Use these links to rapidly review the documentPRIMEDIA Inc. INDEX



UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2004

Commission file number: 1-11106

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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           

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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 April 30, 2004: 260,245,950.



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PRIMEDIA Inc.        INDEX



|                               |  |                                                                                                                |  | PAGE
|------------------------------ |  | -------------------------------------------------------------------------------------------------------------- |  | ----
|Part I. Financial Information: |  |                                                                                                               
|Item 1.                        |  | Financial Statements                                                                                           |  |     
|                               |  | Condensed Consolidated Balance Sheets as of March 31, 2004 (Unaudited) and December 31, 2003                   |  | 2   
|                               |  | Condensed Statements of Consolidated Operations (Unaudited) for the three months ended March 31, 2004 and 2003 |  | 3   
|                               |  | Condensed Statements of Consolidated Cash Flows (Unaudited) for the three months ended March 31, 2004 and 2003 |  | 4   
|                               |  | Notes to Condensed Consolidated Financial Statements (Unaudited)                                               |  | 5-22
|Item 2.                        |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                          |  | 23  
|Item 3.                        |  | Quantitative and Qualitative Disclosures About Market Risk                                                     |  | 46  
|Item 4.                        |  | Controls and Procedures                                                                                        |  | 46  
|Part II. Other Information:    |  |                                                                                                               
|Item 6.                        |  | Exhibits and Reports on Form 8-K                                                                               |  | 47  
|Signatures                     |  | 48                                                                                                            

1

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PRIMEDIA INC. AND SUBSIDIARIES        CONDENSED CONSOLIDATED BALANCE SHEETS

|                                                                                                                   |                                                                                                                                                                                                                                                 | March 31, 2004                                 |           | December 31, 2003 |          
|------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | --------- | ----------------- | ---------
|
|
|ASSETS                                                                                                             |                                                                                                                                                                                                                                                 |                                                |           |                   |          
|Current assets:                                                                                                    |                                                                                                                                                                                                                                                 |                                                |           |                   |          
|                                                                                                                   | Cash and cash equivalents                                                                                                                                                                                                                       |                                                | $         | 19,110            |          
|                                                                                                                   | Accounts receivable, net                                                                                                                                                                                                                        |                                                |           | 201,832           |          
|                                                                                                                   | Inventories                                                                                                                                                                                                                                     |                                                |           | 18,231            |          
|                                                                                                                   | Prepaid expenses and other                                                                                                                                                                                                                      |                                                |           | 45,306            |          
|                                                                                                                   | Assets held for sale                                                                                                                                                                                                                            |                                                |           |                  |          
|                                                                                                                   |                                                                                                                                                                                                                                                 |                                                |           |                   |          
|                                                                                                                   |                                                                                                                                                                                                                                                 | Total current assets                           |           |                   | 284,479  
|Property and equipment (net of accumulated depreciation and amortization of $292,571 in 2004 and $280,612 in 2003) |                                                                                                                                                                                                                                                 |                                                | 104,652   |                   |          
|Other intangible assets, net                                                                                       |                                                                                                                                                                                                                                                 |                                                | 262,799   |                   |          
|Goodwill                                                                                                           |                                                                                                                                                                                                                                                 |                                                | 909,897   |                   |          
|Other non-current assets                                                                                           |                                                                                                                                                                                                                                                 |                                                | 58,134    |                   |          
|                                                                                                                   |                                                                                                                                                                                                                                                 |                                                |           |                   |          
|                                                                                                                   |                                                                                                                                                                                                                                                 | Total Assets                                   |           | $                 | 1,619,961
|                                                                                                                   |                                                                                                                                                                                                                                                 |                                                |           |                   |          
|LIABILITIES AND SHAREHOLDERS' DEFICIENCY                                                                           |                                                                                                                                                                                                                                                 |                                                |           |                   |          
|Current liabilities:                                                                                               |                                                                                                                                                                                                                                                 |                                                |           |                   |          
|                                                                                                                   | Accounts payable                                                                                                                                                                                                                                |                                                | $         | 56,500            |          
|                                                                                                                   | Accrued expenses and other                                                                                                                                                                                                                      |                                                |           | 227,230           |          
|                                                                                                                   | Deferred revenues                                                                                                                                                                                                                               |                                                |           | 162,230           |          
|                                                                                                                   | Current maturities of long-term debt                                                                                                                                                                                                            |                                                |           | 21,369            |          
|                                                                                                                   | Liabilities of businesses held for sale                                                                                                                                                                                                         |                                                |           |                  |          
|                                                                                                                   |                                                                                                                                                                                                                                                 |                                                |           |                   |          
|                                                                                                                   |                                                                                                                                                                                                                                                 | Total current liabilities                      |           |                   | 467,329  
|Long-term debt                                                                                                     |                                                                                                                                                                                                                                                 |                                                | 1,553,720 |                   |          
|Shares subject to mandatory redemption                                                                             |                                                                                                                                                                                                                                                 |                                                | 474,559   |                   |          
|Deferred revenues                                                                                                  |                                                                                                                                                                                                                                                 |                                                | 34,202    |                   |          
|Deferred income taxes                                                                                              |                                                                                                                                                                                                                                                 |                                                | 65,653    |                   |          
|Other non-current liabilities                                                                                      |                                                                                                                                                                                                                                                 |                                                | 24,146    |                   |          
|                                                                                                                   |                                                                                                                                                                                                                                                 |                                                |           |                   |          
|                                                                                                                   |                                                                                                                                                                                                                                                 | Total Liabilities                              |           |                   | 2,619,609
|                                                                                                                   |                                                                                                                                                                                                                                                 |                                                |           |                   |          
|Shareholders' deficiency:                                                                                          |                                                                                                                                                                                                                                                 |                                                |           |                   |          
|                                                                                                                   | Series J convertible preferred stock ($.01 par value, 1,360,315 shares and 1,319,093 shares issued and outstanding, aggregate liquidation and redemption values of $170,040 and $164,887 at March 31, 2004 and December 31,
2003, respectively) |                                                |           | 169,686           |          
|                                                                                                                   | Common stock ($.01 par value, 350,000,000 shares authorized at March 31, 2004 and December 31, 2003 and 268,848,200 shares and 268,333,049 shares issued at March 31, 2004 and December 31, 2003, respectively)                                 |                                                |           | 2,688             |          
|                                                                                                                   | Additional paid-in capital (including warrants of $31,690 at March 31, 2004 and December 31, 2003)                                                                                                                                              |                                                |           | 2,347,518         |          
|                                                                                                                   | Accumulated deficit                                                                                                                                                                                                                             |                                                |           | (3,441,792        | )        
|                                                                                                                   | Accumulated other comprehensive loss                                                                                                                                                                                                            |                                                |           | (186              | )        
|                                                                                                                   | Unearned compensation                                                                                                                                                                                                                           |                                                |           |                  |          
|                                                                                                                   | Common stock in treasury, at cost (8,610,491 shares at March 31, 2004 and December 31, 2003)                                                                                                                                                    |                                                |           | (77,562           | )        
|                                                                                                                   |                                                                                                                                                                                                                                                 |                                                |           |                   |          
|                                                                                                                   |                                                                                                                                                                                                                                                 | Total Shareholders' Deficiency                 |           |                   | (999,648 
|                                                                                                                   |                                                                                                                                                                                                                                                 |                                                |           |                   |          
|                                                                                                                   |                                                                                                                                                                                                                                                 | Total Liabilities and Shareholders' Deficiency |           | $                 | 1,619,961
|                                                                                                                   |                                                                                                                                                                                                                                                 |                                                |           |                   |          

See notes to condensed consolidated financial statements (unaudited).

2

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

|                                                                                                                             |                                                                                                                         | Three Months Ended March 31, |            
|---------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------- | ---------------------------- | -----------
|
|
|Revenues, net:                                                                                                               |                                                                                                                         |                              |            
|Advertising                                                                                                                  |                                                                                                                         | $                            | 204,100    
|Circulation                                                                                                                  |                                                                                                                         |                              | 75,800     
|Other                                                                                                                        |                                                                                                                         |                              | 48,603     
|                                                                                                                             |                                                                                                                         |                              |            
|                                                                                                                             | Total revenues, net                                                                                                     |                              |            
|Operating costs and expenses:                                                                                                |                                                                                                                         |                              |            
|                                                                                                                             | Cost of goods sold                                                                                                      |                              |            
|                                                                                                                             | Marketing and selling                                                                                                   |                              |            
|                                                                                                                             | Distribution, circulation and fulfillment                                                                               |                              |            
|                                                                                                                             | Editorial                                                                                                               |                              |            
|                                                                                                                             | Other general expenses                                                                                                  |                              |            
|                                                                                                                             | Corporate administrative expenses (excluding $1,919 and $1,246 of non-cash compensation in 2004 and 2003, respectively) |                              |            
|                                                                                                                             | Depreciation of property and equipment                                                                                  |                              |            
|                                                                                                                             | Amortization of intangible assets and other                                                                             |                              |            
|                                                                                                                             | Severance related to separated senior executives                                                                        |                              |            
|                                                                                                                             | Non-cash compensation                                                                                                   |                              |            
|                                                                                                                             | Provision for severance, closures and restructuring related costs                                                       |                              |            
|                                                                                                                             | Provision for unclaimed property                                                                                        |                              |            
|                                                                                                                             | (Gain) loss on sale of businesses and other, net                                                                        |                              |            
|                                                                                                                             |                                                                                                                         |                              |            
|Operating income                                                                                                             |                                                                                                                         |                              | 18,637     
|Other expense:                                                                                                               |                                                                                                                         |                              |            
|                                                                                                                             | Interest expense                                                                                                        |                              |            
|                                                                                                                             | Interest on shares subject to mandatory redemption                                                                      |                              |            
|                                                                                                                             | Amortization of deferred financing costs                                                                                |                              |            
|                                                                                                                             | Other income (expense), net                                                                                             |                              |            
|                                                                                                                             |                                                                                                                         |                              |            
|Loss from continuing operations before income tax expense                                                                    |                                                                                                                         |                              | (21,700    
|Income tax expense                                                                                                           |                                                                                                                         |                              | (4,390     
|                                                                                                                             |                                                                                                                         |                              |            
|Loss from continuing operations                                                                                              |                                                                                                                         |                              | (26,090    
|Discontinued operations (including gain (loss) on sale of businesses of $38,035 and ($1,242) in 2004 and 2003, respectively) |                                                                                                                         |                              | 37,161     
|                                                                                                                             |                                                                                                                         |                              |            
|Net income (loss)                                                                                                            |                                                                                                                         |                              | 11,071     
|Preferred stock dividends and related accretion, net                                                                         |                                                                                                                         |                              | (5,153     
|                                                                                                                             |                                                                                                                         |                              |            
|Income (loss) applicable to common shareholders                                                                              |                                                                                                                         | $                            | 5,918      
|                                                                                                                             |                                                                                                                         |                              |            
|Per common share:                                                                                                            |                                                                                                                         |                              |            
|                                                                                                                             | Loss from continuing operations                                                                                         |                              | $          
|                                                                                                                             | Discontinued operations                                                                                                 |                              |            
|                                                                                                                             |                                                                                                                         |                              |            
|                                                                                                                             | Basic and diluted income (loss) applicable to common shareholders                                                       |                              | $          
|                                                                                                                             |                                                                                                                         |                              |            
|Basic and diluted common shares outstanding                                                                                  |                                                                                                                         |                              | 259,894,408
|                                                                                                                             |                                                                                                                         |                              |            

See notes to condensed consolidated financial statements (unaudited).

3

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

|                                               |                                                                                     | Three Months Ended March 31,                        |       
|---------------------------------------------- | ----------------------------------------------------------------------------------- | --------------------------------------------------- | ------
|
|
|Operating activities:                          |                                                                                     |                                                     |       
|                                               | Net income (loss)                                                                   |                                                     | $     
|                                               | Adjustments to reconcile net income (loss) to net cash used in operating activities |                                                     |       
|                                               | Changes in operating assets and liabilities                                         |                                                     |       
|                                               |                                                                                     |                                                     |       
|                                               |                                                                                     | Net cash used in operating activities               |       
|                                               |                                                                                     |                                                     |       
|Investing activities:                          |                                                                                     |                                                     |       
|                                               | Additions to property, equipment and other, net                                     |                                                     |       
|                                               | Proceeds from sale of businesses and other                                          |                                                     |       
|                                               | Payments for businesses acquired, net of cash acquired                              |                                                     |       
|                                               | Proceeds from (payments for) other investments, net                                 |                                                     |       
|                                               |                                                                                     |                                                     |       
|                                               |                                                                                     | Net cash provided by (used in) investing activities |       
|                                               |                                                                                     |                                                     |       
|Financing activities:                          |                                                                                     |                                                     |       
|                                               | Borrowings under credit agreements                                                  |                                                     |       
|                                               | Repayments of borrowings under credit agreements                                    |                                                     |       
|                                               | Payments for repurchases of senior notes                                            |                                                     |       
|                                               | Proceeds from issuances of common stock, net                                        |                                                     |       
|                                               | Purchases of common stock for the treasury                                          |                                                     |       
|                                               | Dividends paid to preferred stock shareholders                                      |                                                     |       
|                                               | Capital lease obligations                                                           |                                                     |       
|                                               | Other                                                                               |                                                     |       
|                                               |                                                                                     |                                                     |       
|                                               |                                                                                     | Net cash provided by (used in) financing activities |       
|                                               |                                                                                     |                                                     |       
|Increase in cash and cash equivalents          |                                                                                     |                                                     | 10,425
|Cash and cash equivalents, beginning of period |                                                                                     |                                                     | 8,685 
|                                               |                                                                                     |                                                     |       
|Cash and cash equivalents, end of period       |                                                                                     | $                                                   | 19,110
|                                               |                                                                                     |                                                     |       
|Supplemental information:                      |                                                                                     |                                                     |       
|                                               | Cash interest paid                                                                  |                                                     | $     
|                                               |                                                                                     |                                                     |       
|                                               | Cash interest paid on shares subject to mandatory redemption                        |                                                     | $     
|                                               |                                                                                     |                                                     |       
|                                               | Cash taxes paid, net of refunds                                                     |                                                     | $     
|                                               |                                                                                     |                                                     |       
|                                               | Accretion in carrying value of exchangeable and convertible preferred stock         |                                                     | $     
|                                               |                                                                                     |                                                     |       
|                                               | Payments of dividends-in-kind on Series J Convertible Preferred Stock               |                                                     | $     
|                                               |                                                                                     |                                                     |       

See
notes to condensed consolidated financial statements (unaudited).

4

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

1.Summary of Significant Accounting Policies

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
condensed consolidated financial statements present fairly the consolidated financial position of the Company as of March 31, 2004 and December 31, 2003 and the consolidated results of
operations of the Company for the three month periods ended March 31, 2004 and 2003, and consolidated cash flows of the Company for the three months ended March 31, 2004 and 2003 and all
adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. All 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, 2003, which are included in the
Company's annual report on Form 10-K for the year ended December 31, 2003. The operating results for the three months ended March 31, 2004 and 2003 are not necessarily
indicative of the results that may be expected for a full year. Certain amounts in the prior periods' condensed consolidated financial statements and related notes have been reclassified to conform to
the presentation as of and for the three month period ended March 31, 2004.

