##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the Year Ended December 31, 2005
 Commission file number 333-99939
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
 ZIFF DAVIS HOLDINGS INC.
 (Exact name of Registrant as Specified in Its Charter)
 Delaware
    
    36-4335050(State or Other Jurisdiction of
    
    (I.R.S. Employer Identification No.)Incorporation or Organization)
 28 East 28th Street
New York, New York 10016  (Address of Principal Executive Offices and Zip Code)
 
 (212) 503-3500  (Registrants Telephone Number, Including Area Code)
 Shares registered pursuant to Section 12(b) of the Act:
 Shares registered pursuant to Section 12(g) of the Act:
 
 o þ
 o þ
 þ o
 þ
 o o þ
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



ZIFF DAVIS HOLDINGS INC.
 Index to Form 10-K for the Year Ended December 31, 2005
 PagePART IItem 1.
    
    Business
    
    3Item 1A.
    
    Risk Factors
    
    10Item 1B.
    
    Unresolved Staff Comments
    
    16Item 2.
    
    Properties
    
    16Item 3.
    
    Legal Proceedings
    
    17Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    17PART IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    17Item 6.
    
    Selected Financial Data
    
    17Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    18Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    29Item 8.
    
    Financial Statements and Supplementary Data
    
    29Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    62Item 9A.
    
    Controls and Procedures
    
    62Item 9B.
    
    Other Information
    
    62PART IIIItem 10.
    
    Directors and Executive Officers of the Registrant
    
    63Item 11.
    
    Executive Compensation
    
    65Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    68Item 13.
    
    Certain Relationships and Related Transactions
    
    70Item 14.
    
    Principal Accountant Fees and Services
    
    72PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    73SIGNATURES
    
    
    
    77EX-10.39: ASSET PURCHASE AGREEMENTEX-10.41: LETTEREX-14.2: AUDIT AND NON-AUDIT SERVICES PRE-APPROVAL POLICYEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION
  2




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##### Table of Contents



PART I
 Important Note:
 
 ITEM 1. BUSINESS
  Background and Organization
       3




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##### Table of Contents



PC Magazine Sync ExtremeTech
 eWEEK, CIO Insight Baseline
 (Electronic Gaming Monthly, Computer Gaming World Official U.S.
PlayStation Magazine) GMR Xbox Nation
  General
  PC Magazine,
eWEEK, Baseline, CIO Insight, Electronic Gaming Monthly, Computer Gaming World Official U.S.
Playstation Magazine. PC Magazine eWEEK
 PC Magazine eWEEK
  Consumer/Small Business Group
 PC Magazine Sync ExtremeTech
 4




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##### Table of Contents



PC Magazine
 First
    
    FrequencyIssue
    
    Per Year
    
    Primary Audience
    
    Circulation
    
    Rate BasePC Magazine
    
    
    1981
    
    
    
    22
    
    
    Consumer/Business
    
    Paid
    
    
    700,000
 PC Magazine PC Magazine PC Magazine PC Magazine PC Magazine PC Magazine
    Website Address
    
    Page Views
    
    Unique Visitorswww.pcmag.com
    
    
    30,107,600
    
    
    
    4,591,400www.extremetech.com
    
    
    8,793,100
    
    
    
    1,358,100Other
Consumer/Small Business Group Sites
    
    
    918,200
    
    
    
    265,000Total
    
    
    39,818,900
    
    
    
    6,214,500
    *
 *
    
    Unadjusted for duplication of unique visitors between all sites. PC Magazine
  Enterprise Group
 eWEEK, CIO Insight Baseline
  First
    
    FrequencyMagazine Title
    
    Issue
    
    Per Year
    
    Primary Audience
    
    Circulation
    
    Rate BaseeWEEK
    
    
    1983
    
    
    
    51
    
    
    Business
    
    Controlled
    
    
    400,100CIO Insight
    
    
    2001
    
    
    
    14
    
    
    Business
    
    Controlled
    
    
    50,000Baseline
    
    
    2001
    
    
    
    15
    
    
    Business
    
    Controlled
    
    
    125,000
 5




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##### Table of Contents



eWEEK eWEEK eWEEK eWEEK eWEEK
 CIO Insight CIO Insight CIO Insight
 Baseline Baseline Baseline
 TM
  Website Address
    
    Page Views
    
    Unique Visitorswww.eweek.com
    
    
    5,243,400
    
    
    
    1,491,900www.cioinsight.com
    
    
    268,800
    
    
    
    86,100www.baselinemag.com
    
    
    312,800
    
    
    
    106,300Other targeted B2B Sites*
    
    
    4,100,800
    
    
    
    1,671,500Total
    
    
    9,925,800
    
    
    
    3,355,800
    **
 
 *
    
    Includes miscellaneous sites such as microsoft-watch.com, webbuyersguide.com,
channelinsider.com, devsource.com, and other targeted sites.**
    
    Unadjusted for duplication of unique visitors between all sites.  6




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##### Table of Contents



eWEEK CIO Insight Baseline
   Game Group
 Electronic Gaming Monthly Computer Gaming World Official U.S.
Playstation Magazine
  First
    
    FrequencyMagazine Title
    
    Issue
    
    Per Year
    
    Primary Audience
    
    Circulation
    
    Rate BaseComputer Gaming World
    
    
    1981
    
    
    
    11
    
    
    Consumer
    
    Paid
    
    
    219,000
    *Electronic Gaming Monthly
    
    
    1988
    
    
    
    12
    
    
    Consumer
    
    Paid
    
    
    667,000Official U.S. Playstation Magazine
    
    
    1997
    
    
    
    12
    
    
    Consumer
    
    Paid
    
    
    300,000
    *
 
 *
    
    Target circulation; no rate base is claimed for these publications. Electronic Gaming Monthly
 Official U.S. PlayStation Magazine
 Computer Gaming World
  Website Address
    
    Page Views
    
    Unique Visitorswww.1up.com
    
    
    23,322,000
    
    
    
    2,041,000www.filefront.com
    
    
    95,814,000
    
    
    
    8,623,000Total
    
    
    119,136,000
    
    
    
    10,664,000
    *
 
 *
    
    Unaudited for duplication of unique visitors between all sites  7




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##### Table of Contents



Revenue
  Advertising.
 Subscriptions.
 Newsstand.
 Other Revenue Sources.
 Operating Costs
    Circulation
   8




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##### Table of Contents



Customers
   Competition
   
    
    editorial quality;
    
    quantity and quality of circulation;
    
    the strength of complementary products serving the same niche;
    
    the effectiveness of sales, research efforts and customer service; and
    
    advertising rates.
  Certain License Agreements and Service Contracts
 Official
U.S. PlayStation Magazine
 9




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##### Table of Contents



Xbox Nation
 GMR GMR
  Trademarks and Intellectual Property Rights
   Employees
  
 ITEM 1A. RISK FACTORS
 Forward-Looking Statements
    Certain Risk Factors
  10




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##### Table of Contents



Risks Related to Our Financial Structure
 Our indebtedness could make it difficult for us to satisfy our obligations with respect to our
long-term debt and preferred stock and reduce the cash available to finance our growth.
   
    
    make it more difficult for us to satisfy our obligations with respect to the Notes;
    
    increase our vulnerability to general adverse economic and industry conditions;
    
    require us to dedicate a substantial portion of our cash flow from operations to payments
on our indebtedness, thereby reducing the availability of our cash flow to fund our
operations;
    
    limit our flexibility in planning for, or reacting to, changes in our business and the publishing industry generally;
    
    place us at a competitive disadvantage compared to our
competitors that have less debt and limit, our ability to borrow
additional funds.
  To service our indebtedness, we will require a significant amount of cash. Our ability to generate
cash depends on many factors beyond our control.
  Despite current indebtedness levels, we and our subsidiaries may still be able to incur
substantially more debt. This could further exacerbate the risks associated with our substantial
leverage.
  An increase in short-term interest rates could adversely affect our cash flows.
  11




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If Ziff Davis Holdings does not receive loans, advances or dividends from its subsidiaries, Ziff
Davis Holdings may be unable to redeem or pay accrued dividends on its preferred stock.
  We may not be able to finance a change of control offer.
  If there is a default, proceeds from sales of the collateral may not be sufficient to repay the
holders of the Floating Rate Notes.
     12




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The guarantees and the liens securing the guarantees of the Notes may not be enforceable because of
fraudulent conveyance laws.
  
    
    incurred the guarantee of the Notes or granted the lien with the intent of hindering,
delaying or defrauding current or future creditors;
    
    received less than reasonably equivalent value or fair consideration for incurring the
guarantee of the Notes or granting the lien and such guarantor;
    
    was insolvent or was rendered insolvent;
    
    was engaged, or about to engage, in a business or transaction for which its remaining
assets constituted unreasonably small capital to carry on its business; or
    
    intended to incur, or believed that it would incur, debts beyond its ability to pay as
such debts matured (as all of the foregoing terms are defined in or interpreted under the
relevant fraudulent transfer or conveyance statutes);
  Our controlling stockholder may have interests that conflict with the interests of other investors.
  Stockholders proportional equity interest in Ziff Davis Holdings could be reduced in the future.
  Because there is no public market for the Notes, you may not be able to resell your Notes.
  
    
    the ability of holders to sell their Notes; or
    
    the price at which the holders would be able to sell their Notes.
  13




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We depend on advertising as a principal source of revenue, which decreases during economic cycle
downturns and fluctuates due to seasonal buying.
  If the U.S. economy worsens, we may have to implement further cost saving efforts to achieve the
benefits we expect, which could result in further restructuring charges and materially impact our
business.
 GMR Xbox Nation Sync ExtremeTech
 We may not be able to protect our intellectual property.
  Our business might suffer if we fail to retain our senior management or to recruit and retain key
personnel.
  New product launches or acquired products may reduce our earnings or generate losses.
  14




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We face significant competition for advertising and circulation.
 PC Magazine PC World,
 Our principal vendors are consolidating and this may adversely affect our business and operations.
  
    
    decreased competition, which may lead to increased prices;
    
    interruptions and delays in services provided by such vendors; and
    
    greater dependence on certain vendors.
 We may be adversely affected by fluctuations in paper and postage costs.
   We may be adversely affected by a continued weakening of newsstand sales.
  15




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Our websites and networks may be vulnerable to unauthorized persons accessing our systems, which
could disrupt our operations and result in the theft of our and our users proprietary or personal
information.
  Our business involves risks of liability claims for publication and website content or technology,
which could result in significant liability.
  
    
    defamation;
    
    negligence;
    
    copyright, patent or trademark infringement;
    
    use or failure to protect personal information about our users collected on our websites or through subscriptions;
    
    other claims based on the nature and content of the materials published or distributed.
  If we fail to maintain an effective system of internal controls, we may not be able to accurately
report our financial results.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
 Properties
  Lease
    
    ApproximateExpiration
    
    Square FeetNew York, New York (Headquarters)
    
    
    2019
    
    
    
    144,000San Francisco, California
    
    
    2010
    
    
    
    35,000Woburn, Massachusetts
    
    
    2006
    
    
    
    11,000
 16




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##### Table of Contents



ITEM 3. LEGAL PROCEEDINGS
 PC Magazine PC Magazine
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
    
 ITEM 6. SELECTED FINANCIAL DATA
  17




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ZIFF DAVIS HOLDINGS INC.
SELECTED FINANCIAL DATA
 Nine MonthsEndedYear Ended December 31,
    
    
    December 31,(in thousands of dollars)
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001(2)Statement of Operations Data(1):Revenue, net
    
    $
    187,611
    
    
    $
    204,477
    
    
    $
    194,107
    
    
    $
    209,037
    
    
    $
    215,859Operating expenses:Cost of production
    
    
    51,834
    
    
    
    59,743
    
    
    
    60,622
    
    
    
    75,835
    
    
    
    81,726Selling, general and administrative expenses
    
    
    117,688
    
    
    
    110,939
    
    
    
    98,973
    
    
    
    125,171
    
    
    
    164,351Depreciation and amortization of property,
equipment and intangible assets
    
    
    5,831
    
    
    
    6,202
    
    
    
    10,793
    
    
    
    18,851
    
    
    
    62,636Amortization of intangible assets
    
    
    16,384
    
    
    
    15,226
    
    
    
    15,108
    
    
    
    18,919
    
    
    
    Restructuring charges, net(3)
    
    
    2,967
    
    
    
    5,491
    
    
    
    (6,238
    )
    
    
    48,950
    
    
    
    37,412Loss on
equity investment
    
    
    56
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Write-down of intangible assets(4)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    79,241
    
    
    
    240,077Total operating expenses
    
    
    194,760
    
    
    
    197,601
    
    
    
    179,258
    
    
    
    366,967
    
    
    
    586,202Income (loss) from operations
    
    $
    (7,149
    )
    
    $
    6,876
    
    
    $
    14,849
    
    
    $
    (157,930
    )
    
    $
    (370,343
    )Net (loss) income
    
    $
    (118,075
    )
    
    $
    (85,186
    )
    
    $
    (1,909
    )
    
    $
    (196,840
    )
    
    $
    (415,424
    )Cash Flows and Other Data(1):Cash Flows:Operating
    
    $
    (8,803
    )
    
    $
    9,801
    
    
    $
    8,535
    
    
    $
    (48,002
    )
    
    $
    (65,138
    )Investing
    
    
    (12,530
    )
    
    
    (8,982
    )
    
    
    2,411
    
    
    
    (1,013
    )
    
    
    (8,704
    )Financing
    
    
    22,915
    
    
    
    (15,535
    )
    
    
    (4,928
    )
    
    
    70,349
    
    
    
    68,287Capital expenditures
    
    
    6,542
    
    
    
    5,849
    
    
    
    2,518
    
    
    
    2,567
    
    
    
    23,336Balance Sheet Data(1) (At End of Period):Cash and cash equivalents
    
    $
    34,174
    
    
    $
    32,592
    
    
    $
    47,308
    
    
    $
    41,290
    
    
    $
    19,956Total assets
    
    
    346,795
    
    
    
    352,652
    
    
    
    376,908
    
    
    
    394,412
    
    
    
    515,295Total debt
    
    
    357,458
    
    
    
    308,857
    
    
    
    309,031
    
    
    
    301,266
    
    
    
    429,201Redeemable preferred stock
    
    
    899,533
    
    
    
    814,549
    
    
    
    739,602
    
    
    
    673,577
    
    
    
    515,987Total stockholders deficit
    
    $
    (1,066,612
    )
    
    $
    (948,537
    )
    
    $
    (863,351
    )
    
    $
    (796,763
    )
    
    $
    (555,314
    )
 
 (1)
    
    The financial information presented is for Ziff Davis
Holdings. See Note 20 to our
Consolidated Financial Statements for condensed consolidating financial information for Ziff
Davis Media and our subsidiary guarantors.(2)
    
    As of January 1, 2002, Ziff Davis Holdings adopted the Emerging Issues Task Force Nos. 01-9
and 00-25, which required the netting of product placement and distribution costs against
reported revenue. Amounts prior to January 1, 2002, have been reclassified to reflect the
current year adoption of this accounting pronouncement.(3)
    
    The restructuring charges incurred in 2001, 2002, 2004 and 2005 were primarily related to the
closure of magazines. They include the write-off of fixed assets, severance costs and
costs to exit certain activities, such as facilities closure costs. The credit incurred in
2003 represents a reversal of a portion of the prior years accruals primarily relating to
adjustments to our estimated future real estate lease costs after excess vacant space was
sublet.(4)
    
    Reflects asset impairment charges primarily related to the closure of magazines. 
 ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  18




