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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-K

(Mark One)

For the Fiscal Year Ended March 29, 2004

OR

Commission file number 1-11112

American Media Operations, Inc.

(Exact name of the registrant as specified in its charter)

Registrant’s telephone number, including area code

(561) 997-7733

Securities registered pursuant to Section 12(b) and 12(g) of the Act:

None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    x

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

As of June 28, 2004, 7,507.6 shares of registrant’s common stock were outstanding. The common stock is privately held and, to the knowledge of registrant, no shares have been sold in the past 60 days.

Documents Incorporated by Reference

None

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AMERICAN MEDIA OPERATIONS, INC.

FORM 10-K

For the Year Ended March 29, 2004

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PART I

Item 1. Business

Unless the context otherwise requires, references in this Form 10-K to the “Company” or “us”, “we” or “our” are to American Media Operations, Inc. and its subsidiaries. All references to a particular fiscal year are to the four fiscal quarters ended the last Monday in March of the fiscal year specified.

We were incorporated under the laws of Delaware in February 1981 and are a wholly-owned subsidiary of American Media, Inc. (“Media,” or, together with its subsidiaries, “AMI”). We conduct all of Media’s operations and represent substantially all of Media’s assets. Our headquarters and principal executive offices are located at 1000 American Media Way, Boca Raton, FL 33464 and our telephone number is (561) 997-7733.

On May 7, 1999 all of the common stock of Media was purchased by EMP Group LLC (the “LLC”), a Delaware limited liability company, pursuant to a merger of Media and EMP Acquisition Corp. (“EMP”), a wholly owned subsidiary of the LLC. The acquisition was financed, in part, by borrowings of approximately $350 million under a new $400 million senior bank facility (the “Credit Agreement”), as well as a cash equity investment by the LLC and borrowings in the form of senior subordinated notes. Upon consummation of this transaction, EMP was merged with and into Media (the “Merger”) resulting in a change in ownership control of both Media and the Company. As a result of this change in control, as of the Merger date we reflected a new basis of accounting that included the elimination of historical amounts of certain assets and liabilities and the revaluation of certain of our tangible and intangible assets.

On November 1, 1999, we acquired all of the common stock of Globe Communications Corp. and certain of the publishing assets and liabilities of Globe International, Inc. (collectively, the “Globe Properties”) for total consideration of approximately $105 million (the “Globe Acquisition”). The Globe Properties consist of several tabloid style magazines, including Globe, National Examiner and Sun as well as other titles including Mini Mags.

On February 14, 2002, we issued $150 million in aggregate principal amount of 10.25% Series B Senior Subordinated Notes due 2009 through a private placement. The gross proceeds from the offering were approximately $150.8 million including the premium on the notes. We used the gross proceeds of the offering to (a) make an approximately $75.4 million distribution to the LLC, (b) to prepay approximately $68.4 million of the term loans under our credit facility and (c) pay transaction costs. The notes are unsecured and subordinated in right of payment to all our existing and future senior indebtedness. The notes rank equally with all our existing and future senior subordinated indebtedness. The notes are guaranteed on a senior subordinated basis by all our current domestic subsidiaries.

On January 23, 2003, we acquired Weider Publications LLC, a newly formed company to which the magazine business of Weider Publications, Inc. and Weider Interactive Networks, Inc. had been contributed by Weider Health and Fitness, Weider Health and Fitness, LLC and Weider Interactive Networks, Inc. (collectively, “Weider” or the “Weider Properties”). The aggregate purchase price paid by us was $357.3 million, which includes a post-closing working capital adjustment of $7.3 million. Weider is the leading worldwide publisher of health and fitness magazines, with a total estimated readership of 24 million in the United States, more than any other publisher in the health and fitness category. Weider currently publishes eight magazines, including Muscle & Fitness, Shape, Men’s Fitness, Muscle & Fitness Hers, Flex, Fit Pregnancy, Natural Health and Shape en Espanol, with an aggregate average circulation of approximately 4.1 million copies. In connection with the acquisition of the Weider Properties, Media borrowed $140 million in a new tranche C-1 term loan and $150 million in senior subordinated notes, and issued $50 million of new equity in the LLC (of which approximately $8.8 million was an equity contribution from the Sellers).

As previously mentioned in connection with the Weider Properties, we issued $150 million in aggregate principal amount of 8.875% senior subordinated notes due 2011. The net proceeds from the offering were approximately $145.9 million including the discount on the notes. We used the net proceeds of the offering to fund a portion of the acquisition of Weider Publications LLC. The notes are unsecured and subordinated in right of payment to all our existing and future senior indebtedness. The notes rank equally with all our existing and future senior subordinated indebtedness. The notes are guaranteed on a senior subordinated basis by all our current domestic subsidiaries.

Our Boca Raton headquarters, which housed substantially all of our editorial operations (including its photo, clipping and research libraries), executive offices and certain administrative functions, was closed on October 7, 2001 by the Palm Beach County

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Department of Health when traces of anthrax were found on a computer keyboard following the death of a photo editor of the Sun from inhalation anthrax. The Company entered into a two-year lease for a 53,000 square foot facility two blocks from its current Boca Raton headquarters. In February 2002, the Palm Beach County of Health quarantined the building for an additional 18 months.

In May 2002, we and our insurance carrier reached a final compromise regarding our insurance claim and the Company received a compromised payment. The insurance proceeds resulted in a net gain on the insurance settlement of approximately $7.6 million for the fiscal year ended March 31, 2003. During the fiscal year ended March 31, 2003, the Company incurred costs for maintaining the Boca facility such as security and utilities, which have been netted against the gain on insurance settlement.

On April 17, 2003, we sold our anthrax-contaminated headquarters in Boca Raton, Florida to 5401 Broken Sound LLC. As a result of the sale, we extended our lease in the 53,000 square foot facility described above. 5401 Broken Sound LLC paid $40,000 as consideration for the transfer of ownership and all future liabilities that can occur with the building.

