---

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FORM 10-Q

SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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

For Quarter Ended: September 30, 2003

Commission file number: 1-11106

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

|DELAWARE(State or other jurisdiction of
incorporation or organization) |  | 13-3647573(I.R.S. Employer
Identification No.)
|---------------------------------------------------------------------- |  | ----------------------------------------------

745 Fifth Avenue, New York, New York(Address of principal executive offices)

10151(Zip Code)

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

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.

Yes ý No o

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

Yes ý No o

Number
of shares of common stock, par value $.01 per share, of PRIMEDIA Inc. outstanding as of October 31, 2003: 259,614,621.

---

---

---



PRIMEDIA Inc.        INDEX

|                               |         |                                                                                                                    |                                                                                       | PAGE
|------------------------------ | ------- | ------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------- | ----
|Part I. Financial Information: |         |                                                                                                                   
|                               | Item 1. |                                                                                                                    | Financial Statements                                                                  |     
|                               |         | Condensed Consolidated Balance Sheets as of September 30, 2003 (Unaudited) and December 31, 2002                   |                                                                                       | 3   
|                               |         | Condensed Statements of Consolidated Operations (Unaudited) for the nine months ended September 30, 2003 and 2002  |                                                                                       | 4   
|                               |         | Condensed Statements of Consolidated Operations (Unaudited) for the three months ended September 30, 2003 and 2002 |                                                                                       | 5   
|                               |         | Condensed Statements of Consolidated Cash Flows (Unaudited) for the nine months ended September 30, 2003 and 2002  |                                                                                       | 6   
|                               |         | Notes to Condensed Consolidated Financial Statements (Unaudited)                                                   |                                                                                       | 7-37
|                               | Item 2. |                                                                                                                    | Management's Discussion and Analysis of Financial Condition and Results of Operations |     
|                               | Item 3. |                                                                                                                    | Quantitative and Qualitative Disclosures About Market Risk                            |     
|                               | Item 4. |                                                                                                                    | Controls and Procedures                                                               |     
|Part II. Other Information:    |         |                                                                                                                   
|                               | Item 5. |                                                                                                                    | Other Information                                                                     |     
|                               | Item 6. |                                                                                                                    | Exhibits and Reports on Form 8-K                                                      |     
|Signatures                     |         | 65                                                                                                                
|Exhibit Index                  |         | 66                                                                                                                

2

---



PRIMEDIA INC. AND SUBSIDIARIES        CONDENSED CONSOLIDATED BALANCE SHEETS

|                                                                                                  |                                                                                                                                                                                                                                                     | September 30,
2003             |           | December 31,
2002 |           
|------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------ | --------- | ----------------- | ----------
|
|
|ASSETS                                                                                            |                                                                                                                                                                                                                                                     |                                |           |                   |           
|Current assets:                                                                                   |                                                                                                                                                                                                                                                     |                                |           |                   |           
|                                                                                                  | Cash and cash equivalents                                                                                                                                                                                                                           |                                | $         | 18,381            |           
|                                                                                                  | Accounts receivable, net                                                                                                                                                                                                                            |                                |           | 173,327           |           
|                                                                                                  | Inventories                                                                                                                                                                                                                                         |                                |           | 22,678            |           
|                                                                                                  | Prepaid expenses and other                                                                                                                                                                                                                          |                                |           | 39,270            |           
|                                                                                                  | Assets held for sale                                                                                                                                                                                                                                |                                |           | 34,624            |           
|                                                                                                  |                                                                                                                                                                                                                                                     |                                |           |                   |           
|                                                                                                  |                                                                                                                                                                                                                                                     | Total current assets           |           |                   | 288,280   
|Property and equipment, net                                                                       |                                                                                                                                                                                                                                                     |                                | 106,278   |                   |           
|Other intangible assets, net                                                                      |                                                                                                                                                                                                                                                     |                                | 276,977   |                   |           
|Goodwill, net                                                                                     |                                                                                                                                                                                                                                                     |                                | 918,228   |                   |           
|Other investments                                                                                 |                                                                                                                                                                                                                                                     |                                | 5,217     |                   |           
|Other non-current assets                                                                          |                                                                                                                                                                                                                                                     |                                | 61,084    |                   |           
|                                                                                                  |                                                                                                                                                                                                                                                     |                                |           |                   |           
|                                                                                                  |                                                                                                                                                                                                                                                     | $                              | 1,656,064 |                   | $         
|                                                                                                  |                                                                                                                                                                                                                                                     |                                |           |                   |           
|LIABILITIES AND SHAREHOLDERS' DEFICIENCY                                                          |                                                                                                                                                                                                                                                     |                                |           |                   |           
|Current liabilities:                                                                              |                                                                                                                                                                                                                                                     |                                |           |                   |           
|                                                                                                  | Accounts payable                                                                                                                                                                                                                                    |                                | $         | 69,274            |           
|                                                                                                  | Accrued interest payable                                                                                                                                                                                                                            |                                |           | 37,730            |           
|                                                                                                  | Accrued expenses and other                                                                                                                                                                                                                          |                                |           | 199,633           |           
|                                                                                                  | Deferred revenues                                                                                                                                                                                                                                   |                                |           | 158,812           |           
|                                                                                                  | Current maturities of long-term debt                                                                                                                                                                                                                |                                |           | 9,276             |           
|                                                                                                  | Liabilities of businesses held for sale                                                                                                                                                                                                             |                                |           | 18,047            |           
|                                                                                                  |                                                                                                                                                                                                                                                     |                                |           |                   |           
|                                                                                                  |                                                                                                                                                                                                                                                     | Total current liabilities      |           |                   | 492,772   
|Long-term debt                                                                                    |                                                                                                                                                                                                                                                     |                                | 1,598,662 |                   |           
|Shares subject to mandatory redemption                                                            |                                                                                                                                                                                                                                                     |                                | 477,059   |                   |           
|Deferred revenues                                                                                 |                                                                                                                                                                                                                                                     |                                | 34,544    |                   |           
|Deferred income taxes                                                                             |                                                                                                                                                                                                                                                     |                                | 60,124    |                   |           
|Other non-current liabilities                                                                     |                                                                                                                                                                                                                                                     |                                | 24,899    |                   |           
|                                                                                                  |                                                                                                                                                                                                                                                     |                                |           |                   |           
|                                                                                                  |                                                                                                                                                                                                                                                     | Total Liabilities              |           |                   | 2,688,060 
|                                                                                                  |                                                                                                                                                                                                                                                     |                                |           |                   |           
|Exchangeable preferred stock (aggregate liquidation and redemption $493,409 at December 31, 2002) |                                                                                                                                                                                                                                                     |                                |          |                   |           
|                                                                                                  |                                                                                                                                                                                                                                                     |                                |           |                   |           
|Shareholders' deficiency:                                                                         |                                                                                                                                                                                                                                                     |                                |           |                   |           
|                                                                                                  | Series J convertible preferred stock ($.01 par value, 1,279,120 shares and 1,166,324 shares issued and outstanding, aggregate liquidation and redemption values of $159,890 and $145,791 at September 30, 2003 and
December 31, 2002, respectively) |                                |           | 159,537           |           
|                                                                                                  | Common stock ($.01 par value, 350,000,000 shares authorized at September 30, 2003 and December 31, 2002 and 268,221,389 and 267,505,223 shares issued at September 30, 2003 and December 31, 2002, respectively)                                    |                                |           | 2,682             |           
|                                                                                                  | Additional paid-in capital (including warrants of $31,690 at September 30, 2003 and December 31, 2002)                                                                                                                                              |                                |           | 2,337,480         |           
|                                                                                                  | Accumulated deficit                                                                                                                                                                                                                                 |                                |           | (3,451,755        | )         
|                                                                                                  | Accumulated other comprehensive loss                                                                                                                                                                                                                |                                |           | (223              | )         
|                                                                                                  | Unearned compensation                                                                                                                                                                                                                               |                                |           | (2,155            | )         
|                                                                                                  | Common stock in treasury, at cost (8,610,491 shares and 8,639,775 shares at September 30, 2003 and December 31, 2002, respectively)                                                                                                                 |                                |           | (77,562           | )         
|                                                                                                  |                                                                                                                                                                                                                                                     |                                |           |                   |           
|                                                                                                  |                                                                                                                                                                                                                                                     | Total shareholders' deficiency |           |                   | (1,031,996
|                                                                                                  |                                                                                                                                                                                                                                                     |                                |           |                   |           
|                                                                                                  |                                                                                                                                                                                                                                                     | $                              | 1,656,064 |                   | $         
|                                                                                                  |                                                                                                                                                                                                                                                     |                                |           |                   |           

See notes to condensed consolidated financial statements (unaudited).

3

---



PRIMEDIA INC. AND SUBSIDIARIES        CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS        (UNAUDITED)

|                                                                                                                                                                  |                                                                                                                                                    | Nine Months Ended September 30, |            
|----------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------- | -----------
|
|
|Sales, net                                                                                                                                                        |                                                                                                                                                    | $                               | 996,300    
|Operating costs and expenses:                                                                                                                                     |                                                                                                                                                    |                                 |            
|                                                                                                                                                                  | Cost of goods sold                                                                                                                                 |                                 |            
|                                                                                                                                                                  | Marketing and selling                                                                                                                              |                                 |            
|                                                                                                                                                                  | Distribution, circulation and fulfillment                                                                                                          |                                 |            
|                                                                                                                                                                  | Editorial                                                                                                                                          |                                 |            
|                                                                                                                                                                  | Other general expenses                                                                                                                             |                                 |            
|                                                                                                                                                                  | Corporate administrative expenses (excluding $2,793 and $10,529 of non-cash compensation and non-recurring charges in 2003 and 2002, respectively) |                                 |            
|                                                                                                                                                                  | Depreciation of property and equipment (including $445 of provision for impairment in 2002)                                                        |                                 |            
|                                                                                                                                                                  | Amortization of intangible assets and other (including $20,495 and $13,400 of provision for impairment in 2003 and 2002, respectively)             |                                 |            
|                                                                                                                                                                  | Severance related to separated senior executives                                                                                                   |                                 |            
|                                                                                                                                                                  | Non-cash compensation and non-recurring charges                                                                                                    |                                 |            
|                                                                                                                                                                  | Provision for severance, closures and restructuring related costs                                                                                  |                                 |            
|                                                                                                                                                                  | Loss on sale of businesses and other, net                                                                                                          |                                 |            
|                                                                                                                                                                  |                                                                                                                                                    |                                 |            
|Operating income                                                                                                                                                  |                                                                                                                                                    |                                 | 52,674     
|Other expense:                                                                                                                                                    |                                                                                                                                                    |                                 |            
|                                                                                                                                                                  | Provision for impairment of investments                                                                                                            |                                 |            
|                                                                                                                                                                  | Interest expense                                                                                                                                   |                                 |            
|                                                                                                                                                                  | Interest on shares subject to mandatory redemption                                                                                                 |                                 |            
|                                                                                                                                                                  | Amortization of deferred financing charges                                                                                                         |                                 |            
|                                                                                                                                                                  | Other expense, net                                                                                                                                 |                                 |            
|                                                                                                                                                                  |                                                                                                                                                    |                                 |            
|Loss from continuing operations before income tax expense                                                                                                         |                                                                                                                                                    |                                 | (68,936    
|Income tax expense                                                                                                                                                |                                                                                                                                                    |                                 | (11,033    
|                                                                                                                                                                  |                                                                                                                                                    |                                 |            
|Loss from continuing operations                                                                                                                                   |                                                                                                                                                    |                                 | (79,969    
|Discontinued operations (including gain on sale of businesses, net of tax of $106,317 and $38,210 in 2003 and 2002, respectively)                                 |                                                                                                                                                    |                                 | 109,799    
|Cumulative effect of a change in accounting principle (from the adoption of Statement of Financial Accounting Standards No. 142)                                  |                                                                                                                                                    |                                 |           
|                                                                                                                                                                  |                                                                                                                                                    |                                 |            
|Net income (loss)                                                                                                                                                 |                                                                                                                                                    |                                 | 29,830     
|Preferred stock dividends and related accretion, net (including $944 and $31,001 gain on exchange of exchangeable preferred stock in 2003 and 2002, respectively) |                                                                                                                                                    |                                 | (36,856    
|                                                                                                                                                                  |                                                                                                                                                    |                                 |            
|Loss applicable to common shareholders                                                                                                                            |                                                                                                                                                    | $                               | (7,026     
|                                                                                                                                                                  |                                                                                                                                                    |                                 |            
|Per common share:                                                                                                                                                 |                                                                                                                                                    |                                 |            
|                                                                                                                                                                  | Loss from continuing operations                                                                                                                    |                                 | $          
|                                                                                                                                                                  | Discontinued operations                                                                                                                            |                                 |            
|                                                                                                                                                                  | Cumulative effect of a change in accounting principle                                                                                              |                                 |            
|                                                                                                                                                                  |                                                                                                                                                    |                                 |            
|                                                                                                                                                                  | Basic and diluted loss applicable to common shareholders                                                                                           |                                 | $          
|                                                                                                                                                                  |                                                                                                                                                    |                                 |            
|Basic and diluted common shares outstanding                                                                                                                       |                                                                                                                                                    |                                 | 259,078,166
|                                                                                                                                                                  |                                                                                                                                                    |                                 |            

See notes to condensed consolidated financial statements (unaudited).

4

---



PRIMEDIA INC. AND SUBSIDIARIES        CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS        (UNAUDITED)

|                                                                                                                                 |                                                                                                                                                 | Three Months Ended September 30, |            
|-------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------- | -----------
|
|
|Sales, net                                                                                                                       |                                                                                                                                                 | $                                | 323,719    
|Operating costs and expenses:                                                                                                    |                                                                                                                                                 |                                  |            
|                                                                                                                                 | Cost of goods sold                                                                                                                              |                                  |            
|                                                                                                                                 | Marketing and selling                                                                                                                           |                                  |            
|                                                                                                                                 | Distribution, circulation and fulfillment                                                                                                       |                                  |            
|                                                                                                                                 | Editorial                                                                                                                                       |                                  |            
|                                                                                                                                 | Other general expenses                                                                                                                          |                                  |            
|                                                                                                                                 | Corporate administrative expenses (excluding $770 and $2,838 of non-cash compensation and non-recurring charges in 2003 and 2002, respectively) |                                  |            
|                                                                                                                                 | Depreciation of property and equipment (including $445 of provision for impairment in 2002)                                                     |                                  |            
|                                                                                                                                 | Amortization of intangible assets and other (including $20,495 and $8,556 of provision for impairment in 2003 and 2002, respectively)           |                                  |            
|                                                                                                                                 | Non-cash compensation and non-recurring charges                                                                                                 |                                  |            
|                                                                                                                                 | Provision for severance, closures and restructuring related costs                                                                               |                                  |            
|                                                                                                                                 | (Gain) loss on sale of businesses and other, net                                                                                                |                                  |            
|                                                                                                                                 |                                                                                                                                                 |                                  |            
|Operating income                                                                                                                 |                                                                                                                                                 |                                  | 3,705      
|Other income (expense):                                                                                                          |                                                                                                                                                 |                                  |            
|                                                                                                                                 | Provision for impairment of investments                                                                                                         |                                  |            
|                                                                                                                                 | Interest expense                                                                                                                                |                                  |            
|                                                                                                                                 | Interest on shares subject to mandatory redemption                                                                                              |                                  |            
|                                                                                                                                 | Amortization of deferred financing charges                                                                                                      |                                  |            
|                                                                                                                                 | Other income, net                                                                                                                               |                                  |            
|                                                                                                                                 |                                                                                                                                                 |                                  |            
|Loss from continuing operations before income tax expense                                                                        |                                                                                                                                                 |                                  | (39,821    
|Income tax (expense) benefit                                                                                                     |                                                                                                                                                 |                                  | (3,982     
|                                                                                                                                 |                                                                                                                                                 |                                  |            
|Loss from continuing operations                                                                                                  |                                                                                                                                                 |                                  | (43,803    
|Discontinued operations (including gain on sale of businesses, net of tax of $3,713 and $27,631 in 2003 and 2002, respectively)  |                                                                                                                                                 |                                  | 4,975      
|                                                                                                                                 |                                                                                                                                                 |                                  |            
|Net income (loss)                                                                                                                |                                                                                                                                                 |                                  | (38,828    
|Preferred stock dividends and related accretion, net (including $2,700 gain on exchange of exchangeable preferred stock in 2002) |                                                                                                                                                 |                                  | (4,845     
|                                                                                                                                 |                                                                                                                                                 |                                  |            
|Loss applicable to common shareholders                                                                                           |                                                                                                                                                 | $                                | (43,673    
|                                                                                                                                 |                                                                                                                                                 |                                  |            
|Per common share:                                                                                                                |                                                                                                                                                 |                                  |            
|                                                                                                                                 | Loss from continuing operations                                                                                                                 |                                  | $          
|                                                                                                                                 | Discontinued operations                                                                                                                         |                                  |            
|                                                                                                                                 |                                                                                                                                                 |                                  |            
|                                                                                                                                 | Basic and diluted loss applicable to common shareholders                                                                                        |                                  | $          
|                                                                                                                                 |                                                                                                                                                 |                                  |            
|Basic and diluted common shares outstanding                                                                                      |                                                                                                                                                 |                                  | 259,343,692
|                                                                                                                                 |                                                                                                                                                 |                                  |            

See
notes to condensed consolidated financial statements (unaudited).

5

---



PRIMEDIA INC. AND SUBSIDIARIES        CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS        (UNAUDITED)

|                                               |                                                                                           | Nine Months Ended September 30,                                                               |       
|---------------------------------------------- | ----------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- | ------
|
|
|Operating activities:                          |                                                                                           |                                                                                               |       
|                                               | Net income (loss)                                                                         |                                                                                               | $     
|                                               | Adjustments to reconcile net income (loss) to net cash provided by operating activities   |                                                                                               |       
|                                               | Changes in operating assets and liabilities                                               |                                                                                               |       
|                                               |                                                                                           |                                                                                               |       
|                                               |                                                                                           |                                                                                               |       
|                                               |                                                                                           |                                                                                               |       
|Investing activities:                          |                                                                                           |                                                                                               |       
|                                               | Additions to property, equipment and other, net                                           |                                                                                               |       
|                                               | Proceeds from sale of businesses and other, net                                           |                                                                                               |       
|                                               | Payments related to businesses acquired                                                   |                                                                                               |       
|                                               | Proceeds from sale of (payments for) other investments                                    |                                                                                               |       
|                                               |                                                                                           |                                                                                               |       
|                                               |                                                                                           |                                                                                               |       
|                                               |                                                                                           |                                                                                               |       
|Financing activities:                          |                                                                                           |                                                                                               |       
|                                               | Borrowings under credit agreements                                                        |                                                                                               |       
|                                               | Repayments of borrowings under credit agreements                                          |                                                                                               |       
|                                               | Payments for redemptions of senior notes                                                  |                                                                                               |       
|                                               | Proceeds from issuance of 8% Senior Notes                                                 |                                                                                               |       
|                                               | Proceeds from issuances of common stock, net                                              |                                                                                               |       
|                                               | Purchases of common stock in connection with the exchange of
exchangeable preferred stock |                                                                                               |       
|                                               | Dividends paid to preferred stock shareholders                                            |                                                                                               |       
|                                               | Deferred financing costs paid                                                             |                                                                                               |       
|                                               | Other                                                                                     |                                                                                               |       
|                                               |                                                                                           |                                                                                               |       
|                                               |                                                                                           |                                                                                               |       
|                                               |                                                                                           |                                                                                               |       
|Decrease in cash and cash equivalents          |                                                                                           |                                                                                               | (172  
|Cash and cash equivalents, beginning of period |                                                                                           |                                                                                               | 18,553
|                                               |                                                                                           |                                                                                               |       
|Cash and cash equivalents, end of period       |                                                                                           | $                                                                                             | 18,381
|                                               |                                                                                           |                                                                                               |       
|Supplemental information:                      |                                                                                           |                                                                                               |       
|                                               | Cash interest paid                                                                        |                                                                                               | $     
|                                               |                                                                                           |                                                                                               |       
|                                               | Cash taxes paid, net                                                                      |                                                                                               | $     
|                                               |                                                                                           |                                                                                               |       
|                                               | Non-cash activities:                                                                      |                                                                                               |       
|                                               |                                                                                           | Issuance of warrants in connection with Emap acquisition and related financing                |       
|                                               |                                                                                           |                                                                                               |       
|                                               |                                                                                           | Issuance of options to a related party in connection with services received                   |       
|                                               |                                                                                           |                                                                                               |       
|                                               |                                                                                           | Accretion in carrying value of exchangeable and convertible preferred stock                   |       
|                                               |                                                                                           |                                                                                               |       
|                                               |                                                                                           | Payments of dividends-in-kind on Series J Convertible Preferred Stock                         |       
|                                               |                                                                                           |                                                                                               |       
|                                               |                                                                                           | Carrying value of exchangeable preferred stock exchanged to common stock                      |       
|                                               |                                                                                           |                                                                                               |       
|                                               |                                                                                           | Fair value of common stock issued in connection with exchange of exchangeable preferred stock |       
|                                               |                                                                                           |                                                                                               |       
|                                               |                                                                                           | Asset-for-equity investments                                                                  |       
|                                               |                                                                                           |                                                                                               |       

See notes to condensed consolidated financial statements (unaudited).