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Overview
        PC Magazine Sync ExtremeTech
 19




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eWEEK, CIO Insight Baseline
 (Electronic Gaming Monthly, Computer Gaming World Official U.S.
PlayStation Magazine) GMR Xbox Nation
   Technology Sector and Economic Trends
    Results of Operations  Year ended December 31, 2005 compared to year ended December 31, 2004
  Year Ended
    
    
    Year EndedDecember 31,
    
    
    December 31,(in thousands of dollars)
    
    2005
    
    
    2004Revenue, net
    
    $
    187,611
    
    
    $
    204,477Operating expenses:Cost of production
    
    
    51,834
    
    
    
    59,743Selling, general and administrative expenses
    
    
    117,688
    
    
    
    110,939Depreciation and amortization of property and equipment
    
    
    5,831
    
    
    
    6,202Amortization of intangible assets
    
    
    16,384
    
    
    
    15,226Restructuring charges, net
    
    
    2,967
    
    
    
    5,491Loss on
equity investment
    
    
    56
    
    
    
    Total operating expenses
    
    
    194,760
    
    
    
    197,601Income (loss) from operations
    
    
    (7,149
    )
    
    
    6,876Interest expense, net
    
    
    (110,711
    )
    
    
    (91,824
    )Loss before income taxes
    
    
    (117,860
    )
    
    
    (84,948
    )Income tax provision
    
    
    215
    
    
    
    238Net loss
    
    $
    (118,075
    )
    
    $
    (85,186
    )
 20




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##### Table of Contents



Revenue, Net
  PC Magazine PC
Magazine PC Magazines Sync ExtremeTech
  GMR Xbox Nation GMR Xbox Nation
 Cost of Production
  PC Magazines
  Xbox Nation Official U.S. Playstation Magazine
 Selling, General and Administrative Expenses
   21




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##### Table of Contents



Xbox Nation GMR Computer Gaming
World, Electronic Gaming Monthly Official U.S. Playstation Magazine
 Depreciation and amortization
  Restructuring charges, net
 Sync ExtremeTech Sync ExtremeTech
 GMR Xbox Nation
 Interest expense, net
  Income taxes
  Results
of Operations  Year ended December 31, 2004 compared to year ended December 31, 2003
 Year Ended
    
    
    Year EndedDecember 31,
    
    
    December 31,(in thousands of dollars)
    
    2004
    
    
    2003Revenue, net
    
    $
    204,477
    
    
    $
    194,107Operating expenses:Cost of production
    
    
    59,743
    
    
    
    60,622
 22




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##### Table of Contents



Year Ended
    
    
    Year EndedDecember 31,
    
    
    December 31,2004
    
    
    2003Selling, general and administrative expenses
    
    
    110,939
    
    
    
    98,973Depreciation and amortization of property and equipment
    
    
    6,202
    
    
    
    10,793Amortization of intangible assets
    
    
    15,226
    
    
    
    15,108Restructuring charges, net
    
    
    5,491
    
    
    
    (6,238
    )Total operating expenses
    
    
    197,601
    
    
    
    179,258Income from operations
    
    
    6,876
    
    
    
    14,849Gain on sale of assets, net
    
    
    
    
    
    
    2,609Interest expense, net
    
    
    (91,824
    )
    
    
    (19,142
    )Loss before income taxes
    
    
    (84,948
    )
    
    
    (1,684
    )Income tax provision
    
    
    238
    
    
    
    225Net loss
    
    $
    (85,186
    )
    
    $
    (1,909
    )
 Revenue, net
  Sync ExtremeTech PC Magazine PC Magazine Sync ExtremeTech PC Magazine
 CIO Insight eWEEK, Baseline CIO Insight Baseline CIO Insight
 GMR
 Cost of Production
    23




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##### Table of Contents



Selling, General and Administrative Expenses
  Sync ExtremeTech PC Magazine
   Depreciation and amortization
  Restructuring charges, net
 GMR Xbox Nation
  Gain on sale of assets, net
  24




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##### Table of Contents



Interest expense, net
   Income taxes
  Liquidity and Capital Resources
      Liquidity Position
   25




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##### Table of Contents



Sources and Uses of Cash  Years Ended December 31, 2005 and 2004
  Operating Activities.
 Investing
Activities.
 Financing Activities
 Contractual Obligations and Commitments
   Balance at December 31, 2005Less Than
    
    
    One to
    
    
    Three to
    
    
    AfterTotal
    
    
    One Year
    
    
    Three Years
    
    
    Five Years
    
    
    Five Years(in thousands of dollars)Long-term debt
    
    $
    357,458
    
    
    $
    
    
    
    $
    
    
    
    $
    152,458
    
    
    $
    205,000Preferred stock at redemption value
    
    
    899,533
    
    
    
    
    
    
    
    
    
    
    
    899,533
    
    
    
    Non-cancelable operating lease obligations
    
    
    93,331
    
    
    
    10,014
    
    
    
    19,845
    
    
    
    17,341
    
    
    
    46,131$
    1,350,322
    
    
    $
    10,014
    
    
    $
    19,845
    
    
    $
    1,069,332
    
    
    $
    251,131
     26




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##### Table of Contents



Off-Balance-Sheet Arrangements
    Cyclicality
  Seasonality
  Critical Accounting Policies and Estimates
     27




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##### Table of Contents



Effect of Recently Issued Accounting Standards
 Share-Based Payment Accounting for
Stock-Based Compensation Accounting for Stock Issued to Employees.
  Exchange of Nonmonetary Assets
 28




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##### Table of Contents



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Risk
  Inflation and Fluctuations in Paper Prices and Postage Costs
  
 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 PageReport of
Independent Registered Public Accounting Firm (Grant Thornton)
    
    30Report of
Independent Registered Public Accounting Firm (PricewaterhouseCoopers)
    
    31Consolidated Balance Sheets as of December 31, 2005 and December 31, 2004
    
    32Consolidated Statements of Operations for the years ended December 31, 2005, 2004 and 2003
    
    33Consolidated Statements of Cash Flows for the years ended December 31, 2005, 2004 and 2003
    
    34Consolidated Statements of Changes in Stockholders Deficit for the years ended December 31, 2005, 2004 and 2003
    
    35Notes to Consolidated Financial Statements
    
    36
 29




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
 30




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
   
 
 31




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##### Table of Contents



ZIFF DAVIS HOLDINGS INC.
 CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)
as of December 31,
 2005
    
    
    2004ASSETSCurrent assets:Cash and cash equivalents
    
    $
    34,174
    
    
    $
    32,592Accounts receivable, net
    
    
    32,496
    
    
    
    35,126Inventories
    
    
    437
    
    
    
    575Prepaid expenses and other current assets
    
    
    5,632
    
    
    
    6,661Total current assets
    
    
    72,739
    
    
    
    74,954Property and equipment, net
    
    
    16,322
    
    
    
    15,004Intangible assets, net
    
    
    196,380
    
    
    
    207,141Goodwill
    
    
    39,828
    
    
    
    39,903Other assets, net (including restricted cash of $1,623 and $0)
    
    
    21,526
    
    
    
    15,650Total assets
    
    $
    346,795
    
    
    $
    352,652LIABILITIES AND STOCKHOLDERS DEFICITCurrent liabilities:Accounts payable
    
    $
    21,787
    
    
    $
    20,280Accrued expenses and other current liabilities
    
    
    34,211
    
    
    
    26,154Current portion of long-term debt
    
    
    
    
    
    
    23,991Unexpired subscriptions and deferred revenue, net
    
    
    18,177
    
    
    
    20,327Total current liabilities
    
    
    74,175
    
    
    
    90,752Long-term debt
    
    
    357,458
    
    
    
    284,866Accrued interest  troubled debt restructuring
    
    
    60,278
    
    
    
    76,190Accrued
restructuring costs  long-term
    
    
    12,058
    
    
    
    14,978Mandatorily redeemable preferred stock
    
    
    899,533
    
    
    
    814,549Other non-current liabilities
    
    
    9,905
    
    
    
    19,854Total liabilities
    
    
    1,413,407
    
    
    
    1,301,189Commitments and contingenciesStockholders deficit:Common stock  $0.001 par value, 100,000,000 shares
authorized, 2,311,049 issued and outstanding as of December
31, 2005 and 2004, respectively
    
    
    17,329
    
    
    
    17,329Additional paid-in capital
    
    
    8,468
    
    
    
    8,468Accumulated deficit
    
    
    (1,092,409
    )
    
    
    (974,334
    )Total stockholders deficit
    
    
    (1,066,612
    )
    
    
    (948,537
    )Total liabilities and stockholders deficit
    
    $
    346,795
    
    
    $
    352,652
  32




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##### Table of Contents



ZIFF DAVIS HOLDINGS INC.
 CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands)
for the year ended December 31,
 2005
    
    

2004
    
    

2003Revenue, net
    
    $
    187,611
    
    
    $
    204,477
    
    
    $
    194,107Operating expenses:Cost of production
    
    
    51,834
    
    
    
    59,743
    
    
    
    60,622Selling, general and administrative expenses
    
    
    117,688
    
    
    
    110,939
    
    
    
    98,973Depreciation and amortization of property and equipment
    
    
    5,831
    
    
    
    6,202
    
    
    
    10,793Amortization of intangible assets
    
    
    16,384
    
    
    
    15,226
    
    
    
    15,108Restructuring charges (reductions), net
    
    
    2,967
    
    
    
    5,491
    
    
    
    (6,238
    )Loss in equity investment
    
    
    56
    
    
    
    
    
    
    
    Total operating expenses
    
    
    194,760
    
    
    
    197,601
    
    
    
    179,258Income (loss) from operations
    
    
    (7,149
    )
    
    
    6,876
    
    
    
    14,849Gain on sale of assets, net
    
    
    
    
    
    
    
    
    
    
    2,609Interest expense, net
    
    
    (110,711
    )
    
    
    (91,824
    )
    
    
    (19,142
    )Loss before income taxes
    
    
    (117,860
    )
    
    
    (84,948
    )
    
    
    (1,684
    )Income tax provision
    
    
    215
    
    
    
    238
    
    
    
    225Net loss
    
    $
    (118,075
    )
    
    $
    (85,186
    )
    
    $
    (1,909
    )
  33




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##### Table of Contents



ZIFF DAVIS HOLDINGS INC.
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
for the year ended December 31,
 2005
    
    
    2004
    
    
    2003Cash flows from operating activities:Net loss
    
    $
    (118,075
    )
    
    $
    (85,186
    )
    
    $
    (1,909
    )Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:Accrued dividends on mandatorily redeemable preferred stock
    
    
    84,985
    
    
    
    74,947
    
    
    
    Depreciation and amortization
    
    
    22,215
    
    
    
    21,428
    
    
    
    25,901Restructuring charge (reduction)
    
    
    2,967
    
    
    
    5,491
    
    
    
    (6,238
    )Loss in equity investment
    
    
    56
    
    
    
    
    
    
    
    Provision for doubtful accounts
    
    
    1,118
    
    
    
    (769
    )
    
    
    557Non-cash rent (income) expense
    
    
    164
    
    
    
    (389
    )
    
    
    (1,617
    )Non-cash interest
    
    
    1,830
    
    
    
    1,531
    
    
    
    1,316Amortization of debt issuance costs
    
    
    3,316
    
    
    
    2,236
    
    
    
    2,158Non-cash stock compensation
    
    
    (807
    )
    
    
    1,109
    
    
    
    Gain on sale of assets
    
    
    
    
    
    
    
    
    
    
    (2,609
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    1,162
    
    
    
    (1,439
    )
    
    
    (2,797
    )Inventories
    
    
    138
    
    
    
    (254
    )
    
    
    13Accounts payable and accrued expenses
    
    
    (5,572
    )
    
    
    (4,901
    )
    
    
    (3,328
    )Unexpired subscriptions and deferred revenue, net
    
    
    (3,068
    )
    
    
    (4,843
    )
    
    
    (4,697
    )Prepaid expenses and other, net
    
    
    768
    
    
    
    840
    
    
    
    1,785Net cash provided by (used in) operating activities
    
    
    (8,803
    )
    
    
    9,801
    
    
    
    8,535Cash flows from investing activities:Acquisitions
    
    
    (5,237
    )
    
    
    (3,146
    )
    
    
    Joint venture investment
    
    
    (751
    )
    
    
    
    
    
    
    Capital expenditures
    
    
    (6,542
    )
    
    
    (5,849
    )
    
    
    (2,518
    )Net proceeds from sale of assets
    
    
    
    
    
    
    13
    
    
    
    4,929Net cash provided by (used in) investing activities
    
    
    (12,530
    )
    
    
    (8,982
    )
    
    
    2,411Cash flows from financing activities:Proceeds from sale of floating rate bonds
    
    
    205,000
    
    
    
    
    
    
    
    Debt issuance costs
    
    
    (6,321
    )
    
    
    (488
    )
    
    
    Repayment of borrowings under senior credit facilities
    
    
    (174,141
    )
    
    
    (15,047
    )
    
    
    (4,928
    )Funding of letters of credit, net
    
    
    (1,623
    )
    
    
    
    
    
    
    Net cash
provided by (used in) financing activities
    
    
    22,915
    
    
    
    (15,535
    )
    
    
    (4,928
    )Net increase (decrease) in cash and cash equivalents
    
    
    1,582
    
    
    
    (14,716
    )
    
    
    6,018Cash and cash equivalents at beginning of year
    
    
    32,592
    
    
    
    47,308
    
    
    
    41,290Cash and cash equivalents at end of year
    
    $
    34,174
    
    
    $
    32,592
    
    
    $
    47,308Cash paid during the year for:Interest
    
    $
    16,963
    
    
    $
    11,743
    
    
    $
    14,444Income taxes
    
    
    15
    
    
    
    15
    
    
    
    33
  34




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##### Table of Contents



ZIFF DAVIS HOLDINGS INC.
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS DEFICIT
(dollars in thousands except per share data)
 AccumulatedStock
    
    
    Additional
    
    
    
    
    
    
    Other
    
    
    TotalCommon Stock
    
    
    Subscription
    
    
    Paid-In
    
    
    Accumulated
    
    
    Comprehensive
    
    
    Stockholders
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Loans
    
    
    Capital
    
    
    Deficit
    
    
    Loss
    
    
    Deficit
    
    
    LossBalance at December
31, 2002
    
    
    2,334,748
    
    
    $
    17,901
    
    
    $
    (572
    )
    
    $
    8,468
    
    
    $
    (821,214
    )
    
    $
    (1,346
    )
    
    $
    (796,763
    )
    
    $
    (196,386
    )Cancellation of
shareholder loans
    
    
    (21,820
    )
    
    
    (558
    )
    
    
    558
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Change in fair
value of interest
rate swap
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,346
    
    
    
    1,346
    
    
    
    1,346Dividends payable
on preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (66,025
    )
    
    
    
    
    
    
    (66,025
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,909
    )
    
    
    
    
    
    
    (1,909
    )
    
    
    (1,909
    )Balance at December
31, 2003
    
    
    2,312,928
    
    
    
    17,343
    
    
    
    (14
    )
    
    
    8,468
    
    
    
    (889,148
    )
    
    
    
    
    
    
    (863,351
    )
    
    $
    (563
    )Cancellation of
shareholder loans
    
    
    (1,879
    )
    
    
    (14
    )
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (85,186
    )
    
    
    
    
    
    
    (85,186
    )
    
    $
    (85,186
    )Balance at December
31, 2004
    
    
    2,311,049
    
    
    
    17,329
    
    
    
    
    
    
    
