American Media (ENQ) 10-Q 2014 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended December 31, 2013

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

For the transition period from ____________ to ____________

Commission File Number 001-10784

American Media, Inc.

(Exact name of registrant as specified in its charter)

Delaware	65-0203383
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1000 American Media Way, Boca Raton, Florida 33464

(Address of principal executive offices) (Zip Code)

(561) 997-7733

(Registrant’s telephone number, including area code)

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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
	Yes þ	No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
	Yes þ	No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨		Accelerated filer	¨
Non-accelerated filer	þ	(Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
	Yes ¨	No þ

The number of shares outstanding of the registrant's common stock, $0.0001 par value, as of January 31, 2014 was 11,137,150.

AMERICAN MEDIA, INC.

Form 10-Q for the Quarter Ended December 31, 2013

INDEX

		Page(s)
Cautionary Statements Regarding Forward-Looking Information		3
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements.
	Unaudited Condensed Consolidated Balance Sheets as of December 31, 2013 and March 31, 2013	4
	Unaudited Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the Three and Nine Months Ended December 31, 2013 and 2012	5
	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2013 and 2012	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	46
Item 4.	Controls and Procedures.	47
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.	48
Item 1A.	Risk Factors.	48
Item 6.	Exhibits.	48
Signatures		49

2

American Media, Inc. and its consolidated subsidiaries are referred to in this Quarterly Report on Form 10-Q (this "Quarterly Report") as American Media, AMI, the Company, we, our and us.

FORWARD-LOOKING STATEMENTS

This Quarterly Report for the fiscal quarter ended December 31, 2013 contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Securities Exchange Act"). These forward-looking statements relate to our current beliefs regarding future events or our future operating or financial performance. By their nature, forward-looking statements involve risks, trends and uncertainties that could cause actual results to differ materially from those anticipated in any forward-looking statements. We have tried, where possible, to identify such statements by using words such as "believes," "expects," "intends," "estimates," "may," "anticipates," "will," "likely," "project," "plans," "should," "could," "potential" or "continue" and similar expressions in connection with any discussion of future operating or financial performance. Any forward-looking statement is and will be based upon our then current expectations, estimates and assumptions regarding future events and is applicable only as of the date of such statement. We may also make written and oral forward-looking statements in the reports we file from time to time with the Securities and Exchange Commission (the "SEC").

Important factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to, the following:

• our high degree of leverage and significant debt service obligations;

• whether we decide to engage in acquisitions, enter into partnerships and joint ventures or execute publishing services agreements in the future;

• our ability to attract and retain experienced and qualified personnel;

• our ability to implement our business strategy;

• changes in discretionary consumer spending patterns;

• changes in general economic and business conditions, both nationally and internationally, which can influence the overall demand for our services and products by our customers and advertisers and affect the readership level of our publications as well as our advertising and circulation revenue;

• increased competition, including price competition and competition from other publications and other forms of media, such as television, radio and digital concentrating on celebrity news and health and fitness;

• changes in the price of fuel, paper, ink and postage;

• any loss of one or more of our key vendors or key advertisers;

• the potential effects of threatened or actual terrorist attacks or other acts of violence or war;

• adverse results in litigation matters or any regulatory proceedings;

• any future impairment of our goodwill or other identified intangible assets;

• our ability to maintain an effective system of internal controls over financial reporting;

• the effects of possible credit losses;

• any disruption in the distribution of our magazines through wholesalers;

• unforeseen increases in employee benefit costs; and

• changes in accounting standards.

These and other factors are discussed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2013 (the “2013 Form 10-K”) under the heading “Part I, Item 1A. Risk Factors.”

We caution you not to place undue reliance on any forward-looking statement, which speaks only as of the date of this Quarterly Report. We undertake no obligation to publicly update or revise any forward-looking statement contained in this Quarterly Report, whether as a result of new information, future events or otherwise, except as required by law.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

AMERICAN MEDIA, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share information)

	December 31, 2013			March 31, 2013
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ($702 and $740 related to VIEs, respectively)	$	4,206		$	2,375
Trade receivables, net of allowance for doubtful accounts of $5,560 and $5,899, respectively	32,283			43,085
Inventories	13,730			13,156
Prepaid expenses and other current assets ($204 and $0 related to VIEs, respectively)	19,113			16,159
Total current assets	69,332			74,775
PROPERTY AND EQUIPMENT, NET:
Leasehold improvements	3,843			3,867
Furniture, fixtures and equipment	42,391			41,351
Less – accumulated depreciation	(26,888		)	(25,950		)
Total property and equipment, net	19,346			19,268
OTHER ASSETS:
Deferred debt costs, net	8,587			9,789
Deferred rack costs, net	5,114			6,604
Investment in affiliates	2,615			—
Other long-term assets	3,791			1,631
Total other assets	20,107			18,024
GOODWILL AND OTHER IDENTIFIED INTANGIBLE ASSETS:
Goodwill	186,898			186,898
Other identified intangibles, net of accumulated amortization of $118,287 and $114,545, respectively ($6,000 related to VIEs)	270,160			278,486
Total goodwill and other identified intangible assets, net	457,058			465,384
TOTAL ASSETS	$	565,843		$	577,451
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable ($1 and $0 related to VIEs, respectively)	$	19,902		$	17,820
Accrued expenses and other liabilities ($83 and $304 related to VIEs, respectively)	28,988			24,764
Accrued interest	2,643			16,823
Redeemable financial instrument (see Note 10)	807			3,447
Deferred revenues ($227 and $388 related to VIEs, respectively)	33,236			34,544
Total current liabilities	85,576			97,398
NON-CURRENT LIABILITIES:
Senior secured notes	471,801			469,889
Revolving credit facility	31,000			12,000
Other non-current liabilities	3,870			3,959
Deferred income taxes	100,566			68,967
Total liabilities	692,813			652,213
COMMITMENTS AND CONTINGENCIES (See Note 11)
Redeemable noncontrolling interest (see Note 10)	3,000			3,000
STOCKHOLDERS' DEFICIT:
Common stock, $0.0001 par value; 14,000,000 shares authorized; 10,000,000 shares issued and outstanding as of December 31, 2013 and March 31, 2013	1			1
Additional paid-in capital	822,723			822,723
Accumulated deficit	(952,557		)	(900,147		)
Accumulated other comprehensive loss	(137		)	(339		)
Total stockholders' deficit	(129,970		)	(77,762		)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	565,843		$	577,451

