacted by revenue growth and reduced advertising expenses, other than fees paid to distribution partners and other than
advertisements provided by USA Networks for which no cash was paid by Ticketmaster.

City Guide

City guide revenues decreased $4.8 million, or 9%, to $46.1 million for the year ended December 31, 2001 from $50.9 million for the
year ended December 31, 2000. This decrease is

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primarily attributable to a decrease in partner revenues due to the expiration of a major contract, a decrease in banner advertising revenues, and a decrease in revenue from website development and
hosting, partially offset by growth in revenue from new local advertising and content products and services.

Costs
related to city guide revenues and other costs and expenses decreased by $21.1 million, or 17%, to $102.4 million in the year ended December 31, 2001 from
$123.5 million in the year ended December 31, 2000. This decrease is primarily attributable to a decrease in sales and marketing expenses and savings in compensation and other operating
costs due to the reorganization of the city guide operations.

Adjusted
EBITDA loss related to city guide operations for the year ended December 31, 2001 improved by $20.7 million, or 39%, to $32.8 million from
$53.5 million in 2000. Adjusted EBITDA loss related to city guide operations improved as a result of savings in compensation and other operating costs due to the reorganization of the city
guide operations, offset in part by declining revenues.

Other

Other revenues decreased $8.0 million, or 99%, to $0.1 million in the year ended December 31, 2001 from $8.1 million for the year
ended December 31, 2000, primarily due to the transfer of the ECS operations to USA Networks in June 2000. The related other operating expenses decreased $12.0 million, or 99%, to
$0.1 million in the year ended December 31, 2001 from $12.1 million in the year ended December 31, 2000.

Year ended December 31, 2000 compared to the year ended December 31, 1999

Revenues.Revenues increased by $108.2 million, or 22%, to $606.7 million in the year ended December 31,
2000 from $498.5 million for the year ended December 31, 1999. The increase is primarily attributable to the increase of $75.8 million from ticketing operations, the increase of
$23.5 million from city guide and the increase of $20.2 million from personals, offset in part by the decrease of $11.3 million in other revenues.

Operating Costs and Other Expenses.For the year ended December 31, 2000, operating costs and other expenses increased
by $215.1 million, or 36%, to $805.1 million from $590.0 million in 1999. The increase is primarily due to the $96.0 million increase in depreciation and amortization, the
$61.1 million increase in ticketing operations costs to support the 17% increase in ticketing operations revenues, the $31.3 million increase in sales and marketing costs, the
$14.2 million increase in general and administrative expenses and the $12.8 million increase in city guide operations costs to support the 86% increase in city guide revenues. The
increase in depreciation and amortization is primarily attributed to the acquisitions of Match.com in June 1999, Web Media Ventures, LLC and the Sidewalk assets in September 1999, TM
VISTA in January 2000, Admission Canada in April 2000, TicketWeb in May 2000 and EDCS in July 2000. The increase in sales and marketing costs is primarily attributable to
the growth of the city guide operations, advertising contributed by USA Networks for which no consideration was paid by Ticketmaster and, to a lesser extent, the addition of sales and marketing
expenses associated with the personals operations. Ticketmaster began recognizing sales and marketing costs from the Match.com and Web Media Ventures, LLC portions of personals operations in the
second and third quarters of 1999, respectively. The increase in general and administrative expenses was primarily attributable to the acquisitions of Admission Canada in April 2000, TicketWeb
in May 2000 and EDCS in July 2000. As a percentage of total revenues, these costs decreased from 16% to 15% in the year ended December 31, 1999 and 2000, respectively.

Interest Income.Interest income decreased by $1.8 million, or 31%, to $3.9 million in the year ended
December 31, 2000 from $5.6 million in the year ended December 31, 1999, primarily due to lower cash balances invested during the periods.

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Interest Expense.Interest expense increased by $0.8 million, or 9%, to $8.9 million in the year ended
December 31, 2000 from $8.1 million in the year ended December 31, 1999, primarily due to higher borrowing levels.

Equity in Net Income (Loss) of Unconsolidated Affiliates.Equity in net loss of unconsolidated affiliates of
$2.2 million during the year ended December 31, 2000 consisted of $3.9 million related to the Company's portion of net losses at foodline.com, Inc. and
Active.com, Inc., offset by $1.7 million in net equity income from the Company's minority investments in Ticketmaster-Mexico and Ticketmaster-Ireland. In December 2000,
foodline.com, Inc. filed for Chapter 7 bankruptcy protection and ceased operations at which time the Company stopped recognizing losses in the operations of foodline.com, Inc. During
2000, the Company's ownership stake in Active.com, Inc. fell below 20% at which time the Company switched to the cost method of accounting. Equity in net income of unconsolidated affiliates for
the year ended December 31, 1999 represents income from the Company's minority investments in Ticketmaster-Mexico and Ticketmaster-Ireland.

Investment Losses, Net.Net investment losses of $8.8 million for the year ended December 31, 2000 represents
our losses in certain equity investments that suffered declines in value that were other than temporary.

Income Tax Provision.The provision for income taxes was $14.7 million and $24.0 million for the year ended
December 31, 2000 and 1999, respectively. The effective tax rate differs from the statutory federal income tax rate, primarily due to non-deductible goodwill, foreign income taxes
and operating losses not benefited.

Ticketing Operations

Revenues from ticketing operations increased by $75.8 million, or 17%, to $518.6 million for the year ended December 31, 2000 from
$442.7 million for the year ended December 31, 1999. The revenue increase is primarily due to an increase in average revenue per ticket (9% increase from $5.25 to $5.71) and an increase
in the number of tickets sold. The increase in the number of tickets sold (from 74.9 million to 83.0 million) primarily resulted from increased ticket sales within existing markets,
growth in new markets such as Northern California, Arizona and Alabama, and the acquisitions of Admission Canada in April 2000 and TicketWeb in May 2000.

Costs
related to ticketing operations revenues and other costs and expenses increased by $71.5 million, or 21%, to $418.5 million in the year ended December 31, 2000
from $347.0 million in the year ended December 31, 1999. Costs related to ticketing operations are primarily variable in nature and increased in accordance with the increase in ticketing
operations revenues. Ticketing operations costs increased as
a percentage of ticketing operations revenues to 64% from 61% in the years ended December 31, 2000 and 1999, respectively, primarily due to higher client commissions and credit card charges as
a result of higher revenue per ticket, increased costs associated with servicing new territories, the costs incurred to consolidate the domestic call centers and the acquisitions of TM VISTA in
January 2000, Admission Canada in April 2000, TicketWeb in May 2000 and EDCS in July 2000.

Adjusted
EBITDA related to ticketing operations for the year ended December 31, 2000 increased by $4.1 million, or 4%, to $100.0 million from $95.9 million in
1999.

Personals

Personals revenues increased $20.1 million, or 225%, to $29.1 million for the year ended December 31, 2000 from $9.0 million for the
year ended December 31, 1999. This increase is primarily attributable to the acquisition of the personals companies, Match.com and Web Media Ventures in June 1999 and
September 1999, respectively. The costs related to personals revenues and other costs

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and expenses increased by $13.4 million, or 142%, to $22.9 million in the year ended December 31, 2000 from $9.5 million in the year ended December 31, 1999.
Adjusted EBITDA related to personals operations for the year ended December 31, 2000 increased by $6.6 million to $6.2 million from an Adjusted EBITDA loss of $0.4 million
in 1999.

City Guide

City guide revenues increased $23.5 million, or 86%, to $50.9 million for the year ended December 31, 2000 from $27.4 million for the
year ended December 31, 1999. This increase is primarily attributable to a growth in revenues from operations in the 25 markets into which the city guide expanded throughout 1999, revenue from
new city guide advertising products and services and also to increases in partner-led market consulting fees.

Costs
related to city guide revenues and other costs and expenses increased by $40.0 million, or 48%, to $123.5 million in the year ended December 31, 2000 from
$83.5 million in the year ended December 31, 1999. This increase is attributable to the full year impact of the city guide expansion in the year ended December 31, 1999.

Adjusted
EBITDA loss related to city guide operations for the year ended December 31, 2000 increased by $1.8 million, or 3%, to $53.5 million from
$51.7 million in 1999. Adjusted EBITDA related to city guide operations was impacted by the full year impact of the city guide expansion in the year ended December 31, 1999.

Other

Other revenues decreased $11.4 million, or 58%, to $8.1 million in the year ended December 31, 2000 from $19.5 million for the year
ended December 31, 1999, primarily due to the discontinuance of the teleservicing business in June 2000. The related other operating expenses decreased $5.7 million, or 32%, to
$12.1 million in the year ended December 31, 2000 from $17.8 million in the year ended December 31, 1999.

Liquidity and Capital Resources

At December 31, 2001, Ticketmaster had cash, cash equivalents and marketable securities available for sale of $76.5 million for its own account,
separate from funds held in accounts on behalf of venues, teams and promoters. The Company historically has financed its operations with internally generated funds and advances from USA Networks.
Future operations will be financed primarily from internally generated funds.

Net
cash provided by operating activities was $99.4 million for the year ended December 31, 2001 compared to net cash provided by operating activities of
$4.0 million for the year ended December 31, 2000. The change primarily reflects increased Adjusted EBITDA from operations and timing differences in net cash collections on behalf of
clients and working capital offset by accrued expenses.

Net
cash used in investing activities was $70.4 million for the year ended December 31, 2001. Cash related to investing activities was used primarily for acquisitions
requiring $34.2 million, capital expenditures of $32.8 million and purchases of marketable securities of $13.7 million offset by proceeds from the sale of marketable securities of
$15.7 million. Net cash used in investing activities was $89.8 million for the year ended December 31, 2000, primarily for acquisitions requiring $49.8 million, capital
expenditures of $34.8 million, payment of merger costs of $14.2 million, payments for investments in affiliates of $10.9 million and purchases of marketable securities of
$21.9 million offset by proceeds from the sale of marketable securities of $40.5 million.

Net
cash used in financing activities was $5.3 million for the year ended December 31, 2001, primarily for payments on long-term debt of $5.3 million and
net proceeds from exercise of options of

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$4.6 million offset in part by advances to USA Networks. Net cash provided by financing activities was $67.3 million for the year ended December 31, 2000 which consisted
primarily of advances to USA Networks. As part of the Combination, the USA Networks advances as of the closing date of the Combination were contributed to the Company.

As
of December 31, 2001, the Company had no material financial commitments other than those under existing capital and operating lease agreements. A summary of the Company's
capital lease obligations and operating lease commitments with payments due by period and in total follow:

|Contractual Obligations            |  | Payments due by Period (in thousands)
|---------------------------------- |  | -------------------------------------
|
|Capital lease obligations          |  | $                                    
|Operating leases                   |  |                                      
|                                   |  |                                      
|Total contractual cash obligations |  | $                                    
|                                   |  |                                      

The
Company's investing activities are consistent with its infrastructure build out and expansion into other businesses that complement its current offerings. The Company will continue
to evaluate possible acquisitions of, or investments in, businesses, products and technologies that are complementary to its own, which may require the use of cash or other capital resources. In
connection with the Combination in January 2001, Ticketmaster entered into a revolving credit facility (the "Revolver") with USA Networks that provided the Company with $25 million in
available credit at USA Networks' borrowing rate through May 1, 2001, payable upon demand. The Revolver has expired. During the year ended December 31, 2001, the Company borrowed and
repaid USA Networks $24 million.

Management
believes that existing cash, cash equivalents, marketable securities, amounts available from other sources, and the positive cash flow from the ticketing operations will be
sufficient to meet the Company's working capital and capital expenditures requirements for the next twelve months. Thereafter, Ticketmaster may be required to raise additional funds through bank
financing, issuance of debt or equity. Management cannot make assurances that the Company will not choose to or be required to raise additional financing prior to such time. If additional funds are
raised through the issuance of equity securities, Ticketmaster's stockholders may experience significant dilution. Furthermore, management cannot make assurances that additional financing will be
available when needed or that, if available, such financing will include terms favorable to the Company or its stockholders. If such financing is not available when required or is not available on
acceptable terms, the Company may be unable to develop or enhance its products and services, take advantage of business opportunities or respond to competitive pressures, any of which could have a
material adverse effect on its business, financial condition and results of operations.

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ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Ticketmaster's exposure to market rate risk for changes in interest rates relates primarily to its cash, cash equivalents and marketable securities. The Company
has not used derivative financial instruments in its cash, cash equivalents and marketable securities. The Company invests its excess cash in debt instruments of the U.S. Government and its agencies
and in high-quality corporate issuers and, by policy, limits the amount of credit exposure to any one issuer. The Company protects and preserves its invested funds by limiting default,
market and reinvestment risk.

Investments
in both fixed rate and floating rate interest earning instruments carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely
impacted due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. Due in part to these factors, the Company's future investment
income may fall short of expectations due to changes in interest rates or the Company may suffer losses in principal if forced to sell securities which have declined in market value due to changes in
interest rates.

Foreign Currency Exchange Risk

As the Company increases its operations in international markets it becomes increasingly exposed to potentially volatile movements in currency exchange rates. The
economic impact of currency exchange rate movements on the Company are often linked to variability in real growth, inflation, interest rates, governmental actions and other factors. These changes, if
material, could cause the Company to adjust its financing and operating strategies.

As
currency exchange rates change, translation of the income statements of the Company's international businesses into U.S. dollars affects year-over-year
comparability of operating results. The Company does not hedge translation risks because cash flows from international operations are
generally reinvested locally. Further, the Company does not enter into hedges to minimize volatility of reported earnings because the Company does not believe it is justified by the attendant cost.

Foreign
exchange gains and losses were not material to the Company's earnings for the years ended December 31, 2001, 2000 and 1999.

Seasonality

Ticketmaster's ticket sales are impacted by fluctuations in the availability of events for sale to the public, which vary depending upon scheduling by the client.
The second quarter of the year generally experiences the most events.

ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our
financial statements, with notes thereto and the report of Ernst & Young, LLP, our independent auditors, are set forth as indicated in Item 14.

ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not
applicable.

39

---

PART III

ITEM 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The
information contained under the headings "Directors" and "Executive Officers" in the definitive Proxy Statement for our 2002 Annual Meeting of Stockholders is incorporated herein by
reference.

ITEM 11.EXECUTIVE COMPENSATION

The
information contained under the headings "Directors" and "Executive Officers" in the definitive Proxy Statement for our 2002 Annual Meeting of Stockholders is incorporated herein by
reference.

ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The
information contained under the heading "Voting Securities and Principal Stockholders" in the definitive Proxy Statement for our 2002 Annual Meeting of Stockholders is incorporated
herein by reference.

ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The
information contained under the heading "Certain Transactions" in the definitive Proxy Statement for our 2002 Annual Meeting of Stockholders is incorporated herein by reference.

PART IV

ITEM 14.EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)(1) Financial Statements:

|                                                                                                   |  | Page Reference
Form 10-K
|-------------------------------------------------------------------------------------------------- |  | ------------------------
|Schedule IIValuation and qualifying accounts for the years ended December 31, 2001, 2000 and 1999 |  | S-1                     

Schedules
other than those listed above have been omitted since they are either not required, not applicable, or the information is otherwise included.

(a)(2) Financial Statements:

The following financial statements of Ticketmaster are included in response to Item 8 of this report.

|                                                                                                     |  | Page Reference
Form 10-K
|---------------------------------------------------------------------------------------------------- |  | ------------------------
|Report of Independent Auditors                                                                       |  | F-1                     
|Consolidated Balance Sheets as of December 31, 2001 and 2000                                         |  | F-2                     
|Consolidated Statements of Operations for the years ended December 31, 2001, 2000 and 1999           |  | F-3                     
|Consolidated Statements of Stockholders' Equity for the years ended December 31, 2001, 2000 and 1999 |  | F-4                     
|Consolidated Statements of Cash Flows for the years ended December 31, 2001, 2000 and 1999           |  | F-5                     
|Notes to Consolidated Financial Statements                                                           |  | F-6                     

40

---

(a)(3) Exhibits filed as part of this report:

|Exhibit Number |  | Exhibit Title                                                                                                                                                                                                                                                                                                       |  | Notes
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----
|2.1            |  | Agreement and Plan of Reorganization, among Citysearch, Inc., MB Acquisition Corporation, MetroBeat, Inc., Mark Davies and Joshua White, dated May 31, 1996.                                                                                                                                                        |  | (A)* 
|2.2            |  | Amended and Restated Agreement and Plan of Reorganization, among Citysearch, Inc., Tiberius, Inc., USA Networks, Inc., Ticketmaster Group, Inc., Ticketmaster Corporation and Ticketmaster Multimedia Holdings, Inc., dated
August 12, 1998.                                                                        |  | (A)  
|2.3            |  | Agreement and Plan of Reorganization, dated January 8, 1999, by and among Ticketmaster OnlineCitysearch, Inc., Nero Acquisition Corp., Inc., CityAuction, Inc., Andrew Rebele and Monica Lee as amended.                                                                                                           |  | (E)  
|2.4            |  | Exchange Agreement by and among Cendant Corporation, Cendant Intermediate Holdings, Inc. and Ticketmaster OnlineCitysearch, Inc. dated as of May 14, 1999.                                                                                                                                                         |  | (F)  
|2.5            |  | Agreement and Plan of Reorganization dated June 10, 1999 among Ticketmaster OnlineCitysearch, Inc., Web Media Ventures LLC (dba One & Only Network) and William Bunker, David Kennedy and Glenn
Wiggins.                                                                                                           |  | (F)  
|2.6            |  | Agreement and Plan of Merger by and among Sidewalk.com, Inc., Microsoft Corporation and the Registrant, dated as of July 19, 1999.                                                                                                                                                                                  |  | (G)  
|2.7            |  | Series D Preferred Stock Purchase Agreement between Ticketmaster and FairMarket, Inc. dated September 15, 1999                                                                                                                                                                                                      |  | (H)  
|2.8            |  | Series D Preferred Stock Purchase Agreement, dated November 17, 1999, by and among RaceGate.com, Inc., a Delaware corporation, RaceGate.com, Inc., a California corporation, RG Acquisition Corp., Active USA.com, Inc.,
Ticketmaster Online-Citysearch, Inc, Austin Ventures IV, L.P. and Kettle Partners IV, L.P. |  | (K)  
|2.9            |  | Agreement and Plan of Merger by and among the Registrant, TMCS Merger Sub, Inc., 2b Technology, Inc., Bryan Bostic, Eric Martin, Live Oak Holdings, L.C., Clarke Holding, L.C., and Kenneth Bostic, dated as of January 30,
2000                                                                                    |  | (J)  
|2.10           |  | Agreement and Plan of Merger by and among the Registrant, TMCS Merger Sub, Inc. and TicketWeb Inc., dated as of May 23, 2000.                                                                                                                                                                                       |  | (L)  
|2.11           |  | Contribution Agreement by and between the Registrant and USA Networks, Inc., dated as of November 20, 2000.                                                                                                                                                                                                         |  | (O)  
|2.12           |  | Work-Out Agreement by and among the Registrant, 2b Technology, Inc., Bryan Bostic, Eric Martin, Live Oak Holdings, L.C., Clarke Holding, L.C., and Kenneth Bostic dated as of December 8, 2000.                                                                                                                     |  | (P)  
|2.13           |  | Share Purchase Agreement by and among Ticketmaster Canada, Inc., Ticketmaster Online-Citysearch, Inc, ReserveAmerica Holdings, Inc., and certain Shareholders of ReserveAmerica Holdings, Inc. dated as of December 28,
2000.                                                                                       |  | (P)  
|2.14           |  | Asset Purchase Agreement entered into as of March 8, 2001 by and among Evite, Inc. a California corporation, and Ticketmaster. Portions of this Exhibit 2.14 have been omitted pursuant to a request to the SEC for
confidential treatment.                                                                         |  | (Q)  
|2.15           |  | Share Transfer Agreement, dated as of October 22, 2001, by and among Posten Norge BA, Reitan Narvesen ASA, Scandinavia Online AS and Ticketmaster UK Limited.                                                                                                                                                       |  |     
|3.1            |  | Amended and Restated Certificate of Incorporation.                                                                                                                                                                                                                                                                  |  | (B)  

41

---

|3.2   |  | Amended and Restated Bylaws.                                                                                                                                                                     |  | (Q)  
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -----
|3.3   |  | Certificate of Amendment to Amended and Restated Certificate of Incorporation.                                                                                                                   |  | (Q)  
|4.1   |  | Specimen Class B Common Stock Certificate.                                                                                                                                                       |  | (S)  
|4.2   |  | Class B Common Stock Purchase Warrant of the Registrant to be delivered upon closing of the Sidewalk acquisition (3,000,000 shares).                                                             |  | (G)  
|4.3   |  | Class B Common Stock Purchase Warrant of the Registrant to be delivered upon closing of the Sidewalk acquisition (1,500,000 shares).                                                             |  | (G)  
|4.4   |  | Specimen Class A Common Stock Certificate.                                                                                                                                                       |  | (S)  
|10.1  |  | 1996 Stock Option Plan and form of agreement thereunder.                                                                                                                                         |  | (B)  
|10.2  |  | 1998 Stock Option Plan and form of agreement thereunder.                                                                                                                                         |  | (B)  
|10.3  |  | 1998 Employee Stock Purchase Plan.                                                                                                                                                               |  | (C)  
|10.4  |  | Amended and Restated 1999 Stock Plan and form of agreement thereunder.                                                                                                                           |  | (Q)  
|10.5  |  | Form of Restricted Stock Agreement under the 1999 Stock Plan.                                                                                                                                    |  | (L)**
|10.6  |  | Form of Restricted Stock Agreement entered into between the Registrant and each of John Pleasants and Dan Marriott.                                                                              |  | (L)**
|10.7  |  | TicketWeb Inc. 2000 Stock Plan                                                                                                                                                                   |  | (N)  
|10.8  |  | License Agreement between Citysearch, Inc. and Perly, Inc., dated March 9, 1996.                                                                                                                 |  | (A)* 
|10.9  |  | Standard Office Lease between Citysearch, Inc. and BPG Pasadena, L.L.C. (later assigned to Spieker Properties), dated September 30, 1996.                                                        |  | (A)  
|10.10 |  | First Amendment to Office Lease, dated April 4, 1997, by and between BPG Pasadena and Citysearch, Inc.                                                                                           |  | (Q)  
|10.11 |  | Lease Amendment No. Two, dated December 1, 1998, by and between Spieker Properties L.P. (as successor to BPG Pasadena) and Citysearch, Inc.                                                      |  | (Q)  
|10.12 |  | Lease Amendment No. Three, dated as of November 14, 1998, by and between Spieker Properties L.P. (as successor to BPG Pasadena) and Citysearch, Inc.                                             |  | (Q)  
|10.13 |  | Lease Amendment No. Four, dated July 9, 1999, by and between Spieker Properties L.P. (as successor to BPG Pasadena) and Ticketmaster Online-Citysearch, Inc. (as successor to Citysearch, Inc.). |  | (Q)  
|10.14 |  | Lease Amendment No. Five, dated August 13, 1999, by and between Spieker Properties L.P. (as successor to BPG Pasadena) and Ticketmaster Online-Citysearch (as successor to Citysearch).          |  | (Q)  
|10.15 |  | Office Lease Agreement, effective as of November 17, 1999, by and between Cardinal Shiloh 190 II, Inc. as lessor, and Ticketmaster Online-Citysearch, Inc. as lessee.                            |  | (Q)  
|10.16 |  | Marketing Agreement between Citysearch, Inc. and American Express Travel Related Services Company, Inc., dated May 26, 1998.                                                                     |  | (A)* 
|10.17 |  | License and Services Agreement between Citysearch, Inc. and Classified Ventures, L.L.C.                                                                                                          |  | (A)* 
|10.18 |  | Development and Services Agreement between Ticketmaster Multimedia Holdings, Inc. and Starwave Corporation, dated June 28, 1996.                                                                 |  | (A)  

42

---

|10.19 |  | Agreement, dated as of July 20, 2000, by and between Ticketmaster Online-Citysearch and ARTISTdirect, Inc.                                                                                                                                            |  | (Q) 
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|10.20 |  | Content License and Promotion Agreement, dated as of September 28, 2000, by and between Yahoo! Inc. and Ticketmaster Online-Citysearch. Portions of this Exhibit 10.20 have been omitted pursuant to a request to the SEC for
confidential treatment. |  | (Q) 
|10.21 |  | Distribution and Promotion Agreement, dated as of November 20, 2000, by and between Yahoo! Inc. and Match.com. Portions of this Exhibit 10.21 have been omitted pursuant to a request to the SEC for confidential
treatment.                          |  | (Q) 
|10.22 |  | Registration Rights Agreement dated May 14, 1999 among Cendant Intermediate Holdings, Inc. and Ticketmaster Online-Citysearch.                                                                                                                        |  | (F) 
|10.23 |  | Registration Rights Agreement between the Registrant and Microsoft Corporation dated September 17, 1999.                                                                                                                                              |  | (G) 
|10.24 |  | License and Services Agreement entered into as of April 6, 2000, by and between Ticketmaster Online-Citysearch, Inc. and Walkerplus.com, Inc., a corporation organized under the laws of Japan.                                                       |  | (Q) 
|10.25 |  | Letter Agreement between Ticketmaster Corporation and SFX Entertainment, Inc. dated as of November 13, 1998 *                                                                                                                                         |  | (R)*
|10.26 |  | Development and Services Agreement between Starwave Corporation and Ticketmaster Multimedia Holdings Inc. dated as of June 28, 1996.                                                                                                                  |  | (R) 
|10.27 |  | Sponsorship Marketing Agreement between American Express Travel Related Services Company, Inc. and Ticketmaster Corporation dated as of April 1, 1999.                                                                                                |  | (R)*
|10.28 |  | License Agreement between Ticketmaster Corporation and Ticketmaster Group Limited Partnership dated as May 23, 1991, as amended.                                                                                                                      |  | (R) 
|10.29 |  | Amended and Restated Employment Agreement dated as of January 31, 2001 between Ticketmaster Corporation and Terry Barnes.                                                                                                                             |  | (R) 
|10.31 |  | Employment Agreement dated as of October 1, 1998 between Ticketmaster Corporation and Daniel R. Goodman.                                                                                                                                              |  | (R) 
|10.32 |  | Employment Agreement dated as of February 1, 1998 between Ticketmaster Ticketing Company, Inc. and Timothy Wood.                                                                                                                                      |  | (R) 
|10.33 |  | Employment Agreement dated as of January 1, 2001 between Ticketmaster Online-Citysearch, Inc. and Brad Serwin.                                                                                                                                        |  | (R) 
|10.34 |  | Employment Agreement dated as of February 1, 1994 between Ticketmaster Corporation and Marc Bension, as amended.                                                                                                                                      |  | (R) 
|10.35 |  | Settlement Statement dated as of November 20, 2000 between USA Networks, Inc. and Ticketmaster Online-Citysearch, Inc.                                                                                                                                |  | (R) 
|10.36 |  | Wilshire Colonnade Office Lease dated as of November 5, 1998 between Colonnade Wilshire Corp and Ticketmaster-California, Inc., as amended.                                                                                                           |  | (R) 
|10.37 |  | Employment Agreement between Ticketmaster Corporation and Timothy J. Wood, dated as of February 1, 2001.                                                                                                                                              |  | (S) 
|10.38 |  | Sublease Agreement, dated December 5, 2001, by and between Aames Financial Corporation and Ticketmaster L.L.C.                                                                                                                                        |  |    
|21.1  |  | Subsidiaries of the Registrant.                                                                                                                                                                                                                       |  |    

43

---

|23.1 |  | Consent of Independent Auditors.        |  | 
|---- |  | --------------------------------------- |  | -
|24.1 |  | Power of Attorney (See signature page). |  | 

---

Confidential
treatment has been granted with respect to portions of this exhibit.