    8,468
    
    
    
    (974,334
    )
    
    
    
    
    
    
    (948,537
    )
    
    $
    (85,186
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (118,075
    )
    
    
    
    
    
    
    (118,075
    )
    
    $
    (118,075
    )Balance at December
31, 2005
    
    
    2,311,049
    
    
    $
    17,329
    
    
    $
    
    
    
    $
    8,468
    
    
    $
    (1,092,409
    )
    
    $
    
    
    
    $
    (1,066,612
    )
    
    $
    (118,075
    )
  35




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##### Table of Contents



ZIFF DAVIS HOLDINGS INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share data)
 NOTE 1  ORGANIZATION AND BASIS OF PRESENTATION
 Formation of Ziff Davis Holdings Inc.
     Operations
  PC Magazine Sync ExtremeTech
 eWEEK, CIO Insight Baseline
 36




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##### Table of Contents



(Electronic Gaming Monthly, Computer Gaming World Official U.S.
PlayStation Magazine) GMR Xbox Nation
  Liquidity
        NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Principles of consolidation
  Cash and cash equivalents
  Concentration of credit risk
   37




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##### Table of Contents



Inventories
 eWEEK.
 Property and equipment
  Capitalized software
 Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use,
 Intangible assets and Goodwill
   Impairment of long-lived assets
  Debt issuance costs
  38




---



##### Table of Contents



Revenue, net
  Operating costs and expenses
   Stock-based compensation
 Accounting for Stock-based Compensation, Accounting for
Stock Issued to Employers
  Comprehensive loss
  Income taxes
  39




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##### Table of Contents



Interest rate swaps
  Fair value of financial investments
  Use of estimates
      Advertising
  40




---



##### Table of Contents



Recent accounting pronouncements
 Share-Based Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees.
 Accounting for Certain Financial Instruments
with Characteristics of both Liabilities and Equity
 Exchange of Nonmonetary Assets
 Reclassifications
  NOTE 3  ACQUISITIONS AND DISPOSITIONS
 Acquisitions
     41




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##### Table of Contents



PC Magazine PC Magazine
 Dispositions
  NOTE 4  ACCOUNTS RECEIVABLE, NET
     As
ofDecember 31,2005
    
    
    2004Trade
    
    $
    23,984
    
    
    $
    22,497Newsstand
    
    
    23,463
    
    
    
    34,417Subscription
    
    
    4,068
    
    
    
    5,540Other
    
    
    4,906
    
    
    
    6,458Total gross accounts receivable
    
    
    56,421
    
    
    
    68,912Allowance for newsstand returns and cancellations
    
    
    (19,141
    )
    
    
    (28,022
    )Allowance for trade accounts receivable, subscriptions and other
    
    
    (4,784
    )
    
    
    (5,764
    )Accounts receivable, net
    
    $
    32,496
    
    
    $
    35,126
  Balance at
    
    
    Increase to
    
    
    Decrease to
    
    
    Balance atbeginning of year
    
    
    allowance
    
    
    allowance
    
    
    end of yearDecember 31, 2005
    
    $
    28,022
    
    
    $
    46,806
    
    
    $
    (55,687
    )
    
    $
    19,141December 31, 2004
    
    $
    16,270
    
    
    $
    45,846
    
    
    $
    (34,094
    )
    
    $
    28,022
  Balance at
    
    
    Net
    
    
    Writeoffs,
    
    
    Balance atbeginning of year
    
    
    additions
    
    
    Net of Recoveries
    
    
    end of yearDecember 31, 2005
    
    $
    5,764
    
    
    $
    1,512
    
    
    $
    (2,492
    )
    
    $
    4,784December 31, 2004
    
    $
    4,819
    
    
    $
    3,850
    
    
    $
    (2,905
    )
    
    $
    5,764
 NOTE 5  PREPAID EXPENSES AND OTHER CURRENT ASSETS
  42




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##### Table of Contents



As
ofDecember 31,2005
    
    
    2004Deferred expenses and deposits
    
    $
    5,310
    
    
    $
    6,178Production expenses
    
    
    322
    
    
    
    54Other
    
    
    
    
    
    
    429$
    5,632
    
    
    $
    6,661
  NOTE 6  PROPERTY AND EQUIPMENT, NET
  As
ofDecember 31,2005
    
    
    2004Computers and equipment
    
    $
    28,962
    
    
    $
    26,778Capitalized computer software
    
    
    25,864
    
    
    
    21,068Leasehold improvements
    
    
    19,929
    
    
    
    19,491Furniture and fixtures
    
    
    6,243
    
    
    
    6,51280,998
    
    
    
    73,849Accumulated depreciation and amortization
    
    
    (64,676
    )
    
    
    (58,845
    )$
    16,322
    
    
    $
    15,004
  NOTE 7
 GOODWILL AND INTANGIBLE ASSETS, NET
     As of December 31, 2005
    
    
    As of December 31, 2004Accumulated
    
    
    
    
    
    
    
    
    
    
    AccumulatedGross
    
    
    Amortization
    
    
    Net
    
    
    Gross
    
    
    Amortization
    
    
    NetAmortized intangible assets:Advertising lists
    
    $
    184,179
    
    
    $
    (74,087
    )
    
    $
    110,092
    
    
    $
    184,178
    
    
    $
    (60,146
    )
    
    $
    124,032Trademark/trade names
    
    
    25,057
    
    
    
    (5,501
    )
    
    
    19,556
    
    
    
    25,057
    
    
    
    (4,104
    )
    
    
    20,953Subscriber lists and other
    
    
    18,595
    
    
    
    (12,646
    )
    
    
    5,949
    
    
    
    12,973
    
    
    
    (11,600
    )
    
    
    1,373Total amortized intangible assets
    
    
    227,831
    
    
    
    (92,234
    )
    
    
    135,597
    
    
    
    222,208
    
    
    
    (75,850
    )
    
    
    146,358Unamortized intangible assets:Trademark/trade names
    
    
    67,686
    
    
    
    (6,903
    )
    
    
    60,783
    
    
    
    67,686
    
    
    
    (6,903
    )
    
    
    60,783Goodwill
    
    
    47,095
    
    
    
    (7,267
    )
    
    
    39,828
    
    
    
    47,170
    
    
    
    (7,267
    )
    
    
    39,903Total
goodwill and intangible assets
    
    $
    342,612
    
    
    $
    (106,404
    )
    
    $
    236,208
    
    
    $
    337,064
    
    
    $
    (90,020
    )
    
    $
    247,044
   43




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##### Table of Contents



GMR
   2006
    
    $
    17,6702007
    
    
    17,6702008
    
    
    16,6242009
    
    
    15,2262010
    
    
    15,007
  NOTE 8  OTHER ASSETS
  As
of
December 31,2005
    
    
    2004Deferred financing costs
    
    $
    13,971
    
    
    $
    10,965Deferred rent asset
    
    
    5,238
    
    
    
    4,685Restricted cash
    
    
    1,623
    
    
    
    Joint venture investment
    
    
    694
    
    
    
    $
    21,526
    
    
    $
    15,650
 NOTE 9  ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
  As
ofDecember 31,2005
    
    
    2004Accrued operating and production costs
    
    $
    13,394
    
    
    $
    11,606Accrued restructuring costs  short-term
    
    
    5,991
    
    
    
    7,977Accrued interest
    
    
    4,103
    
    
    
    1,329Payroll and related employee benefits
    
    
    2,417
    
    
    
    3,037Accrued sales and use taxes payable
    
    
    2,357
    
    
    
    845Foreign tax liabilities
    
    
    4,899
    
    
    
    Other
    
    
    1,050
    
    
    
    1,360Accrued expenses and other current liabilities
    
    $
    34,211
    
    
    $
    26,154
 NOTE 10   COST REDUCTION AND
RESTRUCTURING PROGRAM, ASSET IMPAIRMENT AND RELATED CHARGES
 Xbox Nation
 Year EndedDecember 31,2004Employee severance costs(a)
    
    $
    3,320Costs to exit certain activities(b)
    
    
    2,171$
    5,491
 44




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##### Table of Contents



Sync and ExtremeTech
 Year EndedDecember 31,2005Employee severance costs(a)
    
    $
    2,525Costs to exit certain activities(b)
    
    
    442$
    2,967
 
 (a)
    
    Employee severance costs relate to severance benefits and other
related costs that are calculated pursuant to the Companys employee
severance plan or individual employee contracts, as applicable.(b)
    
    Costs to exit certain activities relate to the termination of
contracts, closure or consolidation of offices, net of sublease income
and other related costs associated with the closure of publications
and other businesses.   Activity for the Year Ended December 31, 2003AppliedBalance
    
    
    
    
    
    
    
    
    
    
    Against
    
    
    BalanceDecember 31,
    
    
    Expenses/
    
    
    
    
    
    
    Related
    
    
    December 31,2002
    
    
    Adjustments
    
    
    Payments
    
    
    Assets
    
    
    2002Employee severance costs
    
    $
    3,916
    
    
    $
    (485
    )
    
    $
    (1,457
    )
    
    $
    
    
    
    $
    1,974Facility consolidation and other costs
    
    
    34,297
    
    
    
    (3,815
    )
    
    
    (10,941
    )
    
    
    1,877
    
    
    
    21,418Total
    
    $
    38,213
    
    
    $
    (4,300
    )
    
    $
    (12,398
    )
    
    $
    1,877
    
    
    $
    23,392
 Activity for the Year Ended December 31, 2004Balance
    
    
    
    
    
    
    
    
    
    
    Accretion
    
    
    BalanceDecember 31,
    
    
    Expenses/
    
    
    
    
    
    
    of
    
    
    December 31,2003
    
    
    Adjustments
    
    
    Payments
    
    
    Liability
    
    
    2004Employee severance costs
    
    $
    1,974
    
    
    $
    3,320
    
    
    $
    (1,374
    )
    
    $
    
    
    
    $
    3,920Facility consolidation and other costs
    
    
    21,418
    
    
    
    2,171
    
    
    
    (7,960
    )
    
    
    3,406
    
    
    
    19,035Total
    
    $
    23,392
    
    
    $
    5,491
    
    
    $
    (9,334
    )
    
    $
    3,406
    
    
    $
    22,955
 Activity for the Year Ended December 31, 2005Balance
    
    
    
    
    
    
    
    
    
    
    Accretion
    
    
    BalanceDecember 31,
    
    
    Expenses/
    
    
    
    
    
    
    of
    
    
    December 31,2004
    
    
    Adjustments
    
    
    Payments
    
    
    Liability
    
    
    2005Employee severance costs
    
    $
    3,920
    
    
    $
    2,525
    
    
    $
    (3,538
    )
    
    $
    
    
    
    $
    2,907Facility consolidation and other costs
    
    
    19,035
    
    
    
    442
    
    
    
    (5,102
    )
    
    
    768
    
    
    
    15,142Total
    
    $
    22,955
    
    
    $
    2,967
    
    
    $
    (8,640
    )
    
    $
    768
    
    
    $
    18,049
 NOTE 11   INCOME TAXES
 Accounting for Income
Taxes.
 45




---



##### Table of Contents



Year Ended
    
    
    Year Ended
    
    
    Year EndedDecember 31,
    
    
    December 31,
    
    
    December 31,2005
    
    
    2004
    
    
    2003U.S. federal income taxes:Current
    
    $
    
    
    
    $
    
    
    
    $
    Deferred
    
    
    
    
    
    
    
    
    
    
    State and local taxes:Current
    
    
    30
    
    
    
    30
    
    
    
    30Deferred
    
    
    
    
    
    
    
    
    
    
    Foreign income taxes:
Current
    
    
    185
    
    
    
    208
    
    
    
    195Total provision
    
    $
    215
    
    
    $
    238
    
    
    $
    225
  Year Ended
    
    
    Year Ended
    
    
    Year EndedDecember 31,
    
    
    December 31,
    
    
    December 31,2005
    
    
    2004
    
    
    2003Federal statutory tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State and local taxes (net of federal tax benefit)
    
    
    
    
    
    
    
    
    
    
    (1.1
    )Permanent differences
    
    
    (25.4
    )
    
    
    (31.5
    )
    
    
    (8.9
    )Valuation allowance
    
    
    (9.6
    )
    
    
    (3.6
    )
    
    
    (26.8
    )Foreign operations
    
    
    (0.2
    )
    
    
    (0.3
    )
    
    
    (11.6
    )Other
    
    
    
    
    
    
    
    
    
    
    Effective tax rate
    
    
    (0.2
    )%
    
    
    (0.4
    )%
    
    
    (13.4
    )%
   As
of
December 31,2005
    
    
    2004Current deferred tax assets and (liabilities):Allowance for doubtful accounts and accrued liabilities
    
    $
    2,299
    
    
    $
    1,124Prepaid expenses
    
    
    (251
    )
    
    
    (108
    )Current deferred net tax assets, net
    
    
    2,048
    
    
    
    1,016Non-current deferred tax assets and (liabilities):Basis difference in intangible assets
    
    
    106,850
    
    
    
    97,195Basis difference in property and equipment
    
    
    (4,792
    )
    
    
    (3,849
    )Start-up costs capitalized
    
    
    1,551
    
    
    
    1,357Deferred rent
    
    
    3,225
    
    
    
    3,073Other
    
    
    7,341
    
    
    
    584Net operating loss and other carryforwards
    
    
    183,062
    
    
    
    169,790Non-current deferred tax assets, net
    
    
    297,237
    
    
    
    268,150Gross deferred tax assets
    
    
    299,285
    
    
    
    269,166Valuation allowance
    
    
    (299,285
    )
    
    
    (269,166
    )Net deferred tax assets
    
    $
    
    
    
    $
    
    46




---



##### Table of Contents



NOTE 12  DEBT
 General
   Floating Rate Notes
   Compounding Notes
   12% Notes
  47




---



##### Table of Contents



Senior Credit Facility
   Maturities
  2006
    
    $
    2007
    
    
    2008
    
    
    2009
    
    
    140,1782010
    
    
    12,280Thereafter
    
    
    205,000$
    357,458
   NOTE 13  FINANCIAL RESTRUCTURING
   
    
    The Company received an equity contribution of $80,000 from Willis Stein in exchange for
the issuance of a new series D redeemable preferred stock (the Series D Preferred Stock)
with an aggregate liquidation preference of approximately $80,000 as well as approximately
38.6 million warrants, each representing the right to purchase one share of the common stock
of Ziff
 48




---



##### Table of Contents



Davis Holdings at an exercise price of $0.001 per share. The contribution was comprised of
$10,100 of cash received during the quarter ended June 30, 2002, approximately $62,531 of cash
received in August 2002, and approximately $7,369 in liquidation preference of Series D
Preferred Stock issued by Ziff Davis Holdings in lieu of a cash payment which otherwise would
have been owed to Willis Stein by Ziff Davis Media with respect to the 12% Notes held by
Willis Stein.
 
    
    Accredited investors representing approximately 95.1% in aggregate principal amount of
the Companys 12% Notes who tendered their notes received an aggregate of approximately
$21,158 in cash and $90,334 in aggregate principal amount of Compounding Notes. These
holders also received an aggregate of approximately $28,526 in liquidation preference of a
new series of preferred stock (Series E Preferred Stock) and warrants for the purchase of
approximately 5.2 million shares of common stock of Ziff Davis Holdings in exchange for
their 12% Notes.
    
