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FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.

For Quarter Ended: June 30, 2003

Commission file number: 1-11106

PRIMEDIA Inc.
(Exact name of registrant as specified in its charter)

Registrant's telephone number, including area code (212) 745-0100

        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, and (2) has been subject to such filing requirements for the past 90 days.

Yes    ý            No    o

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes  ý            No  o

        Number of shares of common stock, par value $.01 per share, of PRIMEDIA Inc. outstanding as of July 31, 2003: 259,604,498.

PRIMEDIA Inc.
INDEX

PRIMEDIA INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

See notes to condensed consolidated financial statements (unaudited).

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PRIMEDIA INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)

See notes to condensed consolidated financial statements (unaudited).

3

PRIMEDIA INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)

See notes to condensed consolidated financial statements (unaudited).

4

PRIMEDIA INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)

See notes to condensed consolidated financial statements (unaudited).

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PRIMEDIA Inc.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

1.    Basis of Presentation

        PRIMEDIA Inc., together with its subsidiaries, is herein referred to as either "PRIMEDIA" or the "Company." In the opinion of the Company's management, the consolidated financial statements present fairly the consolidated financial position of the Company as of June 30, 2003 and December 31, 2002 and the consolidated results of operations of the Company for the six and three months ended June 30, 2003 and 2002, and consolidated cash flows of the Company for the six month periods ended June 30, 2003 and 2002 and all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. All significant intercompany accounts and transactions have been eliminated in consolidation. These statements should be read in conjunction with the Company's annual consolidated financial statements and related notes for the year ended December 31, 2002, which are included in the Company's annual report on Form 10-K for the year ended December 31, 2002. The operating results for the six and three month periods ended June 30, 2003 are not necessarily indicative of the results that may be expected for a full year. Certain amounts in the prior periods' condensed consolidated financial statements have been reclassified to conform to the presentation as of and for the six and three month periods ended June 30, 2003.

Recent Accounting Pronouncements

        In 2002 and 2003, the Company adopted a series of accounting pronouncements, as required by the Financial Accounting Standards Board ("FASB"). These changes are summarized below.

        Statement of Financial Accounting Standards ("SFAS") 142, "Goodwill and Other Intangible Assets"

        In July 2001, the FASB issued SFAS 142, which changes the method by which companies may recognize intangible assets in purchase business combinations and generally requires identifiable intangible assets to be recognized separately from goodwill. In addition, it eliminates the amortization of all existing and newly acquired goodwill and indefinite lived intangible assets on a prospective basis and requires companies to assess goodwill and indefinite lived intangible assets for impairment, at least annually. The Company adopted certain provisions of SFAS 142 in connection with the EMAP, Inc. ("EMAP") acquisition in 2001 and fully adopted the SFAS 142 accounting rules on January 1, 2002 (See Note 5).

        SFAS 143, "Accounting for Asset Retirement Obligations"

        In August 2001, the FASB issued SFAS 143, which requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. When the liability is initially recorded, the entity capitalizes a cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, an entity either settles the obligation for its recorded amount or incurs a gain or loss upon settlement. On January 1, 2003, the Company adopted SFAS 143 which has not had a material impact on the Company's results of operations or financial position.

        SFAS 144, "Accounting for the Impairment or Disposal of Long-Lived Assets"

        In August 2001, the FASB issued SFAS 144, which superseded SFAS 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of". This statement also supersedes accounting and reporting provisions of Accounting Principles Board ("APB") Opinion 30, "Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions," relating to the

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disposal of a segment of a business. SFAS 121 did not address the accounting for business segments accounted for as discontinued operations under APB Opinion 30 and therefore two accounting models existed for long-lived assets to be disposed of. SFAS 144 established one accounting model for long-lived assets to be held and used, long-lived assets (including those accounted for as a discontinued operation) to be disposed of by sale and long-lived assets to be disposed of other than by sale, and resolved certain implementation issues related to SFAS 121. The Company adopted SFAS 144 on January 1, 2002, and as a result, the results of the Modern Bride Group, ExitInfo, Doll Reader, Chicago, Horticulture, IN New York and the American Baby Group, which were sold during 2002, and Seventeen Magazine and related teen properties, which were sold in the second quarter of 2003, were recorded as discontinued operations for the periods prior to their respective divestiture dates. For the six and three months ended June 30, 2003, discontinued operations includes a net loss on sale of businesses, related to the finalization of certain 2002 divestiture transactions. Discontinued Operations includes sales of $10,855 and $40,523, and income of $103,537 and $4,287 (including a gain on sale of $103,748 and $4,069) for the three months ended June 30, 2003 and 2002, respectively, and sales of $35,161 and $92,694, and income of $106,371 and $11,460 (including a gain on sale of $102,770 and $10,579) for the six months ended June 30, 2003 and 2002, respectively. The discontinued operations include expenses related to certain centralized functions that are shared by multiple titles, such as production, circulation, advertising, human resource and information technology costs but exclude general overhead costs. These expenses were allocated to the discontinued entities based upon relative revenues for the related periods. The allocation methodology is consistent with that used across the Company. These allocations amounted to $442 and $1,575 for the three months ended June 30, 2003 and 2002, respectively, and $1,131 and $3,994 for the six months ended June 30, 2003 and 2002, respectively. The Company recorded a state income tax provision of $1,000 associated with the divestiture of Seventeen and its related teen properties which is included in discontinued operations on the condensed statements of consolidated operations for the six and three months ended June 30, 2003.

        In accordance with SFAS 144, the Company reclassified amounts from sales, net, to discontinued operations for the six and three months ended June 30, 2002, as follows:

        SFAS 145, "Rescission of FASB Statements No's. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections"

        In April 2002, the FASB issued SFAS 145, which for most companies will require gains and losses on extinguishments of debt to be classified within income or loss from continuing operations rather than as extraordinary items as previously required under SFAS 4, "Reporting Gains and Losses from

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Extinguishment of Debt (an Amendment of APB Opinion No. 30)." Extraordinary treatment will be required for certain extinguishments as provided under APB Opinion 30. In 2002, the Company early adopted SFAS 145 in accordance with the provisions of the statement. Losses from the extinguishment of debt have been included in other, net, on the condensed statements of consolidated operations (see Note 8).

