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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

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(Mark One)

|ý | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the period ended June 30, 2002
|- | --------------------------------------------------------------------------------------------------------------------------

OR

|o | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ----------------------------------------------------------------------------------------

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(I.R.S. Employer
Identification Number)


3701 Wilshire Boulevard, Los Angeles, CA 90010(Address of principal executive offices)

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

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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.



As
of June 30, 2002 there were 101,245,722 shares of the Registrant's Class B Common Stock outstanding and 42,725,692 shares of the Registrant's Class A Common Stock
outstanding (in each case excluding shares of such class which are held by one of the Registrant's wholly-owned subsidiaries). Only the Company's Class B Common Stock is publicly traded.

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TICKETMASTER    FORM 10-Q    INDEX

|                             |  | Page No.                                                                                     
|---------------------------- |  | ---------------------------------------------------------------------------------------------
|PART IFINANCIAL INFORMATION |  | 3                                                                                            
|                             |  | Item 1. Financial Statements                                                                 
|                             |  | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
|                             |  | Item 3. Quantitative and Qualitative Disclosures about Market Risk                           
|PART IIOTHER INFORMATION    |  | 22                                                                                           
|                             |  | Item 1. Legal Proceedings                                                                    
|                             |  | Item 2. Changes in Securities and Use of Proceeds                                            
|                             |  | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                             |  | Item 6. Exhibits and Reports on Form 8-K                                                     
|                             |  | SIGNATURES                                                                                   

2

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PART IFINANCIAL INFORMATION

Item 1. Financial Statements

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

|                                                    |                                                    | June 30,
2002                                                                                                                                         |                                            | December 31, 2001 |          
|--------------------------------------------------- | -------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ----------------- | ---------
|
|ASSETS                                              |                                                   
|Current assets:                                     |                                                    |                                                                                                                                                       |                                            |                   |          
|                                                    | Cash and cash equivalents                          |                                                                                                                                                       | $                                          | 256,380           |          
|                                                    | Marketable securities                              |                                                                                                                                                       |                                            |                  |          
|                                                    | Accounts receivable, ticket sales                  |                                                                                                                                                       |                                            | 53,818            |          
|                                                    | Accounts receivable, trade                         |                                                                                                                                                       |                                            | 21,377            |          
|                                                    | Contract advances                                  |                                                                                                                                                       |                                            | 12,420            |          
|                                                    | Prepaid expenses and other current assets          |                                                                                                                                                       |                                            | 14,651            |          
|                                                    |                                                    |                                                                                                                                                       |                                            |                   |          
|                                                    |                                                    | Total current assets                                                                                                                                  |                                            |                   | 358,646  
|Property, equipment and leasehold improvements, net |                                                    |                                                                                                                                                       | 83,390                                     |                   |          
|Goodwill                                            |                                                    |                                                                                                                                                       | 796,574                                    |                   |          
|Other intangibles, net                              |                                                    |                                                                                                                                                       | 126,180                                    |                   |          
|Other assets                                        |                                                    |                                                                                                                                                       | 49,445                                     |                   |          
|Deferred income taxes, net                          |                                                    |                                                                                                                                                       |                                           |                   |          
|                                                    |                                                    |                                                                                                                                                       |                                            |                   |          
|                                                    |                                                    | Total assets                                                                                                                                          |                                            | $                 | 1,414,235
|                                                    |                                                    |                                                                                                                                                       |                                            |                   |          
|LIABILITIES AND STOCKHOLDERS' EQUITY                |                                                   
|Current liabilities:                                |                                                    |                                                                                                                                                       |                                            |                   |          
|                                                    | Current portion of capital leases                  |                                                                                                                                                       | $                                          | 630               |          
|                                                    | Accounts payable, trade                            |                                                                                                                                                       |                                            | 13,119            |          
|                                                    | Accounts payable, clients                          |                                                                                                                                                       |                                            | 160,183           |          
|                                                    | Accrued expenses                                   |                                                                                                                                                       |                                            | 77,453            |          
|                                                    | Due to USA and affiliates                          |                                                                                                                                                       |                                            | 1,176             |          
|                                                    | Deferred revenue                                   |                                                                                                                                                       |                                            | 21,179            |          
|                                                    |                                                    |                                                                                                                                                       |                                            |                   |          
|                                                    |                                                    | Total current liabilities                                                                                                                             |                                            |                   | 273,740  
|Capital leases, net of current portion              |                                                    |                                                                                                                                                       | 177                                        |                   |          
|Deferred income taxes, net                          |                                                    |                                                                                                                                                       | 3,937                                      |                   |          
|Other long-term liabilities                         |                                                    |                                                                                                                                                       | 13,079                                     |                   |          
|Minority interest                                   |                                                    |                                                                                                                                                       | 1,095                                      |                   |          
|Stockholders' equity:                               |                                                    |                                                                                                                                                       |                                            |                   |          
|                                                    | Preferred stock, $0.01 par value:                  |                                                                                                                                                       |                                            |                   |          
|                                                    |                                                    | Authorized shares2,000,000 at June 30, 2002
Issued and outstandingnone                                                                              |                                            |                   |         
|                                                    | Convertible Class A Common Stock, $0.01 par value: |                                                                                                                                                       |                                            |                   |          
|                                                    |                                                    | Authorized shares100,000,000 at June 30, 2002
Issued and outstanding42,725,692 and 43,651,566 at June 30, 2002 and December 31, 2001, respectively  |                                            |                   | 427      
|                                                    | Class B Common Stock$0.01 par value:              |                                                                                                                                                       |                                            |                   |          
|                                                    |                                                    | Authorized shares250,000,000 at June 30, 2002
Issued and outstanding101,245,722 and 98,074,251 at June 30, 2002 and December 31, 2001, respectively |                                            |                   | 1,012    
|                                                    | Class C Common Stock$0.01 par value:              |                                                                                                                                                       |                                            |                   |          
|                                                    |                                                    | Authorized shares2,883,506 at June 30, 2002
Issued and outstandingnone                                                                              |                                            |                   |         
|                                                    | Additional paid-in capital                         |                                                                                                                                                       |                                            | 1,760,706         |          
|                                                    | Accumulated deficit                                |                                                                                                                                                       |                                            | (641,436          | )        
|                                                    | Accumulated other comprehensive income (loss)      |                                                                                                                                                       |                                            | 1,498             |          
|                                                    |                                                    |                                                                                                                                                       |                                            |                   |          
|                                                    |                                                    | Total stockholders' equity                                                                                                                            |                                            |                   | 1,122,207
|                                                    |                                                    |                                                                                                                                                       |                                            |                   |          
|                                                    |                                                    |                                                                                                                                                       | Total liabilities and stockholders' equity |                   | $        
|                                                    |                                                    |                                                                                                                                                       |                                            |                   |          

See accompanying notes to condensed consolidated financial statements.