Stock Based Compensation

The Company has a stock-based employee compensation plan. Effective January 1, 2003, the Company adopted Statement of Financial Accounting Standards
("SFAS") No. 123, "Accounting for Stock-Based Compensation", as amended by SFAS 148, "Accounting for Stock-Based CompensationTransition and Disclosure", using the
prospective method. Upon adoption, the Company began expensing the fair value of stock-based compensation for all grants, modifications or settlements made on or after January 1, 2003. The
adoption of SFAS 123 increased the loss from continuing operations for the three months ended March 31, 2004 by $590. The impact of the adoption of SFAS 123 was not significant
for the three months ended March 31, 2003.

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

|                                                                                                                |  | Three Months Ended
March 31, |       
|--------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ------
|
|Reported net income (loss) applicable to common shareholders                                                    |  | $                            | 5,918 
|Add: stock-based employee compensation expense included in reported net income (loss)                           |  |                              | 765   
|Deduct: total stock-based employee compensation expense determined under fair value based method for all awards |  |                              | (3,161
|                                                                                                                |  |                              |       
|Pro forma net income (loss) applicable to common shareholders                                                   |  | $                            | 3,522 
|                                                                                                                |  |                              |       
|Per common share:                                                                                               |  |                              |       
|Reported basic and diluted income (loss)                                                                        |  | $                            | 0.02  
|Pro forma basic and diluted income (loss)                                                                       |  | $                            | 0.01  

5

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Pro
forma information regarding net income and earnings per share is required by SFAS 123, and has been determined as if the Company had accounted for its employee stock options
granted on or before December 31, 2002 under the fair value method of SFAS 123. 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 options granted in 2004 and 2003, respectively: risk-free interest rates of 2.18% and 3.91%; dividend yields of 0.0% and 0.0%;
volatility factors of the expected market price of the Company's common stock of 89% and 79%, and a weighted-average expected life of the options of three and five years. The estimated fair value of
options granted during the three months ended March 31, 2004 and 2003 was $8 and $10, respectively.

The
Black-Scholes pricing model was developed for use in estimating the fair value of traded options which have no vesting restrictions 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.

Recent Accounting Pronouncement

On July 1, 2003, the Company prospectively adopted SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity." SFAS 150 requires the Company to classify as long-term liabilities its Series D Exchangeable Preferred Stock, Series F Exchangeable Preferred
Stock and Series H Exchangeable Preferred Stock (collectively the "Exchangeable Preferred Stock") and to classify dividends from this Exchangeable Preferred Stock as interest expense.

As
a result of the adoption by the Company of SFAS 150, the Series D Exchangeable Preferred Stock, Series F Exchangeable Preferred Stock and Series H
Exchangeable Preferred Stock are now collectively described as "shares subject to mandatory redemption" on the accompanying condensed consolidated balance sheets as of March 31, 2004 and
December 31, 2003. Dividends on these shares, subsequent to the adoption of SFAS 150, are now described as "interest on shares subject to mandatory redemption" and are included in loss
from continuing operations for the three months ended March 31, 2004,
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 three months ended
March 31, 2004 by $11,281 which represents interest on shares subject to mandatory redemption ($10,945) and amortization of issuance costs ($336) which is included in the amortization of
deferred financing costs on the accompanying condensed statement of consolidated operations. If SFAS 150 was adopted on January 1, 2003, loss from continuing operations for the three
months ended March 31, 2003 would have increased by $11,876. This adoption did not have an impact on income (loss) applicable to common shareholders or income (loss) per common share for any of
the periods presented on the accompanying condensed statements of consolidated operations.

2.Divestitures

The Company has classified the results of certain divested entities as discontinued operations in accordance with SFAS 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets".

In
January 2004, the Company completed the sale ofNew Yorkmagazine, part of the Enthusiast Media segment, the results of which
have been classified as discontinued operations for all periods presented. Proceeds from the sale of $55,000, subject to standard post-closing adjustments, were used to pay down the
Company's borrowings under its bank credit facilities with JPMorgan Chase Bank, Bank of America, N.A., The Bank of New York, and The Bank of Nova Scotia, as agents (the "bank

6

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credit
facilities"). Additionally, the Company finalized a working capital settlement with the purchaser ofSeventeenand its companion teen properties,
resulting in a payment to the purchaser of $3,379 in January 2004. With these transactions, the Company has substantially completed its asset divestiture program.

In
February 2004, the Company completed the sale of Kagan World Media, part of the Business Information segment, the results of which have been classified as discontinued
operations for all periods presented. Proceeds from the sale of approximately $2,200, subject to standard post-closing adjustments, were used to pay down the Company's borrowings under its
bank credit facilities.

The
results of the Company's divestiture of certain properties in 2004 and 2003 have been included in discontinued operations on the accompanying condensed statements of consolidated
operations. Discontinued operations include revenues of $1,639 and $47,314 for the three months ended March 31, 2004 and 2003, respectively.

Assets
and liabilities classified as held for sale at December 31, 2003 have been sold as of March 31, 2004.

3.Accounts Receivable, Net

Accounts receivable, net, consisted of the following:

March 31,
2004

December 31,
2003Accounts receivable

$
220,988

$
212,144Less: Allowance for doubtful accounts


11,739


10,798Allowance for returns and rebates


7,417


7,266$
201,832

$
194,080


4.Inventories

Inventories consisted of the following:

March 31,
2004

December 31,
2003Finished goods

$
9,159

$
8,008Work in process





230Raw materials


9,072


9,262$
18,231

$
17,500


5.Goodwill, Other Intangible Assets and Other

As required under SFAS 142, "Goodwill and Other Intangible Assets", the Company continues to assess goodwill and indefinite lived intangible assets for
impairment at least annually since its initial adoption of SFAS 142 on January 1, 2002. The Company established October 31 as the annual impairment test date. In addition to the
annual impairment test, an assessment is also required whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For the three months ended
March 31, 2004 and 2003, there were no events or changes in circumstances requiring the Company to perform an impairment test related to goodwill, intangible assets or other finite lived
assets, and accordingly, there were no impairments recorded.

Historically,
the Company did not need a valuation allowance for the portion of the tax effect of net operating losses equal to the amount of deferred tax liabilities related to
tax-deductible goodwill

7

---



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. Upon adoption of
SFAS 142, the Company recorded a valuation allowance in excess of its net deferred tax assets to the extent the difference between the book and tax basis of indefinite-lived intangible assets
is not expected to reverse during the net operating loss carryforward period. With the adoption of SFAS 142, the Company no longer amortizes the book basis in the indefinite-lived intangibles,
but will continue to amortize these intangibles for tax purposes. For the three months ended March 31, 2004 and 2003, income tax expense primarily consisted of deferred income taxes of $4,289
and $3,325, respectively, related to the increase in the Company's net deferred tax liability for the tax effect of the net increase in the difference between the book and tax basis in the
indefinite-lived intangible assets.

In
addition, 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. The Company expects that it will record a total of approximately $13,100 to increase deferred tax liabilities during the
remaining nine months of 2004.

Changes
in the carrying amount of goodwill for the three months ended March 31, 2004, by operating segment, are as follows:

|                                                                  |  | Enthusiast
Media |         | Consumer
Guides |   | Business
Information |  | Education
and
Training |         | Total |  
|----------------------------------------------------------------- |  | ---------------- | ------- | --------------- | - | -------------------- |  | ---------------------- | ------- | ----- | -
|Balance as of January 1, 2004                                     |  | $                | 695,340 |                 | $ | 95,808               |  | $                      | 119,386 |       | $
|Purchase price allocation adjustments per final valuation reports |  |                  |        |                 |   | 94                   |  |                        |        |       |  
|Goodwill written off related to the sale of businesses            |  |                  |        |                 |   |                     |  |                        | (731    | )     |  
|                                                                  |  |                  |         |                 |   |                      |  |                        |         |       |  
|Balance as of March 31, 2004                                      |  | $                | 695,340 |                 | $ | 95,902               |  | $                      | 118,655 |       | $
|                                                                  |  |                  |         |                 |   |                      |  |                        |         |       |  

Intangible
assets subject to amortization in accordance with SFAS 142 consist of the following:

|                                          |  |      |  | March 31, 2004 |         | December 31, 2003
|----------------------------------------- |  | ---- |  | -------------- | ------- | -----------------
|
|Trademarks                                |  | 3    |  | $              | 21,013  |                  
|Membership, subscriber and customer lists |  | 2-20 |  |                | 348,346 |                  
|Non-compete agreements                    |  | 1-10 |  |                | 137,829 |                  
|Trademark license agreements              |  | 2-15 |  |                | 2,984   |                  
|Copyrights                                |  | 3-20 |  |                | 20,550  |                  
|Databases                                 |  | 2-12 |  |                | 9,353   |                  
|Advertiser lists                          |  | 5-20 |  |                | 135,978 |                  
|Distribution agreements                   |  | 1-7  |  |                | 10,410  |                  
|Other                                     |  | 1-5  |  |                | 9,804   |                  
|                                          |  |      |  |                |         |                  
|                                          |  |      |  | $              | 696,267 |                  
|                                          |  |      |  |                |         |                  

Intangible
assets not subject to amortization had a carrying value of $215,950 and $216,139 at March 31, 2004 and December 31, 2003, respectively, and consisted primarily
of trademarks. Amortization expense for intangible assets still subject to amortization was $5,634 and $8,808 for the

8

---



three
months ended March 31, 2004 and 2003, respectively. Amortization of deferred wiring costs of $363 and $1,923 for the three months ended March 31, 2004 and 2003, respectively, has
also been included in amortization of intangible assets and other on the accompanying condensed statements of consolidated operations. At March 31, 2004, estimated future amortization expense
of intangible assets still subject to amortization, excluding deferred wiring costs, is as follows: approximately $12,000 for the remaining nine months of 2004 and approximately $11,000, $7,000,
$5,000 and $4,000 for 2005, 2006, 2007 and 2008, respectively.

6.Long-term Debt

Long-term debt consisted of the following:

March 31,
2004

December 31,
2003Borrowings under bank credit facilities

$
552,906

$
559,90675/8% Senior Notes Due 2008


225,475


225,44387/8% Senior Notes Due 2011


469,958


469,8208% Senior Notes Due 2013


300,000


300,0001,548,339


1,555,169Obligation under capital leases


26,750


29,4671,575,089


1,584,636Less: Current maturities of long-term debt


21,369


22,195$
1,553,720

$
1,562,441


Under
the most restrictive covenants as defined in the bank credit facilities agreement, the Company must maintain a minimum interest coverage ratio, as defined, of 2.25 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 2.5 to 1 on
January 1, 2005. The Company is in compliance with all of the financial and operating covenants of its financing arrangements.

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 March 31, 2004 and
December 31, 2003, the weighted average variable interest rate on all outstanding borrowings under the bank credit facilities was 3.6%.

7.Series J Convertible Preferred Stock

As of March 31, 2004 and December 31, 2003, the Company had $169,686 and $164,533 of Series J Convertible Preferred Stock outstanding,
respectively. The Company paid dividends-in-kind of 41,222 and 36,448 shares of Series J Convertible Preferred Stock valued at $5,153 and $4,556 during the three months
ended March 31, 2004 and 2003, respectively.

9

---



8.Common Stock and Related Options

The following table summarizes information about stock options outstanding and exercisable at March 31, 2004:

|Range of
Exercise Prices |                | Number
Outstanding at
3/31/04 |            | Number
Exercisable at
3/31/04 |            | Weighted
Average
Remaining
Contractual Life |   | Weighted
Average
Exercise Price
for Outstanding
Options |   | Weighted
Average
Exercise Price
of Exercisable
Options
|------------------------ | -------------- | ----------------------------- | ---------- | ----------------------------- | ---------- | ------------------------------------------- | - | ------------------------------------------------------- | - | ------------------------------------------------------
|$                        | 0.08 - $0.43   |                               | 68,612     |                               | 68,612     |                                             | 4 |                                                         | $ | 0.29                                                  
|$                        | 1.01 - $1.80   |                               | 5,270      |                               | 3,395      |                                             | 6 |                                                         |   | 1.44                                                  
|$                        | 1.85 - $1.98   |                               | 1,151,211  |                               | 593,981    |                                             | 7 |                                                         |   | 1.85                                                  
|$                        | 2.02 - $2.99   |                               | 2,958,969  |                               | 705,219    |                                             | 6 |                                                         |   | 2.82                                                  
|$                        | 3.09 - $3.69   |                               | 2,086,213  |                               | 43,785     |                                             | 8 |                                                         |   | 3.10                                                  
|$                        | 4.00 - $5.95   |                               | 7,292,577  |                               | 5,146,046  |                                             | 6 |                                                         |   | 4.73                                                  
|$                        | 6.00 - $9.83   |                               | 4,476,423  |                               | 2,661,949  |                                             | 7 |                                                         |   | 6.85                                                  
|$                        | 10.04 - $19.81 |                               | 9,654,416  |                               | 8,780,695  |                                             | 6 |                                                         |   | 13.44                                                 
|$                        | 20.00 - $28.94 |                               | 213,212    |                               | 208,981    |                                             | 6 |                                                         |   | 26.08                                                 
|$                        | 30.01 - $36.52 |                               | 24,877     |                               | 24,877     |                                             | 6 |                                                         |   | 32.61                                                 
|                         |                |                               |            |                               |            |                                             |   |                                                         |   |                                                       
|                         | Total          |                               | 27,931,780 |                               | 18,237,540 |                                             | 6 |                                                         | $ | 7.81                                                  
|                         |                |                               |            |                               |            |                                             |   |                                                         |   |                                                       

9.Non-Cash Compensation

Three Months Ended March 31,2004

2003Restricted stock(1)

$
1,154

$
Stock options(2)


590


Amortization of the intrinsic value of unvested "in-the-money" options issued in connection with the About acquisition(3)


175


507Restricted stock and stock optionsAbout(4)





739Total

$
1,919

$
1,246


---

10

---



10.Senior Executives Severance and Provision for Severance, Closures and Restructuring Related Costs

Senior Executives Severance

During the first quarter 2004, the Company recorded $658 of severance relating to the finalization of the separation agreements of the former Chief Executive
Officer and the former President and Interim Chief Executive Officer.

Provision for Severance, Closures and Restructuring Related Costs

Through the first quarter of 2004, the Company continued cost reduction initiatives previously announced to streamline operations, reduce layers of management and
consolidate real estate.