6

---



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

Basis
of Presentation

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

Stock
Based Compensation

In
December 2002, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") 148, "Accounting for Stock-Based
CompensationTransition and Disclosurean Amendment of FASB
Statement No. 123", which amends SFAS 123, "Accounting for Stock-Based Compensation" to provide alternative methods of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require prominent disclosures in both annual and interim
financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. SFAS 148 is effective for annual periods ending
after December 15, 2002 and interim periods beginning after December 15, 2002. On January 1, 2003, the Company adopted certain provisions of SFAS 148, which did not have a
material impact on the Company's results of operations or financial position.

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

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

7

---

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

The
following table illustrates the effect on net loss applicable to common shareholders and loss per share if the Company had applied the fair value recognition provisions of
SFAS 123 to stock-based employee compensation:

|                                                                                                                |  | Nine months ended September 30, |         | Three months ended September 30, |  
|--------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ------- | -------------------------------- | -
|
|Reported net loss applicable to common shareholders                                                             |  | $                               | (7,026  | )                                | $
|Deduct: total stock-based employee compensation expense determined under fair value based method for all awards |  |                                 | (16,864 | )                                |  
|                                                                                                                |  |                                 |         |                                  |  
|Pro forma net loss applicable to common shareholders                                                            |  | $                               | (23,890 | )                                | $
|                                                                                                                |  |                                 |         |                                  |  
|Per common share:                                                                                               |  |                                 |         |                                  |  
|Reported basic and diluted loss                                                                                 |  | $                               | (0.03   | )                                | $
|Pro forma basic and diluted loss                                                                                |  | $                               | (0.09   | )                                | $

The
fair value of these options was estimated at the date of grant using the Black-Scholes pricing model. The following weighted average assumptions were used for the nine months ended
September 30, 2003 and 2002, respectively: risk-free interest rates of 4.44% and 4.61%; dividend yields of 0% and 0%; volatility factors of the expected market price of the
Company's common stock of 79% and 76%; and a weighted average expected life of the options of five years. For the three months ended September 30, 2003 and 2002, respectively, the following
weighted average assumptions were used: risk-free interest rates of 4.46% and 4.61%; dividend yields of 0% and 0%; volatility factors of the expected market price of the Company's common
stock of 79% and 76%; and a weighted average expected life of the options of five years. The estimated fair value of options granted during the nine months ended September 30, 2003 and 2002 was
$482 and $12,367,
respectively, and $463 and $236 during the three months ended September 30, 2003 and 2002, respectively.

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

Barter
Transactions

The
Company trades advertisements in its traditional and online properties in exchange for advertising in properties of other companies and trade show space and booths. Revenue and
related expenses from barter transactions are recorded at fair value in accordance with Emerging Issues Task Force ("EITF") 99-17, "Accounting for Advertising Barter Transactions." Revenue
from barter transactions is recognized in accordance with the Company's revenue recognition policies. Expense from barter transactions is recognized as incurred. Sales from barter transactions were
approximately

8

---

$9,700
and $11,500 for the nine months ended September 30, 2003 and 2002, respectively, and $2,800 and $3,000 for the three months ended September 30, 2003 and 2002, respectively, with
equal related expense amounts in each nine and three month period.

Recent
Accounting Pronouncements

In
2003 and 2002, the Company adopted a series of accounting pronouncements, as required by the FASB. These changes are summarized below.

SFAS 143, "Accounting for Asset Retirement Obligations"

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

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

In August 2001, the FASB issued SFAS 144, which established one accounting model for long-lived assets to be held and used,
long-lived assets (including those accounted for as a discontinued operation) to be disposed of by sale and long-lived assets to be disposed of other than by sale, and resolved
certain implementation issues related to SFAS 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of".

The
Company adopted SFAS 144 on January 1, 2002, and as a result, the results of the Modern Bride Group, ExitInfo,Doll
Reader,Chicago,Horticulture,IN New
Yorkand the American Baby Group, which were sold during 2002,Seventeenmagazine and related teen properties, which were sold
in the second quarter of 2003, and Simba which was sold in the third quarter of 2003, were recorded as discontinued operations for the periods prior to their respective divestiture dates.

The
Company also reclassified the results of Federal Sources,CableWorldand Sprinks, the pay per click advertising network which serves
About.com and numerous third party distribution partners, which were sold in October 2003, as well asNew Yorkmagazine and Kagan World Media for
which the Company has initiated plans to sell, to discontinued operations for all periods presented.

Discontinued
Operations includes sales of $21,537 and $70,115, and net income of $4,975 and $24,584 (including a gain on sale of $3,713 and $27,631) for the three months ended
September 30, 2003 and 2002, respectively, and sales of $100,549 and $201,300, and net income of $109,799 and $24,957 (including a gain on sale of $106,317 and $38,210) for the nine months
ended September 30, 2003 and 2002, respectively. The discontinued operations include expenses related to certain centralized functions that are shared by multiple titles, such as production,
circulation, advertising, human resource and information technology costs but exclude general overhead costs. These expenses were allocated to the discontinued entities based upon relative revenues
for the related periods. The allocation methodology is consistent with that used across the Company. These allocations amounted to $453 and $2,744 for the three months ended September 30, 2003
and 2002, respectively, and $2,397 and $8,115 for the nine months ended September 30, 2003 and 2002, respectively. The Company recorded a state income tax provision of $1,000 associated with
the divestiture ofSeventeenand its related teen properties which is included in discontinued operations on the condensed statements of consolidated
operations for the nine months ended September 30, 2003.

9

---

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

Nine Months Ended
September 30, 2002

Three Months Ended
September 30, 2002Sales, net (as originally reported, which reflects a reclassification of $28,590 and $4,675 for the nine and three months ended September 30, 2002, respectively, related to the sale of the Modern Bride Group, ExitInfo,Doll Reader, Chicago, andHorticulture)

$
1,219,817

$
399,960Less: Additional SFAS 144 adjustments for divestitures subsequent to September 30, 2002


172,710


65,440Sales, net (as reclassified)

$
1,047,107

$
334,520


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

In April 2002, the FASB issued SFAS 145, which for most companies will require gains and losses on extinguishments of debt to be classified within
income or loss from continuing operations rather than as extraordinary items as previously required under SFAS 4, "Reporting Gains and Losses from Extinguishment of Debt (an Amendment of APB Opinion
No. 30)." Extraordinary treatment will be required for certain extinguishments as provided under APB Opinion 30. In 2002, the Company early adopted SFAS 145 in accordance with the
provisions of the statement. Losses from the extinguishment of debt have been included in other, net, on the condensed statements of consolidated operations (see Note 8).

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

In November 2002, the FASB approved FASB Interpretation No. 45 ("FIN 45"). FIN 45 clarifies the requirements of SFAS 5, "Accounting for
Contingencies", relating to a guarantor's accounting for, and disclosure of, the issuance of certain types of guarantees. Specifically, FIN 45 requires a guarantor to recognize a liability for the
non-contingent component of certain guarantees, representing the obligation to stand ready to perform in the event that specified triggering events or conditions occur. Effective
January 1, 2003, the Company adopted FIN 45 which has not had a material impact on the Company's results of operations or financial position.

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

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

10

---

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

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

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

Effective
July 1, 2003, the Company prospectively adopted SFAS 150. SFAS 150 requires the Company to classify as long-term liabilities its
Series D, F and H Exchangeable Preferred Stock and to reclassify dividends from this preferred stock to interest expense. As a result of the adoption by the Company of SFAS 150, the
Series D, F and H Exchangeable Preferred Stock are now collectively described as "shares subject to mandatory redemption" on the accompanying condensed consolidated balance sheet as of
September 30, 2003. Dividends on these shares are now described as "interest on shares subject to mandatory redemption" and included in loss from continuing operations for the nine and three
month periods ended September 30, 2003, whereas previously they were presented below net income (loss) as preferred stock dividends. The adoption of SFAS 150 increased loss from
continuing operations for the nine and three month periods ended September 30, 2003 by $11,008. If SFAS 150 was adopted on July 1, 2002, loss from continuing operations would have
increased by $12,016 for the comparable periods of 2002. This adoption did not have an impact on loss applicable to common shareholders or loss per common share for any of the periods presented on the
accompanying condensed statements of consolidated operations.

On
February 28, 2002, the Company completed the sale of the Modern Bride Group, part of the Consumer segment, the results of which have been included in discontinued operations in
accordance with SFAS 144. The related (gain) loss on sale of the Modern Bride Group of ($6,195) and $227 has been included in discontinued operations on the accompanying condensed statements of
consolidated operations for the nine and three months ended September 30, 2002, respectively. Proceeds from the sale were approximately $50,000 and were used to pay down the Company's
borrowings under its credit facility.

On
June 28, 2002, the Company completed the sale of ExitInfo, part of the Consumer segment, the results of which have been included in discontinued operations in accordance with
SFAS 144. The related (gain) loss on sale of ExitInfo of ($3,889) and $268 is included in discontinued operations on the accompanying condensed statements of consolidated operations for the
nine and three months ended September 30, 2002, respectively. Proceeds from the sale of approximately $23,000 were used to pay down the Company's borrowings under its credit facility.

On
August 1, 2002, the Company completed the sale ofChicagopart of the Consumer segment, to an affiliate of the Chicago Tribune
Company for $35,000 in cash. Proceeds from the sale were used to pay down the Company's outstanding debt. The related gain on the sale ofChicagowas
$28,514 and is included as a component of discontinued operations on the accompanying condensed statements of consolidated operations for the nine and three months ended September 30,
2002.

In
addition, during the three months ended September 30, 2002, the Company completed several other smaller divestitures, including the divestitures of HorticultureandDoll
Reader, both part of the

11

---

Consumer
segment, for proceeds of approximately $5,500. The results of these divestitures, including a related net loss on sale of businesses of $388 for the nine and three months ended
September 30, 2002, have been included as a component of discontinued operations on the accompanying condensed statements of consolidated operations.

During
the remaining three months of 2002, the Company completed several other divestitures whose results have been reclassified as discontinued operations in accordance with
SFAS 144. These divestitures includeIN New Yorkand the American Baby Group, part of the Consumer segment. Certain amounts in the prior periods'
condensed consolidated statements of operations have been reclassified to conform to the current year presentation.

On
May 30, 2003, the Company completed the sale ofSeventeenmagazine and its companion properties including a number of Seventeenbranded assets,Teenmagazine, Seventeen.com, teenmag.com and Cover Concepts, an
in-school marketing unit, all part of the Consumer segment, to The Hearst Corporation. The related gain on the sale of $107,138 and $2,818, net of tax, for the nine and three months ended
September 30, 2003, respectively, has been included in discontinued operations on the accompanying condensed statement of consolidated operations in accordance with SFAS 144. In
connection with this divestiture, the Company agreed to provide certain services to the purchasers including space rental, financial staffing and support, and website hosting services at negotiated
rates over specified terms. Proceeds from the sale were approximately $182,400, subject to standard post closing adjustments, and were used to pay down the Company's borrowings under its credit
facility.

During
the nine and three months ended September 30, 2003, the Company finalized certain aspects of the dispositions which were classified as discontinued operations and
recognized a net (gain) loss of $1,418 and ($298), respectively.

In
September 2003, the Company completed the sale of Simba Information, part of the Business to Business segment, the results of which have been included in discontinued
operations in accordance with SFAS 144. The related gain on sale of Simba Information of $597 is included in discontinued operations on the accompanying condensed statements of consolidated
operations for the nine and three months ended September 30, 2003. Proceeds from the sale of approximately $300 were used to pay down the Company's borrowings under its credit facility.

In
addition, during the nine and three months ended September 30, 2003 and 2002, the Company completed the sale of several other properties which did not qualify as discontinued
operations under SFAS 144. The related net (gain) loss on the sale of these businesses of $1,630 and $1,841 for the nine
months ended September 30, 2003 and 2002, respectively, and $294 and ($290) for the three months ended September 30, 2003 and 2002, respectively, are included in (gain) loss on sale of
businesses and other, net, on the accompanying condensed statements of consolidated operations.

In
September 2003, the Company initiated a plan to sellNew Yorkmagazine, part of the Consumer segment. Results from New Yorkmagazine have been
reclassified as discontinued operations for all periods presented.

In
October 2003, PRIMEDIA reached a four-year distribution and revenue sharing advertising agreement with Google Inc. Google will provide search and contextual
advertising for About.com and 127 PRIMEDIA consumer sites. As part of the transaction, the Company's Sprinks division was sold to Google. Sprinks is the pay per click advertising network which serves
About.com and numerous third party distribution partners. Results from Sprinks, part of the Consumer segment, have been reclassified as discontinued operations for all periods presented.

In
October 2003, the Company completed the sale of Federal Sources andCableWorld. In addition, the Company initiated a plan to
sell Kagan World Media. The results of these businesses, all part of the Business-to-Business segment, have been classified as discontinued operations for all periods presented.

12

---

Balance SheetHeld for Sale

The assets and liabilities of businesses that have been sold or which the Company has initiated plans to sell subsequent to September 30, 2003 have been
reclassified to held for sale on the accompanying condensed consolidated balance sheet as of September 30, 2003 and are as follows:

ASSETSAccounts receivable, net

$
8,249Inventories


416Prepaid expenses and other


707Property and equipment, net


1,827Other intangible assets, net


14,056Goodwill, net


7,517Other non-current assets


1,852Assets held for sale

$
34,624LIABILITIESAccounts payable

$
2,442Accrued expenses and other


5,869Deferred revenues


9,593Current maturities of long term debt


27Long term debt


41Other non-current liabilities


75Liabilities of businesses held for sale

$
18,047


Accounts
receivable, net, consist of the following:

September 30,
2003

December 31,
2002Accounts Receivable

$
192,630

$
246,234Less: Allowance for doubtful accounts


11,633


17,629Allowance for returns and rebates


7,670


9,428$
173,327

$
219,177


Inventories
consist of the following:

September 30,
2003

December 31,
2002Finished goods

$
9,329

$
9,420Work in process


3


73Raw materials


13,346


14,828$
22,678

$
24,321


13

---



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

SFAS 142
requires companies to continue to assess goodwill and indefinite lived intangible assets for impairment at least once a year subsequent to adoption. In addition, an
assessment is also required whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Due to the continued softness of the
business-to-business markets and the resultant reduced revenue of the related units, the Company performed an impairment test on the segment as of July 31, 2003, prior
to its annual testing date of October 31st. As a result, the Company recorded an impairment charge for PRIMEDIA Workplace Learning ("PWPL") within amortization expense of $19,768
related to the impairment of goodwill associated with PWPL. The results of this impairment test indicated that the carrying value of certain of PWPL's finite lived assets might not be
recoverable. Accordingly, impairment testing under SFAS 144 was undertaken resulting in an impairment charge of $727 relating to certain finite lived intangible assets of PWPL, which is
included in amortization expense in the condensed statements of consolidated operations for the three and nine months ended September 30, 2003. Any adjustment to these estimated
non-cash provisions will be recorded upon completion of the Company's annual impairment test in the fourth quarter of 2003. In the third quarter of 2002, impairment testing under
SFAS 144 resulted in impairments of $445 (Consumer segment of $364 and Business-to-Business segment of $81) included in depreciation for the three months ended
September 30, 2002 and $8,556 (Consumer segment of $8,045 and Business-to-Business segment of $511) and $13,400 (Consumer segment of $12,889 and Business-to-Business
segment of $511) included in amortization for the three and nine months ended September 30, 2002, respectively.

The
Company's SFAS 142 evaluations during the third quarter of 2003 have been performed utilizing a methodology consistent with the methodology used for the annual test, which
utilized both an income and market valuation approach, and contains reasonable and supportable assumptions and projections which reflect management's best estimate of projected future cash flows. The
Company's discounted cash flow valuation used a range of discount rates that represented the Company's weighted-average
cost of capital and included an evaluation of other companies in each reporting unit's industry. The assumptions utilized by the Company in the evaluations are consistent with those utilized in the
Company's annual planning process. If the assumptions and estimates underlying these goodwill and trademark impairment evaluations are not achieved, the ultimate amount of the impairment could be
adversely affected. Future impairment tests will be performed at least annually in conjunction with the Company's annual budgeting and forecasting process, with any impairment classified as an
operating expense.

Historically,
the Company did not need a valuation allowance for the portion of the net operating losses equal to the amount of tax-deductible goodwill and trademark
amortization expected to occur during the carryforward period of the net operating losses based on the timing of the reversal of these taxable temporary differences. As a result of the adoption of
SFAS 142, the reversal will not occur during the carryforward period of the net operating losses. Therefore, the Company recorded a non-cash deferred income tax expense of $52,000
on January 1, 2002 and $10,624 and $16,500 during the nine months ended September 30, 2003 and 2002, respectively, and $3,974 and $4,000 during the three months ended
September 30, 2003 and 2002, respectively, each of which would not have been required prior to the adoption of SFAS 142. Additionally, the $52,000 expense was reduced by a

14

---

$23,000
income tax benefit recorded in the third quarter of 2002 as a result of the goodwill and certain finite lived asset impairments recorded in 2002.

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

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

Nine Months Ended September 30, 2003Consumer
Segment

Business-to-
Business
Segment

TotalBalance as of January 1, 2003

$
830,748

$
141,791

$
972,539Impairment Charge





(19,768
)

(19,768
)Acquisitions and finalization of purchase price allocations(1)


1,905


414


2,319Goodwill written off related to the sale of businesses and other


(28,948
)

(397
)

(29,345
)Goodwill allocated to assets held for sale


(4,784
)

(2,733
)

(7,517
)Balance as of September 30, 2003

$
798,921

$
119,307

$
918,228


---

Intangible
assets subject to amortization consist of the following:

|                              |  |       |  | September 30, 2003 |         | December 31, 2002
|----------------------------- |  | ----- |  | ------------------ | ------- | -----------------
|
|Trademarks                    |  | 3     |  | $                  | 21,013  |                  
|Subscriber and customer lists |  | 2-20  |  |                    | 348,346 |                  
|Non-compete agreements        |  | 1-10  |  |                    | 140,091 |                  
|Trademark license agreements  |  | 2-15  |  |                    | 2,984   |                  
|Copyrights                    |  | 3-20  |  |                    | 20,550  |                  
|Databases                     |  | 2-12  |  |                    | 9,353   |                  
|Advertiser lists              |  | .5-20 |  |                    | 133,307 |                  
|Distribution agreements       |  | 1-7   |  |                    | 10,410  |                  
|Other                         |  | 1-5   |  |                    | 9,804   |                  
|                              |  |       |  |                    |         |                  
|                              |  |       |  | $                  | 695,858 |                  
|                              |  |       |  |                    |         |                  

Intangible
assets not subject to amortization had a net carrying value of $221,305 and $270,006 at September 30, 2003 and December 31, 2002, respectively, and consisted of
trademarks. Amortization expense for intangible assets still subject to amortization (excluding provision for impairment) was $24,544 and $39,251 for the nine months ended September 30, 2003
and 2002, respectively, and $7,739 and $12,433 for the three months ended September 30, 2003 and 2002, respectively. Amortization of deferred wiring costs of $5,939 and $8,349 for the nine
months ended September 30, 2003 and 2002, respectively, and $2,046 and $2,854 for the three months ended September 30, 2003 and 2002, respectively, has also been included in amortization
of intangible assets and other on the accompanying

15

---

condensed
statements of consolidated operations. At September 30, 2003, estimated future amortization expense of other intangible assets still subject to amortization, excluding deferred wiring
costs, is as follows: approximately $8,000 for the remaining three months of 2003 and approximately $18,000, $10,000, $7,000, $5,000 and $4,000 for 2004, 2005, 2006, 2007 and 2008, respectively.

During
the three months ended September 30, 2003, the Company recorded a charge of $1,816 related to the disposal of certain fixed assets in depreciation expense on the
accompanying condensed statement of operations.

Other
investments consist of the following:

September 30,
2003

December 31,
2002Cost method investments

$
3,210

$
18,706Equity method investments


2,007


2,562$
5,217

$
21,268


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

The
Company's investments in start-up and venture-stage companies in which the Company received equity in these entities (the "Investees") in exchange for advertising,
content licensing and other services totaled $810 (cost method investments) and $16,870 ($15,956 representing cost method investments and $914 representing equity method investments) at
September 30, 2003 and December 31, 2002, respectively. At September 30, 2003 and December 31, 2002, respectively, $42 and $4,963 relating to start-up
investments and venture stage companies are included as deferred revenues on the accompanying condensed consolidated balance sheets. This deferred revenue represents advertising, content licensing and
other services to be rendered by the Company in exchange for equity in these entities. The Company recognizes these amounts as revenue in accordance with the Company's revenue recognition policies.
The Company recorded revenue from these agreements of $248 and $5,590 for the nine months ended September 30, 2003 and 2002, respectively, and $99 and $1,059 for the three months ended
September 30, 2003 and 2002, respectively. The Company did not enter into such transactions in 2003.

At
December 31, 2002, the Company's PRIMEDIA Ventures investments were $350 (cost method investment). The Company's PRIMEDIA Ventures investment at September 30, 2003 was
nil.

The
Company's equity method investments consist primarily of an investment in the Gravity Games totaling $1,955 and $1,526 at September 30, 2003 and December 31, 2002,
respectively (see Note 16). In addition, the Company had other equity investments of $52 and $122 at September 30, 2003 and December 31, 2002, respectively. The Company has
retained a small interest in a previously divested business of $2,400 (cost method investment) at September 30, 2003 and December 31, 2002.

The
Company recorded $3,907 and $3,977 of equity method losses from Investees and other equity method investments, during the nine months ended September 30, 2003 and 2002,
respectively, and $2,050 and $1,004 for the three months ended September 30, 2003 and 2002, respectively. These equity method losses are included in other income (expense), net on the
accompanying condensed statements of consolidated operations.