    The Compounding Notes accrue interest in semi-annual periods, commencing on February 15
and August 15 of each year, with the first period starting on February 15, 2004. For the
first four years, interest accrues at rates ranging from 12% to 14% and may be paid, at the
Companys option and subject to certain restrictions formerly under the
Senior Credit Facility and now under the Floating Rate Notes Indenture,
either in cash or by compounding such interest on the Compounding Notes. For all payments of
interest accruing after August 12, 2006, interest shall be payable in cash at a rate of 12%
per annum.
    
    The Series E Preferred Stock accrues dividends at a rate of 10% per annum and is subject
to mandatory redemption on the earlier of March 31, 2010 or the date of a change in control.
Dividends will only be paid in cash if declared for payment by the Companys Board of
Directors. In addition, so long as any Series D Preferred Stock remains outstanding, and
without the prior written consent of Willis Stein, together with the holder or holders of a
majority of the outstanding shares of Series D Preferred Stock, Ziff Davis Holdings will not
be permitted directly or indirectly to pay or declare any cash dividend or make any
distribution to the holders of Series E Preferred Stock (see
Note 14). Additionally, the Senior Credit
Facility restricted, and the indenture governing the Floating Rate
Notes and Compounding Notes each restricts, the payment of
dividends to holders of capital stock of Ziff Davis Holdings.
    
    Interest due to holders of the $12,280 principal amount of the 12% Notes not tendered
previously due on July 15, 2002, was funded on August 14, 2002.
    
    The Company amended and restated its Senior Credit Facility providing for, among other
terms: (1) waiver of all existing defaults; (2) deferral of principal payments for eight
quarters; (3) removal of the obligation to pay the default interest rate on the outstanding
principal; and (4) mandatory use of a portion of excess cash flows, as defined, to repay
amounts owed under the Senior Credit Facility.
  NOTE 14  CAPITAL STRUCTURE
 Redeemable Preferred Stock
 Series A Redeemable Preferred Stock divided by divided by
 Series B Redeemable Preferred Stock divided by
 49




---



##### Table of Contents



divided by
 Series C Convertible Preferred Stock divided by divided by
 Series D Redeemable Preferred Stock divided by divided by
 Series E Redeemable Preferred Stock divided by divided by
  50




---



##### Table of Contents



Preferred Stock SeriesA
    
    
    B
    
    
    C
    
    
    D
    
    
    E
    
    
    TotalBalance at December 31, 2002
    
    $
    435,296
    
    
    $
    116,317
    
    
    $
    5,173
    
    
    $
    87,153
    
    
    $
    29,638
    
    
    $
    673,577Dividends payable
    
    
    28,992
    
    
    
    13,143
    
    
    
    
    
    
    
    20,813
    
    
    
    3,077
    
    
    
    66,025Balance at December 31, 2003
    
    $
    464,288
    
    
    $
    129,460
    
    
    $
    5,173
    
    
    $
    107,966
    
    
    $
    32,715
    
    
    $
    739,602Dividends payable
    
    
    31,009
    
    
    
    14,670
    
    
    
    
    
    
    
    25,862
    
    
    
    3,406
    
    
    
    74,947Balance at December 31, 2004
    
    $
    495,297
    
    
    $
    144,130
    
    
    $
    5,173
    
    
    $
    133,828
    
    
    $
    36,121
    
    
    $
    814,549Dividends payable
    
    
    32,988
    
    
    
    16,286
    
    
    
    
    
    
    
    31,961
    
    
    
    3,750
    
    
    
    84,985Balance at December 31, 2005
    
    $
    528,285
    
    
    $
    160,416
    
    
    $
    5,173
    
    
    $
    165,789
    
    
    $
    39,871
    
    
    $
    899,534
 Common Stock
  Restrictions on Transfer of Capital Stock
  Common Stock Warrants
  Liquidation Preference
  NOTE 15  CONTRACTS WITH CNET
 Computer Shopper Computer Shopper Computer Shopper Computer Shopper
 NOTE 16  EARNINGS PER SHARE
  NOTE 17  EMPLOYEE BENEFIT PLANS
 401(k) Plan
  51




---



##### Table of Contents



Stock Option Plans
 2001 Stock Option Plan
   Weighted AverageNumber of Shares
    
    
    Price Per ShareBalance at December 31, 2002
    
    
    26,955
    
    
    
    7.50Options granted
    
    
    
    
    
    
    Options exercised
    
    
    
    
    
    
    Options cancelled/forfeited
    
    
    (5,459
    )
    
    
    7.50Balance at December 31, 2003
    
    
    21,496
    
    
    $
    7.50Options granted
    
    
    
    
    
    
    Options exercised
    
    
    
    
    
    
    Options cancelled/forfeited
    
    
    (3,418
    )
    
    
    7.50Balance at December 31, 2004
    
    
    18,078
    
    
    $
    7.50Reverse stock split
    
    
    
    
    
    
    Options granted
    
    
    
    
    
    
    Options exercised
    
    
    
    
    
    
    Options cancelled/forfeited
    
    
    
    
    
    
    Balance at December 31, 2005
    
    
    18,078
    
    
    $
    7.50
   2002 Stock Option Plan
  52




---



##### Table of Contents



53




---



##### Table of Contents



Series D Pfd.
    
    
    Series B Pfd.
    
    
    Series A Pfd.
    
    
    CommonWtd Avg
    
    
    
    
    
    
    Wtd Avg
    
    
    
    
    
    
    Wtd Avg
    
    
    
    
    
    
    Wtd Avg# of
    
    
    Exercise
    
    
    # of
    
    
    Exercise
    
    
    # of
    
    
    Exercise
    
    
    # of
    
    
    ExerciseOptions
    
    
    Price
    
    
    Options
    
    
    Price
    
    
    Options
    
    
    Price
    
    
    Options
    
    
    PriceOptions
Outstanding at
12/31/04
    
    
    11,816
    
    
    $
    1,098
    
    
    
    14,172
    
    
    $
    1,007
    
    
    
    46,895
    
    
    $
    0.01
    
    
    
    7,605,000
    
    
    $
    0.001Granted
    
    
    652
    
    
    $
    1,787
    
    
    
    661
    
    
    $
    1,000
    
    
    
    2,073
    
    
    $
    0.01
    
    
    
    375,000
    
    
    $
    0.001Forfeited
    
    
    (1,617
    )
    
    $
    1,038
    
    
    
    (1,986
    )
    
    $
    1,011
    
    
    
    (6,653
    )
    
    $
    0.01
    
    
    
    (1,300,000
    )
    
    $
    0.001Expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Options Outstanding
at 12/31/05
    
    
    10,851
    
    
    $
    1,144
    
    
    
    12,847
    
    
    $
    1,002
    
    
    
    42,315
    
    
    $
    0.01
    
    
    
    6,680,000
    
    
    $
    0.001Range of Exercise
Prices
    
    
    
    
    
    $
    1,000-1,790
    
    
    
    
    
    
    $
    1,000-1,221
    
    
    
    
    
    
    $
    0.01
    
    
    
    
    
    
    $
    0.001Weighted Average
Remaining Life
    
    
    
    
    
    
    7.6 years
    
    
    
    
    
        

    7.6 years
    
    
    
    
    
    
    

    7.5 years
    
    
    
    
    
    
    

    7.5 years
   NOTE 18  OPERATING LEASE COMMITMENTS
  Gross Rental
    
    
    Sublease
    
    
    Net RentalCommitments
    
    
    Income
    
    
    Commitments2006
    
    $
    19,218
    
    
    $
    9,204
    
    
    $
    10,0142007
    
    
    18,821
    
    
    
    8,846
    
    
    
    9,9752008
    
    
    18,778
    
    
    
    8,908
    
    
    
    9,8702009
    
    
    18,164
    
    
    
    9,312
    
    
    
    8,8522010
    
    
    18,023
    
    
    
    9,534
    
    
    
    8,489Thereafter
    
    
    132,377
    
    
    
    86,246
    
    
    
    46,131$
    225,381
    
    
    $
    132,050
    
    
    $
    93,331
  NOTE 19  CONTINGENCIES
 Legal Proceedings
 PC Magazine PC Magazine
 54
    Table of Contents  Off-Balance-Sheet Arrangements
  NOTE 20  GUARANTOR AND OTHER FINANCIAL INFORMATION
 Guarantor Financial Information
   At December 31, 2005Ziff Davis
    
    
    Ziff DavisHoldings Inc.
    
    
    Media Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalASSETSCurrent assets:Cash and cash equivalents
    
    $
    
    
    
    $
    
    
    
    $
    34,174
    
    
    $
    
    
    
    $
    34,174Accounts receivable, net
    
    
    
    
    
    
    
    
    
    
    32,496
    
    
    
    
    
    
    
    32,496Inventories
    
    
    
    
    
    
    
    
    
    
    437
    
    
    
    
    
    
    
    437Prepaid expenses and other current assets
    
    
    
    
    
    
    
    
    
    
    5,632
    
    
    
    
    
    
    
    5,632Due (to) from affiliates
    
    
    1
    
    
    
    (200,723
    )
    
    
    200,722
    
    
    
    
    
    
    
    Total current assets
    
    
    1
    
    
    
    (200,723
    )
    
    
    273,461
    
    
    
    
    
    
    
    72,739Property and equipment, net
    
    
    
    
    
    
    
    
    
    
    16,322
    
    
    
    
    
    
    
    16,322Investments in subsidiaries, equity method
    
    
    (167,080
    )
    
    
    (3,215
    )
    
    
    
    
    
    
    170,295
    
    
    
    Intangible assets, net
    
    
    
    
    
    
    
    
    
    
    196,380
    
    
    
    
    
    
    
    196,380Goodwill
    
    
    
    
    
    
    
    
    
    
    39,828
    
    
    
    
    
    
    
    39,828Note receivable  affiliate
    
    
    
    
    
    
    442,250
    
    
    
    
    
    
    
    (442,250
    )
    
    
    Other assets
    
    
    
    
    
    
    15,594
    
    
    
    5,932
    
    
    
    
    
    
    
    21,526Total assets
    
    $
    (167,079
    )
    
    $
    253,906
    
    
    $
    531,923
    
    
    $
    (271,955
    )
    
    $
    346,795LIABILITIES AND STOCKHOLDERS DEFICITCurrent liabilities:Accounts payable
    
    $
    
    
    
    $
    
    
    
    $
    21,787
    
    
    $
    
    
    
    $
    21,787Accrued expenses and other current liabilities
    
    
    
    
    
    
    4,103
    
    
    
    30,108
    
    
    
    
    
    
    
    34,211Current portion of long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unexpired subscriptions and deferred revenue, net
    
    
    
    
    
    
    
    
    
    
    18,177
    
    
    
    
    
    
    
    18,177Total current liabilities
    
    
    
    
    
    
    4,103
    
    
    
    70,072
    
    
    
    
    
    
    
    74,175Long-term debt
    
    
    
    
    
    
    357,458
    
    
    
    
    
    
    
    
    
    
    
    357,458Accrued interest  troubled debt restructuring
    
    
    
    
    
    
    60,278
    
    
    
    
    
    
    
    
    
    
    
    60,278Note payable  affiliate
    
    
    
    
    
    
    
    
    
    
    442,250
    
    
    
    (442,250
    )
    
    
    Accrued
restructuring costslong-term
    
    
    
    
    
    
    
    
    
    
    12,058
    
    
    
    
    
    
    
    12,058Mandatorily redeemable preferred stock
    
    
    899,533
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    899,533Other non-current liabilities
    
    
    
    
    
    
    
    
    
    
    9,905
    
    
    
    
    
    
    
    9,905Total liabilities
    
    
    899,533
    
    
    
    421,839
    
    
    
    534,285
    
    
    
    (442,250
    )
    
    
    1,413,407Stockholders (deficit) equity:Preferred stock
    
    
    
    
    
    
    
    
    
    
    1,234
    
    
    
    (1,234
    )
    
    
    Common stock
    
    
    17,329
    
    
    
    
    
    
    
    28
    
    
    
    (28
    )
    
    
    17,329Additional paid-in capital
    
    
    8,468
    
    
    
    566,631
    
    
    
    813,152
    
    
    
    (1,379,784
    )
    
    
    8,467Accumulated deficit
    
    
    (1,092,409
    )
    
    
    (734,564
    )
    
    
    (816,776
    )
    
    
    1,551,341
    
    
    
    (1,092,408
    )Total stockholders deficit
    
    
    (1,066,612
    )
    
    
    (167,933
    )
    
    
    (2,362
    )
    
    
    170,296
    
    
    
    (1,066,612
    )Total liabilities and stockholders deficit
    
    $
    (167,079
    )
    
    $
    253,906
    
    
    $
    531,923
    
    
    $
    (271,955
    )
    
    $
    346,795
 55
    Table of Contents  At December 31, 2004Ziff Davis
    
    
    Ziff DavisHoldings Inc.
    
    
    Media Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalASSETSCurrent assets:Cash and cash equivalents
    
    $
    
    
    
    $
    
    
    
    $
    32,592
    
    
    $
    
    
    
    $
    32,592Accounts receivable, net
    
    
    
    
    
    
    
    
    
    
    35,126
    
    
    
    
    
    
    
    35,126Inventories
    
    
    
    
    
    
    
    
    
    
    575
    
    
    
    
    
    
    
    575Prepaid expenses and other current assets
    
    
    
    
    
    
    
    
    
    
    6,661
    
    
    
    
    
    
    
    6,661Due from (to) affiliates
    
    
    1
    
    
    
    (190,067
    )
    
    
    190,066
    
    
    
    
    
    
    
    Total current assets
    
    
    1
    
    
    
    (190,067
    )
    
    
    265,020
    
    
    
    
    
    
    
    74,954Property and equipment, net
    
    
    
    
    
    
    
    
    
    
    15,004
    
    
    
    
    
    
    
    15,004Investments in subsidiaries, equity method
    
    
    (133,989
    )
    
    
    (34,166
    )
    
    
    
    
    
    
    168,155
    
    
    
    Intangible assets, net
    
    
    
    
    
    
    
    
    
    
    207,141
    
    
    
    
    
    
    
    207,141Goodwill net
    
    
    
    
    
    
    
    
    
    
    39,903
    
    
    
    
    
    
    
    39,903Note receivable  affiliate
    
    
    
    
    
    
    464,800
    
    
    
    
    
    
    
    (464,800
    )
    
    
    Other assets, net
    
    
    
    
    
    
    10,964
    
    
    
    4,686
    
    
    
    
    
    
    
    15,650Total assets
    
    $
    (133,988
    )
    
    $
    251,531
    
    
    $
    531,754
    
    
    $
    (296,645
    )
    
    $
    352,652LIABILITIES AND STOCKHOLDERS DEFICITCurrent liabilities:Accounts payable
    
    $
    
    
    
    $
    
    
    
    $
    20,280
    
    
    $
    
    
    
    $
    20,280Accrued expenses and other current liabilities
    
    
    
    
    
    
    1,329
    
    
    
    24,825
    
    
    
    
    
    
    
    26,154Current portion of long-term debt
    
    
    
    
    
    
    23,991
    
    
    
    
    
    
    
    
    
    
    
    23,991Unexpired subscriptions and deferred revenue, net
    
    
    
    
    
    
    
    
    
    
    20,327
    
    
    
    
    
    
    
    20,327Total current liabilities
    
    
    
    
    
    
    25,320
    
    
    
    65,432
    
    
    
    
    
    
    
    90,752Long-term debt
    
    
    
    
    
    
    284,866
    
    
    
    
    
    
    
    
    
    
    
    284,866Accrued interest  troubled debt restructuring
    
    
    
    
    
    
    76,190
    
    
    
    
    
    
    
    
    
    
    
    76,190Note payable  affiliate
    
    
    
    
    
    
    
    
    
    
    464,800
    
    
    
    (464,800
    )
    
    
    Accrued expenses  restructuring costs
    
    
    
    
    
    
    
    
    
    
    14,978
    
    
    
    
    
    
    
    14,978Mandatorily redeemable Preferred Stock
    
    
    814,549
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    814,549Other
non-current liabilities
    
    
    
    
    
    
    
    
    
    
    19,854
    
    
    
    
    
    
    
    19,854Total liabilities
    
    
    814,549
    
    
    
    386,376
    
    
    
    565,064
    
    
    
    (464,800
    )
    
    
    1,301,189Stockholders deficit:Preferred stock
    
    
    
    
    
    
    
    
    
    
    1,234
    
    
    
    (1,234
    )
    
    
    Common stock
    
    
    17,329
    
    
    
    
    
    
    
    28
    
    
    
    (28
    )
    
    
    17,329Stock subscription loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Additional paid-in capital
    
    
    8,468
    
    
    
    566,631
    
    
    
    720,420
    
    
    
    (1,287,051
    )
    
    
    8,468Accumulated deficit
    
    
    (974,334
    )
    
    
    (701,476
    )
    
    
    (754,992
    )
    
    
    1,456,468
    
    
    
    (974,334
    )Total stockholders deficit
    
    
    (948,537
    )
    
    
    (134,845
    )
    
    
    (33,310
    )
    
    
    168,155
    
    
    
    (948,537
    )Total liabilities and stockholders deficit
    
    $
    (133,988
    )
    
    $
    251,531
    
    
    $
    531,754
    
    
    $
    (296,645
    )
    
    $
    352,652
 56
    Table of Contents  Year Ended December 31, 2005Ziff Davis Holdings Inc.
    