44

---



(b) Reports on Form 8-K:

45

---



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

| |  | TICKETMASTER
| |  | ------------
| |  | By:         

Dated:
March 29, 2002

POWER OF ATTORNEY

Know All Men By These Presents, that each person whose signature appears below constitutes and appoints Bradley K. Serwin and Thomas J. McInerney, jointly and
severally, his attorney-in-fact, each with the power of substitution for him in any and all capacities, to sign any amendments to this Report on Form 10-K
and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on
the dates indicated:

|Name                                      |  | Title                                                                                          |  | Date          
|----------------------------------------- |  | ---------------------------------------------------------------------------------------------- |  | --------------
|                                          |  |                                                                                                |  |               
|/s/JOHN PLEASANTSJohn Pleasants           |  | Chief Executive Officer (Principal Executive Officer), President and Director                  |  | March 29, 2002
|/s/THOMAS J. MCINERNEYThomas J. McInerney |  | Chief Financial Officer, Executive Vice President (Principal Financial and Accounting Officer) |  | March 29, 2002
|/s/BARRY DILLERBarry Diller               |  | Co-Chairman                                                                                    |  | March 29, 2002
|/s/TERRY BARNESTerry Barnes               |  | Co-Chairman                                                                                    |  | March 29, 2002
|/s/RICHARD BARTONRichard Barton           |  | Director                                                                                       |  | March 29, 2002
|                                          |  |                                                                                                |  |               

46

---

|/s/ROBERT J. DAVISRobert J. Davis     |  | Director |  | March 29, 2002
|------------------------------------- |  | -------- |  | --------------
|/s/VICTOR A. KAUFMANVictor A. Kaufman |  | Director |  | March 29, 2002
|/s/DARA KHOSROWSHAHIDara Khosrowshahi |  | Director |  | March 29, 2002
|/s/BRYAN LOURDBryan Lourd             |  | Director |  | March 29, 2002
|/s/JON MILLERJon Miller               |  | Director |  | March 29, 2002
|Michael Schrage                       |  | Director |  |               
|/s/ALAN SPOONAlan Spoon               |  | Director |  | March 29, 2002

47

---



REPORT OF INDEPENDENT AUDITORS

Stockholders
and Board of Directors
Ticketmaster

We
have audited the accompanying consolidated balance sheets of Ticketmaster (formerly Ticketmaster Online-Citysearch, Inc.) as of December 31, 2001 and 2000, and the
related consolidated statements of operations, stockholders' equity and cash flows for each of the three years ended December 31, 2001. Our audits also included the financial statement schedule
listed in the Index at Item 14(a). These financial statements and the financial statement schedule are the responsibility of Ticketmaster's management. Our responsibility is to express an opinion on
these financial statements and the financial statement schedule based on our audits.

We
conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Ticketmaster at
December 31, 2001 and 2000, and the consolidated results of its operations and its cash flows for each of the three years ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as
a whole, presents fairly in all material respects the information set forth therein.



Los
Angeles, California
January 25, 2002

F-1

---



TICKETMASTER        CONSOLIDATED BALANCE SHEETS        (in thousands, except share information)

|                                                    |                                                                                                                                                                                                             | December 31,
2001          |                                            | December 31,
2000 |          
|--------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------------------------------------------ | ----------------- | ---------
|ASSETS                                              |                                                                                                                                                                                                             |                            |                                            |                   |          
|Current assets:                                     |                                                                                                                                                                                                             |                            |                                            |                   |          
|                                                    | Cash and cash equivalents                                                                                                                                                                                   |                            | $                                          | 142,891           |          
|                                                    | Marketable securities                                                                                                                                                                                       |                            |                                            | 5,883             |          
|                                                    | Accounts receivable, ticket sales                                                                                                                                                                           |                            |                                            | 29,696            |          
|                                                    | Accounts receivable, trade (net of allowance for doubtful accounts of $3,040 and $3,085 at December 31, 2001 and 2000, respectively)                                                                        |                            |                                            | 23,695            |          
|                                                    | Contract advances                                                                                                                                                                                           |                            |                                            | 12,061            |          
|                                                    | Prepaid expenses and other current assets                                                                                                                                                                   |                            |                                            | 12,144            |          
|                                                    |                                                                                                                                                                                                             |                            |                                            |                   |          
|                                                    |                                                                                                                                                                                                             | Total current assets       |                                            |                   | 226,370  
|Property, equipment and leasehold improvements, net |                                                                                                                                                                                                             |                            | 75,604                                     |                   |          
|Goodwill and other intangibles, net                 |                                                                                                                                                                                                             |                            | 1,032,760                                  |                   |          
|Other assets                                        |                                                                                                                                                                                                             |                            | 59,494                                     |                   |          
|Deferred income taxes, net                          |                                                                                                                                                                                                             |                            | 127                                        |                   |          
|                                                    |                                                                                                                                                                                                             |                            |                                            |                   |          
|                                                    |                                                                                                                                                                                                             | Total assets               |                                            | $                 | 1,394,355
|                                                    |                                                                                                                                                                                                             |                            |                                            |                   |          
|LIABILITIES AND STOCKHOLDERS' EQUITY                |                                                                                                                                                                                                             |                            |                                            |                   |          
|Current liabilities:                                |                                                                                                                                                                                                             |                            |                                            |                   |          
|                                                    | Current portion of long-term debt                                                                                                                                                                           |                            | $                                          | 790               |          
|                                                    | Accounts payable, trade                                                                                                                                                                                     |                            |                                            | 16,151            |          
|                                                    | Accounts payable, clients                                                                                                                                                                                   |                            |                                            | 102,011           |          
|                                                    | Accrued expenses                                                                                                                                                                                            |                            |                                            | 65,358            |          
|                                                    | Due to USA and affiliates                                                                                                                                                                                   |                            |                                            | 2,714             |          
|                                                    | Deferred revenue                                                                                                                                                                                            |                            |                                            | 20,909            |          
|                                                    |                                                                                                                                                                                                             |                            |                                            |                   |          
|                                                    |                                                                                                                                                                                                             | Total current liabilities  |                                            |                   | 207,933  
|Long-term debt, net of current portion              |                                                                                                                                                                                                             |                            | 752                                        |                   |          
|Due to USA and affiliates                           |                                                                                                                                                                                                             |                            |                                           |                   |          
|Other long-term liabilities                         |                                                                                                                                                                                                             |                            | 17,149                                     |                   |          
|Minority interest                                   |                                                                                                                                                                                                             |                            | 755                                        |                   |          
|Stockholders' equity:                               |                                                                                                                                                                                                             |                            |                                            |                   |          
|                                                    | Preferred stock, $0.01 par value:
Authorized shares2,000,000 at December 31, 2001 and 2000
Issued and outstandingnone                                                                                     |                            |                                            |                  |          
|                                                    | Convertible Class A Common Stock, $0.01 par value:
Authorized shares150,000,000 at December 31, 2001 and 2000
Issued and outstanding43,651,566 and 47,718,879 at December 31, 2001 and 2000, respectively |                            |                                            | 437               |          
|                                                    | Class B Common Stock, $0.01 par value:
Authorized shares250,000,000 at December 31, 2001 and 2000
Issued and outstanding98,074,251 and 93,291,839 at December 31, 2001 and 2000, respectively             |                            |                                            | 981               |          
|                                                    | Class C Common Stock, $0.01 par value:
Authorized shares2,883,506 at December 31, 2001 and 2000
Issued and outstandingnone                                                                                |                            |                                            |                  |          
|                                                    | Additional paid-in capital                                                                                                                                                                                  |                            |                                            | 1,706,686         |          
|                                                    | Accumulated deficit                                                                                                                                                                                         |                            |                                            | (536,396          | )        
|                                                    | Accumulated other comprehensive loss                                                                                                                                                                        |                            |                                            | (3,942            | )        
|                                                    |                                                                                                                                                                                                             |                            |                                            |                   |          
|                                                    |                                                                                                                                                                                                             | Total stockholders' equity |                                            |                   | 1,167,766
|                                                    |                                                                                                                                                                                                             |                            |                                            |                   |          
|                                                    |                                                                                                                                                                                                             |                            | Total liabilities and stockholders' equity |                   | $        
|                                                    |                                                                                                                                                                                                             |                            |                                            |                   |          

See accompanying notes to consolidated financial statements.

F-2

---



TICKETMASTER        CONSOLIDATED STATEMENTS OF OPERATIONS        (in thousands, except per share information)

|                                                            |                                                          | Year Ended December 31, |         
|----------------------------------------------------------- | -------------------------------------------------------- | ----------------------- | --------
|
|Revenues:                                                   |                                                          |                         |         
|                                                            | Ticketing operations                                     |                         | $       
|                                                            | Personals                                                |                         |         
|                                                            | City guide                                               |                         |         
|                                                            | Other                                                    |                         |         
|                                                            |                                                          |                         |         
|                                                            | Total revenues                                           |                         |         
|                                                            |                                                          |                         |         
|Operating costs and other expenses:                         |                                                          |                         |         
|                                                            | Ticketing operations                                     |                         |         
|                                                            | Personals operations                                     |                         |         
|                                                            | City guide operations                                    |                         |         
|                                                            | Other                                                    |                         |         
|                                                            | Sales and marketing                                      |                         |         
|                                                            | General and administrative                               |                         |         
|                                                            | Depreciation and amortization                            |                         |         
|                                                            | Merger and other non-recurring charges                   |                         |         
|                                                            |                                                          |                         |         
|                                                            | Total operating costs and other expenses                 |                         |         
|                                                            |                                                          |                         |         
|Loss from operations                                        |                                                          |                         | (149,091
|                                                            |                                                          |                         |         
|Other (income) expenses:                                    |                                                          |                         |         
|                                                            | Interest income                                          |                         |         
|                                                            | Interest expense                                         |                         |         
|                                                            | Equity in net (income) loss of unconsolidated affiliates |                         |         
|                                                            | Investment losses, net                                   |                         |         
|                                                            | Other expenses                                           |                         |         
|                                                            |                                                          |                         |         
|                                                            | Total other expenses                                     |                         |         
|                                                            |                                                          |                         |         
|Loss before income taxes and minority interest              |                                                          |                         | (160,350
|Minority interest in loss                                   |                                                          |                         | (957    
|Income tax provision                                        |                                                          |                         | 5,081   
|                                                            |                                                          |                         |         
|Net loss                                                    |                                                          | $                       | (164,474
|                                                            |                                                          |                         |         
|Basic and diluted net loss per share                        |                                                          | $                       | (1.16   
|                                                            |                                                          |                         |         
|Shares used to compute basic and diluted net loss per share |                                                          |                         | 141,440 
|                                                            |                                                          |                         |         

See
accompanying notes to consolidated financial statements.

F-3

---

TICKETMASTER
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands)

|                                                                               |                                              |   |   |   |   | Class A
Common Stock |         | Class B
Common Stock |   |      |   |        |   |   |     |   |  
|------------------------------------------------------------------------------ | -------------------------------------------- | - | - | - | - | -------------------- | ------- | -------------------- | - | ---- | - | ------ | - | - | --- | - | -
|
|
|
|Balance at December 31, 1998                                                   |                                              |  |   | $ |  |                      | 63,292  |                      | $ | 633  |   | 60,167 |   | $ | 602 |   | $
|Comprehensive Loss:                                                            |                                              |   |   |   |   |                      |         |                      |   |      |   |        |   |   |     |   |  
|                                                                               | Net loss                                     |   |  |   |   |                     |         |                     |   |      |  |        |  |   |     |  |  
|                                                                               | Net unrealized gain on marketable securities |   |  |   |   |                     |         |                     |   |      |  |        |  |   |     |  |  
|                                                                               | Foreign currency translation adjustment      |   |  |   |   |                     |         |                     |   |      |  |        |  |   |     |  |  
|                                                                               |                                              |   |   |   |   |                      |         |                      |   |      |   |        |   |   |     |   |  
|Total Comprehensive Loss                                                       |                                              |  |   |   |  |                      |        |                      |   |     |   |       |   |   |    |   |  
|                                                                               |                                              |   |   |   |   |                      |         |                      |   |      |   |        |   |   |     |   |  
|Issuance of Common Stock and warrants for acquisitions and investments         |                                              |  |   |   |  |                      |        |                      |   |     |   | 11,229 |   |   | 112 |   |  
|Issuance of Common Stock to USA                                                |                                              |  |   |   |  |                      |        |                      |   |     |   | 1,302  |   |   | 13  |   |  
|Additional capital contributed by USA through advertising                      |                                              |  |   |   |  |                      |        |                      |   |     |   |       |   |   |    |   |  
|Exercise of stock options                                                      |                                              |  |   |   |  |                      | 582     |                      |   | 6    |   | 373    |   |   | 4   |   |  
|Class A shares converted to Class B                                            |                                              |  |   |   |  |                      | (11,033 | )                    |   | (110 | ) | 11,033 |   |   | 110 |   |  
|                                                                               |                                              |   |   |   |   |                      |         |                      |   |      |   |        |   |   |     |   |  
|Balance at December 31, 1999                                                   |                                              |  |   |   |  |                      | 52,841  |                      |   | 529  |   | 84,104 |   |   | 841 |   |  
|Comprehensive Loss:                                                            |                                              |   |   |   |   |                      |         |                      |   |      |   |        |   |   |     |   |  
|                                                                               | Net loss                                     |   |  |   |   |                     |         |                     |   |      |  |        |  |   |     |  |  
|                                                                               | Net unrealized loss on marketable securities |   |  |   |   |                     |         |                     |   |      |  |        |  |   |     |  |  
|                                                                               | Foreign currency translation adjustment      |   |  |   |   |                     |         |                     |   |      |  |        |  |   |     |  |  
|                                                                               |                                              |   |   |   |   |                      |         |                      |   |      |   |        |   |   |     |   |  
|Total Comprehensive Loss                                                       |                                              |  |   |   |  |                      |        |                      |   |     |   |       |   |   |    |   |  
|                                                                               |                                              |   |   |   |   |                      |         |                      |   |      |   |        |   |   |     |   |  
|Issuance of Common Stock for acquisitions                                      |                                              |  |   |   |  |                      |        |                      |   |     |   | 3,226  |   |   | 32  |   |  
|Additional capital contributed by USA through advertising                      |                                              |  |   |   |  |                      |        |                      |   |     |   |       |   |   |    |   |  
|Compensation expense on option grants                                          |                                              |  |   |   |  |                      |        |                      |   |     |   |       |   |   |    |   |  
|Exercise of stock options                                                      |                                              |  |   |   |  |                      | 626     |                      |   | 6    |   | 214    |   |   | 2   |   |  
|Class A shares converted to Class B                                            |                                              |  |   |   |  |                      | (5,748  | )                    |   | (58  | ) | 5,748  |   |   | 58  |   |  
|                                                                               |                                              |   |   |   |   |                      |         |                      |   |      |   |        |   |   |     |   |  
|Balance at December 31, 2000                                                   |                                              |  |   |   |  |                      | 47,719  |                      |   | 477  |   | 93,292 |   |   | 933 |   |  
|Comprehensive Loss:                                                            |                                              |   |   |   |   |                      |         |                      |   |      |   |        |   |   |     |   |  
|                                                                               | Net loss                                     |   |  |   |   |                     |         |                     |   |      |  |        |  |   |     |  |  
|                                                                               | Net unrealized gain on marketable securities |   |  |   |   |                     |         |                     |   |      |  |        |  |   |     |  |  
|                                                                               | Foreign currency translation adjustment      |   |  |   |   |                     |         |                     |   |      |  |        |  |   |     |  |  
|                                                                               |                                              |   |   |   |   |                      |         |                      |   |      |   |        |   |   |     |   |  
|Total Comprehensive Loss                                                       |                                              |  |   |   |  |                      |        |                      |   |     |   |       |   |   |    |   |  
|                                                                               |                                              |   |   |   |   |                      |         |                      |   |      |   |        |   |   |     |   |  
|Additional capital contributedby USA in connection with transfer of TMC Realty |                                              |  |   |   |  |                      |        |                      |   |     |   |       |   |   |    |   |  
|Additional capital contributed by USA through Combination                      |                                              |  |   |   |  |                      |        |                      |   |     |   |       |   |   |    |   |  
|Additional capital contributed by USA through advertising                      |                                              |  |   |   |  |                      |        |                      |   |     |   |       |   |   |    |   |  
|Compensation expense on option grants                                          |                                              |  |   |   |  |                      |        |                      |   |     |   |       |   |   |    |   |  
|Exercise of stock options                                                      |                                              |  |   |   |  |                      | 623     |                      |   | 7    |   | 92     |   |   | 1   |   |  
|Class A shares converted to Class B                                            |                                              |  |   |   |  |                      | (4,690  | )                    |   | (47  | ) | 4,690  |   |   | 47  |   |  
|                                                                               |                                              |   |   |   |   |                      |         |                      |   |      |   |        |   |   |     |   |  
|Balance at December 31, 2001                                                   |                                              |  |   | $ |  |                      | 43,652  |                      | $ | 437  |   | 98,074 |   | $ | 981 |   | $
|                                                                               |                                              |   |   |   |   |                      |         |                      |   |      |   |        |   |   |     |   |  

See accompanying notes to consolidated financial statements.