16

---

Provision for the Impairment of Investments

Investments are continually reviewed by the Company for impairment whenever significant events occur, such as those affecting general market conditions or those
pertaining to a specific industry or an individual investment, which could result in the carrying value of an investment exceeding its fair value. If an investment is deemed to be other than
temporarily impaired, its carrying value will be reduced to fair market value. During the nine months ended September 30, 2003 and 2002, the Company recorded a provision for impairment of its
investments in certain Investees of $8,975 and $12,404, respectively, and for the three months ended September 30, 2003 and 2002, $1,248 and $7,032, respectively. The Company also recorded an
additional provision for impairment of its PRIMEDIA Ventures investments of $3,008 and $1,108 for the nine and three months ended September 30, 2002, respectively. The Company recorded
impairments on these investments as the decline in the value was deemed other than temporary. In determining such impairments, the Company considered the impact of the Investees' current year
performance and future business plans, and in certain circumstances, the Company utilized the results of work performed by independent valuation specialists.

Sale of Investments

For the nine months ended September 30, 2003, the Company sold certain PRIMEDIA Ventures and assets-for-equity investments for
proceeds of $2,178 and realized a gain on these sales of $443. For the nine months ended September 30, 2002, the Company sold certain PRIMEDIA Ventures investments for proceeds of $323 and
realized a gain on these sales of $28. These gains are included in other income (expense), net, on the condensed statements of consolidated operations.

Other
non-current assets consist of the following:

September 30,
2003

December 31,
2002Deferred financing costs, net

$
27,884

$
18,144Deferred wiring and installation costs, net


3,759


8,468Direct-response advertising costs, net


10,535


14,709Video mastering and programming costs, net


16,282


13,791Other


2,624


3,059$
61,084

$
58,171


The
deferred financing costs at September 30, 2003 include $7,966 of issuance costs related to the Series D, F, and H Exchangeable Preferred Stock which are now
collectively described as shares subject to mandatory redemption (see Note 9). Deferred financing costs are net of accumulated amortization of $17,402 and $12,923 at September 30, 2003
and December 31, 2002, respectively. The deferred wiring and installation costs are net of accumulated amortization of $75,002 and $69,063 at September 30, 2003 and December 31,
2002, respectively. Direct-response advertising costs are net of accumulated amortization of $54,073 and $81,621 at September 30, 2003 and December 31, 2002, respectively. Video
mastering and programming costs are net of accumulated amortization of $47,694 and $42,223 at September 30, 2003 and December 31, 2002, respectively.

17

---

Long-term
debt consists of the following:

September 30,
2003

December 31,
2002Borrowings under the bank credit facility

$
587,819

$
640,731101/4% Senior Notes due 2004





84,17581/2% Senior Notes due 2006





291,00775/8% Senior Notes due 2008


225,408


225,31287/8% Senior Notes due 2011


469,685


469,2998% Senior Notes due 2013


300,000


1,582,912


1,710,524Obligation under capital leases


25,026


24,8141,607,938


1,735,338Less: Current maturities of long-term debt


9,276


7,661$
1,598,662

$
1,727,677


Bank Credit Facility

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

Substantially
all proceeds from the sale of businesses and other investments were used to pay down borrowings under the bank credit facility agreement. Amounts under the bank credit
facility may be reborrowed and used for general corporate and working capital purposes as well as to finance certain future acquisitions. In the second quarter of 2003, the Company made voluntary
pre-payments towards the term loans A and B and a voluntary permanent reduction of the revolving loan commitment in the amounts of $5,000, $21,000 and $24,000, respectively. The bank
credit facility consists of the following at September 30, 2003:

|                              |  | Revolver |          | Term A |   | Term B  |   | Total |         
|----------------------------- |  | -------- | -------- | ------ | - | ------- | - | ----- | --------
|Bank Credit Facility          |  | $        | 427,000  |        | $ | 90,000  |   | $     | 374,819 
|Borrowings Outstanding        |  |          | (123,000 | )      |   | (90,000 | ) |       | (374,819
|Letters of Credit Outstanding |  |          | (19,668  | )      |   |        |   |       |        
|                              |  |          |          |        |   |         |   |       |         
|Unused Bank Commitments       |  | $        | 284,332  |        | $ |        |   | $     |        
|                              |  |          |          |        |   |         |   |       |         

With
the exception of the term loan B, the amounts borrowed bear interest, at the Company's option, at either the base rate plus an applicable margin ranging from 0.125% to 1.5% or the
Eurodollar Rate plus an applicable margin ranging from 1.125% to 2.5%. The term loan B bears interest at the base rate plus 1.75% or the Eurodollar Rate plus 2.75%. At September 30, 2003 and
December 31, 2002, the weighted average variable interest rate on all outstanding borrowings under the bank credit facility was 3.7% and 4.4%, respectively.

18

---

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

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

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

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



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

75/8% Senior Notes.Interest is payable semi-annually in April and October at the annual rate of
75/8%. The 75/8% Senior Notes mature on April 1, 2008, with no sinking fund requirements. The 75/8% Senior Notes are redeemable in whole or in part,
at the option of the Company, at 103.813% as of April 1, 2003 with annual reductions to 100% in 2006 and thereafter, plus accrued and unpaid interest. The unamortized discount for these notes
totaled $707 and $803 at September 30, 2003 and December 31, 2002, respectively.

19

---

87/8% Senior Notes.Interest is payable semi-annually in May and November at an annual rate of
87/8%. The 87/8% Senior Notes mature on May 15, 2011, with no sinking fund requirements. Beginning in 2006, the 87/8% Senior Notes are redeemable in
whole or in part at the option of the Company, at 104.438% with annual reductions to 100% in 2009 and thereafter, plus accrued and unpaid interest. The unamortized discount for these notes totaled
$5,815 and $6,201 at September 30, 2003 and December 31, 2002, respectively.

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

20

---

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

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

Senior Note Redemptions

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

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

Covenant Compliance

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

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

The
Company is herewith providing detailed information and disclosure as to the methodology used in determining compliance with the leverage ratio in the bank credit facility agreement.
The purpose of providing this information is to give more clarity to the substantial amount of disclosure already provided. Under its bank credit facility and Senior Note agreements, the Company is
allowed to designate certain businesses as unrestricted subsidiaries to the extent that the value of those businesses does not exceed the permitted amounts, as defined in these agreements. The Company
has designated certain of its businesses as unrestricted (the "Unrestricted Group"), which primarily represent Internet businesses, trademark and content licensing and service companies, new launches
(including traditional start-ups), other properties under evaluation for turnaround or shutdown and foreign subsidiaries. Except for those specifically designated by the Company as
unrestricted, all businesses of the Company are restricted (the "Restricted Group"). Indebtedness under the bank credit facility and Senior Note agreements is guaranteed by each of the Company's
domestic subsidiaries in the Restricted Group in

21

---

accordance
with the provisions and limitations of the Company's bank credit facility and Senior Note agreements. The guarantees are full, unconditional and joint and several. The Unrestricted Group
does not guarantee the bank credit facility or Senior Notes. For purposes of determining compliance with certain financial covenants under the Company's bank credit facility agreement, the
Unrestricted Group's results (positive or negative) are not reflected in the Consolidated EBITDA of the Restricted Group which as defined in the bank credit facility agreement excludes losses of the
Unrestricted Group, non-cash charges and restructuring charges and is adjusted primarily for the trailing four quarters results of acquisitions and divestitures and estimated savings for
acquired businesses. The Company has established intercompany arrangements that reflect transactions, such as leasing, licensing, sales and related services and cross-promotion, between Company
businesses in the Restricted Group and the Unrestricted Group, which management believes are on an arms length basis and as permitted by the bank credit facility and Senior Note agreements. These
intercompany arrangements afford strategic benefits across the Company's properties and, in particular, enable the Unrestricted Group to utilize established brands and content, promote brand awareness
and increase traffic and revenue to the Company's new media properties. For company-wide consolidated financial reporting, these intercompany transactions are eliminated in consolidation.

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

|Twelve Months Ended September 30, |  | Debt |           | Capital Lease
Obligations |   | Total 
|--------------------------------- |  | ---- | --------- | ------------------------- | - | ------
|2004                              |  | $    | 3,825     |                           | $ | 5,451 
|2005                              |  |      | 26,325    |                           |   | 2,901 
|2006                              |  |      | 26,325    |                           |   | 1,587 
|2007                              |  |      | 26,325    |                           |   | 1,646 
|2008                              |  |      | 374,733   |                           |   | 1,772 
|Thereafter                        |  |      | 1,125,379 |                           |   | 11,669
|                                  |  |      |           |                           |   |       
|                                  |  | $    | 1,582,912 |                           | $ | 25,026
|                                  |  |      |           |                           |   |       

In
May 2003, the FASB issued SFAS 150, which establishes standards for classifying and measuring certain financial instruments that have characteristics of both liabilities
and equity as liabilities (or as assets in some circumstances). SFAS 150 must be applied immediately to instruments entered into or modified after May 31, 2003, and otherwise is
effective at the beginning of the first interim period beginning after June 15, 2003. The Company prospectively adopted SFAS 150 on July 1, 2003, which requires the Company to
classify as long-term liabilities ($477,059 at September 30, 2003) its Series D, F, and H Exchangeable Preferred Stock. Such stock are now collectively described as "shares
subject to mandatory redemption" on the accompanying condensed consolidated balance sheets. Each series individually is legally known as Exchangeable Preferred Stock. Related issuance costs of $7,966
were required to be classified as other non-current assets on the accompanying condensed consolidated balance sheet at September 30, 2003. These issuance costs were included in
Exchangeable Preferred Stock at December 31, 2002. In addition, SFAS 150 requires that the related dividends on these shares be described as "interest on shares subject to mandatory
redemption" and included in loss from continuing operations for the nine and three month periods ended September 30, 2003, whereas previously they were presented below net income (loss) as
preferred stock dividends. The adoption of SFAS 150 increased the loss from continuing operations for the nine and three month periods ended September 30, 2003 by $11,008. If
SFAS 150 was adopted on July 1, 2002, loss from continuing operations would have increased by $12,016 for the comparable periods of 2002.

22

---

Shares
subject to mandatory redemption consists of the following:

September 30,
2003

December 31,
2002$10.00 Series D Exchangeable Preferred Stock

$
169,987

$
174,531$9.20 Series F Exchangeable Preferred Stock


95,333


99,984$8.625 Series H Exchangeable Preferred Stock


211,739


209,950$
477,059

$
484,465


$10.00 Series DExchangeable Preferred Stock

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

$9.20 Series FExchangeable Preferred Stock

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

$8.625 Series HExchangeable Preferred Stock

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

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

During
the nine months ended September 30, 2002, the Company exchanged $23,013 liquidation value of Series D Exchangeable Preferred Stock for 4,467,033 shares of common
stock, $22,667 liquidation value of Series F Exchangeable Preferred Stock for 4,385,222 shares of common stock and $29,761 liquidation value of Series H Exchangeable Preferred Stock for
5,808,050 shares of common stock. The cumulative gain on these exchanges of $31,001 and $2,700 for the nine and three months ended
September 30, 2002, respectively, are included in the calculation of basic and diluted loss applicable to common shareholders per common share on the condensed statements of consolidated
operations for their respective periods. The cumulative gain on these exchanges is included as a component of additional paid in capital on the accompanying condensed consolidated balance sheets.

During
October 2003, the Company exchanged $2,500 liquidation value of Series D Exchangeable Preferred Stock for 832,627 shares of common stock.

23

---

Each
series of Exchangeable Preferred Stock may be redeemed, in whole or in part, at the option of the Company, at specified redemption prices plus accrued and unpaid dividends.

As
of September 30, 2003 and December 31, 2002, the Company had $159,537 and $145,351 of Series J Convertible Preferred Stock outstanding, respectively. These shares
are convertible at the option of the holder after one year from the date of issuance, into approximately 17,900,000 shares of the Company's common stock (excluding dividends) at a conversion price of
$7 per share, subject to adjustment. Dividends on the Series J Convertible Preferred Stock accrue at an annual rate of 12.5% and are payable quarterly in-kind. The Company paid
dividends-in-kind of 112,796 and 38,761 shares of Series J Convertible Preferred Stock valued at $14,099 and $4,845 during the nine and three months ended
September 30, 2003, respectively, and 99,733 and 34,272 shares of Series J Convertible Preferred Stock valued at $12,466 and $4,284 during the nine and three months ended
September 30, 2002, respectively. The Company has the option to redeem any or all of the shares of the Series J Convertible Preferred Stock at any time for cash at 100% of the
liquidation preference of each share being redeemed. On any dividend payment date, the Company has the option to exchange, in whole but not in part, the Series J Convertible Preferred Stock
into 12.5% Class J Subordinated Notes. The Company's ability to redeem or exchange the Series J Convertible Preferred Stock into debt is subject to the approval of a majority of the
independent directors.

During
the second quarter of 2003, the Company exchanged $7,000 liquidation value of Series D Exchangeable Preferred Stock for 2,223,334 shares of common stock, $7,000 liquidation
value of Series F Exchangeable Preferred Stock for 2,124,166 shares of common stock, and $2,350 liquidation value of Series H Exchangeable Preferred Stock for 693,250 shares of common
stock. The Company repurchased these 5,040,750 shares of common stock for $3.00 per share or $15,123.

During
the first quarter of 2003, the Company exchanged $6,150 of Series H Exchangeable Preferred Stock for 2,860,465 shares of common stock. The Company repurchased these
2,860,465 shares of common stock for $1.48 per share or $4,244.

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

In
connection with the merger with About in 2001, outstanding options to purchase shares of About common stock held by certain individuals were converted into 13,383,579 options to
purchase shares of PRIMEDIA common stock. The fair value of the vested and unvested options issued by PRIMEDIA was $102,404 determined using a Black Scholes pricing model. On February 28, 2001,
the date that the Company granted these unvested replacement options, the intrinsic value of the "in-the-money" unvested replacement options was $19,741. Based on a
four-year service period from the original date that these options were granted, the Company classified $7,592 as unearned compensation relating to unvested options. The remaining $12,149
is included within the total purchase price. The Company recorded non-cash compensation related to the amortization of the intrinsic value of unvested
"in-the-money" options of $1,025 and $2,144 during the nine months ended September 30, 2003 and 2002, respectively, and $259 and $631 for the three months ended
September 30, 2003 and 2002, respectively. As of September 30, 2003, a number of these options have been forfeited or expired

24

---

unexercised.
Most of these remaining outstanding options have an exercise price which exceeded the Company's share price on September 30, 2003.

Also
in connection with the About merger, certain senior executives were granted 2,955,450 shares of restricted PRIMEDIA common stock and options to purchase 3,482,300 shares of PRIMEDIA
common stock. These shares and options vest at a rate of 25% per year and are subject to the executives' continued employment. Related non-cash compensation of $1,680 and $3,229 was
recorded for the nine months ended September 30, 2003 and 2002, respectively, and $470 and $874 for the three months ended September 30, 2003 and 2002, respectively. This
non-cash compensation reflects pro rata vesting on a graded basis.

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

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

During
the nine and three months ended September 30, 2003, the Company recognized $88 and $41, respectively, of non-cash compensation related to the Company's grant of
shares of restricted common stock to certain employees in exchange for their options in the Company's Internet subsidiaries. During the nine and three months ended September 30, 2002, the
Company recorded non-cash compensation of $903 and $301, respectively, related to the issuance of stock in connection with an acquisition and a non-recurring charge of $77 and
$42, respectively, related to certain non-recurring compensation arrangements with certain senior executives. In the third quarter of 2002, the Company granted 1,800,000 options to
purchase the Company's common stock to Capstone Consulting LLC for services rendered. Related non-cash compensation of $990, determined using the Black Scholes pricing model, was recorded
for the nine and three months ended September 30, 2002.

For
the nine months ended September 30, 2003 and 2002, non-cash compensation totaled $2,793 and $7,266, respectively, and $770 and $2,796 for the three months ended
September 30, 2003 and 2002, respectively. The non-recurring charges totaled $3,263 and $42 for the nine and three months ended September 30, 2002, respectively.

Senior Executive Severance

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

Provision for Severance, Closures and Restructuring Related Costs

During 2003 and 2002, the Company announced additional cost initiatives that would continue to implement and expand upon the cost initiatives enacted during 2001
and 2000. These initiatives were

25

---

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

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

|                                                 |  | Liability as of
January 1, 2003 |        | Net Provision
for the
Nine Months Ended
September 30, 2003 |   | Payments
during the
Nine Months Ended
September 30, 2003 |  | Liability as of
September 30, 2003
|------------------------------------------------ |  | ------------------------------- | ------ | ---------------------------------------------------------- | - | -------------------------------------------------------- |  | ----------------------------------
|Employee related termination costs               |  | $                               | 3,733  |                                                            | $ | 3,348                                                    |  | $                                 
|Termination of contracts                         |  |                                 | 575    |                                                            |   | 16                                                       |  |                                   
|Termination of leases related to office closures |  |                                 | 41,366 |                                                            |   | 108                                                      |  |                                   
|                                                 |  |                                 |        |                                                            |   |                                                          |  |                                   
|Total severance and closures                     |  | $                               | 45,674 | (1)                                                        | $ | 3,472                                                    |  | $                                 
|                                                 |  |                                 |        |                                                            |   |                                                          |  |                                   

|                                                          |  | Liability as of
January 1, 2002 |        | Net Provision for the Nine Months Ended September 30, 2002 |   | Payments
during the
Nine Months Ended
September 30, 2002 |   | Liability as of
September 30, 2002
|--------------------------------------------------------- |  | ------------------------------- | ------ | ---------------------------------------------------------- | - | -------------------------------------------------------- | - | ----------------------------------
|Severance and closures:                                   |  |                                 |        |                                                            |   |                                                          |   |                                   
|Employee related termination costs                        |  | $                               | 8,011  |                                                            | $ | 5,758                                                    |   | $                                 
|Termination of contracts                                  |  |                                 | 2,243  |                                                            |   | (137                                                     | ) |                                   
|Termination of leases related to office closures          |  |                                 | 12,517 |                                                            |   | 20,452                                                   |   |                                   
|                                                          |  |                                 |        |                                                            |   |                                                          |   |                                   
|                                                          |  |                                 | 22,771 |                                                            |   | 26,073                                                   |   |                                   
|                                                          |  |                                 |        |                                                            |   |                                                          |   |                                   
|Restructuring related:                                    |  |                                 |        |                                                            |   |                                                          |   |                                   
|Relocation and other employee costs                       |  |                                 |       |                                                            |   | 765                                                      |   |                                   
|                                                          |  |                                 |        |                                                            |   |                                                          |   |                                   
|                                                          |  |                                 |       |                                                            |   | 765                                                      |   |                                   
|                                                          |  |                                 |        |                                                            |   |                                                          |   |                                   
|Total severance, closures and restructuring related costs |  | $                               | 22,771 | (1)                                                        | $ | 26,838                                                   |   | $                                 
|                                                          |  |                                 |        |                                                            |   |                                                          |   |                                   

---

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

26

---

Included in the net provision for the nine month period ended September 30, 2003 are reversals of $2,011 of previously recorded accruals primarily due to continuing
re-evaluation of lease assumptions.

As
a result of the implementation of these plans, the Company has closed and consolidated in excess of twenty office locations and has notified a total of 1,956 individuals that they
would be terminated under these plans, of which 200 and 41 individuals were notified during the nine and three month periods ended September 30, 2003, respectively. As of September 30,
2003, all of those individuals have been terminated.

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

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

Nine Months Ended September 30,2003

2002Net income (loss)

$
29,830

$
(526,534
)Other comprehensive income:Change in fair value of derivative instruments





1,897Foreign currency translation adjustments


24


126Total comprehensive income (loss)

$
29,854

$
(524,511
)


Comprehensive
income (loss) for the three months ended September 30, 2003 and 2002 equals net income (loss).

Loss
per share for the nine and three month periods ended September 30, 2003 and 2002 has been determined based on net loss after preferred stock dividends, related accretion,
gain on the exchange of exchangeable preferred stock for common shares and in 2002 the issuance of contingent warrants associated with the Series J Convertible Preferred Stock (see
Note 10) divided by the weighted average number of common shares outstanding for all periods presented. The effect of the assumed exercise of non-qualified stock options and
warrants and the conversion of convertible preferred stock was not included in the computation of per share amounts because the effect of inclusion would be antidilutive. If the Company had recognized
income from continuing operations for the nine and three months ended September 30, 2003, shares attributable to these antidilutive instruments would have increased diluted shares outstanding
by 1,805,251 and 1,718,673 shares, respectively.

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

During
2002, PRIMEDIA contributed the Gravity Games, acquired from EMAP, to a limited liability company (the "LLC") formed jointly by PRIMEDIA and Octagon Marketing and Athlete
Representation, Inc. (now known as Octagon, Inc.) ("Octagon"), with each party owning a 50% interest. The LLC entered into an agreement with NBC Sports, a division of National
Broadcasting Company, Inc. ("NBC"), which required the LLC to pay specified fees to NBC for certain production services performed by NBC and network air time provided by NBC during 2002 and
2003. Under the

27

---

terms
of the agreement and a related guarantee, PRIMEDIA could be responsible for the payment of a portion of such fees in the event the LLC failed to satisfy its payment obligations to NBC.

