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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______ TO ________
COMMISSION FILE NUMBER 0-20570
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A. FULL TITLE OF THE PLAN AND THE ADDRESS OF THE PLAN, IF DIFFERENT
FROM THAT OF THE ISSUER NAMED BELOW:
USA NETWORKS, INC. RETIREMENT SAVINGS PLAN
B. NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE
ADDRESS OF ITS PRINCIPAL EXECUTIVE OFFICE:
USA NETWORKS, INC.
152 WEST 57TH STREET
NEW YORK, NEW YORK
10019
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REQUIRED INFORMATION
1. Not Applicable
2. Not Applicable
3. Not Applicable
4. The USA Networks, Inc. Retirement Savings Plan (the "Plan") is subject
to the requirements of the Employee Retirement Income Security Act of
1974 ("ERISA"). Attached hereto as Appendex I is a copy of the most
recent financial statements and schedules of the Plan prepared in
accordance with the financial reporting requirements of ERISA.
Exhibit
(23) Consent of Ernst & Young LLP
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustee (or other persons who administer the Plan) have duly caused this
annual report to be signed on its behalf by the undersigned thereto duly
authorized.
USA NETWORKS, INC. RETIREMENT
SAVINGS PLAN
Date: June 27, 2000 By: /s/ Lisa Letizio
-------------------------------
Lisa Letizio
Member, Plan Administrative
Committee
3
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Appendix I
Financial Statements and Supplemental Schedules
USA Networks, Inc. Retirement Savings Plan
December 31, 1999 and 1998 and year ended December 31, 1999
with Report of Independent Certified Public Accountants
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USA Networks, Inc. Retirement Savings Plan
Audited Financial Statements
and Supplemental Schedules
December 31, 1999 and 1998 and Year Ended December 31, 1999
CONTENTS
Report of Independent Certified Public Accountants............................1
Audited Financial Statements
Statements of Net Assets Available for Benefits...............................2
Statement of Changes in Net Assets Available for Benefits.....................3
Notes to Financial Statements.................................................4
Supplemental Schedules
Schedule H, Line 4i--Schedule of Assets Held for Investment Purposes
at End of Year............................................................11
Schedule H, Line 4j--Schedule of Reportable Transactions.....................12
Schedule G, Part III--Schedule of Nonexempt Transactions.....................13
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Report of Independent Certified Public Accountants
The Administrative Committee
USA Networks, Inc. Retirement Savings Plan
We have audited the accompanying statements of net assets available for benefits
of the USA Networks, Inc. Retirement Savings Plan as of December 31, 1999 and
1998, and the related statement of changes in net assets available for benefits
for the year ended December 31, 1999. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1999 and 1998, and the changes in its net assets available for
benefits for the year ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes at end of year as of December 31, 1999, and
reportable transactions and nonexempt transactions for the year then ended, are
presented for purposes of additional analysis and are not a required part of the
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in our audits
of the financial statements and, in our opinion, are fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Ernst & Young
Tampa, Florida
June 2, 2000
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USA Networks, Inc. Retirement Savings Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
1999 1998
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ASSETS
Investments, at fair value $55,912,957 $42,351,797
Receivables:
Participant 35,461 43,525
Employer 13,116 -
-----------------------------
Total receivables 48,577 43,525
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Net assets available for benefits $55,961,534 $42,395,322
=============================
See accompanying notes.
2
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USA Networks Inc. Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 1999
ADDITIONS TO NET ASSETS AVAILABLE FOR BENEFITS ATTRIBUTED TO:
Investment income:
Net realized and unrealized appreciation in fair
value of plan investments $13,315,574
Dividend income 255,366
Interest income 422,972
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13,993,912
Contributions:
Participant contributions 4,958,926
Employer contributions 1,365,090
Participant rollover contributions 463,251
-----------
6,787,267
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Total additions 20,781,179
DEDUCTIONS FROM NET ASSETS AVAILABLE FOR
BENEFITS ATTRIBUTED TO:
Benefits paid to participants 5,794,283
Transfers to other plans 1,420,684
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7,214,967
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Net increase in net assets available for benefits 13,566,212
Net assets available for benefits--beginning of year 42,395,322
-----------
Net assets available for benefits--end of year $55,961,534
===========
See accompanying notes.