Details
of the initiatives implemented and the payments made in furtherance of these plans during the three-months ended March 31, 2004 and 2003 are presented in the following
tables:

|                        |                                                  | Liability as of
January 1, 2004 |   | Net Provision
for the Three
Months Ended
March 31, 2004 |     | Payments during
the Three
Months Ended
March 31, 2004 |       | Liability as of
March 31, 2004
|----------------------- | ------------------------------------------------ | ------------------------------- | - | ------------------------------------------------------- | --- | ----------------------------------------------------- | ----- | ------------------------------
|Severance and closures: |                                                  |                                 |   |                                                         |     |                                                       |       |                               
|                        | Employee-related termination costs               |                                 | $ | 2,982                                                   |     | $                                                     | 422   |                               
|                        | Termination of contracts                         |                                 |   | 467                                                     |     |                                                       |      |                               
|                        | Termination of leases related to office closures |                                 |   | 36,900                                                  |     |                                                       | 2,297 |                               
|                        |                                                  |                                 |   |                                                         |     |                                                       |       |                               
|                        | Total severance and closures                     |                                 | $ | 40,349                                                  | (1) | $                                                     | 2,719 | (2)                           
|                        |                                                  |                                 |   |                                                         |     |                                                       |       |                               

|                                                 |  | Liability as of
January 1, 2003 |        | Net Provision
for the Three
Months Ended
March 31, 2003 |   | Payments during
the Three
Months Ended
March 31, 2003 |     | Liability as of
March 31, 2003
|------------------------------------------------ |  | ------------------------------- | ------ | ------------------------------------------------------- | - | ----------------------------------------------------- | --- | ------------------------------
|Severance and closures:                          |  |                                 |        |                                                         |   |                                                       |     |                               
|Employee-related termination costs               |  | $                               | 3,733  |                                                         | $ | 1,016                                                 |     | $                             
|Termination of contracts                         |  |                                 | 575    |                                                         |   |                                                      |     |                               
|Termination of leases related to office closures |  |                                 | 41,366 |                                                         |   | 146                                                   |     |                               
|                                                 |  |                                 |        |                                                         |   |                                                       |     |                               
|Total severance and closures                     |  | $                               | 45,674 | (1)                                                     | $ | 1,162                                                 | (2) | $                             
|                                                 |  |                                 |        |                                                         |   |                                                       |     |                               

---

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. These leases have been recorded at their net present value amounts and are net of estimated sublease income
amounts. If the Company is successful in subleasing the restructured office space at a different rate, or is unable to

11

---



sublease
the space by the prescribed date used in the initial calculation, the reserve will be adjusted accordingly. The Company evaluates the appropriateness of its reserves on a quarterly basis.

As
a result of the implementation of these plans, the Company has closed and consolidated, to date, 22 office locations and has notified a total of 2,023 individuals that they would be
terminated under these plans. As of March 31, 2004, all of these 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 March 31, 2004 and December 31, 2003.

11.Comprehensive Income (Loss)

Comprehensive income (loss) for the three months ended March 31, 2004 and 2003 is presented in the following table:

Three Months Ended
March 31,2004

2003Net income (loss)

$
11,071

$
(20,247
)Other comprehensive income (loss):Foreign currency translation adjustments


(10
)

24Total comprehensive income (loss)

$
11,061

$
(20,223
)


12.Income (loss) per Common Share

Income (loss) per common share for the three months ended March 31, 2004 and 2003 has been determined based on net income (loss) available to common
shareholders, divided by the weighted average number of common shares outstanding for all periods presented. The effect of the assumed exercise of stock options and warrants and the conversion of
convertible preferred stock were not included in the computation of per share amounts because the effect of their inclusion would be antidilutive. If the Company had recognized income from continuing
operations for the three months ended March 31, 2004 and 2003, shares attributable to these antidilutive instruments would have increased diluted shares outstanding by 62,100,000 and
60,900,000, respectively.

13.Contingencies

Based on an initial internal assessment at the end of 2003, the Company believed that certain business units may have unclaimed property that should have been
remitted to one or more states under their respective escheatment laws. The property in question related primarily to unused advertising credits and outstanding accounts payable checks. The Company
hired an outside consultant to assist in estimating the potential risk. It was premature to estimate the extent of the financial risk at the end of 2003, but the Company believed that the risk would
not have a material impact on its results of operations or financial position. Upon completion of the initial phase of this assessment, the Company recorded an estimated provision for unclaimed
property of $5,500. The Company has entered the next
phase of the assessment whereby the consultant will assist in refining the estimated provision and in negotiating settlements under voluntary compliance agreements with the relevant states.

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.

12

---



14.Business Segment Information

The Company's strategy is to focus on its core businesses and grow through leveraging and expanding its market leading brands. This organic growth strategy
requires a segment structure that better aligns the Company's businesses to provide a clearer sense of its strategic focus and operating performance. Accordingly, the Company adopted this structure,
effective in the fourth quarter of 2003, and has reclassified prior year results to reflect this redesigned operating structure into four reportable segments. The Company's four principal segments are
Enthusiast Media, Consumer Guides, Business Information and Education and Training.

The
Enthusiast Media segment produces and distributes content through magazines and via the Internet to consumers in various niche and enthusiast markets. It includes the Company's
consumer magazine brands, including Performance Automotive and International Automotive (formerly Enthusiast Automotive), Consumer Automotive, Outdoors, Action Sports, Life Styles and Home Technology
magazine groups, their related Web sites and events, as well as About.com.

The
Consumer Guides segment is the nation's largest publisher and distributor of free publications, includingApartment Guide, New Homes
GuideandAuto Guide,which was launched in the first quarter of 2004, their related Web sites and the DistribuTech distribution
business.

The
Business Information segment includes the Company's trade magazines, Web sites, events, directories and data products with a focus on bringing sellers together with qualified buyers
in numerous industries.

The
Education and Training segment consists of the businesses that provide content to schools, universities, government and other public institutions as well as corporate training
initiatives. It includes Channel One, Films Media Group and Workplace Learning.

Information
regarding the operations of the Company by business segments is set forth below based primarily 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 earnings before interest, taxes, depreciation, amortization and
other (income) charges ("EBITDA"). Other (income) charges include severance related to separated senior executives, non-cash compensation, provision for severance, closures and
restructuring related costs, provision for unclaimed property and (gain) loss on sale of businesses and other, net.

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 transactions represent intercompany advertising and other services, which are billed at what

13

---



management
believes are prevailing market rates. These intersegment transactions, which represent transactions between operating units in different business segments, are eliminated in consolidation.

Three Months Ended March 31,2004

2003Revenues, net:Enthusiast Media

$
174,228

$
173,373Consumer Guides


71,845


67,924Business Information


55,992


57,469Education and Training


26,773


32,140Intersegment Eliminations


(335
)

(2,419
)Total

$
328,503

$
328,487Segment EBITDA(1):Enthusiast Media

$
30,459

$
24,607Consumer Guides


19,917


17,568Business Information


4,504


3,821Education and Training


(123
)

4,334Corporate Overhead


(7,491
)

(7,425
)Total

$
47,266

$
42,905


Below
is a reconciliation of the Company's Segment EBITDA to operating income:

Three Months Ended March 31,2004

2003Segment EBITDA(1):

$
47,266

$
42,905Depreciation of property and equipment


11,911


12,276Amortization of intangible assets and other


5,997


10,731Severance related to separated senior executives


658


Non-cash compensation


1,919


1,246Provision for severance, closures and restructuring related costs


2,719


1,162Provision for unclaimed property


5,500


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


(75
)

125Operating income

$
18,637

$
17,365


---

14

---





15.Financial Information for Guarantors of the Company's Debt

The information that follows presents condensed consolidating financial information as of March 31, 2004 and December 31, 2003 and for the three
months ended March 31, 2004 and 2003 for a) PRIMEDIA Inc. (as the Issuer), b) the guarantor subsidiaries, which are with limited exceptions, the restricted subsidiaries,
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. During the three months ended March 31, 2004, certain businesses have been
reclassified between restricted and unrestricted subsidiaries. These reclassifications have not had a material effect on our debt covenant ratios as defined in the bank credit facilities.

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 non-guarantor subsidiary results of operations include:
Internet operations, foreign operations, certain distribution operations, certain start-up magazine businesses, revenues and related expenses derived from the licensing of certain products
of guarantor subsidiaries and expenses associated with the cross promotion by the guarantor subsidiaries of the activities of the non-guarantor subsidiaries. The transactions described
above are billed, by the Company, at what the Company believes are prevailing market rates. All intercompany related activities are eliminated in consolidation.

15

---





PRIMEDIA INC. AND SUBSIDIARIES        CONDENSED CONSOLIDATING BALANCE SHEET        (UNAUDITED)        March 31, 2004        (dollars in thousands)

|                                           |                                      | PRIMEDIA Inc.                                  |           | Guarantor
Subsidiaries |           | Non-Guarantor
Subsidiaries |            | Eliminations |        | PRIMEDIA Inc.
and
Subsidiaries |         
|------------------------------------------ | ------------------------------------ | ---------------------------------------------- | --------- | ---------------------- | --------- | -------------------------- | ---------- | ------------ | ------ | ------------------------------ | --------
|ASSETS                                     |                                      |                                                |           |                        |           |                            |            |              |        |                                |         
|Current assets:                            |                                      |                                                |           |                        |           |                            |            |              |        |                                |         
|                                           | Cash and cash equivalents            |                                                | $         | 7,834                  |           | $                          | 10,929     |              | $      | 347                            |         
|                                           | Accounts receivable, net             |                                                |           |                       |           |                            | 188,996    |              |        | 12,836                         |         
|                                           | Intercompany receivables             |                                                |           | 1,610,571              |           |                            | 377,813    |              |        | 118,211                        |         
|                                           | Inventories                          |                                                |           |                       |           |                            | 17,512     |              |        | 719                            |         
|                                           | Prepaid expenses and other           |                                                |           | 3,008                  |           |                            | 29,220     |              |        | 13,078                         |         
|                                           |                                      |                                                |           |                        |           |                            |            |              |        |                                |         
|                                           |                                      | Total current assets                           |           |                        | 1,621,413 |                            |            | 624,470      |        |                                | 145,191 
|Property and equipment, net                |                                      |                                                | 6,547     |                        |           | 84,910                     |            |              | 13,195 |                                |         
|Investment in and advances to subsidiaries |                                      |                                                | 550,467   |                        |           |                           |            |              |       |                                |         
|Other intangible assets, net               |                                      |                                                |          |                        |           | 261,446                    |            |              | 1,353  |                                |         
|Goodwill                                   |                                      |                                                |          |                        |           | 894,672                    |            |              | 15,225 |                                |         
|Other non-current assets                   |                                      |                                                | 11,179    |                        |           | 34,669                     |            |              | 12,286 |                                |         
|                                           |                                      |                                                |           |                        |           |                            |            |              |        |                                |         
|                                           |                                      | Total Assets                                   |           | $                      | 2,189,606 |                            | $          | 1,900,167    |        | $                              | 187,250 
|                                           |                                      |                                                |           |                        |           |                            |            |              |        |                                |         
|LIABILITIES AND SHAREHOLDERS' DEFICIENCY   |                                      |                                                |           |                        |           |                            |            |              |        |                                |         
|Current liabilities:                       |                                      |                                                |           |                        |           |                            |            |              |        |                                |         
|                                           | Accounts payable                     |                                                | $         | 6,264                  |           | $                          | 39,480     |              | $      | 10,756                         |         
|                                           | Intercompany payables                |                                                |           | 959,199                |           |                            | 414,032    |              |        | 733,364                        |         
|                                           | Accrued expenses and other           |                                                |           | 112,376                |           |                            | 110,522    |              |        | 4,332                          |         
|                                           | Deferred revenues                    |                                                |           | 1,738                  |           |                            | 150,890    |              |        | 9,602                          |         
|                                           | Current maturities of long-term debt |                                                |           | 15,999                 |           |                            | 5,370      |              |        |                               |         
|                                           |                                      |                                                |           |                        |           |                            |            |              |        |                                |         
|                                           |                                      | Total current liabilities                      |           |                        | 1,095,576 |                            |            | 720,294      |        |                                | 758,054 
|Long-term debt                             |                                      |                                                | 1,534,411 |                        |           | 19,309                     |            |              |       |                                |         
|Intercompany notes payable                 |                                      |                                                |           |                        |           | 2,927,094                  |            |              | 69,650 |                                |         
|Shares subject to mandatory redemption     |                                      |                                                | 474,559   |                        |           |                           |            |              |       |                                |         
|Deferred revenues                          |                                      |                                                |          |                        |           | 34,202                     |            |              |       |                                |         
|Deferred income taxes                      |                                      |                                                | 65,653    |                        |           |                           |            |              |       |                                |         
|Other non-current liabilities              |                                      |                                                | 19,055    |                        |           | 4,311                      |            |              | 780    |                                |         
|                                           |                                      |                                                |           |                        |           |                            |            |              |        |                                |         
|                                           |                                      | Total Liabilities                              |           |                        | 3,189,254 |                            |            | 3,705,210    |        |                                | 828,484 
|                                           |                                      |                                                |           |                        |           |                            |            |              |        |                                |         
|Shareholders' deficiency:                  |                                      |                                                |           |                        |           |                            |            |              |        |                                |         
|                                           | Series J convertible preferred stock |                                                |           | 169,686                |           |                            |           |              |        |                               |         
|                                           | Common stock                         |                                                |           | 2,688                  |           |                            |           |              |        |                               |         
|                                           | Additional paid-in capital           |                                                |           | 2,347,518              |           |                            |           |              |        |                               |         
|                                           | Accumulated deficit                  |                                                |           | (3,441,792             | )         |                            | (1,805,037 | )            |        | (641,054                       | )       
|                                           | Accumulated other comprehensive loss |                                                |           | (186                   | )         |                            | (6         | )            |        | (180                           | )       
|                                           | Common stock in treasury, at cost    |                                                |           | (77,562                | )         |                            |           |              |        |                               |         
|                                           |                                      |                                                |           |                        |           |                            |            |              |        |                                |         
|                                           |                                      | Total Shareholders' Deficiency                 |           |                        | (999,648  | )                          |            | (1,805,043   | )      |                                | (641,234
|                                           |                                      |                                                |           |                        |           |                            |            |              |        |                                |         
|                                           |                                      | Total Liabilities and Shareholders' Deficiency |           | $                      | 2,189,606 |                            | $          | 1,900,167    |        | $                              | 187,250 
|                                           |                                      |                                                |           |                        |           |                            |            |              |        |                                |         

