News Analysis: USA Networks Uses Innovation in Programming -- and Accounting

USA Networks' (USAI Quote) core business strategy appears to be a ceaseless devotion to schlock. One-fifth of the items sold on its Home Shopping Network are returned; USA's Miami television station tried -- and failed -- to generate viewer interest last year with innovations like having portions of the evening news read by a pair of sultry female lips.

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Unfortunately, USA's far-flung operations don't generate much net income. But what the company lacks at the bottom line, it makes up with its own very special style of reporting earnings.

Most public companies stick to a standard form for their earnings statements -- revenue minus costs equals operating income. Then, operating income minus taxes and interest expenses equals profits. ...