<PAGE>   1
 
     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 14, 1999.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                                   FORM 10-Q
 
                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
 
                 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
                      COMMISSION FILE NUMBER 333-71305-03
 
                                   USANI LLC
             (Exact name of Registrant as specified in its charter)
 
<TABLE>
<S>                                            <C>
                   DELAWARE                                      59-3490970
       (State or other jurisdiction of                        (I.R.S. Employer
        incorporation or organization)                      Identification No.)
</TABLE>
 
                              152 WEST 57TH STREET
                               NEW YORK, NEW YORK
                    (Address of principal executive offices)
 
                                     10019
                                   (Zip Code)
 
                                 (212) 314-7300
              (Registrant's telephone number, including area code)
 
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  ___   No X
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>   2
 
                        PART I -- FINANCIAL INFORMATION
 
ITEM 1.  FINANCIAL STATEMENTS
 
                           USANI LLC AND SUBSIDIARIES
 
          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
                                                                     THREE MONTHS
                                                                   ENDED MARCH 31,
---------------------------------------------------------------------------------------
                                                                 1999          1998
<S>                                                            <C>         <C>
---------------------------------------------------------------------------------------
 
<CAPTION>
                                                                    (In thousands)
<S>                                                            <C>         <C>
NET REVENUES
  Networks and television production........................   $331,753      $166,162
  Electronic retailing......................................    275,783       242,196
  Internet services.........................................      6,307         3,813
  Other.....................................................      4,046         3,187
                                                               --------      --------
     Total net revenues.....................................    617,889       415,358
                                                               --------      --------
Operating costs and expenses:
  Cost of sales.............................................    176,086       152,280
  Program costs.............................................    170,067        90,138
  Selling and marketing.....................................     62,631        40,602
  General and administrative................................     56,036        26,783
  Other operating costs.....................................     22,129        41,496
  Depreciation and amortization.............................     49,097        33,203
                                                               --------      --------
     Total operating costs and expenses.....................    536,046       384,502
                                                               --------      --------
     Operating profit.......................................     81,843        30,856
  Other income (expense):
  Interest income...........................................     10,615           978
  Interest expense..........................................    (20,378)      (18,206)
  Gain on sale of securities................................     47,300            --
  Other, net................................................      9,616        (5,673)
                                                               --------      --------
                                                                 47,153       (22,901)
                                                               --------      --------
  Earnings before income taxes and minority interest........    128,996         7,955
  Income tax expense........................................     (1,883)       (2,645)
  Minority interest.........................................        186            --
                                                               --------      --------
NET EARNINGS................................................   $127,299      $  5,310
                                                               ========      ========
</TABLE>
 
        The accompanying notes are an integral part of these statements.
 
                                        1
<PAGE>   3
 
                           USANI LLC AND SUBSIDIARIES
 
               CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
                                                              MARCH 31,      DECEMBER 31,
ASSETS                                                           1999            1998
<S>                                                           <C>            <C>
-----------------------------------------------------------------------------------------
 
<CAPTION>
                                                                    (In thousands)
<S>                                                           <C>            <C>
CURRENT ASSETS
Cash and cash equivalents...................................  $  295,435      $  234,903
Accounts and notes receivable, net of allowance of $25,757
  and $20,572, respectively.................................     306,605         317,298
Inventories, net............................................     404,921         411,727
Investment held for sale....................................      47,606              --
Other current assets, net...................................      16,833          14,685
                                                              ----------      ----------
          Total current assets..............................   1,071,400         978,613
 
PROPERTY, PLANT AND EQUIPMENT
Computer and broadcast equipment............................      91,306          79,465
Buildings and leasehold improvements........................      55,589          55,136
Furniture and other equipment...............................      39,609          45,616
                                                              ----------      ----------
                                                                 186,504         180,217
  Less accumulated depreciation and amortization............     (52,405)        (43,262)
                                                              ----------      ----------
                                                                 134,099         136,955
Land........................................................      10,242          10,242
Projects in progress........................................      20,084          14,587
                                                              ----------      ----------
                                                                 164,425         161,784
OTHER ASSETS
Intangible assets, net......................................   5,273,983       5,307,517
Cable distribution fees, net ($40,127 and $39,650,
  respectively, to related parties).........................     101,307         100,416
Long-term investments.......................................      48,322          65,327
Notes and accounts receivable, net of current portion
  ($1,250 and $3,356, respectively, from related parties)...      40,487          41,508
Inventories, net............................................     148,653         150,293
Advances to USAi and subsidiaries...........................     144,168         158,152
Deferred charges and other, net.............................      43,544          39,075
                                                              ----------      ----------
                                                              $7,036,289      $7,002,685
                                                              ==========      ==========
</TABLE>
 
        The accompanying notes are an integral part of these statements.
 
                                        2
<PAGE>   4
 
                           USANI LLC AND SUBSIDIARIES
 
               CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
                                                              MARCH 31,     DECEMBER 31,
LIABILITIES AND MEMBERS' EQUITY                                  1999           1998
<S>                                                           <C>           <C>
----------------------------------------------------------------------------------------
 
<CAPTION>
                                                                    (In thousands)
<S>                                                           <C>           <C>
CURRENT LIABILITIES
Current maturities of long-term obligations.................  $   34,523     $   28,223
Accounts payable, trade.....................................     115,178        159,288
Obligations for program rights and film costs...............     198,265        184,074
Cable distribution fees payable ($18,738 and $18,633,
  respectively, to related parties).........................      28,543         44,588
Other accrued liabilities...................................     288,322        279,084
                                                              ----------     ----------
          Total current liabilities.........................     664,831        695,257
LONG-TERM OBLIGATIONS (net of current maturities)...........     719,131        732,307
OBLIGATIONS FOR PROGRAM RIGHTS AND FILM COSTS, net of
  current...................................................     390,891        409,716
OTHER LONG-TERM LIABILITIES.................................      47,101         49,857
MINORITY INTEREST...........................................         957            143
MEMBERS' EQUITY
Class A (113,778,742) shares................................   1,753,618      1,753,618
Class B (133,689,889) shares................................   2,736,363      2,736,363
Class C (22,887,354) shares.................................     466,252        466,252
Retained earnings...........................................     216,589        142,045
Unrealized gain in available for sale securities............      40,999         17,850
Unearned compensation.......................................        (443)          (723)
                                                              ----------     ----------
          Total members' equity.............................   5,213,378      5,115,405
                                                              ----------     ----------
                                                              $7,036,289     $7,002,685
                                                              ==========     ==========
</TABLE>
 
        The accompanying notes are an integral part of these statements.
 