On April 17, 2003, we completed a series of transactions whereby principals and affiliates of Evercore Partners (“Evercore”) and Thomas H. Lee Partners (“T.H. Lee”), David J. Pecker (the Chief Executive Officer of the Company), other members of management and certain other investors contributed approximately $434.6 million in cash and existing ownership interests of the LLC, our ultimate parent, valued at approximately $73.3 million, to a merger vehicle which was merged with and into the LLC in exchange for newly issued ownership interests of the LLC. These transactions are referred to collectively as the “Recapitalization” in this Form 10-K. Please see “Security Ownership of Certain Beneficial Owners and Management” for a summary of our ownership structure and Note 14 to the Consolidated Financial Statements.

Industry Data and Circulation Information

Information contained in this Form 10-K concerning publishing industry data, circulation information, rankings, readership information (e.g., multiple readers per copy) and other industry and market information, including our general expectations concerning the publishing industry, are based on estimates prepared by us based on certain assumptions and our knowledge of the publishing industry as well as data from various third party sources. These sources include, but are not limited to, the report of the Audit Bureau of Circulations (“ABC”), BPA Circulation Statements, Statement of Ownership figures filed with the U.S. Postal Service, Mediamark Research Inc. (“MRI”) syndicated research data and Veronis Suhler Stevenson research data. While we are not aware of any misstatements regarding any industry data presented in this Form 10-K we have not independently verified any of the data from any of these sources and, as a result, this data may be imprecise. Our estimates, in particular as they relate to our general expectations concerning the publishing industry, involve risks and uncertainties and are subject to change based on various factors.

Unless otherwise indicated, all average weekly circulation information for our tabloid publications is an average of actual weekly single copy circulation for the fiscal year ended March 29, 2004. Unless otherwise indicated, all average circulation information for Weider’s publications is an average of actual per issue circulation for the twelve months ended March 29, 2004. All references to “circulation” are to single copy and subscription circulation, unless otherwise specified.

The Company

Overview

We are a leading publisher in the field of general interest magazines, publishing National Enquirer, Star, Globe, National Examiner, Weekly World News, Sun, Country Weekly, MIRA!, Muscle & Fitness, Shape, Shape en Espanol, Men’s Fitness, Muscle & Fitness Hers, Flex, Fit Pregnancy, Natural Health and other monthly publications. Among our weekly periodicals, National Enquirer, Star, and Globe, have the third, fourth and eighth highest weekly single copy circulation, respectively, of any weekly periodical in the United States. We are the leader in total weekly single copy circulation of magazines in the United States and Canada with approximately 35% of total U.S. and Canadian circulation for audited weekly publications. Total average circulation per issue is approximately 5.7 million copies for our consumer publications (including Star magazine) and 2.7 million copies for our tabloid publications, for an aggregate average circulation of 8.4 million copies.

On January 23, 2003, we acquired Weider Publications LLC, a privately held company controlled by Weider Health and Fitness. Weider is the leading worldwide publisher of health and fitness magazines, with a total estimated readership of 24 million in the United States, more than any other publisher in the health and fitness category. The health and fitness category is the fastest growing advertising segment of special interest magazines. Weider currently publishes eight magazines, including Muscle & Fitness, Shape, Shape en Espanol, Men’s Fitness, Muscle & Fitness Hers, Flex, Fit Pregnancy and Natural Health, with an aggregate average circulation of approximately 4 million copies.

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We derive approximately 65% of our revenues from circulation, predominantly single copy sales in retail outlets, and the remainder from advertising and other sources. Our publications are distributed in approximately 145,000 retail outlets in the United States and Canada, representing, in the opinion of management, substantially complete coverage of periodical outlets in these countries. Distribution Services, Inc. (“DSI”), our subsidiary, arranges for the placement, merchandising, and sales and marketing of our publications and third-party publications at retail outlets throughout the United States and Canada. In addition, DSI provides sales of marketing, merchandising and information-gathering services for third parties including non-magazine clients.

Our tabloid publications include the following titles:

Our consumer publications include the following titles:

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Circulation

Total average circulation per issue is approximately 5.7 million copies for our consumer publications and 2.7 million copies for our tabloid publications, for an aggregate average circulation of 8.4 million copies. Our tabloid titles have historically had greater single copy circulation while our consumer titles are more subscription based. For fiscal 2004, approximately 84% of circulation revenue and 55% of total operating revenue were generated by single copy circulation and the remainder of circulation revenues by subscriptions.

Subscription Sales

Our strategy with respect to subscriptions seeks to optimize subscription revenues and profitability as opposed to subscription circulation. We accomplish this strategy by focusing on direct sales of our titles by us through inserts, direct mailings and in-house advertisements in the respective magazines. In fiscal 2004, approximately 16% of our total revenues from circulation were from subscription sales.

Advertising Revenues

Our advertising revenues are generated by national advertisers, including automotive, entertainment, packaged goods, pharmaceutical, sports apparel, beauty and cosmetics, tobacco and direct response. The average ad pages for the period from January to December 2003, as measured by the Publishers Information Bureau, were flat over the prior year period for National Enquirer and Star, while the overall industry was down 1.0%.

Production and Distribution

An outside vendor performs most of the pre-press operations for our publications and is responsible for transmitting them electronically to printing plants. We have a long-term printing agreement with a printer to print National Enquirer, Star, Globe, National Examiner, Weekly World News, Sun and Country Weekly through December 2015 for sales in the United States, Canada and, to the extent applicable, outside of North America (except for the United Kingdom). National Enquirer has a special United Kingdom edition, which is printed by another printer. A different party performs the pre-press operations for the Weider publications and is responsible for transmitting them electronically to plants. This same vendor also performs the printing for the Weider publications. Both the pre-press and printing contracts for the Weider publications expire in December 2005.

Once printed, the copies are distributed primarily by 4 regional wholesalers, who we estimate represent 82% of the newsstand distribution market, as well as several smaller wholesalers who represent the remaining 18%, in the United States and Canada, who deliver the requisite number of copies to approximately 145,000 retail sales locations. We believe our relationships with our printing companies are adequate and that there are printing facilities available elsewhere, should the need arise.