        SFAS 146, "Accounting for Costs Associated with Exit or Disposal Activities"

        In June 2002, the FASB issued SFAS 146, which superseded EITF 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)". SFAS 146 affects the timing of the recognition of costs associated with an exit or disposal plan by requiring them to be recognized when incurred rather than at the date of a commitment to an exit or disposal plan. SFAS 146 has been applied prospectively to exit or disposal activities initiated after December 31, 2002.

        SFAS 148, "Accounting for Stock-Based Compensation—Transition and Disclosure—an Amendment of FASB Statement No. 123"

        In December 2002, the FASB issued SFAS 148 which amends SFAS 123, "Accounting for Stock-Based Compensation" to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. SFAS 148 is effective for annual periods ending after December 15, 2002 and interim periods beginning after December 15, 2002. On January 1, 2003, the Company adopted certain provisions of SFAS 148, which did not have a material impact on the Company's results of operations or financial position.

        SFAS 123 provides for a fair-value based method of accounting for employee options and measures compensation expense using an option valuation model that takes into account, as of the grant date, the exercise price and expected life of the option, the current price of the underlying stock and its expected volatility, expected dividends on the stock, and the risk-free interest rate for the expected term of the option. The Company has elected to continue accounting for employee stock-based compensation under APB 25, "Accounting for Stock Issued to Employees." Under APB 25, when the exercise price of the Company's employee stock options equals or exceeds the market price of the underlying stock on the date of grant, no compensation expense is recognized.

        The PRIMEDIA Inc. 1992 Stock Purchase and Option Plan (the "Stock Option Plan") authorizes sales of shares of common stock and grants of incentive awards in the form of, among other things, stock options to key employees and other persons with a unique relationship with the Company. The Stock Option Plan has authorized grants of up to 35,000,000 shares of the Company's common stock or options to management personnel.

        Most of the Company's options are exercisable at the rate of 20%—25% per year over a four to five-year period commencing on the effective date of the grant. Most options granted will expire no later than ten years from the date the option was granted. In general, no stock-based employee compensation cost is reflected in net income, as most options granted under the Stock Option Plan had

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an exercise price equal to or greater than the market value of the underlying common stock on the date of grant.

        The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS 123 to stock-based employee compensation.

        The fair value of these options was estimated at the date of grant using the Black-Scholes pricing model. The following weighted average assumptions were used for the six months ended June 30, 2003 and 2002, respectively: risk-free interest rates of 3.87% and 4.61%; dividend yields of 0% and 0%; volatility factors of the expected market price of the Company's common stock of 122% and 122%; and a weighted—average expected life of the options of ten years. For the three months ended June 30, 2003 and 2002, respectively, the following weighted average assumptions were used: risk-free interest rates of 3.82% and 4.61%; dividend yields of 0% and 0%; volatility factors of the expected market price of the Company's common stock of 122% and 122%; and a weighted average expected life of the options of ten years. The estimated fair value of options granted during the six months ended June 30, 2003 and 2002 was $29 and $17,213, respectively, and $15 and $16,882 during the three months ended June 30, 2003 and 2002, respectively.

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

        FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, including Indirect Guarantees of Indebtedness of Others, an Interpretation of FASB Statements No. 5, 57 and 107 and Rescission of FASB Interpretation No. 34"

        In November 2002, the FASB approved FASB Interpretation No. 45 ("FIN 45"). FIN 45 clarifies the requirements of SFAS 5, "Accounting for Contingencies", relating to a guarantor's accounting for, and disclosure of, the issuance of certain types of guarantees. Specifically, FIN 45 requires a guarantor

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to recognize a liability for the non-contingent component of certain guarantees, representing the obligation to stand ready to perform in the event that specified triggering events or conditions occur. Effective January 1, 2003, the Company adopted FIN 45 which has not had a material impact on the Company's results of operations or financial position.

        FASB Interpretation No. 46, "Consolidation of Variable Interest Entities"

        In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"). FIN 46 clarifies the application of Accounting Research Bulletin No. 51, "Consolidated Financial Statements", to certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. Effective January 31, 2003, the Company has adopted FIN 46 which has not had a material impact on the Company's results of operations or financial position.

        SFAS 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities"

        In April 2003, the FASB issued SFAS 149, which amends and clarifies accounting for derivative instruments, and for hedging activities under SFAS 133. Specifically, SFAS 149 requires that contracts with comparable characteristics be accounted for similarly. Additionally, SFAS 149 clarifies the circumstances in which a contract with an initial net investment meets the characteristics of a derivative and when a derivative contains a financing component that requires special reporting in the statement of cash flows. This Statement is generally effective for contracts entered into or modified after June 30, 2003. Subsequent to June 30, 2003, the Company was not a party to and has not entered into any derivative contracts.

        SFAS 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity"

        In May 2003, the FASB issued SFAS 150, which establishes standards for classifying and measuring certain financial instruments that have characteristics of both liabilities and equity as liabilities (or as assets in some circumstances). SFAS 150 must be applied immediately to instruments entered into or modified after May 31, 2003,and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. The Company is currently assessing the impact that this statement will have on its results of operations and financial position.

Barter Transactions

        The Company trades advertisements in its traditional and online properties in exchange for advertising in properties of other companies and trade show space and booths. Revenue and related expenses from barter transactions are recorded at fair value in accordance with EITF 99-17, "Accounting for Advertising Barter Transactions." Revenue from barter transactions is recognized in accordance with the Company's revenue recognition policies. Expense from barter transactions is recognized as incurred. Sales from barter transactions were approximately $7,300 and $8,900 for the six months ended June 30, 2003 and 2002, respectively, and $3,200 and $3,400 for the three months ended June 30, 2003 and 2002, respectively, with equal related expense amounts in each six and three month period.

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2.    Divestitures

        On February 28, 2002, the Company completed the sale of the Modern Bride Group, the results of which have been included in discontinued operations in accordance with SFAS 144. The related gain on sale of the Modern Bride Group of $6,422 has been included in discontinued operations on the accompanying condensed statement of consolidated operations for the six months ended June 30, 2002. In connection with this divestiture, the Company agreed to provide certain services to the purchasers including space rental and finance staff support and sales and systems support at negotiated rates over specified terms. Proceeds from the sale were approximately $50,000 and were used to pay down the Company's borrowings under the credit facility.

        On June 28, 2002, the Company completed the sale of ExitInfo, the results of which have been included in discontinued operations in accordance with SFAS 144. The related gain on sale of ExitInfo of $4,157 is included in discontinued operations on the accompanying condensed statements of consolidated operations for the six and three months ended June 30, 2002. Proceeds from the sale of approximately $23,000 were used to pay down the Company's borrowings under the credit facility.