                                        3
<PAGE>   5
 
                           USANI LLC AND SUBSIDIARIES
 
        CONDENSED CONSOLIDATED STATEMENTS OF MEMBERS' EQUITY (UNAUDITED)
 
--------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                         CLASS A      CLASS B     CLASS C
                                                           LLC          LLC         LLC      RETAINED   UNREALIZED     UNEARNED
                                             TOTAL        SHARES       SHARES      SHARES    EARNINGS     GAINS      COMPENSATION
---------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>          <C>          <C>          <C>        <C>        <C>          <C>
BALANCE AT JANUARY 1, 1999...............  $5,115,405   $1,753,618   $2,736,363   $466,252   $142,045    $17,850       $  (723)
Comprehensive income:
  Net earnings for the three months ended
    March 31, 1999.......................     127,299           --           --         --    127,299         --            --
  Increase in unrealized gains in
    available for sale securities........      23,149           --           --         --         --     23,149            --
                                           ----------
        Comprehensive income.............     150,448
                                           ----------
Mandatory tax distribution to LLC
  partners...............................     (52,755)          --           --         --    (52,755)        --            --
Cancellation of employee equity
  program................................         280           --           --         --         --         --           280
                                           ----------   ----------   ----------   --------   --------    -------       -------
BALANCE AT MARCH 31, 1999................  $5,213,378   $1,753,618   $2,736,363   $466,252   $216,589    $40,999       $  (443)
                                           ==========   ==========   ==========   ========   ========    =======       =======
</TABLE>
 
        The accompanying notes are an integral part of these statements.
 
                                        4
<PAGE>   6
 
                           USANI LLC AND SUBSIDIARIES
 
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                    THREE MONTHS
                                                                       ENDED
                                                                     MARCH 31,
-------------------------------------------------------------------------------------
                                                                 1999         1998
-------------------------------------------------------------------------------------
                                                                   (In thousands)
<S>                                                            <C>          <C>
Cash flows from operating activities:
Net earnings................................................   $127,299     $   5,310
Adjustments to reconcile net earnings to net cash provided
  by operating activities:
  Depreciation and amortization.............................     43,007        27,593
  Amortization of cable distribution fees...................      6,090         5,610
  Amortization of program rights and film costs.............    159,261        78,238
  Equity in losses of unconsolidated affiliates.............        443         6,066
  Gain on sale of securities................................    (47,300)           --
  Non-cash stock compensation...............................        472            --
  Minority interest.........................................       (186)           --
  Changes in current assets and liabilities:
    Accounts receivable.....................................     11,477       (45,288)
    Inventories.............................................      5,332        (2,441)
    Accounts payable........................................    (44,110)       16,232
    Accrued liabilities.....................................     (8,172)       25,560
  Payment for program rights and film costs.................   (161,939)      (76,591)
  Increase in cable distribution fees.......................     (6,981)       (1,089)
  Other, net................................................     (1,657)      (25,220)
                                                               --------     ---------
        NET CASH PROVIDED BY OPERATING ACTIVITIES...........     83,036        13,980
                                                               --------     ---------
Cash flows from investing activities:
  Acquisition of Universal Transaction, net of cash
    acquired................................................         --     (1,297,233)
  Acquisitions, net of cash acquired........................     (7,500)           --
  Capital expenditures, net.................................    (10,011)       (9,701)
  Increase in long-term investments.........................    (11,385)      (12,149)
  Proceeds from long-term notes receivable..................      3,691            --
  Proceeds from sale of securities..........................     58,110            --
  Other, net................................................         --       (10,680)
                                                               --------     ---------
        NET CASH PROVIDED BY (USED IN) INVESTING
        ACTIVITIES..........................................     32,905     (1,329,763)
                                                               --------     ---------
Cash flows from financing activities:
  Borrowings................................................         --     1,499,380
  Principal payments on long-term obligations...............     (6,965)      (53,952)
  Payment of mandatory tax distribution to LLC Partners.....    (52,755)           --
  Intercompany..............................................      4,311       (75,155)
                                                               --------     ---------
        NET CASH (USED IN) PROVIDED BY FINANCING
        ACTIVITIES..........................................    (55,409)    1,370,273
                                                               --------     ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS...................     60,532        54,490
Cash and cash equivalents at beginning of period............    234,903        23,022
                                                               --------     ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD..................   $295,435     $  77,512
                                                               ========     =========
</TABLE>
 
        The accompanying notes are an integral part of these statements.
 
                                        5
<PAGE>   7
 
                           USANI LLC AND SUBSIDIARIES
 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 
NOTE A -- ORGANIZATION AND BASIS OF PRESENTATION
 
COMPANY FORMATION
 
     USANi LLC (the "Company" or "LLC"), a Delaware limited liability company,
was formed on February 12, 1998 and is a subsidiary of Home Shopping Network,
Inc. ("Home Shopping"), which is a subsidiary of USA Networks, Inc. ("USAi"),
formerly known as HSN, Inc. At its formation, USAi and Home Shopping contributed
substantially all of the operating assets and liabilities of Home Shopping to
the Company in exchange for Class A shares in the Company.
 
     On February 12, 1998, USAi acquired USA Networks, a New York general
partnership, consisting of cable television networks, USA Network and The Sci-Fi
Channel ("Networks"), as well as the domestic television production and
distribution businesses of Universal Studios ("Studios USA") from Universal
Studios, Inc. ("Universal"), an entity controlled by The Seagram Company Ltd.
("Seagram") and contributed those businesses to the Company (the "Universal
Transaction").
 
COMPANY BUSINESS
 
     The Company is a holding company, the subsidiaries of which are engaged in
diversified media and electronic commerce businesses.
 
     The three principal areas of business are:
 
     - NETWORKS AND TELEVISION PRODUCTION, which includes Networks and Studios
       USA. Networks operates the USA Network and The Sci-Fi Channel cable
       networks and Studios USA produces and distributes television programming.
 
     - ELECTRONIC RETAILING, which consists primarily of the Home Shopping
       Network and America's Store which are engaged in the electronic retailing
       business.
 
