American Media, Inc. Reports Fourth Quarter and Fiscal Year End Results.

Business Editors

BOCA RATON, Fla.--(BUSINESS WIRE)--June 14, 2002

American Media, Inc. today announced results for the fourth quarter and fiscal year ended March 25, 2002.

Revenues for the March 2002 fiscal quarter were $93,581,000 compared to $95,829,000 for the prior year fiscal quarter. Excluding Auto World Magazine and Mira! Magazine (which had three and four more issues in fiscal 2001 than fiscal 2002, respectively, due to changes in publication frequency) circulation revenues were flat to the prior fiscal year. On the same basis, advertising revenues increased 5.0%, from $10.0 million to $10.5 million. EBITDA (net income (loss) before extraordinary charges, interest expense, income taxes, depreciation and amortization and other income) for the period was $37,076,000 compared to the prior year quarter of $37,348,000.

Net loss was $8,324,000 for the March 2002 fiscal quarter compared to net loss of $2,072,000 in the prior year fiscal quarter. This increase in net loss was primarily due to additional depreciation expense of $8.5 million recorded during the March 2002 fiscal quarter as a result of the acceleration of the depreciable lives for the building improvements and equipment in our Boca Raton headquarters as a result of the anthrax incident discussed below.

Revenues for the fiscal year ended March 25, 2002 were $368,131,000 compared to $372,201,000 for the prior fiscal year. Results for the fiscal year ended March 25, 2002 reflect a loss of revenues from discontinued/sold operations of $4.5 million. Circulation revenue for continuing publications decreased $4.1 million primarily due to the cancellation of several expanded issues and decreased newsstand copies sold, we believe due to the anthrax incident in October. This decline in circulation revenue was partially offset by increased cover prices as compared to the prior fiscal year. Advertising revenues increased 7.5% from $37.1 million to $39.9 million, despite the industry being down 18% as measured by the Publishers Information Bureau. EBITDA for the fiscal year was $135,003,000 compared to $139,303,000 for the prior fiscal year. The decrease in EBITDA is primarily attributable to the circulation declines as noted above, as a result of the anthrax incident.

Net loss was $21,482,000 for the fiscal year ended March 25, 2002 compared to net loss of $15,296,000 in the prior fiscal year. This increase in net loss was primarily due to $8.5 million of additional depreciation expense discussed above.

Our Boca Raton headquarters, which housed substantially all editorial operations (including its photo, clipping and research libraries), executive offices and certain administrative functions, was closed on October 7, 2001 by the Palm Beach County Department of Health when traces of anthrax were found on a computer keyboard following the death of a photo editor of the Sun from inhalation anthrax. In response to the closure of the Boca facility, we immediately implemented our hurricane disaster plan to produce all the weekly publications as originally scheduled. We temporarily moved our editorial operations into a facility leased on a short-term basis, which expired in February 2002. As a result of the uncertainty on the timing of being able to return to the Boca Raton headquarters, we entered into a two year lease for a 53,000 square foot facility two blocks from our current Boca Raton headquarters. We will remain in this leased facility until the Palm Beach County Health Department, OSHA (Occupational Safety and Health Administration) and NIOSH (National Institute for Occupational Safety and Health) deems the Boca Raton facility is safe to return to, or if we are unable to return, we will extend the lease term on this new facility or seek an alternative location. In February of 2002, the Palm Beach Health Department quarantined the building for an additional 18 months or until the building has been remediated. Management is currently evaluating its options regarding its headquarters' building and its contents and has not yet committed to a remediation plan. In May of 2002, we reached a final settlement agreement with our insurance company, and received payment.

We believe as a result of the anthrax incident, we have experienced a decline in circulation. When the incident first occurred, there were specific concerns and consumer discomfort and lack of knowledge with respect to the safety of our magazines. We quickly responded to safety concerns with an extensive public relations effort to educate consumers that there was no health risk in buying our magazines. Since the first issues following the anthrax incident, we have witnessed a steady improvement in unit sales, although they remain below normalized levels.