        During the remaining six months of 2002, the Company completed several other divestitures whose results have been reclassified as discontinued operations in accordance with SFAS 144. These divestitures include Doll Reader, Chicago, Horticulture, IN New York and the American Baby Group. Certain amounts in the prior periods' condensed consolidated financial statements have been reclassified to conform to the current year presentation.

        During the six and three months ended June 30, 2003, the net Company finalized certain aspects of the dispositions which were classified as discontinued operations in 2002 and recognized a net loss of $1,534 and $556, respectively.

        On May 30, 2003, the Company completed the sale of Seventeen magazine and its companion properties including a number of Seventeen branded assets, Teen magazine, Seventeen.com, teenmag.com and Cover Concepts, an in-school marketing unit, to The Hearst Corporation. The related gain on the sale of $104,304, net of tax, for the three months ended June 30, 2003 has been included in discontinued operations on the accompanying condensed statement of consolidated operations in accordance with SFAS 144. In connection with this divestiture, the Company agreed to provide certain services to the purchasers including space rental, financial staffing and support, and website hosting services at negotiated rates over specified terms. Proceeds from the sale were approximately $182,400, subject to standard post closing adjustments, and were used to pay down the Company's borrowings under the credit facility.

        In addition, during the six and three months ended June 30, 2003 and 2002, the Company completed the sale of several other properties which did not qualify as discontinued operations under SFAS 144. The related net loss on the sale of these businesses of $1,502 and $2,131 for the six months ended June 30, 2003 and 2002, respectively, and $1,114 and $2,686 for the three months ended June 30, 2003 and 2002, respectively, is included in loss on sale of businesses and other, net, on the accompanying condensed statements of consolidated operations.

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3.    Accounts Receivable, Net

        Accounts receivable, net, consist of the following:

4.    Inventories, net

        Inventories, net, consist of the following:

5.    Goodwill, Other Intangible Assets and Other

        As required under SFAS 142, the Company reviewed its goodwill and indefinite lived intangible assets (primarily trademarks) for impairment upon adoption on January 1, 2002 and determined that certain of these assets were impaired. As a result, the Company recorded an impairment charge within cumulative effect of a change in accounting principle of $388,508 effective in the first quarter 2002, of which $219,314 relates to the Consumer segment and $169,194 relates to the Business-to-Business segment. Previously issued financial statements as of June 30, 2002 and for the six and three months then ended have been restated to reflect the cumulative effect of this accounting change at the beginning of the year of adoption.

        The Company's SFAS 142 evaluations have been performed by an independent valuation firm, utilizing reasonable and supportable assumptions and projections and reflect management's best estimate of projected future cash flows. The Company's discounted cash flow evaluation used a range of discount rates that represented the Company's weighted-average cost of capital and included an evaluation of other companies in each reporting unit's industry. The assumptions utilized by the Company in the evaluations are consistent with those utilized in the Company's annual planning process. If the assumptions and estimates underlying these goodwill and trademark impairment evaluations are not achieved, the ultimate amount of the impairment could be adversely affected. Future impairment tests will be performed at least annually in conjunction with the Company's annual budgeting and forecasting process, with any impairment classified as an operating expense.

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        Historically, the Company did not need a valuation allowance for the portion of the net operating losses equal to the amount of tax-deductible goodwill and trademark amortization expected to occur during the carryforward period of the net operating losses based on the timing of the reversal of these taxable temporary differences. As a result of the adoption of SFAS 142, the reversal will not occur during the carryforward period of the net operating losses. Therefore, the Company recorded a non-cash deferred income tax expense of $52,000 on January 1, 2002 and $6,650 and $12,500 during the six months ended June 30, 2003 and 2002, respectively, and $3,325 and $6,500 during the three months ended June 30, 2003 and 2002, respectively, each of which would not have been required prior to the adoption of SFAS 142.

        Since amortization of tax-deductible goodwill and trademarks ceased on January 1, 2002, the Company will have deferred tax liabilities that will arise each quarter because the taxable temporary differences related to the amortization of these assets will not reverse prior to the expiration period of the Company's deductible temporary differences unless the related assets are sold or an impairment of the assets is recorded.

        Changes in the carrying amount of goodwill for the six months ended June 30, 2003, by operating segment, are as follows:

(1)

Primarily related to final working capital settlement for EMAP.

        Intangible assets subject to amortization consist of the following:

        Intangible assets not subject to amortization had a net carrying value of $235,477 and $270,006 at June 30, 2003 and December 31, 2002, respectively, and consisted of trademarks. Amortization expense

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for intangible assets still subject to amortization (excluding provision for impairment) was $16,805 and $28,376 for the six months ended June 30, 2003 and 2002, respectively, and $7,997 and $13,543 for the three months ended June 30, 2003 and 2002, respectively. Amortization of deferred wiring costs of $3,893 and $5,495 for the six months ended June 30, 2003 and 2002, respectively, and $1,970 and $2,781 for the three months ended June 30, 2003 and 2002, respectively, has also been included in amortization of intangible assets and other on the accompanying condensed statements of consolidated operations. At June 30, 2003, estimated future amortization expense of other intangible assets still subject to amortization, excluding deferred wiring costs, is as follows: approximately $15,000 for the remaining six months of 2003 and approximately $18,000, $11,000, $7,000, $5,000 and $4,000 for 2004, 2005, 2006, 2007 and 2008, respectively.

6.    Other Investments

        Other investments consist of the following:

        The Company's cost method investments consist primarily of the PRIMEDIA Ventures, Inc. ("PRIMEDIA Ventures") investments and the assets-for-equity investments, detailed below. PRIMEDIA's equity method investments represent PRIMEDIA's investment in certain companies where PRIMEDIA has the ability to exercise significant influence over the operations (including financial and operational policies).

PRIMEDIA Ventures' Investments

        In 1998, the Company created PRIMEDIA Ventures to invest in early-stage Internet companies and other technology opportunities. For the six and three months ended June 30, 2002, the Company recorded a provision for impairment of PRIMEDIA Ventures' investments of $2,650 and $1,900, respectively, as a component of provision for impairment of investments on the accompanying condensed statements of consolidated operations. At June 30, 2003, the Company had no remaining carrying value related to the PRIMEDIA Ventures investments on the accompanying condensed consolidated balance sheet.