     - INTERNET SERVICES, which represents the Company's on-line retailing
       networks business.
 
BASIS OF PRESENTATION
 
     The contribution of assets by USAi and Home Shopping to the Company was
accounted for in the accompanying consolidated financial statements in a manner
similar to the pooling-of-interests for business
 
                                        6
<PAGE>   8
                           USANI LLC AND SUBSIDIARIES
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
 
NOTE A -- ORGANIZATION AND BASIS OF PRESENTATION -- (CONTINUED)
combinations due to the common ownership of Home Shopping and USANi LLC.
Accordingly, the assets and liabilities were transferred to the LLC at Home
Shopping's historical cost.
 
     Given that equity interests in limited liability companies are not in the
form of common stock, earnings per share data is not presented.
 
     The interim Condensed Consolidated Financial Statements of the Company are
unaudited and should be read in conjunction with the audited Consolidated
Financial Statements and Notes thereto for the year ended December 31, 1998
contained in the Form S-4 Registration Statement (File No. 333-71305) for the
$500.0 million 6 3/4% Senior Notes.
 
     In the opinion of the Company, all adjustments necessary for a fair
presentation of such Condensed Consolidated Financial Statements have been
included. Such adjustments consist of normal recurring items. Interim results
are not necessarily indicative of results for a full year. The interim Condensed
Consolidated Financial Statements and Notes thereto are presented as permitted
by the Securities and Exchange Commission and do not contain certain information
included in the Company's audited Consolidated Financial Statements and Notes
thereto.
 
NOTE B -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
     See the Company's Form S-4 Registration Statement (File No. 333-71305) for
the fiscal year ended December 31, 1998 for a summary of all significant
accounting policies.
 
CONSOLIDATION
 
     The consolidated financial statements include the accounts of the Company
and all wholly-owned and voting-controlled subsidiaries. All significant
intercompany transactions and accounts have been eliminated.
 
     Investments in which the Company owns a 20%, but not in excess of 50%,
interest and where it can exercise significant influence over the operations of
the investee, are accounted for using the equity method. All other investments
are accounted for using the cost method. The Company periodically evaluates the
recoverability of investments recorded under the cost method and recognizes
losses if a decline in value is determined to be other than temporary.
 
ACCOUNTING ESTIMATES
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
footnotes thereto. Actual results could differ from those estimates.
 
     Significant estimates underlying the accompanying consolidated financial
statements and notes include the inventory carrying adjustment, program rights
and film cost amortization, sales return accrual and other revenue allowance,
allowances for doubtful accounts, recoverability of intangibles and other
long-lived assets, management's forecast of anticipated revenues from the
distribution of television product in order to evaluate the ultimate
recoverability of film inventory and amortization or program usage.
 
NOTE C -- BUSINESS ACQUISITIONS
 
UNIVERSAL TRANSACTION
 
     In connection with the Universal Transaction, USAi paid Universal
approximately $4.1 billion in the form of a cash payment of approximately $1.6
billion, a portion of which ($300 million plus interest) was deferred until no
later than June 30, 1998, and an effective 45.8% interest in USAi through shares
of common stock, par value $.01 per share, of USAi (the "Common Stock") and
Class B common stock, par value $.01 per
 
                                        7
<PAGE>   9
                           USANI LLC AND SUBSIDIARIES
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
 
NOTE C -- BUSINESS ACQUISITIONS -- (CONTINUED)
share, of USAi (the "Class B Common Stock"), and shares ("LLC Shares") of a
newly formed limited liability company ("USANi LLC") which are exchangeable
(subject to regulatory restrictions) into shares of Common Stock and Class B
Common Stock. At the closing of the Universal Transaction, USAi contributed its
Home Shopping business to USANi LLC, a subsidiary of USAi. Simultaneously with
this transaction, the remaining 1,178,322 shares of Class B Common Stock were
issued in accordance with Liberty's contingent right to receive such shares as
part of the Home Shopping Merger in 1996.
 
     The Investment Agreement, as amended and restated as of December 18, 1997,
among USAi, Home Shopping, Universal and Liberty (the "Investment Agreement"),
relating to the Universal Transaction also contemplated that, on or prior to
June 30, 1998, USAi and Liberty, a subsidiary of Tele-Communications, Inc.
("TCI"), would complete a transaction involving a $300 million cash investment,
plus an interest factor, by Liberty in USAi through the purchase of Common Stock
or LLC Shares. The transaction closed on June 30, 1998 with Liberty making a
cash payment of $308.5 million in exchange for 15,000,000 LLC shares.
 
     The following unaudited pro forma condensed consolidated financial
information for the three months ended March 31, 1998, is presented to show the
results of the Company, as if the Universal Transaction had occurred as of
January 1, 1998. The pro forma results include certain adjustments, including
increased amortization related to goodwill and other intangibles, changes in
programming and film costs amortization and an increase in interest expense, and
are not necessarily indicative of what the results would have been had the
transactions actually occurred on the aforementioned dates.
 
<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED
                                                         MARCH 31, 1998
                                                       ------------------
                                                         (IN THOUSANDS)
<S>                                                    <C>
Net revenues.......................................         $572,722
Net earnings.......................................           17,328
</TABLE>
 
                                        8
<PAGE>   10
                           USANI LLC AND SUBSIDIARIES
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
 
NOTE D -- CONSOLIDATED STATEMENTS OF CASH FLOWS
 
     SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS FOR THE QUARTER ENDED
MARCH 31, 1998:
 
<TABLE>
<CAPTION>
----------------------------------------------------------------------------
                                                              (In thousands)
<S>                                                           <C>
     ACQUISITION OF USA NETWORKS AND STUDIOS USA
       Acquisition price....................................   $ 4,115,531
       Less: Amount paid in cash............................    (1,300,983)
                                                               -----------
       Total Non-Cash Consideration.........................   $ 2,814,548
                                                               ===========
     Components of Non-Cash Consideration:
       Deferred purchase price liability....................   $   300,000
       Issuance of Common Shares and Class B Shares.........       277,898
       Issuance of USANi LLC Shares.........................     2,236,650
                                                               -----------
                                                               $ 2,814,548
                                                               ===========
 
     Exchange of Minority Interest in USANi LLC for Deferred
      Purchase Price Liability..............................   $   122,711
                                                               ===========
</TABLE>
 
     During the quarter ended March 31, 1998, the Company acquired computer
equipment through a capital lease totaling $15.5 million.
 
     SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS FOR THE QUARTER ENDED
MARCH 31, 1999:
 
     During the quarter ended March 31, 1999, the Company acquired
post-production equipment through a capital lease totaling $2.0 million.
 
NOTE E -- INVENTORIES
 
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
                                                         MARCH 31,             DECEMBER 31,
                                                           1999                    1998
                                                   ---------------------   ---------------------
INVENTORIES CONSIST OF                             CURRENT    NONCURRENT   CURRENT    NONCURRENT
------------------------------------------------------------------------------------------------
                                                                  (In thousands)
<S>                                                <C>        <C>          <C>        <C>
     Film costs:
       Released, less amortization...............  $ 86,259    $ 58,773    $ 98,082    $ 61,310
       In process and unreleased.................     2,996          --         138          --
     Programming costs, net of amortization......   152,178      89,880     151,192      88,983
     Merchandise held for sale...................   163,085          --     162,315          --
     Other.......................................       403          --          --          --
                                                   --------    --------    --------    --------
               Total.............................  $404,921    $148,653    $411,727    $150,293
                                                   ========    ========    ========    ========
</TABLE>
 
     The Company estimates that approximately 90% of unamortized film costs
(including amounts allocated under purchase accounting) at March 31, 1999 will
be amortized within the next three years.
 
NOTE F -- PROGRAM RIGHTS AND FILM COSTS
 
     As of March 31, 1999, the liability for program rights, representing future
payments to be made under program contract agreements amounted to $512.7
million. Annual payments required are $158.5 million in 1999, $139.0 million in
2000, $76.3 million in 2001, $51.3 million in 2002, $36.6 million in 2003 and
$51.0 million in
 
                                        9
<PAGE>   11
                           USANI LLC AND SUBSIDIARIES
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
 
NOTE F -- PROGRAM RIGHTS AND FILM COSTS -- (CONTINUED)
2004 and thereafter. Amounts representing interest are $35.9 million and the
present value of future payments is $476.8 million.
 
     As of March 31, 1999, the liability for film costs amounted to $112.4.
Annual payments are $47.4 in 1999 and $65.0 in 2000.
 
     Unrecorded commitments for program rights consist of programs for which the
license period has not yet begun or the program is not yet available to air. As
of March 31, 1999, the unrecorded commitments amounted to $728.6 million. Annual
commitments are $55.9 million for the remainder of 1999, $125.6 million in 2000,
$157.3 million in 2001, $133.9 million in 2002, $82.2 million in 2003 and $173.7
million in 2004 and thereafter.
 
NOTE G -- INVESTMENTS
 
     During the quarter ended March 31, 1999, the Company recognized a gain of
$47.3 million on the sale of securities in a publicly traded entity.
 
     In March 1999, the Company entered into a series of financial instruments
to hedge the value of the Company's investment in securities of a publicly
traded entity. This hedge establishes a floor and ceiling for the value of these
securities and is intended to minimize the impact of market fluctuations until
the Company sells these securities. The hedge instruments expire in the third
quarter of 1999, which is within the period the Company expects to sell the
securities. The fair value of the hedge as of March 31, 1999 approximates the
carrying value.
 
NOTE H -- NOTES OFFERING AND GUARANTEES
 
     On November 23, 1998, the Company issued $500.0 million 6 3/4% Senior Notes
due 2005 (the "Notes" and "Notes Offering") with USAi, as joint and several
co-obligors. The Notes are jointly and severally guaranteed by substantially all
subsidiaries of the Company and certain wholly and non-wholly owned subsidiaries
of USAi, including Home Shopping.
 
     Full financial statements of the Guarantors have not been included because,
pursuant to their respective guarantees, the Guarantors are jointly and
severally liable with respect to the Notes. Management does not believe that the
information contained in full financial statements of the Guarantors would be
material to investors. See the USAi March 31, 1999 consolidated financial
statements filed on Form 10 Q for summarized statements setting forth certain
financial information concerning Guarantor and Non-Guarantor Subsidiaries.
 
NOTE I -- INDUSTRY SEGMENTS
 
     For the quarter ended March 31, 1999, the Company operated principally in
three industry segments: Networks and television production, Electronic
retailing and Internet services. Networks and television production consists of
the cable networks USA Network and The Sci-Fi Channel and Studios USA, which
produces and distributes television programming. The Electronic retailing
segment consists of Home Shopping Network and America's Store, which are engaged
in the sale of merchandise through electronic retailing. Internet services
represents the Company's on-line retailing network business.
 
                                       10
<PAGE>   12
                           USANI LLC AND SUBSIDIARIES
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
 
NOTE I -- INDUSTRY SEGMENTS -- (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                 THREE MONTHS ENDED
                                                                      MARCH 31,
                                                              -------------------------
                                                                1999           1998
                                                              ---------    ------------
                                                                   (IN THOUSANDS)
<S>                                                           <C>          <C>
Revenue
  Networks and television production........................  $331,753       $166,162
  Electronic retailing......................................   275,783        242,196
  Internet services.........................................     6,307          3,813
  Other.....................................................     4,046          3,187
                                                              --------       --------
                                                              $617,889       $415,358
                                                              ========       ========
Operating profit (loss)
  Networks and television production........................  $ 80,715       $ 27,872
  Electronic retailing......................................    14,409          7,781
  Internet services.........................................    (7,246)        (2,610)
  Other.....................................................    (6,035)        (2,187)
                                                              --------       --------
                                                              $ 81,843       $ 30,856
                                                              ========       ========
</TABLE>
 
NOTE J -- SUBSEQUENT EVENT
 
     On February 8, 1999, USAi USANi LLC, Lycos. Inc. ("Lycos"), Ticketmaster
Online-CitySearch, Inc. ("TMCS"), USA Interactive Inc. ("Newco") and two wholly
owned subsidiaries of Newco entered into agreements relating to the combination
of Lycos, TMCS and certain of USAi's assets in an entity to be controlled by
USAi. On May 12, 1999, the parties jointly announced that they had agreed by
mutual consent to terminate these agreements. The agreement terminating the
transaction requires Lycos to pay $25.5 million to USAi and $9.5 million to TMCS
if prior to July 15, 1999 Lycos enters into an agreement with respect to, or,
under certain circumstances, becomes subject to, certain acquisition proposals.
In addition, subject to certain exceptions, USAi and TMCS each has agreed that
until July 15, 1999 it will not acquire Lycos stock or make any proposals to
acquire Lycos.
 