F-4

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TICKETMASTER        CONSOLIDATED STATEMENTS OF CASH FLOWS        (in thousands)

|                                                     |                                                                                 | Year Ended December 31,                             |                                                         
|---------------------------------------------------- | ------------------------------------------------------------------------------- | --------------------------------------------------- | --------------------------------------------------------
|
|Operating activities:                                |                                                                                 |                                                     |                                                         
|                                                     | Net loss                                                                        |                                                     | $                                                       
|                                                     | Adjustments to reconcile net loss to net cash provided by operating activities: |                                                     |                                                         
|                                                     |                                                                                 |                                                     | Depreciation and amortization                           
|                                                     |                                                                                 |                                                     | Loss attributable to minority interests                 
|                                                     |                                                                                 |                                                     | Equity in net (income) loss of unconsolidated affiliates
|                                                     |                                                                                 |                                                     | Benefit for deferred income taxes                       
|                                                     |                                                                                 |                                                     | Advertising provided by USA                             
|                                                     |                                                                                 |                                                     | Investment losses, net                                  
|                                                     |                                                                                 |                                                     | Non-cash compensation                                   
|                                                     | Changes in operating assets and liabilities:                                    |                                                     |                                                         
|                                                     |                                                                                 | Accounts receivable, ticket sales                   |                                                         
|                                                     |                                                                                 | Accounts receivable, trade                          |                                                         
|                                                     |                                                                                 | Prepaid expenses and other current assets           |                                                         
|                                                     |                                                                                 | Accounts payable, trade                             |                                                         
|                                                     |                                                                                 | Accounts payable, clients                           |                                                         
|                                                     |                                                                                 | Accrued expenses                                    |                                                         
|                                                     |                                                                                 | Deferred revenue and other                          |                                                         
|                                                     |                                                                                 |                                                     |                                                         
|                                                     |                                                                                 | Net cash provided by operating activities           |                                                         
|                                                     |                                                                                 |                                                     |                                                         
|Investing activities:                                |                                                                                 |                                                     |                                                         
|                                                     | Capital expenditures                                                            |                                                     |                                                         
|                                                     | Payments for investments in affiliates                                          |                                                     |                                                         
|                                                     | Cash distributions from and sale of affiliates                                  |                                                     |                                                         
|                                                     | Acquisitions, net of cash acquired                                              |                                                     |                                                         
|                                                     | Proceeds from sale of marketable securities                                     |                                                     |                                                         
|                                                     | Purchase of marketable securities                                               |                                                     |                                                         
|                                                     | Payment of merger costs                                                         |                                                     |                                                         
|                                                     | Other, net                                                                      |                                                     |                                                         
|                                                     |                                                                                 |                                                     |                                                         
|                                                     |                                                                                 | Net cash used in investing activities               |                                                         
|                                                     |                                                                                 |                                                     |                                                         
|Financing activities:                                |                                                                                 |                                                     |                                                         
|                                                     | Advances from (to) USA                                                          |                                                     |                                                         
|                                                     | Proceeds from borrowings                                                        |                                                     |                                                         
|                                                     | Debt payments                                                                   |                                                     |                                                         
|                                                     | Issuance of Common Stock to USA                                                 |                                                     |                                                         
|                                                     | Proceeds from minority shareholders, net                                        |                                                     |                                                         
|                                                     | Dividend paid to minority shareholders of consolidated subsidiaries             |                                                     |                                                         
|                                                     | Net proceeds from exercise of options                                           |                                                     |                                                         
|                                                     |                                                                                 |                                                     |                                                         
|                                                     |                                                                                 | Net cash (used in) provided by financing activities |                                                         
|                                                     |                                                                                 |                                                     |                                                         
|Effect of exchange rate on cash and cash equivalents |                                                                                 |                                                     | (1,552                                                  
|                                                     |                                                                                 |                                                     |                                                         
|Net increase (decrease) in cash and cash equivalents |                                                                                 |                                                     | 22,082                                                  
|Cash and cash equivalents at beginning of period     |                                                                                 |                                                     | 120,809                                                 
|                                                     |                                                                                 |                                                     |                                                         
|Cash and cash equivalents at end of period           |                                                                                 | $                                                   | 142,891                                                 
|                                                     |                                                                                 |                                                     |                                                         
|Supplemental statement of cash flow information      |                                                                                 |                                                     |                                                         
|                                                     | Cash paid for:                                                                  |                                                     |                                                         
|                                                     |                                                                                 | Interest                                            |                                                         
|                                                     |                                                                                 |                                                     |                                                         
|                                                     |                                                                                 | Income taxes                                        |                                                         
|                                                     |                                                                                 |                                                     |                                                         

See accompanying notes to consolidated financial statements.

F-5

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TICKETMASTER        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1DESCRIPTION OF BUSINESS, ORGANIZATION AND BASIS OF PRESENTATION

Description of Business

Ticketmaster (the "Company") provides automated ticketing services to its client venues, promoters and sport franchises, which provide patrons with the option of
purchasing tickets through operator-staffed call centers, the Internet or independent sales outlets. In addition, the Company operates an online personals service providing singles with a way to meet
others online and other Internet-related businesses. Ticketmaster also produces and delivers comprehensive local city guides on the Internet, providing up-to-date information
regarding arts and entertainment events, community events and activities, recreation, shopping, business and professional services and news/sports/weather to consumers in metropolitan areas.

Organization and Basis of Presentation

In July 1997, USA Networks, Inc. ("USA Networks" or "USA") acquired a controlling interest in Ticketmaster Group, Inc. and its subsidiaries
("Ticketmaster Group") through the issuance of shares of USA common stock. In June 1998, USA completed its acquisition of Ticketmaster Group in a tax-free merger, pursuant to which
each outstanding share of Ticketmaster Group common stock not owned by USA was exchanged for 1.126 shares of USA common stock, resulting in Ticketmaster Group becoming a wholly-owned subsidiary of
USA.

On
September 28, 1998, pursuant to an Amended and Restated Agreement and Plan of Reorganization dated as of August 12, 1998 (the "Merger Agreement"), by and among
Citysearch, Inc. ("Citysearch"), USA, Ticketmaster Group, Ticketmaster Multimedia Holdings, Inc. ("Ticketmaster.com") and Tiberius, Inc. ("Tiberius"), a wholly-owned subsidiary of
Citysearch, Tiberius was merged with and into Ticketmaster.com, with Ticketmaster.com continuing as the surviving corporation and as a wholly-owned subsidiary of Citysearch (the "Merger"). Prior to
the Merger, Ticketmaster.com was a wholly-owned subsidiary of Ticketmaster Corporation ("Ticketmaster Corp.") which was a wholly-owned subsidiary of Ticketmaster Group. In connection with the Merger
Agreement, all the issued and outstanding common shares of Ticketmaster.com held by Ticketmaster Corp. were converted into an aggregate of 37,238,000 shares of Citysearch Common Stock and such shares
were subsequently reclassified as Class A Common Stock of the Company. The Merger was accounted for using the "reverse purchase" method of accounting, pursuant to which Ticketmaster.com was
treated as the acquiring entity for accounting purposes, and the assets acquired and liabilities assumed of Citysearch were recorded at their respective fair values. In connection with the Merger the
name of the combined company was changed from Citysearch, Inc. to Ticketmaster Online-Citysearch, Inc. ("TMCS"). References throughout these financial statements to Ticketmaster.com and
Citysearch relate to the individual businesses of Ticketmaster.com and Citysearch, respectively.

On
January 31, 2001, pursuant to a contribution agreement dated November 20, 2000 between TMCS and USA ("Contribution Agreement"), TMCS acquired the equity and businesses
of Ticketmaster Group from USA in exchange for 52,000,000 new shares of TMCS' Class B Common Stock (the "Combination"). The Combination was accounted for as an exchange of assets between
entities under common control in a manner similar to the pooling of interests method of accounting. In connection with the Combination, the Company entered into a revolving credit facility (the
"Revolver") with USA Networks that provided $25 million in available credit at USA's borrowing rate through May 1, 2001. All amounts borrowed under the Revolver were payable upon demand.
During the year ended December 31, 2001, the Company borrowed and repaid USA Networks $24 million under the terms of the Revolver which has been reflected as a financing activity in the
statements of cash flows as

F-6

---

an advance from USA. At the closing date of the Combination, USA Networks contributed amounts due from Ticketmaster totaling $172.5 million to the Company. On February 1, 2001, in
connection with its option under the Contribution Agreement, USA Networks purchased TMC Realty, L.L.C. ("TMC Realty") from the Company in exchange for the assumption of all of the liabilities of TMC
Realty and promotional services equal in value to the amount by which $28.8 million exceeded the liabilities assumed by USA Networks. As a result, the Company recorded a receivable for
promotional services of approximately $8.0 million and recognized additional paid-in capital of $5.3 million, net of tax effect. Further, in connection with the TMC Realty transaction,
the Company agreed that an outstanding receivable from USA in the amount of $8.0 million would be settled by USA providing such amount in promotional services, resulting in a total receivable
for promotional services of $16.0 million.

Upon
the closing of the Combination, TMCS changed its name to "Ticketmaster."

The
consolidated financial statements include the accounts of Ticketmaster, its wholly owned subsidiaries and majority owned companies and joint ventures. Prior periods have been
restated to give effect to the Combination. For accounting purposes, the number of shares outstanding does not include 42,480,143 shares of Class A Common Stock and 50,260,401 shares of
Class B Common Stock held by
one of the Company's wholly-owned subsidiaries as they are treated similarly to shares held in treasury. All significant intercompany balances and transactions have been eliminated. Investments in
companies and joint ventures with ownership interests ranging from 20% to 50% and in which Ticketmaster exercises significant influence over operating and financial policies are accounted for using
the equity method. Investments in which the Company owns less than a 20% interest, where it cannot exercise significant influence and/or which are not considered investments in marketable securities
with a readily determinable fair market value are accounted for using the cost method.

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

Ticketing operations revenues primarily consist of convenience, order processing and delivery charges generated through ticket sales. The sale of tickets for an
event often commences several months prior to the date of the event. The Company recognizes ticketing operations revenue when the ticket is sold. The Company only recognizes revenue from amounts
payable to Ticketmaster, and excludes ticket proceeds collected on behalf of its clients. Transaction fees related to reservations are recognized as the related services are provided. Revenue from
advertising and sponsorship agreements is recognized when the service is provided or over the contract period.

Ticketing
operations revenues also includes revenue from software licensed under noncancellable license agreements. The Company provides services related to such agreements including
maintenance, training, installation, consulting and support services. License fee revenues, which are less than five percent of ticketing operations revenue, are generally recognized when a
noncancellable license agreement has been signed, the product has been delivered, there are no uncertainties surrounding product acceptance, the fees are fixed and determinable and collection is
considered probable. Revenues from maintenance agreements for maintaining, supporting and providing periodic upgrades are recognized ratably over the maintenance period, which in most instances is one
year. Revenues for training and consulting services are recognized as services are performed.

F-7

---

Personals
revenues consist of subscription fees, generated from customers who subscribe to our online matchmaking services for one to twelve months on our Match.com and other personals
Web sites, and online advertising revenue. Subscription fees and online advertising revenue are recognized over the period the services are provided.

City
guide revenues consist of local and national online advertising, product licensing and related royalties, consulting services and transaction fees from affiliate partners. Local
advertising revenues are derived primarily from sale of premium placement listings, in context advertising and targeted promotional packages. In addition, the Company generates local advertising
income from Web site development, hosting and placement in Citysearch's directory listings. Local advertising revenues are recognized over the period the services are provided. Royalty revenues are
recognized when earned based on the revenues generated by the license or based on the minimum royalty provisions in the contract. Revenues from consultation and design services are recognized as the
services are provided. Revenues from the sale of licenses for use of the Company's business and technology systems to its partner-led markets are generally recognized over the term of the
license agreement, ranging from five to eight years, or the period over which the relevant services are delivered.

Revenues
from barter transactions are recognized at fair value during the period that the goods or services are exchanged. Barter transactions are valued based on similar cash
transactions which have occurred within six months prior to the date of the barter transaction or the cost of the service provided in the absence of similar cash transactions. Barter revenues of
$3.9 million, $2.1 million, and $1.1 million were recognized in the years ended December 31, 2001, 2000, and 1999, respectively. Similar amounts were recorded as sales and
marketing expense.

Cash and Cash Equivalents

Cash and cash equivalents include cash and short-term investments. Short-term investments consist primarily of commercial paper and money
market funds with original maturities of less than 91 days. Cash and cash equivalents include collected ticket proceeds which are payable to clients and reflected as accounts payable, clients.

Marketable Securities

The Company's marketable securities are classified as available-for-sale as of the balance sheet dates and are reported at fair value,
with unrealized gains and losses, net of tax, recorded as a component of other comprehensive income (loss) included in stockholders' equity. Realized gains or losses and other than temporary declines
in value, if any, on available-for-sale securities are reported in other income or expense.

Accounts Receivable

Accounts receivable, ticket sales are amounts due principally from ticketing outlets and credit card processors and represent the face value of the tickets sold
plus convenience charges, generally net of outlet commissions. The Company performs credit evaluations of new ticket outlets, which are reviewed and updated periodically, requiring collateral as
circumstances warrant.

F-8

---

Accounts
receivable, trade consists primarily of amounts due from licensees in connection with software sales, subscription services for both local advertising and personals and other
services including advertising, maintenance and installation.