3
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USA Networks, Inc. Retirement Savings Plan
Notes to Financial Statements
December 31, 1999
1. DESCRIPTION OF PLAN
The following description of the USA Networks, Inc. Retirement Savings Plan (the
Plan) provides only general information. Participants should refer to the Plan
agreement for a more complete description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan covering substantially all employees of
certain affiliated companies of USA Networks, Inc. (the Company). The Plan is
subject to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
Effective January 1, 1998, the Plan was merged with the Silver King
Communications, Inc. 401(k) Retirement Savings Plan (SK Plan). The assets and
liabilities of the SK Plan totaling $2,706,619 were transferred to, and assumed
by, the Plan. The resulting merged plan was amended to allow a Company match of
up to the greater of the first 3% of eligible compensation or $520 per employee.
Concurrent with the above merger, the Plan was renamed the HSN, Inc. Retirement
Savings Plan, and PNC Bank was replaced by New York Life Trust Company (NYLTC or
the Trustee) as the trustee of the Plan. All assets of the Plan were transferred
to NYLTC during January 1998.
The Plan was amended effective September 30, 1998 to allow the merger of Home
Shopping Network, Inc. Employee Equity Participation Plan (EEPP) into the Plan.
The assets of the EEPP, consisting of USA Networks, Inc. common stock and money
market funds, were assumed by the Plan. In addition, the Plan was amended to
change the name to the USA Networks, Inc. Retirement Savings Plan effective
October 1, 1998.
Effective July 27, 1999, USA Networks, Inc. sold its controlling ownership in
Vela Research. Pursuant to this sale, employees of Vela Research were no longer
covered by the Plan. Assets of the Plan totaling $1,420,684 were transferred to
the Vela Research plan.
4
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USA Networks, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF PLAN (CONTINUED)
CONTRIBUTIONS
Participants can make contributions through payroll deductions ranging from 1%
to 16% of their compensation as defined in the Plan, limited to $10,000 in 1999
and 1998. Participants' contributions may be changed on a quarterly basis.
Participants can direct their contributions to any of the Plan's fund options,
with the exception of USA Network EEPP Stock Fund, and may change their
investment options on a daily basis.
The Company may match participant contributions (the Matching Contribution). The
Company may also make a discretionary contribution of funds which is set
annually by the Company's Board of Directors. For the year ended December 31,
1999, the Company's Matching Contribution was $1,365,090. No discretionary
contributions were made to the Plan.
VESTING
Participant contributions are fully vested at the time of contribution. Vesting
in the Company contribution portion of their accounts plus actual earnings
thereon is based on years of continuous service. A participant is 100% vested
after five years of credited service.
ELIGIBILITY
Participants must be 21 years of age or older and have completed at least 1,000
hours of service, as defined in the Plan document.
PARTICIPANTS' ACCOUNTS
Each participant's account is credited with the participant's contribution, and:
o Any Matching Contribution, which for 1999 was equal to 50% of
the first 6% of each participant's deferred compensation.
Participants whose employer match does not exceed $520 and who
contributed an average of 3% or greater, are eligible to
receive a "look-back" match of the lesser of $520 or 100% of
their contribution.
o Plan earnings or losses, which are allocated daily.
5
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USA Networks, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF PLAN (CONTINUED)
FORFEITURES
Company Matching Contributions that become forfeitures are first made available
to reinstate previously forfeited account balances of participants who have left
the Company and have subsequently returned. The remaining amount, if any, is
used to reduce the Company's Matching Contributions. Forfeitures available for
reallocation or to offset future employer contributions were $85,658 and
$237,875 at December 31, 1999 and 1998, respectively. Unallocated forfeitures
related to the EEPP portion of the Plan were $2,201,127 and $1,759,610 at
December 31, 1999 and 1998, respectively.
PARTICIPANT LOANS
Participants may borrow from their fund accounts a minimum of $500 up to a
maximum equal to the lesser of $50,000 reduced by the highest outstanding loan
balance within the last 12 months or 50% of their vested account balances. With
the exception of loans used to purchase a primary residence which can have terms
up to 15 years, loan terms are limited to a maximum of five years. Loans are
secured by the balance in the participant's account and bear interest at a rate
commensurate with commercial prevailing rates as determined by the plan
administrator. Principal and interest are paid ratably through biweekly payroll
deductions.