16

---





PRIMEDIA INC. AND SUBSIDIARIES        CONDENSED STATEMENT OF CONSOLIDATING OPERATIONS        (UNAUDITED)        For the Three Months Ended March 31, 2004    
(dollars in thousands)

|                                                                   |                                                                     | PRIMEDIA Inc. |         | Guarantor
Subsidiaries |   | Non-Guarantor
Subsidiaries |         | Eliminations |         | PRIMEDIA Inc.
and
Subsidiaries |  
|------------------------------------------------------------------ | ------------------------------------------------------------------- | ------------- | ------- | ---------------------- | - | -------------------------- | ------- | ------------ | ------- | ------------------------------ | -
|Revenues, net                                                      |                                                                     | $             |        |                        | $ | 302,977                    |         | $            | 40,927  |                                | $
|Operating costs and expenses:                                      |                                                                     |               |         |                        |   |                            |         |              |         |                                |  
|                                                                   | Cost of goods sold                                                  |               |         |                       |   |                            | 59,296  |              |         | 6,063                          |  
|                                                                   | Marketing and selling                                               |               |         |                       |   |                            | 63,208  |              |         | 11,985                         |  
|                                                                   | Distribution, circulation and fulfillment                           |               |         |                       |   |                            | 41,685  |              |         | 14,978                         |  
|                                                                   | Editorial                                                           |               |         |                       |   |                            | 23,825  |              |         | 3,652                          |  
|                                                                   | Other general expenses                                              |               |         | 34                     |   |                            | 45,528  |              |         | 18,927                         |  
|                                                                   | Corporate administrative expenses (excluding non-cash compensation) |               |         | 5,748                  |   |                            |        |              |         | 1,709                          |  
|                                                                   | Depreciation of property and equipment                              |               |         | 684                    |   |                            | 8,871   |              |         | 2,356                          |  
|                                                                   | Amortization of intangible assets and other                         |               |         |                       |   |                            | 5,914   |              |         | 83                             |  
|                                                                   | Severance related to separated senior executives                    |               |         | 658                    |   |                            |        |              |         |                               |  
|                                                                   | Non-cash compensation                                               |               |         | 1,919                  |   |                            |        |              |         |                               |  
|                                                                   | Provision for severance, closures and restructuring related costs   |               |         | 1,606                  |   |                            | 856     |              |         | 257                            |  
|                                                                   | Provision for unclaimed property                                    |               |         | 56                     |   |                            | 5,444   |              |         |                               |  
|                                                                   | (Gain) loss on sale of businesses and other, net                    |               |         |                       |   |                            | (75     | )            |         |                               |  
|                                                                   |                                                                     |               |         |                        |   |                            |         |              |         |                                |  
|Operating income (loss)                                            |                                                                     |               | (10,705 | )                      |   | 48,425                     |         |              | (19,083 | )                              |  
|Other income (expense):                                            |                                                                     |               |         |                        |   |                            |         |              |         |                                |  
|                                                                   | Interest expense                                                    |               |         | (27,417                | ) |                            | (1,151  | )            |         | (10                            | )
|                                                                   | Interest on shares subject to mandatory redemption                  |               |         | (10,945                | ) |                            |        |              |         |                               |  
|                                                                   | Amortization of deferred financing costs                            |               |         | (336                   | ) |                            | (762    | )            |         | (4                             | )
|                                                                   | Equity in income of subsidiaries                                    |               |         | 27,293                 |   |                            |        |              |         |                               |  
|                                                                   | Intercompany management fees and interest                           |               |         | 37,120                 |   |                            | (36,906 | )            |         | (214                           | )
|                                                                   | Other income (expense), net                                         |               |         | 349                    |   |                            | (53     | )            |         | (8                             | )
|                                                                   |                                                                     |               |         |                        |   |                            |         |              |         |                                |  
|Income (loss) from continuing operations before income tax expense |                                                                     |               | 15,359  |                        |   | 9,553                      |         |              | (19,319 | )                              |  
|Income tax expense                                                 |                                                                     |               | (4,288  | )                      |   | (89                        | )       |              | (13     | )                              |  
|                                                                   |                                                                     |               |         |                        |   |                            |         |              |         |                                |  
|Income (loss) from continuing operations                           |                                                                     |               | 11,071  |                        |   | 9,464                      |         |              | (19,332 | )                              |  
|Discontinued operations                                            |                                                                     |               |        |                        |   | 36,371                     |         |              | 790     |                                |  
|                                                                   |                                                                     |               |         |                        |   |                            |         |              |         |                                |  
|Net income (loss)                                                  |                                                                     | $             | 11,071  |                        | $ | 45,835                     |         | $            | (18,542 | )                              | $
|                                                                   |                                                                     |               |         |                        |   |                            |         |              |         |                                |  

17

---





PRIMEDIA INC. AND SUBSIDIARIES        CONDENSED STATEMENT OF CONSOLIDATING CASH FLOWS        (UNAUDITED)        For the Three Months Ended March 31, 2004    
(dollars in thousands)

|                                                 |                                                                                                   | PRIMEDIA Inc.                                       |       | Guarantor
Subsidiaries |         | Non-Guarantor
Subsidiaries |         | Eliminations |      | PRIMEDIA Inc.
and
Subsidiaries |        
|------------------------------------------------ | ------------------------------------------------------------------------------------------------- | --------------------------------------------------- | ----- | ---------------------- | ------- | -------------------------- | ------- | ------------ | ---- | ------------------------------ | -------
|Operating activities:                            |                                                                                                   |                                                     |       |                        |         |                            |         |              |      |                                |        
|                                                 | Net income (loss)                                                                                 |                                                     | $     | 11,071                 |         | $                          | 45,835  |              | $    | (18,542                        | )      
|                                                 | Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities |                                                     |       | (57,018                | )       |                            | 15,792  |              |      | 1,757                          |        
|                                                 | Changes in operating assets and liabilities                                                       |                                                     |       | 6,365                  |         |                            | (18,979 | )            |      | (17,781                        | )      
|                                                 |                                                                                                   |                                                     |       |                        |         |                            |         |              |      |                                |        
|                                                 |                                                                                                   | Net cash provided by (used in) operating activities |       |                        | (39,582 | )                          |         | 42,648       |      |                                | (34,566
|                                                 |                                                                                                   |                                                     |       |                        |         |                            |         |              |      |                                |        
|Investing activities:                            |                                                                                                   |                                                     |       |                        |         |                            |         |              |      |                                |        
|                                                 | Additions to property, equipment and other, net                                                   |                                                     |       | (168                   | )       |                            | (4,576  | )            |      | (1,409                         | )      
|                                                 | Proceeds from sale of businesses and other                                                        |                                                     |       |                       |         |                            | 55,869  |              |      | 2,208                          |        
|                                                 | Payments for businesses acquired, net of cash acquired                                            |                                                     |       |                       |         |                            | (1,117  | )            |      |                               |        
|                                                 | Proceeds from (payments for) other investments, net                                               |                                                     |       | (51                    | )       |                            | 598     |              |      |                               |        
|                                                 |                                                                                                   |                                                     |       |                        |         |                            |         |              |      |                                |        
|                                                 |                                                                                                   | Net cash provided by (used in) investing activities |       |                        | (219    | )                          |         | 50,774       |      |                                | 799    
|                                                 |                                                                                                   |                                                     |       |                        |         |                            |         |              |      |                                |        
|Financing activities:                            |                                                                                                   |                                                     |       |                        |         |                            |         |              |      |                                |        
|                                                 | Intercompany activity                                                                             |                                                     |       | 54,748                 |         |                            | (88,190 | )            |      | 33,442                         |        
|                                                 | Borrowings under credit agreements                                                                |                                                     |       | 93,000                 |         |                            |        |              |      |                               |        
|                                                 | Repayments of borrowings
under credit agreements                                                  |                                                     |       | (100,000               | )       |                            |        |              |      |                               |        
|                                                 | Proceeds from issuances of common stock, net                                                      |                                                     |       | 628                    |         |                            |        |              |      |                               |        
|                                                 | Capital lease obligations                                                                         |                                                     |       | (1,089                 | )       |                            | (1,733  | )            |      |                               |        
|                                                 | Other                                                                                             |                                                     |       | 3                      |         |                            | (238    | )            |      |                               |        
|                                                 |                                                                                                   |                                                     |       |                        |         |                            |         |              |      |                                |        
|                                                 |                                                                                                   | Net cash provided by (used in) financing activities |       |                        | 47,290  |                            |         | (90,161      | )    |                                | 33,442 
|                                                 |                                                                                                   |                                                     |       |                        |         |                            |         |              |      |                                |        
|Increase (decrease) in cash and cash equivalents |                                                                                                   |                                                     | 7,489 |                        |         | 3,261                      |         |              | (325 | )                              |        
|Cash and cash equivalents, beginning of period   |                                                                                                   |                                                     | 345   |                        |         | 7,668                      |         |              | 672  |                                |        
|                                                 |                                                                                                   |                                                     |       |                        |         |                            |         |              |      |                                |        
|Cash and cash equivalents, end of period         |                                                                                                   | $                                                   | 7,834 |                        | $       | 10,929                     |         | $            | 347  |                                | $      
|                                                 |                                                                                                   |                                                     |       |                        |         |                            |         |              |      |                                |        

18

---





PRIMEDIA INC. AND SUBSIDIARIES        CONSOLIDATING BALANCE SHEET        December 31, 2003        (dollars in thousands)

|                                           |                                         | PRIMEDIA Inc.                                  |           | Guarantor
Subsidiaries |            | Non-Guarantor
Subsidiaries |            | Eliminations |         | PRIMEDIA Inc.
and
Subsidiaries |           
|------------------------------------------ | --------------------------------------- | ---------------------------------------------- | --------- | ---------------------- | ---------- | -------------------------- | ---------- | ------------ | ------- | ------------------------------ | ----------
|ASSETS                                     |                                         |                                                |           |                        |            |                            |            |              |         |                                |           
|Current assets:                            |                                         |                                                |           |                        |            |                            |            |              |         |                                |           
|                                           | Cash and cash equivalents               |                                                | $         | 345                    |            | $                          | 7,668      |              | $       | 672                            |           
|                                           | Accounts receivable, net                |                                                |           |                       |            |                            | 175,144    |              |         | 18,936                         |           
|                                           | Intercompany receivables                |                                                |           | 1,685,986              |            |                            | 402,428    |              |         | 61,271                         |           
|                                           | Inventories                             |                                                |           |                       |            |                            | 17,417     |              |         | 83                             |           
|                                           | Prepaid expenses and other              |                                                |           | 5,009                  |            |                            | 29,865     |              |         | 1,185                          |           
|                                           | Assets held for sale                    |                                                |           | 1,460                  |            |                            | 28,985     |              |         | 1,434                          |           
|                                           |                                         |                                                |           |                        |            |                            |            |              |         |                                |           
|                                           |                                         | Total current assets                           |           |                        | 1,692,800  |                            |            | 661,507      |         |                                | 83,581    
|Property and equipment, net                |                                         |                                                | 7,065     |                        |            | 83,693                     |            |              | 20,101  |                                |           
|Investment in and advances to subsidiaries |                                         |                                                | 488,986   |                        |            |                           |            |              |        |                                |           
|Other intangible assets, net               |                                         |                                                |          |                        |            | 266,839                    |            |              | 1,568   |                                |           
|Goodwill                                   |                                         |                                                |          |                        |            | 871,598                    |            |              | 38,936  |                                |           
|Other non-current assets                   |                                         |                                                | 11,477    |                        |            | 35,967                     |            |              | 10,674  |                                |           
|                                           |                                         |                                                |           |                        |            |                            |            |              |         |                                |           
|                                           |                                         | Total Assets                                   |           | $                      | 2,200,328  |                            | $          | 1,919,604    |         | $                              | 154,860   
|                                           |                                         |                                                |           |                        |            |                            |            |              |         |                                |           
|LIABILITIES AND SHAREHOLDERS' DEFICIENCY   |                                         |                                                |           |                        |            |                            |            |              |         |                                |           
|Current liabilities:                       |                                         |                                                |           |                        |            |                            |            |              |         |                                |           
|                                           | Accounts payable                        |                                                | $         | 11,482                 |            | $                          | 55,724     |              | $       | 11,588                         |           
|                                           | Intercompany payables                   |                                                |           | 984,262                |            |                            | 534,801    |              |         | 630,622                        |           
|                                           | Accrued expenses and other              |                                                |           | 102,372                |            |                            | 103,725    |              |         | 12,515                         |           
|                                           | Deferred revenues                       |                                                |           | 1,738                  |            |                            | 147,375    |              |         | 8,740                          |           
|                                           | Current maturities of long-term debt    |                                                |           | 16,232                 |            |                            | 5,963      |              |         |                               |           
|                                           | Liabilities of businesses held for sale |                                                |           |                       |            |                            | 13,500     |              |         | 2,549                          |           
|                                           |                                         |                                                |           |                        |            |                            |            |              |         |                                |           
|                                           |                                         | Total current liabilities                      |           |                        | 1,116,086  |                            |            | 861,088      |         |                                | 666,014   
|Long-term debt                             |                                         |                                                | 1,542,095 |                        |            | 20,346                     |            |              |        |                                |           
|Shares subject to mandatory redemption     |                                         |                                                | 474,559   |                        |            |                           |            |              |        |                                |           
|Intercompany notes payable                 |                                         |                                                |          |                        |            | 2,210,418                  |            |              | 753,838 |                                |           
|Deferred revenues                          |                                         |                                                |          |                        |            | 33,604                     |            |              |        |                                |           
|Deferred income taxes                      |                                         |                                                | 61,364    |                        |            |                           |            |              |        |                                |           
|Other non-current liabilities              |                                         |                                                | 19,479    |                        |            | 4,497                      |            |              | (71     | )                              |           
|                                           |                                         |                                                |           |                        |            |                            |            |              |         |                                |           
|                                           |                                         | Total Liabilities                              |           |                        | 3,213,583  |                            |            | 3,129,953    |         |                                | 1,419,781 
|                                           |                                         |                                                |           |                        |            |                            |            |              |         |                                |           
|Shareholders' deficiency:                  |                                         |                                                |           |                        |            |                            |            |              |         |                                |           
|                                           | Series J convertible preferred stock    |                                                |           | 164,533                |            |                            |           |              |         |                               |           
|                                           | Common stock                            |                                                |           | 2,683                  |            |                            |           |              |         |                               |           
|                                           | Additional paid-in capital              |                                                |           | 2,345,152              |            |                            |           |              |         |                               |           
|                                           | Accumulated deficit                     |                                                |           | (3,447,710             | )          |                            | (1,210,343 | )            |         | (1,264,751                     | )         
|                                           | Accumulated other comprehensive loss    |                                                |           | (176                   | )          |                            | (6         | )            |         | (170                           | )         
|                                           | Unearned compensation                   |                                                |           | (175                   | )          |                            |           |              |         |                               |           
|                                           | Common stock in treasury, at cost       |                                                |           | (77,562                | )          |                            |           |              |         |                               |           
|                                           |                                         |                                                |           |                        |            |                            |            |              |         |                                |           
|                                           |                                         | Total Shareholders' Deficiency                 |           |                        | (1,013,255 | )                          |            | (1,210,349   | )       |                                | (1,264,921
|                                           |                                         |                                                |           |                        |            |                            |            |              |         |                                |           
|                                           |                                         | Total Liabilities and Shareholders' Deficiency |           | $                      | 2,200,328  |                            | $          | 1,919,604    |         | $                              | 154,860   
|                                           |                                         |                                                |           |                        |            |                            |            |              |         |                                |           