Property, Equipment and Leasehold Improvements

Property, equipment and leasehold improvements are stated at cost. Depreciation and amortization are computed using the straight-line method over the
estimated useful life of the asset or, for leasehold improvements, the term of the lease, if shorter. Assets acquired under capitalizable lease arrangements are recorded at the present value of the
minimum lease payments and amortization of such assets is included in depreciation expense. The Company capitalizes certain qualified costs incurred in connection with the development of internal use
software. Capitalization of internal use software costs begins when the preliminary project stage is completed, management with the relevant authority authorizes and commits to the funding of the
software project, and it is probable that the project will be completed and the software will be used to perform the function intended. Capitalized internal use software costs are amortized on a
straight-line basis over the estimated useful life of the software, not to exceed three years.

Asset Category

Depreciation/
Amortization PeriodBuildings

40 YearsComputer software and equipment

1 to 3 YearsTelephone equipment and furnishings

5 to 7 YearsTransportation equipment

5 YearsLeasehold improvements

3 to 10 Years


Research and Development

Research and development expenditures are charged to operations as incurred. Based on the Company's product development process, technological feasibility is
established upon completion of a working model. Costs incurred between completion of the working model and the point at which the product is ready for general release have been insignificant and are
expensed as incurred. For the years ended December 31, 2001, 2000 and 1999, the Company incurred research and development costs of $12.6 million, $11.5 million and
$13.3 million, respectively.

Other Assets

Other assets consist primarily of contract advances, deferred marketing charges and investments. Contract advances represent amounts paid in advance to the
Company's clients pursuant to agreements that provide for the client's participation in the convenience charges and/or order processing fees. Such contract advances are generally recoupable against
future participation rights. Deferred marketing primarily represents capitalized affiliation fees for in-kind media and television promotion and is recognized as sales and marketing
expense on a straight-line basis over the contract term. The

F-9

---

Company's investments are discussed in more detail in Note 7. Other assets consisted of the following at the balance sheet dates (in thousands):

December 31,2001

2000Contract advances

$
28,592

$
36,799Deferred marketing


18,068


3,385Investments


15,226


16,928Other


9,669


6,99071,555


64,102Less current portion


(12,061
)

(10,551
)$
59,494

$
53,551


Long-Lived Assets Including Intangibles

The Company assesses the carrying value of long-lived assets, including goodwill and other intangibles and property, equipment and leasehold
improvements, if the facts and circumstances suggest that they may be impaired. If this review indicates that the carrying value will not be recoverable, as determined based on the projected
undiscounted future cash flows, the carrying value is reduced to its estimated fair value. Effective January 1, 2002, goodwill and intangible assets deemed to have indefinite lives are subject
to annual, or more frequent if certain indicators arise, impairment tests as required by Statement of Financial Accounting Standard ("SFAS") No. 142, "Goodwill and Other
Intangible Assets" consisting of a comparison of carrying value of the asset to its fair value.

The
Company recognizes as goodwill the excess of the cost of an acquired entity over the assigned amount of net assets acquired and liabilities assumed. Goodwill and indefinite lived
intangible assets arising from a business combination completed after June 30, 2001 are not amortized. Goodwill from purchase business combinations completed prior to July 1, 2001 is
being amortized using the straight-line method over terms ranging from five to forty years, with a period of five to ten years for Internet-related businesses. Such amortization will cease
upon the adoption of SFAS No. 142. The Company recognizes as the Sidewalk intangible (see Note 5) the excess of the fair value of the consideration provided in exchange for the Sidewalk
assets and distribution agreement over the assigned amount of the distribution agreement and is amortized on a straight-line basis over five years. Ticketing purchased service agreements
represent the value of agreements for ticketing services acquired in business combinations or from third parties and are generally amortized on a straight-line basis over the contract
term, generally three to seven years.

Accounts Payable, Clients

Accounts payable, clients represents contractual amounts due to clients for tickets sold by the Company on behalf of the organizations that sponsor events.

Deferred Revenue

Deferred revenue primarily consists of prepayment of subscription services, for both local advertising and personals, subscription sales, licensing revenue from
city guide partner-led markets,

F-10

---

maintenance revenue related to concession control systems, and sponsorship revenue related to ticketing operations. Deferred maintenance revenue is recognized over the term of the agreements
(generally one year) on a straight-line basis. Deferred sponsorship revenue and the related costs are recognized over the term of the agreements on a straight-line basis or are
earned ratably based upon delivery.

Income Taxes

The Company accounts for income taxes under the liability method, and deferred tax assets and liabilities are recognized for the future tax consequences
attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates in effect for the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date. A valuation allowance is established for net deferred tax assets when management assesses the realizability of the asset to be
less than more likely than not.

Financial Instruments

The estimated fair values of cash, accounts receivable, accounts payable and accrued expenses approximate their carrying values because of the
short-term maturity of these instruments. Market price of the Company's investments in marketable securities, which is readily available, is used to estimate fair value. The carrying value
of long-term debt approximates fair value as of the balance sheet date.

Advertising Costs

Advertising costs are generally expensed in the period incurred. For the years ended December 31, 2001, 2000 and 1999, advertising costs amounted to
$46.9 million, $40.0 million and $18.8 million, respectively.

During
the years ended December 31, 2001, 2000 and 1999, the Company recorded $17.7 million, $7.3 million and $0.2 million in sales and marketing expense
related to advertising provided by USA on its television properties, Sci-Fi Channel and USA Network, for which no cash was paid by the Company (see Note 16).

Delivery and Order Processing Costs

Delivery and order processing costs are classified in each respective segment's operating costs in the consolidated statement of operations.

Merger and Other Non-Recurring Charges

In 2001, merger and other non-recurring charges consisted primarily of restructuring charges including severance and facilities costs associated with
Citysearch's reorganization initiative. In 2000 and 1999, these costs consisted primarily of advisory fees, regulatory filing fees and legal and accounting costs related to the Combination and the
terminated merger with certain assets owned by our majority stockholder and Lycos, Inc., as well as certain expenses related to the operation of Sidewalk city guides before the integration of
these properties into the Citysearch network in 1999.

F-11

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Minority Interest

Minority interest represents the ownership interests of third parties in the net assets and results of operations of certain consolidated subsidiaries.

Foreign Currency Translation

The functional currency of the Company's foreign operations is the local currency. The financial statements of these foreign operations are translated to U.S.
dollars using month-end rates of exchanges for assets and liabilities, and average rates of exchange for the month for revenues and expenses. The effects of exchange rate changes related
to assets and liabilities located outside the United States are included in accumulated other comprehensive income (loss) as a component of stockholders' equity. Foreign currency translation gains and
losses are included in interest expense on the combined statements of operations; such gains and losses have not been significant.

Concentration of Credit Risk

The Company places its temporary cash investments principally in commercial paper with large domestic and international companies and limits the amount of credit
exposure in any one company.

Concentration
of credit risk with respect to trade receivables is limited based on the transaction size, the use of credit card and bank drafts as method of payment, the large volume of
transactions and geographic dispersion of the Company's customers. The Company generally does not require collateral; however, credit losses have generally been within management's expectations and
have not been significant.

Stock-Based Compensation

As permitted by SFAS No. 123,"Accounting for Stock-Based Compensation,"the Company accounts for
stock-based compensation in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB
No. 25"). In cases where exercise prices are less than fair value as of the grant date, compensation expense is recognized over the vesting period.

Basic and Diluted Net Loss per Share

Basic net loss per share is determined by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted
net loss per share is determined by dividing the net loss by the weighted-average number of shares of common stock outstanding plus the dilutive effects of stock options, warrants and other
convertible securities. The calculation of basic and diluted net loss per share adjusts the historical weighted-average number of 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. Basic and diluted net loss per share are the same for the years ended December 31, 2001, 2000 and 1999 because the
effects of outstanding stock options and warrants are antidilutive.

Estimates Used in the Preparation of Consolidated Financial Statements

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes

F-12

---

thereto. Actual results could differ from those estimates, although management does not believe that any differences would materially affect the Company's consolidated financial position or results
of operations.

Significant
estimates underlying the accompanying consolidated financial statements include the allowance for doubtful accounts, valuation allowance on deferred tax assets, allocation of
purchase price in business combinations, capitalization of internal use computer software, recoverability of intangibles and other long-lived assets and various other operating allowances
and accruals.

Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 141, "Business
Combinations," effective after June 30, 2001, and SFAS No. 142, effective for fiscal years beginning after December 15, 2001. Under the new rules, goodwill
and intangible assets deemed to have indefinite lives will no longer be amortized but will be subject to annual impairment tests. Other intangible assets will continue to be amortized over their
useful lives. The requirements of SFAS No. 141 are effective for any business combination accounted for by the purchase method that is completed after June 30, 2001.

Effective
January 1, 2002, the Company must adopt the new rules on accounting for goodwill and other intangible assets. During the first quarter of 2002, the Company will perform
the first of the required impairment tests for goodwill and indefinite lived intangible assets recorded at January 1, 2002. Although it has not completed its assessment, the Company anticipates
a write-off of $75 to $125 million primarily related to the City guide segment. Although Citysearch is expected to generate positive cash flows in the future, due to cash flow
discounting techniques required by the new rules, the discounted future cash flows do not support current carrying values. The new accounting rule would reduce the Company's annual amortization of
goodwill and other intangible assets by approximately $115 million, assuming the mid-point of the range of the potential write-off.

In
October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets",
effective for fiscal years beginning after December 15, 2001. The Statement addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The
Company believes that this Statement will not have a material effect on the results of operations and financial position of the Company.

Reclassifications

Certain reclassifications have been made to the prior years' financial statements to conform to the current year presentation.

F-13

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NOTE 3MARKETABLE SECURITIES

At December 31, 2001 and 2000, marketable securities were as follows (in thousands):

|                                       |  | Cost |       | Gross
Unrealized
Gains |   | Gross
Unrealized
Losses |  | Estimated
Fair Value
|-------------------------------------- |  | ---- | ----- | ---------------------- | - | ----------------------- |  | --------------------
|As of December 31, 2001                |  |      |       |                        |   |                         |  |                     
|U.S. agency mortgage-backed securities |  | $    | 676   |                        | $ | 9                       |  | $                   
|State government debt securities       |  |      | 4,181 |                        |   | 19                      |  |                     
|Corporate debt securities              |  |      | 986   |                        |   | 12                      |  |                     
|                                       |  |      |       |                        |   |                         |  |                     
|                                       |  | $    | 5,843 |                        | $ | 40                      |  | $                   
|                                       |  |      |       |                        |   |                         |  |                     
|As of December 31, 2000                |  |      |       |                        |   |                         |  |                     
|Commercial paper                       |  | $    | 2,003 |                        | $ |                        |  | $                   
|U.S. government debt securities        |  |      | 1,945 |                        |   |                        |  |                     
|U.S. agency mortgage-backed securities |  |      | 1,980 |                        |   | 15                      |  |                     
|Corporate debt securities              |  |      | 2,001 |                        |   | 9                       |  |                     
|                                       |  |      |       |                        |   |                         |  |                     
|                                       |  | $    | 7,929 |                        | $ | 24                      |  | $                   
|                                       |  |      |       |                        |   |                         |  |                     

The
contractual maturities of debt securities classified as available-for-sale as of December 31, 2001 are as follows (in thousands):

Cost

Estimated
Fair ValueWithin one year

$
5,158

$
5,190After one year through five years


685


693Total

$
5,843

$
5,883


The
specific identification method is used to compute realized gains and losses. Gross realized gains and losses from the sale of securities were not material.

NOTE 4PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Property, equipment and leasehold improvements consisted of the following (in thousands):

December 31,2001

2000Land

$
1,568

$
3,646Buildings and leasehold improvements


12,612


27,306Computer software and equipment


120,119


97,949Telephone equipment and furnishings


27,234


26,638Transportation equipment


2,370


2,543163,903


158,082Less accumulated depreciation and amortization


(88,299
)

(69,696
)$
75,604

$
88,386


F-14

---

Property,
equipment and leasehold improvements, net of accumulated depreciation and amortization, of $17.4 million were transferred to USA Networks in connection with the sale of
TMC Realty.

Depreciation
and amortization expense on property, equipment and leasehold improvements was $32.3 million, $31.5 million and $19.3 million for the years ended
December 31, 2001, 2000 and 1999, respectively. The gross amount of assets recorded under capital leases amounted to $6.6 million and $4.6 million at December 31, 2001 and
2000, respectively. Related accumulated amortization amounted to $5.0 million and $4.1 million at December 31, 2001 and 2000, respectively. Capitalized internal use software
costs, net of accumulated amortization of $7.5 million and $3.6 million, amounted to $10.2 million and $8.5 million at December 31, 2001 and 2000, respectively.

NOTE 5BUSINESS AND OTHER ACQUISITIONS

Acquisition of CityAuction, Inc.

On March 29, 1999, the Company completed the acquisition of CityAuction, a person-to-person online auction community. In connection
with the acquisition, the Company issued an aggregate of 793,726 shares of its Class B Common Stock for all the outstanding capital stock of CityAuction representing an aggregate purchase price
of $27.3 million. The acquisition was accounted for using the purchase method of accounting which resulted in approximately $28.7 million of goodwill which was being amortized over five
years. The results of operations of CityAuction are included in the accompanying statements of operations from the date of acquisition.

During
the quarter ended December 31, 2000, the Company determined that its investment in CityAuction had suffered a decline in value that was considered other than temporary and
recorded additional amortization expense of $18.7 million.

Acquisition of Match.com, Inc.

On June 14, 1999, the Company completed the acquisition of Match.com, an Internet personals company. In connection with the acquisition, the Company issued
1,924,777 shares of Class B Common Stock to the former owners of Match.com representing a total purchase price of approximately $43.5 million. The acquisition was accounted for using the
purchase method of accounting which resulted in approximately $42.4 million of goodwill which was being amortized over five years. The results of operations of Match.com are included in the
accompanying statements of operations from the date of acquisition.

Acquisition of Web Media Ventures, L.L.C.

On September 13, 1999, the Company purchased all the outstanding limited liability company units ("Units") of Web Media (d.b.a. One & Only Network).
Web Media is an Internet personals company distributing its services through a network of affiliated Internet sites. In connection with the acquisition, the Company issued 1,204,215 shares of
Class B Common Stock in exchange for all of the Web Media Units and became obligated to issue $2.2 million of Class B Common Stock payable at the end of each quarter following the
closing of the transaction and an additional number of shares of Class B Common Stock no later than 270 days after the closing of the transaction with the last installment subject to
adjustment based on the achievement of certain revenue targets by Web Media. As a result,

F-15

---

an additional 61,962 shares and 626,173 shares of Class B Common Stock were issued during 1999 and 2000, respectively, resulting in a total purchase price of $45.0 million. The
acquisition was accounted for using the purchase method of accounting and resulted in $44.7 million of goodwill which was being amortized by the Company over a period of five years. The results
of operations of Web Media are included in the accompanying statements of operations from the date of acquisition.