DISTRIBUTION OF BENEFITS
Upon a participant's retirement, death, disability or other interruption of
continuous service, his/her entire vested account balance will be distributed in
the form of a lump sum, unless the participant's vested balance is at least
$5,000 and the participant elects to leave such amounts in the Plan.
There were no funds allocated to persons who have withdrawn from participation
in the Plan as of December 31, 1999 and 1998.
PLAN TERMINATION
Although the Company has expressed no intent to terminate the Plan, in the event
that the Plan is terminated by the Company, all amounts credited to the
participants' accounts would become 100% vested, and the assets would be
distributed to participants.
6
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USA Networks, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF PLAN (CONTINUED)
EXPENSES
Expenses incurred in connection with Plan administration are paid by the
Company. These expenses totaled approximately $136,536 for the year ended
December 31, 1999.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying financial statements have been prepared on the accrual basis of
accounting.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect amounts reported in the financial statements and the accompanying
notes. Actual results could differ from those estimates.
RECLASSIFICATION
Certain amounts in the 1998 financial statements have been reclassified to
conform with the 1999 presentation.
INVESTMENTS
The Plan's investments are stated at fair value. The shares of registered
investment companies are valued at quoted market prices which represent the net
asset values of shares held by the Plan at year end. Securities traded on a
national securities exchange are valued at the last reported sales price on the
last business day of the plan year. The participant loans are valued at their
outstanding balances, which approximate fair value.
Purchases and sales of securities are recorded as of their trade date. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
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USA Networks, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CASH AND CASH EQUIVALENTS
The Plan's cash and cash equivalents are held in a trust fund by the Trustee.
Cash equivalents include highly liquid, short-term investments with original
maturities of less than 91 days.
3. INVESTMENTS
During 1999, the Plan's investments (including investments purchased, sold, as
well as held during the year) appreciated in fair value as determined by quoted
market prices as follows:
Investments in mutual funds $ 3,208,926
Investments in USA Networks Stock Fund 5,348,885
Investments in USA Networks EEPP Stock Fund 4,757,763
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$13,315,574
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The Plan's investments are held in a bank-administered trust fund. The following
are investments that represent 5% or more of the Plan's net assets.
DECEMBER 31
1999 1998
-------------------------
New York Life Anchor Account $ 9,643,250 $ 6,333,846
Mainstay Institutional Indexed
Equity Fund 11,379,031 10,014,252
USA Networks, Inc. Stock Fund 12,746,426 9,143,457
USA Networks, Inc. EEPP Stock Fund * 10,610,917 9,390,392
* Non-participant directed
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USA Networks, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
4. NON-PARTICIPANT DIRECTED INVESTMENTS
The following changes in net assets available for benefits are presented for the
employer directed fund, USA Networks, Inc. EEPP Stock Fund for the year ended
December 31, 1999:
<TABLE>
<S> <C>
Additions to net assets available for benefits attributed to:
Net realized and unrealized appreciation (depreciation) in fair value
of plan investments $ 4,757,763
Interest income 14,274
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Total additions 4,772,037
Interfund transfers (2,481,350)
Deductions from net assets available for benefits attributed to:
Benefits paid to participants 1,004,927
Transfers out of plan 65,235
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Net increase 1,220,525
Net assets available for benefits--beginning of year 9,390,392
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Net assets available for benefits--end of year $10,610,917
===========
</TABLE>
5. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated June 13, 1996, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the Code) and, therefore, the related trust is exempt
from taxation. Once qualified, the Plan is required to operate in conformity
with the Code to maintain its qualification. The Plan Sponsor has indicated that
it will take the necessary steps, if any, to maintain the Plan's qualified
status.
The Plan has been amended since receiving the determination letter. However, the
Plan's management believes that the Plan is designed and is currently being
operated in compliance with the applicable requirements of the IRC.