19

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PRIMEDIA INC. AND SUBSIDIARIES        CONDENSED STATEMENT OF CONSOLIDATING OPERATIONS        (UNAUDITED)        For the Three Months Ended March 31, 2003    
(dollars in thousands)

|                                                                   |                                                                     | PRIMEDIA Inc. |         | Guarantor
Subsidiaries |   | Non-Guarantor
Subsidiaries |         | Eliminations |         | PRIMEDIA Inc.
and
Subsidiaries |  
|------------------------------------------------------------------ | ------------------------------------------------------------------- | ------------- | ------- | ---------------------- | - | -------------------------- | ------- | ------------ | ------- | ------------------------------ | -
|Revenues, net                                                      |                                                                     | $             | 121     |                        | $ | 293,643                    |         | $            | 45,212  |                                | $
|Operating costs and expenses:                                      |                                                                     |               |         |                        |   |                            |         |              |         |                                |  
|                                                                   | Cost of goods sold                                                  |               |         |                       |   |                            | 61,866  |              |         | 20,828                         |  
|                                                                   | Marketing and selling                                               |               |         |                       |   |                            | 63,559  |              |         | 11,817                         |  
|                                                                   | Distribution, circulation and fulfillment                           |               |         |                       |   |                            | 42,913  |              |         | 15,264                         |  
|                                                                   | Editorial                                                           |               |         |                       |   |                            | 22,475  |              |         | 3,406                          |  
|                                                                   | Other general expenses                                              |               |         | 600                    |   |                            | 33,461  |              |         | 12,501                         |  
|                                                                   | Corporate administrative expenses (excluding non-cash compensation) |               |         | 4,958                  |   |                            |        |              |         | 2,423                          |  
|                                                                   | Depreciation of property and equipment                              |               |         | 644                    |   |                            | 7,896   |              |         | 3,736                          |  
|                                                                   | Amortization of intangible assets and other                         |               |         |                       |   |                            | 7,805   |              |         | 2,926                          |  
|                                                                   | Non-cash compensation                                               |               |         | 1,246                  |   |                            |        |              |         |                               |  
|                                                                   | Provision for severance, closures and restructuring related costs   |               |         | 181                    |   |                            | 981     |              |         |                               |  
|                                                                   | (Gain) loss on sale of businesses and other, net                    |               |         | (19                    | ) |                            | 1,058   |              |         | (914                           | )
|                                                                   |                                                                     |               |         |                        |   |                            |         |              |         |                                |  
|Operating income (loss)                                            |                                                                     |               | (7,489  | )                      |   | 51,629                     |         |              | (26,775 | )                              |  
|Other income (expense):                                            |                                                                     |               |         |                        |   |                            |         |              |         |                                |  
|                                                                   | Interest expense                                                    |               |         | (32,656                | ) |                            | (790    | )            |         | (7                             | )
|                                                                   | Amortization of deferred financing costs                            |               |         | 915                    |   |                            | (1,650  | )            |         | (6                             | )
|                                                                   | Equity in losses of subsidiaries                                    |               |         | (13,187                | ) |                            |        |              |         |                               |  
|                                                                   | Intercompany management
fees and interest                           |               |         | 35,868                 |   |                            | (35,868 | )            |         |                               |  
|                                                                   | Other income (expense), net                                         |               |         | (302                   | ) |                            | (311    | )            |         | 67                             |  
|                                                                   |                                                                     |               |         |                        |   |                            |         |              |         |                                |  
|Income (loss) from continuing operations before income tax expense |                                                                     |               | (16,851 | )                      |   | 13,010                     |         |              | (26,721 | )                              |  
|Income tax expense                                                 |                                                                     |               | (3,396  | )                      |   | (306                       | )       |              | (16     | )                              |  
|                                                                   |                                                                     |               |         |                        |   |                            |         |              |         |                                |  
|Income (loss) from continuing operations                           |                                                                     |               | (20,247 | )                      |   | 12,704                     |         |              | (26,737 | )                              |  
|Discontinued operations                                            |                                                                     |               |        |                        |   | 4,020                      |         |              | (3,174  | )                              |  
|                                                                   |                                                                     |               |         |                        |   |                            |         |              |         |                                |  
|Net income (loss)                                                  |                                                                     | $             | (20,247 | )                      | $ | 16,724                     |         | $            | (29,911 | )                              | $
|                                                                   |                                                                     |               |         |                        |   |                            |         |              |         |                                |  

20

---





PRIMEDIA INC. AND SUBSIDIARIES        CONDENSED STATEMENT OF CONSOLIDATING CASH FLOWS        (UNAUDITED)        For the Three Months Ended March 31, 2003    
(dollars in thousands)

|                                               |                                                                                                   | PRIMEDIA Inc.                                       |       | Guarantor
Subsidiaries |         | Non-Guarantor
Subsidiaries |         | Eliminations |       | PRIMEDIA Inc.
and
Subsidiaries |        
|---------------------------------------------- | ------------------------------------------------------------------------------------------------- | --------------------------------------------------- | ----- | ---------------------- | ------- | -------------------------- | ------- | ------------ | ----- | ------------------------------ | -------
|Operating activities:                          |                                                                                                   |                                                     |       |                        |         |                            |         |              |       |                                |        
|                                               | Net income (loss)                                                                                 |                                                     | $     | (20,247                | )       | $                          | 16,724  |              | $     | (29,911                        | )      
|                                               | Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities |                                                     |       | (15,174                | )       |                            | 55,486  |              |       | 7,484                          |        
|                                               | Changes in operating assets and liabilities                                                       |                                                     |       | 1,240                  |         |                            | (10,619 | )            |       | (12,135                        | )      
|                                               |                                                                                                   |                                                     |       |                        |         |                            |         |              |       |                                |        
|                                               |                                                                                                   | Net cash provided by (used in) operating activities |       |                        | (34,181 | )                          |         | 61,591       |       |                                | (34,562
|                                               |                                                                                                   |                                                     |       |                        |         |                            |         |              |       |                                |        
|Investing activities:                          |                                                                                                   |                                                     |       |                        |         |                            |         |              |       |                                |        
|                                               | Additions to property, equipment and other, net                                                   |                                                     |       | 194                    |         |                            | (6,499  | )            |       | (2,681                         | )      
|                                               | Proceeds from sale of businesses and other                                                        |                                                     |       | 19                     |         |                            | 25      |              |       |                               |        
|                                               | Payments for businesses acquired, net of cash acquired                                            |                                                     |       |                       |         |                            | (2,036  | )            |       | (150                           | )      
|                                               | Proceeds from (payments for) other investments, net                                               |                                                     |       | (89                    | )       |                            | (575    | )            |       | 532                            |        
|                                               |                                                                                                   |                                                     |       |                        |         |                            |         |              |       |                                |        
|                                               |                                                                                                   | Net cash provided by (used in) investing activities |       |                        | 124     |                            |         | (9,085       | )     |                                | (2,299 
|                                               |                                                                                                   |                                                     |       |                        |         |                            |         |              |       |                                |        
|Financing activities:                          |                                                                                                   |                                                     |       |                        |         |                            |         |              |       |                                |        
|                                               | Intercompany activity                                                                             |                                                     |       | 12,335                 |         |                            | (49,500 | )            |       | 37,165                         |        
|                                               | Borrowings under credit agreements                                                                |                                                     |       | 169,500                |         |                            |        |              |       |                               |        
|                                               | Repayments of borrowings under credit agreements                                                  |                                                     |       | (47,500                | )       |                            |        |              |       |                               |        
|                                               | Payments for repurchases of senior notes                                                          |                                                     |       | (84,175                | )       |                            |        |              |       |                               |        
|                                               | Proceeds from issuances of common stock, net                                                      |                                                     |       | 493                    |         |                            |        |              |       |                               |        
|                                               | Purchases of common stock for the treasury                                                        |                                                     |       | (4,244                 | )       |                            |        |              |       |                               |        
|                                               | Dividends paid to preferred stock shareholders                                                    |                                                     |       | (11,527                | )       |                            |        |              |       |                               |        
|                                               | Capital lease obligations                                                                         |                                                     |       | (121                   | )       |                            | (840    | )            |       |                               |        
|                                               | Other                                                                                             |                                                     |       |                       |         |                            | (77     | )            |       |                               |        
|                                               |                                                                                                   |                                                     |       |                        |         |                            |         |              |       |                                |        
|                                               |                                                                                                   | Net cash provided by (used in) financing activities |       |                        | 34,761  |                            |         | (50,417      | )     |                                | 37,165 
|                                               |                                                                                                   |                                                     |       |                        |         |                            |         |              |       |                                |        
|Increase in cash and cash equivalents          |                                                                                                   |                                                     | 704   |                        |         | 2,089                      |         |              | 304   |                                |        
|Cash and cash equivalents, beginning of period |                                                                                                   |                                                     | 4,700 |                        |         | 12,857                     |         |              | 996   |                                |        
|                                               |                                                                                                   |                                                     |       |                        |         |                            |         |              |       |                                |        
|Cash and cash equivalents, end of period       |                                                                                                   | $                                                   | 5,404 |                        | $       | 14,946                     |         | $            | 1,300 |                                | $      
|                                               |                                                                                                   |                                                     |       |                        |         |                            |         |              |       |                                |        

21

---



16.Subsequent Events

Sale of About Web Services

In
April 2004, the Company sold About Web Services, the web hosting business of About Inc., part of the Enthusiast Media segment, for proceeds of approximately $12,200. The results of
operations, assets and liabilities of Web Services were immaterial on a segment and consolidated basis for all periods presented.

$175 Million Senior Floating Rate Notes Offering

On May 10, 2004, the Company announced that it will offer $175,000 principal amount of Senior Floating Rate Notes Due 2010, and intends to enter into a new
$100,000 term loan credit facility. The Senior Floating Rate Notes will bear interest equal to three-month LIBOR plus 5.375% per year. The Company intends to use the net proceeds from the Senior
Floating Rate Notes offering, together with borrowings of $100,000 under the new term loan credit facility, to repay outstanding indebtedness under its existing bank credit facilities and, subject to
the approval of the Company's independent directors as required by its charter, toward the redemption, in whole or in part, of its Series J
Convertible Preferred Stock. If such redemption of the Series J Convertible Preferred Stock is consummated, the Company will borrow additional amounts under its revolving loan facility. If the
Company does not redeem its Series J Convertible Preferred Stock and/or its new term loan credit facility does not become effective, the Company will use the net proceeds of the Senior Floating
Rate Notes offering to reduce other outstanding indebtedness or redeem other preferred stock, and may not permanently reduce available commitments under its bank credit facilities.

Offering and Amendment to the Company's Bank Credit Facilities

In connection with the offering of the Senior Floating Rate Notes, the Company entered into an amendment to its bank credit facilities that will change the terms
of certain of the Company's financial covenants and repayment obligations. The effectiveness of the amendment to the Company's bank credit facilities is subject to the incurrence of additional
indebtedness in the amount of $250,000.

If
the amendment to the bank credit facilities becomes effective, the maximum allowable debt leverage ratio, as defined in the bank credit facilities, will be 6.25 to 1 and will decrease
to 6.00 to 1, 5.75 to 1, 5.50 to 1, 5.25 to 1, 5.00 to 1, 4.75 to 1, and 4.50 to 1 on October 1, 2005, July 1, 2006, October 1, 2006, April 1, 2007, October 1, 2007,
April 1, 2008 and July 1, 2008, respectively. Also, if the amendment to the bank credit facilities becomes effective, the minimum interest coverage ratio and the minimum fixed charge
coverage ratio, both as defined in the bank credit facilities, remain at 2.25 to 1 through maturity and 1.05 to 1 through maturity, respectively.

Additionally,
upon the consummation of the offering together with the new term loan facility, and after giving effect to the amendment to the bank credit facilities, the aggregate
mandatory reductions of the revolving loan commitments under the bank credit facilities would be $42,700 in 2005, $64,050 in 2006, $128,100 in 2007 and a final reduction of $170,800 in 2008, and the
remaining aggregate term loan payments would be $500 in 2004, $20,764 in 2005, 2006 and 2007, $12,192 in 2008 and $337,922 in 2009.

22

---





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 summarizes the financial condition and operating performance of the Company and its business segments and should be read in conjunction with the
unaudited condensed consolidated financial statements and notes thereto.

Executive Summary

Our Business

The Company's revenues are generated from advertising (print and online), circulation (subscriptions and single copy sales) and other sources (events, third party
distribution, training services, sales of data products and directories, list rental and licensing). PRIMEDIA's operating expenses include cost of goods sold (principally paper and printing);
marketing and selling; distribution, circulation and fulfillment; editorial; and other general and corporate administrative expenses (collectively referred to as "operating expenses").

Background

Historically, PRIMEDIA was a broad based media enterprise built primarily from a series of acquisitions and comprised of numerous disparate assets. The most
recent significant acquisitions were About.com ("About") and the EMAP properties in 2001. During 2001 and 2002, the Company integrated those properties into its operating units. Additionally, during
the past few years, the Company sold a number of properties, including Bacon's, the Modern Bride Group, the American Baby Group,Seventeenand New Yorkmagazines and other properties, in order to better focus the Company on its core businesses and reduce debt. As a result of recent
divestitures, the Company has transformed itself into a highly focused targeted media company. Over the past few years, to counter the effects of the weakness in the overall advertising environment,
the Company has aggressively controlled its costs. These initiatives have resulted in charges for severance, closures and restructuring related costs to integrate Company operations and consolidate
many back office functions and facilities, resulting in a significant reduction in the number of employees and office space required. These actions have resulted in a stronger balance sheet, improved
liquidity and a more efficient and better focused organization. The asset divestiture and cost reduction programs are essentially complete and the Company is now focused on growing organically while
still diligently controlling costs.

Company Strategy

In October 2003, PRIMEDIA appointed Kelly P. Conlin as President and Chief Executive Officer ("CEO"). Mr. Conlin and the executive team reviewed the
Company's operations and formulated a strategy to enable the Company to capitalize on the full potential of its businesses and maximize its operating performance. That review resulted in a redesigned
operating structure with four reportable segments to better enable the Company to execute key investment and organic growth initiatives. Those four principal segments are: Enthusiast Media, Consumer
Guides, Business Information, and Education and Training. Accordingly, the Company has reclassified prior year results to reflect this redesigned operating structure with four reportable segments.

The
Company's strategy is to focus on its core enthusiast media businesses and grow through leveraging and expanding its market-leading brands. Actions the Company is taking to
organically grow revenues include introducing new products, improving and upgrading existing products, expanding into

23

---



new
markets, enhancing the capabilities of its sales force, broadening its advertiser base, optimizing distribution, and leveraging its well known brands through brand extensions including events,
licensing and merchandising arrangements.

Business Trends

The industry continues to be adversely affected by the weakness in the overall advertising environment, declining single copy sales of consumer magazines,
cutbacks in the demand for training services and budgetary constraints in the education markets. Additionally, high apartment vacancy rates have pressured the advertising budgets of property managers.

In
2004 and 2003, many of PRIMEDIA's products continued to grow, while others were affected by industry trends and actions the Company took to improve profitability. The Company has
capitalized on the general trend of marketers seeking to better target their advertising, the growth of free publications, the aggressive marketing and new product introductions in the automotive
industry and the growing popularity of personal hobbies and leisure activities, as the Company has a large presence in those sectors. The Company has taken certain actions to lower costs and improve
profitability, which has also negatively affected revenues, including reducing the rate base for the soap opera magazine titles in January 2003, and consolidating or shutting down certain
properties.