3

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

|                                                                                                |                                                             | Three Months Ended
June 30,              |         | Six Months Ended
June 30, |        
|----------------------------------------------------------------------------------------------- | ----------------------------------------------------------- | ---------------------------------------- | ------- | ------------------------- | -------
|
|
|Revenues:                                                                                       |                                                             |                                          |         |                           |        
|                                                                                                | Ticketing operations                                        |                                          | $       | 175,406                   |        
|                                                                                                | Personals                                                   |                                          |         | 29,523                    |        
|                                                                                                | City guide                                                  |                                          |         | 7,587                     |        
|                                                                                                | Other                                                       |                                          |         |                          |        
|                                                                                                |                                                             |                                          |         |                           |        
|                                                                                                |                                                             | Total revenues                           |         |                           | 212,516
|                                                                                                |                                                             |                                          |         |                           |        
|Operating costs and other expenses:                                                             |                                                             |                                          |         |                           |        
|                                                                                                | Ticketing operations                                        |                                          |         | 109,762                   |        
|                                                                                                | Personals operations                                        |                                          |         | 10,221                    |        
|                                                                                                | City guide operations                                       |                                          |         | 6,503                     |        
|                                                                                                | Other                                                       |                                          |         |                          |        
|                                                                                                | Sales and marketing                                         |                                          |         | 19,390                    |        
|                                                                                                | General and administrative                                  |                                          |         | 24,753                    |        
|                                                                                                | Depreciation and amortization                               |                                          |         | 24,284                    |        
|                                                                                                |                                                             |                                          |         |                           |        
|                                                                                                |                                                             | Total operating costs and other expenses |         |                           | 194,913
|                                                                                                |                                                             |                                          |         |                           |        
|Income (loss) from operations                                                                   |                                                             |                                          | 17,603  |                           |        
|                                                                                                |                                                             |                                          |         |                           |        
|Other (income) expenses:                                                                        |                                                             |                                          |         |                           |        
|                                                                                                | Interest income                                             |                                          |         | (1,148                    | )      
|                                                                                                | Interest expense                                            |                                          |         | 60                        |        
|                                                                                                | Equity in net income of unconsolidated affiliates           |                                          |         | (427                      | )      
|                                                                                                |                                                             |                                          |         |                           |        
|                                                                                                |                                                             | Total other (income) expenses            |         |                           | (1,515 
|                                                                                                |                                                             |                                          |         |                           |        
|Income (loss) before income taxes, minority interest and cumulative effect of accounting change |                                                             |                                          | 19,118  |                           |        
|Minority interest in income (loss)                                                              |                                                             |                                          | 162     |                           |        
|Income tax provision                                                                            |                                                             |                                          | 4,283   |                           |        
|                                                                                                |                                                             |                                          |         |                           |        
|Income (loss) before cumulative effect of accounting change                                     |                                                             |                                          | 14,673  |                           |        
|Cumulative effect of accounting change                                                          |                                                             |                                          |        |                           |        
|                                                                                                |                                                             |                                          |         |                           |        
|Net income (loss)                                                                               |                                                             | $                                        | 14,673  |                           | $      
|                                                                                                |                                                             |                                          |         |                           |        
|Income (loss) per share:                                                                        |                                                             |                                          |         |                           |        
|                                                                                                | Income (loss) before cumulative effect of accounting change |                                          | $       | 0.10                      |        
|                                                                                                | Cumulative effect of accounting change                      |                                          |         |                          |        
|                                                                                                |                                                             |                                          |         |                           |        
|                                                                                                | Basic and diluted net income (loss) per share               |                                          | $       | 0.10                      |        
|                                                                                                |                                                             |                                          |         |                           |        
|Shares used to compute basic net income (loss) per share                                        |                                                             |                                          | 143,834 |                           |        
|                                                                                                |                                                             |                                          |         |                           |        
|Shares used to compute diluted net income (loss) per share                                      |                                                             |                                          | 145,295 |                           |        
|                                                                                                |                                                             |                                          |         |                           |        

See
accompanying notes to condensed consolidated financial statements.

4

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TICKETMASTER        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS        (in thousands)