    
    Ziff Davis Media Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalRevenue, net
    
    $
    
    
    
    $
    
    
    
    $
    187,611
    
    
    $
    
    
    
    $
    187,611Operating expenses:Cost of production
    
    
    
    
    
    
    
    
    
    
    51,834
    
    
    
    
    
    
    
    51,834Selling, general and administrative expenses
    
    
    
    
    
    
    
    
    
    
    117,688
    
    
    
    
    
    
    
    117,688Depreciation and amortization of property and equipment
    
    
    
    
    
    
    
    
    
    
    5,831
    
    
    
    
    
    
    
    5,831Amortization of intangible assets
    
    
    
    
    
    
    
    
    
    
    16,384
    
    
    
    
    
    
    
    16,384Restructuring charges, net
    
    
    
    
    
    
    
    
    
    
    2,967
    
    
    
    
    
    
    
    2,967Loss in equity investee
    
    
    
    
    
    
    
    
    
    
    56
    
    
    
    
    
    
    
    56Write-down of intangible assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total operating expenses
    
    
    
    
    
    
    
    
    
    
    194,760
    
    
    
    
    
    
    
    194,760Loss from operations
    
    
    
    
    
    
    
    
    
    
    (7,149
    )
    
    
    
    
    
    
    (7,149
    )Equity in (loss) income from subsidiaries
    
    
    (33,088
    )
    
    
    (61,785
    )
    
    
    
    
    
    
    94,873
    
    
    
    Gain on sale of assets, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Intercompany interest income (expense)
    
    
    
    
    
    
    54,761
    
    
    
    (54,761
    )
    
    
    
    
    
    
    Interest income (expense), net
    
    
    (84,987
    )
    
    
    (26,064
    )
    
    
    340
    
    
    
    
    
    
    
    (110,711
    )Loss before income taxes
    
    
    (118,075
    )
    
    
    (33,088
    )
    
    
    (61,570
    )
    
    
    94,873
    
    
    
    (117,860
    )Income tax provision (benefit)
    
    
    
    
    
    
    
    
    
    
    215
    
    
    
    
    
    
    
    215Net loss
    
    $
    (118,075
    )
    
    $
    (33,088
    )
    
    $
    (61,785
    )
    
    $
    94,873
    
    
    $
    (118,075
    )
 Year Ended December 31, 2004Ziff Davis
    
    
    Ziff DavisHoldings Inc.
    
    
    Media Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalRevenue, net
    
    $
    
    
    
    $
    
    
    
    $
    204,477
    
    
    $
    
    
    
    $
    204,477Operating expenses:Cost of production
    
    
    
    
    
    
    
    
    
    
    59,743
    
    
    
    
    
    
    
    59,743Selling, general and administrative expenses
    
    
    
    
    
    
    
    
    
    
    110,939
    
    
    
    
    
    
    
    110,939Depreciation and amortization of property and equipment
    
    
    
    
    
    
    
    
    
    
    6,202
    
    
    
    
    
    
    
    6,202Amortization of intangible assets
    
    
    
    
    
    
    
    
    
    
    15,226
    
    
    
    
    
    
    
    15,226Restructuring charges, net
    
    
    
    
    
    
    
    
    
    
    5,491
    
    
    
    
    
    
    
    5,491Total operating expenses
    
    
    
    
    
    
    
    
    
    
    197,601
    
    
    
    
    
    
    
    197,601Income from operations
    
    
    
    
    
    
    
    
    
    
    6,876
    
    
    
    
    
    
    
    6,876Equity in (loss) income from subsidiaries
    
    
    (10,239
    )
    
    
    (50,332
    )
    
    
    
    
    
    
    60,571
    
    
    
    Intercompany interest income (expense)
    
    
    
    
    
    
    57,430
    
    
    
    (57,430
    )
    
    
    
    
    
    
    Interest (expense) income, net
    
    
    (74,947
    )
    
    
    (17,337
    )
    
    
    460
    
    
    
    
    
    
    
    (91,824
    )Loss before income taxes
    
    
    (85,186
    )
    
    
    (10,239
    )
    
    
    (50,094
    )
    
    
    60,571
    
    
    
    (84,948
    )Income tax provision
    
    
    
    
    
    
    
    
    
    
    238
    
    
    
    
    
    
    
    238Net loss
    
    $
    (85,186
    )
    
    $
    (10,239
    )
    
    $
    (50,332
    )
    
    $
    60,571
    
    
    $
    (85,186
    )
 Year Ended December 31, 2003Ziff Davis
    
    
    Ziff DavisHoldings Inc.
    
    
    Media Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalRevenue, net
    
    $
    
    
    
    $
    
    
    
    $
    194,107
    
    
    $
    
    
    
    $
    194,107Operating expenses:Cost of production
    
    
    
    
    
    
    
    
    
    
    60,622
    
    
    
    
    
    
    
    60,622Selling, general and administrative expenses
    
    
    
    
    
    
    
    
    
    
    98,973
    
    
    
    
    
    
    
    98,973Depreciation and amortization of property
and equipment
    
    
    
    
    
    
    
    
    
    
    10,793
    
    
    
    
    
    
    
    10,793Amortization of intangible assets
    
    
    
    
    
    
    
    
    
    
    15,108
    
    
    
    
    
    
    
    15,108Restructuring charges, net
    
    
    
    
    
    
    
    
    
    
    (6,238
    )
    
    
    
    
    
    
    (6,238
    )Loss in equity investee
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total operating expenses
    
    
    
    
    
    
    
    
    
    
    179,258
    
    
    
    
    
    
    
    179,258Income from operations
    
    
    
    
    
    
    
    
    
    
    14,849
    
    
    
    
    
    
    
    14,849Equity in (loss) income from subsidiaries
    
    
    (1,909
    )
    
    
    (44,729
    )
    
    
    
    
    
    
    46,638
    
    
    
    Gain on sale of assets, net
    
    
    
    
    
    
    2,544
    
    
    
    65
    
    
    
    
    
    
    
    2,609Intercompany interest income (expense)
    
    
    
    
    
    
    59,757
    
    
    
    (59,757
    )
    
    
    
    
    
    
    Interest income (expense), net
    
    
    
    
    
    
    (19,481
    )
    
    
    339
    
    
    
    
    
    
    
    (19,142
    )Loss before income taxes
    
    
    (1,909
    )
    
    
    (1,909
    )
    
    
    (44,504
    )
    
    
    46,638
    
    
    
    (1,684
    )Income tax provision
    
    
    
    
    
    
    
    
    
    
    225
    
    
    
    
    
    
    
    225Net (loss) income
    
    $
    (1,909
    )
    
    $
    (1,909
    )
    
    $
    (44,729
    )
    
    $
    46,638
    
    
    $
    (1,909
    )
 57
    Table of Contents  Year Ended December 31, 2005Ziff Davis
    
    
    Ziff DavisHoldings Inc.
    
    
    Media Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalCash flows from operating activities:Net loss
    
    $
    (118,075
    )
    
    $
    (33,088
    )
    
    $
    (61,785
    )
    
    $
    94,873
    
    
    $
    (118,075
    )Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    22,215
    
    
    
    
    
    
    
    22,215Provision for doubtful accounts
    
    
    
    
    
    
    
    
    
    
    1,118
    
    
    
    
    
    
    
    1,118Non-cash rent expense
    
    
    
    
    
    
    
    
    
    
    164
    
    
    
    
    
    
    
    164Non-cash rent expense
    
    
    
    
    
    
    1,830
    
    
    
    
    
    
    
    
    
    
    
    1,830Amortization of debt issuance costs
    
    
    
    
    
    
    3,316
    
    
    
    
    
    
    
    
    
    
    
    3,316Loss on equity investee
    
    
    
    
    
    
    
    
    
    
    56
    
    
    
    
    
    
    
    56Non-cash restructuring charges
    
    
    
    
    
    
    
    
    
    
    2,967
    
    
    
    
    
    
    
    2,967Non-cash compensation
    
    
    
    
    
    
    
    
    
    
    (807
    )
    
    
    
    
    
    
    (807
    )Accrued dividends on mandatorily redeemable preferred
stock
    
    
    84,985
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    84,985Equity in loss of subsidiaries
    
    
    33,091
    
    
    
    61,783
    
    
    
    
    
    
    
    (94,873
    )
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    
    
    
    
    
    
    
    
    1,162
    
    
    
    
    
    
    
    1,162Inventories
    
    
    
    
    
    
    
    
    
    
    138
    
    
    
    
    
    
    
    138Accounts payable and accrued expenses
    
    
    
    
    
    
    2,777
    
    
    
    (8,349
    )
    
    
    
    
    
    
    (5,572
    )Unexpired subscriptions and deferred revenue, net
    
    
    
    
    
    
    
    
    
    
    (3,068
    )
    
    
    
    
    
    
    (3,068
    )Due (to) from affiliate
    
    
    
    
    
    
    7,220
    
    
    
    (7,220
    )
    
    
    
    
    
    
    Prepaid expenses and other, net
    
    
    
    
    
    
    
    
    
    
    768
    
    
    
    
    
    
    
    768Net cash provided by (used in) operating activities
    
    
    
    
    
    
    43,838
    
    
    
    (52,641
    )
    
    
    
    
    
    
    (8,803
    )Cash flows from investing activities:Capital expenditures
    
    
    
    
    
    
    
    
    
    
    (6,542
    )
    
    
    
    
    
    
    (6,542
    )Net proceeds from sale of assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Joint Venture investment
    
    
    
    
    
    
    
    
    
    
    (751
    )
    
    
    
    
    
    
    (751
    )Investments in subsidiaries
    
    
    
    
    
    
    (89,303
    )
    
    
    
    
    
    
    89,303
    
    
    
    Acquisitions and investments, net of cash acquired
    
    
    
    
    
    
    
    
    
    
    (5,237
    )
    
    
    
    
    
    
    (5,237
    )Net cash used in investing activities
    
    
    
    
    
    
    (89,303
    )
    
    
    (12,530
    )
    
    
    89,303
    
    
    
    (12,530
    )Cash flows from financing activities:Proceeds from capital contributions
    
    
    
    
    
    
    
    
    
    
    89,303
    
    
    
    (89,303
    )
    
    
    Proceeds from floating rate notes offering
    
    
    
    
    
    
    205,000
    
    
    
    
    
    
    
    
    
    
    
    205,000Repayment of borrowings under senior credit facilities
    
    
    
    
    
    
    (174,141
    )
    
    
    
    
    
    
    
    
    
    
    (174,141
    )Funding of letters of credit
    
    
    
    
    
    
    (1,623
    )
    
    
    
    
    
    
    
    
    
    
    (1,623
    )Proceeds from collection of intercompany notes receivable
    
    
    
    
    
    
    22,550
    
    
    
    
    
    
    
    (22,550
    )
    
    
    Repayment of intercompany notes payable
    
    
    
    
    
    
    
    
    
    
    (22,550
    )
    
    
    22,550
    
    
    
    Debt issuance costs
    
    
    
    
    
    
    (6,321
    )
    
    
    
    
    
    
    
    
    
    
    (6,321
    )Net cash
provided by (used in) financing activities
    
    
    
    
    
    
    45,465
    
    
    
    66,753
    
    
    
    (89,303
    )
    
    
    22,915Net increase in cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    1,582
    
    
    
    
    
    
    
    1,582Cash and cash equivalents at beginning of year
    
    
    
    
    
    
    
    
    
    
    32,592
    
    
    
    
    
    
    
    32,592Cash and cash equivalents at end of year
    
    $
    
    
    
    $
    
    
    
    $
    34,174
    
    
    $
    
    
    
    $
    34,174
 Year Ended December 31, 2004Ziff Davis
    
    
    Ziff DavisHoldings Inc.
    
    
    Media Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalCash flows from operating activities:Net loss
    
    $
    (85,186
    )
    
    $
    (10,239
    )
    
    $
    (50,332
    )
    
    $
    60,571
    
    
    $
    (85,186
    )Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    21,428
    
    
    
    
    
    
    
    21,428Provision for doubtful accounts
    
    
    
    
    
    
    
    
    
    
    (769
    )
    
    
    
    
    
    
    (769
    )Non-cash rent income
    
    
    
    
    
    
    
    
    
    
    (389
    )
    
    
    
    
    
    
    (389
    )Non-cash interest expense, net
    
    
    
    
    
    
    1,531
    
    
    
    
    
    
    
    
    
    
    
    1,531Amortization of debt issuance costs
    
    
    
    
    
    
    2,236
    
    
    
    
    
    
    
    
    
    
    
    2,236Loss on equity investee
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-cash restructuring charges
    
    
    
    
    
    
    
    
    
    
    5,491
    
    
    
    
    
    
    
    5,491Non-cash compensation
    
    
    
    
    
    
    
    
    
    
    1,109
    
    
    
    
    
    
    
    1,109
 58
    Table of Contents  Year Ended December 31, 2004Ziff Davis
    
    
    Ziff DavisHoldings Inc.
    