                                       11
<PAGE>   13
 
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS
 
GENERAL
 
     USANi LLC (the "Company" or "LLC") is a holding company, the subsidiaries
of which are engaged in diversified media and electronic commerce businesses.
 
EBITDA
 
     Earnings before interest, income taxes, depreciation and amortization
("EBITDA") is defined as operating profit plus depreciation and amortization.
EBITDA is presented here as a management tool and as a valuation methodology for
companies in the media, entertainment and communications industries. EBITDA does
not purport to represent cash provided by operating activities. EBITDA should
not be considered in isolation or as a substitute for measures of performance
prepared in accordance with generally accepted accounting principles.
 
     THIS REPORT INCLUDES FORWARD-LOOKING STATEMENTS RELATING TO SUCH MATTERS AS
ANTICIPATED FINANCIAL PERFORMANCE, BUSINESS PROSPECTS, NEW DEVELOPMENTS, NEW
MERCHANDISING STRATEGIES AND SIMILAR MATTERS. A VARIETY OF FACTORS COULD CAUSE
THE COMPANY'S ACTUAL RESULTS AND EXPERIENCE TO DIFFER MATERIALLY FROM THE
ANTICIPATED RESULTS OR OTHER EXPECTATIONS EXPRESSED IN THE COMPANY'S
FORWARD-LOOKING STATEMENTS. THE RISKS AND UNCERTAINTIES THAT MAY AFFECT THE
OPERATIONS, PERFORMANCE, DEVELOPMENT AND RESULTS OF THE COMPANY'S BUSINESS
INCLUDE, BUT ARE NOT LIMITED TO, THE FOLLOWING: MATERIAL ADVERSE CHANGES IN
ECONOMIC CONDITIONS IN THE MARKETS SERVED BY THE COMPANY; FUTURE REGULATORY
ACTIONS AND CONDITIONS IN THE COMPANY'S OPERATING AREAS; COMPETITION FROM
OTHERS; SUCCESSFUL INTEGRATION OF THE COMPANY'S DIVISIONS' MANAGEMENT
STRUCTURES; PRODUCT DEMAND AND MARKET ACCEPTANCE; THE ABILITY TO PROTECT
PROPRIETARY INFORMATION AND TECHNOLOGY OR TO OBTAIN NECESSARY LICENSES ON
COMMERCIALLY REASONABLE TERMS; AND OBTAINING AND RETAINING KEY EXECUTIVES AND
EMPLOYEES.
 
TRANSACTIONS AFFECTING THE COMPARABILITY OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
 
     The Company has pursued several strategic initiatives that have resulted in
the acquisition and development of several new businesses. The Universal
Transaction in February 1998 caused a significant increase in net revenues,
operating costs and expenses and operating profit. To enhance comparability, the
discussion of consolidated results of operations is supplemented, where
appropriate, with separate pro forma financial information that gives effect to
the Universal Transaction as if it had occurred as of January 1, 1998. The pro
forma information is not necessarily indicative of the revenues and cost of
revenues that would have actually been reported had the Universal Transaction
occurred as of January 1, 1998, nor is it necessarily indicative of future
results.
 
A. CONSOLIDATED RESULTS OF OPERATIONS
 
     The following discussions present the material changes in the consolidated
results of operations of the Company for the quarter ended March 31, 1999,
compared with the quarter ended March 31, 1998. The operations for the quarter
ended March 31, 1998, consist of the operations of Home Shopping, and since
February 12, 1998, the results of USA Networks and Studios USA. The quarter
ended March 31, 1999 consists of the operations of Home Shopping, of USA
Networks and Studios USA for the full quarter. Reference should also be made to
the unaudited Condensed Consolidated Financial Statements included herein.
 
QUARTER ENDED MARCH 31, 1999 VS. QUARTER ENDED MARCH 31, 1998
 
     The Universal Transaction resulted in significant increases in net
revenues, operating costs and expenses, other income (expense) for the three
months ended March 31, 1999, when compared to 1998.
 
NET REVENUES
 
     For the quarter ended March 31, 1999, revenues increased $202.5 million
compared to 1998 primarily due to the inclusion of operating results of USA
Networks and Studios USA for the full quarter and increased revenues from Home
Shopping.
 
                                       12
<PAGE>   14
 
OPERATING COSTS AND EXPENSES
 
     For the quarter ended March 31, 1999, total operating costs and expenses
increased $151.5 million compared to 1998 primarily due to increased costs
associated with including the operations of USA Networks and Studios USA for the
full quarter.
 
OTHER INCOME (EXPENSE), NET
 
     For the quarter ended March 31, 1999, interest expense, net decreased $7.5
million compared to 1998 primarily due to lower borrowing levels as a result of
the repayment of bank debt from proceeds of equity transactions involving
Universal and Liberty during 1998 and lower interest rates.
 
     Other, net totaled $9.6 million in income compared to an expense of $5.7
million in 1998 primarily. The change resulted from the reversal of equity
losses which were previously recorded as a result of the Universal Transaction.
 
MINORITY INTEREST
 
     For the quarter ended March 31, 1999, minority interest represents third
parties' ownership interest in certain foreign subsidiaries.
 
QUARTER ENDED MARCH 31, 1999 VS. PRO FORMA QUARTER
ENDED MARCH 31, 1998
 
     The following unaudited pro forma operating results of the Company presents
combined results of operations as if the Universal Transaction had occurred on
January 1, 1998.
 
     The Unaudited Combined Condensed Pro Forma Statements of Operations are
presented for illustrative purposes only and are not necessarily indicative of
the results of operations that would have actually been
 
                                       13
<PAGE>   15
 
reported had the Universal transaction occurred as of January 1, 1998, nor are
they necessarily indicative of future results of operations.
 