|                                                     |                                                                                 | Six Months Ended
June 30,                         |                                                    
|---------------------------------------------------- | ------------------------------------------------------------------------------- | ------------------------------------------------- | ---------------------------------------------------
|
|
|Operating activities:                                |                                                                                 |                                                   |                                                    
|                                                     | Net loss                                                                        |                                                   | $                                                  
|                                                     | Adjustments to reconcile net loss to net cash provided by operating activities: |                                                   |                                                    
|                                                     |                                                                                 | Depreciation and amortization                     |                                                    
|                                                     |                                                                                 | Cumulative effect of accounting change            |                                                    
|                                                     |                                                                                 | Income (loss) attributable to minority interests  |                                                    
|                                                     |                                                                                 | Equity in net income of unconsolidated affiliates |                                                    
|                                                     |                                                                                 | Benefit for deferred income taxes                 |                                                    
|                                                     |                                                                                 | Advertising provided by USA                       |                                                    
|                                                     |                                                                                 | Non-cash compensation                             |                                                    
|                                                     | Changes in operating assets and liabilities:                                    |                                                   |                                                    
|                                                     |                                                                                 | Accounts receivable, ticket sales                 |                                                    
|                                                     |                                                                                 | Accounts receivable, trade                        |                                                    
|                                                     |                                                                                 | Due (from) to USA and affiliates                  |                                                    
|                                                     |                                                                                 | Prepaid expenses and other current assets         |                                                    
|                                                     |                                                                                 | Accounts payable, trade                           |                                                    
|                                                     |                                                                                 | Accounts payable, clients                         |                                                    
|                                                     |                                                                                 | Accrued expenses                                  |                                                    
|                                                     |                                                                                 | Deferred revenue                                  |                                                    
|                                                     |                                                                                 |                                                   |                                                    
|                                                     |                                                                                 |                                                   | Net cash provided by operating activities          
|                                                     |                                                                                 |                                                   |                                                    
|Investing activities:                                |                                                                                 |                                                   |                                                    
|                                                     | Capital expenditures                                                            |                                                   |                                                    
|                                                     | Acquisitions, net of cash acquired                                              |                                                   |                                                    
|                                                     | Proceeds from sale of marketable securities                                     |                                                   |                                                    
|                                                     | Purchase of marketable securities                                               |                                                   |                                                    
|                                                     | Other                                                                           |                                                   |                                                    
|                                                     |                                                                                 |                                                   |                                                    
|                                                     |                                                                                 |                                                   | Net cash used in investing activities              
|                                                     |                                                                                 |                                                   |                                                    
|Financing activities:                                |                                                                                 |                                                   |                                                    
|                                                     | Advances from (to) USA                                                          |                                                   |                                                    
|                                                     | Proceeds from borrowings                                                        |                                                   |                                                    
|                                                     | Debt payments                                                                   |                                                   |                                                    
|                                                     | Dividends paid to minority shareholders of consolidated subsidiaries            |                                                   |                                                    
|                                                     | Net proceeds from exercise of stock options                                     |                                                   |                                                    
|                                                     |                                                                                 |                                                   |                                                    
|                                                     |                                                                                 |                                                   | Net cash provided by (used in) financing activities
|                                                     |                                                                                 |                                                   |                                                    
|Effect of exchange rate on cash and cash equivalents |                                                                                 |                                                   | 3,001                                              
|                                                     |                                                                                 |                                                   |                                                    
|Net increase in cash and cash equivalents            |                                                                                 |                                                   | 113,489                                            
|Cash and cash equivalents at beginning of period     |                                                                                 |                                                   | 142,891                                            
|                                                     |                                                                                 |                                                   |                                                    
|Cash and cash equivalents at end of period           |                                                                                 | $                                                 | 256,380                                            
|                                                     |                                                                                 |                                                   |                                                    

See
accompanying notes to condensed consolidated financial statements.

5

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Ticketmaster        Notes to Condensed Consolidated Financial Statements        (unaudited)

Note 1The Company and Summary of Significant Accounting Policies

Description of Business

Ticketmaster (the "Company") provides automated ticketing services to its client venues, promoters and sport franchises, which provide patrons with the
alternatives of purchasing tickets through operator-staffed call centers, the Internet and independent sales outlets. Ticketmaster also operates an online personals service providing singles with a
way to meet others online and other Internet-related businesses. Through its City guide segment, the Company offers comprehensive local city guides on the Internet, providing
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.

Basis of Presentation

The consolidated financial statements include the accounts of Ticketmaster, its wholly-owned subsidiaries and majority-owned companies and joint ventures in which
the Company exercises significant influence over operating and financial policies.

The
accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission
("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been
condensed or omitted pursuant to such rules and regulations. The balance sheet at December 31, 2001 was derived from audited financial statements, but does not include all disclosures required
by generally accepted accounting principles. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated
financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2001.

The
unaudited condensed consolidated financial statements included herein reflect all adjustments (which include only normal, recurring adjustments) which are, in the opinion of
management, necessary to fairly state the results for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of the operating results
to be expected for the full fiscal year or any future periods.

Certain
reclassifications have been made to prior period balances in order to conform to the current period presentation.

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.

Basic and Diluted Net Income (Loss) per Share

Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per
share is computed using the weighted-average number of common shares outstanding plus the dilutive effects of stock options and

6

---

warrants. Basic and diluted net loss per share are the same for the three months and six months ended June 30, 2001 because the effects of outstanding stock options and warrants are
antidilutive.

Note 2Adoption of SFAS No. 142

Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standard No. 142 ("SFAS No. 142"),
"Goodwill and Other Intangible Assets." Under SFAS No. 142, goodwill and other intangible assets with indefinite lives are not amortized. The
carrying amount of goodwill is assessed for recoverability at least annually with the first test date on the date of adoption. Interim tests are performed if indicators of impairment exist. Such
indicators include, among other things, unanticipated competition, an adverse action or assessment by a regulator, or an adverse change in legal factors or in the business climate. An impairment
exists when the carrying amount of goodwill or other intangibles exceeds its implied fair value. The Company determines fair value using the market value method or the present value method of
measurement of future cash flows. Under the market value method, the Company uses the average of quoted market prices over a specified time period as its best estimate of fair value. The present value
method includes the estimation of a cash flow stream, applying a discount rate. The Company's best estimate of future cash flows is determined using its internal budgets as the basis. The discount
rate used is commensurate with the risks involved, including the nature of the business, the time value of money, expectations about the amount or timing of future cash flows, and factors affecting
liquidity. Upon the adoption of FAS 142, the Company recorded a goodwill impairment loss related to the City guide segment of approximately $59.0 million and an impairment of the
Sidewalk intangible of approximately $55.8 million for a total impairment of approximately $114.8 million. The impairment is presented as a cumulative effect of accounting change in the
statements of operations.

Other
intangibles, net consist of the Sidewalk intangible, purchased service agreements and unamortized intangible assets, primarily trademarks and Internet domain names, and are as
follows (in thousands):

June 30,
2002

December 31,
2001Amortized intangible assets:Sidewalk intangible

$
278,001

$
333,798Accumulated amortization


(175,786
)

(152,643
)Sidewalk intangible, net


102,215


181,155Purchased service agreements


63,571


59,051Accumulated amortization


(40,056
)

(34,964
)Purchased service agreements, net


23,515


24,087Total amortized intangible assets


125,730


205,242Unamortized intangible assets


450


169Other intangibles, net

$
126,180

$
205,411


7

---

Amortization
expense for the six months ended June 30, 2002 and 2001 was approximately $27.8 million and $38.3 million, respectively. Amortization expense based on
June 30, 2002 balances for the next five years is estimated to be as follows (in thousands):