Transaction Regarding Sidewalk.com

On September 17, 1999, the Company acquired certain assets associated with the entertainment city guide (A&E) portion of Sidewalk from Microsoft
Corporation ("Microsoft"). The Company also entered into a four-year distribution agreement with Microsoft pursuant to which the Company became the exclusive provider of local city guide
content on the Microsoft Network ("MSN") and the Company's internet personals Web sites became the premier provider of personals content to MSN. In addition, the Company and Microsoft entered into
additional cross-promotional arrangements. In connection with these transactions, the Company issued to Microsoft 7.0 million shares of its Class B Common Stock and two warrants to
purchase an aggregate of 4.5 million shares of its Class B Common Stock. The first warrant for 3.0 million shares has an initial exercise price of $30 per share, which adjusts
downward by $0.0625 for each $0.0625 increase in the price of the Class B Common Stock over $30 at the time the warrant is exercised. At December 31, 2001, the exercise price of this
warrant was determined to be $30. The second warrant for 1.5 million shares has a fixed exercise price of $60 per share of Class B Common Stock. Both warrants expire on
September 17, 2004, five years from the date of issuance. To date, Microsoft has not exercised any of these warrants. The Company granted Microsoft certain registration rights in connection
with the transaction. The impact of the Company's ownership of the Sidewalk assets is included in the accompanying statement of operations from the date the transaction closed.

The
fair value of the consideration provided in exchange for the Sidewalk assets and distribution agreement, including transaction costs, amounted to $338.8 million of which
$333.8 million has been recorded in goodwill and other intangibles in the accompanying consolidated balance sheet and $5.0 million has been allocated to the distribution agreement and
recorded as deferred marketing in the accompanying balance sheet. The Sidewalk intangible of $333.8 million is being amortized over five years. The deferred marketing charge of
$5.0 million is being amortized over four years with the
amortization expense included in sales and marketing expense. Amortization expense for the years ended December 31, 2001, 2000 and 1999 was $68.1 million, $68.1 million and
$19.2 million, respectively.

Acquisition of TM VISTA, Inc.

On January 31, 2000, the Company completed the acquisition of TM VISTA, Inc. (formerly 2b Technology, Inc; "TM VISTA"), a ticketing and software
licensing company. In connection with the acquisition, the Company issued an aggregate of 757,959 shares of Class B Common Stock to the former owners of TM VISTA representing a purchase price
of approximately $20.4 million. The acquisition was accounted for using the purchase method of accounting. The acquisition resulted in $20.5 million of goodwill which was being amortized
by the Company over a period of five years. The results of operations of TM VISTA are included in the accompanying statements of operations from the date of acquisition.

F-16

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Acquisition of Admission Canada

On April 19, 2000, the Company completed the acquisition of Réseau Admission Inc., Concept Électronique
Microflex Inc. and Admission Network USA Inc. (collectively known as "Admission Canada") for $30 million in cash. Admission Canada is a ticketing company operating primarily in
the Canadian provinces. The acquisition was accounted for using the purchase method of accounting and resulted in $7.2 million of goodwill being recorded which was being amortized over
10 years. The results of operations of Admission Canada are included in the accompanying statement of operations from the date of acquisition.

Acquisition of TicketWeb, Inc.

On May 26, 2000, the Company completed the acquisition of TicketWeb, Inc ("TicketWeb"), a web-based live event ticketing company. In connection
with the acquisition, the Company issued 1,841,204 shares of Class B Common Stock to the former owners of TicketWeb representing a purchase price of approximately $35.4 million. The
acquisition was accounted for using the purchase method of accounting and resulted in $33.5 million of goodwill being recorded. The total amount of goodwill recorded was being amortized by the
Company over a period of five years. The results of operations of TicketWeb are included in the accompanying statements of operations from the date of acquisition.

Acquisition of Essential Data Customer Systems

On July 13, 2000, the Company acquired Essential Data Customer Systems ("EDCS") for $7.9 million in cash. EDCS's fan loyalty system is an
incentive-based program that brings "frequent flier" type benefits to sports fans. The acquisition was accounted for using the purchase method of accounting and resulted in $7.2 million of
goodwill being recorded which was being amortized over 10 years. The results of operations of EDCS are included in the accompanying statements of operations from the date of acquisition.

Acquisition of Tom Lasley, Inc.

On December 18, 2000, the Company acquired its Oregon ticketing licensee, Tom Lasley, Inc., for $10.9 million in cash. The acquisition was
accounted for using the purchase method of accounting and resulted in $10.7 million of goodwill being recorded which was being amortized over 20 years. The results of operations of Tom
Lasley, Inc. are included in the accompanying statements of operations from the date of acquisition.

Increase in Ireland Ownership

On July 31, 1997, Ticketmaster acquired 50% of the capital stock of Ticket Shop Limited, the entity through which Ticketmaster conducts its live
entertainment ticketing business in Ireland and this investment was accounted for under the equity method of accounting. In December 2000, Ticketmaster acquired an additional 10% of the capital
stock of Ticket Shop Limited and therefore, the accounts of Ticket Shop Limited are included in the consolidated financial statements.

F-17

---

Acquisition of ReserveAmerica Holdings, Inc.

On February 12, 2001, the Company completed the acquisition of ReserveAmerica Holdings, Inc. ("ReserveAmerica"), a leading provider of campsite
reservations. The Company paid approximately $24.9 million in cash for the initial consideration due in the transaction. The purchase price will be increased by the value of additional shares
of the Company's Class B Common Stock and/or cash to be paid by the Company, if certain financial targets are achieved in 2002. The acquisition has been accounted for using the purchase method
of accounting. The preliminary allocation of the purchase price resulted in $22.4 million of goodwill recorded with adjustments to be made in the event that shares and/or cash are issued upon
achievement of certain financial targets. The total amount of goodwill was being amortized by the Company over a period of ten years. The results of operations of
ReserveAmerica are included in the accompanying statements of operations from the date of acquisition.

Acquisition of Evite, Inc.

On March 13, 2001, the Company acquired Evite, Inc. ("Evite"), a free online invitation service, for $5.0 million in cash. The acquisition
was accounted for using the purchase method of accounting and resulted in $3.4 million of goodwill being recorded which was being amortized over five years. The results of operations of Evite
are included in the accompanying statements of operations from the date of acquisition.

Acquisition of Towne Ticket Centre

On March 30, 2001, the Company acquired its Canadian ticketing licensee, Towne Ticket Centre, for $1.0 million in cash. The acquisition is being
accounted for using the purchase method of accounting and resulted in $0.2 million of goodwill being recorded which was being amortized over 20 years. The results of operations of Towne
Ticket Centre are included in the accompanying statement of operations from the date of acquisition.

Acquisition of Billetservice AS

On October 31, 2001, the Company completed its acquisition of Billetservice AS for $5.3 million in cash. Billetservice is a ticketing company
operating primarily in Norway. The acquisition was accounted for using the purchase method of accounting and the allocation of the purchase price resulted in $3.8 million of goodwill being
recorded. In accordance with SFAS No. 141, the goodwill balance will not be amortized but subject to annual impairment tests. The results of operations of Billetservice AS are included in the
accompanying statement of operations from the date of acquisition.

Pro
forma results of operations for the above acquisitions are not presented as the information is not material to the consolidated financial statements.

F-18

---



NOTE 6GOODWILL AND OTHER INTANGIBLES

Goodwill and other intangibles consisted of the following (in thousands):

December 31,2001

2000Goodwill

$
1,125,026

$
1,130,228Sidewalk intangible


333,798


333,798Purchased service agreements


59,051


68,5291,517,875


1,532,555Less accumulated amortization


(485,115
)

(346,607
)$
1,032,760

$
1,185,948


Goodwill
and other intangible amortization expense was $174.9 million, $192.4 million and $108.6 million for the years ended December 31, 2001, 2000 and 1999,
respectively.

NOTE 7INVESTMENTS

Equity Method Investments

On December 1, 1995, the Company and the Victorian Arts Centre Trust ("VACT") formed joint ventures (the "Australian Joint Ventures") for the purpose of
conducting the Company's live entertainment ticketing business in Australia. In September 1999, VACT sold its interest in the venture to Seven Pty Limited. As a result, the Company has a 50.1%
interest in Ticketmaster 7 Pty Limited. Through June 2001 the Company exercised control over the Australian Joint Ventures and its assets, liabilities and results of operations were
consolidated. In the third quarter of 2001, certain rights were relinquished and the Company no longer exercised control over the Australian Joint Ventures. Accordingly, the Company discontinued the
consolidation of its investment in the Australian Joint Ventures and began to account for the investment using the equity method of accounting.

On
October 10, 1996, the Company acquired a 27% equity interest in the Company's Mexican licensee from a third party for $1.8 million in cash and 5% of net distributions
(as defined) received with respect to such 27% equity interest from the Mexican operation through December 31, 1998. In 1998, the Company and Corporacion Interamericana de Entretenimiento, S.A.
de C.V. ("CIE"), the majority owner of its Mexican licensee, entered into a license agreement for the purpose of marketing and operating the Ticketmaster System throughout Central and South America.
Accordingly, Ticketmaster is licensor to CIE's operating ventures, which are currently operating in Brazil, Argentina and Chile. CIE is currently the owner of a 50.01% equity interest in the Company's
Mexican licensee with the Company owning the remaining 49.99% equity interest in this licensee. Accordingly, this investment is accounted for under the equity method.

Cost Method Investments

In September 1999, the Company purchased a minority equity position in FairMarket, Inc. ("FairMarket"), a privately-held, online auction
company in exchange for cash and other consideration consisting of a license to FairMarket of the CityAuction auction technology and the Company's agreement to a multi-year Auction
Services Agreement with FairMarket. The FairMarket investment is being accounted for using the cost method of accounting.

F-19

---

In
October 1999, the Company purchased a minority equity position in foodline.com, Inc ("foodline.com"), a privately-held, online restaurant reservations company in
exchange for $5.0 million cash. The Company and foodline.com also entered into a multi-year content sharing and distribution agreement. In March 2000, the Company sold
$2.2 million of its interest in foodline.com for cost. The foodline.com investment was being accounted for using the equity method of accounting. In December 2000, foodline.com filed for
Chapter 7 bankruptcy protection and ceased operations. The Company will recognize no further losses in the operations of foodline.com.

In
December 1999, the Company purchased a minority equity interest in The Active Network, Inc. ("Active"), a privately-held online local participatory sports
registration and reservation company in exchange for $12.5 million cash and a commitment by the Company to provide $3.0 million in services to Active. The Company and Active also entered
into a multi-year content sharing and distribution agreement. During 2001 and 2000, Active completed additional financing transactions in which the Company invested an aggregate of
$1.8 million. The Active investment is being accounted for using the cost method of accounting; however, at various times throughout the year ended December 31, 2000, the Company's
ownership interest required recognizing equity losses in Active.

In
April 2000, the Company purchased an ownership interest in Walkerplus.com, Inc ("Walkerplus") for $2.9 million in cash. Walkerplus is a privately-held,
Japanese arts and entertainment online guide. The Company also entered into an exclusive five-year license to provide technology and business methods to the joint venture. The Walkerplus
investment was accounted for using the cost method of accounting. The carrying amount of this investment is zero at December 31, 2001.

Impairment Losses on Investments

During 2001 and 2000, the Company determined that certain equity investments in the City guide segment had suffered declines in value that were other than
temporary after giving consideration to, among other things, the current business environment and recent financing transactions. As a result, investment losses totaling $10.8 million and
$10.2 million were recognized during 2001 and 2000, respectively, that reduced such investments to their aggregate fair value.

Gains on Investments

During 2000, the Company sold its minority equity interest in an investment that resulted in a gain of $1.4 million which is included in investment losses,
net on the accompanying statement of operations.

F-20

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NOTE 8LONG-TERM DEBT

Long-term debt consists of the following (in thousands):

|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | December 31, |      
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | -----
|
|Due to USA, interest rate at one-month London Inter-Bank Offering Rate ("LIBOR") plus 0.75% (6.565% at December 31, 2000), no specific repayment terms                                                                                                                                                                                                                                                                                               |  | $            |     
|Promissory note secured by a building; bearing interest at a rate of 9.20% per annum; principal and interest payable monthly, based on a 25year term, with the balance due on April 25, 2007                                                                                                                                                                                                                                                        |  |              |     
|Note payable to bank on term loan collateralized by substantially all of a subsidiary's assets, interest at prime (9.50% at December 31, 2000) plus 0.25% or at the LIBOR plus 225 basis points per annum during 1998 or plus 0.75% per annum during 1999;
principal and interest payable monthly (to the extent the subsidiary's cash flows exceed certain amounts). During 2001, the remaining balance of the note payable to bank was fully paid. |  |              |     
|Note payable to minority shareholder; bearing interest at the rate of 6.00% per annum; interest payable quarterly in arrears; balance due on the date of termination of agreement or such earlier time as the subsidiaries' shareholders may unanimously
agree                                                                                                                                                                                       |  |              |     
|Capital leases                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |              | 1,542
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |              |      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |              | 1,542
|Less current portion                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |              | (790 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |              |      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | $            | 752  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |              |      

Future
minimum lease payments for capital leases including interest and executory costs of $54,000 are as follows (in thousands):

Year ending December 31:2002

$
7902003


6122004


1022005


38$
1,542


In
connection with the Combination, amounts due to USA were contributed to the Company or settled with USA.

In
connection with the change in the method of accounting for the Company's investment in the Australian Joint Ventures to the equity method, the Company no longer consolidates the note
payable to minority shareholder.

F-21

---

In
connection with the sale of TMC Realty to USA Networks, the liability associated with the promissory note secured by a building was assumed by USA Networks.

NOTE 9STOCKHOLDERS' EQUITY

The Company has three classes of common stock. Holders of each share of Class A Common Stock have 15 votes. Each share of Class A Common Stock will
automatically convert into one share of Class B Common Stock upon a "transfer," as defined, of such share except for transfers to certain parties. Holders of Class B Common Stock have
rights in the Company's Restated Certificate of Incorporation
similar to holders of Class A Common Stock except each share of Class B Common Stock carries one vote. Holders of Class C Common Stock have no voting rights.

The
Company is authorized to issue 2,000,000 shares of Preferred Stock. The Board of Directors is authorized, subject to limitations prescribed by Delaware law, to provide for the
issuance of shares of Preferred Stock in one or more series, to establish from time to time the number of shares to be included in each such series, to fix the powers, designations, preferences and
rights of the shares of each wholly unissued series and designate any qualifications, limitations or restrictions thereon, and to increase or decrease the number of shares of any such series (but not
below the number of shares of such series then outstanding) without any further vote or action by the stockholders.