        UNAUDITED COMBINED CONDENSED PRO FORMA STATEMENTS OF OPERATIONS
 
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
                                                                THREE MONTHS ENDED
                                                                    MARCH 31,
                                                              ----------------------
                                                                1999          1998
------------------------------------------------------------------------------------
                                                                  (In thousands)
<S>                                                           <C>           <C>
NET REVENUES:
  Networks and television production........................  $331,753      $323,526
  Electronic retailing......................................   275,783       242,196
  Internet Services.........................................     6,307         3,813
  Other.....................................................     4,046         3,187
                                                              --------      --------
          Total net revenues................................   617,889       572,722
Operating costs and expenses:
  Cost of sales.............................................   176,086       152,280
  Program costs.............................................   170,067       177,822
  Selling and marketing.....................................    62,631        61,039
  General and administrative................................    56,036        52,499
  Other operating costs.....................................    22,129        24,115
  Depreciation and amortization.............................    49,097        46,426
                                                              --------      --------
          Total operating costs and expenses................   536,046       514,181
                                                              --------      --------
          Operating profit..................................  $ 81,843      $ 58,541
                                                              ========      ========
EBITDA......................................................  $130,940      $104,967
                                                              ========      ========
</TABLE>
 
     For the quarter ended March 31, 1999, revenues for the Company increased
$45.2 million, or 7.9%, to $617.9 million from $572.7 million compared to pro
forma 1998. For the quarter ended March 31, 1999, cost of revenues and other
costs, excluding depreciation and amortization, increased $19.1 million, or
4.1%, to $486.9 million from $467.8 million compared to pro forma 1998.
 
     For the quarter ended March 31, 1999, pro forma EBITDA increased $25.9
million, or 24.7%, to $130.9 million from $105.0 million compared to 1998.
 
     The following discussion provides an analysis of the aforementioned
increases in pro forma revenues and costs of revenues and other costs, excluding
depreciation and amortization by significant business segment.
 
  Networks and Television Production
 
     Net revenues for the quarter ended March 31, 1999 increased by $8.3
million, or 2.6%, to $331.8 million from $323.5 million compared to 1998. The
increase primarily resulted from an increase in advertising revenues and
affiliate revenues at USA Network and The Sci-Fi Channel and increased
deliveries of and advertising revenue from first run product at the television
production business. The increase was partially offset by fewer deliveries of
network product and an increased usage of internally produced series for which
revenue recognition is deferred until aired on USA Network and The Sci-Fi
Channel.
 
     Cost of revenues and other costs decreased by $16.7 million, or 7.0%, to
$222.9 million from $239.6 million. The decrease results primarily from lower
overhead and marketing costs, the sale of first run product at higher margins
and increased usage of internally produced product.
 
     EBITDA for the quarter ended March 31, 1999 increased $25.0 million, or
29.8%, to $108.9 million from $83.9 million compared to pro forma 1998.
 
                                       14
<PAGE>   16
 
  Electronic Retailing
 
     Net revenues for the quarter ended March 31, 1999 increased by $33.6
million, or 13.9%, to $275.8 million from $242.2 million compared to 1998. The
increase resulted from higher revenues on both the Home Shopping Network and
America's Store services, higher continuity (or off-air) sales and the launch of
Home Shopping en Espanol on March 30, 1998. The increases were partially offset
by a planned decrease in the mail order business.
 
     Cost of revenues and other costs increased by $24.6 million, or 11.3%, to
$241.4 million from $216.8 million. This increase resulted primarily from higher
sales (gross margin increased to 38.3% in 1999 compared to 38.2% in 1998),
severance costs and higher merchandising personnel costs. Also contributing to
the increase in costs was cost of sales of Home Shopping en Espanol and costs
associated with developing the Company's Short Shopping concept.
 
     EBITDA for the quarter ended March 31, 1999 increased $9.0 million, or
35.4%, to $34.4 million from $25.4 million compared to 1998.
 
  Internet Services
 
     Net revenues for the quarter ended March 31, 1999 increased by $2.5
million, or 65.8%, to $6.3 million from $3.8 million in 1998. The increase
resulted from an increase in registered users to USAi's primary online retailing
service, First Auction, which was partially offset by the shut down of another
service during 1998.
 
     Cost of revenues and other costs for the quarter ended March 31, 1999
increased by $7.0 million, or 114.8%, to $13.1 million from $6.1 million in
1998. The increase resulted primarily from increased costs to maintain and
enhance the Internet services and increased advertising and promotion costs. An
increased loss is expected for the remainder of 1999 as new sites are rolled
out.
 
     EBITDA loss for the quarter ended March 31, 1999 decreased $4.5 million, to
($6.8) million from ($2.3) million in 1998.
 
  Other
 
     Other costs related to revenues and other costs and expenses include
corporate expenses.
 
              FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
 
     The operating results and capital resources and liquidity requirements of
USANi, Holdco and USANi LLC are dependent on each other. The investment
agreement, among Universal, Liberty, USAi and Holdco requires that no less
frequently than monthly, (1) all cash generated by entities not owned by USANi
LLC be transferred to USANi LLC and (2) any cash needs by entities not owned by
USANi LLC be funded by USANi LLC. In addition, USAi and USANi LLC are jointly
and severally obligated under the notes. The following discussion of financial
resources, liquidity and capital resources is presented on a consolidated basis.
 
     Net cash provided by operating activities was $83.0 million for Holdco and
USANi LLC for the quarter ended March 31, 1999. These cash proceeds were used to
pay for capital expenditures of $10.0 million for Holdco and USANi LLC, for
long-term investments totaling $11.4 million for Holdco and USANi LLC and to
provide funding to USAi. In addition, USANi LLC sold securities in a publicly
traded entity which generated cash proceeds of $58.1 million.
 
     Under the investment agreement, transfers of cash between USAi and USANi
LLC are evidenced by a demand note and accrue interest at USANi LLC's borrowing
rate under the existing credit agreement. Certain transfers of funds between
Holdco, USANi LLC and USAi are not evidenced by a demand note and do not accrue
interest, primarily relating to the establishment of the operations of USANi LLC
and capital contributions from USAi into USANi LLC. During the quarter ended
March 31, 1999, net transfers from USANi LLC to USAi totaling approximately
$16.3 million were made to fund the operations of USAi's television broadcast
operations, fund ticketing operations and purchase shares of treasury stock.
 