Six months ended December 31, 2002

$
28,077Year ended December 31, 2003


53,824Year ended December 31, 2004


39,027Year ended December 31, 2005


3,238Year ended December 31, 2006


699Year ended December 31, 2007 and thereafter


865$
125,730


Reported
net loss and basic and diluted net loss per share adjusted to exclude amortization expense related to goodwill and other intangible assets that are no longer being amortized
follows (in thousands, except per share information):

|                                                                     |  | Three Months Ended
June 30, |        | Six Months Ended
June 30, |  
|-------------------------------------------------------------------- |  | --------------------------- | ------ | ------------------------- | -
|
|Reported income (loss) before cumulative effect of accounting change |  | $                           | 14,673 |                           | $
|Cumulative effect of accounting change                               |  |                             |       |                           |  
|                                                                     |  |                             |        |                           |  
|Reported net income (loss)                                           |  |                             | 14,673 |                           |  
|Add back: goodwill amortization                                      |  |                             |       |                           |  
|                                                                     |  |                             |        |                           |  
|Adjusted net income (loss)                                           |  | $                           | 14,673 |                           | $
|                                                                     |  |                             |        |                           |  
|Income (loss) per share:                                             |  |                             |        |                           |  
|Reported income (loss) before cumulative effect of accounting change |  | $                           | 0.10   |                           | $
|Cumulative effect of accounting change                               |  |                             |       |                           |  
|                                                                     |  |                             |        |                           |  
|Reported basic and diluted net income (loss) per share               |  |                             | 0.10   |                           |  
|Add back: goodwill amortization                                      |  |                             |       |                           |  
|                                                                     |  |                             |        |                           |  
|Adjusted basic and diluted net income (loss) per share               |  | $                           | 0.10   |                           | $
|                                                                     |  |                             |        |                           |  

Note 3Related Party Transactions

During the six months ended June 30, 2002, the Company amortized $3.7 million of deferred marketing expense related to a strategic alliance which
was entered into during 2001 and $3.3 million of a related liability for promotional services was satisfied by USA Interactive. During the six months ended June 30, 2001, the Company
amortized $2.9 million of deferred marketing expense related to the strategic alliance and $4.3 million of the related liability was satisfied by USA Interactive.

8

---

During
the six months ended June 30, 2002, the Company received a total of $5.0 million from USA in the form of advertising on its formerly wholly-owned properties,
Sci-Fi Channel and USA Network, which it contributed to a newly formed joint venture on May 7, 2002, for which no consideration was paid. Of the $5.0 million,
$3.3 million was provided to satisfy an obligation of the Company to a third party business partner and $1.7 million was provided to the Company and recorded as sales and marketing
expenses. The advertising provided by USA was reflected as an equity contribution of $5.0 million.

During
the six months ended June 30, 2001, the Company received a total of $11.5 million from USA in the form of advertising of which $4.3 million was provided to
satisfy an obligation of the Company to a third party business partner and $7.2 million was provided to the Company and recorded as sales and marketing expenses. The advertising provided by USA
was reflected as a reduction of the promotional receivable due from USA which arose from the sale of TMC Realty, L.L.C. to USA.

Note 4Business Combination

On April 12, 2002, the Company acquired all of the equity interests of Soulmates Technology Pty Ltd ("Soulmates"), a global online personals company
that provides dating and matchmaking services. Soulmates delivers a private-label solution for portals seeking a customized personals interface that takes on the look and feel of their site, and with
the capability to deliver online personals in more than 18 languages, the acquisition of Soulmates gives the Company's personals business worldwide presence. In connection with the acquisition, the
Company issued 817,790 shares of Class B Common Stock valued at approximately $23.6 million, based on an average of the opening and closing price of the
Company's Class B Common Stock for the period just before and just after the terms of the acquisition were agreed to by the parties and announced to the public, and also paid approximately
$0.5 million in cash. The preliminary allocation of the purchase price included goodwill amounting to $17.9 million and software technology with an estimated useful life of three years
amounting to $10.0 million. In connection with the purchase price allocation, a deferred tax liability of $3.0 million was recorded. Pro forma results of operations are not material to
the consolidated financial statements.

On
June 7, 2002, the Company acquired Ticket Service Nederland B.V., a leading live event ticketing company in The Netherlands, for $9.5 million in cash. The
preliminary allocation of the purchase price included goodwill and other intangibles, primarily purchased service agreements, amounting to $9.9 million. The purchased service agreements are
amortized over periods ranging from two to five years. In connection with the purchase price allocation, a deferred tax liability of $1.3 million was recorded. Pro forma results of operations
are not material to the consolidated financial statements.

Note 5Industry Segments

The Company operates principally within the United States. For the three and six months ended June 30, 2002, the Company operated principally in three
industry segments: ticketing operations, personals and city guide. Industry segment information is presented below for the three and six months ended June 30, 2002 and 2001. 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

9

---

provided by USA Interactive (for which no consideration was paid by the Company), non-cash compensation, equity in net income (loss) of unconsolidated affiliates, investment losses, net,
and other income and expenses.

Three Months Ended
June 30,

Six Months Ended
June 30,2002

2001

2002

2001(in thousands)RevenuesTicketing operations

$
175,406

$
163,898

$
328,785

$
314,006Personals


29,523


10,666


54,788


19,209City guide


7,587


12,389


14,862


24,773Other











149$
212,516

$
186,953

$
398,435

$
358,137Adjusted EBITDATicketing operations

$
43,679

$
35,521

$
77,365

$
65,754Personals


9,700


2,843


16,572


3,107City guide


(5,813
)

(8,288
)

(13,803
)

(17,288
)Corporate and other


(2,911
)

(2,762
)

(5,777
)

(5,506
)$
44,655

$
27,314

$
74,357

$
46,067


Reconciliation
of consolidated income (loss) from operations to Adjusted EBITDA:

Three Months Ended
June 30,

Six Months Ended
June 30,2002

2001

2002

2001(in thousands)Income (loss) from operations

$
17,603

$
(30,495
)
$
14,964

$
(67,279
)Depreciation and amortization


24,284


51,620


49,117


102,726Advertising provided by USA


1,754


5,846


5,217


9,933Non-cash compensation


1,014


343


5,059


687Adjusted EBITDA

$
44,655

$
27,314

$
74,357

$
46,067


10

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The
changes in the carrying amount of goodwill for the six months ended June 30, 2002, are as follows (in thousands):

|                                             |  | Ticketing
Operations
Segment |         | Personals
Segment |   | City Guide
Segment |  | Total |        
|-------------------------------------------- |  | ---------------------------- | ------- | ----------------- | - | ------------------ |  | ----- | -------
|Balance at January 1, 2002                   |  | $                            | 722,786 |                   | $ | 45,738             |  | $     | 58,994 
|Acquisitions                                 |  |                              | 6,439   |                   |   | 17,911             |  |       |       
|Foreign currency translation adjustment      |  |                              | 2,385   |                   |   | 1,315              |  |       |       
|Goodwill impairment upon adoption of FAS 142 |  |                              |        |                   |   |                   |  |       | (58,994
|                                             |  |                              |         |                   |   |                    |  |       |        
|Balance at June 30, 2002                     |  | $                            | 731,610 |                   | $ | 64,964             |  | $     |       
|                                             |  |                              |         |                   |   |                    |  |       |        