The principal raw materials utilized by our publications are paper and ink. Paper is purchased directly from several suppliers based upon pricing and, to a lesser extent, availability. Both paper and ink are commodity products with pricing affected by demand, capacity and economic conditions. We believe that adequate sources of supply are, and will continue to be, available to fulfill our requirements. Our operating income may be significantly affected by the price of paper used in our publications. We have currently committed a significant portion of our volume and pricing requirements with our major suppliers through December 2005.

Marketing and Merchandising

We have established, through DSI, our own marketing organization whose primary function is to arrange for the sales and marketing, placement and merchandising of our publications and third-party publications at retail outlets throughout the United States and Canada.

In addition to the services DSI provides for our publications, DSI acts as a “category captain” for approximately 40% (based on our estimates) of all new front-end racking programs accounting for 65% of all the racks placed annually in the United States and Canada by supermarkets and other retailers. Recently, DSI has begun to leverage its network of field representatives, which are regularly in retail outlets performing its services, by expanding its services to provide merchandising, resetting of rack programs and other information gathering services to consumer product companies outside the publishing industry. We have expanded the distribution of the Weider titles since the acquisition of the Weider Properties utilizing DSI’s retail relationships.

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Approximately every three years, supermarkets and other retailers typically redesign their front-end racks, generally as part of store renovations or new store openings. As a “category captain,” DSI is selected by retailers to coordinate the design and installation of the front-end racks and the positioning of magazines for increased sales. Publishers, including AMI, which are allocated space on a rack enter into contracts directly with the retailer for the payment of fees (rack display payments) or other charges with respect to that space. DSI uses its role as category captain of new front-end rack programs initiated annually by retailers in the United States to achieve better placement of our publications and of the publications of DSI’s third-party publishing clients.

Some of DSI’s third-party clients include Hachette, which publishes Woman’s Day and Elle; Gruner + Jahr, which publishes Family Circle, Fitness, Parents and YM; Newsweek, Inc., which publishes Newsweek; Bauer Publishing, which publishes First for Women, Woman’s World and In-Touch; Rodale, Inc., which publishes Prevention, Men’s Health and Organic Style; General Mills, which publishes Pillsbury and Betty Crocker; and New York Magazine Holdings, which publishes New York Magazine and Specials.

Other Businesses

On November 27, 2000, we sold our 80% owned subsidiary, Frontline Marketing (“FMI”), to the minority shareholder for a $2.5 million note receivable. (See Note 11 to the Consolidated Financial Statements).

We also had ancillary sales (primarily licensing, syndication, new media and product merchandise sales) of $8.3 million in fiscal 2004.

In connection with the Weider acquisition, we acquired Weider Interactive Networks, Inc. (“WIN”). WIN houses the online operations for Weider. WIN develops and tests new interactive consumer fitness information products in an effort to develop new revenue streams for Weider. In addition, WIN creates and operates companion websites and web-delivered applications for Weider’s branded businesses, delivering both development expertise and networking services. Revenues are generated primarily from a subscription based interactive on-line weight loss and exercise program (ishape.com), but also include advertising and branded product sales.

Competition

Star, National Enquirer, Globe, National Examiner, Weekly World News, Sun, Mira!, and Country Weekly compete in varying degrees with other publications sold at retailers’ checkout counters, as well as forms of media concentrating on celebrity news, such as certain newspapers, magazines and television and radio programs. We believe that historical declines in single copy circulation of Star, National Enquirer, Globe and National Examiner have resulted in part from increased competition from these publications and forms of media. Competition for circulation is largely based upon the content of the publication, its placement in retail outlets and, to a lesser extent, its price. As part of our re-launch of Star as a 100 page glossy magazine, we physically moved Star copies in most retail outlets to be next to People magazine and away from the tabloid publications. Competition for advertising revenues is largely based upon circulation levels, readership, demographics, price and advertising results. We believe that our most significant direct competitors in the print media are Time Warner Inc. (which publishes People, In Style and Entertainment Weekly), Wenner Media, Inc. (which publishes US Weekly), and Bauer (which publishes In-Touch).

Each of our Weider specialty consumer magazines faces competition in its subject area from a variety of publishers and competes for readers on the basis of the high quality of its targeted editorial content. Competition for advertising revenues is largely based upon circulation levels, readership, demographics, price and advertising results. We believe that Weider’s most significant direct competitors include Conde Nast Publications, Inc. (which publishes Self), Gruner + Jahr Publishing (which publishes Fitness, Parents and Child), Rodale Inc. (which publishes Men’s Health and Organic Style), Wenner Media, Inc. (which publishes Men’s Journal), Advanced Research Press (which publishes Muscular Development) and Muscle Media Publishing (which publishes Muscle Media).

DSI competes with two other companies providing marketing and distribution services.

Employee Relations

We currently employ approximately 976 full-time employees and 1,387 part-time employees. Approximately 1,582 of our employees, including almost all of our part-time employees, work for DSI. None of our employees are represented by any union or other labor organization. We have had no strikes or work stoppages during the last five years. We believe that our relations with our employees are good.

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Item 2. Properties

Our Boca Raton headquarters, which housed substantially all editorial operations (including photo, clipping and research libraries), executive offices and certain administrative functions, was closed on October 7, 2001 by the Palm Beach County Health Department when traces of anthrax were found on a computer keyboard following the death of one of our photo editors from inhalation anthrax. In response to the closure of our Boca Raton facility, we immediately implemented our hurricane disaster plan to produce all of our weekly publications as originally scheduled. In February 2002, the Palm Beach County Health Department quarantined the Boca Raton facility for an additional 18 months. We entered into a two year lease for a 53,000 square foot facility two blocks from our Boca Raton headquarters which was due to expire in February 2004. During February 2004, we extended this lease until 2007. In May 2002, we reached a final settlement with our property insurance carrier and received payment. On April 17, 2003, the Company sold its anthrax contaminated headquarters in Boca Raton, Florida to 5401 Broken Sound LLC. 5401 Broken Sound LLC paid $40,000 as consideration for the transfer of ownership.

The following table sets forth certain information with respect to our principal locations as of March 29, 2004. We consider the locations presently used for our operations as adequate for our present needs.

