American Media Operations, Inc. Reports Second Quarter and First Half Results.

Business Editors

BOCA RATON, Fla.--(BUSINESS WIRE)--Nov. 8, 2001

American Media, Inc. (NYSE:ENQ) today announced results for the second quarter and six months ended September 24, 2001.

Revenues for the September 2001 fiscal quarter were $102,283,000 compared to $99,486,000 for the prior year quarter. Results in this quarter reflect a loss of revenues from discontinued/sold operations of $1.4 million. Circulation revenue for continuing publications increased $3.1 million primarily due to increased cover prices. Advertising revenues increased 10.1%, from $8.5 million to $9.4 million, despite a weak industry-wide advertising climate.

EBITDA (net income (loss) before interest expense, income taxes, depreciation and amortization and other income) for the September 2001 fiscal quarter was $34,003,000 versus $33,751,000 in the prior fiscal quarter. Net loss was $4,520,000 for the September fiscal quarter compared to a net loss of $4,103,000 in the prior year fiscal quarter.

Revenues for the six months ended September 24, 2001 were $200,028,000 compared to $196,862,000 for the prior year period. Results for the two quarters reflect a loss of revenues from discontinued/sold operations of $3.5 million. EBITDA (net income (loss) before extraordinary charges, interest expense, income taxes, depreciation and amortization and other income) for the six month period was $65,857,000 versus $65,617,000 in the prior period. The net loss of $9,105,000 for six month period ended September 24, 2001 was equal to the prior year period loss.

The Company's 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 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, the Company immediately implemented its hurricane disaster plan to produce all the weekly publications as originally scheduled. The Company has temporarily moved its editorial operations into a facility being leased on a short-term basis, which allows AMI to produce the impacted publications weekly without interruption. We will remain in this leased facility until the Palm Beach Health Department deems the Boca Raton facility is safe to return to, or if we are unable to return, until we find a new headquarters. The Company has property insurance on its Boca Raton headquarters and on the building's contents and also has business interruption insurance. The amount of any potential loss and related insurance recovery is indeterminable at this time.

As a result of the above, we have cancelled all expanded issues (72 page folio versus 48 page folio) through December 31, 2001 that were scheduled to be on sale after October 7, 2001.

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. The Company 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, "Our Company was performing to expectations when we were attacked by terrorists. We have since lost one colleague due to inhalation anthrax while another survived, and have had more than 400 employees undergo testing and be placed on mandatory 60 day antibiotic treatment programs. We were forced to leave our newly renovated corporate headquarters, yet were able to publish and distribute our papers without missing a deadline. As one of the editors said, `AMI people were evacuated, medicated and dedicated.' In my 25 years of publishing, I have never seen as courageous a group of individuals as the men and women of AMI who confronted a situation that no American company had ever faced before and triumphed over it. I am confident that as a result of our extensive public relations efforts and as the American people return to a more normal day-to-day routine, our results will come back to where they were before October 7."

American Media's Senior Subordinated Notes trade on the New York Stock Exchange under the symbol ENQ with a coupon of 10 1/4% due May 2009.

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 (LOSS)
                            (in thousands)


                                     UNAUDITED
                ------------------------------------------------------
                   Three Months Ended             Six Months Ended
                -----------------------       -----------------------
                Sept. 25,     Sept. 24,       Sept. 25,     Sept. 24,
                  2000          2001            2000          2001
                -----------------------       -----------------------

Revenues        $99,486       $102,283        $196,862       $200,028
                -------       --------        --------       --------

Operating
 expenses        65,735         68,280         131,245        134,171
Depreciation and
 amortization    18,404         19,626          36,746         38,937
                -------       --------        --------       --------

Total operating
 expenses        84,139         87,906         167,991        173,108
                -------       --------        --------       --------

Operating
 income          15,347         14,377          28,871         26,920

Interest
 expense        (17,989)       (17,035)        (35,811)       (32,970)
Other income,
 net                232             54             419             81
                -------       --------        --------       --------

Loss before
 income taxes    (2,410)        (2,604)         (6,521)        (5,969)

Provision for
 income taxes     1,693          1,916           2,584          3,136
                -------       --------        --------       --------

Net loss        $(4,103)       $(4,520)        $(9,105)       $(9,105)
                =======       ========        ========       ========

EBITDA:
  Net loss      $(4,103)       $(4,520)        $(9,105)       $(9,105)
  Add (deduct) -
   Interest
    expense      17,989         17,035          35,811         32,970
   Income taxes   1,693          1,916           2,584          3,136
   Depreciation
    and
    amortization 18,404         19,626          36,746         38,937
    Other income   (232)           (54)           (419)           (81)
                -------       --------        --------       --------

EBITDA          $33,751        $34,003         $65,617        $65,857
                =======       ========        ========       ========