Mr. Pecker said, "We are very gratified with our results for the three and twelve months ended March 25, 2002 despite being the first company to experience a bio-terrorist attack that resulted in a fatality and the loss of our corporate headquarters with all its contents, compounded by the worst newsstand and advertising market since World War II. We have successfully moved our entire corporate headquarters, including all editorial departments, to our new 53,000 square foot leased facility in Boca Raton, Florida. Despite all of the obstacles we have faced this year, I am very happy to report that we have successfully launched with the April 2, 2002 issue, the new 60-page National Enquirer and Star tabloids at $2.09 per issue. The average sale for the first six 60-page issues of the National Enquirer and Star are flat compared to the previous six 48-page issues at $1.89. This is a major accomplishment considering that we have broken the $2.00 barrier with a 60-page folio for the first time in the history of the tabloids and in the face of the current newsstand market conditions."

American Media Operations, Inc. owns and publishes the National Enquirer, Star, Weekly World News, Globe, National Examiner, Sun, Country Weekly, Country Music Magazine, MIRA! and Auto World Magazine. AMI also owns Distribution Services, Inc. (DSI), the leading in-store supermarket and drugstore newspaper and magazine distribution company.

Evercore Partners, based in New York and Los Angeles, makes private equity investments through its Evercore Capital Partners affiliate and venture investments through its Evercore Ventures affiliate. Evercore also provides strategic, financial and restructuring advisory services. Evercore Capital Partners' investments include: American Media, Vertis, Resources Connection, Energy Partners, Continental Energy Services and Telenet/Callahan Associates International. Ventures investments include Xdrive, Go2Systems, Business.com and Atheros. Recent advisory work includes advising ACNielsen on its merger with VNU N.V. and General Mills on its acquisition of Pillsbury from Diageo plc.

                    AMERICAN MEDIA OPERATIONS, INC.
              CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                            (in thousands)

                                UNAUDITED
                            Three Months Ended    Twelve Months Ended
                           --------------------   --------------------
                           March 26,  March 25,   March 26,  March 25,
                             2001       2002        2001       2002
                           --------   --------    --------   --------

Revenues (1)               $ 95,829   $ 93,581    $372,201   $368,131
                           --------   --------    --------   --------

Operating expenses           58,481     56,505     232,898    233,128
Depreciation and
 amortization                18,965     29,529      76,733     88,170
                           --------   --------    --------   --------

Total operating expenses     77,446     86,034     309,631    321,298
                           --------   --------    --------   --------

Operating income             18,383      7,547      62,570     46,833

Interest                    (17,658)   (16,586)    (71,742)   (65,167)
Other (expense) income, net     (55)      (266)        751       (139)
                           --------   --------    --------   --------
Income (loss) before income
 taxes and extraordinary
 charge                         670     (9,305)     (8,421)   (18,473)

Provision (benefit) for
 income taxes                 2,742       (981)      6,875      3,009
                           --------   --------    --------   --------

Net loss                    ($2,072)   ($8,324)   ($15,296)  ($21,482)
                           ========   ========    ========   ========

EBITDA:
 Net loss                   ($2,072)   ($8,324)   ($15,296)  ($21,482)
 Add (deduct) -
  Interest expense           17,658     16,586      71,742     65,167
  Income taxes                2,742       (981)      6,875      3,009
  Depreciation and
   amortization              18,965     29,529      76,733     88,170
  Other income (expense)         55        266        (751)       139
                           --------   --------    --------   --------

EBITDA                     $ 37,348   $ 37,076    $139,303   $135,003
                           ========   ========    ========   ========

(1) The prior year's retail display allowance fee amounts and retail
    pocket fee amounts have been reclassified from operating expense
    to circulation revenues as a result of our adoption of the EITF
    01-9 "Accounting for Consideration Given by a Vendor to a Customer
    (Including a Reseller of the Vendor's Products)." The
    reclassification resulted in a net decrease in operating revenues
    and a corresponding decrease in operating expenses of $25,194,
    $25,582, $5,164, and $6,714 for the twelve months ended March 25,
    2002, the twelve months ended March 26, 2001, the three months
    ended March 25, 2002 and the three months ended March 26, 2001,
    respectively.