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Item 3. Legal Proceedings

We are involved in a number of litigation matters which have arisen in the ordinary course of our business. Because the focus of our publications often involves controversial celebrities or subjects, the risk of defamation or invasion of privacy litigation arises in the ordinary course of our business. Our experience suggests that the claims for damages made in such lawsuits are heavily inflated. We do not believe that we are currently party to any pending legal action that could reasonably be expected to have a material adverse effect on our business, financial condition and results of operations.

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

No items were submitted to a vote of our security holders during the fourth quarter of fiscal 2004.

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PART II

Item 5. Market for the Registrant’s Common Equity and Related Security Holders

All of the Company’s common stock is owned by Media. Accordingly, there is no established public trading market for our common stock.

Item 6. Selected Financial Data

The selected financial data for each of the five fiscal years in the period ended March 29, 2004 below have been derived from the consolidated financial statements of the Company, which have been audited by independent certified public accountants. The following selected financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, the Company’s Consolidated Financial Statements and Notes thereto and other financial information appearing elsewhere in this Form 10-K. As discussed above, the parent of American Media Operations, Inc. was purchased on May 7, 1999 resulting in a change in the historical cost basis of various assets and liabilities. Accordingly, the historical financial information provided herein, for periods prior to May 7, 1999 is not comparable to post acquisition financial information. For purposes of presentation, all historical financial information for periods prior to May 7, 1999 will be referred to as the “Predecessor Company” and all periods subsequent to May 6, 1999 will be referred to as the “Company”. A solid black vertical line has been inserted in tables where financial information may not be comparable across periods.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

The following is a discussion of our financial condition and results of operations for the three fiscal years ended March 29, 2004. This discussion should be read in conjunction with our consolidated financial statements and the related notes thereto.

Executive Summary

We are a leading publisher in the field of general interest magazines, publishing National Enquirer, Star, Globe, National Examiner, Weekly World News, Sun, Country Weekly, MIRA!, Muscle & Fitness, Shape, Shape en Espanol, Men’s Fitness, Muscle & Fitness Hers, Flex, Fit Pregnancy, Natural Health and other monthly publications. Among our weekly periodicals, National

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Enquirer, Star, and Globe, have the third, fourth and eighth highest weekly single copy circulation, respectively, of any weekly periodical in the United States. We are the leader in total weekly single copy circulation of magazines in the United States and Canada with approximately 35% of total U.S. and Canadian circulation for audited weekly publications. Total average circulation per issue is approximately 5.7 million copies for our consumer publications and 2.7 million copies for our tabloid publications, for an aggregate average circulation of 8.4 million copies.

On January 23, 2003, we acquired Weider Publications LLC a newly formed company to which the magazine business of Weider Publications, Inc. and Weider Interactive Networks, Inc. had been contributed by Weider Health and Fitness, Weider Health and Fitness, LLC and Weider Interactive Networks, Inc. Weider Publications LLC currently publishes seven magazines, including Muscle & Fitness, Shape, Men’s Fitness, Muscle & Fitness Hers, Flex, Fit Pregnancy and Natural Health. Accordingly, our fiscal 2003 results include 8 weeks of operations from the Weider Properties whereas our fiscal 2004 results include a full 52 weeks of operations from the Weider Properties. For Management’s Discussion and Analysis of Financial Condition and Results of Operations we have presented certain financial and statistical information on a pro forma basis for the Weider acquisition.

In fiscal 2004 and 2003, approximately 65% and 79% of our total operating revenues were from circulation, respectively. Single copy sales accounted for approximately 84% and 88% of such circulation revenues in fiscal years 2004 and 2003, respectively, and the remainder was from subscription sales.

Our primary operating costs and expenses are comprised of editorial, production, distribution, circulation and other costs of sales and selling, general and administrative expenses. The largest components of our costs are related to production, which includes printing and paper expenses, and to distribution, circulation and other costs of sales. Distribution, circulation and other costs of sales primarily include the costs associated with operating DSI, subscription fulfillment and subscription postage.

Results of Operations

The financial information provided in the table below is pro forma for the Weider acquisition.

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Circulation. The following table sets forth average circulation and U.S. cover prices for our publications for the fiscal years 2002, 2003 and 2004 on a pro forma basis for the Weider acquisition.

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Comparison of Fiscal Year Ended March 29, 2004 to Fiscal Year Ended March 31, 2003

Please note that our fiscal year ended March 29, 2004 includes 52 weeks of operations versus 53 weeks for the prior fiscal year. Additionally, our fiscal year ended March 29, 2004 includes 53 issues for our weekly publications due to a change in our on-sale dates to be consistent with our primary competitors.

Revenues

Total operating revenues were $515.7 million for fiscal 2004. Operating revenues increased by $115.9 million or 29.0%, from the prior fiscal year primarily due to the Weider acquisition ($143.8 million – circulation revenue of $48.6 million; advertising revenue of $88.7 million; other revenue of $6.5 million). This was partially offset by a decline in circulation revenues for the non-Weider AMI titles of $27.9 million. Advertising and other revenue for the non-Weider AMI titles were in line with the prior fiscal year.

The decline in circulation revenues for the non-Weider AMI titles was primarily due to a 14.9% decline in unit sales (see above table for detail by title e.g. National Enquirer 14.4%, Star 14.7%, Globe 13.8%) partially offset by an average cover price increase of approximately 5% (net revenue decline of 10%). This compares to an industry wide decline for checkout title units of approximately 11% versus the prior year. Contributing to the tabloid decline in unit sales were factors including recent strong competition from new launches in the tabloid category, particularly from US Weekly and In Touch, continued media fragmentation and competition from electronic media, and a less favorable retail environment as people are shopping less frequently at traditional grocery outlets.

Operating Expenses

Total operating expenses for the current fiscal year increased by $119.0 million when compared to the prior fiscal year. This increase was primarily due to the Weider acquisition and increased operating expenses related to producing the expanded and glossy versions of the Star. The Weider acquisition operating expenses increase was $103.3 million (editorial of $16.6 million; production of $34.1 million; distribution, circulation and other cost of sales of $18.5 million; depreciation of $1.7 million; amortization of $7.3 million; selling, general and administrative expense of $25.1 million). The increased operating expenses related to producing the expanded and glossy versions of the Star were $9.9 million, primarily the result of producing 13% more pages in fiscal 2004 versus the prior year. In addition, these incremental pages were produced on coated paper stock whereas all pages produced in the prior year were on newsprint. This upgrade in paper contributed approximately $2 million of the $9.9 million of incremental expenses. The operating expense increase was also due to a net gain on our insurance settlement related to the Boca building included as a reduction of operating expenses for the prior fiscal year ($7.6 million). These operating expense increases were offset by an overall workforce reduction at our tabloid publications and corporate office during fiscal 2004.