The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

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AMERICAN MEDIA, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

AND COMPREHENSIVE INCOME (LOSS)

(in thousands)

	Three Months Ended						Nine Months Ended
	December 31,						December 31,
	2013			2012			2013			2012
OPERATING REVENUES:
Circulation	$	44,603		$	56,556		$	147,482		$	163,943
Advertising	22,769			22,788			84,226			76,425
Other	7,276			5,975			23,936			22,061
Total operating revenues	74,648			85,319			255,644			262,429
OPERATING EXPENSES:
Editorial	9,979			10,052			29,063			31,158
Production	20,889			23,897			69,727			73,479
Distribution, circulation and other cost of sales	12,330			16,668			45,047			50,896
Selling, general and administrative	19,020			19,986			65,291			61,549
Depreciation and amortization	3,736			2,431			10,453			7,219
Impairment of goodwill and intangible assets	9,238			54,523			9,238			54,523
Total operating expenses	75,192			127,557			228,819			278,824
OPERATING (LOSS) INCOME	(544		)	(42,238		)	26,825			(16,395		)
OTHER INCOME (EXPENSE):
Interest expense	(14,099		)	(15,231		)	(43,838		)	(45,014		)
Amortization of deferred debt costs	(414		)	(367		)	(1,202		)	(1,063		)
Other income (expense), net	63			(241		)	(188		)	(251		)
Total other expense, net	(14,450		)	(15,839		)	(45,228		)	(46,328		)
LOSS BEFORE INCOME TAXES	(14,994		)	(58,077		)	(18,403		)	(62,723		)
INCOME TAX PROVISION (BENEFIT)	35,410			(140		)	32,954			(1,570		)
NET LOSS	(50,404		)	(57,937		)	(51,357		)	(61,153		)
LESS: NET (INCOME) LOSS ATTRIBUTABLE TO THE NONCONTROLLING INTEREST	23			42			(1,053		)	(739		)
NET LOSS ATTRIBUTABLE TO AMERICAN MEDIA, INC.	$	(50,381	)	$	(57,895	)	$	(52,410	)	$	(61,892	)

	Three Months Ended						Nine Months Ended
	December 31,						December 31,
	2013			2012			2013			2012
NET LOSS	$	(50,404	)	$	(57,937	)	$	(51,357	)	$	(61,153	)
Foreign currency translation adjustment	71			3			202			(17		)
Comprehensive loss	(50,333		)	(57,934		)	(51,155		)	(61,170		)
Less: comprehensive (income) loss attributable to the noncontrolling interest	23			42			(1,053		)	(739		)
COMPREHENSIVE LOSS ATTRIBUTABLE TO AMERICAN MEDIA, INC.	$	(50,310	)	$	(57,892	)	$	(52,208	)	$	(61,909	)

The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

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AMERICAN MEDIA, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Nine Months Ended
	December 31,
	2013			2012
OPERATING ACTIVITIES
Net loss	$	(51,357	)	$	(61,153	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation of property and equipment	6,711			4,485
Amortization of other identified intangibles	3,742			2,734
Impairment of goodwill and intangible assets	9,238			54,523
Amortization of deferred debt costs	1,202			1,063
Amortization of deferred rack costs	4,755			6,484
Deferred income tax provision (benefit)	32,737			(1,883		)
Non-cash payment-in-kind interest accretion	1,912			—
Provision for doubtful accounts	1,545			1,264
Other	513			195
Changes in operating assets and liabilities:
Trade receivables	9,242			14,033
Inventories	(597		)	4,988
Prepaid expenses and other current assets	(4,185		)	4,259
Deferred rack costs	(3,265		)	(3,684		)
Other long-term assets	(2,160		)	(9		)
Accounts payable	1,495			4,808
Accrued expenses and other liabilities	4,475			(1,596		)
Accrued interest	(14,180		)	(14,454		)
Other non-current liabilities	(89		)	(234		)
Deferred revenues	(1,308		)	(6,236		)
Total changes in operating assets and liabilities	(10,572		)	1,875
Net cash provided by operating activities	426			9,587
INVESTING ACTIVITIES
Purchases of property and equipment	(6,521		)	(6,985		)
Purchases of intangible assets	(4,654		)	(1,785		)
Proceeds from sale of assets	120			80
Investment in affiliates	(2,536		)	(350		)
Other	(300		)	(300		)
Net cash used in investing activities	(13,891		)	(9,340		)
FINANCING ACTIVITIES
Proceeds from revolving credit facility	79,600			60,500
Repayment to revolving credit facility	(60,600		)	(47,500		)
Payments to noncontrolling interest holders of Olympia	(1,004		)	(679		)
Payments for redemption of Odyssey preferred stock	(3,002		)	(8,279		)
Net cash provided by financing activities	14,994			4,042
Effect of exchange rate changes on cash	302			14
Net increase in cash and cash equivalents	1,831			4,303
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	2,375			5,226
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	4,206		$	9,529
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Non-cash property and equipment (incurred but not paid)	$	584		$	140