On
December 2, 1999, USA Networks invested $40 million in the Company through the acquisition of 1.3 million shares of Class B Common Stock.

At
December 31, 2001 the Company has 21,452,625 shares of Class A and Class B Common Stock reserved for future issuance, excluding the potential conversion of
Class A Common Stock to Class B Common Stock. Shares reserved for future issuance include shares applicable to acquisitions and shares issuable upon exercise of stock options and
warrants.

NOTE 10COMPREHENSIVE INCOME (LOSS)

Components of comprehensive income (loss) include foreign currency translation adjustments and unrealized gains and losses on marketable securities. Other
comprehensive income (loss), net of tax, was approximately a loss of $0.3 million, a loss of $10.4 million and income of $6.3 million for the years ended December 31, 2001,
2000 and 1999, respectively. At December 31, 2001, accumulated other comprehensive loss was comprised of $4.0 million in foreign currency translation losses offset by $39,000 of
unrealized gains on marketable securities.

F-22

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NOTE 11INCOME TAXES

The provision for income taxes consisted of the following (in thousands):

|          |         | Year Ended December 31, |      
|--------- | ------- | ----------------------- | -----
|
|Current:  |         |                         |      
|          | Federal |                         | $    
|          | Foreign |                         |      
|          | State   |                         |      
|          |         |                         |      
|          |         |                         | 5,081
|          |         |                         |      
|Deferred: |         |                         |      
|          | Federal |                         |      
|          | State   |                         |      
|          |         |                         |      
|          |         |                         |     
|          |         |                         |      
|          |         | $                       | 5,081
|          |         |                         |      

The
following is a reconciliation of the statutory federal income tax rate to the Company's effective income tax rate:

|                                                              |  | Year Ended December 31, |   
|------------------------------------------------------------- |  | ----------------------- | --
|
|Statutory federal income tax benefit                          |  | (35                     | )%
|State income taxes, net of Federal benefit                    |  |                        |   
|Effect of foreign operations                                  |  | 2                       |   
|Change in valuation allowance                                 |  | 4                       |   
|Non-deductible amortization of goodwill and other intangibles |  | 31                      |   
|Other                                                         |  | 1                       |   
|                                                              |  |                         |   
|                                                              |  | 3                       | % 
|                                                              |  |                         |   

F-23

---

Significant
components of the Company's deferred tax assets and liabilities are as follows (in thousands):

December 31,2001

2000Deferred tax assets:Net operating loss carryforward

$
73,362

$
67,637Goodwill and other intangible assets, principally due to amortization


13,588


7,232Deferred revenue


3,677


3,719Reserves


4,376


2,009Research and development credit (carryforwards)


1,363


1,344Depreciation, net


1,783


Foreign tax credit


3,294


Investments, basis difference, net


5,233


Other


1,175


2,480Total deferred tax assets


107,851


84,421Valuation allowance


(103,100
)

(80,147
)Net deferred tax assets


4,751


4,274Deferred tax liabilities:Depreciation, net





95Unpatriated earnings from foreign subsidiaries


2,501


Other


2,123


788Total deferred tax liabilities


4,624


883Net deferred tax assets

$
127

$
3,391


The
valuation allowance increased by approximately $23 million and $28 million during the years ended December 31, 2001 and 2000, respectively. The remaining
valuation allowance recorded in connection with the Citysearch Merger is approximately $25.3 million. If the related deferred tax assets become realizable in the future, the reversal of the
valuation allowance will be recorded as a reduction of remaining goodwill of Citysearch, if any. Also, approximately $13.2 million of the valuation allowance relates to stock option deductions,
which if realized, would increase additional paid-in capital. The Company had net operating loss carryforwards for federal and state income tax purposes at December 31, 2001 of
approximately $179 million and $129 million, respectively. The federal carryforwards expire principally in the period from 2010 to 2020, and the state carryforwards expire principally in
the period from 2004 to 2021. Utilization of the net operating loss carryforwards is subject to limitations as a result of ownership changes as defined in the Internal Revenue Code.

NOTE 12STOCK OPTIONS

USA has various stock option plans (the "Plans") under which options to purchase USA Common Stock may be granted to employees of the Company at not less than fair
market value on the date of the grant. The options under the Plans vest ratably, generally over a range of three to five years from the date of grant and generally expire not more than ten years from
the date of grant. Five of the Plans have options available for future grants.

F-24

---

The
Company has various stock option plans (the "Option Plans") under which options to purchase Ticketmaster common stock may be granted to employees of the Company, directors and
consultants. The options under the Option Plans vest ratably, generally over a range of four years from the date of grant and generally expire not more than ten years from the date of grant. Two of
the Option Plans have options available for future grants.

At
December 31, 2001, the 1998 Stock Option Plan had options outstanding to purchase 130,000 restricted shares of Class B Common Stock. The options generally vest over
three years with 20-25% of the shares vesting in the first and second years and 50-60% of the shares vesting in the third year. Each restricted share may be purchased by the
grantee for $0.01 and may be repurchased by the Company for $0.01 until the repurchase right lapses (the shares "vest"). For the year ended December 31, 2001, the Company recorded compensation
expense related to the restricted shares in the amount of $1.4 million. The Company expects to amortize approximately $3.7 million during 2002 related to the remaining unvested
restricted shares.

1998 Employee Stock Purchase Plan

The Company has adopted the 1998 Employee Stock Purchase Plan ("Purchase Plan") and reserved an aggregate of 1,000,000 shares of Class B Common Stock for
grant thereunder. The number of shares reserved will be increased automatically each year on the first day of the of the Company's fiscal year beginning in 2000 by an amount equal to
(i) 200,000 shares of Class B Common Stock or (ii) a lesser amount determined by the Board of Directors. The Purchase Plan is intended to qualify as an employee stock purchase
plan within the meaning of Section 423 of the Code. Under the Purchase Plan, the Board of Directors may authorize participation by eligible employees, including officers, in periodic offerings
following the commencement of the Purchase Plan. Each offering period under the Purchase Plan will run for six months, other than the initial offering period, which commenced in December 1998
and ended on August 14, 1999. Thereafter, new six-month offering periods will commence each February 15 and August 15. The Company has not sold any shares under this
plan to date.

F-25

---

Stock Option Table for USA Options

A summary of changes in outstanding options under the USA stock option plans with respect to employees of the Company is as follows:

|                       |                   | Number of
Shares |        | Weighted
Average
Exercise Price |   | Number of
Shares
Exercisable |  | Weighted Average
Exercise Price of
Exercisable Shares
|---------------------- | ----------------- | ---------------- | ------ | ------------------------------- | - | ---------------------------- |  | -----------------------------------------------------
|
|Options outstanding at |                   |                  |        |                                 |   |                              |  |                                                      
|                       | December 31, 1998 |                  | 5,949  |                                 | $ | 7.86                         |  |                                                      
|                       | Granted           |                  | 1,032  |                                 |   | 26.97                        |  |                                                      
|                       | Exercised         |                  | (1,957 | )                               |   | 6.61                         |  |                                                      
|                       | Canceled          |                  | (160   | )                               |   | 11.75                        |  |                                                      
|                       |                   |                  |        |                                 |   |                              |  |                                                      
|Options outstanding at |                   |                  |        |                                 |   |                              |  |                                                      
|                       | December 31, 1999 |                  | 4,864  |                                 |   | 12.27                        |  | 2,847                                                
|                       | Granted           |                  | 884    |                                 |   | 23.99                        |  |                                                      
|                       | Exercised         |                  | (371   | )                               |   | 7.34                         |  |                                                      
|                       | Canceled          |                  | (534   | )                               |   | 18.49                        |  |                                                      
|                       |                   |                  |        |                                 |   |                              |  |                                                      
|Options outstanding at |                   |                  |        |                                 |   |                              |  |                                                      
|                       | December 31, 2000 |                  | 4,843  |                                 |   | 14.42                        |  | 2,826                                                
|                       | Granted           |                  | 575    |                                 |   | 23.76                        |  |                                                      
|                       | Exercised         |                  | (800   | )                               |   | 10.02                        |  |                                                      
|                       | Canceled          |                  | (156   | )                               |   | 22.70                        |  |                                                      
|                       |                   |                  |        |                                 |   |                              |  |                                                      
|Options outstanding at |                   |                  |        |                                 |   |                              |  |                                                      
|                       | December 31, 2001 |                  | 4,462  |                                 | $ | 16.12                        |  | 2,778                                                
|                       |                   |                  |        |                                 |   |                              |  |                                                      

Additional
information with respect to outstanding options as of December 31, 2001 is as follows:

|                   |  | Options Outstanding |  | Options Exercisable
|------------------ |  | ------------------- |  | -------------------
|
|
|$  5.81 to $  6.28 |  | 49                  |  | $                  
|6.44 to    6.44    |  | 1,479               |  |                    
|7.55 to  12.50     |  | 937                 |  |                    
|17.78 to  23.82    |  | 914                 |  |                    
|26.88 to  27.91    |  | 1,083               |  |                    
|                   |  |                     |  |                    
|$  5.81 to $27.91  |  | 4,462               |  | $                  
|                   |  |                     |  |                    

F-26

---

Stock Option Table for Ticketmaster Options

The following table summarizes certain information related to options for Ticketmaster Common Stock:

|                                 |                                          | Number of
Shares |        | Weighted
Average
Exercise
Price |       | Number of
Shares
Exercisable |       | Weighted Average
Exercise Price of
Exercisable Shares
|-------------------------------- | ---------------------------------------- | ---------------- | ------ | ------------------------------- | ----- | ---------------------------- | ----- | -----------------------------------------------------
|
|Outstanding at December 31, 1998 |                                          | 3,898            |        | $                               | 7.28  |                              |       |                                                      
|                                 | Granted                                  |                  | 5,550  |                                 |       | 31.97                        |       |                                                      
|                                 | Exercised                                |                  | (955   | )                               |       | 4.44                         |       |                                                      
|                                 | Canceled                                 |                  | (1,008 | )                               |       | 15.03                        |       |                                                      
|                                 |                                          |                  |        |                                 |       |                              |       |                                                      
|Outstanding at December 31, 1999 |                                          | 7,485            |        |                                 | 24.55 |                              | 1,766 |                                                      
|                                 | Options assumed in TicketWeb acquisition |                  | 131    |                                 |       | 11.14                        |       |                                                      
|                                 | Granted                                  |                  | 4,925  |                                 |       | 23.81                        |       |                                                      
|                                 | Exercised                                |                  | (840   | )                               |       | 5.96                         |       |                                                      
|                                 | Canceled                                 |                  | (1,991 | )                               |       | 25.60                        |       |                                                      
|                                 |                                          |                  |        |                                 |       |                              |       |                                                      
|Outstanding at December 31, 2000 |                                          | 9,710            |        |                                 | 25.39 |                              | 3,145 |                                                      
|                                 | Granted                                  |                  | 4,920  |                                 |       | 11.45                        |       |                                                      
|                                 | Exercised                                |                  | (715   | )                               |       | 5.89                         |       |                                                      
|                                 | Canceled                                 |                  | (2,332 | )                               |       | 22.68                        |       |                                                      
|                                 |                                          |                  |        |                                 |       |                              |       |                                                      
|Outstanding at December 31, 2001 |                                          | 11,583           |        | $                               | 21.26 |                              | 4,651 |                                                      
|                                 |                                          |                  |        |                                 |       |                              |       |                                                      

Additional
information with respect to outstanding options as of December 31, 2001 is as follows:

|                  |  | Options Outstanding |  | Options Exercisable
|----------------- |  | ------------------- |  | -------------------
|
|
|$  0.01 to $16.87 |  | 5,686               |  | $                  
|17.00 to  22.75   |  | 1,597               |  |                    
|25.06 to  38.12   |  | 2,084               |  |                    
|38.43 to  42.81   |  | 2,216               |  |                    
|                  |  |                     |  |                    
|$  0.01 to $42.81 |  | 11,583              |  | $                  
|                  |  |                     |  |                    

USA
has not issued options to any of the Company's employees with an exercise price below fair market value. Accordingly, in accordance with APB No. 25, no compensation has been
charged to the Company by USA.

Pro
forma information regarding net loss and earnings per share is required by SFAS No. 123 and has been computed as if compensation cost had been measured using the fair value
based accounting

F-27

---

method. The pro forma information was estimated at the date of grant using the Black-Scholes option pricing model based on the following assumptions:

2001

2000

1999Expected life (years)

2 years

1 year

1 yearRisk-free interest rate

3.25
%
5.75
%
5.64
%Dividend yield





Annualized volatility

81
%
94
%
65
%


The
Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition,
this option valuation model requires the input of highly subjective assumptions including the expected stock price volatility. Because the Company's employee stock options have characteristics
significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing model
does not necessarily provide a reliable single measure of the fair value of its employee stock options.

For
purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the options' vesting period. The Company's pro forma information follows (in
thousands except per share data):

|                                               |  | Year Ended December 31, |         
|---------------------------------------------- |  | ----------------------- | --------
|
|Pro forma net loss                             |  | $                       | (198,905
|Pro forma basic and diluted net loss per share |  | $                       | (1.41   

These
pro forma amounts may not be representative of future disclosures since the estimated fair value of stock options is amortized to expense over the vesting period and additional
options may be granted in future years.

Additional
awards in future years are anticipated. The weighted-average grant-date fair value of options granted during the years ended December 31, 2001, 2000 and
1999 was $5.14, $14.96 and $11.11, respectively, for options granted with an exercise price equal to the market price of the underlying Common Stock on the grant date.

During
2001, the Company accelerated the vesting terms of one of its equity awards which resulted in compensation expense of approximately $1.1 million.

F-28

---



NOTE 13DEFINED CONTRIBUTION PLANS

The Company has a 401(k) plan covering a portion of all eligible employees, which contains discretionary employer-matching feature of 50% (25% in 1999) up to a
maximum of 6% of the employee's compensation. The Company's contributions, which were recognized as expense during the years ended December 31, 2001, 2000 and 1999, were $0.8 million,
$0.9 million and $0.5 million, respectively. Effective December 31, 1999, the Company merged its 401(k) plan into the USA Networks, Inc. Retirement Savings
PlanCommerce (the "New Plan") and all assets of the Company's 401(k) plan were transferred to the New Plan.

In
July 1997, Citysearch established a defined contribution plan for certain qualified employees as defined in the plan which also provides for discretionary contributions by the
Company as outlined in the plan. Participants may contribute from 1% to 20% of pretax compensation subject to certain liabilities. The Company contributed approximately $76,000 to the plan for the
year ended December 31, 2001. No Company contributions were made during 2000 and 1999.