Assets-for-Equity Transactions

        From 2000 to 2002, the Company made a number of investments in start-up and venture-stage companies in which the Company received equity in these entities (the "Investees") in exchange for advertising, content licensing and other services ("assets-for-equity"). These transactions are recorded at the fair value of the equity securities received, which are typically based on cash consideration for like securities. For any significant transactions involving equity securities in private companies, the Company obtains and considers independent third-party valuations where appropriate. No new transactions were entered into in 2003.

        The Company's investments in Investees, included in other investments on the accompanying condensed consolidated balance sheets, totaled $2,272 ($2,067 representing cost method investments and $205 representing equity method investments) and $16,870 ($15,956 representing cost method investments and $914 representing equity method investments) at June 30, 2003 and December 31, 2002, respectively. At June 30, 2003 and December 31, 2002, respectively, $141 and $4,963 relating to these arrangements is included as deferred revenues on the accompanying condensed consolidated

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balance sheets. This deferred revenue represents advertising, content licensing and other services to be rendered by the Company in exchange for the equity in these entities. The Company recognizes these amounts as revenue in accordance with the Company's revenue recognition policies. The Company recorded revenue from these agreements of $149 and $4,531 for the six months ended June 30, 2003 and 2002, respectively, and $76 and $1,695 for the three months ended June 30, 2003 and 2002, respectively.

        Investments are continually reviewed by the Company for impairment whenever significant events occur, such as those affecting general market conditions or those pertaining to a specific industry or an individual investment, which could result in the carrying value of an investment exceeding its fair value. If an investment is deemed to be other than temporarily impaired, its carrying value will be reduced to fair market value. The Company recorded a net provision for impairment of its investments in certain Investees of $4,907 and $2,198 for the six and three months ended June 30, 2002, respectively, as the decline in value of the investments was deemed to be other than temporary. During the six and three months ended June 30, 2003, the Company recorded a provision for impairment of its investments in certain Investees of $7,727 as the decline in the value of the investments was deemed to be other than temporary.

        The Company recorded $710 and $2,107 of equity method losses from Investees during the six months ended June 30, 2003 and 2002, respectively, and $355 and $76 for the three months ended June 30, 2003 and 2002, respectively. These equity method losses from Investees are included in other, net on the accompanying condensed statements of consolidated operations. The Company recognized $0 and $665 of revenue related to the equity method Investees during the six months ended June 30, 2003 and 2002, respectively, and $0 and $228 for the three months ended June 30, 2003 and 2002, respectively.

Sale of Investments

        For the six and three months ended June 30, 2003, the Company sold certain PRIMEDIA Ventures and assets-for-equity investments for proceeds of $2,050 ($800 of which was received in July 2003) and realized a gain on these sales of $315. For the six and three months ended June 30, 2002, the Company sold certain PRIMEDIA Ventures investments for proceeds of $323 and $0 and realized a gain on these sales of $28 and $0, respectively. These gains are included in other, net, on the condensed statements of consolidated operations.

7.    Other Non-Current Assets

        Other non-current assets consist of the following:

        The deferred financing costs are net of accumulated amortization of $16,289 and $12,923 at June 30, 2003 and December 31, 2002, respectively. The deferred wiring and installation costs are net of accumulated amortization of $72,956 and $69,063 at June 30, 2003 and December 31, 2002, respectively. Direct-response advertising costs are net of accumulated amortization of $52,002 and $81,621 at June 30, 2003 and December 31, 2002, respectively. Video mastering and programming costs

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are net of accumulated amortization of $45,785 and $42,223 at June 30, 2003 and December 31, 2002, respectively.

8.    Long-term Debt

        Long-term debt consists of the following:

Bank Credit Facility

        The Company has credit facilities with various financial institutions with JPMorgan Chase Bank, Bank of America, N.A., The Bank of New York, and The Bank of Nova Scotia, as agents (the "bank credit facility"). The debt under the bank credit facility agreement and as otherwise permitted under the bank credit facility agreement and the indebtedness relating to the 7⁵/8 Senior Notes, 8⁷/8 Senior Notes and the 8% Senior Notes of the Company (together referred to as "Senior Notes") of the Company is secured by a pledge of the stock of PRIMEDIA Companies Inc., an intermediate holding company, owned directly by the Company, which owns directly or indirectly all shares of PRIMEDIA subsidiaries that guarantee such debt (as well as certain of the Company's other equally and ratably secured indebtedness).

        Substantially all proceeds from sales of businesses and other investments were used to pay down borrowings under the bank credit facility agreement. Amounts under the bank credit facility may be reborrowed and used for general corporate and working capital purposes as well as to finance certain future acquisitions. In the second quarter of 2003, the Company made voluntary pre-payments towards the term loans A and B and a voluntary permanent reduction of the revolving loan commitment in the amounts of $5,000, $21,000 and $24,000, respectively. The bank credit facility consists of the following:

        With the exception of the term loan B, the amounts borrowed bear interest, at the Company's option, at either the base rate plus an applicable margin ranging from 0.125% to 1.5% or the Eurodollar Rate plus an applicable margin ranging from 1.125% to 2.5%. The term loan B bears interest at the base rate plus 1.75% or the Eurodollar Rate plus 2.75%. At June 30, 2003, the weighted average variable interest rate on all outstanding borrowings under the bank credit facility was 3.6%.

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        Under the bank credit facility, the Company has agreed to pay commitment fees at a per annum rate of either 0.375% or 0.5%, depending on its debt to EBITDA ratio, as defined in the bank credit facility agreement, on the daily average aggregate unutilized commitment under the revolving loan commitment. During the first and second quarters of 2003, the Company's commitment fees were paid at weighted average rates of 0.5% and 0.375%, respectively. The Company also has agreed to pay certain fees with respect to the issuance of letters of credit and an annual administration fee.

        The commitments under the revolving loan portion of the bank credit facility are subject to mandatory reductions semi-annually on June 30 and December 31, commencing December 31, 2004, with the final reduction on June 30, 2008. The aggregate mandatory reductions of the revolving loan commitments under the bank credit facility are $21,350 in 2004, $42,700 in 2005, $64,050 in 2006, $128,100 in 2007 and a final reduction of $170,800 in 2008. To the extent that the total revolving credit loans outstanding exceed the reduced commitment amount, these loans must be paid down to an amount equal to or less than the reduced commitment amount. However, if the total revolving credit loans outstanding do not exceed the reduced commitment amount, then there is no requirement to pay down any of the revolving credit loans. Remaining aggregate term loan payments under the bank credit facility are $1,912 in 2003, $15,075 in 2004, $26,325 in 2005, 2006 and 2007, $15,075 in 2008 and $353,782 in 2009.