Summary of Consolidated Results for the three months ended March 31, 2004

In 2004, revenues were $328,503, flat as compared to $328,487 in 2003. Revenue gains in the Consumer Guides segment were offset by declines in the Education and
Training segment. In 2004, operating expenses were $281,237, down 1.5% compared to 2003. In 2004, operating income was $18,637, improved from $17,365 in 2003 due to reduced operating expenses and
decreased amortization expense, partially offset by a provision for unclaimed property. Net income was $11,071 in 2004 compared to a net loss of $20,247 in 2003. The improvement in net income was
primarily due to the gain on the sale ofNew Yorkmagazine of $38,119 in 2004, recorded in discontinued operations on the Company's condensed statement
of consolidated operations.

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.

Why We Use Segment EBITDA

Segment EBITDA represents the segment's 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, provision for severance, closures and restructuring related costs, provision for unclaimed
property and (gain) loss on sale of businesses and other, net. PRIMEDIA believes that Segment EBITDA is the most accurate indicator of its segments' results, because it focuses on revenue and
operating cost items driven by each operating managers' performance, and excludes items largely outside of the operating managers' control. Internally, the Company's chief operating decision maker,
who is the President and CEO, and the executive team measure performance primarily based on Segment EBITDA.

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
accounting

24

---



principles
generally accepted in the United States of America), as an indicator of the Company's operating performance or to cash flows as a measure of liquidity. Segment EBITDA may not be available
for the Company's discretionary use as there are requirements to redeem preferred stock 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 an identical manner, and therefore is not necessarily an accurate measure of comparison between
companies. For more information, see the reconciliation of Segment EBITDA to operating income (loss) for the Company's four segments in their respective segment discussions below.

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 transactions represent intercompany 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.

Reclassifications due to Discontinued Operations

In accordance with Statement of Financial Accounting Standards ("SFAS") 144, "Accounting for the Disposal of Long-Lived Assets", the Company's results
have been reclassified to reflectSeventeenand its companion teen properties ("Seventeen"), Simba Information, Federal Sources, CableWorld,Sprinks,
RealEstate.com,New Yorkmagazine and Kagan World Media as discontinued operations
for the periods prior to their respective divestiture dates.

25

---



Segment Data

The following table presents the results of the Company's four operating segments and Corporate for the three months ended March 31, 2004 and 2003:

Three Months Ended March 31,2004

2003Revenues, net:Enthusiast Media

$
174,228

$
173,373Consumer Guides


71,845


67,924Business Information


55,992


57,469Education and Training


26,773


32,140Intersegment Eliminations


(335
)

(2,419
)Total

$
328,503

$
328,487Segment EBITDA(1):Enthusiast Media

$
30,459

$
24,607Consumer Guides

$
19,917

$
17,568Business Information

$
4,504

$
3,821Education and Training

$
(123
)
$
4,334Corporate Overhead

$
(7,491
)
$
(7,425
)Depreciation, amortization and other charges(2):Enthusiast Media

$
10,853

$
9,081Consumer Guides

$
2,909

$
3,027Business Information

$
5,319

$
5,039Education and Training

$
4,624

$
6,340Corporate

$
4,924

$
2,053Operating income (loss):Enthusiast Media

$
19,606

$
15,526Consumer Guides


17,008


14,541Business Information


(815
)

(1,218
)Education and Training


(4,747
)

(2,006
)Corporate


(12,415
)

(9,478
)Total


18,637


17,365Other expense:Interest expense


(28,578
)

(33,453
)Interest on shares subject to mandatory redemption(3)


(10,945
)

Amortization of deferred financing costs(3)


(1,102
)

(741
)Other income (expense), net


288


(546
)Loss from continuing operations before income tax expense


(21,700
)

(17,375
)Income tax expense


(4,390
)

(3,718
)Loss from continuing operations


(26,090
)

(21,093
)Discontinued operations(4)


37,161


846Net income (loss)

$
11,071

$
(20,247
)


---

26

---





Three Months Ended March 31, 2004 Compared to Three Months Ended March 31, 2003:

Consolidated Results:

Revenues, Net

Consolidated revenues were $328,503 in 2004 compared to $328,487 in 2003:

Three Months Ended
March 31,Percent
Change2004

2003Revenues, net:Advertising

$
204,100

$
203,766

0.2Circulation


75,800


77,784

(2.6
)Other


48,603


46,937

3.5Total

$
328,503

$
328,487




Advertising
revenues increased by $334 in the first quarter of 2004 compared to 2003 due to increases of $2,670 and $2,157 at the Consumer Guides and Enthusiast Media segments,
respectively, partially offset by declines of $2,819 and $1,674 at the Business Information and Education and Training segments, respectively. Circulation revenues decreased $1,984 in 2004,
principally driven by a $1,695 decline in revenues at the Enthusiast Media segment due to continued weakness in single copy sales. Other revenues increased in 2004 compared to 2003 primarily due to
increases at Consumer Guides of $1,261 from continued growth of its third party distribution business and at Business Information of $1,297 partially offset by a $1,498 decline at the Education and
Training segment.Revenue trends within each segment are further detailed in the segment discussions below.

27

---



Operating Income (Loss)

Operating income was $18,637 in 2004 compared to $17,365 in 2003. The improvement in operating income in 2004 was due to reduced operating expenses and a decrease
in amortization of intangible assets. Amortization expense decreased $4,734 in 2004 compared to 2003 primarily due to certain intangible assets that have become fully amortized subsequent to the first
quarter of 2003. These expense reductions were partially offset by a provision for unclaimed property. The Company has completed the initial phase of its internal assessment regarding compliance with
escheatment requirements for unclaimed property in certain states and as a result has recorded an estimated provision of $5,500.

Net Income (Loss)

The Company had net income in 2004 of $11,071 compared to net loss of $20,247 in 2003. The increase in net income was primarily due to the gain on the sale of New
Yorkmagazine of $38,119 recorded in discontinued operations during the first quarter of 2004.

Interest
expense decreased $4,875, or 14.6% in 2004 to $28,578 from $33,453 in 2003. The decrease in interest expense is due to the Company's reduction of its debt, lower interest rates
and the Company's refinancing of its highest cost debt at lower interest rates.

In
accordance with the prospective adoption, effective July 1, 2003, of SFAS 150, "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and
Equity", loss from continuing operations increased by $11,281 which represents $10,945 of interest on shares subject to mandatory redemption and $336 of amortization of issuance costs which is
included in the amortization of deferred financing costs on the accompanying condensed statement of consolidated operations for the three months ended March 31, 2004. If SFAS 150 was
adopted on January 1, 2003, loss from continuing operations for the three months ended March 31, 2003 would have increased by $11,876.

SFAS 144
requires sales or disposals of long-lived assets that meet certain criteria to be classified on the statement of consolidated operations as discontinued
operations and to reclassify prior periods accordingly. During 2003, the Company completed the sale of Seventeen, Simba Information, Federal Sources, CableWorld,Sprinks and RealEstate.com and during
2004, the Company soldNew Yorkmagazine and Kagan
World Media. In accordance with SFAS 144, the financial results of these operations have been reclassified into discontinued operations on the condensed statements of consolidated operations
for periods prior to their respective divestiture date. For the three months ended March 31, 2004 and 2003, discontinued operations includes a net gain (loss) on sale of businesses of $38,035
and ($1,242), respectively.

28

---



Segment Results:

Enthusiast Media Segment (includes Consumer Automotive, Performance Automotive, International Automotive, Outdoors, Action Sports, Lifestyles and Home Technology magazine
groups, their related Web sites, events, and About.com)

Revenues, Net

Enthusiast Media revenues were $174,228 or 53.0% and $173,373 or 52.8% of the Company's consolidated revenues for 2004 and 2003, respectively. Enthusiast Media
revenues increased $855 or 0.5% in 2004 compared to 2003 as follows:

Three Months Ended
March 31,Percent
Change2004

2003Revenues, net:Advertising

$
93,956

$
91,799

2.3Circulation


64,247


65,942

(2.6
)Other


15,804


15,198

4.0Intersegment revenues


221


434

(49.1
)Total

$
174,228

$
173,373

0.5


The
automotive properties had a challenging quarter, with revenues declining 4.2%, while the rest of the portfolio posted revenue gains of 5.6% in 2004.

Advertising
revenues increased $2,157 or 2.3% in 2004. The growth was led by an increase in online advertising of approximately $6,000 predominantly driven by the Company's relationship
with Google and an aggressive effort to improve the sales and marketing of the Company's online properties. The Company is in discussions to expand the Google relationship to the Consumer Guides and
Business Information segments.

The
increase in online advertising revenues allows the Company to reinvest in its properties to be well positioned for the strong growth opportunities in online marketing. In
April 2004, About.com unveiled its most significant product improvement since the site's debut in 1997 as it launched About 4.0 with an innovative new site design and architecture aimed at
enhancing the total user experience.

The
increase in online advertising was partially offset by an approximate $3,800 decrease in print advertising. Print advertising pages were down 4.0% in the first quarter of 2004
compared to the first quarter of 2003. Specifically, advertising pages in the Company's automotive titles declined 5.3% while advertising pages for the remainder of the segment's properties declined
2.8%. Industry wide advertising pages were down 2.3%, with automotive advertising pages declining 9.8%, as reported by Publishers Information Bureau. The Company expects automotive advertising to
resume growth in the second half of 2004 as many new car models are scheduled for introduction.

Circulation
revenues at Enthusiast Media declined $1,695 or 2.6% for the three months ended March 31, 2004 due to continued softness in single copy sales. Newsstand revenue
declines at the Enthusiast Automotive (now known as International Automotive and Performance Automotive), Action Sports and Home Technology groups were partially offset by gains from the Consumer
Automotive (includesMotor TrendandAutomobile) and Lifestyles (including the soap opera titles)
groups. Overall, single copy units for Enthusiast Media magazines declined 5.3% for the six months ended March 31, 2004, compared to the industry average decline of 11.3%, as reported by the
International Periodical Distributors Association.

29

---



Other
revenues for Enthusiast Media, which include licensing, list rental, events and other, increased $606, or 4.0%, in 2004 compared to 2003. The increase was primarily due to growth
in events, licensing and merchandising revenue.

Key Accomplishments

The Company is combating industry wide circulation weakness with several initiatives, including product redesigns. The first product to emerge from the Company's
aggressive editorial and product improvement campaign was the February issue ofMotor Trend. This issue yielded positive results as its newsstand sales
levels were higher than any issue since 2002.

The
segment's 2004 notable new product introductions wereBoatworks For The Hands-On Sailor, a practical
do-it-yourself boat restoration and maintenance guide for the sailing enthusiast from the editors ofSailmagazine, and Connected: Guide to the Digital Home, a guide dedicated entirely to adopting and integrating home technologies.

In
addition, during the first quarter of 2004, the Company reorganized the Enthusiast Automotive group, separating it into two focused units, International Automotive and Performance
Automotive, both led by executives with strong track records for growth and innovation.

Segment EBITDA

Enthusiast Media Segment EBITDA increased 23.8% to $30,459 in 2004 from $24,607 in 2003. This increase was due to reduced operating expenses of $4,997
particularly in cost of goods sold and distribution expenses partially offset by higher overhead. As a result, Segment EBITDA margin increased to 17.5% in 2004 from 14.2% in 2003.

Below
is a reconciliation of Enthusiast Media Segment EBITDA to operating income for the three months ended March 31, 2004 and 2003:

Three Months Ended
March 31,2004

2003Segment EBITDA

$
30,459

$
24,607Depreciation of property and equipment


5,155


4,333Amortization of intangible assets and other


2,418


4,359Provision for severance, closures and restructuring related costs


84


391Provision for unclaimed property


3,271


Gain on sale of businesses and other, net


(75
)

(2
)Operating income

$
19,606

$
15,526


Operating Income (Loss)

Operating income was $19,606 in 2004 compared to $15,526 in 2003, an increase of $4,080. This increase was principally driven by the improvement in Segment EBITDA
as well as a decrease in amortization expense, partially offset by an increase in depreciation expense and a provision for unclaimed property.

Discontinued Operations

In accordance with SFAS 144, the operating results of Seventeen, Sprinks andNew Yorkmagazine have been
reclassified to discontinued operations on the condensed statements of consolidated operations for the periods prior to their respective divestiture dates.

30

---



Enthusiast
Media revenues exclude revenues from discontinued operations of $504 and $42,374 for the three months ended March 31, 2004 and 2003, respectively. Enthusiast Media
segment operating income excludes operating income from discontinued operations of $36,378 and $3,415 for the three months ended March 31, 2004 and 2003, respectively. For the three months
ended March 31, 2004 and 2003, discontinued operations includes a net gain (loss) on sale of businesses of $37,119 and ($978), respectively.

Consumer Guides Segment (includesApartment Guide, New Homes GuideandAuto
Guidepublications and their related Web sites, and the DistribuTech distribution business)

Revenues, Net

Consumer Guides revenues were $71,845 or 21.9% and $67,924 or 20.7% of the Company's consolidated revenues for 2004 and 2003, respectively. Consumer Guides
revenues increased $3,921 or 5.8% in 2004 compared to 2003 as follows:

Three Months Ended
March 31,Percent
Change2004

2003Revenues, net:Advertising

$
60,551

$
57,881

4.6Other


11,294


10,033

12.6Intersegment revenues





10

(100
)Total

$
71,845

$
67,924

5.8


Advertising
revenues for the Consumer Guides segment increased $2,670 to $60,551 in 2004 compared to $57,881 in 2003. Advertising revenue at theApartment
Guidebusiness continued to grow despite challenges presented by record low interest rates driving increased home buying and higher than normal apartment vacancy rates
depressing apartment owners' advertising budgets. Apartment complex owners typically reduce marketing and advertising spending in periods of high vacancy.

Consumer
Guides other revenues, which relate to its distribution arm, DistribuTech, increased $1,261 during the first quarter of 2004 compared to 2003 due to continued growth of its
distribution network, increased rack utilization and an effective pricing strategy. Since the first quarter of 2003, DistribuTech has added over 1,000 retail locations and approximately 350 additional
third party publications and boosted its total rack utilization from 65% to 70%. DistribuTech distributes more than 2,000 publications on behalf of other publishing organizations to many of the
country's leading supermarkets and chain stores, with which it has exclusive distribution relationships.

Key Accomplishments

In March of 2004, the first weeklyAuto Guidewas launched in Charlotte, North Carolina, featuring 1,400
advertisements from 34 dealers and was distributed through the Company's proprietary distribution system in more than 675 locations. Additional launches are planned for 2004, including the
Winston/Salem/Greensboro and Raleigh/Durham/Chapel Hill markets. The Company also introduced theCentral Florida New Homes Guideduring the first
quarter of 2004, featuring new homes from dozens of builders in the Greater Orlando area, and theNew Homes Guidein Houston in late April 2004.

31

---



Segment EBITDA

Consumer Guides Segment EBITDA increased $2,349 or 13.4% in 2004 to $19,917. The increase is due to higher revenues in 2004 with relatively stable operating
expenses. As a result, Segment EBITDA margin increased to 27.7% in 2004 compared to 25.9% in 2003.