During
the third quarter of 2003, the Company contributed $2,500 to the LLC, $1,100 of which was used to fund the LLC's obligations to NBC. As of September 30, 2003, the LLC was
scheduled to make $2,025 of additional payments to NBC, $1,013 of which could be required to be contributed by the Company. In October 2003, the Company and Octagon each contributed an
additional $850 to the LLC for a total of $1,700. The LLC used $438 of each party's payment, for a total of $876, to pay NBC, leaving $1,150 still due to NBC, of which the Company could be required to
pay up to $575. The Company has accrued for this $850 payment in accrued expenses and other on the condensed consolidated balance sheet at September 30, 2003. The asset representing the
Company's equity investment in the LLC as well as the Company's share of the LLC's losses are reflected in the Company's condensed consolidated financial statements. The Company's investment in the
LLC of $1,955 and $1,526 is reflected as a component of other investments on the accompanying condensed consolidated balance sheets at September 30, 2003 and December 31, 2002,
respectively. The Company's share of the LLC's losses of $2,921 and $1,942 are reflected as a component of other, net on the accompanying condensed statements of consolidated operations for the nine
and three months ended September 30, 2003, respectively. In 2002, the Company's share of the LLC's losses were $184 for the nine and three months ended September 30, 2002.

Pursuant
to a restructuring agreement entered into between PRIMEDIA and Octagon in August 2003, PRIMEDIA's interest in the LLC terminated effective October 31, 2003 and
PRIMEDIA has ended its direct involvement in the Gravity Games with the conclusion of the September 2003 event. Going forward, PRIMEDIA is entitled to receive, among other things, a share of
accumulated net profit (as defined) generated by the LLC during the period commencing October 31, 2003 and ending on the earlier of (i) October 31, 2006 and (ii) the date
of the sale of all or substantially all of the capital stock or assets of the LLC. Additionally, as a result of PRIMEDIA's exit from the LLC, the Company is entitled to 50% of certain assets and
liabilities of the LLC as of October 31, 2003, which will result in a cash settlement between the Company and the LLC.

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

The
Company's operations have been classified into two business segments: Consumer and Business-to-Business. PRIMEDIA groups its businesses into these two
segments based on the nature of the products and services they provide and the type or class of customer for these products or services. The Company's Consumer segment produces and distributes
magazines, guides, videos and Internet products for consumers in various niche markets. The Company's Business-to-Business segment produces and distributes content via
magazines, books, videos, exhibits, databases and Internet products to business professionals in such fields as communications, agriculture, professional services, media, transportation and
healthcare. These segment results are regularly reviewed by the Company's chief operating decision-maker and the remainder of the executive team to make decisions about resources to be allocated to
each segment and to assess its performance. The information presented below includes certain intersegment transactions and is therefore, not necessarily indicative of the results had the operations
existed as stand-alone businesses. Intersegment eliminations include intersegment content and brand licensing, advertising and other services, which are billed at what management believes are
prevailing market rates. These intersegment transactions, which represent transactions between operating units in different business segments, are eliminated in consolidation. Intersegment
eliminations and other includes eliminations of $4,182 and $3,112 related to the Consumer segment and $7 and $1,907 related to the Business-to-Business segment for the nine
months ended September 30,

28

---

2003
and 2002, respectively. Intersegment eliminations and other includes eliminations of $1,413 and $1,064 related to the Consumer segment and $5 and $604 related to the
Business-to-Business segment for the three months ended September 30, 2003 and 2002, respectively. For 2003, the Company has eliminated intrasegment transactions within
the segment results and has restated the prior periods accordingly. These intrasegment transactions totaled $47,461 and $88,437 for the nine months ended September 30, 2003 and 2002,
respectively, and $14,219 and $26,613 for the three months ended September 30, 2003 and 2002, respectively.

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

Information
as to the operations of the Company in different business segments is set forth below based on the nature of the targeted audience. Corporate represents items not allocated
to other business segments. PRIMEDIA evaluates performance based on several factors, of which the primary financial measure is segment earnings before interest, taxes, depreciation, amortization and
other (income) charges ("Segment EBITDA"). Other charges include severance related to separated senior executives, non-cash compensation and non-recurring charges, provision
for severance, closures and restructuring related costs and (gain) loss on sale of businesses and other, net.

|                      |                                     | Nine Months Ended
September 30, |         | Three Months Ended
September 30, |  
|--------------------- | ----------------------------------- | ------------------------------- | ------- | -------------------------------- | -
|
|Sales, Net:           |                                     |                                 |         |                                  |  
|Consumer              |                                     | $                               | 801,999 |                                  | $
|Business-to-Business  |                                     |                                 | 198,466 |                                  |  
|                      | Intersegment eliminations and other |                                 |         | (4,165                           | )
|Other:                |                                     |                                 |         |                                  |  
|                      |                                     | Non-Core Businesses             |         |                                  | 
|                      |                                     |                                 |         |                                  |  
|Total                 |                                     | $                               | 996,300 |                                  | $
|                      |                                     |                                 |         |                                  |  
|Segment EBITDA(1)(2): |                                     |                                 |         |                                  |  
|Consumer              |                                     | $                               | 166,383 |                                  | $
|Business-to-Business  |                                     |                                 | 14,916  |                                  |  
|Other:                |                                     |                                 |         |                                  |  
|                      | Corporate                           |                                 |         | (21,458                          | )
|                      | Non-Core Businesses                 |                                 |         |                                 |  
|                      |                                     |                                 |         |                                  |  
|Total                 |                                     | $                               | 159,841 |                                  | $
|                      |                                     |                                 |         |                                  |  

29

---

The
following is a reconciliation of Segment EBITDA to loss from continuing operations before income tax expense:

|                                                                  |                                                       | Nine Months Ended
September 30, |         | Three Months Ended
September 30, |  
|----------------------------------------------------------------- | ----------------------------------------------------- | ------------------------------- | ------- | -------------------------------- | -
|
|Total Segment EBITDA(1)(2)                                        |                                                       | $                               | 159,841 |                                  | $
|Depreciation of property and equipment                            |                                                       |                                 | (42,718 | )                                |  
|Amortization of intangible assets and other                       |                                                       |                                 | (50,978 | )                                |  
|Severance related to separated senior executives                  |                                                       |                                 | (5,576  | )                                |  
|Non-cash compensation and non-recurring charges                   |                                                       |                                 | (2,793  | )                                |  
|Provision for severance, closures and restructuring related costs |                                                       |                                 | (3,472  | )                                |  
|Gain (loss) on sale of businesses and other, net                  |                                                       |                                 | (1,630  | )                                |  
|                                                                  |                                                       |                                 |         |                                  |  
|Operating income                                                  |                                                       |                                 | 52,674  |                                  |  
|Other income (expense):                                           |                                                       |                                 |         |                                  |  
|                                                                  | Provision for impairment of investments               |                                 |         | (8,975                           | )
|                                                                  | Interest expense                                      |                                 |         | (95,552                          | )
|                                                                  | Interest on shares subject to mandatory redemption(3) |                                 |         | (11,008                          | )
|                                                                  | Amortization of deferred financing charges            |                                 |         | (2,360                           | )
|                                                                  | Other income (expense), net                           |                                 |         | (3,715                           | )
|                                                                  |                                                       |                                 |         |                                  |  
|Loss from continuing operations before income tax expense         |                                                       | $                               | (68,936 | )                                | $
|                                                                  |                                                       |                                 |         |                                  |  

---

30

---



The
information that follows presents condensed consolidating financial information as of September 30, 2003 and December 31, 2002 and for the nine months ended
September 30, 2003 and 2002 for a) PRIMEDIA Inc. (as the Issuer), b) the guarantor subsidiaries, which are with limited exceptions, the restricted subsidiaries, and which
represent the core PRIMEDIA businesses and exclude investment and other development properties included in the unrestricted category, c) the non-guarantor subsidiaries (primarily
representing Internet assets and businesses, new launches and other properties under evaluation for turnaround or shutdown and foreign subsidiaries), which are with limited exceptions, the
unrestricted subsidiaries, d) elimination entries and e) the Company on a consolidated basis.

The
condensed consolidating financial information includes certain allocations of revenues, expenses, assets and liabilities based on management's best estimates, which are not
necessarily indicative of the financial position, results of operations and cash flows that these entities would have achieved on a stand-alone basis and should be read in conjunction with the
consolidated financial statements of the Company. The intercompany balances in the accompanying condensed consolidating financial statements include cash management activities, management fees, cross
promotional activities and other intercompany charges between Corporate and the business units and among the business units. The transactions described above are billed, by the Company, at what the
Company believes are market rates. All intercompany related activities are eliminated in consolidation.

31

---



PRIMEDIA INC. AND SUBSIDIARIES        CONDENSED CONSOLIDATING BALANCE SHEET        (UNAUDITED)        September 30, 2003  (dollars in thousands)

|                                           |                                         | Primedia Inc.                                |                                | Guarantor
Subsidiaries |            | Non-Guarantor
Subsidiaries |           | Eliminations |            | Primedia Inc.
and
Subsidiaries |           
|------------------------------------------ | --------------------------------------- | -------------------------------------------- | ------------------------------ | ---------------------- | ---------- | -------------------------- | --------- | ------------ | ---------- | ------------------------------ | ----------
|ASSETS                                     |                                         |                                              |                                |                        |            |                            |           |              |            |                                |           
|Current assets:                            |                                         |                                              |                                |                        |            |                            |           |              |            |                                |           
|                                           | Cash and cash equivalents               |                                              | $                              | 4,866                  |            | $                          | 12,760    |              | $          | 755                            |           
|                                           | Accounts receivable, net                |                                              |                                | 8                      |            |                            | 155,277   |              |            | 18,042                         |           
|                                           | Intercompany receivables                |                                              |                                | 1,496,871              |            |                            | 671,346   |              |            | (42,555                        | )         
|                                           | Inventories                             |                                              |                                |                       |            |                            | 21,837    |              |            | 841                            |           
|                                           | Prepaid expenses and other              |                                              |                                | 3,464                  |            |                            | 25,608    |              |            | 10,198                         |           
|                                           | Assets held for sale                    |                                              |                                |                       |            |                            | 26,421    |              |            | 8,203                          |           
|                                           |                                         |                                              |                                |                        |            |                            |           |              |            |                                |           
|                                           |                                         | Total current assets                         |                                |                        | 1,505,209  |                            |           | 913,249      |            |                                | (4,516    
|Property and equipment, net                |                                         |                                              | 7,385                          |                        |            | 76,958                     |           |              | 21,935     |                                |           
|Investment in and advances to subsidiaries |                                         |                                              | 484,814                        |                        |            |                           |           |              |           |                                |           
|Other intangible assets, net               |                                         |                                              |                               |                        |            | 272,249                    |           |              | 4,728      |                                |           
|Goodwill, net                              |                                         |                                              |                               |                        |            | 877,048                    |           |              | 41,180     |                                |           
|Other investments                          |                                         |                                              | 3,210                          |                        |            | 2,007                      |           |              |           |                                |           
|Other non-current assets                   |                                         |                                              | 10,452                         |                        |            | 35,870                     |           |              | 14,762     |                                |           
|                                           |                                         |                                              |                                |                        |            |                            |           |              |            |                                |           
|                                           |                                         | $                                            | 2,011,070                      |                        | $          | 2,177,381                  |           | $            | 78,089     |                                | $         
|                                           |                                         |                                              |                                |                        |            |                            |           |              |            |                                |           
|LIABILITIES AND SHAREHOLDERS' DEFICIENCY   |                                         |                                              |                                |                        |            |                            |           |              |            |                                |           
|Current liabilities:                       |                                         |                                              |                                |                        |            |                            |           |              |            |                                |           
|                                           | Accounts payable                        |                                              | $                              | 5,736                  |            | $                          | 51,249    |              | $          | 12,289                         |           
|                                           | Intercompany payables                   |                                              |                                | 790,350                |            |                            | 811,748   |              |            | 523,564                        |           
|                                           | Accrued interest payable                |                                              |                                | 37,730                 |            |                            |          |              |            |                               |           
|                                           | Accrued expenses and other              |                                              |                                | 86,427                 |            |                            | 100,102   |              |            | 13,104                         |           
|                                           | Deferred revenues                       |                                              |                                | 30                     |            |                            | 148,847   |              |            | 9,935                          |           
|                                           | Current maturities of long-term debt    |                                              |                                | 3,953                  |            |                            | 5,323     |              |            |                               |           
|                                           | Liabilities of businesses held for sale |                                              |                                |                       |            |                            | 14,142    |              |            | 3,905                          |           
|                                           |                                         |                                              |                                |                        |            |                            |           |              |            |                                |           
|                                           |                                         | Total current liabilities                    |                                |                        | 924,226    |                            |           | 1,131,411    |            |                                | 562,797   
|Long-term debt                             |                                         |                                              | 1,579,248                      |                        |            | 19,414                     |           |              |           |                                |           
|Shares subject to mandatory redemption     |                                         |                                              | 477,059                        |                        |            |                           |           |              |           |                                |           
|Intercompany notes payable                 |                                         |                                              |                               |                        |            | 2,213,128                  |           |              | 775,841    |                                |           
|Deferred revenues                          |                                         |                                              |                               |                        |            | 34,544                     |           |              |           |                                |           
|Deferred income taxes                      |                                         |                                              | 60,124                         |                        |            |                           |           |              |           |                                |           
|Other non-current liabilities              |                                         |                                              | 2,409                          |                        |            | 22,553                     |           |              | (63        | )                              |           
|                                           |                                         |                                              |                                |                        |            |                            |           |              |            |                                |           
|                                           | Total liabilities                       |                                              |                                | 3,043,066              |            |                            | 3,421,050 |              |            | 1,338,575                      |           
|                                           |                                         |                                              |                                |                        |            |                            |           |              |            |                                |           
|Shareholders' deficiency:                  |                                         |                                              |                                |                        |            |                            |           |              |            |                                |           
|                                           |                                         | Series J convertible preferred stock         |                                |                        | 159,537    |                            |           |             |            |                                |          
|                                           |                                         | Common stock                                 |                                |                        | 2,682      |                            |           |             |            |                                |          
|                                           |                                         | Additional paid-in capital                   |                                |                        | 2,337,480  |                            |           |             |            |                                |          
|                                           |                                         | Accumulated deficit                          |                                |                        | (3,451,755 | )                          |           | (1,243,433   | )          |                                | (1,260,499
|                                           |                                         | Accumulated other comprehensive income(loss) |                                |                        | (223       | )                          |           | (236         | )          |                                | 13        
|                                           |                                         | Unearned compensation                        |                                |                        | (2,155     | )                          |           |             |            |                                |          
|                                           |                                         | Common stock in treasury, at cost            |                                |                        | (77,562    | )                          |           |             |            |                                |          
|                                           |                                         |                                              |                                |                        |            |                            |           |              |            |                                |           
|                                           |                                         |                                              | Total shareholders' deficiency |                        |            | (1,031,996                 | )         |              | (1,243,669 | )                              |           
|                                           |                                         |                                              |                                |                        |            |                            |           |              |            |                                |           
|                                           |                                         | $                                            | 2,011,070                      |                        | $          | 2,177,381                  |           | $            | 78,089     |                                | $         
|                                           |                                         |                                              |                                |                        |            |                            |           |              |            |                                |           

32

---



PRIMEDIA INC. AND SUBSIDIARIES        CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS        (UNAUDITED)        For the Nine Months Ended September 30, 2003  (dollars in
thousands)

|                                                                   |                                                                                               | Primedia Inc. |         | Guarantor
Subsidiaries |   | Non-Guarantor
Subsidiaries |          | Eliminations |         | Primedia Inc.
and
Subsidiaries |  
|------------------------------------------------------------------ | --------------------------------------------------------------------------------------------- | ------------- | ------- | ---------------------- | - | -------------------------- | -------- | ------------ | ------- | ------------------------------ | -
|Sales, net                                                         |                                                                                               | $             | 191     |                        | $ | 847,064                    |          | $            | 149,045 |                                | $
|Operating costs and expenses:                                      |                                                                                               |               |         |                        |   |                            |          |              |         |                                |  
|                                                                   | Cost of goods sold                                                                            |               |         |                       |   |                            | 149,791  |              |         | 65,316                         |  
|                                                                   | Marketing and selling                                                                         |               |         |                       |   |                            | 170,130  |              |         | 42,734                         |  
|                                                                   | Distribution, circulation and fulfillment                                                     |               |         |                       |   |                            | 125,252  |              |         | 44,702                         |  
|                                                                   | Editorial                                                                                     |               |         |                       |   |                            | 72,377   |              |         | 8,460                          |  
|                                                                   | Other general expenses                                                                        |               |         | 1,076                  |   |                            | 88,280   |              |         | 47,768                         |  
|                                                                   | Corporate administrative expenses (excluding non-cash compensation and non-recurring charges) |               |         | 18,146                 |   |                            |         |              |         | 2,427                          |  
|                                                                   | Depreciation of property and equipment                                                        |               |         | 4,312                  |   |                            | 26,443   |              |         | 11,963                         |  
|                                                                   | Amortization of intangible assets and other                                                   |               |         |                       |   |                            | 44,997   |              |         | 5,981                          |  
|                                                                   | Severance related to separated senior executives                                              |               |         | 5,576                  |   |                            |         |              |         |                               |  
|                                                                   | Non-cash compensation and non-recurring charges                                               |               |         | 2,793                  |   |                            |         |              |         |                               |  
|                                                                   | Provision for severance, closures and restructuring related costs                             |               |         | (860                   | ) |                            | 3,697    |              |         | 635                            |  
|                                                                   | (Gain) loss on sale of businesses and other, net                                              |               |         | (19                    | ) |                            | 1,390    |              |         | 259                            |  
|                                                                   |                                                                                               |               |         |                        |   |                            |          |              |         |                                |  
|Operating income (loss)                                            |                                                                                               |               | (30,833 | )                      |   | 164,707                    |          |              | (81,200 | )                              |  
|Other income (expense):                                            |                                                                                               |               |         |                        |   |                            |          |              |         |                                |  
|                                                                   | Provision for impairment of investments                                                       |               |         | (8,975                 | ) |                            |         |              |         |                               |  
|                                                                   | Interest expense                                                                              |               |         | (91,552                | ) |                            | (3,975   | )            |         | (25                            | )
|                                                                   | Interest on shares subject to mandatory redemption                                            |               |         | (11,008                | ) |                            |         |              |         |                               |  
|                                                                   | Amortization of deferred financing charges                                                    |               |         | 1,052                  |   |                            | (3,401   | )            |         | (11                            | )
|                                                                   | Equity in losses of subsidiaries                                                              |               |         | 40,637                 |   |                            |         |              |         |                               |  
|                                                                   | Intercompany management fees and interest                                                     |               |         | 142,157                |   |                            | (142,157 | )            |         |                               |  
|                                                                   | Other expense, net                                                                            |               |         | (953                   | ) |                            | (2,747   | )            |         | (15                            | )
|                                                                   |                                                                                               |               |         |                        |   |                            |          |              |         |                                |  
|Income (loss) from continuing operations before income tax expense |                                                                                               |               | 40,525  |                        |   | 12,427                     |          |              | (81,251 | )                              |  
|Income tax benefit (expense)                                       |                                                                                               |               | (10,695 | )                      |   | (350                       | )        |              | 12      |                                |  
|                                                                   |                                                                                               |               |         |                        |   |                            |          |              |         |                                |  
|Income (loss) from continuing operations                           |                                                                                               |               | 29,830  |                        |   | 12,077                     |          |              | (81,239 | )                              |  
|Discontinued operations                                            |                                                                                               |               |        |                        |   | 114,009                    |          |              | (4,210  | )                              |  
|                                                                   |                                                                                               |               |         |                        |   |                            |          |              |         |                                |  
|Net Income (loss)                                                  |                                                                                               | $             | 29,830  |                        | $ | 126,086                    |          | $            | (85,449 | )                              | $
|                                                                   |                                                                                               |               |         |                        |   |                            |          |              |         |                                |  