NOTE 14STATEMENTS OF CASH FLOWS

SUPPLEMENTAL
DISCLOSURE OF NON-CASH TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2001:

On
January 31, 2001, TMCS acquired the equity and businesses of Ticketmaster Group from USA in exchange for 52,000,000 new shares of TMCS' Class B Common Stock. In
connection with the Combination, amounts totaling $172.5 million that were due to USA from Ticketmaster Group were contributed to the Company by USA.

On
February 1, 2001, in connection with the Combination, USA Networks acquired TMC Realty from the Company in exchange for the assumption of all of the liabilities of TMC Realty
and promotional services equal in value to the amount by which $28.8 million exceeded the liabilities assumed by USA Networks. The Company recorded a receivable for promotional services of
approximately $8.0 million and recognized additional paid-in capital of $5.3 million, net of tax effect. Further, in connection with the TMC Realty transaction, the Company
agreed that an outstanding receivable from USA in the amount of $8.0 million would be settled by USA providng such amount in promotional services, resulting in a total receivable for
promotional services of $16.0 million.

In
connection with a strategic alliance entered into during 2001, the Company recorded deferred marketing expense and a related liability for promotional services of
$19.9 million. Deferred marketing expense is amortized as sales and marketing expense on a straight-line basis over the contract term and the related liability is reduced as the obligation is
satisfied. During 2001, the Company amortized $6.1 million of deferred marketing expense and $9.7 million of the promotional obligation was satisfied by USA.

During
the year ended December 31, 2001, the Company received a total of $21.3 million from USA in the form of advertising on its wholly-owned television properties for
which no consideration was paid. Of the $21.3 million, $9.7 million was used to satisfy an obligation of the Company to a third party and $11.6 million was recorded by the Company
as sales and marketing expense. The advertising was reflected as a reduction of the $8.0 million receivable of promotional services due from the sale of TMC Realty and as an equity contribution
of $5.3 million.

F-29

---

In
the third quarter of 2001, the Company discontinued the consolidation of its investment in its Australian Joint Ventures and began to account for the investment using the equity
method of accounting.

For
the year ended December 31, 2001, the Company recorded compensation expense related to options to purchase restricted shares of Class B Common Stock in the amount of
$1.4 million. During 2001, the Company also accelerated the vesting terms of one of its equity awards which resulted in compensation expense of approximately $1.1 million.

In
2001, the Company realized pre-tax losses of approximately $57,000 on equity losses in unconsolidated subsidiaries. In 2001, the Company realized pre-tax
losses of $10.8 million related to the write-off of equity investments to fair value.

SUPPLEMENTAL
DISCLOSURE OF NON-CASH TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2000:

In
June 2000, the Company's Electronic Commerce Service operations with net assets of $0.2 million were transferred to USA Networks in a non-cash transaction.

On
January 31, 2000, the Company completed the acquisition of TM VISTA by issuing 757,959 shares of Class B Common Stock for a total value of approximately
$20.4 million.

On
May 26, 2000, the Company completed the acquisition of TicketWeb by issuing 1,841,204 shares of Class B Common Stock for a total value of approximately
$35.4 million.

In
2000, the Company realized pre-tax losses of approximately $2.2 million on equity losses in unconsolidated subsidiaries. In 2000, the Company realized
pre-tax losses of $10.2 million related to the write-off of equity investments to fair value.

During
the quarter ended December 31, 2000, the Company recorded additional amortization expense of $18.7 million related to its investment in CityAuction because it had
suffered a decline in value that was considered other than temporary.

During
2000 in connection with the Web Media acquisition, the Company issued 626,173 shares of Class B Common Stock with a total value of approximately $8.1 million as
contingent purchase price.

SUPPLEMENTAL
DISCLOSURE OF NON-CASH TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1999:

On
March 29, 1999, the Company completed the acquisition of CityAuction and issued an aggregate of 793,726 shares of its Class B Common Stock for a total value of
approximately $20.4 million.

On
June 14, 1999, the Company completed the acquisition of Match.com and issued 1,924,777 shares of Class B Common Stock for a total value of approximately
$43.5 million.

On
September 13, 1999, the Company purchased all the outstanding limited liability company units of Web Media by issuing 1,204,215 shares of Class B Common Stock for a
total value of approximately
$30.0 million. During 1999, an additional 61,962 shares of Class B Common Stock with a total value of approximately $2.2 million were issued as contingent purchase price.

F-30

---

On
September 17, 1999, the Company acquired certain assets associated with the entertainment city guide portion of Sidewalk from Microsoft and entered into certain distribution
and cross-promotional arrangements by issuing to Microsoft 7.0 million shares of its Class B Common Stock and two warrants to purchase an aggregate of 4.5 million shares of its
Class B Common Stock for a total value of approximately $338.8 million (See Note 5).

In
December 1999, the Company issued 243,620 shares of Class B Common Stock with a total value of approximately $10 million as part of its acquisition of Active.

In
1999, the Company realized pre-tax income of approximately $1.2 million on equity income in unconsolidated subsidiaries.

NOTE 15COMMITMENTS AND CONTINGENCIES

The Company leases office space and equipment under various operating leases that expire at various dates through 2014. Renewal options exist for a substantial
portion of the leases, and certain leases provide for free rent and escalations. Additional rental payments may be required for the Company's pro rata share of certain operating expenses associated
with office space leases. Future minimum lease payments for operating leases are as follows as of December 31, 2001 (in thousands):

Year ended December 31:2002

$
12,3932003


10,1182004


8,3652005


6,3432006


4,032Thereafter


7,575$
48,826


Rental
expense charged to operations for operating leases was approximately $15.1 million, $14.4 million and $13.1 million for the years ended December 31,
2001, 2000 and 1999, respectively.

NOTE 16RELATED PARTY TRANSACTIONS

In June 2000, the Company's Electronic Commerce Service operations with net assets of $0.2 million were transferred to USA Networks. The transfer
was accounted for as an exchange of assets between entities under common control. No gain or loss was recognized upon transfer.

During
the year ended December 31, 2001, the Company received a total of $21.3 million from USA in the form of advertising on its wholly-owned television properties,
Sci-Fi Channel and USA Network, for which no consideration was paid. Of the $21.3 million, $9.7 million was provided to satisfy an obligation of the Company to a third party
business partner and $11.6 million was provided to the Company and recorded as sales and marketing expense. The advertising provided by USA was reflected as a reduction of the
$16.0 million receivable of promotional services due from the sale of TMC Realty and as an equity contribution of $5.3 million. During the years ended December 31, 2000 and 1999,
the Company received additional equity investments of $7.3 million and $0.2 million, respectively, from

F-31

---

USA in the form of advertising on its wholly-owned television properties, Sci-Fi Channel and USA Network, for which no consideration was paid.

The
Company has $0.1 million in outstanding letters of credit which are guaranteed by USA Networks.

For
the years ended December 31, 2001 and 2000, revenues from a strategic partner and stockholder amounted to $16.0 million and $6.7 million, respectively. For the
years ended December 31, 2001 and 2000, revenue from affiliated companies amounted to $725,000 and $10,000, respectively.

NOTE 17LITIGATION

The Company from time to time is party to various legal proceedings arising in the ordinary course of business. The Company is the plaintiff in various legal
proceedings seeking injunctive relief and/or damages from third parties for breach of contract and unauthorized use of the Company's intellectual property. Management does not believe that any of the
above matters will have a material adverse impact on its operating results, financial position or cash flows, but management can give no assurance that it will not incur material damages or costs in
connection with such litigation.

The
Company is a defendant to a counter-claim brought by Tickets.com, Inc. in a lawsuit filed by the Company against Tickets.com. Tickets.com asserted claims for relief against
the Company for violation of antitrust laws and laws governing restraint of trade and unfair competition and business practices, interference with contract and declaratory relief. Tickets.com seeks
monetary damages which, if awarded, would have a material adverse effect on the Company. The Company is vigorously defending against the claims brought by Tickets.com. However, the Company can give no
assurances that it will not incur material damages or costs in connection with the litigation.

F-32

---



NOTE 18INDUSTRY SEGMENTS

The Company identifies its operating segments based on business activities, management responsibility and geographical location. The Company's chief operating
decision maker reviews financial information to manage the business consistent with the manner presented in the consolidated financial statements. The Company operates principally within the United
States. For the years ended December 31, 2001, 2000 and 1999, the Company operated principally in three industry segments: ticketing operations, personals and city guide. Industry segment
information related to other represents the Company's TMC Realty and Electronic Commerce Service operations which were sold in February 2001 and transferred in June 2000 to USA Networks,
respectively. Industry segment information is presented below for the years ended December 31, 2001, 2000 and 1999. Industry segment information related to Adjusted EBITDA represents the
Company's earnings before interest, taxes, depreciation, amortization, minority interest, merger and other non-recurring charges, advertising provided by USA Networks (for which no cash
was paid by the Company), non-cash compensation, equity in net income (loss) of unconsolidated affiliates, investment losses, net, and other income and expenses.

|                              |                      | Year Ended December 31, |          
|----------------------------- | -------------------- | ----------------------- | ---------
|
|
|Revenues                      |                      |                         |          
|                              | Ticketing operations |                         | $        
|                              | Personals            |                         |          
|                              | City guide           |                         |          
|                              | Other                |                         |          
|                              |                      |                         |          
|                              |                      | $                       | 675,184  
|                              |                      |                         |          
|Adjusted EBITDA               |                      |                         |          
|                              | Ticketing operations |                         | $        
|                              | Personals            |                         |          
|                              | City guide           |                         |          
|                              | Corporate and other  |                         |          
|                              |                      |                         |          
|                              |                      | $                       | 79,319   
|                              |                      |                         |          
|Assets                        |                      |                         |          
|                              | Ticketing operations |                         | $        
|                              | Personals            |                         |          
|                              | City guide           |                         |          
|                              | Corporate and other  |                         |          
|                              |                      |                         |          
|                              |                      | $                       | 1,394,355
|                              |                      |                         |          
|Depreciation and amortization |                      |                         |          
|                              | Ticketing operations |                         | $        
|                              | Personals            |                         |          
|                              | City guide           |                         |          
|                              | Corporate and other  |                         |          
|                              |                      |                         |          
|                              |                      | $                       | 207,199  
|                              |                      |                         |          
|Capital expenditures          |                      |                         |          
|                              | Ticketing operations |                         | $        
|                              | Personals            |                         |          
|                              | City guide           |                         |          
|                              | Corporate and other  |                         |          
|                              |                      |                         |          
|                              |                      | $                       | 32,750   
|                              |                      |                         |          

F-33

---

Reconciliation of consolidated loss from operations to Adjusted EBITDA:

Year Ended December 31,2001

2000

1999(in thousands)Loss from operations

$
(149,091
)
$
(198,363
)
$
(91,445
)Depreciation and amortization


207,199


223,889


127,921Advertising provided by USA


17,715


7,252


207Non-cash compensation


2,520


1,374


Merger and other non-recurring charges


976


4,103


4,236Segment Adjusted EBITDA

$
79,319

$
38,255

$
40,919


The
Company maintains operations in the United States, the United Kingdom, Canada and other international territories. Geographic information about the United States and international
territories for the years ended December 31, 2001, 2000 and 1999 is presented below (in thousands).

Year Ended December 31,2001

2000

1999RevenueUnited States

$
592,484

$
534,075

$
434,958All other countries


82,700


72,645


63,572$
675,184

$
606,720

$
498,530




December 31,2001

2000

1999Long-lived assetsUnited States

$
1,141,624

$
1,288,426

$
1,392,145All other countries


26,234


38,209


37,461$
1,167,858

$
1,326,635

$
1,429,606


During
the years ended December 31, 2001, 2000 and 1999, revenues related to a major client represented a significant portion of ticketing operations revenues and amounted to
approximately $99.3 million, $81.6 million and $52.2 million, respectively.

F-34

---

NOTE 19QUARTERLY RESULTS (UNAUDITED)

|                                     |  | Quarter
Ended
December 31, |         | Quarter
Ended
September 30, |   | Quarter
Ended
June 30, |   | Quarter
Ended
March 31, |        
|------------------------------------ |  | -------------------------- | ------- | --------------------------- | - | ---------------------- | - | ----------------------- | -------
|
|Year Ended December 31, 2001         |  |                            |         |                             |   |                        |   |                         |        
|Total revenue                        |  | $                          | 159,593 |                             | $ | 157,453                |   | $                       | 186,953
|Loss from operations                 |  |                            | (39,838 | )                           |   | (41,973                | ) |                         | (30,495
|Net loss                             |  |                            | (45,953 | )                           |   | (49,407                | ) |                         | (29,481
|Basic and diluted net loss per share |  |                            | (0.32   | )                           |   | (0.35                  | ) |                         | (0.21  
|Year Ended December 31, 2000         |  |                            |         |                             |   |                        |   |                         |        
|Total revenue                        |  | $                          | 144,396 |                             | $ | 147,082                |   | $                       | 166,048
|Loss from operations                 |  |                            | (69,871 | )                           |   | (50,738                | ) |                         | (37,822
|Net loss                             |  |                            | (84,860 | )                           |   | (51,244                | ) |                         | (45,789
|Basic and diluted net loss per share |  |                            | (0.60   | )                           |   | (0.36                  | ) |                         | (0.33  

Quarterly
data may not sum to the full year data reported in the Company's consolidated financial statements due to rounding.

NOTE 20SUBSEQUENT EVENT (UNAUDITED)

On March 27, 2002, the Company announced that it has entered into an agreement to acquire Soulmates Technology for approximately $23 million to be paid
primarily in stock, Soulmates Technology is a global online personals group providing dating and matchmaking services in nearly 30 countries worldwide.

F-35

---



SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

|                                 |  | Balance at
Beginning
of Period |           | Charged to
Costs and
Expenses |   | Charged to
Other
Accounts (b) |  | Deductions (a) |        | Balance at
End of
Period
|-------------------------------- |  | ------------------------------ | --------- | ----------------------------- | - | ----------------------------- |  | -------------- | ------ | ------------------------
|Allowance for doubtful accounts: |  |                                |           |                               |   |                               |  |                |        |                         
|Year ended December 31, 2001     |  | $                              | 3,085,000 |                               | $ | 4,067,000                     |  |                |       |                         
|Year ended December 31, 2000     |  |                                | 2,764,000 |                               |   | 4,227,000                     |  | $              | 13,000 |                         
|Year ended December 31, 1999     |  |                                | 188,000   |                               |   | 3,806,000                     |  |                |       |                         

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S-1

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