Workforce Reduction

During fiscal 2004, we initiated a plan to relocate the Star and Mira! publications to New York City. Our relocation plan involved the termination of 94 employees. This activity resulted in a charge of $2,600,000 for termination benefits and $139,000 for costs associated with the relocation of existing employees. Through March 29, 2004 we paid termination benefits totaling $2,228,000 and paid $139,000 of costs associated with relocation of existing employees. We have an accrual at March 29, 2004 of $372,000 for the remaining termination benefits associated with this action. These severance benefits will be paid out through October 2004. We have fully completed this restructuring plan and estimate that this plan will yield savings of $5 million annually for the Company.

Interest Expense

Interest expense increased for the current fiscal year by $14.9 million to $75.0 million compared to the same prior fiscal year. This increase in interest expense is primarily due to the $290 million of increased debt related to the Weider acquisition ($15.3 million). In

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addition, the recognition of the fair value and payments received in fiscal 2004 for various interest rate swap transactions ($4.4 million) compares to $7.3 million received in the prior year for similar interest swap transactions. Offsetting this increase is a lower effective interest rate during fiscal 2004 (average interest rate in fiscal 2004 was 4.0% versus 5.0% in fiscal 2003).

Income Taxes

Provision for income taxes decreased from fiscal 2003 to fiscal 2004 by approximately $6.6 million, or 30.8%, due primarily to the overall decrease in pre-tax income.

Comparison of Fiscal Year Ended March 31, 2003 to Fiscal Year Ended March 25, 2002

Please note that our fiscal year ended March 31, 2003 includes 53 weeks of operations versus 52 weeks for the prior fiscal year. The additional 53rd week in the fiscal year ended March 31, 2003, provided $5.6 million of additional operating revenues. Further, fiscal 2003 includes 8 weeks of operations from the Weider Properties.

Revenues

Total operating revenues were $399.7 million for fiscal 2003. Operating revenues increased by $31.6 million or 8.6%, from the prior year due to the Weider acquisition ($29.4 million), as well as an increase of $2.2 million from the non-Weider AMI titles. Circulation revenue increased by $5.3 million primarily due to the Weider acquisition. Circulation revenues from the non-Weider AMI titles declined by $3.5 million primarily due to an increased discount to wholesalers of approximately $9.0 million.

Advertising revenues were $61.3 million for fiscal 2003. Advertising revenues increased by $21.4 million or 53.6%, when compared to the 2002 fiscal year of $39.9 million. This increase was primarily due to the Weider acquisition ($19.6 million), coupled with a $1.7 million (4%) increase for the non-Weider AMI titles despite a weak industry-wide advertising climate.

Operating Expenses

Total operating expenses for fiscal 2003 decreased by $38.2 million when compared to the prior fiscal year. This decrease was primarily due to the elimination of the amortization of goodwill and tradenames due to our adoption of SFAS No. 142 during the 2003 fiscal year ($51.9 million), a net gain on our insurance settlement related to the Boca building ($7.6 million) and production savings for the original AMI titles due to management’s negotiation of production related agreements ($2.7 million). These amounts were partially offset by Weider’s operating expenses ($24.6 million).

Interest Expense

Interest expense decreased for fiscal 2003 by $5.1 million to $60.1 million compared to the prior fiscal year. This decrease in interest expense relates to payments received in fiscal 2003 for various interest rate swap transactions ($7.3 million) and also a lower effective interest rate during fiscal 2003 (average interest rate in fiscal 2003 was 5.0% versus 7.5% in fiscal 2002), partially offset by the increased debt incurred as a result of the Weider acquisition ($3.6 million).

Income Taxes

Provision for income taxes increased from fiscal 2002 to fiscal 2003 by approximately $18.5 million due primarily to the overall increase in pre-tax income.

Liquidity and Capital Resources

We have substantially increased our indebtedness in connection with the Weider acquisition. Our liquidity requirements have been significantly increased, primarily due to increased interest and principal payment obligations under the Credit Agreement and our subordinated notes. We believe that the net cash generated from operating activities and amounts available under the $60.0 million revolving credit facility will be sufficient to fund our debt service requirements under the Credit Agreement and the subordinated notes, to make capital expenditures and to cover working capital requirements. As of March 29, 2004, there were no amounts outstanding on the revolving credit facility. We believe, however, that based upon our current level of operations and anticipated growth, it will be necessary to refinance the subordinated notes upon their maturity. To the extent we make future acquisitions, we may require new sources of funding, including additional debt, equity financing or some combination thereof. There can be no assurances that such additional sources of funding will be available to us on acceptable terms.

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Our ability to make scheduled payments of principal and interest under the Credit Agreement and the subordinated notes, as well as our other obligations and liabilities, is subject to our future operating performance which is dependent upon general economic, financial, competitive, legislative, regulatory, business and other factors beyond our control.

At March 29, 2004, we had cash and cash equivalents of $22.2 million and a working capital deficiency of $12.6 million. We do not consider our working capital deficiency as a true measure of our liquidity position as our working capital needs typically are met by cash generated by our business. Our working capital deficiencies result principally from our policy of using available cash to reduce borrowings which are recorded as noncurrent liabilities, thereby reducing current assets without a corresponding reduction in current liabilities.

Historically, our primary sources of liquidity have been cash generated from operations and amounts available under our credit agreements, which have been used to fund shortfalls in available cash. Cash generated from operations for the fiscal year ended March 29, 2004, was used to fund working capital requirements, fund capital expenditures and to make term loan principal repayments.

We made capital expenditures in the fiscal years ended March 29, 2004 and March 31, 2003 totaling $25.9 million and $24.7 million, respectively.