33

---



PRIMEDIA INC. AND SUBSIDIARIES        CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS        (UNAUDITED)        For the Nine Months Ended September 30, 2003  (dollars in
thousands)

|                                                 |                                                                                                    | Primedia Inc.                                       |       | Guarantor
Subsidiaries |          | Non-Guarantor
Subsidiaries |          | Eliminations |      | Primedia Inc.
and
Subsidiaries |        
|------------------------------------------------ | -------------------------------------------------------------------------------------------------- | --------------------------------------------------- | ----- | ---------------------- | -------- | -------------------------- | -------- | ------------ | ---- | ------------------------------ | -------
|Operating activities:                            |                                                                                                    |                                                     |       |                        |          |                            |          |              |      |                                |        
|                                                 | Net Income (loss)                                                                                  |                                                     | $     | 29,830                 |          | $                          | 126,086  |              | $    | (85,449                        | )      
|                                                 | Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |                                                     |       | (141,291               | )        |                            | 118,593  |              |      | 23,233                         |        
|                                                 | Changes in operating assets and liabilities                                                        |                                                     |       | (1,225                 | )        |                            | (18,315  | )            |      | (7,491                         | )      
|                                                 |                                                                                                    |                                                     |       |                        |          |                            |          |              |      |                                |        
|                                                 |                                                                                                    | Net cash provided by (used in) operating activities |       |                        | (112,686 | )                          |          | 226,364      |      |                                | (69,707
|                                                 |                                                                                                    |                                                     |       |                        |          |                            |          |              |      |                                |        
|Investing activities:                            |                                                                                                    |                                                     |       |                        |          |                            |          |              |      |                                |        
|                                                 | Additions to property, equipment and other, net                                                    |                                                     |       | (559                   | )        |                            | (19,196  | )            |      | (6,768                         | )      
|                                                 | Proceeds from sales of (payments for) businesses and other, net                                    |                                                     |       | 19                     |          |                            | 184,047  |              |      | (325                           | )      
|                                                 | Payments related to businesses acquired                                                            |                                                     |       |                       |          |                            | (7,186   | )            |      | (536                           | )      
|                                                 | Proceeds from sale of (payments for) other investments                                             |                                                     |       | (632                   | )        |                            | (2,285   | )            |      | (266                           | )      
|                                                 |                                                                                                    |                                                     |       |                        |          |                            |          |              |      |                                |        
|                                                 |                                                                                                    | Net cash provided by (used in) investing activities |       |                        | (1,172   | )                          |          | 155,380      |      |                                | (7,895 
|                                                 |                                                                                                    |                                                     |       |                        |          |                            |          |              |      |                                |        
|Financing activities:                            |                                                                                                    |                                                     |       |                        |          |                            |          |              |      |                                |        
|                                                 | Intercompany activity                                                                              |                                                     |       | 294,405                |          |                            | (371,869 | )            |      | 77,464                         |        
|                                                 | Borrowings under credit agreements                                                                 |                                                     |       | 329,400                |          |                            |         |              |      |                               |        
|                                                 | Repayments of borrowings under credit agreements                                                   |                                                     |       | (382,312               | )        |                            |         |              |      |                               |        
|                                                 | Payments for redemptions of senior notes                                                           |                                                     |       | (375,675               | )        |                            |         |              |      |                               |        
|                                                 | Proceeds from issuance of 8% Senior Notes                                                          |                                                     |       | 300,000                |          |                            |         |              |      |                               |        
|                                                 | Proceeds from issuances of common stock, net                                                       |                                                     |       | 1,120                  |          |                            |         |              |      |                               |        
|                                                 | Purchases of common stock in connection with the exchange of exchangeable preferred stock          |                                                     |       | (19,367                | )        |                            |         |              |      |                               |        
|                                                 | Dividends paid to preferred stock shareholders                                                     |                                                     |       | (33,928                | )        |                            |         |              |      |                               |        
|                                                 | Deferred financing cost paid (received)                                                            |                                                     |       | 474                    |          |                            | (6,762   | )            |      |                               |        
|                                                 | Other                                                                                              |                                                     |       | (93                    | )        |                            | (3,210   | )            |      | (103                           | )      
|                                                 |                                                                                                    |                                                     |       |                        |          |                            |          |              |      |                                |        
|                                                 |                                                                                                    | Net cash provided by (used in) financing activities |       |                        | 114,024  |                            |          | (381,841     | )    |                                | 77,361 
|                                                 |                                                                                                    |                                                     |       |                        |          |                            |          |              |      |                                |        
|Increase (decrease) in cash and cash equivalents |                                                                                                    |                                                     | 166   |                        |          | (97                        | )        |              | (241 | )                              |        
|Cash and cash equivalents, beginning of period   |                                                                                                    |                                                     | 4,700 |                        |          | 12,857                     |          |              | 996  |                                |        
|                                                 |                                                                                                    |                                                     |       |                        |          |                            |          |              |      |                                |        
|Cash and cash equivalents, end of period         |                                                                                                    | $                                                   | 4,866 |                        | $        | 12,760                     |          | $            | 755  |                                | $      
|                                                 |                                                                                                    |                                                     |       |                        |          |                            |          |              |      |                                |        

34

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PRIMEDIA INC. AND SUBSIDIARIES        CONDENSED CONSOLIDATING BALANCE SHEET        December 31, 2002  (dollars in thousands)

|                                           |                                      | Primedia Inc.                  |           | Guarantor
Subsidiaries |            | Non-Guarantor
Subsidiaries |            | Eliminations |         | Primedia Inc.
and
Subsidiaries |           
|------------------------------------------ | ------------------------------------ | ------------------------------ | --------- | ---------------------- | ---------- | -------------------------- | ---------- | ------------ | ------- | ------------------------------ | ----------
|ASSETS                                     |                                      |                                |           |                        |            |                            |            |              |         |                                |           
|Current assets:                            |                                      |                                |           |                        |            |                            |            |              |         |                                |           
|                                           | Cash and cash equivalents            |                                | $         | 4,700                  |            | $                          | 12,857     |              | $       | 996                            |           
|                                           | Accounts receivable, net             |                                |           | 622                    |            |                            | 197,476    |              |         | 21,079                         |           
|                                           | Intercompany receivables             |                                |           | 1,542,122              |            |                            | 655,911    |              |         | (37,955                        | )         
|                                           | Inventories                          |                                |           |                       |            |                            | 23,460     |              |         | 861                            |           
|                                           | Prepaid expenses and other           |                                |           | 5,979                  |            |                            | 29,982     |              |         | 6,659                          |           
|                                           |                                      |                                |           |                        |            |                            |            |              |         |                                |           
|                                           |                                      | Total current assets           |           |                        | 1,553,423  |                            |            | 919,686      |         |                                | (8,360    
|Property and equipment, net                |                                      |                                | 10,578    |                        |            | 81,274                     |            |              | 36,098  |                                |           
|Investment in and advances to subsidiaries |                                      |                                | 582,781   |                        |            |                           |            |              |        |                                |           
|Other intangible assets, net               |                                      |                                |          |                        |            | 341,276                    |            |              | 9,745   |                                |           
|Goodwill, net                              |                                      |                                | (6,076    | )                      |            | 934,812                    |            |              | 43,803  |                                |           
|Other investments                          |                                      |                                | 19,392    |                        |            | 1,876                      |            |              |        |                                |           
|Other non-current assets                   |                                      |                                | 162       |                        |            | 52,520                     |            |              | 5,422   |                                |           
|                                           |                                      |                                |           |                        |            |                            |            |              |         |                                |           
|                                           |                                      | $                              | 2,160,260 |                        | $          | 2,331,444                  |            | $            | 86,708  |                                | $         
|                                           |                                      |                                |           |                        |            |                            |            |              |         |                                |           
|LIABILITIES AND SHAREHOLDERS' DEFICIENCY   |                                      |                                |           |                        |            |                            |            |              |         |                                |           
|Current liabilities:                       |                                      |                                |           |                        |            |                            |            |              |         |                                |           
|                                           | Accounts payable                     |                                | $         | 8,591                  |            | $                          | 84,617     |              | $       | 16,703                         |           
|                                           | Intercompany payables                |                                |           | 825,616                |            |                            | 889,613    |              |         | 444,782                        |           
|                                           | Accrued interest payable             |                                |           | 25,835                 |            |                            |           |              |         |                               |           
|                                           | Accrued expenses and other           |                                |           | 94,669                 |            |                            | 110,706    |              |         | 19,048                         |           
|                                           | Deferred revenues                    |                                |           | 2,067                  |            |                            | 166,782    |              |         | 16,272                         |           
|                                           | Current maturities of long-term debt |                                |           | 4,163                  |            |                            | 3,498      |              |         |                               |           
|                                           |                                      |                                |           |                        |            |                            |            |              |         |                                |           
|                                           |                                      | Total current liabilities      |           |                        | 960,941    |                            |            | 1,255,216    |         |                                | 496,805   
|                                           |                                      |                                |           |                        |            |                            |            |              |         |                                |           
|Long-term debt                             |                                      |                                | 1,706,743 |                        |            | 20,934                     |            |              |        |                                |           
|Intercompany notes payable                 |                                      |                                |          |                        |            | 2,365,640                  |            |              | 764,384 |                                |           
|Deferred revenues                          |                                      |                                |          |                        |            | 41,466                     |            |              |        |                                |           
|Deferred income taxes                      |                                      |                                | 49,500    |                        |            |                           |            |              |        |                                |           
|Other non-current liabilities              |                                      |                                | 2,409     |                        |            | 20,577                     |            |              | 373     |                                |           
|                                           |                                      |                                |           |                        |            |                            |            |              |         |                                |           
|                                           |                                      | Total liabilities              |           |                        | 2,719,593  |                            |            | 3,703,833    |         |                                | 1,261,562 
|                                           |                                      |                                |           |                        |            |                            |            |              |         |                                |           
|Exchangeable preferred stock               |                                      |                                | 484,465   |                        |            |                           |            |              |        |                                |           
|                                           |                                      |                                |           |                        |            |                            |            |              |         |                                |           
|Shareholders' deficiency:                  |                                      |                                |           |                        |            |                            |            |              |         |                                |           
|                                           | Series J convertible preferred stock |                                |           | 145,351                |            |                            |           |              |         |                               |           
|                                           | Common stock                         |                                |           | 2,675                  |            |                            |           |              |         |                               |           
|                                           | Additional paid-in capital           |                                |           | 2,336,091              |            |                            |           |              |         |                               |           
|                                           | Accumulated deficit                  |                                |           | (3,445,083             | )          |                            | (1,372,317 | )            |         | (1,174,679                     | )         
|                                           | Accumulated other comprehensive loss |                                |           | (247                   | )          |                            | (72        | )            |         | (175                           | )         
|                                           | Unearned compensation                |                                |           | (4,730                 | )          |                            |           |              |         |                               |           
|                                           | Common stock in treasury, at cost    |                                |           | (77,855                | )          |                            |           |              |         |                               |           
|                                           |                                      |                                |           |                        |            |                            |            |              |         |                                |           
|                                           |                                      | Total shareholders' deficiency |           |                        | (1,043,798 | )                          |            | (1,372,389   | )       |                                | (1,174,854
|                                           |                                      |                                |           |                        |            |                            |            |              |         |                                |           
|                                           |                                      | $                              | 2,160,260 |                        | $          | 2,331,444                  |            | $            | 86,708  |                                | $         
|                                           |                                      |                                |           |                        |            |                            |            |              |         |                                |           

35

---



PRIMEDIA INC. AND SUBSIDIARIES        CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS        (UNAUDITED)        For the Nine Months Ended September 30, 2002  (dollars in
thousands)

|                                                                   |                                                                                               | Primedia Inc. |          | Guarantor
Subsidiaries |   | Non-Guarantor
Subsidiaries |          | Eliminations |          | Primedia Inc.
and
Subsidiaries |  
|------------------------------------------------------------------ | --------------------------------------------------------------------------------------------- | ------------- | -------- | ---------------------- | - | -------------------------- | -------- | ------------ | -------- | ------------------------------ | -
|Sales, net                                                         |                                                                                               | $             | 514      |                        | $ | 995,092                    |          | $            | 144,954  |                                | $
|Operating costs and expenses:                                      |                                                                                               |               |          |                        |   |                            |          |              |          |                                |  
|                                                                   | Cost of goods sold                                                                            |               |          |                       |   |                            | 267,579  |              |          | 63,007                         |  
|                                                                   | Marketing and selling                                                                         |               |          | 30                     |   |                            | 156,163  |              |          | 70,401                         |  
|                                                                   | Distribution, circulation and fulfillment                                                     |               |          |                       |   |                            | 126,017  |              |          | 54,564                         |  
|                                                                   | Editorial                                                                                     |               |          |                       |   |                            | 58,093   |              |          | 28,837                         |  
|                                                                   | Other general expenses                                                                        |               |          | 1,894                  |   |                            | 103,502  |              |          | 34,142                         |  
|                                                                   | Corporate administrative expenses (excluding non-cash compensation and non-recurring charges) |               |          | 16,483                 |   |                            |         |              |          | 7,235                          |  
|                                                                   | Depreciation of property and equipment                                                        |               |          | 2,001                  |   |                            | 27,748   |              |          | 15,278                         |  
|                                                                   | Amortization of intangible assets and other                                                   |               |          | 563                    |   |                            | 49,747   |              |          | 10,690                         |  
|                                                                   | Non-cash compensation and non-recurring charges                                               |               |          | 6,282                  |   |                            | 990      |              |          | 3,257                          |  
|                                                                   | Provision for severance, closures and restructuring related costs                             |               |          | 16,068                 |   |                            | 10,321   |              |          | 449                            |  
|                                                                   | (Gain) loss on sale of businesses and other, net                                              |               |          | (97                    | ) |                            | 518      |              |          | 1,420                          |  
|                                                                   |                                                                                               |               |          |                        |   |                            |          |              |          |                                |  
|Operating income (loss)                                            |                                                                                               |               | (42,710  | )                      |   | 194,414                    |          |              | (144,326 | )                              |  
|Other income (expense):                                            |                                                                                               |               |          |                        |   |                            |          |              |          |                                |  
|                                                                   | Provision for impairment of investments                                                       |               |          | (12,403                | ) |                            |         |              |          | (3,009                         | )
|                                                                   | Interest expense                                                                              |               |          | (103,679               | ) |                            | (2,454   | )            |          | (59                            | )
|                                                                   | Amortization of deferred financing charges                                                    |               |          |                       |   |                            | (2,605   | )            |          | (3                             | )
|                                                                   | Equity in losses of subsidiaries                                                              |               |          | (468,663               | ) |                            |         |              |          |                               |  
|                                                                   | Intercompany management fees and interest                                                     |               |          | 146,174                |   |                            | (146,174 | )            |          |                               |  
|                                                                   | Other income (expense), net                                                                   |               |          | 247                    |   |                            | (511     | )            |          | (385                           | )
|                                                                   |                                                                                               |               |          |                        |   |                            |          |              |          |                                |  
|Income (loss) from continuing operations before income tax expense |                                                                                               |               | (481,034 | )                      |   | 42,670                     |          |              | (147,782 | )                              |  
|Income tax expense                                                 |                                                                                               |               | (45,500  | )                      |   |                           |          |              |         |                                |  
|                                                                   |                                                                                               |               |          |                        |   |                            |          |              |          |                                |  
|Income (loss) from continuing operations                           |                                                                                               |               | (526,534 | )                      |   | 42,670                     |          |              | (147,782 | )                              |  
|Discontinued operations                                            |                                                                                               |               |         |                        |   | 35,865                     |          |              | (10,908  | )                              |  
|Cumulative effect of a change in accounting principle              |                                                                                               |               |         |                        |   | (368,174                   | )        |              | (20,334  | )                              |  
|                                                                   |                                                                                               |               |          |                        |   |                            |          |              |          |                                |  
|Net loss                                                           |                                                                                               | $             | (526,534 | )                      | $ | (289,639                   | )        | $            | (179,024 | )                              | $
|                                                                   |                                                                                               |               |          |                        |   |                            |          |              |          |                                |  

36

---



PRIMEDIA INC. AND SUBSIDIARIES        CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS        (UNAUDITED)        For the Nine Months Ended September 30, 2002  (dollars in
thousands)

|                                               |                                                                                          | Primedia Inc.                                       |         | Guarantor
Subsidiaries |          | Non-Guarantor
Subsidiaries |          | Eliminations |        | Primedia Inc.
and
Subsidiaries |         
|---------------------------------------------- | ---------------------------------------------------------------------------------------- | --------------------------------------------------- | ------- | ---------------------- | -------- | -------------------------- | -------- | ------------ | ------ | ------------------------------ | --------
|Operating activities:                          |                                                                                          |                                                     |         |                        |          |                            |          |              |        |                                |         
|                                               | Net loss                                                                                 |                                                     | $       | (526,534               | )        | $                          | (289,639 | )            | $      | (179,024                       | )       
|                                               | Adjustments to reconcile net loss to net cash provided by (used in) operating activities |                                                     |         | 390,085                |          |                            | 568,967  |              |        | 50,794                         |         
|                                               | Changes in operating assets and liabilities                                              |                                                     |         | (83                    | )        |                            | (22,084  | )            |        | 19,947                         |         
|                                               |                                                                                          |                                                     |         |                        |          |                            |          |              |        |                                |         
|                                               |                                                                                          | Net cash provided by (used in) operating activities |         |                        | (136,532 | )                          |          | 257,244      |        |                                | (108,283
|                                               |                                                                                          |                                                     |         |                        |          |                            |          |              |        |                                |         
|Investing activities:                          |                                                                                          |                                                     |         |                        |          |                            |          |              |        |                                |         
|                                               | Additions to property, equipment and other, net                                          |                                                     |         | (2,175                 | )        |                            | (10,597  | )            |        | (14,632                        | )       
|                                               | Proceeds from sale of businesses and other, net                                          |                                                     |         | 420                    |          |                            | 122,764  |              |        | 6,247                          |         
|                                               | Payments related to businesses acquired                                                  |                                                     |         |                       |          |                            | (3,329   | )            |        | (141                           | )       
|                                               | Proceeds from sale of (payments for) other investments                                   |                                                     |         | (832                   | )        |                            | (2,520   | )            |        |                               |         
|                                               |                                                                                          |                                                     |         |                        |          |                            |          |              |        |                                |         
|                                               |                                                                                          | Net cash provided by (used in) investing activities |         |                        | (2,587   | )                          |          | 106,318      |        |                                | (8,526  
|                                               |                                                                                          |                                                     |         |                        |          |                            |          |              |        |                                |         
|Financing activities:                          |                                                                                          |                                                     |         |                        |          |                            |          |              |        |                                |         
|                                               | Intercompany activity                                                                    |                                                     |         | 244,113                |          |                            | (359,271 | )            |        | 115,158                        |         
|                                               | Borrowings under credit agreements                                                       |                                                     |         | 304,765                |          |                            |         |              |        |                               |         
|                                               | Repayments of borrowings under credit agreements                                         |                                                     |         | (367,890               | )        |                            |         |              |        |                               |         
|                                               | Payments for redemptions of senior notes                                                 |                                                     |         | (19,141                | )        |                            |          |              |        |                                |         
|                                               | Proceeds from issuances of common stock, net                                             |                                                     |         | 1,533                  |          |                            |         |              |        |                               |         
|                                               | Dividends paid to preferred stock shareholders                                           |                                                     |         | (38,279                | )        |                            |         |              |        |                               |         
|                                               | Deferred financing costs paid                                                            |                                                     |         | (108                   | )        |                            |         |              |        |                               |         
|                                               | Other                                                                                    |                                                     |         | (99                    | )        |                            | (3,209   | )            |        | (27                            | )       
|                                               |                                                                                          |                                                     |         |                        |          |                            |          |              |        |                                |         
|                                               |                                                                                          | Net cash provided by (used in) financing activities |         |                        | 124,894  |                            |          | (362,480     | )      |                                | 115,131 
|                                               |                                                                                          |                                                     |         |                        |          |                            |          |              |        |                                |         
|Decrease in cash and cash equivalents          |                                                                                          |                                                     | (14,225 | )                      |          | 1,082                      |          |              | (1,678 | )                              |         
|Cash and cash equivalents, beginning of period |                                                                                          |                                                     | 17,478  |                        |          | 13,257                     |          |              | 2,853  |                                |         
|                                               |                                                                                          |                                                     |         |                        |          |                            |          |              |        |                                |         
|Cash and cash equivalents, end of period       |                                                                                          | $                                                   | 3,253   |                        | $        | 14,339                     |          | $            | 1,175  |                                | $       
|                                               |                                                                                          |                                                     |         |                        |          |                            |          |              |        |                                |         

37

---



Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

PRIMEDIA Inc., together with its subsidiaries, is herein referred to as either "PRIMEDIA" or the "Company."

The
following discussion and analysis of the Company's unaudited consolidated financial condition and results of consolidated operations should be read in conjunction with the unaudited
condensed consolidated financial statements and notes thereto.

Why We Use Segment EBITDA

PRIMEDIA believes that Segment EBITDA (as defined below) is the most accurate indicator of its segments' results, because it focuses on revenue and operating cost
items driven by operating managers' performance, and excludes non-recurring items and items largely outside of operating managers' control. Internally, the Company's chief operating
decision maker and the remainder of the executive team measure performance primarily based on Segment EBITDA. Segment EBITDA represents the segments' earnings before interest, taxes, depreciation,
amortization and other charges (income) ("Segment EBITDA"). Other charges (income) include severance related to separated senior executives, non-cash compensation and
non-recurring charges, provision for severance, closures and restructuring related costs and (gain) loss on the sale of businesses and other, net.

Segment
EBITDA is not intended to represent cash flows from operating activities and should not be considered as an alternative to net income or loss (as determined in conformity with
generally accepted accounting principles), as an indicator of the Company's operating performance, or as an indicator of cash flows as a measure of liquidity. Segment EBITDA may not be available for
the Company's discretionary use because there are requirements to redeem shares subject to mandatory redemption
and repay debt, among other payments. Segment EBITDA as presented may not be comparable to similarly titled measures reported by other companies since not all companies necessarily calculate Segment
EBITDA in identical manners, and therefore, it is not necessarily an accurate measure of comparison between companies. See reconciliation of Segment EBITDA to operating income (loss) for the nine and
three months ended September 30, 2003 and 2002 for the Consumer and Business-to-Business segments in their respective segment discussions below.

The
Company's two segments are Consumer and Business-to-Business. PRIMEDIA groups its businesses into these two segments based on the nature of the products and
services they provide and the type or class of customer for these products or services. The Company's Consumer segment produces and distributes content through magazines, guides, videos and via the
Internet to consumers primarily in niche and enthusiast markets. The Consumer segment includes the Consumer Magazines & Media Group, Consumer Guides, PRIMEDIA Television and About. The
Company's Business-to-Business segment produces and distributes content via magazines, books, videos, exhibits, the Internet and databases to business professionals in such
fields as communications, agriculture, professional services, media, transportation and healthcare. The Business-to-Business segment includes the Business Magazines &
Media Group and PRIMEDIA Workplace Learning. Corporate represents items not allocated to other business segments such as general corporate administration.