                                       15
<PAGE>   17
 
     On February 12, 1998, USAi and USANi LLC, as borrower, entered into the
credit agreement which provides for a $1.6 billion credit facility. The credit
facility was used to finance the Universal transaction and to refinance USAi's
then-existing $275.0 million revolving credit facility. The credit facility
consists of (1) a $600.0 million revolving credit facility with a $40.0 million
sub-limit for letters of credit, (2) a $750.0 million Tranche A Term Loan and,
(3) a $250.0 million Tranche B Term Loan. On August 5, 1998, USANi LLC
permanently repaid the Tranche B Term Loan in the amount of $250.0 million from
cash on hand. The Tranche B Term Loan was scheduled to mature on December 31,
2003. The revolving credit facility and the Tranche A Term Loan mature on
December 31, 2002.
 
     On November 23, 1998, USAi completed an offering of $500.0 million 6 3/4%
Senior Notes due 2005 (the "Notes"). Proceeds received from the sale of the
Notes together with available cash were used to repay and permanently reduce
$500.0 million of the Tranche A Term Loan. The existing credit facility is
guaranteed by substantially all of USAi's material subsidiaries. The interest
rate on borrowings under the existing credit facility is tied to an alternate
base rate or the London InterBank Rate, in each case, plus an applicable margin.
As of March 31, 1999 and as of May 7, 1999, there was $243.7 million in
outstanding borrowings under the Tranche A Term Loan and, under the revolving
credit portion of the credit facility, $599.9 million was available for
borrowing after taking into account outstanding letters of credit. As of March
31, 1999, the interest rate on loans outstanding under the Tranche A Term Loan
was 5.75%.
 
     Under the investment agreement relating to the Universal transaction, USAi
has granted to Universal and Liberty preemptive rights with respect to future
issuances of USAi's common stock and Class B common stock. These preemptive
rights generally allow Universal and Liberty the right to maintain an ownership
percentage equal to the ownership percentage that entity held, on a fully
converted basis, immediately prior to the issuance. In addition, Universal had
certain mandatory purchase obligations with respect to USAi's common stock or
USANi LLC shares issued with respect to the conversion of the Home Shopping
Debentures and the Ticketmaster tax-free merger. All of the events for which
Universal had mandatory purchase obligations have occurred.
 
     As part of the Universal transaction, USAi entered into a joint venture
agreement relating to the development of international general entertainment
television channels including international versions of USA Network, The Sci-Fi
Channel and Universal's action/adventure channel, 13th Street. USAi has elected
to have Universal buy out its 50% interest in the venture. Accordingly, during
the quarter ended March 31, 1999 USANi LLC reversed amounts previously recorded
for its share of losses of the joint venture.
 
     USAi anticipates that it will need to invest working capital towards the
development and expansion of its overall operations. Due primarily to the
expansion of the Internet business future capital expenditures are projected to
be higher than current amounts.
 
                                       16
<PAGE>   18
 
     On March 1, 1999, the Company made a mandatory tax distribution payment to
the LLC partners in the amount of $52.8 million, including $23.9 million to
USAi. Under the terms of the investment agreement, USAi loaned that amount back
to USANi LLC.
 
     In management's opinion, available cash, internally generated funds and
available borrowings will provide sufficient capital resources to meet the
Company's foreseeable needs.
 
OTHER MATTERS
 
     The Company is currently working to resolve the potential impact of the
year 2000 on the processing of date-sensitive information by its computerized
information systems.
 
     Although assessment of non-critical systems is an ongoing process, the
Company has substantially completed its detailed assessment of all of its
information technology and non-information technology hardware and software to
assess the scope of its year 2000 issue. The Company has potential exposure in
technological operations within the sole control of its technological operations
which are dependent in some way on one or more third parties. The Company
believes that it has identified all significant technological areas within its
control. the Company has ongoing communications with significant vendors and
customers to confirm their plans to become Year 2000 compliant and is assessing
any possible risk to or effects on its operations.
 
     The Company believes that, with respect to technological operations which
are dependent on third parties, the significant areas of potential risk are the
ability of satellite and cable operators to receive the signal transmission of
USA Network, The Sci-Fi Channel and the Home Shopping Network and America's
Store services, and the ability of banks and credit card processors to process
credit card transactions. Remediation of critical systems that are not Year 2000
compliant is nearly complete. The Company expects its Year 2000 assessment,
remediation, implementation and testing to be completed by the end of the second
quarter of 1999, except for some of its systems at Home Shopping Network which
are scheduled to be completed by September 1999.
 
                                       17
<PAGE>   19
 
     It is not possible at this time to predict with any reasonable certainty
the total cost to address all Year 2000 issues. However, the Company believes
that the total costs associated with the Year 2000 assessment, remediation,
implementation and testing will not exceed $10 million of which approximately $4
million has been spent through April 30, 1999. This amount is exclusive of
capital expenditures that have either been made or are currently planned to be
made to replace existing hardware and software systems, all as part of its
ongoing efforts to upgrade its infrastructure and systems.
 
     Accordingly, based on existing information, the Company believes that the
costs of addressing potential problems will not have a material adverse effect
on its financial position, results of operations or cash flows. However, if the
Company, its customers or vendors were unable to resolve the issues in a timely
manner, it could result in a material adverse effect on its financial position,
results of operations or cash flows. The Company plans to devote the necessary
resources to resolve all significant year 2000 issues in a timely manner.
 
     The Company is currently focusing its efforts on identification and
remediation of its Year 2000 exposures and has not yet developed contingency
plans in the event it does not successfully complete all phases of its Year 2000
program. The Company is currently examining its status and will continue to
examine its status by the end of the first quarter of 1999, and periodically
thereafter, to determine whether such plans are necessary.
 
                                  SEASONALITY
 
     The Company's businesses are subject to the effects of seasonality.
 
     Networks and Television Production revenues are influenced by advertiser
demand and the seasonal nature of programming, and generally peak in the spring
and fall.
 
     The Company believes seasonality impacts its Electronic Retailing segment
but not to the same extent it impacts the retail industry in general.
 
                                       18
<PAGE>   20
 
                          PART II -- OTHER INFORMATION
 
ITEM 1.  LEGAL PROCEEDINGS
 
     In the ordinary course of business, the Company and its subsidiaries are
parties to litigation involving property, personal injury, contract and other
claims. The amounts that may be recovered in these matters may be subject to
insurance coverage and, although there can be no assurance in this regard, are
not expected to be material to the financial position or operations of the
Company.
 