At March 29, 2004, our outstanding indebtedness totaled $990.4 million, of which $439.7 million represented borrowings under the Credit Agreement. In connection with the acquisition of the Globe Properties in fiscal 2000, we increased our Credit Agreement borrowing capacity by $90 million. Additionally, in connection with the acquisition of Weider Publications LLC, we further increased the borrowing capacity on our credit facility by $140 million. The effective interest rate under the Credit Agreement, including amounts borrowed under the term loan commitments and revolving credit commitment, as of March 29, 2004, was 3.9%, and the weighted average interest rates for the fiscal years 2002, 2003 and 2004 were 7.5%, 5.0%, and 4.0%, respectively. On March 22, 2002, we amended our Credit Agreement. This amendment decreased the marginal interest rate on our term loans by 1% for a fee of $1,050,000. The Credit Agreement was also amended on February 17, 2004, which changed the total leverage ratio covenant from 6.25 to 6.50 for the December 2003 and March 2004 quarters. Additionally, the Credit Agreement was amended on June 25, 2004, which changed our total leverage ratio covenant and certain interest coverage ratio covenants through June 2006. As a result of the amendment, the total leverage ratio covenant is 6.95 through March 2005, 6.75 from June 2005 to March 2006 and 6.50 from June 2006 and thereafter. The interest coverage ratio remains at 1.75 from March 2004 and thereafter.

We are subject to interest risk on our credit facilities and any future financing requirements. Our fixed rate debt consists primarily of senior subordinated notes.

Effective March 26, 2002, we entered into two interest rate swap agreements, which effectively converted a portion of our fixed-rate debt to variable rate debt. The first agreement, which was originally scheduled to expire in May 2004, had a notional amount of $125 million. Under this agreement, we were to receive a fixed rate of 10.25% and were to pay LIBOR in arrears plus a spread of 5.265%. The second agreement, which was originally scheduled to expire in May 2005, had a notional amount of $25 million. Under this agreement, we were to receive a fixed rate of 10.25% and we were to pay LIBOR in arrears plus a spread of 4.885%. On June 29, 2002, we received $3,277,000 to terminate these two interest rate swap agreements. This amount received was recognized as a reduction of interest expense for the fiscal year ended March 31, 2003.

Additionally, effective June 28, 2002, we entered into two new interest rate swap agreements, which effectively converted a portion of fixed-rate debt to variable rate debt. The first agreement, which was originally scheduled to expire in May 2004, had a notional amount of $125 million. Under this agreement, we were to receive a fixed rate of 10.25% and pay LIBOR in arrears plus a spread of 6.49%. The second agreement, which was originally scheduled to expire in May 2005, had a notional amount of $25 million. Under this agreement, we were to receive a fixed rate of 10.25% and pay LIBOR in arrears plus a spread of 5.99%. On October 8, 2002, we received $3,978,000 to terminate these two interest rate swap agreements, which was recognized as a reduction of interest expense for the fiscal year ended March 31, 2003.

Effective August 20, 2003, we entered into an interest rate swap agreement, which effectively converted a portion of our fixed-rate debt to variable debt. The agreement is scheduled to expire in January 2007 and has a notional amount of $150 million. Under this agreement, we receive a fixed rate of 8.875% and pay LIBOR in arrears plus a spread of 5.38% subject to a collar adjustment. On January 15, 2004, we received $1,635,000 in connection with the interim settlement of this swap agreement. The next reset date for this swap agreement is July 15, 2004. As of March 29, 2004, the fair value of this swap was $2,813,000. The fair value of this swap

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as of March 29, 2004, along with the cash received on interim settlement has been recognized as a reduction of interest expense for the fiscal year ended March 29, 2004. At each reset date we either receive or pay money based on the fair value of the swap as of that date.

We have no material assets or operations other than the investments in our subsidiaries. The subordinated notes are unconditionally guaranteed, on a senior subordinated basis, by all of our material subsidiaries. Each domestic subsidiary that will be organized in the future by us, unless such subsidiary is designated as an unrestricted subsidiary, will jointly, severally, fully and unconditionally guarantee the subordinated notes on a senior subordinated basis. Note guarantees are joint and several, full and unconditional and general unsecured obligations of the note guarantors. The note guarantors are our wholly owned domestic subsidiaries. At present, the note guarantors comprise all of our direct and indirect subsidiaries. Note guarantees are subordinated in right of payment to all existing and future senior debt of the note guarantors, including the Credit Agreement, and are also effectively subordinated to all secured obligations of note guarantors to the extent of the assets securing such obligations, including the Credit Agreement. Furthermore, the notes indenture permits note guarantors to incur additional indebtedness, including senior debt, subject to certain limitations. We have not presented separate financial statements and other disclosures concerning each of the note guarantors, as these disclosures are not applicable under SEC rules and regulations.

So long as the factors set forth in the paragraph immediately above remain true and correct, under applicable SEC rules and regulations, our note guarantors will not need to individually comply with the reporting requirements of the Exchange Act, nor will we have to include separate financial statements and other disclosures concerning each of the note guarantors in its Exchange Act reports.

The following table and discussion summarizes EBITDA for the fiscal years ended March 25, 2002, March 31, 2003 and March 29, 2004.

We define EBITDA as net income (loss) before extraordinary charges, interest expense, income taxes, depreciation and amortization and other income (expense). EBITDA is not a measure of performance defined by GAAP. EBITDA should not be considered in isolation or as a substitute for net income or cash flows from operating activities, which have been prepared in accordance with GAAP or as a measure of our operating performance, profitability or liquidity. We believe EBITDA provides useful information regarding our ability to service our debt, and we understand that such information is considered by certain investors to be an additional basis for evaluating a company’s ability to pay interest and repay debt. EBITDA is a widely used performance measure for publishing companies and is provided here as a supplemental measure of operating performance to operating income calculated in accordance with GAAP.