Below
is a reconciliation of Consumer Guides Segment EBITDA to operating income for the three months ended March 31, 2004 and 2003:

Three Month Ended
March 31,2004

2003Segment EBITDA

$
19,917

$
17,568Depreciation of property and equipment


2,041


1,996Amortization of intangible assets and other


823


899Provision for severance, closures and restructuring related costs


38


Provision for unclaimed property


7


Loss on sale of businesses and other, net





132Operating income

$
17,008

$
14,541


Operating Income (Loss)

Operating income increased $2,467 or 17.0% in 2004. This increase is primarily driven by the improvement in Segment EBITDA.

Discontinued Operations

In accordance with SFAS 144, the results of RealEstate.com have been reclassified to discontinued operations on the condensed statements of consolidated
operations for three months ended March 31, 2004 and 2003.

Consumer
Guides revenues exclude revenues from discontinued operations of $535 for the three months ended March 31, 2003. Consumer Guides segment operating income excludes
operating losses from discontinued operations of $518 and $189 for the three months ended March 31, 2004 and 2003, respectively. In 2004, discontinued operations includes a loss on sale of
business of $518 due to post closing adjustments related to the sale of RealEstate.com.

32

---



Business Information Segment (includes trade magazines and their related Web sites, events, directories and data products)

Revenues, Net

Business Information revenues were $55,992 or 17.0% and $57,469 or 17.5% of the Company's consolidated revenues for 2004 and 2003, respectively. Business
Information revenues decreased $1,477 or 2.6% in 2004 compared to 2003 as follows:

Three Months Ended
March 31,Percent
Change2004

2003Revenues, net:Advertising

$
39,619

$
42,438

(6.6
)Circulation


5,209


5,164

0.9Other


11,164


9,867

13.1Total

$
55,992

$
57,469

(2.6
)


Overall,
Business Information segment revenues are stabilizing, with approximately 20% of the segment's revenues coming from sectors that are up, approximately 50% from sectors that are
flat and approximately 30% from sectors that are down.

Advertising
revenues decreased $2,819 in 2004 due to continued softness in trade advertising, particularly in the entertainment technology and agriculture categories partially offset by
strength in the electrical, automotive and telecommunications sectors.

Circulation
revenues, which consist of subscriptions to directories and data based products, were flat in 2004 compared to 2003.

Other
revenues, which consist of trade shows, information products and online revenues, were up $1,297, or 13.1%, in 2004 compared to 2003. The focus on online initiatives contributed to
revenue improvements as online revenues were up 93%, page views were up 49%, the number of e-newsletters created was up 34% and the number of e-newsletter subscribers was up
86%.

Key Accomplishments

Additional sales training and the creation of customized marketing programs resulted in advertising pages improving approximately 8% and advertising revenues
increasing approximately 12% atRegistered Rep.magazine, which is the flagship of the financial services group. AtRegistered
Rep.the revenue gains were driven by creating customized marketing solutions for brokerage firms, insurance and mutual fund distributors that target financial advisors through
the magazine, the Web site and a series of e-letters. During the first quarter of 2004, the Company launchedAc-U-Kwik Aircraft
Appraisalsas an extension of Ac-U-Kwik, leveraging the Company's expertise and market leading brand in worldwide airport and ground services data.

Segment EBITDA

Business Information Segment EBITDA increased $683 for the three months ended March 31, 2004 to $4,504. The improvement is predominantly due to continued
cost control with expenses declining in nearly all categories, partially offset by the decline in revenues. Operating expenses in this segment declined by approximately $2,200 in 2004 compared to
2003. These factors contributed to an improved Segment EBITDA margin of 8.0% for 2004 versus 6.6% for 2003.

33

---



Below
is a reconciliation of Business Information Segment EBITDA to operating loss for the three months ended March 31, 2004 and 2003:

Three Months Ended
March 31,2004

2003Segment EBITDA

$
4,504

$
3,821Depreciation of property and equipment


1,647


2,156Amortization of intangible assets and other


1,391


2,279Provision for severance, closures and restructuring related costs


743


590Provision for unclaimed property


1,538


Loss on sale of businesses and other, net





14Operating loss

$
(815
)
$
(1,218
)


Operating Income (Loss)

Business Information operating loss decreased $403 to $815 in 2004 compared to $1,218 in 2003. The decrease in operating loss was driven by improved Segment
EBITDA and decreases in depreciation and amortization expense in 2004 as certain assets became fully depreciated or amortized, partially offset by a provision for unclaimed property.

Discontinued Operations

In accordance with SFAS 144, the results of Simba, Federal Sources,CableWorldand Kagan World Media have
been reclassified to discontinued operations on the condensed statements of consolidated operations for periods prior to their respective divestiture dates.

Business
Information revenues exclude revenues from discontinued operations of $1,135 and $4,405 for the three months ended March 31, 2004 and 2003, respectively. Business
Information segment operating results exclude the operating income (loss) from discontinued operations of $1,328 and ($2,320) for the three months ended March 31, 2004 and 2003, respectively.
For the three months ended March 31, 2004 and 2003, discontinued operations include a net gain (loss) on sale of businesses of $1,434 and ($264), respectively.

Education and Training (includes Channel One, Films Media Group and Workplace Learning)

Revenues, Net

Education and Training revenues were $26,773 or 8.2% and $32,140 or 9.8% of the Company's consolidated revenues for 2004 and 2003, respectively. Education and
Training revenues decreased $5,367 or 16.7% in 2004 compared to 2003 as follows:

Three Months Ended
March 31,Percent
Change2004

2003Revenues, net:Advertising

$
9,974

$
11,648

(14.4
)Circulation


6,344


6,678

(5.0
)Other


10,341


11,839

(12.7
)Intersegment revenues


114


1,975

(94.2
)Total

$
26,773

$
32,140

(16.7
)


34

---



Education and Training advertising revenues, which are generated entirely by Channel One, decreased $1,674 in 2004 as compared to 2003. Channel One's advertising revenue declined as a
result of reduced spending by several food and beverage accounts and the absence of any barter deals in 2004, partially offset by revenue gains from additional health and beauty brands, movies and
telecommunications firms.

Workplace
Learning subscription revenue accounts for all of the segment's circulation revenue, which decreased $334 in 2004. Lagging demand for training services from Workplace Learning
continued to depress subscription revenues as well as product sale revenues which are classified in other.

Reduced
product sales at Workplace Learning and the Films Media Group (formerly known as Films for the Humanities and Sciences) primarily accounted for the decline of $1,498 in other
revenues in 2004. At the Films Media Group continuing constraints on state and local school budgets was the driver of approximately $900 of declines in product sales in 2004 compared to 2003.

Key Action Steps to Improve Performance

The Company is working to improve Channel One's sales effectiveness by better addressing the growing retail and health and beauty aids sectors. New leadership at
the Films Media Group has resulted in the development of an improved platform for the digital deployment of its program library that will afford its customers new flexibility in the use of video
library and classroom environments. The Company has initiated a thorough review of the markets for Workplace Learning's portfolio to focus the organization on the product lines with the greatest
potential.

Segment EBITDA

Education and Training Segment EBITDA decreased $4,457 to ($123) for the three months ended March 31, 2004. This decrease is principally due to the
declines in revenue discussed above partially offset by continued cost control during the first quarter of 2004. These factors contributed to a decrease in Segment EBITDA margin in 2004 to (0.5%)
compared to 13.5% in 2003.

Below
is a reconciliation of Education and Training Segment EBITDA to operating loss for the three months ended March 31, 2004 and 2003:

Three Months Ended March 31,2004

2003Segment EBITDA

$
(123
)
$
4,334Depreciation of property and equipment


2,383


3,146Amortization of intangible assets and other


1,365


3,194Provision for severance, closures and restructuring related costs


248


Provision for unclaimed property


628


Operating loss

$
(4,747
)
$
(2,006
)


Operating Income (Loss)

Operating loss increased $2,741 for the three months ended March 31, 2004 due to the decrease in Segment EBITDA partially offset by decreased amortization
and depreciation as certain assets became fully amortized and fully depreciated since the first quarter of 2003.

35

---



Corporate:

Corporate Overhead

Corporate overhead was essentially flat, up $66 in 2004 to $7,491 from $7,425 in 2003.

Operating Income (Loss)

Corporate operating loss increased $2,937 in 2004 to $12,415 from $9,478 in 2003 principally driven by an increase in the provision for severance, closures and
restructuring related costs of $1,425 to $1,606 in 2004 primarily due to adjustments to sublease assumptions related to previously restructured leases. During the first quarter of 2004, the Company
recorded severance related to the separated senior executives of $658 as a result of the finalization of the separation agreements of two of the executives. In addition, the Company recorded $1,919 of
stock-based compensation expense in 2004 compared to $1,246 in 2003.

Risk Factors

Set forth below are risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements
contained in this Quarterly Report.

General economic trends, as well as trends in advertising spending, may reduce our advertising revenues.

Our advertising revenues are subject to the risks arising from adverse changes in domestic and global economic conditions and possible shifting of advertising
spending amongst media. A decline in the level of business activity of our advertisers has had an adverse effect on our revenues and profit margins. Additionally, high apartment vacancy rates have
pressured the advertising budgets of property owners, constraining growth in one of our segments. Because of the recent economic slowdown in the United States, many advertisers, particularly
business-to-business advertisers,
have reduced advertising expenditures. Any further impact of this slowdown and high vacancy rates on the Company is difficult to predict, but it may result in further reductions in advertising
revenue. Additionally, if geopolitical events negatively impact the economy or advertising spending patterns change, our results of operations may be adversely affected. The Company believes that the
targeted nature of its products together with its diversification of advertising vehicles, including print, on-line, events and television, would minimize the effects of shifting
advertising spending.

We have substantial indebtedness and other monetary obligations, which consume a substantial portion of the cash flow that we generate.

A substantial portion of our cash flow is dedicated to the payment of interest on indebtedness and to the payment of dividends on our preferred stock, which
reduces funds available for capital expenditures and business opportunities and may limit our ability to respond to adverse developments in our business or in the economy.

Our debt instruments limit our business flexibility by imposing operating and financial restrictions on our operations.

The agreements and indentures governing our indebtedness impose specific operating and financial restrictions on us. These restrictions impose limitations on our
ability to, among other things:



36

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Our
failure to comply with the terms and covenants in our indebtedness could lead to a default under the terms of those documents, which would entitle the lenders to accelerate the
indebtedness and declare all amounts owed due and payable. Moreover, the instruments governing almost all of our indebtedness contain cross-default provisions so that a default under any of our
indebtedness may result in a default under our other indebtedness. If a cross-default occurs, the maturity of almost all of our indebtedness could be accelerated and become immediately due and
payable. If that happens, we would not be able to satisfy our debt obligations, which would have a substantial material adverse effect on our ability to continue as a going concern. We may not be able
to comply with these restrictions in the future, or in order to comply with these restrictions we may have to forgo opportunities that might otherwise be beneficial to us.

Under
the terms of our debt instruments, we have the ability to make significant additional investments in our unrestricted subsidiaries.

Kohlberg Kravis Roberts & Co. L.P., or KKR, has control of our common stock and has the power to elect all the members of our board of directors and to approve any
action requiring stockholder approval.

As of March 31, 2004, approximately 60% of the shares of our common stock were held by investment partnerships, of which KKR Associates, L.P., a New York
limited partnership ("KKR Associates"), and KKR GP 1996 LLC, a Delaware limited liability company ("KKR GP 1996"), each an affiliate of KKR, are the general partners. KKR Associates and KKR GP 1996
have sole voting and investment power with respect to these shares. Consequently, KKR Associates and KKR GP 1996 and their respective general partners and members, three of whom are also our
directors, control us and have the power to elect all of our directors and approve any action requiring stockholder approval, including adopting amendments to our certificate of incorporation and
approving mergers or sales of all or substantially all of our assets. KKR Associates and KKR GP 1996 will also be able to prevent or cause a change of control at any time.

Increases in paper and postage costs may have an adverse impact on our future financial results.

The price of paper is a significant expense relating to our print products and direct mail solicitations. Postage for product distribution and direct mail
solicitations is also a significant expense. We use the U.S. Postal Service for distribution of many of our products and marketing materials. In April 2003, President Bush signed legislation
that will hold postal rates stable until at least 2006. Paper and postage cost increases may have an adverse effect on our future results. We may not be able to pass these cost increases through to
our customers.

Incompatible financial systems limit the Company's ability to operate efficiently.

PRIMEDIA is the result of numerous acquisitions since its inception in 1989. Many of the companies acquired had financial systems which are incompatible.
Incompatible financial systems across PRIMEDIA have negatively impacted the Company's ability to efficiently analyze data and respond to business opportunities on a timely basis. Significant capital
expenditures are necessary to upgrade and standardize financial systems across the Company. Despite the economic slowdown, the Company has

37

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been
engaged in upgrading its key financial systems, which are designed to make the financial reporting and analysis functions more efficient. To address management's concerns regarding the current
lack of compatible financial systems across the Company and the demands surrounding increased financial disclosure, the Company has installed an integrated enterprise-wide general ledger
system across all companies. Despite the difficult economic environment, the Company spent approximately $15,000 on the systems upgrade, of which approximately $10,000 and $5,000 was spent during 2003
and 2002, respectively. However, it will take approximately 12 months to fully realize the planned benefits of this integrated enterprise-wide system. The Company is also
implementing a new integrated billing/accounts receivable system across its consumer magazine units which is scheduled for completion in the latter part of 2004 at a cost of approximately $5,000. The
Company recognizes that there are inherent risks in a system implementation and has taken reasonable steps to mitigate these risks.

We depend on some important employees, and the loss of any of those employees may harm our business.

Our performance is substantially dependent on the performance of our executive officers and other key employees. In addition, our success is dependent on our
ability to attract, train, retain and motivate high quality personnel, especially for our management team. The loss of the services of any of our executive officers or key employees may harm our
business.

The
decline in revenues, in certain segments, has necessitated cost cuts including the reduction of certain personnel at the Company. Such workforce reductions may impact the ability of
remaining personnel to perform their assigned responsibilities in an efficient manner, due to the increased volume of work being generated in the financial area and to the continuing process of
converting certain of our financial systems. The Company believes that it has in place the necessary financial workforce to analyze data and has put in place additional financial personnel during the
period prior to the completion of the financial systems upgrade in order to improve the efficiency of financial analysis and mitigate the risk of employee turnover.

The
Company's management is concerned about the intense competition in this economy for the hiring and retention of qualified financial personnel, the inherent risk in certain system
implementations across the Company and the demands surrounding increased financial disclosure. To mitigate management's concerns regarding the hiring and retention of qualified financial personnel and
to ensure future stability in the financial workforce, the Company continues to upgrade the skill level of its back office personnel, consolidate certain back office functions and cross train
individuals in the performance of multiple job functions. Additionally, the Company continues to aggressively recruit qualified professionals to strengthen and increase its financial personnel. The
Company believes that it is currently close to being fully staffed in the finance area.