The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

6

AMERICAN MEDIA, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2013

Note 1 - Nature of the Business

Unless otherwise noted, references to American Media, AMI, the Company, we, our and us in this Quarterly Report on Form 10-Q refer to American Media, Inc. and its consolidated subsidiaries.

American Media, Inc. was incorporated under the laws of the State of Delaware in 1990 and is headquartered in Boca Raton, Florida. The Company is the largest publisher of celebrity and health and fitness magazines in the United States and operates a diversified portfolio of 14 publications. Total circulation of our print publications with a frequency of six or more times per year were approximately 5.9 million copies per issue during the nine months endedDecember 31, 2013.

As of December 31, 2013, the Company published seven weekly publications: National Enquirer, Star, Globe, National Examiner, Country Weekly, OK! and Soap Opera Digest; two monthly publications: Muscle & Fitness and Flex; two publications that are published 10 times per year: Shape and Men's Fitness; and three bi-monthly publications: Fit Pregnancy, Natural Health and Muscle & Fitness Hers.

In September 2013, we divested substantially all of the assets comprising our distribution and merchandising businesses operated by Distribution Services, Inc. (“DSI”), a wholly-owned subsidiary of American Media, Inc. DSI was an in-store product merchandising and marketing company doing business in the U.S. and Canada. DSI serviced the Company by placing and monitoring its print publications, as well as third-party publications, to ensure prominent display in major national and regional retail, drug and supermarket chains. DSI also provided marketing, merchandising and information gathering services to third parties, including non-magazine clients. The divested assets, which consisted primarily of working capital (exclusive of $3.7 million in accounts receivable which were retained by AMI), the sales and support workforce and certain other related assets, were contributed in exchange for a membership interest in a joint venture. See Note 10, "Investments in Affiliates and Redeemable Noncontrolling Interest" for a further description.

After the divestiture of the DSI business, which was included in and comprised a majority of our publishing services segment, the publishing services segment has been combined with the corporate and other segment effective with the quarter ended September 30, 2013. Given this change, the Company has restated prior period segment information to correspond to the current segment reporting structure. See Note 12, "Business Segment Information."

Our fiscal year ends on March 31, 2014 and is referred to herein as fiscal 2014.

Note 2- Significant Accounting Policies

Basis of Presentation

The information included in the foregoing interim condensed consolidated financial statements is unaudited. In the opinion of management, all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the results of operations for the interim periods presented, have been reflected herein. These unaudited condensed consolidated financial statements do not include all disclosures associated with annual financial statements and, accordingly, should be read in conjunction with the audited financial statements and footnotes contained in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") with respect to the Company's fiscal year ended March 31, 2013 (the "2013 Form 10-K"), which may be accessed through the SEC's website at http://www.sec.gov.

The results of operations for interim periods presented herein are not necessarily indicative of the results of operations that may be expected for the full fiscal year or any other subsequent interim period.

Principles of Consolidation

Our unaudited condensed consolidated financial statements reflect our financial statements, those of our wholly-owned domestic and foreign subsidiaries and those of certain variable interest entities where we are the primary beneficiary. For consolidated entities where we own less than 100% of the equity, we record net income (loss) attributable to noncontrolling interest in our unaudited condensed consolidated statements of income (loss) equal to the percentage of the interests retained in such entities by the respective noncontrolling parties. All material intercompany balances and transactions are eliminated in consolidation.

7

In determining whether we are the primary beneficiary of an entity and therefore required to consolidate, we apply a qualitative approach that determines whether we have both (1) the power to direct the economically significant activities of the entity and (2) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity. These considerations impact the way we account for our existing joint ventures. We continually assess whether we are the primary beneficiary of a variable interest entity as changes to existing relationships or future transactions occur.

Financial information for the Company's unconsolidated joint ventures is reported in the accompanying financial statements with a one-month lag in reporting periods. The effect of this one-month lag on the Company's financial position and results of operations is not significant.

See Note 10, “Investments in Affiliates and Redeemable Noncontrolling Interest.”

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("US GAAP") requires management to make estimates and assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes. Management's estimates are based on the facts and circumstances available at the time estimates are made, past historical experience, risk of loss, general economic conditions and trends, and management's assessments of the probable future outcome of these matters. As a result, actual results could differ from those estimates.