    
    Media Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalAccrued dividends on mandatorily redeemable preferred
stock
    
    
    74,947
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    74,947Equity in loss (income) of subsidiaries
    
    
    10,239
    
    
    
    50,332
    
    
    
    
    
    
    
    (60,571
    )
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    
    
    
    
    
    
    
    
    (1,439
    )
    
    
    
    
    
    
    (1,439
    )Inventories
    
    
    
    
    
    
    
    
    
    
    (254
    )
    
    
    
    
    
    
    (254
    )Accounts payable and accrued expenses
    
    
    
    
    
    
    289
    
    
    
    (5,190
    )
    
    
    
    
    
    
    (4,901
    )Unexpired subscriptions and deferred revenue, net
    
    
    
    
    
    
    
    
    
    
    (4,843
    )
    
    
    
    
    
    
    (4,843
    )Due (to) from affiliate
    
    
    
    
    
    
    36,373
    
    
    
    (36,373
    )
    
    
    
    
    
    
    Prepaid expenses and other, net
    
    
    
    
    
    
    
    
    
    
    840
    
    
    
    
    
    
    
    840Net cash
provided by (used in) operating activities
    
    
    
    
    
    
    80,522
    
    
    
    (70,721
    )
    
    
    
    
    
    
    9,801Cash flows from investing activities:Capital expenditures
    
    
    
    
    
    
    
    
    
    
    (5,849
    )
    
    
    
    
    
    
    (5,849
    )Net proceeds from sale of assets
    
    
    
    
    
    
    
    
    
    
    13
    
    
    
    
    
    
    
    13Joint Venture investment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Investments in subsidiaries
    
    
    
    
    
    
    (86,287
    )
    
    
    
    
    
    
    (86,287
    )
    
    
    Acquisitions and investments, net of cash acquired
    
    
    
    
    
    
    
    
    
    
    (3,146
    )
    
    
    
    
    
    
    (3,146
    )Net cash used in investing activities
    
    
    
    
    
    
    (86,287
    )
    
    
    (8,982
    )
    
    
    (86,287
    )
    
    
    (8,982
    )Cash flows from financing activities:Proceeds from capital contributions
    
    
    
    
    
    
    
    
    
    
    86,287
    
    
    
    (86,287
    )
    
    
    Repayment of borrowings under senior credit facilities
    
    
    
    
    
    
    (15,047
    )
    
    
    
    
    
    
    
    
    
    
    (15,047
    )Proceeds from collection of intercompany notes receivable
    
    
    
    
    
    
    21,300
    
    
    
    
    
    
    
    (21,300
    )
    
    
    Repayment of intercompany notes payable
    
    
    
    
    
    
    
    
    
    
    (21,300
    )
    
    
    21,300
    
    
    
    Debt issuance costs
    
    
    
    
    
    
    (488
    )
    
    
    
    
    
    
    
    
    
    
    (488
    )Net cash provided by (used in) financing activities
    
    
    
    
    
    
    5,765
    
    
    
    64,987
    
    
    
    (86,287
    )
    
    
    (15,535
    )Net decrease in cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    (14,716
    )
    
    
    
    
    
    
    (14,716
    )Cash and cash equivalents at beginning of year
    
    
    
    
    
    
    
    
    
    
    47,308
    
    
    
    
    
    
    
    47,308Cash and cash equivalents at end of year
    
    $
    
    
    
    $
    
    
    
    $
    32,592
    
    
    $
    
    
    
    $
    32,592
 Year Ended December 31, 2003Ziff Davis
    
    
    Ziff DavisHoldings Inc.
    
    
    Media Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalCash flows from operating activities:Net loss
    
    $
    (1,909
    )
    
    $
    (1,909
    )
    
    $
    (44,729
    )
    
    $
    46,638
    
    
    $
    (1,909
    )Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    25,901
    
    
    
    
    
    
    
    25,901Provision for doubtful accounts
    
    
    
    
    
    
    
    
    
    
    557
    
    
    
    
    
    
    
    557Non-cash rent expense
    
    
    
    
    
    
    
    
    
    
    (1,617
    )
    
    
    
    
    
    
    (1,617
    )Non-cash interest expense, net
    
    
    
    
    
    
    1,316
    
    
    
    
    
    
    
    
    
    
    
    1,316Amortization of debt issuance costs
    
    
    
    
    
    
    2,158
    
    
    
    
    
    
    
    
    
    
    
    2,158Loss on equity investee
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gain on sale of asset
    
    
    
    
    
    
    
    
    
    
    (2,609
    )
    
    
    
    
    
    
    (2,609
    )Non-cash restructuring charges
    
    
    
    
    
    
    
    
    
    
    (6,238
    )
    
    
    
    
    
    
    (6,238
    )Equity in loss (income) of subsidiaries
    
    
    1,909
    
    
    
    44,729
    
    
    
    
    
    
    
    (46,638
    )
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    
    
    
    
    
    
    
    
    (2,797
    )
    
    
    
    
    
    
    (2,797
    )Inventories
    
    
    
    
    
    
    
    
    
    
    13
    
    
    
    
    
    
    
    13Accounts payable and accrued expenses
    
    
    
    
    
    
    (312
    )
    
    
    (3,016
    )
    
    
    
    
    
    
    (3,328
    )Unexpired subscriptions and deferred revenue, net
    
    
    
    
    
    
    
    
    
    
    (4,697
    )
    
    
    
    
    
    
    (4,697
    )Due from (to) affiliate
    
    
    (1
    )
    
    
    (859
    )
    
    
    860
    
    
    
    
    
    
    
    Prepaid expenses and other, net
    
    
    
    
    
    
    1,346
    
    
    
    439
    
    
    
    
    
    
    
    1,785Net cash
provided by (used in) operating activities
    
    
    (1
    )
    
    
    46,469
    
    
    
    (37,933
    )
    
    
    
    
    
    
    8,535Cash flows from investing activities:Capital expenditures
    
    
    
    
    
    
    
    
    
    
    (2,518
    )
    
    
    
    
    
    
    (2,518
    )Net proceeds from sale of assets
    
    
    
    
    
    
    
    
    
    
    4,929
    
    
    
    
    
    
    
    4,929Joint Venture investment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Investments in subsidiaries
    
    
    
    
    
    
    (86,733
    )
    
    
    
    
    
    
    86,733
    
    
    
    Net cash provided by
(used in) investing activities
    
    
    
    
    
    
    (86,733
    )
    
    
    2,411
    
    
    
    86,733
    
    
    
    2,411Cash flows from financing activities:Proceeds from capital contributions
    
    
    
    
    
    
    
    
    
    
    86,733
    
    
    
    (86,733
    )
    
    
    Repayment under senior credit facilities
    
    
    
    
    
    
    (4,928
    )
    
    
    
    
    
    
    
    
    
    
    (4,928
    )Proceeds from collection of intercompany notes
 59
    Table of Contents  Year Ended December 31, 2003Ziff Davis
    
    
    Ziff DavisHoldings Inc.
    
    
    Media Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    Totalreceivable
    
    
    
    
    
    
    16,925
    
    
    
    
    
    
    
    (16,925
    )
    
    
    Repayment of intercompany notes payable
    
    
    
    
    
    
    
    
    
    
    (16,925
    )
    
    
    16,925
    
    
    
    Net cash provided by (used in) financing activities
    
    
    
    
    
    
    11,997
    
    
    
    69,808
    
    
    
    (86,733
    )
    
    
    (4,928
    )Net (decrease) increase in cash and cash equivalents
    
    
    (1
    )
    
    
    (28,267
    )
    
    
    34,286
    
    
    
    
    
    
    
    6,018Cash and cash equivalents at beginning of year
    
    
    1
    
    
    
    28,267
    
    
    
    13,022
    
    
    
    
    
    
    
    41,290Cash and cash equivalents at end of year
    
    $
    
    
    
    $
    
    
    
    $
    47,308
    
    
    $
    
    
    
    $
    47,308
 NOTE 21  RELATED PARTY TRANSACTIONS
   NOTE 22  SEGMENT INFORMATION
 Disclosures about Segments of
an Enterprise and Related Information.
  PC Magazine Sync ExtremeTech
 eWEEK, CIO Insight Baseline
 (Electronic Gaming Monthly, Computer Gaming World Official U.S.
PlayStation Magazine) GMR Xbox Nation
  60
    Table of Contents  Year Ended December 31,2005
    
    
    2004
    
    
    2003Revenue, net:Consumer/Small Business Group
    
    $
    68,359
    
    
    $
    80,988
    
    
    $
    76,928Enterprise Group
    
    
    76,564
    
    
    
    72,925
    
    
    
    60,234Game Group
    
    
    42,688
    
    
    
    50,564
    
    
    
    56,945Total
    
    $
    187,611
    
    
    $
    204,477
    
    
    $
    194,107EBITDA:Consumer/Small Business Group
    
    $
    10,784
    
    
    $
    20,945
    
    
    $
    22,946Enterprise Group
    
    
    5,323
    
    
    
    12,474
    
    
    
    3,392Game Group
    
    
    1,175
    
    
    
    1,485
    
    
    
    8,174Total
    
    $
    17,282
    
    
    $
    34,904
    
    
    $
    34,512
 Year Ended December 31,2005
    
    
    2004
    
    
    2003Reconciliation of segment EBITDA to consolidated loss before income taxes:Total segment EBITDA
    
    $
    17,282
    
    
    $
    34,904
    
    
    $
    34,512Depreciation and amortization
    
    
    (22,215
    )
    
    
    (21,428
    )
    
    
    (25,901
    )Restructuring charges
    
    
    (2,967
    )
    
    
    (5,491
    )
    
    
    6,238Losses from equity investees
    
    
    (56
    )
    
    
    
    
    
    
    Gain on sale of assets, net
    
    
    
    
    
    
    
    
    
    
    2,609Interest expense, net
    
    
    (110,711
    )
    
    
    (91,824
    )
    
    
    (19,142
    )Non-cash employee stock compensation (expense) income
    
    
    807
    
    
    
    (1,109
    )
    
    
    Loss before income taxes
    
    $
    (117,860
    )
    
    $
    (84,948
    )
    
    $
    (1,684
    )
   Year Ended December 31,2005
    
    
    2004
    
    
    2003Advertising
    
    $
    116,559
    
    
    $
    130,301
    
    
    $
    132,865Circulation
    
    
    33,124
    
    
    
    37,980
    
    
    
    40,042Other
    
    
    37,928
    
    
    
    36,196
    
    
    
    21,200Total Revenue, net
    
    $
    187,611
    
    
    $
    204,477
    
    
    $
    194,107
  NOTE 23  QUARTERLY FINANCIAL DATA (UNAUDITED)
  2005 Quarterly Periods EndingMarch 31,
    
    June 30,
    
    September 30,
    
    December 31,Revenue, net
    
    $
    42,681
    
    
    $
    45,347
    
    
    $
    41,826
    
    
    $
    57,758Operating loss
    
    
    (912
    )
    
    
    (2,197
    )
    
    
    (3,489
    )
    
    
    (550
    )Net loss
    
    
    (26,322
    )
    
    
    (29,508
    )
    
    
    (32,404
    )
    
    
    (29,840
    )
 2004 Quarterly Periods EndingMarch 31,
    
    June 30,
    
    September 30,
    
    December 31,Revenue, net
    
    $
    41,968
    
    
    $
    51,328
    
    
    $
    46,166
    
    
    $
    65,015Operating loss
    
    
    (2,590
    )
    
    
    2,350
    
    
    
    1,421
    
    
    
    5,695Net loss
    
    
    (24,706
    )
    
    
    (20,394
    )
    
    
    (22,200
    )
    
    
    (17,886
    )
 61
    Table of Contents  2003 Quarterly Periods EndingMarch 31,
    
    June 30,
    
    September 30,
    
    December 31,Revenue, net
    
    $
    42,091
    
    
    $
    47,116
    
    
    $
    45,209
    
    
    $
    59,691Operating
(loss) income
    
    
    (5,530
    )
    
    
    2,610
    
    
    
    1,197
    
    
    
    16,572Net (loss)
income
    
    
    (10,726
    )
    
    
    (2,342
    )
    
    
    (1,205
    )
    
    
    12,364
 NOTE 24  FAIR VALUE OF FINANCIAL INSTRUMENTS
   December 31, 2005
    
    December 31, 2004Carrying
    
    
    
    
    
    CarryingAmount
    
    Fair Value
    
    Amount
    
    Fair ValueCash and equivalents
    
    $
    34,174
    
    
    $
    34,174
    
    
    $
    32,592
    
    
    $
    32,592Accounts receivable, net.
    
    
    32,496
    
    
    
    32,496
    
    
    
    35,126
    
    
    
    35,126Accounts payable
    
    
    21,787
    
    
    
    21,787
    
    
    
    20,280
    
    
    
    20,280Floating rate notes
    
    
    205,000
    
    
    
    186,550
    
    
    
    
    
    
    
    Senior credit facility
    
    
    
    
    
    
    
    
    
    
    174,141
    
    
    
    174,141Compounding notes
    
    
    140,178
    
    
    
    118,754
    
    
    
    122,437
    
    
    
    122,43712% notes
    
    
    12,280
    
    
    
    10,438
    
    
    
    12,280
    
    
    
    13,140Preferred stock
    
    
    899,533
    
    
    
    66,219
    
    
    
    814,549
    
    
    
    80,059
 Standby Letters of Credit
  
 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
   
 ITEM 9A. CONTROLS AND PROCEDURES
   
 ITEM 9B. OTHER INFORMATION
  62
    Table of Contents   
 PART III
 
 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 Directors and Executive Officers
  
    
    Ziff Davis Holdings Chief Executive Officer;
    
    one person designated by DLJ Merchant Banking Partners II, L.P.; currently nobody has been designated, and
    
    four persons designated by Willis Stein, who currently are Avy H. Stein, John R. Willis,
Daniel H. Blumenthal and Bradley J. Shisler.
   Name
    
    Age
    
    PositionRobert F. Callahan
    
    
    54
    
    
    Chairman of the Board of Directors and Chief Executive OfficerMark Moyer
    
    
    46
    
    
    Senior Vice President, Chief Financial OfficerJason Young
    
    
    36
    
    
    President, Consumer/Small Business GroupSloan Seymour
    
    
    43
    
    
    President, Enterprise GroupScott McCarthy
    
    
    40
    
    
    President, Game GroupGregory Barton
    
    
    44
    
    
    Executive Vice President of
Licensing and Legal Affairs, General Counsel and SecretaryMichael J. Miller
    
    
    47
    
    
    Executive Vice President, Chief Content OfficerElda Vale
    
    
    49
    
    
    Senior Vice President of Corporate Marketing and ResearchPaul OReilly
    
    
    51
    
    
    Vice President, Ziff Davis Event Marketing GroupBeth Repeta
    
    
    39
    
    
    Vice President of Human ResourcesJohn Willis
    
    
    56
    
    
    DirectorAvy Stein
    
    
    50
    
    
    Director
 63    Table of Contents  Name
    
    Age
    
    PositionDaniel Blumenthal
    
    
    42
    
    
    DirectorBradley Shisler
    
    
    35
    
    
    DirectorBart Catalane
    
    
    49
    
    
    DirectorSusan Alderton
    
    
    53
    
    
    Director
 Robert Callahan
 Mark Moyer
 Jason
Young Windows Pro, Windows Sources,
 Sloan Seymour Baseline Baseline, PC Magazine eWEEK.
 Scott McCarthy
 Gregory Barton
 Michael J. Miller PC Magazine PC Magazine. InfoWorld, Popular Computing Building
Design & Construction.
 Elda Vale
 Paul OReilly
 64
    Table of Contents  Beth Repeta
 John Willis
 Avy Stein
 Daniel Blumenthal
 Bradley Shisler
 Bart Catalane
 Susan Alderton
  
 ITEM 11. EXECUTIVE COMPENSATION
 Summary Compensation Table
  65
    Table of Contents  Long-TermCompensationAnnual Compensation
    
    SecuritiesFiscal
    
    
    
    
    
    
    
    
    
    Other Annual
    
    UnderlyingName and Principal Position
    
    Year
    
    Salary
    
    Bonus
    
    Compensation
    
    Options(in dollars)Robert F. Callahan
    
    
    2005
    
    
    $
    1,000,000
    
    
    $
    
    
    
    $
    100,000
    (1)
    
    
    1,216,566Chairman and Chief Executive
    
    
    2004
    
    
    
    1,000,000
    
    
    
    
    