        The bank credit facility agreement, among other things, limits the Company's ability to change the nature of its businesses, incur indebtedness, create liens, sell assets, engage in mergers, consolidations or transactions with affiliates, make investments in or loans to certain subsidiaries, issue guarantees and make certain restricted payments including dividend payments on or repurchases of the Company's common stock in excess of $75,000 in any given year.

        The bank credit facility and Senior Notes of the Company contain certain customary events of default which generally give the banks or the note holders, as applicable, the right to accelerate payments of outstanding debt. Under the bank credit facility agreement these events include:

•

failure to maintain required covenant ratios, as described below;



•

failure to make a payment of principal when due or a payment of interest or fees within five days after its due date;



•

default, beyond any applicable grace period, on any aggregate indebtedness of PRIMEDIA exceeding $20,000;



•

occurrence of certain insolvency proceedings with respect to PRIMEDIA or any of its material subsidiaries;



•

entry of one judgment or decree involving a liability of $15,000 or more (or more than one involving an aggregate liability of $25,000 or more); and



•

occurrence of certain events constituting a change of control of the Company.

        The events of default contained in PRIMEDIA's Senior Notes are similar to, but generally less restrictive than, those contained in the Company's bank credit facility.

        7⁵/8% Senior Notes.    Interest is payable semi-annually in April and October at the annual rate of 7⁵/8%. The 7⁵/8% Senior Notes mature on April 1, 2008, with no sinking fund requirements. The 7⁵/8% Senior Notes are redeemable in whole or in part, at the option of the Company, at 103.813% as of April 1, 2003 with annual reductions to 100% in 2006 and thereafter, plus accrued and unpaid interest. The unamortized discount for these notes totaled $739 and $803 at June 30, 2003 and December 31, 2002, respectively.

        8⁷/8% Senior Notes.    Interest is payable semi-annually in May and November at an annual rate of 8⁷/8%. The 8⁷/8% Senior Notes mature on May 15, 2011, with no sinking fund requirements. Beginning in 2006, the 8⁷/8% Senior Notes are redeemable at 104.438% with annual reductions to 100% in 2009 and thereafter, plus accrued and unpaid interest. The unamortized discount for these notes totaled $5,947 and $6,201 at June 30, 2003 and December 31, 2002, respectively.

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        8% Senior Notes.    The 8% Senior Notes were issued at par for $300,000 in May 2003. Interest is payable semi-annually in May and November at the annual rate of 8%. The 8% Senior Notes mature on May 15, 2013 with no sinking fund requirements and may not be redeemed prior to May 15, 2008 other than through the use of proceeds of future equity offerings, subject to certain conditions, or in connection with a change of control. Beginning in May 2008, the notes are redeemable in whole or in part at the option of the Company, at 104% in 2008 with annual reductions to 100% in 2011 and thereafter, plus accrued and unpaid interest. The Company has agreed to use its reasonable best efforts to consummate, within 12 months after the issue date of the notes, an offer to exchange the 8% Senior Notes for registered notes with substantially identical terms to those notes, except that the registered exchange notes will generally be freely transferable in certain circumstances, and to file and cause to become effective a shelf registration statement with respect to the resale of the registered exchange notes. Under certain circumstances if the Company is not in compliance with these obligations, the Company will be required to pay additional interest for the period it is not in compliance.

        The Senior Notes and the bank credit facility, all rank senior in right of payment to all subordinated obligations which PRIMEDIA Inc. (a holding company) may incur. The Senior Notes are secured by a pledge of stock of PRIMEDIA Companies Inc.

        If the Company becomes subject to a change of control, each holder of the Senior Notes will have the right to require the Company to purchase any or all of its Senior Notes at a purchase price equal to 101% of the aggregate principal amount of the purchased Senior Notes plus accrued and unpaid interest, if any, to the date of purchase.

Senior Note Redemptions

        On March 5, 2003, the Company redeemed the remaining $84,175 of the 10¹/4% Senior Notes at the carrying value of $84,175, plus accrued interest. These notes were redeemed 15 months prior to maturity. The Company funded this transaction with additional borrowings under its bank credit facility. The redemption resulted in a write-off of unamortized issuance costs of $343 which is included in other, net, on the accompanying condensed statement of consolidated operations for the six months ended June 30, 2003.

        On June 16, 2003, the Company redeemed the remaining 8¹/2% Senior Notes at the carrying value of $291,073, plus accrued interest. The Company funded the transaction with the proceeds of the 8% Senior Note offering. The redemption resulted in write-offs of unamortized issuance costs of $1,810 and the unamortized discount of $427 which are included in other, net, on the accompanying condensed statements of consolidated operations, for the six and three months ended June 30, 2003.

Covenant Compliance

        On June 13, 2003, the bank credit facility agreement was amended to provide for a one-year hiatus in each of the scheduled step-downs in the permitted leverage ratio, as defined in the bank credit facility agreement. As a result of the amendment, the leverage ratio, remains at 6.0 and does not step down to 5.75 until the third quarter of 2004. This amendment enables the Company to consider alternatives to improve its capital structure, but was not necessary for the Company to remain in compliance with all of its debt covenants.

        Under the most restrictive covenants as defined in the bank credit facility agreement, the Company must maintain a minimum interest coverage ratio, as defined, of 1.80 to 1 and a minimum fixed charge coverage ratio, as defined, of 1.05 to 1. The maximum allowable debt leverage ratio, as defined, is 6.0 to 1. The maximum leverage ratio decreases to 5.75 to 1, 5.5 to 1, 5.0 to 1 and 4.5 to 1, respectively, on July 1, 2004, January 1, 2005, January 1, 2006 and January 1, 2007. The minimum interest coverage ratio increases to 2.0 to 1, 2.25 to 1 and 2.5 to 1, respectively, on July 1, 2003, January 1, 2004 and

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January 1, 2005. The Company is in compliance with all of the financial and operating covenants of its financing arrangements.