Concentrations

As of December 31, 2013, single copy revenues consisted of copies distributed to retailers primarily by two major wholesalers. During the three months ended December 31, 2013 and 2012, The News Group accounted for approximately 42% and 32%, respectively, of our total operating revenues and Source Interlink Companies accounted for approximately 18% and 15%, respectively, of our total operating revenues. During the nine months endedDecember 31, 2013 and 2012, The News Group accounted for approximately 31% and 29%, respectively, of our total operating revenues and Source Interlink Companies accounted for approximately 14% of our total operating revenues. We have multi-year service arrangements with our major wholesalers, which provide incentives to maintain certain levels of service.

Recently Adopted Accounting Pronouncements

In July 2012, the Financial Accounting Standards Board ("FASB") issued ASU 2012-02, Intangibles - Goodwill and Other: Testing Indefinite-Lived Intangible Assets for Impairment ("ASU 2012-02"), which amended ASC 350, Intangibles - Goodwill and Other ("ASC 350"). This amendment is intended to simplify how an entity tests indefinite-lived intangible assets for impairment and allows an entity to first assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test. An entity no longer is required to calculate the fair value of an indefinite-lived intangible asset unless the entity determines, based on a qualitative assessment, that it is more-likely-than-not that the indefinite-lived intangible asset is impaired. The more-likely-than-not threshold is defined as having a likelihood of more than 50%. ASU 2012-02 was effective for the Company beginning on April 1, 2013. The adoption of ASU 2012-02 did not have an impact on the Company's consolidated financial position, results of operations or cash flows.

In February 2013, the FASB issued ASU 2013-02, Comprehensive Income (Topic 220), Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income ("ASU 2013-02") which supersedes and replaces the presentation requirements for reclassifications out of accumulated other comprehensive income in ASUs 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income and 2011-12 Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 for all public organizations. ASU 2013-02 requires an entity to provide additional information about reclassifications out of accumulated other comprehensive income. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. ASU 2013-02 was effective for the Company beginning on April 1, 2013. The adoption of ASU 2013-02 did not have an impact on the Company's consolidated financial position, results of operations or cash flows, since this ASU concerns disclosure only.

8

Recently Issued Accounting Pronouncements

In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740), Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists ("ASU 2013-11"). ASU 2013-11 requires the netting of unrecognized tax benefits against a deferred tax asset for a loss or other carryforward that would apply in settlement of uncertain tax positions. Under ASU 2013-11 unrecognized tax benefits will be netted against all available same-jurisdiction loss or other tax carryforwards that would be utilized, rather than only against carryforwards that are created by the unrecognized tax benefits. ASU 2013-11 is effective for the Company on April 1, 2014. While the adoption of ASU 2013-11 will not have an impact on the Company's results of operations or cash flows, we are currently evaluating the impact of presenting unrecognized tax benefits net of our deferred tax assets where applicable on the Company's consolidated financial position.

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued accounting pronouncements that are not yet effective will not have a material impact on our financial position, results of operations or cash flows upon adoption.

The Company's other significant accounting policies are discussed in detail in the audited financial statements included in the Company's 2013 Form 10-K.

Note 3 - Inventories

Inventories are stated at the lower of cost or market. Cost is determined on the first-in, first-out ("FIFO") method. The Company writes down inventory for estimated obsolescence and/or excess or damaged inventory. Inventory write-downs during the nine months endedDecember 31, 2013 and 2012 were insignificant. Inventories are comprised of the following (in thousands):

	December 31, 2013		March 31, 2013
Raw materials – paper	$	11,224	$	9,268
Finished product — paper, production and distribution costs of future issues	2,506		3,888
Total inventory	$	13,730	$	13,156

Note 4 - Goodwill and Other Identified Intangible Assets

As of December 31, 2013 and March 31, 2013, the Company had goodwill with a carrying value of $186.9 million and other identified intangible assets not subject to amortization with carrying values of $256.9 million and $266.1 million, respectively. Other identified intangible assets not subject to amortization consist of tradenames with indefinite lives.

Identified intangible assets with finite lives subject to amortization consist of the following at December 31, 2013 and March 31, 2013 (in thousands):

		December 31, 2013							March 31, 2013
	Range of Lives (in years)	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Tradenames	8 - 27	$	10,610	$	(4,853	)	$	5,757	$	10,610	$	(4,521	)	$	6,089
Subscriber lists	3 - 15	32,702		(31,966		)	736		32,702		(30,328		)	2,374
Customer relationships	5 - 10	2,300		(1,125		)	1,175		2,300		(829		)	1,471
Other intangible assets	3	8,172		(2,535		)	5,637		3,518		(1,059		)	2,459
		$	53,784	$	(40,479	)	$	13,305	$	49,130	$	(36,737	)	$	12,393

Amortization expense of intangible assets was $3.7 million and $2.7 million during the nine months endedDecember 31, 2013 and 2012, respectively. Based on the carrying value of identified intangible assets recorded at December 31, 2013, and assuming no subsequent impairment of the underlying assets, the amortization expense is expected to be as follows (in thousands):

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Fiscal Year	Amortization Expense
2014	$	1,665
2015	3,423
2016	2,736
2017	1,138
2018	468
Thereafter	3,875
	$	13,305

During an evaluation of goodwill and other identified intangible assets at December 31, 2013, the Company determined that indicators were present in certain reporting units which would suggest the fair value of the reporting unit may have declined below the carrying value. This decline was primarily due to the continuing softness in the U.S. economy, which impacts consumer spending, including further declines in certain advertising markets, resulting in lowered future cash flow projections.