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Contractual Obligations

The impact that our aggregate contractual obligations as of March 29, 2004 are expected to have on our liquidity and cash flow in future periods is as follows (dollars in 000’s):

Printing Agreement

During fiscal 2003, we successfully renegotiated a new 13-year printing agreement expiring in fiscal 2016 with an unrelated printer to print National Enquirer, Star, Globe, National Examiner, Weekly World News, Sun, Mira, Country Weekly and Street Performance Compact. We have also assumed the Weider printing agreement expiring in fiscal 2006 with an unrelated printer to print Shape, Muscle and Fitness, Muscle and Fitness Hers, Men’s Fitness, Fit Pregnancy, and Natural Health. The payments due by period in the table above are based on current pricing and production levels, and pricing adjustments based on changes in the Consumer Price Index.

New Accounting Pronouncements

In November 2002, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others”. This Interpretation expands the disclosures to be made by a guarantor about its obligations under certain guarantees and requires that, at the inception of a guarantee, a guarantor recognize a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and measurement provisions of this Interpretation are effective for guarantees issued or modified after December 31, 2002. The adoption of this Interpretation did not have a material effect on our consolidated financial statements.

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities” (“FIN 46”), which was amended in December 2003. This Interpretation requires variable interest entities (commonly referred to as SPEs) to be consolidated by the primary beneficiary of the entity if certain criteria are met. FIN 46 is effective immediately for all new variable interest entities created or acquired after January 31, 2003. For variable interest entities created or acquired prior to February 1, 2003, the provisions of FIN 46 must be applied for the first interim or annual period beginning after June 15, 2003. The adoption of this Interpretation did not have a material effect on our consolidated financial statements.

In April 2003, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”. This Statement amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging activities under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”. This Statement is effective for contracts entered into or modified after June 30, 2003. The adoption of SFAS No. 149 did not have a material impact on our consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity”. This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). This Statement is effective for financial instruments entered into or modified after May 30, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of SFAS No. 150 did not have a material impact on our consolidated financial statements.

Critical Accounting Policies and Estimates

Critical accounting policies are those that are both most important to the portrayal of a company’s financial position and results of

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operations, and require management’s most difficult, subjective or complex judgments. Although not all of the Company’s critical accounting policies require management to make difficult, subjective or complex judgments or estimates, the following policies and estimates are those that the Company deems most critical.

The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements require us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to allowances for doubtful accounts, reserves for sales returns and allowances and the recoverability of long-lived assets including excess of purchase price over net assets acquired. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. These form the basis of our judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates which would affect our reported results from operations. We believe the following is a description of the critical accounting policies and estimates used in the preparation of our consolidated financial statements.

Allowances for doubtful accounts are estimated losses resulting from our customers’ failure to make required payments. We continually monitor collections from customers and provide a provision for estimated credit losses. We aggressively pursue collection efforts on these overdue accounts. If future payments by our customers were to differ from our estimates, we may need to increase or decrease our allowances for doubtful accounts.

Revenues from copy sales are net of reserves provided for expected sales returns, which are established in accordance with GAAP after considering such factors as sales history and available market information. We continually monitor the adequacy of the reserves and make adjustments when necessary.

We record purchase price allocations for our acquisitions based on preliminary information received at the date of acquisition and based on our acquisition experience. These allocations are subject to adjustments and are finalized once additional information concerning asset and liability valuations is obtained, typically from an independent appraisal. The final asset and liability fair values may differ from the preliminary allocations. If the final allocations for the acquisitions differ from the preliminary allocations, we may need to increase or decrease our depreciation and/or amortization expense for the acquired assets.

We periodically evaluate whether events or circumstances have occurred that would indicate that long-lived assets, including property and equipment, goodwill and other intangible assets, may not be recoverable or that the remaining useful life may be impaired. When such events or circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value will be recovered through the expected future cash flows resulting from the use of the asset. If the results of this testing indicates an impairment of the carrying value of the asset, an impairment loss is recorded. The long-term nature of these assets requires the estimation of its cash inflows and outflows several years into the future and only takes into consideration circumstances known at the time of the impairment test. Future adverse changes in market conditions or poor operating results of the related business may indicate an inability to recover the carrying value of the assets, thereby possibly requiring an impairment charge to the carrying value of the asset in the future.

We account for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes,” which requires that deferred tax assets and liabilities be recognized, using enacted tax rates, for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. SFAS No. 109 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Forward-Looking Statements

Some of the information presented in this Form 10-K constitutes forward-looking statements, including, in particular, the statements about our plans, strategies and prospects under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. We have based these forward-looking statements on our current assumptions, expectations and projections about future events. We caution you that a variety of factors could cause business conditions and results to differ materially from what is contained in the forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions about us, including, among other things:

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Item 7A. Quantitative and Qualitative Disclosures about Market Risks

We are exposed to certain market risks that are inherent in our financial statements. We are subject to interest risk on our credit facilities and any future financing requirements. Our fixed rate debt consists primarily of senior subordinated notes.

Interest rate changes result in increases or decreases in our income before taxes and cash provided from operating activities. A 1% change in our weighted interest rate on our variable debt would have resulted in a change of $5.9 million in our interest expense for the year ended March 29, 2004.

Effective March 26, 2002, we entered into two interest rate swap agreements, which effectively converted a portion of our fixed-rate debt to variable rate debt. The first agreement, which was originally scheduled to expire in May 2004, had a notional amount of $125 million. Under this agreement, we were to receive a fixed rate of 10.25% and were to pay LIBOR in arrears plus a spread of 5.265%. The second agreement, which was originally scheduled to expire in May 2005, had a notional amount of $25 million. Under this agreement, we were to receive a fixed rate of 10.25% and we were to pay LIBOR in arrears plus a spread of 4.885%. On June 29, 2002, we received $3,277,000 to terminate these two interest rate swap agreements. This amount received was recognized as a reduction of interest expense for the fiscal year ended March 31, 2003.

Additionally, effective June 28, 2002, we entered into two new interest rate swap agreements, which effectively converted a portion of fixed-rate debt to variable rate debt. The first agreement, which was originally scheduled to expire in May 2004, had a notional amount of $125 million. Under this agreement, we were to receive a fixed rate of 10.25% and pay LIBOR in arrears plus a spread of 6.49%. The second agreement, which was originally scheduled to expire in May 2005, had a notional amount of $25 million. Under this agreement, we were to receive a fixed rate of 10.25% and pay LIBOR in arrears plus a spread of 5.99%. On October 8, 2002, we received $3,978,000 to terminate these two interest rate swap agreements, which was recognized as a reduction of interest expense for the fiscal year ended March 31, 2003.