        The Company is herewith providing detailed information and disclosure as to the methodology used in determining compliance with the leverage ratio in the bank credit facility agreement. The purpose of providing this information is to give more clarity to the substantial amount of disclosure already provided. Under its bank credit facility and Senior Note agreements, the Company is allowed to designate certain businesses as unrestricted subsidiaries to the extent that the value of those businesses does not exceed the permitted amounts, as defined in these agreements. The Company has designated certain of its businesses as unrestricted (the "Unrestricted Group"), which primarily represent Internet businesses, trademark and content licensing and service companies, new launches (including traditional start-ups), other properties under evaluation for turnaround or shutdown and foreign subsidiaries. Indebtedness under the bank credit facility and Senior Note agreements is guaranteed by each of the Company's domestic restricted subsidiaries in accordance with the provisions and limitations of the Company's bank credit facility and Senior Note agreements. The guarantees are full, unconditional and joint and several. The Unrestricted Group does not guarantee the bank credit facility or Senior Notes. For purposes of determining compliance with certain financial covenants under the Company's bank credit facility agreement, the Unrestricted Group's results (positive or negative) are not reflected in the Consolidated EBITDA of the company and its restricted subsidiaries which as defined in the bank credit facility agreement excludes losses of the Unrestricted Group, non-cash charges and restructuring charges and is adjusted primarily for the trailing four quarters results of acquisitions and divestitures and estimated savings for acquired businesses. The Company has established intercompany arrangements that reflect transactions, such as leasing, licensing, sales and related services and cross-promotion, between restricted and unrestricted subsidiaries, which management believes is on an arms length basis and as permitted by the bank credit facility and Senior Note agreements. These intercompany arrangements afford strategic benefits across the Company's properties and, in particular, enable the Unrestricted Group to utilize established brands and content, promote brand awareness and increase traffic and revenue to the Company's new media properties. For company-wide consolidated financial reporting, these intercompany transactions are eliminated in consolidation.

        The scheduled repayments of all debt outstanding, net of unamortized discounts, including capital leases, as of June 30, 2003, are as follows:

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9. Exchangeable Preferred Stock

        Exchangeable Preferred Stock consists of the following:

$10.00 Series D Exchangeable Preferred Stock

        The Company authorized 2,000,000 shares of $.01 par value, $10.00 Series D Exchangeable Preferred Stock, of which 1,699,867 and 1,769,867 shares were outstanding at June 30, 2003 and December 31, 2002, respectively. The liquidation and redemption value was $169,987 and $176,987 at June 30, 2003 and December 31, 2002, respectively.

$9.20 Series F Exchangeable Preferred Stock

        The Company authorized 1,250,000 shares of $.01 par value, $9.20 Series F Exchangeable Preferred Stock, of which 953,328 and 1,023,328 shares were outstanding at June 30, 2003 and December 31, 2002, respectively. The liquidation and redemption value was $95,333 and $102,333 at June 30, 2003 and December 31, 2002, respectively.

$8.625 Series H Exchangeable Preferred Stock

        The Company authorized 2,500,000 shares of $.01 par value, $8.625 Series H Exchangeable Preferred Stock, of which 2,117,391 and 2,140,891 shares were outstanding at June 30, 2003 and December 31, 2002, respectively. The liquidation and redemption value was $211,739 and $214,089 at June 30, 2003 and December 31, 2002, respectively.

        During the second quarter of 2003, the Company exchanged $7,000 of Series D Exchangeable Preferred Stock for 2,223,334 shares of common stock, $7,000 of Series F Exchangeable Preferred Stock for 2,124,166 shares of common stock, and $2,350 of Series H Exchangeable Preferred Stock for 693,250 shares of common stock. The Company recognized a related gain of $944 for the six and three months ended June 30, 2003, which has been included in the calculation of basic and diluted income (loss) applicable to common shareholders per common share on the condensed statements of consolidated operations. This gain is included as a component of additional paid in capital on the accompanying condensed consolidated balance sheet at June 30, 2003.

        During the six months ended June 30, 2002, the Company exchanged $19,013 of Series D Exchangeable Preferred Stock for 3,696,979 shares of common stock, $22,667 of Series F Exchangeable Preferred Stock for 4,385,222 shares of common stock and $29,761 of Series H Exchangeable Preferred Stock for 5,808,050 shares of common stock. The gains of $28,301 and $25,323 for the six and three months ended June 30, 2002, respectively, are included in the calculation of basic and diluted income (loss) applicable to common shareholders per common share on the condensed statements of consolidated operations for their respective periods. The cumulative gain on these exchanges is included as a component of additional paid in capital on the accompanying condensed consolidated balance sheets.

        The exchangeable preferred stock may be redeemed in whole or in part, at the option of the Company at specified redemption prices plus accrued and unpaid dividends.

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10. Series J Convertible Preferred Stock

        As of June 30, 2003 and December 31, 2002, the Company had $154,692 and $145,351 of Series J Convertible Preferred Stock outstanding, respectively. These shares are convertible at the option of the holder into approximately 17,900,000 shares of the Company's common stock (excluding dividends) at a conversion price of $7 per share, subject to adjustment. Dividends on the Series J Convertible Preferred Stock accrue at an annual rate of 12.5% and are payable quarterly in-kind. The Company paid dividends-in-kind of 74,035 and 37,587 shares of Series J Convertible Preferred Stock valued at $9,254 and $4,698 during the six and three months ended June 30, 2003 and 65,460 and 33,234 shares of Series J Convertible Preferred Stock valued at $8,182 and $4,154, respectively, during the six and three months ended June 30, 2002. The Company has the option to redeem any or all of the shares of the Series J Convertible Preferred Stock at any time for cash at 100% of the liquidation preference of each share being redeemed. On any dividend payment date, the Company has the option to exchange, in whole but not in part, the Series J Convertible Preferred Stock into 12.5% Class J Subordinated Notes. The Company's ability to redeem or exchange the Series J Convertible Preferred Stock into debt is subject to the approval of a majority of the independent directors.

11. Common Stock and Related Options and Warrants

        During the second quarter of 2002, the Board of Directors approved and the shareholders ratified an amendment to the Company's Certificate of Incorporation, which increased the number of authorized shares of the Company's common stock from 300,000,000 to 350,000,000.

        In connection with the exchange of $6,150 of Series H Preferred Stock in December 2002, the Company repurchased the 2,860,465 shares of common stock exchanged for Series H Preferred Stock for $1.48 per share or $4,233. The transaction settled in January 2003.