As a result, an interim impairment test of goodwill and other indefinite lived intangible assets was performed as of December 31, 2013 for certain reporting units in accordance with FASB Accounting Standards Codification (“ASC”) Topic No. 350, “Goodwill and Other Intangible Assets” (“ASC 350”). Impairment testing for goodwill is a two-step process. The first step compares the fair value of the reporting unit to its carrying value, including goodwill. If the carrying value of the reporting unit exceeds its fair value, the second step of the test is performed to measure the amount of the impairment charge, if any. The second step compares the implied fair value of the reporting unit's goodwill with the carrying value of that goodwill and an impairment charge is recorded for the difference. Impairment testing for indefinite lived intangible assets, consisting of tradenames, compares the fair value of the tradename to the carrying value and an impairment charge is recorded for any excess carrying value over fair value.

The evaluation resulted in the carrying value of tradenames for certain reporting units to exceed the estimated fair value. As a result, the Company recorded an estimated pre-tax non-cash impairment charge of $9.2 million to reduce the carrying value of tradenames during the three months ended December 31, 2013.

The gross carrying amount and accumulated impairment losses of goodwill, as of December 31, 2013 and March 31, 2013, by reportable segment are as follows (in thousands):

	Celebrity Brands			Women's Active Lifestyle Group			Men's Active Lifestyle Group			Corporate and Other			Total
Goodwill	$	428,518		$	84,905		$	112,296		$	20,136		$	645,855
Accumulated impairment losses	(304,595		)	(62,841		)	(80,446		)	(11,075		)	(458,957		)
Goodwill, net of impairment loss	$	123,923		$	22,064		$	31,850		$	9,061		$	186,898

Impairment Charge Assumptions

The fair value of the reporting unit's goodwill and tradenames was based on the Company's projections of revenues, operating costs and cash flows of each reporting unit, considering historical and anticipated future results and general economic and market conditions as well as the impact of planned business and operational strategies. The valuations employ a combination of income and market approaches to measure fair value. The key assumptions used to determine fair value of the reporting unit's goodwill and tradenames as of December 31, 2013 were:

a) expected cash flow periods of five years;

b) terminal values based upon terminal growth rates ranging from 0% to 3%;

c) implied multiples used in the business enterprise value income and market approaches ranging from 4.4 to 8.3; and

d) discount rates ranging from 14% to 15%, which were based on the Company's best estimate of the weighted average cost of capital adjusted for risks associated with the reporting unit.

Management believes the discount rate used is consistent with the risks inherent in the Company's current business model and with industry discount rates. Changes in management's judgments and projections or assumptions used could result in a significantly different estimate of the fair value of the reporting units and could materially change the impairment charge related to goodwill and tradenames.

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Note 5 - Revolving Credit Facility

In December 2010, we entered into a revolving credit facility maturing in December 2015 (the "2010 Revolving Credit Facility"). The 2010 Revolving Credit Facility provides for borrowing up to $40.0 million, less outstanding letters of credits.

The Company has the option to pay interest based on (i) a floating base rate option equal to the greatest of (x) the prime rate in effect on such day; (y) the federal funds effective rate in effect on such day plus ½ of 1%; and (z) one month LIBOR (but no less than 2%) plus 1%, or (ii) LIBOR, in each case, plus a margin. The interest rate under the 2010 Revolving Credit Facility has ranged from 8.00% to 8.25% during the nine months endedDecember 31, 2013 and 2012.

In addition, the Company is required to pay a commitment fee ranging from 0.50% to 0.75% on the unused portion of the revolving commitment. Commitment fees paid during the nine months endedDecember 31, 2013 and 2012 were insignificant.

During the nine months endedDecember 31, 2013, the Company borrowed $79.6 million and repaid $60.6 million under the 2010 Revolving Credit Facility. At December 31, 2013, the Company has available borrowing capacity of $4.6 million after considering the $31.0 million outstanding balance and the $4.4 million outstanding letter of credit. The outstanding balance of the 2010 Revolving Credit Facility on December 31, 2013 of $31.0 million is included in non-current liabilities, as the outstanding balance is not due until December 2015.

The 2010 Revolving Credit Facility includes certain representations and warranties, conditions precedent, affirmative covenants, negative covenants and events of default. The negative covenants include a financial maintenance covenant comprised of a first lien leverage ratio. The 2010 Revolving Credit Facility also contains certain covenants that, subject to certain exceptions, restrict paying dividends, incurring additional indebtedness, creating liens, making acquisitions or other investments, entering into certain mergers or consolidations and selling or otherwise disposing of assets. With respect to the dividend restrictions, the 2010 Revolving Credit Facility includes a cap on the total amount of cash available for distribution to our common stockholders.

As of December 31, 2013, the Company was in compliance with its covenants under the 2010 Revolving Credit Facility.

Although there can be no assurances, management believes that, based on current projections (including projected borrowings and repayments under the 2010 Revolving Credit Facility), its operating results for fiscal 2014 will be sufficient to satisfy the first lien leverage ratio financial covenant under the 2010 Revolving Credit Facility. The Company’s ability to satisfy the first lien leverage ratio financial covenant is dependent on its business performing in accordance with its projections.  If the performance of the Company’s business deviates significantly from its projections, the Company may not be able to satisfy such first lien leverage ratio financial covenant.  The Company's projections are subject to a number of factors, many of which are events beyond its control, which could cause its actual results to differ materially from its projections. If the Company does not comply with its financial covenant, the Company will be in default under the 2010 Revolving Credit Facility.