Intrasegment and Intersegment Transactions

The information presented below includes certain intersegment transactions and is therefore, not necessarily indicative of the results had the operations existed
as stand-alone businesses. Intersegment eliminations represent intercompany content and brand licensing, advertising and other services, which are billed at what management believes are prevailing
market rates. These intersegment transactions,

38

---

which
represent transactions between operating units in different business segments, are eliminated in consolidation. During 2003, the Company has eliminated intrasegment transactions within the
segment results and has restated prior periods accordingly. These intrasegment transactions totaled $47,461 and $88,437 for the nine months ended September 30, 2003 and 2002, respectively, and
$14,219 and $26,613 for the three months ended September 30, 2003 and 2002, respectively.

Non-Core Businesses

Management believes a meaningful comparison of the results of operations for the nine and three months ended September 30, 2003 and 2002 is obtained by
using the segment information and by presenting results from continuing businesses ("Continuing Businesses") which exclude the results of the businesses classified as non-core
("Non-Core Businesses"). The
Non-Core Businesses are those businesses that have been divested, discontinued or that management was evaluating for turnaround or shutdown. The Non-Core Businesses included
certain titles of the Business Magazines & Media Group and the Consumer Magazines & Media Group which were discontinued or divested. In addition, the Company restructured or consolidated
several new media properties, and included these properties in Non-Core Businesses. In the ordinary course of business, corporate administrative costs of approximately $1,900 were
allocated to the Non-Core Businesses during the nine months ended September 30, 2002. The Company believes that most of these costs, many of which are volume driven, such as the
processing of payables and payroll, were permanently reduced due to the shutdown or divestiture of the Non-Core Businesses. Since June 30, 2002, the Company has not classified any
additional businesses as Non-Core Businesses nor have any additional balances been allocated to the Non-Core Businesses.

Discontinued Operations

On January 1, 2002, the Company adopted Statement of Financial Accounting Standards ("SFAS") No 144, "Accounting for the Disposal of Long-Lived
Assets". As a result of this adoption, the Company's results have been reclassified to reflect the results of the Modern Bride Group, ExitInfo,Chicago, Horticulture,DollReader, the American Baby Group,IN New
York,Seventeenand its companion teen properties ("Seventeen") and Simba Information, a leading authority for market
intelligence and forecasts in the media industry, as discontinued operations for the periods prior to their respective divestiture dates.

The
Company also reclassified the results of Federal Sources,CableWorldand Sprinks, the pay per click advertising network which serves
About and numerous third party distribution partners, which were sold in October 2003, as well asNew Yorkmagazine and Kagan World Media for
which the Company has initiated plans to sell, to discontinued operations for all periods presented.

39

---

Segment Data:

|                                                                                      |                                                        | Nine Months Ended
September 30,     |          | Three Months Ended
September 30, |        
|------------------------------------------------------------------------------------- | ------------------------------------------------------ | ----------------------------------- | -------- | -------------------------------- | -------
|
|Sales, net:                                                                           |                                                        |                                     |          |                                  |        
|                                                                                      | Continuing Businesses:                                 |                                     |          |                                  |        
|                                                                                      |                                                        | Consumer                            |          | $                                | 801,999
|                                                                                      |                                                        | Business-to-Business                |          |                                  | 198,466
|                                                                                      |                                                        | Intersegment Eliminations and other |          |                                  | (4,165 
|                                                                                      |                                                        |                                     |          |                                  |        
|                                                                                      |                                                        |                                     | Subtotal |                                  |        
|                                                                                      | Non-Core Businesses                                    |                                     |          |                                 |        
|                                                                                      |                                                        |                                     |          |                                  |        
|                                                                                      |                                                        |                                     | Total    |                                  | $      
|                                                                                      |                                                        |                                     |          |                                  |        
|Segment EBITDA (1):                                                                   |                                                        |                                     |          |                                  |        
|                                                                                      | Continuing Businesses:                                 |                                     |          |                                  |        
|                                                                                      |                                                        | Consumer                            |          | $                                | 166,383
|                                                                                      |                                                        |                                     |          |                                  |        
|                                                                                      |                                                        | Business-to-Business                |          | $                                | 14,916 
|                                                                                      |                                                        |                                     |          |                                  |        
|                                                                                      |                                                        | Corporate Overhead                  |          | $                                | (21,458
|                                                                                      |                                                        |                                     |          |                                  |        
|                                                                                      | Non-Core Businesses                                    |                                     | $        |                                 |        
|                                                                                      |                                                        |                                     |          |                                  |        
|Depreciation, Amortization and Other Charges (2):                                     |                                                        |                                     |          |                                  |        
|                                                                                      | Continuing Businesses:                                 |                                     |          |                                  |        
|                                                                                      |                                                        | Consumer                            |          | $                                | 53,150 
|                                                                                      |                                                        |                                     |          |                                  |        
|                                                                                      |                                                        | Business-to-Business                |          | $                                | 40,781 
|                                                                                      |                                                        |                                     |          |                                  |        
|                                                                                      |                                                        | Corporate                           |          | $                                | 13,236 
|                                                                                      |                                                        |                                     |          |                                  |        
|                                                                                      | Non-Core Businesses                                    |                                     | $        |                                 |        
|                                                                                      |                                                        |                                     |          |                                  |        
|Operating income (loss):                                                              |                                                        |                                     |          |                                  |        
|                                                                                      | Continuing Businesses:                                 |                                     |          |                                  |        
|                                                                                      |                                                        | Consumer                            |          | $                                | 113,233
|                                                                                      |                                                        | Business-to-Business                |          |                                  | (25,865
|                                                                                      |                                                        | Corporate                           |          |                                  | (34,694
|                                                                                      |                                                        |                                     |          |                                  |        
|                                                                                      |                                                        |                                     | Subtotal |                                  |        
|                                                                                      | Non-Core Businesses                                    |                                     |          |                                 |        
|                                                                                      |                                                        |                                     |          |                                  |        
|                                                                                      |                                                        |                                     | Total    |                                  |        
|Other income (expense):                                                               |                                                        |                                     |          |                                  |        
|                                                                                      | Provision for impairment of investments                |                                     |          | (8,975                           | )      
|                                                                                      | Interest expense                                       |                                     |          | (95,552                          | )      
|                                                                                      | Interest on shares subject to mandatory redemption (3) |                                     |          | (11,008                          | )      
|                                                                                      | Amortization of deferred financing charges             |                                     |          | (2,360                           | )      
|                                                                                      | Other income (expense), net                            |                                     |          | (3,715                           | )      
|                                                                                      |                                                        |                                     |          |                                  |        
|Loss from continuing operations before income tax expense                             |                                                        |                                     | (68,936  | )                                |        
|Income tax benefit (expense)                                                          |                                                        |                                     | (11,033  | )                                |        
|                                                                                      |                                                        |                                     |          |                                  |        
|Loss from continuing operations                                                       |                                                        |                                     | (79,969  | )                                |        
|Discontinued operations                                                               |                                                        |                                     | 109,799  |                                  |        
|Cumulative effect of a change in accounting principle (from the adoption of SFAS 142) |                                                        |                                     |         |                                  |        
|                                                                                      |                                                        |                                     |          |                                  |        
|Net income (loss)                                                                     |                                                        | $                                   | 29,830   |                                  | $      
|                                                                                      |                                                        |                                     |          |                                  |        

---

40

---



Nine Months Ended September 30, 2003 Compared to Nine Months Ended September 30, 2002:

Consolidated Results:

Sales, Net

Total sales, including Continuing Businesses and Non-Core Businesses, decreased 4.9% to $996,300 in 2003 from $1,047,107 in 2002. Sales from
Continuing Businesses decreased 3.6% to $996,300 in 2003 from $1,033,616 in 2002, due to declines in the Business-to-Business segment of $35,327 and Consumer segment of $2,452
further detailed in the segment discussions below.

Revenue
recognized in connection with assets-for-equity transactions was $248 and $5,590 during the nine months ended September 30, 2003 and 2002,
respectively. There are no material deferred revenues relating to assets-for-equity transactions remaining on the Company's balance sheet at September 30, 2003. In
addition, for the nine months ended September 30, 2003 and 2002, sales from barter transactions were approximately $9,700 and $11,500, respectively, with equal related expense amounts in each
period.

Operating Income (Loss)

Operating income from Continuing Businesses was $52,674 in 2003 compared to $13,714 in 2002. This increase in operating income was primarily due to cost
reductions and cost cutting measures, particularly relating to savings in paper and production, headcount reductions, elimination of group and corporate-level overhead and consolidation of
back-office functions. The improvement was also driven by a decline in the provisions for severance, closures and restructuring related costs of $23,366 in 2003. In addition, amortization
expense declined by $9,973 including impairments, primarily due to the adoption of SFAS 144, which resulted in an impairment of certain amortizable intangible assets in 2002. Partially
offsetting these decreases was severance related to separated senior executives of $5,576 resulting from the departure of the Company's former CEO and CFO. Total operating income, including Continuing
and Non-Core Businesses, was $52,674 in 2003 compared to $7,378 in 2002.

Net Income (Loss)

Net income was $29,830 in 2003 compared to a net loss of $526,534 in 2002 for an increase of $556,364. The increase was primarily driven by the gain on the sale
of Seventeen of $107,138 in 2003, as well as the impact of the Company's adoption of SFAS 142, "Goodwill and Other Intangible Assets," in 2002.

In
connection with the adoption of SFAS 142 during the nine months ended September 30, 2002, the Company recorded an impairment charge related to its goodwill and certain
indefinite lived intangible assets of $388,508 within cumulative effect of a change in accounting principle, which was recorded effective January 1, 2002. In addition, the Company recorded
$10,624 and $45,500 of related non-cash deferred income tax expense for the nine months ended September 30, 2003 and 2002, respectively. The $45,500 of non-cash deferred
income tax expense includes a $23,000 income tax benefit recorded in the third quarter of 2002 resulting from impairments of goodwill and certain finite lived assets recorded in 2002 as a result of
the adoption of SFAS 142. The Company expects that it will record an additional $3,575 tax expense to increase the deferred tax liabilities during the fourth quarter of 2003, before considering
the impact of any additional impairment of goodwill and indefinite lived intangible assets.

41

---

In addition, interest expense decreased by $10,640, or 10.0%, in 2003 compared to 2002 as a result of reduced interest rates and reductions in outstanding debt.

Effective
July 1, 2003, the Company prospectively adopted SFAS 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity",
which requires dividends on Exchangeable Preferred Stock (such stock are now collectively described as "shares subject to mandatory redemption") to be included in loss from continuing operations as
interest expense whereas previously they were presented below net income as preferred stock dividends. The adoption of SFAS 150 increased loss from continuing operations by $11,008 for the nine
months ended September 30, 2003.

During
2002, the Company completed the sale of the Modern Bride Group, ExitInfo, Doll Reader, Chicago, Horticulture, IN New Yorkand the
American Baby Group and, as a result of adopting SFAS 144, reclassified the financial results of these divested units into discontinued operations on the condensed statement of consolidated
operations for the nine months ended September 30, 2002. SFAS 144 requires sales or disposals of long-lived assets that meet certain criteria be classified on the statement
of consolidated operations as discontinued operations and to reclassify prior periods accordingly (see Recent Accounting Pronouncements for further discussion of SFAS 142 and SFAS 144).

During
the nine months ended September 30, 2003, the Company completed the sales of Seventeen and Simba Information and during October 2003, the Company sold Federal
Sources,CableWorldand Sprinks. In addition, the Company initiated plans to sellNew Yorkmagazine and
Kagan World Media. In accordance with SFAS 144, the financial results of Seventeen, Simba Information, Federal Sources,CableWorld, Sprinks, New Yorkand Kagan have been reclassified into discontinued operations on the condensed statements of consolidated operations for the nine months ended
September 30, 2003 and 2002.

Consumer:

Consumer segment (including Consumer Magazines & Media Group, Consumer Guides, PRIMEDIA Television and About):

Sales, Net

Consumer segment sales from Continuing Businesses for the nine months decreased 0.3% to $801,999 in 2003 from $804,451 in 2002, before intersegment eliminations.

Sales
at Consumer Magazines decreased $7,525 in 2003. This decline was driven by the advertising rate base reduction at the Soap Opera titles implemented in the first quarter of 2003 to
improve their profitability. For the nine months ended September 2003, the Soap Opera titles have seen a decline of $13,324 in advertising and subscription revenue.

Excluding
the revenue drop attributable to the rate base reduction, revenue has been increasing at Consumer Magazines with particular strength atMotor
Trend,Automobileand the automotive enthusiast titles which have seen year-to-date revenue increases of
14%, 11% and 4%, respectively, due to advertising revenue gains. These increases have been offset by across the board weakness in single copy unit sales and advertising page declines in several
enthusiast magazine groups, including Home Entertainment and Photography. For the group as a whole, ad pages have been up 1.4% in 2003 versus an industry average of 0.3% as reported by Publishers
Information Bureau ("PIB").

PRIMEDIA
Television sales decreased $7,198 from 2002 primarily due to declines at Channel One and Films for the Humanities and Sciences. Channel One sales declined as revenue from new
accounts was offset by lower combined spending from several large accounts, including Pepsi and Gatorade as a result of their merger.

42

---

Sales
increased primarily at the Consumer Guides division. Consumer Guides sales were up $11,208 driven by continuing page growth in the Apartment Guide business and increased
third-party distribution revenue at its DistribuTech distribution arm.

Sales
at About increased $1,063 in 2003 over 2002 as a result of increased subscription revenue at the unit's web hosting division.

Intersegment
eliminations of $4,182 in 2003 and $3,112 in 2002, represent intersegment sales, which are eliminated in consolidation. Revenue recognized in connection with
assets-for-equity transactions was $248 and $2,500 for the nine months ended September 30, 2003 and 2002, respectively. For the nine months ended September 30,
2003 and
2002, revenue from barter transactions was approximately $5,100 and $6,200, respectively, with equal related expense amounts in each period.

Segment EBITDA

Consumer Segment EBITDA from Continuing Businesses increased 9.6% to $166,383 in 2003 from $151,773 in 2002. This increase was due primarily to cost cutting
initiatives enacted across the Consumer segment, including savings in paper, production, headcount and group overhead. Specific actions included the elimination of the Company's stand alone corporate
integrated sales group and the folding of its responsibilities into the magazine groups. As a result of these factors, Segment EBITDA margin increased to 20.7% in 2003 compared to 18.9% in 2002.

Below
is a reconciliation of Consumer Segment EBITDA to operating income for the nine months ended September 30, 2003 and 2002:

For the Nine Months Ended September 30,2003

2002Segment EBITDA

$
166,383

$
151,773Depreciation of property and equipment


(26,510
)

(28,631
)Amortization of intangible assets and other


(23,254
)

(46,458
)Non-cash compensation and non-recurring charges





(3,917
)Provision for severance, closures and restructuring related costs


(2,499
)

(21,377
)Gain (loss) on sale of businesses and other, net


(887
)

500Operating income

$
113,233

$
51,890


Operating Income (Loss)

Operating income from Continuing Businesses was $113,233 in 2003 compared to $51,890 in 2002, an increase of 118.2%. The increase in operating income was
attributable to the increase in Segment EBITDA of $14,610. In addition, there was a decrease in amortization expense, including impairments, of $23,204 primarily due to the adoption of
SFAS 144, which resulted in an impairment of certain amortizable intangible assets in 2002. There was also a decline in restructuring and restructuring related costs of $18,878 primarily as a
result of 2002 charges for real estate lease commitments for space that the Company no longer occupies and a decrease in non-recurring charges of $3,917 related to share lockup agreements
entered into in 2001 with two senior executives of About.

Discontinued Operations

During 2002, the Company completed the sale of the Modern Bride Group, ExitInfo,Doll Reader, Chicago,Horticulture, the American Baby Group andIN New
York. In accordance with SFAS 144, the

43

---

operating
results of the divested operating units have been reclassified to discontinued operations on the condensed statement of consolidated operations for the nine months ended September 30,
2002.

During
the nine months ended September 30, 2003, the Company completed the sale of Seventeen and during October 2003, the Company sold Sprinks. In addition, during
September 2003, the Company initiated a plan to sellNew Yorkmagazine. In accordance with SFAS 144, the financial results of Seventeen,
Sprinks andNew Yorkmagazine have been reclassified into discontinued operations on the condensed statements of consolidated operations for the nine
months ended September 30, 2003 and 2002.

Sales
from Continuing Businesses excludes sales from discontinued operations of $87,265 and $186,113 for the nine months ended September 30, 2003 and 2002, respectively. Consumer
segment operating income from Continuing Businesses excludes operating income from discontinued operations of $112,360 and $36,132 for the nine months ended September 30, 2003 and 2002,
respectively. For the nine months ended September 30, 2003 and 2002, discontinued operations includes a net gain on sale of businesses of $105,886 and $38,210, respectively.

Business-to-Business:

Business-to-Business segment (including Business Magazines & Media Group and PRIMEDIA Workplace Learning):

Sales, Net

Sales from Continuing Businesses for the nine months decreased 15.1% to $198,466 in 2003 from $233,793 in 2002, before intersegment eliminations.

Sales
at the Business Magazines & Media Group declined by $25,034. This decrease was due primarily to trade advertising softness, particularly in the telecommunications,
entertainment technology, agriculture and trucking categories, as well as the shut-down of several unprofitable product lines. Trade magazine advertising pages were down 6.4% for the nine
months ended September 30, 2003, compared to the same period in 2002.

Sales
were also down $10,293 compared to 2002 at PRIMEDIA Workplace Learning, where demand for corporate training services continues to lag, particularly in industrial videotape sales
and satellite based training for healthcare professionals.

Intersegment
eliminations of $7 in 2003 and $1,907 in 2002, represent intersegment sales, which are eliminated in consolidation. Revenue recognized in connection with
assets-for-equity transactions was $3,090 for the nine months ended September 30, 2002. For the nine months ended September 30, 2003 and 2002, revenue from barter
transactions was approximately $4,600 and $5,300, respectively, with equal related expense amounts in each year.

Segment EBITDA

Business-to-Business Segment EBITDA from Continuing Businesses decreased 49.0% to $14,916 in 2003 from $29,221 in 2002. This decrease was
primarily due to revenue declines at various Business-to-Business segment units, partially offset by continued cost cutting initiatives, including headcount reductions,
elimination of group overhead and the shutdown of unprofitable titles, which resulted in an operating cost decline of approximately $21,000 in 2003. Specific actions included the consolidation of the
former Media Central magazines and trade shows into the Business Magazines & Media Group and the reorganization of the Business Magazines & Media Group management. In addition, during
2003 and 2002 there were reversals of employee incentive compensation accruals of $1,610 and $477, respectively, due to changes in estimates.

44

---

Below
is a reconciliation of Business-to-Business Segment EBITDA to operating loss for the nine months ended September 30, 2003 and 2002:

For the Nine Months Ended September 30,2003

2002Segment EBITDA

$
14,916

$
29,221Depreciation of property and equipment


(11,895
)

(14,094
)Amortization of intangible assets and other


(27,724
)

(13,930
)Non-cash compensation and non-recurring charges





(330
)Provision for severance, closures and restructuring related costs


(399
)

(3,141
)Gain (loss) on sales of businesses and other, net


(763
)

391Operating loss

$
(25,865
)
$
(1,883
)


Operating Income (Loss)

Operating loss from Continuing Businesses was $25,865 in 2003 compared to $1,883 in 2002. The decrease in Segment EBITDA of $14,305 and increase in amortization
of intangible assets and other of $13,794 drove the increased operating loss in 2003. The increase in amortization expense, including impairments, was primarily due to an estimated
non-cash provision for impairment of PRIMEDIA Workplace Learning's goodwill and certain finite lived intangible assets of $20,495 recorded during the third quarter of 2003. In addition,
the loss on sale of businesses and other expense, net, increased $1,154, primarily due to the sale ofCoal Ageand Engineering & Mining Journal.These factors were offset by reductions in depreciation of property and equipment of $2,199 and restructuring and
restructuring related costs of $2,742.

Discontinued Operations

During the three months ended September 30, 2003, the Company completed the sale of Simba. The Company sold Federal Sources and CableWorldduring October 2003 and has initiated a plan to sell Kagan World Media. In accordance with SFAS 144, the results of these
operating units have been reclassified to discontinued operations on the condensed statements of consolidated operations for the nine months ended September 30, 2003 and 2002.

Sales
from Continuing Businesses excludes sales from discontinued operations of $13,284 and $15,187 for the nine months ended September 30, 2003 and 2002, respectively.
Business-to-Business segment operating loss from Continuing Businesses excludes operating loss from discontinued operations of $2,582 and $10,329 for the nine months ended
September 30, 2003 and 2002, respectively. For the nine months ended September 30, 2003, discontinued operations includes a net gain on sales of businesses of $431.

Corporate:

Corporate overhead decreased to $21,458 in 2003 from $25,128 in 2002 due to compensation savings associated with the separation of the former CEO and CFO as well
as reversals of employee incentive compensation accruals of $3,078 and $1,354 in 2003 and 2002, respectively, due to changes in estimates.

Operating
loss decreased to $34,694 in 2003 from $36,293 in the prior year due to the improvement in Corporate overhead as well as reductions in restructuring related costs of $1,746 and
in non-cash compensation and non-recurring charges of $3,489. These decreases were partially offset by increased depreciation expense of $2,311, primarily due to the disposal
of certain fixed assets of $1,816 and severance of $5,576 related to separated senior executives recorded in 2003.