FEDERAL TRADE COMMISSION MATTER
 
     Home Shopping Network is involved from time to time in investigations and
enforcement actions by consumer protection agencies and other regulatory
authorities. Effective October 2, 1996, the Federal Trade Commission and Home
Shopping Network and two of its subsidiaries entered into a consent order under
which Home Shopping Network agreed that it will not make claims for specified
categories of products, including any claim that any product can cure, treat or
prevent illness, or affect the structure or function of the human body, unless
it possesses competent and reliable scientific evidence to substantiate the
claims. The settlement did not represent an admission of wrongdoing by Home
Shopping Network, and did not require the payment of any monetary damages. The
FTC investigated Home Shopping Network's compliance with its consent order and
indicated to Home Shopping Network that it believed Home Shopping Network had
not complied with the consent order. Effective April 29, 1999, Home Shopping
Network settled the FTC's claims that it had violated the consent order. The FTC
filed a complaint in Federal District Court in Tampa, Florida and entered a
consent decree, under which Home Shopping Network paid a civil penalty of $1.1
million and was enjoined from violating the consent order. The settlement did
not constitute an admission of wrongdoing by Home Shopping Network.
 
ASCAP LITIGATION
 
     Networks, along with almost every other satellite-delivered network, is
involved in continuing disputes regarding the amounts to be paid by it for the
performance of copyrighted music from members of the American Society of
Composers, Authors and Publishers and by Broadcast Music, Inc. The payments to
be made to the American Society will be determined in a "rate court" proceeding
under the jurisdiction of the U.S. District Court in the Southern District of
New York. In the initial phase of this proceeding, it was determined that
Networks must pay the American Society a specified interim fee, calculated as a
percentage of the gross revenues of each of USA Network and The Sci-Fi Channel.
This fee level is subject to upward or downward adjustment in future rate court
proceedings, or as the result of future negotiations, for all payments
subsequent to January 1, 1986 with respect to USA Network and for all payments
subsequent to launch with respect to The Sci-Fi Channel. All American Society
claims prior to these times have been settled and are final. As to Broadcast
Music, Networks has agreed with Broadcast Music with respect to certain interim
fees to be paid by both USA Network and The Sci-Fi Channel. Subsequent to July
1, 1992 and subsequent to launch of The Sci-Fi Channel, respectively, these
interim fees are subject to upward or downward adjustment, based on a future
negotiated resolution or submission of the issue to Broadcast Music's own
federal "rate court." The Company cannot predict the final outcome of these
disputes, but does not believe that it will suffer any material liability as a
result of them.
 
URBAN LITIGATION
 
     Beginning in October 1996, Home Shopping Club, Inc., predecessor in
interest to Home Shopping Club, L.P., withheld monthly payments under the
Affiliation Agreement with Urban Broadcasting Corporation due to breaches of the
Affiliation Agreement by Urban. Urban has contested this action. In addition, on
January 10, 1997, Urban filed an Emergency Request for Declaratory Ruling with
the FCC requesting an order that the requirement in the Affiliation Agreement
that Urban broadcast at full power violates the FCC's rules, or alternatively,
requesting that the FCC revise the terms of the Affiliation Agreement to bring
it into compliance with its rules. Urban also requested that the FCC undertake
an inquiry into USAi's actions of withholding payments to Urban to determine
whether USAi is fit to remain an FCC licensee. As of this date, no ruling has
been issued by the Commission.
 
                                       19
<PAGE>   21
 
     On October 23, 1997, HSC filed suit against Urban in the Circuit Court for
Arlington County, Virginia seeking a judicial declaration that it was entitled
to withhold the payments in dispute because of Urban's breaches of the
Affiliation Agreement. Urban has responded with counterclaims and began a
related action in the Circuit Court against HSC, HSN, Inc. (now USAi) and Silver
King Broadcasting of Virginia, Inc. (now USA Station Group of Virginia, Inc.).
Urban has asserted contract and tort claims related to HSC's decision to
withhold affiliation payments. On April 5-7, 1999, a trial was held and the
court ruled that Urban's evidence be struck and that judgment by entered in
favor of Home Shopping Club LP, USAi and USA Station Group of Virginia, Inc. on
all counts of Urban's First Amended Motion for Judgment. Further, the court
ruled that the related chancery action, which had been consolidated with the law
action for trial, be severed for further proceedings at some future date. A
Final Order of Judgment concerning the above rulings was entered by the court on
May 5, 1999. On or about May 3, 1999, HSC, USAi and USA Station Group of
Virginia, Inc. filed a Motion for Summary Judgment directed to all remaining
counts in the chancery action. A hearing on that motion is currently set for
June 3, 1999. USAi, HSC and USA Station Group of Virginia continue to defend the
case vigorously.
 
     The Company is engaged in various other lawsuits either as plaintiff or
defendant. In the opinion of management, the ultimate outcome of these various
lawsuits should not have a material impact on the Company.
 
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
 
     (a) Exhibits
 
<TABLE>
<CAPTION>
  EXHIBIT
   NUMBER         DESCRIPTION
  -------         -----------
<C>          <C>  <S>
    27.1      --  Financial Data Schedule (for SEC use only)
    27.2      --  Financial Data Schedule (for SEC use only)
</TABLE>
 
     (b) Reports on Form 8-K.
 
        None.
 
                                       20
<PAGE>   22
 
                                   SIGNATURES
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
 
                                          USA NETWORKS, INC.
 
                                          --------------------------------------
                                          (Registrant)
 
<TABLE>
<C>                                               <S>
                 Dated              May 14, 1999  /s/ BARRY DILLER
        ----------------------------------------  --------------------------------------------------------
                                                  Barry Diller
                                                  Chairman of the Board and
                                                  Chief Executive Officer
 
                 Dated              May 14, 1999  /s/ VICTOR A. KAUFMAN
        ----------------------------------------  --------------------------------------------------------
                                                  Victor A. Kaufman
                                                  Office of the Chairman,
                                                  Chief Financial Officer
                                                  (Principal Financial Officer)
 
                 Dated              May 14, 1999  /s/ MICHAEL P. DURNEY
        ----------------------------------------  --------------------------------------------------------
                                                  Michael P. Durney
                                                  Vice President, Controller
                                                  (Chief Accounting Officer)
</TABLE>
 
                                       21
<PAGE>   23
 
                                   USANi LLC
 
                                   FORM 10-Q
 
                             For the Quarter Ended
                                 March 31, 1999
<PAGE>   24
 
                                   USANi LLC