Note 6Comprehensive Income (Loss)

Components
of comprehensive income (loss) include foreign currency translation adjustments and unrealized gains and losses on marketable securities. Total comprehensive income was
approximately $20.0 million for the three months ended June 30, 2002 and total comprehensive loss was approximately $28.2 million for the three months ended June 30, 2001.
Total comprehensive loss was approximately
$99.6 million and $70.1 million for the six months ended June 30, 2002 and 2001, respectively. At June 30, 2002, accumulated other comprehensive loss was primarily
comprised of $1.5 million in foreign currency translation gains.

Note 7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 assurances 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.

11

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Item 2.    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
unaudited Condensed 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:



12

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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 June 30,
2002.

Overview

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 Developments

On June 3, 2002, USA Interactive ("USA", formerly USA Networks, Inc.) announced its intention to commence exchange offers with three USA public
subsidiaries including Ticketmaster whereby USA would seek to increase its equity ownership to up to 100% in each of them. In the exchanges, stockholders of these public companies would be offered the
opportunity to exchange their shares for USA shares on the basis of conversion ratios that, in each case, reflect a premium of 7.5% to market as of the close of market on Friday, May 31, 2002.
USA subsequently stated on June 5, 2002 that it did not intend to commence an exchange offer in the near future but has publicly stated on several occasions that it remains committed to
pursuing a transaction to acquire the balance of Ticketmaster. The Company has formed a Special Committee of its Board of Directors to consider USA's proposal, if one is made.

On
June 7, 2002, the Company acquired Ticket Service Nederland B.V., a leading live event ticketing company in The Netherlands.

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

13

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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 we believe 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, Goodwill and Other Intangible Assets

Our long-lived assets include long-term investments, goodwill and other intangible assets. At June 30, 2002, we had
$14 million of long-term investments and $923 million of goodwill and other intangible assets, accounting for approximately 66% 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. No impairment charge related to
our long-term investments was recorded during the six months ended June 30, 2002.

Effective
January 1, 2002, we adopted Statement of Financial Accounting Standard No. 142 and are 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. Application of the new measurement criterion at the effective date indicated an impairment of the City guide segment and we recorded a total impairment
charge of $114.8 million as a cumulative effect of accounting change during the six months ended June 30, 2002.

14

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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 did not support its
carrying value.

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 99.4% has a valuation allowance, are principally related to domestic loss carryforwards and intangible assets. We would
release our valuation allowance when it is more likely than not that we would be able to utilize our deferred tax assets. Management evaluates the realizability of the deferred tax assets quarterly
and assesses the need for additional, or less, valuation allowances quarterly. At June 30, 2002, we had recorded a valuation allowance of $102.1 million.

Related Party Transactions

USA Interactive has provided advertising to us on its formerly wholly-owned television properties, Sci-Fi Channel and USA Network, which it
contributed to a newly formed joint venture on May 7, 2002, for no additional shares of common stock or other consideration. During the six months ended June 30, 2002, we received a
total of $5.0 million from USA of which $3.3 million was provided to satisfy our obligation to a third party business partner and $1.7 million was provided to us. USA Interactive
is committed to provide an additional $8.4 million to satisfy the remaining third party obligation for no additional shares or consideration and notwithstanding the contribution of those
television properties. However, there is no guarantee that USA Interactive 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 us; (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 our
distribution system. The average revenue per ticket will vary as a result of the amount of convenience, order processing, delivery charges and other revenue earned on each ticket. The amount of the
convenience, order processing, delivery charges and other revenue 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.

15

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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, telecommunication charges along with data communication costs, credit
card processing fees, commissions paid on tickets distributed through outlets away from the box office, and other less material expenses including ticket stock and postage. Personals operations costs
are associated with fees paid to distribution partners of the Company's online matchmaking services, the production and maintenance of the matchmaking Web sites 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.

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 Interactive (for which no consideration 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 Income (Loss) from Operations to Adjusted EBITDA for the six months ended June 30, 2002 and 2001 (in thousands).

Six Months Ended June 30,2002

2001Income (loss) from operations

$
14,964

$
(67,279
)Depreciation and amortization


49,117


102,726Advertising provided by USA


5,217


9,933Non-cash compensation


5,059


687Adjusted EBITDA

$
74,357

$
46,067


Results of Operations

Revenues.Revenues increased by $25.5 million, or 14%, to $212.5 million in the three months ended
June 30, 2002 from $187.0 million in the three months ended June 30, 2001. The increase is primarily attributable to the increase of $18.8 million from personals and the
increase of $11.5 million from ticketing operations, offset by the decrease of $4.8 million from city guide. Revenues increased by

16

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$40.3 million, or 11%, to $398.4 million in the six months ended June 30, 2002 from $358.1 million for the six months ended June 30, 2001. The increase is primarily
attributable to the $35.6 million increase from personals and the $14.8 million increase from ticketing operations, offset by the $9.9 million decrease from city guide.

Operating Costs and Other Expenses.For the three months ended June 30, 2002, operating costs and other expenses
decreased by $22.5 million, or 10%, to $194.9 million from $217.4 million in the 2001 quarterly period. The decrease is primarily due to the $27.3 million decrease in
depreciation and amortization, the $3.9 million decrease in city guide operations costs and the $3.8 million decrease in sales and marketing expenses, offset by the $7.1 million
increase in personals operations costs to support the 177% increase in personals revenues and the $5.5 million increase in ticketing operations costs to support the 7% increase in ticketing
operations revenues. The decrease in depreciation and amortization expense is primarily attributable to the adoption of new accounting rules resulting in the elimination of goodwill amortization and a
decrease in other intangible asset amortization. The decrease in city guide costs (including operations and sales and marketing expenses) reflects Citysearch's initiatives to reduce its costs. The
increase in personals costs (including operations and sales and marketing expenses) is primarily due to the growth in the personals business and increased fees paid to distribution partners in
connection with related revenue growth.