45

---

Non-Core Businesses:

Since June 30, 2002, the Company has not classified any additional businesses as Non-Core Businesses nor have any additional balances been
allocated to the Non-Core Businesses subsequent to June 30, 2002.

Three Months Ended September 30, 2003 Compared to Three Months Ended September 30, 2002:

Consolidated Results:

Sales, Net

Sales from Continuing Businesses decreased 3.2% to $323,719 in 2003 from $334,520 in 2002, due to declines of $11,602 in the
Business-to-Business segment slightly offset by an increase of $599 in the Consumer segment, further detailed in the segment discussions below.

Revenue
recognized in connection with assets-for-equity transactions was $99 and $1,059 during the three months ended September 30, 2003 and 2002,
respectively. There are no material deferred revenues relating to assets-for-equity transactions remaining on the Company's balance sheet at September 30, 2003. In
addition, for the three months ended September 30, 2003 and 2002, sales from barter transactions were approximately $2,800 and $3,000 respectively, with equal related expense amounts recorded
in each period.

Operating Income (Loss)

Operating income from Continuing Businesses was $3,705 in 2003 compared to $13,921 in 2002. This decrease is primarily due to the decline in sales as well as an
increase of $6,437 in amortization of intangible assets and other in 2003, partially offset by declines in the provision for severance, closures and restructuring related costs of $1,618 and
non-cash compensation and non-recurring charges of $2,068. The increase in the amortization of intangible assets, goodwill and other is due to an impairment of $20,495 recorded
in 2003 related to PRIMEDIA Workplace Learning compared to $8,556 of an impairment of certain amortizable intangible assets in 2002 due to the adoption of SFAS 144.

Net Income (Loss)

Net loss was $38,828 in 2003 compared to net income of $14,368 in 2002. The decrease was primarily a result of the gain on sale of businesses of $27,631, included
in discontinued operations in 2002, and a $23,000 income tax benefit during the three months ended September 30, 2002 related to impairments recorded in connection with the adoption of
SFAS 142, "Goodwill and Other Intangible Assets", during 2002.

In
addition, interest expense decreased by $4,776, or 13.6% in 2003 compared to 2002 as a result of reduced interest rates and reductions in outstanding debt.

Effective
July 1, 2003, the Company prospectively adopted SFAS 150, which requires dividends on Exchangeable Preferred Stock (such stock is now collectively described as
"Shares Subject to Mandatory Redemption") to be included in loss from continuing operations as interest expense whereas previously they were presented below net income as preferred stock dividends.
The adoption of SFAS 150 increased loss from continuing operations by $11,008 for the three months ended September 30, 2003.

During
2002, the Company completed the sale of the Modern Bride Group, ExitInfo, Doll Reader, Chicago, Horticulture, IN New Yorkand the
American Baby Group and, as a result of adopting SFAS 144, reclassified the financial results of these divested units into discontinued operations on the

46

---

condensed
statement of consolidated operations for the three months ended September 30, 2002. SFAS 144 requires sales or disposals of long-lived assets that meet certain
criteria to be classified on the condensed statement of consolidated operations as discontinued operations and to reclassify prior periods accordingly.

During
the three months ended September 30, 2003, the Company completed the sale of Simba Information and during October 2003, the Company sold Federal Sources, CableWorldand Sprinks. The Company
initiated plans to sellNew Yorkmagazine and Kagan World Media. In
addition, during the second quarter 2003, the Company completed the sale of Seventeen. In accordance with SFAS 144, the financial results of Seventeen, Simba Information, Federal Sources, CableWorld, Sprinks,New Yorkand Kagan have been reclassified into discontinued operations on the
condensed statements of consolidated operations for the three months ended September 30, 2003 and 2002.

Consumer:

Consumer segment (including Consumer Magazines & Media Group, Consumer Guides, PRIMEDIA Television and About):

Sales, Net

Sales from Continuing Businesses for the three months increased 0.2% to $265,977 in 2003 from $265,378 in 2002, before intersegment eliminations.

Sales
increased $3,621 at Consumer Guides, driven by increased advertising pages at the Apartment Guides and growth in distribution revenue from third-party publications at its
DistribuTech distribution arm. Apartment Guide revenue growth has slowed in recent months as the apartment industry continues to face historically high vacancy rates, depressing property managers'
marketing budgets.

Consumer
magazine sales declined $1,747 from the third quarter of 2002. This variance was driven primarily by the advertising rate base reduction at the Soap Opera titles implemented in
the first quarter of 2003 to improve their profitability. For the third quarter, the decline in subscription and advertising revenue at the Soap Opera titles was approximately $4,800.

Overall,
advertising revenues at consumer magazines were up approximately 1.4% over the prior year.Motor Trendshowed particular strength
in the quarter, posting double-digit advertising growth. Advertising revenues at the Performance Automobile, Action Sports, Crafts and Outdoor groups also grew. Offsetting this growth were advertising
revenue declines in several enthusiast magazine categories, including Home Entertainment, Photography and Marine and Equine. For the Consumer Magazines group as a whole, advertising pages grew 5.8% on
a comparable titles basis in 2003, compared to an industry decline of 2.8% as reported by PIB.

Newsstand
revenue declined, with particular weakness in the automotive enthusiast category. Overall unit sales declined by 6.0% for the April to September 2003 period compared to
an industry average of 10% as reported by the International Periodical Distributors Association ("IPDA"). Single copy sales are reported on a trailing six-month basis to conform to the
IPDA industry benchmark.

PRIMEDIA
Television saw a quarter-over-quarter sales decline of $1,617, with the majority of this decline coming at the Films for Humanities and Sciences unit.
Films for the Humanities and Sciences, a distributor of video content to secondary schools and colleges, continues to face the adverse effects of state and local school budget cuts with sales
declining $929 in 2003. The third quarter is seasonally the lowest revenue quarter for PRIMEDIA Television's school-focused businesses, Channel One and Films for the Humanities and Sciences.

47

---

Sales
at About increased $342 over the prior year, driven by modest advertising growth at About.com. Intersegment eliminations of $1,413 in 2003 and $1,064 in 2002 represent intersegment
sales which are eliminated in consolidation. Revenue recognized in connection with assets-for-equity transactions was $99 and $222 for the three months ended
September 30, 2003 and 2002, respectively. For the three months ended September 30, 2003 and 2002, sales from barter transactions were approximately $1,500 and $1,300, respectively, with
equal related expense amounts in each period.

Segment EBITDA

Consumer Segment EBITDA from Continuing Businesses decreased 1.5% to $54,247 in 2003 from $55,047 in 2002. This decrease is attributable to the high flow through
of the revenue decline at PRIMEDIA Television as well as the diminishing impact of cost actions taken in the first half of 2002.

Below
is a reconciliation of Consumer Segment EBITDA to operating income for the three months ended September 30, 2003 and 2002:

For the Three Months Ended
September 30,2003

2002Segment EBITDA

$
54,247

$
55,047Depreciation of property and equipment


(9,234
)

(9,862
)Amortization of intangible assets and other


(7,408
)

(18,565
)Non-cash compensation and non-recurring charges





(660
)Provision for severance, closures and restructuring related costs


(195
)

(1,832
)Gain (loss) on sales of businesses and other, net


(641
)

327Operating income

$
36,769

$
24,455


Operating Income (Loss)

Operating income from Continuing Businesses was $36,769 in 2003 compared to $24,455 in 2002. The increase in operating income was primarily due to a decrease in
amortization expense, including impairments, of $11,157, mainly due to the adoption of SFAS 144, which resulted in an impairment of certain amortizable intangible assets in 2002. In addition,
there was a decrease in restructuring and restructuring related costs of $1,637 primarily due to 2002 charges related to real estate lease commitments for space that the Company no longer occupies.

Discontinued Operations

During 2002, the Company completed the sale of the Modern Bride Group, ExitInfo,Doll Reader, Chicago,Horticulture, the American Baby Group andIN New
York. In accordance with SFAS 144, the
operating results of the divested operating units have been reclassified to discontinued operations on the condensed statement of consolidated operations for the three months ended
September 30, 2002.

The
Company completed the sale of Seventeen and Sprinks in May and October 2003, respectively. In addition, during September 2003, the Company initiated a plan to sell New Yorkmagazine. In
accordance with SFAS 144, the financial results of Seventeen have been reclassified into discontinued operations on the
condensed statement of consolidated operations for the three months ended September 30, 2002. The results of Sprinks andNew Yorkmagazine have
been reclassified into discontinued operations on the condensed statements of consolidated operations for the three months ended September 30, 2003 and 2002.

Sales
from Continuing Businesses excludes sales from discontinued operations of $17,308 and $65,188 for the three months ended September 30, 2003 and 2002, respectively. Consumer
segment

48

---

operating
income from Continuing Businesses excludes operating income from discontinued operations of $4,468 and $30,533 for the three months ended September 30, 2003 and 2002, respectively.
For the three months ended September 30, 2003 and 2002, discontinued operations include a net gain on sale of businesses of $3,116 and $27,631, respectively.

Business-to-Business:

Business-to-Business segment (including Business Magazines & Media Group and PRIMEDIA Workplace Learning):

Sales, Net

Sales from Continuing Businesses for the three months decreased 16.4% to $59,209 in 2003 from $70,811 in 2002 before intersegment eliminations.

Revenues
at the Business Magazines & Media Group declined by $7,388, primarily due to advertising page declines. The telecommunications, entertainment and financial services
categories showed particular weakness. For the quarter, trade magazine advertising pages from continuing titles declined 13%. Additionally, the loss of revenue from products shut down in 2002 (and not
classified as Discontinued Operations) accounted for $2,002 of the decline.

Revenues
were also down $4,214 compared to the same period in 2002 at PRIMEDIA Workplace Learning, where demand for corporate training continues to lag, particularly in the areas of
industrial videotape sales and satellite based training for healthcare professionals.

Intersegment
eliminations of $5 in 2003 and $604 in 2002 represent intersegment sales, which are eliminated in consolidation. Revenue recognized in connection with
assets-for-equity transactions was $837 for the three months ended September 30, 2002. For the three months ended September 30, 2003 and 2002, sales from barter
transactions were approximately $1,300 and $1,700, respectively, with equal related expense amounts in each year.

Segment EBITDA

Business-to-Business Segment EBITDA from Continuing Businesses decreased 62.2% to $3,814 in 2003 from $10,077 in 2002.

The
decrease is due to the continued softness in sales as discussed above as well as investment in PRIMEDIA Workplace Learning's Homeland One product line. The decline in sales was
partially offset by lower costs. Continuing cost cutting initiatives included the integration of certain stand-alone magazines and trade shows into our Business Magazines & Media Group, the
continued consolidation of production locations and back-office functions, paper savings and headcount reductions.

49

---

Below
is a reconciliation of Business-to-Business Segment EBITDA to operating loss for the three months ended September 30, 2003 and 2002:

For the Three Months Ended
September 30,2003

2002Segment EBITDA

$
3,814

$
10,077Depreciation of property and equipment


(3,766
)

(4,391
)Amortization of intangible assets and other


(22,872
)

(5,089
)Non-cash compensation and non-recurring charges





(330
)Provision for severance, closures and restructuring related costs


61


(650
)Gain (loss) on sales of businesses and other, net


347


(37
)Operating loss

$
(22,416
)
$
(420
)


Operating Income (Loss)

Operating loss from Continuing Businesses was $22,416 in 2003 compared to $420 in 2002. The increase in operating loss was primarily attributable to the decline
in Segment EBITDA of $6,263 and to the increase in amortization expense, including impairments, of $17,783 due to an estimated non-cash provision for impairment of PRIMEDIA Workplace
Learning's goodwill and certain finite lived intangible assets of $20,495 in 2003.

Discontinued Operations

During the three months ended September 30, 2003, the Company completed the sale of Simba. The Company sold Federal Sources and CableWorldduring October 2003 and initiated a plan to sell Kagan World Media. In accordance with SFAS 144, the operating results of these
operating units have been
reclassified to discontinued operations on the condensed statements of consolidated operations for the three months ended September 30, 2003 and 2002.

Sales
from Continuing Businesses excludes sales from discontinued operations of $4,229 and $4,927 for the three months ended September 30, 2003 and 2002, respectively.
Business-to-Business segment operating income from Continuing Businesses excludes operating income (loss) from discontinued operations of $391 and ($6,046) for the three months
ended September 30, 2003 and 2002, respectively. For the three months ended September 30, 2003, discontinued operations includes a net gain on sales of businesses of $597.

Corporate:

Corporate overhead decreased to $6,647 in 2003 from $7,658 in 2002 primarily due to compensation savings associated with the separation of the former CEO and CFO
and lower professional fees.

Corporate
operating loss was $10,648 in 2003 compared to $10,114 in 2002. This decrease was due to an increase in depreciation expense of $2,082 primarily related to the disposal of
certain fixed assets offset by the improvement in Corporate overhead. In addition, non-cash compensation and non-recurring charges were $770 and $1,848 for the three months
ended September 30, 2003 and 2002, respectively, primarily representing executive compensation in the form of stock and option grants and the extension of the expiration period of certain stock
options relating to the About acquisition.

50

---

Non-Core Businesses:

The Company has not classified any additional businesses as Non-Core Businesses since June 30, 2002 nor have any additional balances been
allocated to the Non-Core Businesses subsequent to June 30, 2002.

Risk Factors

Management's concerns remain consistent with and should be read in conjunction with the Risk Factors section of the Company's Annual Report on
Form 10-K for the year ended December 31, 2002.

Liquidity, Capital and Other Resources

The Company believes its liquidity, capital resources and cash flow are sufficient to fund planned capital expenditures, working capital requirements, interest
and principal payments on its debt, the payment of preferred stock dividends and other anticipated expenditures for the foreseeable future. The Company has implemented and continues to implement
various cost-cutting programs and cash conservation plans, which involve the limitation of capital expenditures and the control of working capital.

Working Capital

Consolidated working capital deficiency, which includes current maturities of long-term debt, was $204,492 at September 30, 2003 compared to
$248,280 at December 31, 2002. The change in working capital was primarily due to the reclassification of certain assets and liabilities of businesses to be divested as of September 30,
2003 to held for sale on the Company's condensed consolidated balance sheet as of September 30, 2003. The businesses classified as held for sale include CableWorld,Sprinks, Federal Sources,New Yorkmagazine and Kagan World Media. The reclassification of
the assets and liabilities of these businesses to be divested reduced consolidated working capital deficiency by approximately $25,000. In addition, the timing of certain seasonal payments contributed
to the change in working capital at September 30, 2003 as compared to December 31, 2002. Consolidated working capital reflects certain industry working capital practices and accounting
principles, including the recording of deferred revenue from subscriptions as a current liability as well as the expensing of certain advertising, editorial and product development costs as incurred.

At
September 30, 2003, the Company had cash and unused credit facilities of $302,713 as further discussed below.

Cash Flow2003 Compared to 2002

Net cash provided by operating activities during 2003, after interest payments of $75,746, increased to $43,971 as compared to $12,429 during 2002 mainly due to
the improvement in the Consumer Segment EBITDA and the reduction of corporate overhead offset by certain working capital changes. Net capital expenditures were $26,523 during 2003 compared to $27,404
during 2002. Net cash provided by investing activities during 2003 was $146,313 compared to $95,205 during 2002. The cash provided by investing activities in 2002 and 2003 is due to proceeds from the
sales of businesses. Net cash used in financing activities during 2003 was $190,456 compared to $122,455 during 2002. The Company has used the proceeds from the sales of businesses in 2002 and 2003 to
repay borrowings under its revolving loan facilities and to invest in PRIMEDIA's businesses, thereby enabling the Company to use available liquidity under its revolving loan facilities to redeem and
repurchase capital obligations of the Company.

51

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Financing Arrangements

Bank Credit Facility

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

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

|                              |  | Revolver |          | Term A |   | Term B  |   | Total |         
|----------------------------- |  | -------- | -------- | ------ | - | ------- | - | ----- | --------
|Bank Credit Facility          |  | $        | 427,000  |        | $ | 90,000  |   | $     | 374,819 
|Borrowings Outstanding        |  |          | (123,000 | )      |   | (90,000 | ) |       | (374,819
|Letters of Credit Outstanding |  |          | (19,668  | )      |   |        |   |       |        
|                              |  |          |          |        |   |         |   |       |         
|Unused Bank Commitments       |  | $        | 284,332  |        | $ |        |   | $     |        
|                              |  |          |          |        |   |         |   |       |         

With
the exception of the term loan B, the amounts borrowed bear interest, at the Company's option, at either the base rate plus an applicable margin ranging from 0.125% to 1.5% or the
Eurodollar Rate plus an applicable margin ranging from 1.125% to 2.5%. The term loan B bears interest at the base rate plus 1.75% or the Eurodollar Rate plus 2.75%. At September 30, 2003, and
December 31, 2002, the weighted average variable interest rate on all outstanding borrowings under the bank credit facility was 3.7% and 4.4%, respectively.

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

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

52

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

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



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

Senior Note Redemptions

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

On
May 15, 2003, the Company issued $300,000 of 8% Senior Notes at par. Subsequently, on June 16, 2003, the Company redeemed the remaining 81/2% Senior Notes
at the carrying value of $291,073, plus accrued interest. The Company funded the transaction with the proceeds of the 8% Senior Notes offering. The redemption resulted in write-offs of
unamortized issuance costs of $1,810 and the unamortized discount of $427 which are included in other, net, on the accompanying condensed statements of consolidated operations for the nine months
ended September 30, 2003.

The
75/8% Senior Notes mature in April 2008, the 87/8% Senior Notes mature in May 2011 and the 8% Senior Notes mature in May 2013.

Covenant Compliance

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

53

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

The
Company is herewith providing detailed information and disclosure as to the methodology used in determining compliance with the leverage ratio in the bank credit facility agreement.
The purpose of providing this information is to give more clarity to the substantial amount of disclosure already provided. Under its bank credit facility and Senior Note agreements, the Company is
allowed to designate certain businesses as unrestricted subsidiaries to the extent that the value of those businesses does not exceed the permitted amounts, as defined in these agreements. The Company
has designated certain of its businesses as unrestricted (the "Unrestricted Group"), which primarily represent Internet businesses, trademark and content licensing and service companies, new launches
(including traditional start-ups), other properties under evaluation for turnaround or shutdown and foreign subsidiaries. Except for those specifically designated by the Company as
unrestricted, all businesses of the Company are restricted (the "Restricted Group"). Indebtedness under the bank credit facility and Senior Note agreements is guaranteed by each of the Company's
domestic subsidiaries in the Restricted Group in accordance with the provisions and limitations of the Company's bank credit facility and Senior Note agreements. The guarantees are full, unconditional
and joint and several. The Unrestricted Group does not guarantee the bank credit facility or Senior Notes. For purposes of determining compliance with certain financial covenants under the Company's
bank credit facility agreement, the Unrestricted Group's results (positive or negative) are not reflected in the Consolidated EBITDA of the Restricted Group which as defined in the bank credit
facility agreement excludes losses of the Unrestricted Group, non-cash charges and restructuring charges and is adjusted primarily for the trailing four quarters results of acquisitions
and divestitures and estimated savings for acquired businesses.

The
following represents a reconciliation of EBITDA of the Restricted Group for purposes of the leverage ratio as defined in the credit agreement to operating income (loss) for the three
and twelve months ended September 30, 2003:

For the Three
Months Ended
September 30,
2003

For the Twelve
Months Ended
September 30,
2003EBITDA of the Restricted Group

$
73,325

$
332,492EBITDA loss of the Unrestricted Group


(18,206
)

(76,488
)Divestiture and other adjustments


(3,705
)

(10,130
)Depreciation of property and equipment


(15,880
)

(66,584
)Amortization of intangible assets and other


(30,280
)

(200,717
)Non-cash compensation and non-recurring charges


(770
)

(7,846
)Provision for severance, closures and restructuring related costs


(485
)

(26,303
)Loss on the sales of businesses and other, net


(294
)

(8,756
)Operating income (loss)

$
3,705

$
(64,332
)


54

---

The
EBITDA loss of the Unrestricted Group, as defined in the credit agreement, is comprised of the following categories:

For the Three
Months Ended
September 30,
2003

For the Twelve
Months Ended
September 30,
2003Internet properties

$
9,668

$
40,189Traditional turnaround and start-up properties


6,111


27,622Related overhead and other charges


2,427


8,677$
18,206

$
76,488


The
Company has established intercompany arrangements that reflect transactions, such as leasing, licensing, sales and related services and cross-promotion, between Company businesses in
the Restricted Group and the Unrestricted Group which management believes are on an arms length basis and as permitted by the bank credit facility and Senior Note agreements. These intercompany
arrangements afford strategic benefits across the Company's properties and, in particular, enable the Unrestricted Group to utilize established brands and content, promote brand awareness and increase
traffic and revenue to the Company's new media properties. For company-wide consolidated financial reporting, these intercompany transactions are eliminated in consolidation.

The
calculation of the Company's leverage ratio, as required under the bank credit facility agreement for covenant purposes, is defined as the Company's consolidated debt divided by the
EBITDA of the Restricted Group. At September 30, 2003, this leverage ratio was approximately 4.9 to 1.0.