The indebtedness under the 2010 Revolving Credit Facility is guaranteed by certain of the domestic subsidiaries of the Company and is secured by liens on substantially all the assets of the Company and certain of its domestic subsidiaries. In addition, the Company’s obligations are secured by a pledge of all the issued and outstanding shares of, or other equity interests in, certain of the Company's existing or subsequently acquired or organized domestic subsidiaries and a percentage of the capital stock of, or other equity interests in, certain of its existing or subsequently acquired or organized foreign subsidiaries.

Note 6 - Senior Secured Notes

In December 2010, we issued (i) $385.0 million aggregate principal amount of senior secured notes, which bear interest at a rate of 11.5% per annum and mature in December 2017 (the “First Lien Notes”), and (ii) $104.9 million aggregate principal amount of senior secured notes, which bear interest at a rate of 13.5% per annum and mature in June 2018 (the “Second Lien Notes”). Interest on the First Lien Notes and Second Lien Notes is payable semi-annually on June 15th and December 15th of each year and is computed on the basis of a 360-day year comprised of twelve 30-day months. During the first quarter of fiscal 2012, the Company redeemed $20.0 million in aggregate principal amount of the First Lien Notes.

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In October 2013, we exchanged approximately $94.3 million aggregate principal amount of Second Lien Notes for an equal aggregate principal amount of new second lien senior secured notes, which bear interest at a rate of 10.0% per annum, are payable in kind, and mature in June 2018 (the “Second Lien PIK Notes”), pursuant to an exchange agreement (the “Exchange Agreement”). The Second Lien PIK Notes were issued under a new indenture, by and among American Media, Inc., certain of its subsidiaries listed as guarantors thereto and Wilmington Trust, National Association, as trustee (the “Second Lien PIK Notes Indenture”). After giving effect to this exchange, approximately $10.6 million aggregate principal amount of Second Lien Notes remain outstanding.

The Second Lien PIK Notes are payable in kind at a rate of 10% per annum until the earliest of: (a) December 15, 2016, (b) the closing of a refinancing of the First Lien Notes or (c) upon the occurrence of certain specified events of default relating to the application of the cash interest savings and the right of first offer (any such date being the "Cash Interest Rate Conversion Date"), at which point the interest payable on the then outstanding aggregate principal amount of Second Lien PIK Notes will be payable at a cash interest rate of 13.5% per annum until the June 2018 maturity date. Subject to certain exceptions, cash interest savings resulting from the exchange of the Second Lien Notes must be used by the Company to repurchase First Lien Notes until the Cash Interest Rate Conversion Date. The participating holders have a right of first offer to sell any of their First Lien Notes to the Company before the Company makes repurchases of First Lien Notes from any other holders of the First Lien Notes, including those purchases pursuant to open market repurchases.

The Exchange Agreement also provides that, should the Company effect a refinancing of the First Lien Notes, under certain circumstances the Company may require additional exchanges at its option. Upon completion of a refinancing of the First Lien Notes, the Company may require (i) the participating holders to exchange up to $55.0 million in aggregate principal amount of the Company’s First Lien Notes for Second Lien PIK Notes or, alternatively, new second lien cash pay notes (the “New Second Lien Cash Pay Notes”) to be issued by the Company at a future date pursuant to the terms of the Exchange Agreement and a new indenture that would govern the New Second Lien Cash Pay Notes (the “Optional First Lien Note Exchange”) and/or (ii) the holders of all Second Lien PIK Notes (including any Second Lien PIK Notes received in the Optional First Lien Note Exchange) to exchange all of their Second Lien PIK Notes for New Second Lien Cash Pay Notes (the "Optional Second Lien Note Exchange"). In the event of the Optional Second Lien Note Exchange, certain of the participating holders may have the right to designate one independent director, in total, to the Board of Directors of the Company under certain conditions.

The First Lien Notes, the Second Lien Notes and the Second Lien PIK Notes are referred to herein collectively as the Senior Secured Notes.

The First Lien Notes are guaranteed on a first lien senior secured basis by the same subsidiaries of the Company that guarantee its 2010 Revolving Credit Facility. The First Lien Notes and the guarantees thereof are secured by a first-priority lien on substantially all our assets (subject to certain permitted liens and exceptions), pari passu with the liens granted under our 2010 Revolving Credit Facility, provided that in the event of a foreclosure on the collateral or of insolvency proceedings, obligations under our 2010 Revolving Credit Facility will be repaid in full with proceeds from the collateral prior to the obligations under the First Lien Notes.

The Second Lien Notes and the Second Lien PIK Notes are guaranteed on a second lien senior secured basis by the same subsidiaries of the Company that guarantee our 2010 Revolving Credit Facility and the First Lien Notes. The Second Lien Notes and Second Lien PIK Notes and the guarantees thereof are secured by a second-priority lien on substantially all our assets (subject to certain permitted liens and exceptions).