Liquidity, Capital and Other Resources

The Company has reduced long-term debt, including current maturities, by $160,249, or 9.2%, to $1,575,089 at March 31, 2004 from $1,735,338 at
December 31, 2002. As of March 31, 2004, the Company had cash and unused credit facilities of $336,694 as further detailed below under "Financing Arrangements". The Company has also
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.
These plans should help mitigate any future possible cash flow shortfalls. The Company's asset sales and continued cost reductions during 2004 and 2003 have facilitated its strategy to become a more
efficient and better focused company while strengthening its balance sheet and improving liquidity.

The
Company believes its liquidity, capital resources and cash flow from operations are sufficient to fund planned capital expenditures, working capital requirements, interest and
principal payments on

38

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its
debt, payment of preferred stock dividends and other anticipated expenditures for the remainder of 2004. The Company has no significant required debt repayments until 2008.

Working Capital

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. Consolidated working capital deficiency, which includes
current maturities of long-term debt, was $182,850 at March 31, 2004 compared to $205,300 at December 31, 2003.

Cash Flow2004 Compared to 2003

Net cash used in operating activities increased $24,348 to $31,500 in 2004 from $7,152 in 2003. This change is primarily due to payments made in 2004 related to
the finalization of the separation agreements of the former CEO and the former President and Interim CEO and the timing of certain incentive compensation payments in 2004.

Net
cash provided by (used in) investing activities increased $62,614 to $51,354 from ($11,260) for the three months ended March 31, 2004 and 2003, respectively. Proceeds from the
sale of businesses were $58,077 in 2004 compared to $44 in 2003. Cash paid for acquired businesses decreased to $1,117 in 2004 from $2,186 in 2003. Net capital expenditures including the Company's
continued investment in enterprise-wide financial systems, decreased to $6,153 in 2004, compared to $8,986 in 2003. The Company expects capital spending in 2004 to remain consistent with
2003.

Net
cash provided by (used in) financing activities was ($9,429) in 2004 compared to $21,509 in 2003 predominantly due to decreased borrowings under the Company's bank credit facilities
in 2004.

Financing Arrangements

Bank Credit Facilities (See Subsequent Events)

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 facilities"). The debt under the bank credit facilities agreement and as otherwise permitted under the bank credit facilities 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.

Substantially
all proceeds from sales of businesses and other investments were used to pay down borrowings under the bank credit facilities agreement. Amounts under the bank credit
facilities 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 bank credit

39

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facilities
revolving loan commitment in the amounts of $5,000, $21,000 and $24,000, respectively. The bank credit facilities consisted of the following as of March 31, 2004:

|                              |  | Revolver |         | Term A |   | Term B  |   | Total |         
|----------------------------- |  | -------- | ------- | ------ | - | ------- | - | ----- | --------
|Bank Credit Facilities        |  | $        | 427,000 |        | $ | 90,000  |   | $     | 372,906 
|Borrowings Outstanding        |  |          | (90,000 | )      |   | (90,000 | ) |       | (372,906
|Letters of Credit Outstanding |  |          | (19,416 | )      |   |        |   |       |        
|                              |  |          |         |        |   |         |   |       |         
|Unused Bank Commitments       |  | $        | 317,584 |        | $ |        |   | $     |        
|                              |  |          |         |        |   |         |   |       |         

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 March 31, 2004 and December 31,
2003, the weighted average variable interest rate on all outstanding borrowings under the bank credit facilities was 3.6%.

Under
the bank credit facilities, 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 facilities agreement, on the daily average aggregate unutilized commitment under the revolving loan commitment. During the first quarter of 2004, the Company's commitment fees were paid at
a weighted average rate of 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 facilities 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 facilities 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 facilities are $15,075 in 2004, $26,325 in 2005, 2006
and 2007, $15,074 in 2008 and $353,782 in 2009.

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



40

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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 facilities.

Contractual Obligations

There are no required significant debt repayments until 2008. The following are certain contractual obligations of the Company as of March 31, 2004:

|                                                                                     |  | Payments Due by Period
|------------------------------------------------------------------------------------ |  | ----------------------
|
|Long-term debt obligations (net of unamortized discount)                             |  | $                     
|Interest on long-term debt obligations(1)                                            |  |                       
|Shares subject to mandatory redemption (Exchangeable Preferred Stock)                |  |                       
|Interest on shares subject to mandatory redemption (Exchangeable Preferred Stock)(1) |  |                       
|Capital lease obligations                                                            |  |                       
|Interest on capital lease obligations                                                |  |                       
|Operating lease obligations                                                          |  |                       
|                                                                                     |  |                       
|Total Contractual Obligations                                                        |  | $                     
|                                                                                     |  |                       

---

The
Company currently has $90,000 of borrowings outstanding at March 31, 2004 under the revolving loan portion of the bank credit facilities. The bank credit facilities expire in
2008. Assuming this balance remains constant until the end of the term, and application of the Company's projected interest rates, total interest payments related to the revolver under our bank credit
facilities are estimated to be $25,794 for the periods presented in the above table. These interest payments are not included in the above table.

The
Company has other commitments in the form of letters of credit of $19,416 aggregate face value which expire on or before March 31, 2005.

Off Balance Sheet Arrangements

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.

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Covenant Compliance (See Subsequent Events)

Under the most restrictive covenants as defined in the bank credit facilities agreement, the Company must maintain a minimum interest coverage ratio, as defined,
of 2.25 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 2.5
to 1 on 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 facilities
agreement. Under its bank credit facilities 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 facilities 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 facilities and Senior Note agreements. The guarantees are full, unconditional and joint and several. The Unrestricted Group does not guarantee the bank credit facilities or
Senior Notes. For purposes of determining compliance with certain financial covenants under the Company's bank credit facilities 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 facilities 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 bank credit facilities agreement to operating income for
the three and twelve months ended March 31, 2004:

For the Three
Months Ended
March 31, 2004

For the Twelve
Months Ended
March 31, 2004EBITDA of the Restricted Group

$
62,597

$
313,646EBITDA loss of the Unrestricted Group


(16,481
)

(65,788
)Divestiture and other adjustments


492


(9,463
)Depreciation of property and equipment


(11,911
)

(55,521
)Amortization of intangible assets and other


(5,997
)

(71,219
)Non-cash compensation


(1,919
)

(11,857
)Provision for severance, closures and restructuring related costs


(2,719
)

(10,230
)Provision for unclaimed property


(5,500
)

(5,500
)Income (loss) on the sales of businesses and other, net


75


(399
)Operating income

$
18,637

$
83,669


42

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

For the Three
Months Ended
March 31, 2004

For the Twelve
Months Ended
March 31, 2004Internet properties

$
6,950

$
31,600Traditional turnaround and start-up properties


7,822


27,751Related overhead and other charges


1,709


6,437$
16,481

$
65,788


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 facilities 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 properties of the Unrestricted Group. 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 facilities agreement for covenant purposes, is defined as the Company's consolidated debt divided by
the EBITDA of the Restricted Group. At March 31, 2004, this leverage ratio was approximately 5.1 to 1.0.

Other Arrangements

During 2002, the Company's Board of Directors authorized the exchange of up to $165,000 of the Company's Exchangeable Preferred Stock for common stock. As of
March 31, 2004, the Company has exchanged $75,441 liquidation value of Series D Exchangeable Preferred Stock, Series F Exchangeable Preferred Stock and Series H
Exchangeable Preferred Stock (carrying value of $73,874) for 14,360,306 shares of common stock of the Company.

In
addition, the Company's Board of Directors authorized the exchange by the Company of up to $50,000 of Exchangeable Preferred Stock for common stock and the subsequent repurchase of
the common stock issued in connection with the exchange transactions. As of March 31, 2004, the Company has exchanged $25,000 liquidation value of Series D Exchangeable Preferred Stock,
Series F Exchangeable Preferred Stock and Series H Exchangeable Preferred Stock (carrying value of $24,597) for 8,733,842 shares of common stock of the Company and subsequently
repurchased all of the common stock issued in connection with such exchanges.

The
Series J Convertible Preferred Stock is convertible at the option of the holder after one year from the date of issuance, into approximately 24,300,000 shares of the Company's
common stock at a conversion price of $7 per share, subject to adjustment. Dividends on the Series J Convertible Preferred Stock accrue quarterly at an annual rate of 12.5% and are payable
quarterly in-kind. The Company paid dividends-in-kind of 41,222 shares of Series J Convertible Preferred Stock valued at $5,153 during the three months ended
March 31, 2004 and 36,448 shares of Series J Convertible Preferred Stock valued at $4,556 during the three months ended March 31, 2003. 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.

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Subsequent Events

Sale of About Web Services

In
April 2004, the Company sold About Web Services, the web hosting business of About Inc., part of the Enthusiast Media segment, for proceeds of approximately $12,200. The results of
operations, assets
and liabilities of Web Services were immaterial on a segment and consolidated basis for all periods presented.

$175 Million Senior Floating Rate Notes Offering

On May 10, 2004, the Company announced that it will offer $175,000 principal amount of Senior Floating Rate Notes Due 2010, and intends to enter into a new
$100,000 term loan credit facility. The Senior Floating Rate Notes will bear interest equal to three-month LIBOR plus 5.375% per year. The Company intends to use the net proceeds from the Senior
Floating Rate Notes offering, together with borrowings of $100,000 under the new term loan credit facility, to repay outstanding indebtedness under its existing bank credit facilities and, subject to
the approval of the Company's independent directors as required by its charter, toward the redemption, in whole or in part, of its Series J Convertible Preferred Stock. If such redemption of
the Series J Convertible Preferred Stock is consummated, the Company will borrow additional amounts under its revolving loan facility. If the Company does not redeem its Series J
Convertible Preferred Stock and/or its new term loan credit facility does not become effective, the Company will use the net proceeds of the Senior Floating Rate Notes offering to reduce other
outstanding indebtedness or redeem other preferred stock, and may not permanently reduce available commitments under its bank credit facilities.

Offering and Amendment to the Company's Bank Credit Facilities

In connection with the offering of the Senior Floating Rate Notes, the Company entered into an amendment to its bank credit facilities that will change the terms
of certain of the Company's financial covenants and repayment obligations. The effectiveness of the amendment to the Company's bank credit facilities is subject to the incurrence of additional
indebtedness in the amount of $250,000.

If
the amendment to the bank credit facilities becomes effective, the maximum allowable debt leverage ratio, as defined in the bank credit facilities, will be 6.25 to 1 and will decrease
to 6.00 to 1, 5.75 to 1, 5.50 to 1, 5.25 to 1, 5.00 to 1, 4.75 to 1, and 4.50 to 1 on October 1, 2005, July 1, 2006, October 1, 2006, April 1, 2007, October 1, 2007,
April 1, 2008 and July 1, 2008, respectively. Also, if the amendment to the bank credit facilities becomes effective, the minimum interest coverage ratio and the minimum fixed charge
coverage ratio, both as defined in the bank credit facilities, remain at 2.25 to 1 through maturity and 1.05 to 1 through maturity, respectively.

Additionally,
upon the consummation of the offering together with the new term loan facility, and after giving effect to the amendment to the bank credit facilities, the aggregate
mandatory reductions of the revolving loan commitments under the bank credit facilities would be $42,700 in 2005, $64,050 in 2006, $128,100 in 2007 and a final reduction of $170,800 in 2008, and the
remaining aggregate term loan payments would be $500 in 2004, $20,764 in 2005, 2006 and 2007, $12,192 in 2008 and $337,922 in 2009.

Contingencies

Based on an initial internal assessment at the end of 2003, the Company believed that certain business units may have unclaimed property that should have been
remitted to one or more states under their respective escheatment laws. The property in question related primarily to unused advertising credits and outstanding accounts payable checks. The Company
hired an outside consultant

44

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to
assist in estimating the potential risk. It was premature to estimate the extent of the financial risk at the end of 2003, but the Company believed that the risk would not have a material impact on
its results of operations or financial position. Upon completion of the initial phase of this assessment, the Company recorded an estimated provision for unclaimed property of $5,500. The Company has
entered the next phase of the assessment whereby the consultant will assist in refining the estimated provision and in negotiating settlements under voluntary compliance agreements with the relevant
states.

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.

Critical Accounting Policies and Estimates

During the first three months of 2004, there were no significant changes related to the Company's critical accounting policies and estimates as disclosed in the
Company's annual report on Form 10-K for the year ended December 31, 2003.

Recent Accounting Pronouncements

In 2003, the Company adopted an accounting change, as required by the Financial Accounting Standards Board, that impacts year-over-year
comparisons of financial results. This change is summarized below:

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 Exchangeable Preferred Stock, Series F Exchangeable Preferred Stock and Series H Exchangeable Preferred Stock and to reclassify dividends from this preferred stock as
interest expense. As a result of the adoption by the Company of SFAS 150, the Series D Exchangeable Preferred Stock, Series F Exchangeable Preferred Stock and Series H
Exchangeable Preferred Stock are now collectively described as "shares subject to mandatory redemption" on the accompanying condensed consolidated balance sheets as of March 31, 2004 and
December 31, 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 three months ended
March 31, 2004 whereas previously they were presented below net income (loss) as preferred stock dividends. 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.

Impact of Inflation and Other Costs

The impact of inflation was immaterial during 2003 and through the first three months of 2004. Postage, however, 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. There were no increases in postage
rates in 2003 or the first quarter of 2004. In April 2003, President Bush signed legislation that will hold postal rates stable until at least 2006. 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
the future. 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 three months of 2004, paper costs were approximately 7% of the Company's total operating costs and expenses. The Company's paper expense decreased

45

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approximately
13% during the first three months of 2004 as compared to the same period in 2003. The Company attributes the decrease in paper expenses to a decrease in the volume of paper used as a
result of the smaller folio sizes of magazines and fewer bulk copies.

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.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

During the first three months of 2004, 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 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

During the three month period ended March 31, 2004, there have not been any changes in the Company's internal control over financial reporting that have
materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

46

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PART II. OTHER INFORMATION

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 200231.2

Certification by Matthew A. Flynn Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.3

Certification by Robert J. Sforzo Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1

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 200232.2

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 200232.3

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




The
Company furnished a Current Report on Form 8-K, dated February 5, 2004, (a) announcing under Item 5 thereof the issuance of a press release dated
February 5, 2004 regarding the Company's new strategic operating structure, (b) announcing under Item 12 thereof the issuance of a press release dated February 5, 2004 regarding
its financial results for the fourth quarter ended December 31, 2003, and (c) furnishing as exhibits under Item 7 thereof a copy of each of the press releases.

The
Company furnished a Current Report on Form 8-K/A, dated February 11, 2004, amending the Current Report on Form 8-K, dated
February 5, 2004, for the purpose of (i) correcting a typographical error in Exhibit 99.2, and (ii) furnishing the amended Exhibit 99.2 under Item 7.

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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: May 10, 2004 |  | /s/KELLY P. CONLIN(Signature) Chief Executive Officer and
President
(Principal Executive Officer)                           
|                   |  |                                                                                                                             
|Date: May 10, 2004 |  | /s/MATTHEW A. FLYNN(Signature) Senior Vice President,
Chief Financial Officer and Treasurer
(Principal Financial Officer)   
|                   |  |                                                                                                                             
|Date: May 10, 2004 |  | /s/ROBERT J. SFORZO(Signature) Senior Vice President,
Chief Accounting Officer
and Controller
(Principal Accounting Officer)

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