    
    
    100,000
    (1)
    
    
    1,216,566Officer of Ziff Davis
    
    
    2003
    
    
    
    1,000,000
    
    
    
    1,000,000
    
    
    
    100,000
    (1)
    
    
    Holdings, Ziff Davis Media and Ziff Davis
Publishing Inc.Jason Young
    
    
    2005
    
    
    
    350,000
    
    
    
    403,750
    
    
    
    
    
    
    
    603,907President, Consumer/Small Business Group
    
    
    2004
    
    
    
    262,500
    
    
    
    438,321
    
    
    
    
    
    
    
    603,9372003
    
    
    
    250,000
    
    
    
    378,156
    
    
    
    
    
    
    
    Michael J. Miller
    
    
    2005
    
    
    
    378,325
    
    
    
    50,000
    
    
    
    
    
    
    
    301,903Executive Vice President and Chief Content Officer
    
    
    2004
    
    
    
    370,000
    
    
    
    
    
    
    
    
    
    
    
    301,9032003
    
    
    
    370,000
    
    
    
    150,000
    
    
    
    
    
    
    
    Sloan Seymour
    
    
    2005
    
    
    
    311,250
    
    
    
    225,000
    
    
    
    
    
    
    
    402,920President, Enterprise Group
    
    
    2004
    
    
    
    300,000
    
    
    
    275,000
    
    
    
    
    
    
    
    402,9202003
    
    
    
    288,042
    
    
    
    55,000
    
    
    
    
    
    
    
    402,920Scott McCarthy
    
    
    2005
    
    
    
    337,500
    
    
    
    175,000
    
    
    
    
    
    
    
    302,034President, Game Group
    
    
    2004
    
    
    
    62,800
    
    
    
    
    
    
    
    
    
    
    
    302,0342003
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    Allowance, without need for accounting, for reimbursement of expenses in addition to expenses
eligible for reimbursement under our existing policies. Stock Option/SAR Grants in Last Fiscal Year.
  Number of
    
    % of Total
    
    Weighted
    
    WeightedSecurities
    
    Options Granted
    
    Average
    
    AverageUnderlying
    
    to Employees in
    
    Exercise
    
    Expiration
    
    Grant DateExecutive
    
    Options Granted
    
    Fiscal Year
    
    Price
    
    Date
    
    Present ValueRobert F CallahanSeries D
    
    
    2,612
    
    
    
    21.2
    %
    
    $
    1,000.00
    
    
    
    6/30/2013
    
    
    $
    327,767Series B
    
    
    3,209
    
    
    
    21.7
    %
    
    
    1,000.00
    
    
    
    6/30/2013
    
    
    
    Series A
    
    
    10,745
    
    
    
    21.4
    %
    
    
    0.01
    
    
    
    6/30/2013
    
    
    
    Common Stock
    
    
    1,200,000
    
    
    
    15.0
    %
    
    
    0.001
    
    
    
    6/30/2013
    
    
    
    Jason YoungSeries D
    
    
    700
    
    
    
    5.7
    %
    
    
    1,348.39
    
    
    
    2/12/2014
    
    
    
    87,840Series B
    
    
    769
    
    
    
    5.2
    %
    
    
    1,000.00
    
    
    
    1/12/2014
    
    
    
    Series A
    
    
    2,468
    
    
    
    5.0
    %
    
    
    0.01
    
    
    
    12/31/2013
    
    
    
    Common Stock
    
    
    600,000
    
    
    
    7.5
    %
    
    
    0.001
    
    
    
    12/31/2013
    
    
    
    Michael J. MillerSeries D
    
    
    300
    
    
    
    2.4
    %
    
    
    1,000.00
    
    
    
    3/3/2013
    
    
    
    37,646Series B
    
    
    369
    
    
    
    2.5
    %
    
    
    1,000.00
    
    
    
    3/3/2013
    
    
    
    Series A
    
    
    1,234
    
    
    
    2.5
    %
    
    
    0.01
    
    
    
    3/3/2013
    
    
    
    Common Stock
    
    
    300,000
    
    
    
    3.8
    %
    
    
    0.001
    
    
    
    3/3/2013
    
    
    
    Sloan SeymourSeries D
    
    
    500
    
    
    
    4.5
    %
    
    
    1,000.00
    
    
    
    3/3/2013
    
    
    
    62,500Series B
    
    
    569
    
    
    
    4.4
    %
    
    
    1,000.00
    
    
    
    3/3/2013
    
    
    
    Series A
    
    
    1,851
    
    
    
    4.3
    %
    
    
    0.01
    
    
    
    3/3/2013
    
    
    
    Common Stock
    
    
    400,000
    
    
    
    5.9
    %
    
    
    0.001
    
    
    
    3/3/2013
    
    
    
    Scott McCarthySeries D
    
    
    400
    
    
    
    3.6
    %
    
    
    1,000.00
    
    
    
    3/3/2013
    
    
    
    50,000Series B
    
    
    400
    
    
    
    3.0
    %
    
    
    1,000.00
    
    
    
    3/3/2013
    
    
    
    Series A
    
    
    1,234
    
    
    
    2.9
    %
    
    
    0.01
    
    
    
    3/3/2013
    
    
    
    Common Stock
    
    
    300,000
    
    
    
    4.4
    %
    
    
    0.001
    
    
    
    3/3/2013
    
    
    
    
 Stock Option/SAR Exercised in Last Fiscal Year.
 66
    Table of Contents  Executive Agreements
 Mr. Callahan.
 Mr. Young.
 Mr. Miller. PC Magazine
 Mr. Seymour.
 Mr. McCarthy.
 67
    Table of Contents  Equity Incentive Plans
  2002 Stock Option Plan
   Board Practices
      
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
 68
    Table of Contents  Beneficial Ownership(1)Percent of
    
    
    
    
    
    Percent ofShares of
    
    Outstanding
    
    Shares of
    
    Outstanding
    
    
    Percent ofSeries A
    
    Series A
    
    Series E
    
    Series E
    
    Shares of
    OutstandingPreferred
    
    Preferred
    
    Preferred
    
    Preferred
    
    Common
    CommonBeneficial Owner
    
    Stock
    
    Stock
    
    Stock
    
    Stock
    
    Stock
    StockWillis Stein Entities(2)
    
    
    281,627.5
    
    
    
    85.57
    %
    
    
    8,088.6
    
    
    
    28.35
    %
    
    
    50,650,938
    
    
    
    99.35
    %DLJ Entities(3)
    
    
    47,500.0
    
    
    
    14.43
    
    
    
    
    
    
    
    
    
    
    
    333,333
    
    
    
    14.42MacKay Shields LLP(4)
    
    
    
    
    
    
    
    
    
    
    10,360.8
    
    
    
    36.32
    
    
    
    1,921,502
    
    
    
    45.40Robert F. Callahan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sloan Seymour
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Scott McCarthy
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Jason Young
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Michael J. Miller
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    John R. Willis(2)
    
    
    281,627.5
    
    
    
    85.57
    
    
    
    8,088.6
    
    
    
    28.35
    
    
    
    50,650,938
    
    
    
    99.35Avy H. Stein(2)
    
    
    281,627.5
    
    
    
    85.57
    
    
    
    8,088.6
    
    
    
    28.35
    
    
    
    50,650,938
    
    
    
    99.35Daniel H. Blumenthal(2)
    
    
    281,627.5
    
    
    
    85.57
    
    
    
    8,088.6
    
    
    
    28.35
    
    
    
    50,650,938
    
    
    
    99.35Bradley J. Shisler
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Susan E. Alderton
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    All directors and executive
officers as a group (22
persons)
    
    
    281,627.5
    
    
    
    85.57
    %
    
    
    8,088.6
    
    
    
    28.35
    %
    
    
    50,650,938
    
    
    
    99.35
    %
 
 *
    
    Less than 1% of outstanding series of stock.(1)
    
    Beneficial ownership generally means voting or investment power with respect to a security
or the right to acquire such power within 60 days. Unless otherwise indicated, we believe that
each holder has sole voting and investment power with regard to the equity interests listed as
beneficially owned.(2)
    
    Includes 213,750 shares of Series A Preferred Stock (64.9%), 8,088.6 shares of Series E
Preferred Stock (28.4%) and 50.2 million shares of common stock (including approximately 8.6
million shares issuable upon conversion of Series C Preferred Stock and approximately 40.1
million shares issuable upon the exercise of warrants to purchase common stock) held by Willis
Stein & Partners II, L.P., Willis Stein & Partners III, L.P., Willis Stein & Partners Dutch,
L.P., Willis Stein & Partners Dutch III-A, L.P., Willis Stein & Partners Dutch III-B, L.P.,
and Willis Stein & Partners III-C, L.P. (collectively, the Willis Stein Entities). Also
includes 67,877.5 shares of Series A Preferred Stock and 477,716 shares of common stock held
by the stockholders executing the Investor Rights Agreement (other than the DLJ Entities).
Such stockholders have agreed pursuant to the terms of the Investor Rights Agreement to vote
their shares as directed by the Willis Stein Entities in certain matters as described more
fully in Item 13 hereof and in the Investor Rights Agreement. As a result of the foregoing,
the Willis Stein Entities may be deemed to have beneficial ownership with respect to the
shares held by the stockholders executing the Investor Rights Agreement (other than the DLJ
Entities). The Willis Stein Entities disclaim beneficial ownership of such shares held by such
stockholders. Messrs. John R. 69
    Table of Contents  Willis, Avy H. Stein and Daniel H. Blumenthal are Managing
Directors of each of the ultimate general partners of the Willis Stein Entities, and, as a
result, may be deemed to have beneficial ownership with respect to the shares held by and
deemed to be beneficially owned by the Willis Stein Entities. Each disclaims beneficial
ownership of such shares held by and deemed to be beneficially owned by such funds. The
address for Willis Stein and Messrs. Willis, Stein and Blumenthal is One North Wacker Drive,
Suite 4800, Chicago, Illinois 60606.(3)
    
    Includes shares held by DLJ Diversified Partners, L.P., DLJ Diversified Partners-A, L.P., DLJ
EAB Partners, L.P., DLJ ESC II L.P., DLJ First Esc L.P., DLJ Merchant Banking Partners II-A,
L.P., DLJ Offshore Partners II, CV. and DLJMB Funding II, Inc., which are private equity
investment funds affiliated with DLJ Merchant Banking, Inc. The address for DLJ Merchant
Banking, Inc. is Eleven Madison Avenue, New York, New York 10010.(4)
    
    Based on the most recent information available to the Company, includes 10,361 shares of
Series E Preferred Stock of Ziff Davis Holdings and 1,921,502 shares issuable upon the
exercise of warrants to purchase shares of common stock of Ziff Davis Holdings held by MacKay
Shields LLP as investment manager on behalf of its managed funds for which it has
discretionary authority. The address for MacKay Shields LLP is 9 West 57th Street, 33rd Floor,
New York, New York 10019. Equity Compensation Plans
  (c)Number of Securities(a)
    
    (b)
    
    Remaining Available forNumber of Securities to
    
    Weighted-Average
    
    Future Issuance underbe Issued upon Exercise
    
    Exercise Price of
    
    Equity Compensation Plansof Outstanding Options,
    
    Outstanding Options,
    
    (Excluding SecuritiesWarrants and Rights
    
    Warrants and Rights
    
    Reflected in Column (a))Plan category:Equity compensation plans approved by security holders
    
    
    
    
    
    
    
    
    
    
    Equity compensation plans not approved by security
holders:2001 Stock Option Plan
    
    
    18,078
    
    
    $
    7.502002 Stock Option PlanSeries D
    
    
    10,851
    
    
    
    1,098.05Series B
    
    
    12,847
    
    
    
    1,007.05Series A
    
    
    42,315
    
    
    
    0.01Common Stock
    
    
    6,680,000
    
    
    
    0.001Total
    
    
    6,764,091
    
    
    
    
    
    
    
    2,962,700
    *
 
 *
    
    Comprised of 3,266 shares of Series D Preferred Stock, 4,497 shares of Series B Preferred
Stock, 15,766 shares of Series A Preferred Stock and 2,939,171 shares of common stock. 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 Investor Rights Agreement
  
    
    Ziff Davis Holdings Chief Executive Officer;
    
    one person designated by DLJ Merchant Banking Partners II, L.P.; currently nobody has been designated; and
    
    four persons designated by Willis Stein, who currently are Avy H. Stein, John R. Willis,
Daniel H. Blumenthal and Bradley J. Shisler.
 70
    Table of Contents  Subscription Services
  Willis Stein
  Distribution and Payment Arrangements
   71
    Table of Contents  Indemnification of Directors and Officers
  
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  Audit and Other Fees for the Past Two Fiscal Years
  2005
    
    
    2004Audit fees(l)
    
    $
    855,530
    
    
    $
    310,000Audit-related fees(2)
    
    
    71,492
    
    
    
    23,650Tax fees(3)
    
    
    
    
    
    
    182,985All other fees(4)
    
    
    25,000
    
    
    
    1,400Total
    
    $
    952,022
    
    
    $
    518,035
 
 (1)
    
    Audit fees consist of the audit of our annual financial statements, the review of quarterly
financial statements, as well as work generally only the independent auditor can reasonably be
expected to provide, such as statutory audits and financial audits of
subsidiaries, services associated with SEC registration statements filed in connection with
securities offerings (i.e., comfort letters and consents), and financial accounting and reporting
consultations.(2)
    
    Audit-related fees consist principally of audits of employee benefit plans, assurance and
related services that are reasonably related to the performance of the audit or review of
financial statements and consulting on financial accounting and reporting standards.(3)
    
    Tax fees consist principally of assistance with tax compliance, tax advice and tax planning.
Tax compliance includes preparation of original and amended tax returns for Ziff Davis
Holdings and its consolidated subsidiaries; refund claims; and payment planning. Tax advice
and tax planning includes assistance with tax audits and appeals, tax work stemming from
Audit-Related items, tax work relating to employee benefit plans and requests for rulings or
technical advice from taxing authorities.(4)
    
    All other fees consisted principally of amounts paid for consulting services related to a
review of the Companys 2002 Plan. 72
    Table of Contents  PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
  ExhibitNo.
    