Under the First Lien Notes Indenture, the Company has the option to redeem the First Lien Notes on or after December 15, 2013, in whole or in part, at the redemption prices set forth below, plus accrued and unpaid interest through the redemption date, if redeemed during the 12-month period beginning on December 15th of each of the years indicated below:

Year	Percentage
2013	108.625%
2014	105.75%
2015	102.875%
2016 and thereafter	100%

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Under the Second Lien Notes Indenture and the Second Lien PIK Notes Indenture, the Company has the option to redeem the Second Lien Notes or the Second Lien PIK Notes on or after December 15, 2013, in whole or in part, at the redemption prices set forth below, plus accrued and unpaid interest through the redemption date, if redeemed during the 12-month period beginning on December 15th of each of the years indicated below:

Year	Percentage
2013	110.125%
2014	106.75%
2015	103.375%
2016 and thereafter	100%

The interest payment-in-kind from the December 15, 2013 interest payment on the Second Lien PIK Notes totaled $1.9 million and was recorded as an increase to the Senior Secured Notes in the accompanying financial statements. The total cash interest savings from the December 15, 2013 interest payment on the Second Lien and Second Lien PIK Notes totaled $2.6 million and must be used to repurchase First Lien Notes no later than March 1, 2014.

As of December 31, 2013, the Company’s total principal amount of Senior Secured Notes was approximately $471.8 million, consisting of $365.0 million principal amount of First Lien Notes, $10.6 million principal amount of Second Lien Notes and $96.2 million principal amount of Second Lien PIK Notes.

The indentures governing the Senior Secured Notes contain certain affirmative covenants, negative covenants and events of default. For example, the indentures governing the Senior Secured Notes contain covenants that limit our ability and that of our restricted subsidiaries, subject to important exceptions and qualifications, to: borrow money; guarantee other indebtedness; use assets as security in other transactions; pay dividends on stock, redeem stock or redeem subordinated debt; make investments; enter into agreements that restrict the payment of dividends by subsidiaries; sell assets; enter into affiliate transactions; sell capital stock of subsidiaries; enter into new lines of business; and merge or consolidate. In addition, the indentures governing the Senior Secured Notes impose certain requirements as to future subsidiary guarantors. As of December 31, 2013, the Company was in compliance with all the covenants under the indentures governing the Senior Secured Notes.

Note 7 - Fair Value of Financial Instruments

FASB ASC Topic 825, Financial Instruments requires the Company to disclose the fair value of financial instruments that are not measured at fair value in the accompanying financial statements. The fair value of the Company’s financial instruments has been estimated primarily by using inputs, other than quoted prices in active markets that are observable either directly or indirectly. However, the use of different market assumptions or methods of valuation could result in different fair values.

FASB ASC Topic 820, Fair Value Measurements and Disclosures ("ASC 820"), established a three-tier fair value hierarchy, which prioritizes the use of inputs used in measuring fair value as follows:

Level 1    Observable inputs such as quoted prices in active markets for identical assets and liabilities;

Level 2    Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

Level 3    Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions.

The estimated fair value of the Company’s financial instruments is as follows (in thousands):

		December 31, 2013				March 31, 2013
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
First Lien Notes	Level 2	$	365,000	$	398,536	$	365,000	$	356,788
Second Lien Notes	Level 2	10,601		10,959		104,889		85,485
Second Lien PIK Notes	Level 2	96,200		94,577		—		—
Revolving Credit Facility	Level 2	31,000		32,124		12,000		10,755
Redeemable Financial Instrument	Level 3	807		836		3,447		3,089

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The fair value of the First Lien Notes, the Second Lien Notes, the Second Lien PIK Notes and the Revolving Credit Facility is estimated using quoted market prices for the same or similar issues. The fair value of the Redeemable Financial Instrument is estimated using a discounted cash flow valuation technique, considering the current credit spread of the debtor.

As of December 31, 2013 and March 31, 2013, the Company did not have financial assets or liabilities that would require measurement on a recurring basis, based on the guidance in ASC 820. The Company's financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses. The carrying amount of these accounts approximates fair value.

Assets measured at fair value on a nonrecurring basis

The Company's non-financial assets, such as goodwill, intangible assets and property and equipment, are measured at fair value when there is an indicator of impairment and are recorded at fair value only when an impairment charge is recognized. During an evaluation of goodwill and other identified intangible assets at December 31, 2013, the carrying value of tradenames for certain reporting units exceeded fair value. As a result, the Company recorded an impairment charge that incorporates fair value measurements based on Level 3 inputs. See Note 4, "Goodwill and Other Identified Intangible Assets," for further discussion on measuring the Company's non-financial assets, specifically goodwill and tradenames.

Note 8 - Income Taxes

The asset and liability method of accounting for deferred income taxes requires a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. At December 31, 2013, a valuation allowance of $30.5 million was recorded against the Company's net deferred tax assets, excluding the deferred tax liability for indefinite-lived intangibles. The Company's deferred tax liabilities related to indefinite-lived intangibles were not considered a future source of income to support the realization of deferred tax assets within the net operating loss carryforward period.

Note 9 - Related Party Transactions

In January 2013, the Company and Mr. Elkins, a member of our Board of Directors, entered into a one-year consulting agreement for Mr. Elkins to provide certain financial advisory services through Roxbury Advisory, LLC, a company controlled by Mr. Elkins. Purchases of these services from Roxbury Advisory, LLC totaled $100,000 during the nine months endedDecember 31, 2013. Mr. Elkins was affiliated with Avenue Capital, a majority stockholder of the Company, until January 2013.