For
the six months ended June 30, 2002, operating costs and other expenses decreased by $41.9 million, or 10%, to $383.5 million from $425.4 million in the
2001 six-month period. The decrease is primarily due to the $53.6 million decrease in depreciation and amortization, the $7.6 million decrease in city guide operations costs
reflecting Citysearch's initiatives to reduce operating costs and the $4.6 million decrease in sales and marketing expenses, offset by the $13.6 million increase in personals operations
costs to support the 185% increase in personals revenues, the $7.1 million increase in ticketing operations costs to support the 5% increase in ticketing operations revenues and the
$3.3 million increase in general and administrative expenses. The increase in general and administrative expenses is primarily attributable to a one-time non-cash
compensation charge related to one of the Company's former key executives and an increase in legal fees, offset in part by a change in the method of accounting for the Company's investment in its
Australian ticketing subsidiary from consolidation to the equity method of accounting during the third quarter of 2001.

Interest Income.Interest income increased by $0.4 million, or 58%, to $1.1 million in the three months ended
June 30, 2002 from $0.7 million in the three months ended June 30, 2001. For the six months
ended June 30, 2002, interest income increased by $0.1 million, or 7%, to $1.4 million from $1.3 million in the 2001 six-month period. These increases are
primarily due to higher cash balances invested offset, in part, by lower interest rates during the periods.

Interest Expense.Interest expense decreased by $0.7 million, or 92%, to $0.1 million in the three months ended
June 30, 2002 from $0.8 million in the three months ended June 30, 2001, primarily due to lower borrowing levels. For the six months ended June 30, 2002, interest expense
decreased by $2.2 million, or 93% to $0.2 million from $2.4 million in the 2001 six-month period, primarily due to lower borrowing levels.

Equity in Net Income of Unconsolidated Affiliates.Equity in net income of unconsolidated affiliates of $0.4 million
and $0.6 million during the three and six months ended June 30, 2002, respectively, primarily represents $0.3 million and $0.7 million in income from our minority
investment in Ticketmaster-Mexico and $0.1 million in income and $0.1 million in loss from our investment in Ticketmaster-Australia due to the change in method of accounting during the
third quarter of 2001. Equity in net income of unconsolidated affiliates for the three and six months ended June 30, 2001 of $0.4 million and $0.9 million represents income from
our minority investment in Ticketmaster-Mexico.

17

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Income Tax Provision.The provision for income taxes was $4.3 million and $0.4 million for the three months
ended June 30, 2002 and 2001, respectively. The provision for income taxes was $6.7 million and $3.2 million for the six months ended June 30, 2002 and 2001, respectively.
The provision primarily reflects foreign and state income tax expense. Our effective tax rate differs from the statutory federal income tax rate, primarily due to non-deductible intangible
assets, foreign income taxes, operating losses not benefited and changes in the valuation allowance. At June 30, 2002, the Company's balance sheet has a deferred tax asset of
$66.3 million for a net operating loss which is fully offset by a valuation allowance. The Company will retain the valuation allowance until it is more likely than not that the Company will be
able to utilize the net operating loss. Each quarter, the Company will evaluate the need for additional, or less, valuation allowances. 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 as an increase in additional paid-in capital.

Cumulative Effect of Accounting Change.The cumulative effect of accounting change of $114.8 million resulting from
the adoption of SFAS No. 142 effective January 1, 2002 represents goodwill impairment related to the City guide segment of approximately $59.0 million and an impairment of the
Sidewalk intangible of approximately $55.8 million which is also part of the City guide segment.

Ticketing Operations

Revenues from ticketing operations increased by $11.5 million, or 7%, to $175.4 million for the three months ended June 30, 2002 from
$163.9 million for the three months ended June 30, 2001. Revenue from ticketing operations increased by $14.8 million, or 5%, to $328.8 million for the six months ended
June 30, 2002 from $314.0 million for the six months ended June 30, 2001. The revenue increases are primarily due to an increase in average revenue per ticket (7% increase from
$6.29 to $6.72 for the three-month period and 4% increase from $6.13 to $6.35 for the six-month period) and an increase in the number of tickets sold, offset by a decrease in advertising
revenue and by lower revenues from the Company's subsidiary that sells and services computerized ticketing and concession systems primarily to movie theaters. The increase in the number of tickets
sold (from 23.6 million to 24.3 million for the three-month period and from 47.1 million to 48.2 million for the six-month period) was primarily the result of
an overall increase in tickets sold within existing international markets and the acquisitions of Ticketmaster-Norway in October 2001 and Ticketmaster-Netherlands in June 2002. 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 since then.

Cost
related to ticketing operations revenues (including related sales and marketing and general and administrative costs) increased by $3.8 million, or 3%, to
$132.2 million in the three months ended June 30, 2002 from $128.4 million in the three months ended June 30, 2001 and cost related to ticketing operations revenues
(including related sales and marketing and general and administrative costs) increased by $3.9 million, or 2%, to $252.1 million in the six months ended June 30, 2002 from
$248.3 million in the six months ended June 30, 2001, primarily due to the increase in related revenue growth. As a percentage of ticketing operations revenues, these costs decreased
from 78% in the three months ended June 30, 2001 to 75% in the three months ended June 30, 2002 and from 79% in the six months ended June 30, 2001 to 77% in the six months ended
June 30, 2002, primarily a result of greater fixed cost leverage and the change in the method of accounting for our investment in Ticketmaster-Australia in the third quarter of 2001. These
decreases were offset by an increase in legal fees.

Adjusted
EBITDA for the three months ended June 30, 2002 increased by $8.2 million, or 23%, to $43.7 million from $35.5 million in the 2001 quarterly period.
Adjusted EBITDA for the six months ended June 30, 2002 increased by $11.6 million, or 18%, to $77.4 million from $65.8 million for the six

18

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months ended June 30, 2001. The increases in Adjusted EBITDA were primarily due to the related revenue growth and improved margins in the international operations, including the impact of the
change in the method of accounting for our investment in Ticketmaster-Australia to the equity method in the third quarter of 2001.