Effective August 20, 2003, we entered into an interest rate swap agreement, which effectively converted a portion of our fixed-rate debt to variable debt. The agreement is scheduled to expire in January 2007 and has a notional amount of $150 million. Under this agreement, we receive a fixed rate of 8.875% and pay LIBOR in arrears plus a spread of 5.38% subject to a collar adjustment. On January 15, 2004, we received $1,635,000 in connection with the interim settlement of this swap agreement. The next reset date for this swap agreement is July 15, 2004. As of March 29, 2004, the fair value of this swap was $2,813,000. The fair value of this swap as of March 29, 2004, along with the cash received on interim settlement has been recognized as a reduction of interest expense for the fiscal year ended March 29, 2004.

Our primary market risk exposures relate to (1) the interest rate risk on long-term and short-term borrowings, (2) our ability to refinance our senior subordinated notes at maturity at market rates, (3) the impact of interest rate movements on our ability to meet interest expense requirements and comply with financial covenants and (4) the impact of interest rate movements on our ability to obtain adequate financing to fund acquisitions. We manage the interest rate risk on our outstanding long-term and short-term debt through our use of fixed and variable rate debt. While we cannot predict or manage our ability to refinance existing debt or the impact interest rate movements will have on our ability to refinance existing debt, we continue to evaluate our financial position on an ongoing basis.

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Item 8. Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

FINANCIAL STATEMENTS:

Schedules have been omitted since the information is not applicable, not required or because the required information is included in the Consolidated Financial Statements or Notes thereto.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of American Media Operations, Inc.:

We have audited the accompanying consolidated balance sheets of American Media Operations, Inc., a wholly-owned subsidiary of American Media, Inc., and subsidiaries (the “Company”) as of March 29, 2004 and March 31, 2003, and the related consolidated statements of income (loss), comprehensive income (loss), stockholder’s equity, and cash flows for the fiscal years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the fiscal year 2004 and 2003 consolidated financial statements based on our audits. The Company’s consolidated financial statements for the year ended March 25, 2002, before the inclusion of the revised disclosures discussed in Notes 1 and 3 to the consolidated financial statements, were audited by other auditors who have ceased operations. Those auditors expressed an unqualified opinion on those consolidated financial statements in their report dated May 10, 2002.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated 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, such 2004 and 2003 consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 29, 2004 and March 31, 2003 and the results of its operations and its cash flows for the fiscal years then ended, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Notes 1 and 3 to the consolidated financial statements, the Company changed its method of accounting for goodwill and other intangible assets in fiscal year 2003 to conform to Statement of Financial Accounting Standards No. 142.

As discussed above, the consolidated financial statements of the Company for the year ended March 25, 2002 were audited by other auditors who have ceased operations. These consolidated financial statements have been revised as follows: (a) as described in Note 3 under the heading “Goodwill and Other Intangible Assets”, these consolidated financial statements have been revised to include the transitional disclosures required by Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, which was adopted by the Company as of March 26, 2002. Our audit procedures with respect to the transitional disclosures in Note 3 for fiscal year 2002 included (i) agreeing the previously reported net income to the previously issued consolidated financial statements and the adjustments to reported net income representing amortization expense (including any related tax effects) recognized in those periods to the Company’s underlying records obtained from management, and (ii) testing the mathematical accuracy of the reconciliation of adjusted net income to reported net income; and (b) rent expense for fiscal year 2002 has been disclosed in Note 13. Our audit procedures with respect to rent expense described in Note 13 included agreeing the amounts for fiscal year 2002 to the Company’s underlying records obtained from management. In our opinion, such disclosures are appropriate and have been properly applied. However, we were not engaged to audit, review, or apply any procedures to the fiscal year 2002 consolidated financial statements of the Company other than with respect to such disclosures and disaggregations, and accordingly, we do not express an opinion or any other form of assurance on the fiscal year 2002 consolidated financial statements taken as a whole.

DELOITTE & TOUCHE LLP

Certified Public Accountants

Fort Lauderdale, Florida

June 25, 2004

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To American Media Operations, Inc.:

We have audited the accompanying consolidated balance sheets of American Media Operations, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of March 25, 2002 and March 26, 2001 and the related consolidated statements of income (loss), comprehensive income (loss), stockholder’s equity and cash flows for the fiscal years ended March 25, 2002 and March 26, 2001, and for the period from May 7, 1999 through March 27, 2000. We have also audited the accompanying consolidated statements of income (loss), comprehensive income (loss), stockholder’s equity and cash flows of the Predecessor Company of American Media Operations, Inc. (the “Predecessor Company”) for the period from March 30, 1999 through May 6, 1999. These financial statements are the responsibility of the Company’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 financial position of American Media Operations, Inc. and subsidiaries as of March 25, 2002 and March 26, 2001, and the results of their operations and their cash flows for the fiscal years ended March 25, 2002 and March 26, 2001 and for the period from May 7, 1999 through March 27, 2000 and the results of the Predecessor Company’s operations and cash flows for the period from March 30, 1999 through May 6, 1999 in conformity with accounting principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

New York, New York

May 10, 2002

NOTE: The report of Arthur Andersen LLP presented above is a copy of a previously issued Arthur Andersen LLP report. This report has not been reissued by Arthur Andersen LLP nor has Arthur Andersen LLP provided a consent to the inclusion of its report in this Form 10-K.

NOTE: The consolidated financial statements for the year ended March 25, 2002 have been revised to include: (i) the transitional disclosures required by Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, which was adopted by the Company as of March 26, 2002 (see Note 3 under the heading “Goodwill and Other Intangible Assets”); and (ii) the disclosure of rent expense for fiscal year 2002 under the heading “Operating Leases” in Note 13. The report of Arthur Andersen LLP presented above does not extend to these changes.

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AMERICAN MEDIA OPERATIONS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

As of March 31, 2003 and March 29, 2004

(In 000’s, except share information)