The
following are certain contractual obligations of the Company as of September 30, 2003:

|Contractual Obligations   |  | Total |           | Less than
1 year |   | 1-3 years |  | 4-5 years |         | After
5 years
|------------------------- |  | ----- | --------- | ---------------- | - | --------- |  | --------- | ------- | -------------
|Long-term debt            |  | $     | 1,582,912 |                  | $ | 3,825     |  | $         | 52,650  |              
|Capital lease obligations |  |       | 25,026    |                  |   | 5,451     |  |           | 4,488   |              
|Operating leases          |  |       | 292,740   |                  |   | 47,038    |  |           | 86,908  |              
|                          |  |       |           |                  |   |           |  |           |         |              
|Total                     |  | $     | 1,900,678 |                  | $ | 56,314    |  | $         | 144,046 |              
|                          |  |       |           |                  |   |           |  |           |         |              

The
Company has other commitments in the form of letters of credit of $19,668 aggregate face value which expire on or before March 31, 2004.

The
Company has no variable interest (otherwise known as "special purpose") entities or off balance sheet debt, other than as related to operating leases in the ordinary course of
business as disclosed above and the contingent liability with NBC Sports relating to the Gravity Games, which is more fully disclosed below.

Other Arrangements

In connection with the About merger in 2001, certain senior executives were granted 2,955,450 shares of restricted PRIMEDIA common stock and options to purchase
3,482,300 shares of PRIMEDIA common stock. These shares and options vest at a rate of 25% per year and are subject to the executives' continued employment. Related non-cash compensation of
$1,680 and $3,229 was recorded for the nine months ended September 30, 2003 and 2002, respectively, and $470 and $874 for the three months ended September 30, 2003 and 2002,
respectively. This non-cash compensation reflects pro rata vesting on a graded basis.

55

---

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

During
2002, the Board of Directors authorized the exchange by the Company of up to $165,000 of exchangeable preferred stock. During the nine months ended September 30, 2002, the
Company exchanged $19,013 liquidation value of Series D Exchangeable Preferred Stock for 3,696,979 shares of common stock, $22,667 liquidation value of Series F Exchangeable Preferred
Stock for 4,385,222 shares of common stock and $29,761 liquidation value of Series H Exchangeable Preferred Stock for 5,808,050 shares of common stock. The related gain is included in the
calculation of basic and diluted loss applicable to common shareholders per common share on the condensed statement of consolidated operations. In July 2002, the Company exchanged $4,000
liquidation value of Series D Exchangeable Preferred Stock for 770,054 shares of common stock.

Under
its share repurchase program, the Company's Board of Directors authorized the repurchase of up to $50,000 of its outstanding common stock from time to time in the open market and
through privately negotiated transactions. In December 2002, the Company exchanged $6,150 liquidation value of Series H Preferred Stock for 2,860,465 shares of common stock. The Company
then subsequently repurchased the 2,860,465 shares of common stock for $1.48 per share or $4,244. The transaction settled in January 2003. During the second quarter of 2003, the Company
exchanged $7,000 liquidation value of Series D Exchangeable Preferred Stock for 2,223,334 shares of common stock, $7,000 liquidation value of Series F Exchangeable Preferred Stock for
2,124,166 shares of common stock, and $2,350 liquidation value of Series H Exchangeable Preferred Stock for 693,250 shares of common stock. The Company repurchased these 5,040,750 shares of
common stock for $3.00 per share or $15,123.

The
Series J Convertible Preferred Stock is convertible at the option of the holder after one year from the date of issuance, into approximately 17,900,000 shares of the Company's
common stock (excluding dividends) at a conversion price of $7 per share, subject to adjustment. Dividends on the Series J Convertible Preferred Stock accrue at an annual rate of 12.5% and are
payable quarterly in-kind. The Company paid dividends-in-kind of 112,796 and 38,761 shares of Series J Convertible Preferred Stock valued at $14,099 and
$4,845 during the nine and three months ended September 30, 2003, respectively, and 99,733 and 34,272 shares of Series J Convertible Preferred Stock valued at $12,466 and $4,284 during
the nine and three months ended September 30, 2002, respectively. The Company has the option to redeem any or all of the shares of the Series J Convertible Preferred Stock at any time
for cash at 100% of the liquidation preference of each share being redeemed. On any dividend payment date, the Company has the option to exchange, in whole but not in part, the Series J
Convertible Preferred Stock into 12.5% Class J Subordinated Notes. The Company's ability to redeem or exchange the Series J Convertible Preferred Stock into debt is subject to the
approval of a majority of the independent directors.

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

56

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Contingencies

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

During
2002, PRIMEDIA contributed the Gravity Games, acquired from EMAP, to a limited liability company (the "LLC") formed jointly by PRIMEDIA and Octagon Marketing and Athlete
Representation, Inc. (now known as Octagon, Inc.) (Octagon), with each party owning a 50% interest. The LLC entered into an agreement with NBC Sports, a division of National Broadcasting
Company, Inc. ("NBC") which required the LLC to pay specified fees to NBC for certain production services performed by NBC and network air time provided by NBC during 2002 and 2003. Under the
terms of the agreement and a related guarantee, PRIMEDIA could be responsible for the payment of a portion of such fees in the event the LLC failed to satisfy its payment obligations to NBC.

During
the third quarter of 2003, the Company contributed $2,500 to the LLC, $1,100 of which was used to fund the LLC's obligations to NBC. As of September 30, 2003, the LLC was
scheduled to be responsible for up to $2,025 in additional payments to NBC, $1,013 of which could be required to be contributed by the Company. In October 2003, the Company and Octagon each
contributed an additional $850 to the LLC for a total of $1,700. The LLC used $438 of each party's payment, for a total of $876, to pay NBC, leaving $1,150 still due to NBC, of which the Company could
be required to pay up to $575. The Company has accrued for this $850 payment in accrued expenses and other on the condensed consolidated balance sheet at September 30, 2003. The asset
representing the Company's equity investment in the LLC as well as the Company's share of the LLC's losses are reflected in the Company's condensed consolidated financial statements. The Company's
investment in the LLC of $1,955 and $1,526 is reflected as a component of other investments on the accompanying condensed consolidated balance sheets at September 30, 2003 and
December 31, 2002, respectively. The Company's share of the LLC's losses of $2,921 and $1,942 are reflected as a component of other, net on the accompanying condensed statements of consolidated
operations for the nine and three months ended September 30, 2003, respectively. In 2002, the Company's share of the LLC's losses were $184 for the nine and three months ended
September 30, 2002.

Pursuant
to a restructuring agreement entered into between PRIMEDIA and Octagon in August 2003, PRIMEDIA's interest in the LLC terminated effective October 31, 2003 and
PRIMEDIA has ended its direct involvement in the Gravity Games with the conclusion of the September 2003 event. Going forward, PRIMEDIA is entitled to receive, among other things, a share of
accumulated net profit (as defined) generated by the LLC during the period commencing October 31, 2003 and ending on the earlier of (i) October 31, 2006 and (ii) the date
of the sale of all or substantially all of the capital stock or
assets of the LLC. Additionally, as a result of PRIMEDIA's exit from the LLC, the Company is entitled to 50% of certain assets and liabilities of the LLC as of October 31, 2003, which will
result in a cash settlement between the Company and the LLC.

The
Company anticipates that a capital investment will be required after 2003 to continue the current business operations and to maintain profit margins at Channel One. PRIMEDIA expects
spending would begin in 2004 and extend over a three-year period. However, management is pursuing alternative solutions which would decrease the required capital investment of the Company
and provide additional significant revenue streams.

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

57

---

Critical Accounting Policies and Estimates

During the first nine months of 2003, there were no significant changes related to the Company's critical accounting policies and estimates.

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

Senior Executive Severance

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

Provision for Severance, Closures and Restructuring Related Costs

During 2003 and 2002, the Company announced additional cost initiatives that would continue to implement and expand upon the cost initiatives enacted during 2001
and 2000. These initiatives were enacted to integrate the operations of the Company and consolidate many back office functions. In June 2002, the Financial Accounting Standards Boards ("FASB")
issued SFAS 146 "Accounting for Costs Associated with Exit or Disposal Activities, which superseded EITF 94-3, "Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)". SFAS 146 affects the timing of the recognition of costs associated with an exit or disposal plan by
requiring them to be recognized when incurred rather than at the date of a commitment to an exit or disposal plan. SFAS 146 has been applied prospectively to exit or disposal activities
initiated after December 31, 2002.

58

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

|                                                 |  | Liability as of January 1, 2003 |        | Net Provision for the Nine Months Ended September 30, 2003 |   | Payments during the Nine Months Ended September 30, 2003 |  | Liability as of September 30, 2003
|------------------------------------------------ |  | ------------------------------- | ------ | ---------------------------------------------------------- | - | -------------------------------------------------------- |  | ----------------------------------
|Employee related termination costs               |  | $                               | 3,733  |                                                            | $ | 3,348                                                    |  | $                                 
|Termination of contracts                         |  |                                 | 575    |                                                            |   | 16                                                       |  |                                   
|Termination of leases related to office closures |  |                                 | 41,366 |                                                            |   | 108                                                      |  |                                   
|                                                 |  |                                 |        |                                                            |   |                                                          |  |                                   
|Total severance and closures                     |  | $                               | 45,674 | (1)                                                        | $ | 3,472                                                    |  | $                                 
|                                                 |  |                                 |        |                                                            |   |                                                          |  |                                   

|                                                          |  | Liability as of January 1, 2002 |        | Net Provision for the Nine Months Ended September 30, 2002 |   | Payments during the Nine Months Ended September 30, 2002 |   | Liability as of September 30, 2002
|--------------------------------------------------------- |  | ------------------------------- | ------ | ---------------------------------------------------------- | - | -------------------------------------------------------- | - | ----------------------------------
|Severance and closures:                                   |  |                                 |        |                                                            |   |                                                          |   |                                   
|Employee related termination costs                        |  | $                               | 8,011  |                                                            | $ | 5,758                                                    |   | $                                 
|Termination of contracts                                  |  |                                 | 2,243  |                                                            |   | (137                                                     | ) |                                   
|Termination of leases related to office closures          |  |                                 | 12,517 |                                                            |   | 20,452                                                   |   |                                   
|                                                          |  |                                 |        |                                                            |   |                                                          |   |                                   
|                                                          |  |                                 | 22,771 |                                                            |   | 26,073                                                   |   |                                   
|                                                          |  |                                 |        |                                                            |   |                                                          |   |                                   
|Restructuring related:                                    |  |                                 |        |                                                            |   |                                                          |   |                                   
|Relocation and other employee costs                       |  |                                 |       |                                                            |   | 765                                                      |   |                                   
|                                                          |  |                                 |        |                                                            |   |                                                          |   |                                   
|                                                          |  |                                 |       |                                                            |   | 765                                                      |   |                                   
|                                                          |  |                                 |        |                                                            |   |                                                          |   |                                   
|Total severance, closures and restructuring related costs |  | $                               | 22,771 | (1)                                                        | $ | 26,838                                                   |   | $                                 
|                                                          |  |                                 |        |                                                            |   |                                                          |   |                                   

---

(1)
Reduced for liabilities relating to discontinued operations totaling $1,627 and $3,760 at January 1, 2002 and 2003, respectively.

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

Included
in the net provision for the nine month period ended September 30, 2003 are reversals of $2,011 of previously recorded accruals primarily due to continuing
re-evaluation of lease assumptions.

As
a result of the implementation of these plans, the Company has closed and consolidated in excess of twenty office locations and has notified a total of 1,956 individuals that they
would be terminated under these plans, of which 200 and 41 individuals were notified during the nine and three month periods ended September 30, 2003, respectively. As of September 30,
2003, all of those individuals have been terminated.

The
Company expects to realize sufficient savings from its plans to integrate the operations of the Company and to recover the costs associated with employee terminations within
approximately a

59

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one-year
period. Savings from terminations of contracts and leases will be realized over the estimated life of the contract or lease.

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

Recent Accounting Pronouncements

Adoption of FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, including Indirect Guarantees of Indebtedness of Others, an
Interpretation of FASB Statements No. 5, 57 and 107 and Rescission of FASB Interpretation No. 34", effective January 1, 2003

In November 2002, the FASB approved FASB Interpretation No. 45 ("FIN 45") which clarifies the requirements of SFAS 5, "Accounting for
Contingencies", relating to a guarantor's accounting for, and disclosure of, the issuance of certain types of guarantees. Specifically, FIN 45 requires a guarantor to recognize a liability for the
non-contingent component of certain guarantees, representing the obligation to stand ready to perform in the event that specified triggering events or conditions occur. Effective
January 1, 2003, the Company has adopted FIN 45 which has not had a material impact on the Company's results of operations or financial position.

Adoption of FASB Interpretation No. 46, "Consolidation of Variable Interest Entities", effective January 31, 2003

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

Issuance of SFAS 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities", effective July 1, 2003

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

Adoption of SFAS 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity", effective July 1, 2003

In May 2003, the FASB issued SFAS 150, which requires the Company to classify as long-term liabilities its Series D, F and H
Exchangeable Preferred Stock and to reclassify dividends from this preferred stock to interest expense. As a result of the adoption by the Company of SFAS 150, the Series D, F and H
Exchangeable Preferred Stock are now collectively described as "shares subject to mandatory redemption" on the accompanying condensed consolidated balance sheets and dividends on these shares are now
described as "interest on shares subject to mandatory redemption" and included in loss from continuing operations before income tax expense whereas previously they were presented

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below
net income (loss) as preferred stock dividends. The adoption of SFAS 150 increased loss from continuing operations for the three and nine-month periods ended
September 30, 2003 by $11,008. If SFAS 150 was adopted on July 1, 2002, loss from continuing operations would have increased by $12,016 for the comparable periods of 2002. The
SFAS 150 adoption had no impact on loss applicable to common shareholders or loss per common share for any of the periods presented on the accompanying condensed statements of consolidated
operations.

Impact of Inflation and Other Costs

The impact of inflation was immaterial during 2002 and through the first nine months of 2003. Postage for product distribution and direct mail solicitations is a
significant expense of the Company. The Company uses the U.S. Postal Service for distribution of many of its products and marketing materials. Postage rates increased approximately 12% effective
July 1, 2002.In the past, the effects of inflation on operating expenses have substantially been offset by PRIMEDIA's ability to increase
selling prices. No assurances can be given that the Company can pass such cost increases through to its customers. In addition to pricing actions, the Company is continuing to examine all aspects of
the manufacturing and purchasing processes to identify ways to offset some of these price increases. In the first nine months of 2003, paper costs, excluding Seventeen andNew
Yorkmagazine, were approximately 7% of the Company's total operating costs and expenses. This represents a decrease of approximately 18% from the first nine months of 2002,
excluding Seventeen andNew Yorkmagazine. The Company attributes the decrease in paper expenses to the decline of paper prices generally, as well as
the smaller folio sizes of magazines that have seen advertising declines.

Seasonality

The Company's operations are seasonal in nature. Operating results have historically been stronger in the second half of the year with generally strongest results
generated in the fourth quarter of the year. The seasonality of the Company's business reflects (i) the relationship between advertising purchases
and the retail and academic cycles and (ii) subscription promotions and the holiday season. This seasonality causes, and will likely continue to cause, a variation in the Company's quarterly
operating results. Such variations have an effect on the timing of the Company's cash flows and the reported quarterly results.

Forward-Looking Information

This report contains certain forward-looking statements concerning the Company's operations, economic performance and financial condition. These statements are
based upon a number of assumptions and estimates, which are inherently subject to uncertainties and contingencies, many of which are beyond the control of the Company, and reflect future business
decisions, which are subject to change. Some of the assumptions may not materialize and unanticipated events will occur which can affect the Company's results.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

During the first nine months of 2003, there were no significant changes related to the Company's market risk exposure.

Item 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company's management, with the participation of the Company's Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, has evaluated the
effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based on such

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evaluation,
the Company's Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer have concluded that, as of the end of such period, the Company's disclosure controls and
procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the
Securities Exchange Act of 1934, as amended.

Internal Control Over Financial Reporting

There have not been any changes in the Company's internal control over financial reporting during the fiscal quarter to which this report relates that have
materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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Part II. OTHER INFORMATION

Item 5.    OTHER INFORMATION

During the first nine months of 2003, the Company completed the sale ofSeventeenmagazine and its related teen
properties ("Seventeen") and Simba Information. During October 2003, the Company sold Federal Sources,CableWorldand Sprinks. In addition, the
Company initiated plans to sellNew Yorkmagazine and Kagan World Media. In accordance with SFAS 144, these entities have been reclassified to
discontinued operations for all periods. The following table reflects the reclassification for sales, net and operating income (loss) for these entities:

|                                                        |  | First
Quarter
2002 |         | Second
Quarter
2002 |   | Third
Quarter
2002 |  | Fourth
Quarter
2002 |         | Full
Year
2002 |   | First
Quarter
2003 |  | Second
Quarter
2003
|------------------------------------------------------- |  | ------------------ | ------- | ------------------- | - | ------------------ |  | ------------------- | ------- | -------------- | - | ------------------ |  | -------------------
|Sales, net (as reported (1))                            |  | $                  | 388,929 |                     | $ | 400,836            |  | $                   | 385,272 |                | $ | 412,527            |  | $                  
|Effect of the sale of divested entities (2)             |  |                    | 42,342  |                     |   | 34,836             |  |                     | 50,752  |                |   | 47,081             |  |                    
|                                                        |  |                    |         |                     |   |                    |  |                     |         |                |   |                    |  |                    
|Sales, net (as reclassified)                            |  |                    | 346,587 |                     |   | 366,000            |  |                     | 334,520 |                |   | 365,446            |  |                    
|Non-Core sales, net (as reported)                       |  |                    | 10,974  |                     |   | 2,517              |  |                     |        |                |   |                   |  |                    
|                                                        |  |                    |         |                     |   |                    |  |                     |         |                |   |                    |  |                    
|Sales, net from Continuing Businesses (as reclassified) |  | $                  | 335,613 |                     | $ | 363,483            |  | $                   | 334,520 |                | $ | 365,446            |  | $                  
|                                                        |  |                    |         |                     |   |                    |  |                     |         |                |   |                    |  |                    

|                                                                     |  | First
Quarter
2002 |         | Second
Quarter
2002 |   | Third
Quarter
2002 |   | Fourth
Quarter
2002 |        | Full
Year
2002 |   | First
Quarter
2003 |   | Second
Quarter
2003
|-------------------------------------------------------------------- |  | ------------------ | ------- | ------------------- | - | ------------------ | - | ------------------- | ------ | -------------- | - | ------------------ | - | -------------------
|Operating income (loss) (as reported (1))                            |  | $                  | (23,232 | )                   | $ | 7,249              |   | $                   | 8,408  |                | $ | (113,526           | ) | $                  
|Effect of the sale of divested entities (2)                          |  |                    | (5,150  | )                   |   | (4,290             | ) |                     | (5,513 | )              |   | 1,982              |   |                    
|                                                                     |  |                    |         |                     |   |                    |   |                     |        |                |   |                    |   |                    
|Operating income (loss) (as reclassified)                            |  |                    | (18,082 | )                   |   | 11,539             |   |                     | 13,921 |                |   | (115,508           | ) |                    
|Non-Core operating loss, net (as reported)                           |  |                    | (2,255  | )                   |   | (4,081             | ) |                     |       |                |   |                   |   |                    
|                                                                     |  |                    |         |                     |   |                    |   |                     |        |                |   |                    |   |                    
|Operating income (loss) from Continuing businesses (as reclassified) |  | $                  | (15,827 | )                   | $ | 15,620             |   | $                   | 13,921 |                | $ | (115,508           | ) | $                  
|                                                                     |  |                    |         |                     |   |                    |   |                     |        |                |   |                    |   |                    

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Item 6. EXHIBITS AND REPORTS ON FORM 8-K

|31.1 |  | Certification by Kelly P. Conlin Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(*)                                                
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------
|31.2 |  | Certification by Matthew A. Flynn Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(*)                                               
|31.3 |  | Certification by Robert J. Sforzo Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(*)                                               
|32.1 |  | Certification by Kelly P. Conlin Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(*) 
|32.2 |  | Certification by Matthew A. Flynn Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(*)
|32.3 |  | Certification by Robert J. Sforzo Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(*)

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The
Company furnished a Current Report on Form 8-K, dated July 31, 2003, (a) announcing under Item 12 the issuance of a press release dated
July 31, 2003 regarding its earnings for the three months ending June 30, 2003 and (b) furnishing as an exhibit under Item 7 thereof a copy of the related press release.

The
Company filed a Current Report on Form 8-K, dated September 11, 2003, (a) reporting under Item 5 thereof the election of Timothy D. Dattels to the
Board of Directors of the Company and (b) filing as an exhibit under Item 7 thereof a copy of the related press release dated September 11, 2003.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

|                        |  | PRIMEDIA Inc.(Registrant)                                                                                                    
|----------------------- |  | -----------------------------------------------------------------------------------------------------------------------------
|                        |  |                                                                                                                              
|Date: November 14, 2003 |  | /s/ KELLY P. CONLIN(Signature) Chief Executive Officer and President
(Principal Executive Officer)                           
|                        |  |                                                                                                                              
|Date: November 14, 2003 |  | /s/ MATTHEW A. FLYNN(Signature) Senior Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)   
|                        |  |                                                                                                                              
|Date: November 14, 2003 |  | /s/ ROBERT J. SFORZO(Signature) Senior Vice President, Chief Accounting Officer and Controller
(Principal Accounting Officer)

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EXHIBIT INDEX

|Exhibit No. |  | Description                                                                                                                              
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------
|31.1        |  | Certification by Kelly P. Conlin Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                               
|31.2        |  | Certification by Matthew A. Flynn Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                              
|31.3        |  | Certification by Robert J. Sforzo Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                              
|32.1        |  | Certification by Kelly P. Conlin Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|32.2        |  | Certification by Matthew A. Flynn Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|32.3        |  | Certification by Robert J. Sforzo Pursuant to 10 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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