Personals

Personals revenues increased $18.8 million, or 177%, to $29.5 million for the three months ended June 30, 2002 from $10.7 million for
the three months ended June 30, 2001. This increase is primarily attributable to a 166% increase in the average number of subscribers which includes, in small part, the acquisition of Soulmates
Technology in April 2002. Personals revenues increased $35.6 million, or 185%, to $54.8 million for the six months ended June 30, 2002 from $19.2 million for the six
months ended June 30, 2001. This increase is primarily attributable to a 168% increase in the average number of subscribers.

Cost
related to personals revenues (including related sales and marketing and general and administrative costs) increased by $11.6 million, or 126%, to $20.8 million in the
three months ended June 30, 2002 from $9.2 million in the three months ended June 30, 2001. Cost related to personals revenues (including related sales and marketing and general
and administrative costs) increased by $24.4 million, or 140%, to $41.9 million in the six months ended June 30, 2002 from $17.5 million in the six months ended
June 30, 2001. These increases are attributable to operations costs associated with the growth in the personals business, primarily fees paid to distribution partners of the Company's online
matchmaking services and additional online and offline advertising expense including advertising provided by USA Interactive for which no consideration was paid by Ticketmaster.

Adjusted
EBITDA for the three months ended June 30, 2002 increased by $6.9 million to $9.7 million from $2.8 million in the 2001 quarterly period. Adjusted
EBITDA for the six months ended June 30, 2002 increased by $13.5 million to $16.6 million from $3.1 million for the six months ended June 30, 2001. Adjusted EBITDA
was positively impacted by greater fixed cost leverage.

City Guide

City guide revenues decreased $4.8 million, or 39%, to $7.6 million for the three months ended June 30, 2002 from $12.4 million for
the three months ended June 30, 2001. City guide revenues decreased $9.9 million, or 40%, to $14.9 million for the six months ended June 30, 2002 from $24.8 million
for the six months ended June 30, 2001. These decreases are primarily attributable to the continued softness in the online advertising market.

Cost
related to city guide revenues (including related sales and marketing and general and administrative costs) decreased by $11.2 million, or 45%, to $13.9 million in the
three months ended June 30, 2002 from $25.1 million in the three months ended June 30, 2001. Cost related to city guide revenues (including related sales and marketing and general
and administrative costs) decreased by $20.9 million, or 41%, to $29.7 million for the six months ended June 30, 2002 from $50.6 million for the six months ended
June 30, 2001. These decreases are primarily attributable to reduced marketing expenses and savings in employee costs due to the reorganization of the city guide operations.

Adjusted
EBITDA loss for the three months ended June 30, 2002 improved by $2.5 million, or 30%, to $5.8 million from $8.3 million in the 2001 quarterly
period. Adjusted EBITDA loss for the six months ended June 30, 2002 improved by $3.5 million, or 20%, to $13.8 million from $17.3 million for the six months ended
June 30, 2001.

19

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Other

Other revenues of $0.1 million in the six months ended June 30, 2001 represents income from TMC Realty, Inc. which was sold to USA
Interactive in February 2001.

Liquidity and Capital Resources

At June 30, 2002, Ticketmaster had cash and cash equivalents of $150.0 million for its own account, separate from funds held in accounts on behalf
of venues, teams and promoters. Current operations are financed primarily from internally generated funds.

Net
cash provided by operating activities was $108.6 million for the six months ended June 30, 2002 compared to net cash provided by operating activities of
$67.5 million for the six months ended June 30, 2001. The change primarily reflects an overall increase in Adjusted EBITDA and timing differences in accrued expenses and net cash
collections on behalf of clients and amounts due to/from USA and affiliates.

Net
cash used in investing activities was $17.5 million for the six months ended June 30, 2002. This cash was used primarily for capital expenditures of
$17.7 million and for acquisitions of $7.3 million offset by proceeds from the sale of marketable securities of $7.9 million. Net cash used in investing activities was
$43.7 million for the six months ended June 30, 2001. This cash was used primarily for acquisitions requiring $31.7 million and capital expenditures of $11.8 million offset
by proceeds from the sale of marketable securities of $7.0 million.

Net
cash provided by financing activities was $19.4 million for the six months ended June 30, 2002, primarily from the proceeds of stock option exercises totaling
$20.4 million. Net cash used in financing activities was $11.2 million for the six months ended June 30, 2001, consisting primarily of advances from USA Interactive of
$9.5 million and debt payments of $4.8 million offset by proceeds of stock option exercises of $3.3 million.

As
of June 30, 2002, the Company had no material commitments other than those under existing capital and operating lease agreements. 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. Management believes that existing cash and cash
equivalents, marketable securities, amounts available from other sources, including USA Interactive, and the positive cash flow from the ticketing and personals operations will be sufficient to meet
the Company's working capital and capital expenditures requirements for at least the next twelve months. Thereafter, Ticketmaster may be required to raise additional funds. 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.

Item 3.    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 investment portfolio. The Company has not used derivative
financial instruments in its investment portfolio. The Company invests its excess cash in debt instruments of the U.S. Government and its agencies, state government agencies and in
high-quality corporate issuers and, by policy, limits the

20

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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 three and six months ended June 30, 2002 and 2001.

Seasonality

Ticketmaster's ticketing operations revenues 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 ticket on-sales for events.

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PART IIOTHER INFORMATION

Item 1. 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
previously reported and the legal proceedings described below, the Company 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 its intellectual property.

Tickets.com Litigation

In the previously reported case ofTicketmaster Corporation and Ticketmaster Online-Citysearch, Inc. v.
Tickets.com, Inc.,Case No. 99-07654 HLH, the following matters have occurred since the Company's last disclosure in the Company's Annual Report on
Form 10-K filed with the SEC on April 1, 2002: The Court recently amended the pretrial schedule setting October 1, 2002 as the discovery cut-off date,
February 7, 2003 as the date for the final pre-trial conference, and has indicated that the trial will be set to commence in March 2003. Pursuant to the stipulation of the
parties, on July 31, 2002, the Court entered an Order dismissing Tickets.com's claims that Ticketmaster filed litigation against Tickets.com and others for predatory and/or anticompetitive
purposes. The parties currently are actively engaged in document and deposition discovery in the matter. A mediation with a retired Federal District Court Judge is expected to take place by the end of
September 2002. 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:In the previously reported case ofVictoria McLean V. Ticketmaster Corporation and Time,
Inc., Case No. G0009564, the following matters have occurred since the Company's last disclosure in the Company's Annual Report on Form 10-K filed with the
SEC on April 1, 2002: On May 31, 2002, Ticketmaster and Time filed a summary judgment motion. That motion is presently scheduled to be heard on October 24, 2002. Discovery is
continuing. Ticketmaster believes the claims are without merit and expects to vigorously defend against the lawsuit.