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USA Networks, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
6. SUBSEQUENT EVENTS
Effective January 1, 2000, the assets and liabilities of the Ticketmaster 401(k)
Savings Plan were transferred to and assumed by the Plan. Additionally, assets
and liabilities of the Plan attributable to participants who are current or
former USAi Corporate employees and USA Broadcasting employees were transferred
out of the Plan. Concurrent with the above merger and transfer, the Plan will be
renamed the USA Networks, Inc. Retirement Savings Plan - Commerce.
Subsequent to December 31, 1999, New York Life Trust Company was replaced with
UMB Bank as the trustee of the Plan and J.P. Morgan/American Century as the
record keeper of the plan. All assets of the Plan were transferred to UMB Bank
effective January 1, 2000.
10
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Supplemental Schedules
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USA Networks, Inc. Retirement Savings Plan
E.I.N. 59-2649518
Plan No: 001
Schedule H, Line 4i
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 1999
<TABLE>
<CAPTION>
(c) DESCRIPTION OF INVESTMENT
(INCLUDING MATURITY DATE,
(b) IDENTITY OF ISSUE, BORROWER, RATE OF INTEREST, COLLATERAL, (e)
(a) LESSOR OR SIMILAR PARTY PAR OR MATURITY VALUE) (d) COST CURRENT VALUE
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
* New York Life Anchor Account Pooled separate account # $ 9,643,250
Mainstay High Yield Corporate Bond Mutual fund
Fund # 521,863
PIMCO Total Return Fund Mutual fund # 803,802
Dodge & Cox Stock Fund Mutual fund # 1,791,402
Franklin Balance Sheet Investment Mutual fund
Fund # 2,011,742
Mainstay Institutional Indexed Mutual fund
Equity Fund # 11,379,031
Strong Schafer Value Fund Mutual fund # 691,793
Franklin Small Cap Growth Fund Mutual fund # 1,695,285
PIMCO Mid Cap Growth Fund Mutual fund # 795,553
GAM International Fund Mutual fund # 253,193
T Rowe Price International Stock Mutual fund
Fund # 1,043,724
* USA Networks, Inc Stock Fund Common stock # 12,746,426
* USA Networks, Inc. EEPP Stock Fund Common stock $6,686,163 10,610,917
-----------
53,987,981
Participant Loans 3.75 to 10% 1,924,976
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$55,912,957
===========
</TABLE>
# information is not required as investments are participant directed
* Party-in-interest
11
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USA Networks, Inc. Retirement Savings Plan
E.I.N. 59-2649518
Plan No: 001
Schedule H, Line 4j
Schedule of Reportable Transactions
Year ended December 31, 1999
<TABLE>
<CAPTION>
(h) CURRENT VALUE OF
(a) IDENTITY OF ASSET ON (i)
PARTY INVOLVED (b) DESCRIPTION OF ASSET (d) SELLING PRICE (g) COST OF ASSET TRANSACTION DATE NET GAIN (LOSS)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Category (i) - Individual Transactions in Excess
of 5% of Plan Assets
New York Life USA Networks, Inc. EEPP Stock Fund $2,288,088 $2,023,263 $2,288,088 $264,825
Category (iii) - Series of Transactions in Excess
of 5% of Plan Assets
New York Life USA Networks, Inc. EEPP Stock Fund 3,551,512 3,149,451 3,551,512 402,061
There were no Category (ii) or (iv) transactions.
Note: Columns (c), (e) and (f) are not applicable.
</TABLE>
12
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USA Networks Inc. Retirement Savings Plan
E.I.N. 59-2649518
Plan No: 001
Schedule G, Part III--Schedule of Nonexempt Transactions
Year ended December 31, 1999
<TABLE>
<CAPTION>
(c) DESCRIPTION OF TRANSACTIONS
(b) RELATIONSHIP TO PLAN, EMPLOYER, INCLUDING MATURITY DATE,
(a) IDENTITY OF OR OTHER RATE OF INTEREST, COLLATERAL, (d) PURCHASE
PARTY INVOLVED PARTY-IN-INTEREST PAR OR MATURITY VALUE PRICE
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The Home Shopping Plan Sponsor Late remittance of participant $45,463
Network contributions for December, 1999
made January 24, 2000
The Home Shopping Plan Sponsor Late remittance of participant 3,103
Network contributions for December, 1999
made February 16, 2000
</TABLE>
Note: Columns (e) through (j) are not applicable.
13