    Description2.1
    
    Purchase Agreement dated December 6, 1999 among WS-ZP Acquisition, Inc., ZD Inc. and ZD Holdings (Europe) Ltd.
Previously filed in connection with Ziff Davis Medias Registration Statement on Form S-4 (No. 333-48014) dated
October 16, 2000 as Exhibit 2.1.*3.1
    
    Certificate of Incorporation for Ziff Davis Media Inc. Previously filed in connection with Ziff Davis Medias
Registration Statement on Form S-4 (No. 333-48014) dated October 16, 2000 as Exhibit 3.1.*3.2
    
    Fifth Amended and Restated Certificate of Incorporation for Ziff Davis Holdings Inc.*3.3
    
    Certificate of Incorporation for Ziff Davis Publishing Holdings Inc. Previously filed in connection with Ziff
Davis Medias Registration Statement on Form S-4 (No. 333-48014) dated October 16, 2000 as Exhibit 3.2.*3.4
    
    Certificate of Incorporation for Ziff Davis Internet Inc. Previously filed in connection with Ziff Davis
Medias Registration Statement on Form S-4 (No. 333-48014) dated October 16, 2000 as Exhibit 3.3.*3.5
    
    Certificate of Incorporation for Ziff Davis Development Inc. Previously filed in connection with Ziff Davis
Medias Registration Statement on Form S-4 (No. 333-48014) dated October 16, 2000 as Exhibit 3.4.*3.6
    
    Certificate of Incorporation for Ziff Davis Publishing Inc. Previously filed in connection with Ziff Davis
Medias Registration Statement on Form S-4 (No. 333-48014) dated October 16, 2000 as Exhibit 3.5.*3.7
    
    By-laws for Ziff Davis Media Inc. Previously filed in connection with Ziff Davis Medias Registration Statement
on Form S-4 (No. 333-48014) dated October 16, 2000 as Exhibit 3.7.*3.8
    
    By-laws for Ziff Davis Holdings Inc.*3.9
    
    By-laws for Ziff Davis Publishing Holdings Inc. Previously filed in connection with Ziff Davis Medias
Registration Statement on Form S-4 (No. 333-48014) dated October 16, 2000 as Exhibit 3.8.*3.10
    
    By-laws for Ziff Davis Internet Inc. Previously filed in connection with Ziff Davis Medias Registration
Statement on Form S-4 (No. 333-48014) dated October 16, 2000 as Exhibit 3.9.*3.11
    
    By-laws for Ziff Davis Development Inc. Previously filed in connection with Ziff Davis Medias Registration
Statement on Form S-4 (No. 333-48014) dated October 16, 2000 as Exhibit 3.10.*3.12
    
    By-laws for Ziff Davis Publishing Inc. Previously filed in connection with Ziff Davis Medias Registration
Statement on Form S-4 (No. 333-48014) dated October 16, 2000 as Exhibit 3.11.*3.13
    
    Certificate of Incorporation of Ziff Davis Intermediate Holdings Inc.*3.14
    
    By-laws of Ziff Davis Intermediate Holdings Inc.*4.1
    
    Indenture, dated August 12, 2002, by and between Ziff Davis Media Inc., the guarantors thereunder and Deutsche
Bank Trust Company Americas.*4.2
    
    Registration Rights Agreement, dated August 12, 2002, by and among Ziff Davis Holdings Inc. and Ziff Davis
Media Inc.*4.3
    
    Indenture, dated July 21, 2000 by and between Ziff Davis Media Inc., the guarantors thereunder and Bankers
Trust Company. Previously filed on April 30, 2002 in connection with Ziff Davis Medias Registration Statement
on Form S-4 dated January 24, 2001. Previously filed in connection with Ziff Davis Medias Registration
Statement on Form S-4, (No. 333-48014) dated October 16, 2000 as Exhibit 4.1.*4.4
    
    First Supplemental Indenture, dated as of August 12, 2002 by and between Ziff Davis Media, the guarantors
thereunder and Deutsche Bank Trust Company Americas, supplementing that certain indenture, dated July 21, 2000,
by and between Ziff Davis Media Inc., the guarantors thereunder and Bankers Trust Company.*
 73
    Table of Contents  ExhibitNo.
    
    Description4.5
    
    Investor Rights Agreement, dated April 5, 2000, by and among Ziff Davis Holdings Inc., Willis Stein & Partners
II, L.P., Willis Stein & Partners Dutch II, L.P., Willis Stein & Partners III, L.P. (and other partnerships
sharing a common general partner therewith), the investors listed on the Schedule of Co-Investors, certain
executive employees of Ziff Davis Holdings Inc., and certain other stockholders listed on the Schedule of New
Stockholders. Previously filed on March 20, 2002 in connection with Ziff Davis Medias Form 10-K as Exhibit
9.1.*4.6
    
    Amendment No. 1 to Investor Rights Agreement, dated August 12, 2002, by and among Ziff Davis Holdings Inc.,
Willis Stein & Partners II, L.P., Willis Stein & Partners Dutch II, L.P., Willis Stein & Partners III, L.P.
(and other partnerships sharing a common general partner therewith), the investors listed on the Schedule of
Co-Investors, certain executive employees of Ziff Davis Holdings Inc., and certain other stockholders listed on
the Schedule of New Stockholders.*4.7
    
    Supplemental Indenture, dated as of September 18, 2002, by and among Ziff Davis Media Inc., Ziff Davis Holdings
Inc., and Deutsche Bank Trust Company Americas, supplementing the indenture, dated as of August 12, 2002, by
and between Ziff Davis Media Inc., the guarantors thereunder and Deutsche Bank Trust Company Americas.*4.8
    
    Second Supplemental Indenture, dated as of September 18, 2002, by and among Ziff Davis Media Inc., Ziff Davis
Holdings Inc. and Deutsche Bank Trust Company Americas, supplementing the indenture, dated as of July 21, 2000,
by and between Ziff Davis Media Inc., the guarantors thereunder and Deutsche Bank Trust Company Americas (f/k/a Bankers Trust Company).*4.9
    
    Form of Global Series E-l Preferred Stock Certificate.*10.1
    
    Series D Preferred Stock Purchase Agreement, dated August 12, 2002, by and between Ziff Davis Holdings Inc.,
and the purchasers thereunder.*10.2
    
    Stock Purchase Agreement, dated as of April 30, 2002, by and among Ziff Davis Holdings Inc. and the purchasers
thereunder.*10.3
    
    Stock Purchase Agreement, dated as of May 31, 2002, by and among Ziff Davis Holdings Inc. and the purchasers
thereunder.*10.4
    
    Stock Purchase Agreement, dated as of June 28, 2002, by and among Ziff Davis Holdings Inc. and the purchasers
thereunder.*10.5
    
    Stock Purchase Agreement, dated as of August 8, 2002, by and among Ziff Davis Holdings Inc. and the purchasers
thereunder.*10.6
    
    Warrant Agreement, dated August 12, 2002, by and among Ziff Davis Holdings Inc. and Willis Stein & Partners II,
L.P.*10.7
    
    Warrant Agreement, dated August 12, 2002, by and among Ziff Davis Holdings Inc. and Deutsche Bank Trust Company
Americas.*10.8
    
    Distribution and Payment Agreement, dated August 12, 2002, by and between Ziff Davis Holdings Inc. and Willis
Stein & Partners II, L.P.*10.10
    
    2002 Ziff Davis Holdings Inc. Amended and Restated Employee Stock Option Plan.*10.11
    
    License Agreement, dated April 5, 2000 with ZD Inc. Previously filed in connection with Ziff Davis Medias
Registration Statement on Form S-4 (No. 333-48014) dated October 16, 2000 as Exhibit 10.2.*
 74
    Table of Contents  ExhibitNo.
    
    Description10.12
    
    License Agreement, dated April 5, 2000 with ZD Inc. (ZD logo). Previously filed in connection with Ziff Davis
Medias Registration Statement on Form S-4 (No. 333-48014) dated October 16, 2000 as Exhibit 10.3.*10.13
    
    License Agreement, dated April 5, 2000 with ZD Inc. (Interactive). Previously filed in connection with Ziff
Davis Medias Registration Statement on Form S-4 (No. 333-48014) dated October 16, 2000 as Exhibit 10.4.*10.15
    
    Amendment to License Agreement, dated January 19, 2001 with ZDNet, Inc. Previously filed in connection with
Ziff Davis Medias Amendment No. 1 to Registration Statement on Form S-4 (No. 333-48014) dated January 24, 2001
as Exhibit 10.10.*10.16
    
    Amended and Restated Executive Agreement by and between Ziff Davis Holdings Inc., Ziff Davis Publishing Inc.
and Mr. Robert F. Callahan, dated as of March 23, 2005.*10.18
    
    Executive Agreement by and between Ziff Davis Media Inc. and Mr. Paul OReilly, dated as of September 17,
2004.*10.19
    
    Stock Purchase Agreement by and among Ziff Davis Holdings Inc. and the stock purchasers thereunder, dated May
20, 2001. Previously filed in connection with Ziff Davis Medias Form 10-Q as Exhibit 10.2 for the quarter
ended September 30, 2001.*10.20
    
    Stock Purchase Agreement by and among Ziff Davis Holdings Inc. and the stock purchasers thereunder, dated July
13, 2001. Previously filed in connection with Ziff Davis Medias Form 10-Q as Exhibit 10.3 for the quarter
ended September 30, 2001.*10.21
    
    Stock Purchase Agreement by and among Ziff Davis Holdings Inc. and the stock purchasers thereunder, dated
August 30, 2001. Previously filed in connection with Ziff Davis Medias Form 10-Q as Exhibit 10.4 for the
quarter ended September 30, 2001.*10.22
    
    Sale and Purchase Agreement relating to certain Print-Based Publishing Assets in the UK, Germany and France,
dated June 20, 2000 with VNU N.V., View Group B.V., VNU Business Publications Limited, VNU Holding Deutschland
GMBH, VNU Business Publications France S.A. Previously filed in connection with Ziff Davis Medias Registration
Statement on Form S-4 dated October 16, 2000 as Exhibit 2.2.*10.23
    
    Stock Purchase Agreement, dated as of July 3, 2002, by and among Ziff Davis Media Inc., Ziff Davis Development
Inc. and Lionbridge Technologies, Inc.*10.25
    
    Amendment No. 1 to Stock Purchase Agreement, dated as of August 12, 2002 by and among Ziff Davis Holdings,
Inc., Willis Stein & Partners Dutch III-B, L.P. and Willis Stein & Partners III-C, L.P. (relating to Stock
Purchase Agreement, dated as of April 30, 2002).*10.26
    
    Amendment No. 1 to Stock Purchase Agreement, dated as of August 12, 2002 by and among Ziff Davis Holdings,
Inc., Willis Stein & Partners Dutch III-B, L.P. and Willis Stein & Partners III-C, L.P. (relating to Stock
Purchase Agreement, dated as of May 31, 2002).*10.27
    
    Amendment No. 1 to Stock Purchase Agreement, dated as of August 12, 2002 by and among Ziff Davis Holdings,
Inc., Willis Stein & Partners Dutch III-B, L.P. and Willis Stein & Partners III-C, L.P. (relating to Stock
Purchase Agreement, dated as of June 28, 2002).*10.28
    
    Amendment No. 1 to Stock Purchase Agreement, dated as of August 12, 2002 by and among Ziff Davis Holdings,
Inc., Willis Stein & Partners Dutch III-B, L.P. and Willis Stein & Partners III-C, L.P. (relating to Stock
Purchase Agreement, dated as of August 8, 2002).*10.29
    
    Executive Agreement by and between Ziff Davis Holdings Inc., Ziff Davis Publishing Inc. and Mr. Gregory Barton,
dated as of October 23, 2002.*10.30
    
    Executive Agreement by and between Ziff Davis Media Inc. and Mr. Mark Moyer, dated as of September 3, 2005.*10.32
    
    Executive Agreement by and between Ziff Davis Media Inc. and Mr. Jason Young, dated as of June 1, 2004.*10.33
    
    Executive Agreement by and between Ziff Davis Media Inc. and Mr. Timothy Castelli, dated as of August 1, 2004.*10.34
    
    Executive Agreement by and between Ziff Davis Media Inc. and Mr. Sloan Seymour, dated as of August 1, 2004.*
 75
    Table of Contents  ExhibitNo.
    
    Description10.31
    
    Amendment dated December 30, 2004 to Amended and Restated Executive Agreement by and between Ziff Davis
Holdings Inc., Ziff Davis Publishing Inc. and Mr. Robert F. Callahan.*10.32
    
    Amendment dated December 30, 2004 to Amended and Restated Executive Agreement by and between Ziff Davis
Holdings Inc., Ziff Davis Publishing Inc. and Mr. Bart Catalane.*10.33
    
    Amendment dated February 28, 2005 to Amended and Restated Executive Agreement by and between Ziff Davis
Holdings Inc., Ziff Davis Publishing Inc. and Mr. Robert F. Callahan.*10.34
    
    Amendment dated February 28, 2005 to Amended and Restated Executive Agreement by and between Ziff Davis
Holdings Inc., Ziff Davis Publishing Inc. and Mr. Bart Catalane.*10.35
    
    Executive Agreement by and between Ziff Davis Media Inc. and Mr. Michael Miller, dated as of October 1, 2004.*10.36
    
    Executive Agreement by and between Ziff Davis Media Inc. and Mr. Scott McCarthy, dated as of October 15, 2004.*10.37
    
    Amendment dated December 31, 2005 to Executive Agreement by and between Ziff Davis Media Inc. and Mr. Scott
McCarthy.*10.38
    
    Letter dated September 23,
2004 from the Registrant to David Wittels.*10.39
    
    Asset Purchase Agreement by and among Ziff Davis Media, Inc., MBPS, Com, Inc., FileFront, L.P. and FileFront
Principals Dated as of November 4, 2005**10.40
    
    Offer letter by and between Ziff
Davis Media Inc. and Mr. Kenneth Beach, dated as of March 4,
2005*10.41
    
    Letter dated December 6, 2005
from the Registrant to Susan E. Alterton.**10.42
    
    Purchase Agreement, dated
April 18, 2005, by and among Ziff Davis Media Inc., the
guarantors named therein and Bear, Stearns & Co. Inc. and Lehman
Brothers Inc. Incorporated by reference to Ziff Davis Holdings
Form 8-K filed on April 26, 2005.*10.43
    
    Indenture, dated April 22,
2005, by and among Ziff Davis Media Inc., the guarantors named
therein and US Bank National Association, as Trustee.
Incorporated by reference to Ziff Davis Holdings Form 8-K
filed on April 26, 2005.*10.44
    
    First Lien Security Agreement,
dated as of April 22, 2005, by and among Ziff Davis Media Inc., the
guarantors named therein and US Bank National Association, as
Trustee. Incorporated by reference to Ziff Davis Holdings
Form 8-K filed April 26, 2005.*10.45
    
    Registration Rights Agreement,
dated April 22, 2005, by and among Ziff Davis Media Inc., the Guarantors named therein and Bear,
Stearns & Co. Inc. and Lehman Brothers Inc. Incorporated by
reference to Ziff Davis Holdings Form 8-K filed on
April 26, 2005.*14.1
    
    Code of Ethics.*14.2
    
    Ziff Davis Holdings Inc. Audit and
Non-Audit Services Pre-Approval Policy.**21.1
    
    Subsidiaries of Registrants.*31.1
    
    Certification of our Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**31.2
    
    Certification of our Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**32.1
    
    Certification of our Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. **32.2
    
    Certification of our Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
 
 *
    
    Previously filed.**
    
    Filed herewith.
    
    Denotes management contract or compensatory plan or arrangement. 76
    Table of Contents  SIGNATURES
 Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on it behalf by the undersigned, thereunto
duly authorized on the 31st day of March 2006.
 ZIFF DAVIS HOLDINGS INC.By:
    
    /s/ MARK D. MOYERName: Mark D. MoyerTitle: Chief Financial Officer
 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the capacities.
 Signatures
    
    Title/s/      ROBERT F. CALLAHAN
    
    Chairman and Chief Executive OfficerRobert F. Callahan
    
    (Principal Executive Officer)/s/      MARK D. MOYER
    
    Chief Financial OfficerMark Moyer
    
    (Principal Financial and Accounting Officer)/s/      BART W. CATALANE
    
    DirectorBart W. Catalane/s/      JOHN R. WILLIS
    
    DirectorJohn R. Willis/s/      AVY H. STEIN
    
    DirectorAvy H. Stein/s/      DANIEL H. BLUMENTHAL
    
    DirectorDaniel H. Blumenthal/s/      BRADLEY J. SHISLER
    
    DirectorBradley J. Shisler/s/
     SUSAN E. ALDERTON
Susan E. Alderton
    
    Director
 Supplemental Information to be Furnished With Reports Filed Pursuant to Section 15(d) of the
Act by Registrants Which Have Not Registered Securities Pursuant to Section 12 of the Act.
  77