California:On July 23, 2002, Ticketmaster and Time Inc. were named as defendants in a lawsuit entitled Rupert Fowler, an individual, On Behalf of the General Public, Plaintiffs v. Ticketmaster Corporation, Time Inc., and Does 1-100 inclusive,
Defendants, in the Superior Court of the State of California for the County of San Francisco, Case Number 410588. The lawsuit is styled as a Complaint for Injunctive Relief,
Restitution and Disgorgement Under California Business Professions Code Section 17200 Et Seq. The Complaint purports to allege a cause of action for violations of California Business and
Professions Code Section 17200 et seq. The Complaint alleges among other things that commencing in 1999 and continuing to December 24, 2001, Ticketmaster and Time invaded its customers'
California Constitutional right to privacy by improperly using credit card and billing information and that the alleged misconduct constituted an unfair business practice. The Complaint seeks a
permanent injunction, restitution and disgorgement, reasonable attorney fees and other relief the Court may deem just and proper. Ticketmaster believes the case is without merit, and is preparing to
vigorously defend itself.

Shareholder Cases Related to USAI Possible Exchange Proposal

On June 3, 2002, USA Interactive (USAI) announced that it had delivered to the board of directors of Ticketmaster, Expedia, Inc., and Hotels.com a
letter pursuant to which USAI proposed the acquisition of the minority interest in each of these subsidiaries that it did not already own.

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Ticketmaster has since formed a special committee comprised of all of its disinterested directors to review the proposal. Following the announcement by USAI of the proposals, a number of complaints
against USAI, its subsidiaries (including Ticketmaster) and the boards of directors of the USAI subsidiaries were filed in the Court of Chancery, County of New Castle, State of Delaware with respect
to Ticketmaster and in U.S. District Court for the Central District of California with respect to Ticketmaster. The complaints generally allege the proposed transaction would be a breach of fiduciary
duty and that the indicated exchange ratio is unfair to the minority stockholders. Each of the complaints seeks, among other things, injunctive relief against consummation of the transaction and
damages in an unspecified amount. The time for defendants to respond to the complaints has not yet elapsed. Ticketmaster understands that the actions as to Ticketmaster in Delaware are in the process
of being consolidated under the following caption:In re Ticketmaster Shareholders Litigation(Delaware Court of Chancery, Consolidated C.A.
No. 19663-NC). The California case is captionedHarbor Finance Partners, on behalf of itself and all others similarly situated, plaintiff v. Terry Barnes, et
al. defendants, United States District Court, Central District Court of California, Case No. 02-04401 TJH. Plaintiff's counsel in the Harbor Finance case has
indicated that the case will be dismissed without prejudice. The Company believes the allegations in the cases involving Ticketmaster and its directors are without merit and intends to defend itself
against the actions vigorously.

General

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 the legal proceedings previously reported 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 or other businesses 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.

Item 2.    Changes in Securities and Use of Proceeds



In
April 2002, the Company issued 817,790 shares of Class B Common Stock as part of the consideration for the Soulmates acquisition. The shares were issued to the
shareholders of Soulmates.

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The
issuance of these securities was deemed to be exempt from registration under the Securities Act of 1933 (the "Securities Act") in reliance on Section 4(2) of the Securities
Act, or Regulation D promulgated thereunder, as a transaction by an issuer not involving a public offering.

Item 4.    Submission of Matters to a Vote of Security Holders

The Company's 2002 Annual Meeting of Stockholders was held on May 22, 2002.

At
that meeting, the Company's stockholders elected each of the following persons to serve as a director of the Company for the ensuing year to serve until the next Annual Meeting of
Stockholders and thereafter until his successor is elected and has been qualified with the following votes for, withheld, abstained and broker non-votes:

Director

Yes Votes

No Votes

Abstaining Votes

Broker
Non-VotesTerry Barnes

727,296,582



411,133

Richard Barton

727,114,078



593,638

Robert Davis

727,114,078



593,638

Barry Diller

727,296,583



411,133

Victor Kaufman

727,114,078



593,638

Dara Khosrowshahi

727,114,078



593,638

Bryan Lourd

727,296,583



411,133

Jon Miller

727,296,583



411,133

John Pleasants

727,296,583



411,133

Michael Schrage

727,296,583



411,133

Alan Spoon

727,296,583



411,133




In
addition to the election of directors, the Company's stockholders ratified the appointment by the Board of Directors of Ernst & Young LLP as independent auditors for the
Company and its subsidiaries for the year ending December 31, 2002. The stockholders ratified the appointment of Ernst & Young LLP with 726,916,854 votes in favor, 770,822 votes against,
20,040 votes abstaining and no broker non-votes.

Item 6. Exhibits and Reports on Form 8-K



Exhibit No.

Exhibit Title

Notes2.1

Agreement for the sale and purchase of all shares in the capital of Ticket Service Nederland B.V. by and between Postkantoren B.V. and KPN Consumer Internet and Media Services B.V., as sellers, and Ticketmaster UK Limited,
 as purchaser, dated June 7, 2002

10.1

Sponsorship Marketing Agreement, dated as of April 1, 2002 between Ticketmaster L.L.C. and American Express Travel Related Services Company, Inc.

*10.2

Employment Agreement dated as of April 29, 2002 between Ticketmaster and Briggs Ferguson








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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.

|Dated: August 14, 2002 |  | TICKETMASTER
|---------------------- |  | ------------
|                       |  |             
|                       |  | By:         
|                       |  |             
|                       |  | By:         

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INDEX TO EXHIBITS

Exhibit No.

Exhibit Title

Notes2.1

Agreement for the sale and purchase of all shares in the capital of Ticket Service Nederland B.V. by and between Postkantoren B.V., KPN Consumer Internet and Media Services B.V., as sellers, and Ticketmaster UK Limited,
as purchaser, dated June 7, 2002

10.1

Sponsorship Marketing Agreement, dated as of April 1, 2002 between Ticketmaster L.L.C. and American Express Travel Related Services Company, Inc.

*10.2

Employment Agreement dated as of April 29, 2002 between Ticketmaster and Briggs Ferguson




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