        During the second quarter of 2003 the Company exchanged $7,000 of Series D Exchangeable Preferred Stock for 2,223,334 shares of common stock, $7,000 of Series F Exchangeable Preferred Stock for 2,124,166 shares of common stock, and $2,350 of Series H Exchangeable Preferred Stock for 693,250 shares of common stock. The Company repurchased these 5,040,750 shares of common stock for $3.00 per share or $15,122.

        In connection with PRIMEDIA's acquisition of EMAP in 2001, the Company issued warrants to purchase 2,000,000 shares of common stock at an exercise price of $9 per share to EMAP. In addition, the Company paid KKR 1996 Fund a commitment fee consisting of warrants to purchase 1,250,000 shares of common stock ("commitment warrants") of the Company at an exercise price of $7 per share, subject to adjustment, and a funding fee consisting of warrants to purchase an additional 2,620,000 shares of the Company's common stock ("funding warrants") at an exercise price of $7 per share, subject to adjustment. These warrants may be exercised after the first anniversary of the grant date and expire on August 24, 2011 or upon a change in control, as defined.

        As the Series J Convertible Preferred Stock was outstanding for twelve months from the date of issuance, KKR 1996 Fund received additional warrants to purchase 4,000,000 shares of common stock during 2001 and 2002. The Company ascribed a value of $6,389 to these warrants using the Black Scholes pricing model. These warrants expire ten years from the date of issuance or upon a change in control.

        In April 2002, the Company granted certain executives an aggregate total of 6,630,000 options to purchase shares of the Company's common stock. The exercise prices of these options range from $4.00 per share to $6.00 per share. The options granted at $4.00 per share vest over a four-year period following the date of the grant. The remaining options vest in 2010 unless the Company achieves certain earnings targets. Upon the achievement of these targets, the vesting of the respective options is accelerated upon the financial statements for the relevant period being finalized.

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12. Non-Cash Compensation and Non-Recurring Charges

        In connection with the merger with About in 2001, outstanding options to purchase shares of About common stock held by certain individuals were converted into 13,383,579 options to purchase shares of PRIMEDIA common stock. The fair value of the vested and unvested options issued by PRIMEDIA was $102,404 determined using a Black Scholes pricing model. On February 28, 2001, the date that the Company granted these unvested replacement options, the intrinsic value of the "in-the-money" unvested replacement options was $19,741. Based on a four-year service period from the original date that these options were granted, the Company classified $7,592 as unearned compensation relating to unvested options. The remaining $12,149 is included within the total purchase price. The Company recorded non-cash charges related to the amortization of the intrinsic value of unvested "in-the-money" options of $766 and $1,513 during the six months ended June 30, 2003 and 2002, respectively, and $259 and $631 for the three months ended June 30, 2003 and 2002. As of June 30, 2003, a number of these options have been forfeited or expired unexercised. Most of these remaining outstanding options have an exercise price which exceeded the Company's share price on June 30, 2003.

        Also in connection with the About merger, certain senior executives were granted 2,955,450 shares of restricted PRIMEDIA common stock and options to purchase 3,482,300 shares of PRIMEDIA common stock. These shares and options vest at a rate of 25% per year and are subject to the executives' continued employment. Related non-cash compensation of $1,210 and $2,355 was recorded for the six months ended June 30, 2003 and 2002, respectively, and $471 and $944 for the three months ended June 30, 2003 and 2002. This non-cash compensation reflects pro rata vesting on a graded basis.

        Two senior executives of About also entered into share lockup agreements with the Company, pursuant to which they agreed to specific restrictions regarding the transferability of their shares of PRIMEDIA common stock issued in the merger. Under the terms of those agreements, during the first year after the closing of the merger, the executives could sell a portion of their shares of the Company's common stock, subject to the Company's right of first refusal with respect to any sale. In the event that the gross proceeds received on sale were less than $33,125 (assuming all shares are sold), the Company agreed to pay the executives the amount of such shortfall. During the six and three months ended June 30, 2002, the Company recorded $3,186 and $149, respectively, of non-recurring charges related to these share lockup agreements. In 2002, the Company paid approximately $21,000 related to these agreements.

        As a result of one of these executives leaving the Company, effective December 2001, half of his restricted shares (1,105,550 shares) and options (1,302,650 options) were accelerated and the remainder was forfeited. The accelerated options expired unexercised during the first quarter of 2002.

        During the six and three months ended June 30, 2002, the Company recorded a non-cash charge of $657 and $328, respectively, related to the issuance of stock in connection with an acquisition and a non-recurring charge of $35 and $9, respectively, related to certain non-recurring compensation arrangements with certain senior executives. In addition, during the second quarter of 2003, the Company recognized $47 of non-cash compensation related to the Company's grant of shares of restricted common stock to certain employees in exchange for their options in the Company's Internet subsidiaries.

        For the six months ended June 30, 2003, and 2002, these non-cash charges totaled $2,023 and $4,525, respectively, and $777 and $1,903 for the three months ended June 30, 2003 and 2002, respectively. The non- recurring charges totaled $0 and $3,221 for the six months ended June 30, 2003 and 2002, respectively, and $0 and $158 for the three months ended June 30, 2003 and 2002, respectively.

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13. Senior Executive Severance and Provision for Severance, Closures and Restructuring Related Costs

Senior Executive Severance

        During the second quarter of 2003, the Company estimated and recorded $5,576 of severance related to the separation of the former Chief Executive Officer and Chief Financial Officer. The actual severance amount may differ from this estimated amount; accordingly, the Company may record future adjustments as amounts are finalized. At June 30, 2003, this amount is included in accrued expenses and other on the accompanying condensed consolidated balance sheet.

Provision for Severance, Closures and Restructuring Related Costs

        During 2002 and 2003, the Company announced additional cost initiatives that would continue to implement and expand upon the cost initiatives enacted during 2001 and 2000. These initiatives were enacted to integrate the operations of the Company and consolidate many back office functions. Effective January 1, 2003, the Company has accounted for all severance, closures and restructuring related costs in accordance with SFAS 146.

        Details of the initiatives implemented and the payments made in furtherance of these plans during the six-month periods ended June 30, 2003 and 2002 are presented in the following tables:

        The remaining costs, comprised primarily of real estate lease commitments for space that the Company no longer occupies, are expected to be paid through 2015. To reduce the lease related costs, the Company is aggressively pursuing subleases of its available office space. The leases have been recorded at their net present value amounts and are net of estimated sublease income amounts.

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        Included in the net provision for the six month period ended June 30, 2003 are reversals of $1,810 of previously recorded accruals primarily due to continuing re-evaluation of lease assumptions.

        As a result of the implementation of these plans, the Company has closed and consolidated in excess of twenty office locations and has notified a total of 1,915 individuals that they would be terminated under these plans, of which 159 and 103 individuals were notified during the six and three month periods ended June 30, 2003, respectively. As of June 30, 2003, all but eleven of those individuals have been terminated.

        The liabilities representing the provision for severance, closures and restructuring related costs are included in accrued expenses and other on the condensed consolidated balance sheets as of their respective dates.

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14. Comprehensive Income (Loss)

        Comprehensive income (loss) for the six and three months ended June 30, 2003 and 2002 are presented in the following tables:

15. Income (loss) per Common Share

        Income (loss) per share for the six and three month periods ended June 30, 2003 and 2002 has been determined based on net income (loss) after preferred stock dividends, related accretion, gain on the exchange of exchangeable preferred stock for common shares and in 2002 the issuance of contingent warrants associated with the Series J Convertible Preferred Stock (see Note 11) divided by the weighted average number of common shares outstanding for all periods presented. The effect of the assumed exercise of non-qualified stock options and warrants and the conversion of convertible preferred stock was not included in the computation of per share amounts because the effect of inclusion would be antidilutive.

16.    Contingencies

        The Company is involved in ordinary and routine litigation incidental to its business. In the opinion of management, there is no pending legal proceeding that would have a material adverse affect on the condensed consolidated financial statements of the Company.

        During 2002, PRIMEDIA contributed the Gravity Games, a product previously acquired from EMAP, to a limited liability company (the "LLC") formed jointly by PRIMEDIA, on one hand, and Octagon Marketing and Athlete Representation, Inc., on the other hand, with each party owning 50%. The LLC has entered into an agreement with NBC Sports, a division of National Broadcasting Company, Inc., which requires the LLC to pay specified fees to NBC for certain production services performed by NBC and network air time provided by NBC during 2003. Under the terms of this agreement and a related guarantee, PRIMEDIA could be responsible for the payment of a portion of such fees, in the event that the LLC failed to satisfy its payment obligations to NBC. The LLC satisfied all of its payment obligations due NBC in 2002. The maximum amounts for which PRIMEDIA could be liable would be $2,200 in 2003. As this liability will be contingent on the LLC's failure to pay and the occurrence of certain other events and existence of certain other conditions, the Company has not recorded a liability on the accompanying condensed consolidated balance sheet as of June 30, 2003; however, the asset representing the Company's 50% investment in the LLC as well as the Company's share of the LLC's losses are reflected in the Company's condensed consolidated financial statements.

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The Company's investment in the LLC of $547 is reflected as a component of other investments on the accompanying condensed consolidated balance sheet at June 30, 2003. The Company's share of the LLC's losses of $979 and $587 are reflected as a component of other, net on the accompanying condensed statements of consolidated operations for the six and three months ended June 30, 2003, respectively. In July 2003, PRIMEDIA paid $1,150 to the LLC primarily in connection with the NBC contingent obligation discussed above.

        As of and for the six months ended June 30, 2003, no officers or directors of the Company have been granted loans by the Company, nor has the Company guaranteed any obligations of such persons.

17.    Business Segment Information

        The Company's operations have been classified into two business segments: consumer and business-to-business. PRIMEDIA groups its businesses into these two segments based on the nature of the products and services they provide and the type or class of customer for these products or services. The Company's consumer segment produces and distributes magazines, guides, videos and Internet products for consumers in various niche markets. The Company's business-to-business segment produces and distributes magazines, books, directories, databases, vocational training materials and Internet products to business professionals in such fields as communications, agriculture, professional services, media, transportation and healthcare. These segment results are regularly reviewed by the Company's chief operating decision-maker and the remainder of the executive team to make decisions about resources to be allocated to each segment and to assess its performance. The information presented below includes certain intersegment transactions and is therefore, not necessarily indicative of the results had the operations existed as stand-alone businesses. Intersegment eliminations include intersegment content and brand licensing, advertising and other services, which are billed at what management believes are prevailing market rates. These intersegment transactions, which represent transactions between operating units in different business segments, are eliminated in consolidation. Intersegment eliminations and other includes eliminations of $2,769 and $2,048 related to the Consumer segment and $2 and $1,303 related to the Business-to-Business segment for the six months ended June 30, 2003 and 2002, respectively. Intersegment eliminations and other includes eliminations of $1,469 and $1,154 related to the Consumer segment and $0 and $518 related to the Business-to-Business segment for the three months ended June 30, 2003 and 2002, respectively. For 2003, the Company has eliminated intrasegment transactions within the segment results and has restated the prior periods accordingly. These intrasegment transactions totaled $33,241 and $61,824 for the six months ended June 30, 2003 and 2002, respectively, and $16,241 and $28,860 for the three months ended June 30, 2003 and 2002, respectively.

        The Non-Core Businesses include certain titles of the Business Magazines & Media Group and the Consumer Magazines & Media Group which have been discontinued or divested. In addition, during 2001, the Company restructured or consolidated several new media properties, whose value can be realized with far greater efficiency by having select functions absorbed by the core operations and has included these properties in Non-Core Businesses. The Company segregated the Non-Core Businesses from the aforementioned segments because the Company's chief operating decision-maker and the remainder of the executive team viewed these businesses separately in evaluating and making decisions regarding ongoing operations. In the ordinary course of business, corporate administrative costs of approximately $1,900 and $800 were allocated to the Non-Core Businesses during the six and three months ended June 30, 2002, respectively. Since June 30, 2002, the Company has not classified any additional businesses as Non-Core Businesses nor have any additional balances been allocated to the Non-Core Businesses.

        Information as to the operations of the Company in different business segments is set forth below based on the nature of the targeted audience. Corporate represents items not allocated to other business segments. PRIMEDIA evaluates performance based on several factors, of which the primary

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financial measure is segment earnings before interest, taxes, depreciation, amortization and other charges ("Segment EBITDA"). Other charges include severance related to separated senior executives, non-cash compensation and non-recurring charges, provision for severance, closures and restructuring related costs and loss on sale of businesses and other, net.