Note 10 - Investments in Affiliates and Redeemable Noncontrolling Interest

Consolidated Joint Ventures

Our condensed consolidated financial statements include the financial results of joint ventures that are variable interest entities in which we are the primary beneficiary.

Mr. Olympia, LLC

In April 2005, the Company entered into a limited liability company agreement to form a joint venture, Mr. Olympia, LLC (“Olympia”), to manage and promote the Mr. Olympia fitness events. In September 2011, the Company and the other limited liability company member entered into an amendment to the limited liability company agreement (the "Amendment"), which, among other things, extended the time period that the Company could be required to purchase all the limited liability company units from the other member, from April 2015 to October 2019, for a fixed price of $3.0 million cash (the "Olympia Put Option"). The Amendment also extended the time period that the Company could require the other limited liability company member to sell to the Company all its limited liability company units from April 2015 to April 2020, for $3.0 million cash (the “Olympia Call Option”).

In April 2005, the other limited liability company member licensed certain trademarks related to the Mr. Olympia fitness events (collectively, the “Olympia Trademarks”) to Olympia for $3.0 million, payable by the Company over a 10-year period (the “License Fee”). Upon the exercise of the Olympia Put Option or the Olympia Call Option, the ownership of the Olympia Trademarks will be transferred to Olympia. If the Olympia Put Option or the Olympia Call Option is not exercised, then Olympia will retain the license to the Olympia Trademarks in perpetuity. The License Fee has been recorded as other identified intangibles, and the final payment was made in April 2013.

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The Company has a variable interest in the Olympia joint venture, a variable interest entity. The Olympia joint venture is deemed a variable interest entity because there is insufficient equity investment at risk. The Company concluded it is the primary beneficiary because the holder of the Olympia Put Option has the ability to cause the Company to absorb the potential losses of the joint venture and the Company controls the activities that most significantly impact the economic performance of Olympia. As a result, the Company accounts for the Olympia joint venture as a consolidated subsidiary.

The Company follows the accounting for noncontrolling interest in equity that is redeemable at terms other than fair value. Accordingly, the Company has reflected the noncontrolling interest's equity within temporary equity for the Olympia joint venture as the Olympia joint venture’s securities are currently redeemable, pursuant to the terms of the Olympia Put Option. As a result, the Company has recorded the Olympia Put Option, at a minimum, equal to the maximum redemption amount as “Redeemable noncontrolling interest” in the accompanying financial statements.

Olympia's net income during the nine months ended December 31, 2013 and 2012 was $1.1 million and $0.7 million, respectively.

Zinczenko-AMI Ventures, LLC

In February 2013, the Company entered into a limited liability company agreement to form Zinczenko-AMI Ventures, LLC, a joint venture ("ZAM"), to create a book publishing division. ZAM was initially capitalized by the Company and the other limited liability company member (the "ZAM LLC Member") and the Company and the ZAM LLC Member each received an initial ownership interest of 51% and 49%, respectively, in ZAM. In accordance with the terms of the limited liability company agreement, the Company will be responsible for the day-to-day operations and management of ZAM.

The Company has a variable interest in the ZAM joint venture, a variable interest entity. The ZAM joint venture is deemed a variable interest entity because there is insufficient equity investment at risk. The Company concluded it is the primary beneficiary because the Company controls the activities that most significantly impact the economic performance of ZAM as manager of the day-to-day operations. As a result, the Company accounts for the ZAM joint venture as a consolidated subsidiary. The operating results of ZAM were insignificant to the Company's consolidated financial statements for the nine months ended December 31, 2013.

Redeemable Financial Instrument

Odyssey Magazine Publishing Group, Inc. (formerly known as Odyssey Magazine Publishing Group, LLC)

In June 2011, the Company entered into a limited liability company agreement to form a joint venture, Odyssey Magazine Publishing Group, LLC (“Odyssey”). Odyssey was initially capitalized by the Company and the other limited liability company member (the “LLC Member”) with a total of $23.0 million in cash, and the Company and the LLC Member each received an initial 50% ownership interest in Odyssey. In April 2012, pursuant to the exercise of a put option by the LLC Member, the Company and the LLC Member entered into a membership interest purchase agreement (the “Membership Interest Purchase Agreement”), which required the Company to purchase all of the LLC Member’s interest in Odyssey for approximately $13.3 million, payable on a quarterly basis over a two-year period. Through June 2012, pursuant to the Membership Interest Purchase Agreement, the Company paid approximately $6.1 million.

Effective April 2012, Odyssey was no longer deemed a variable interest entity. However, the Company continues to consolidate Odyssey based on the Company’s control of Odyssey and the right to receive 100% of the net income (loss) of Odyssey, the obligation to provide all required capital contributions to Odyssey and the obligation to purchase all of the LLC Member's interest in Odyssey. As such, the Company has accounted for the Membership Interest Purchase Agreement as a mandatorily redeemable financial instrument, and the future obligation has been reflected as a liability because the Company has an unconditional obligation to pay a fixed amount, in cash, on specified dates.

In August 2012, Odyssey was converted from a limited liability company to a corporation (the “Conversion”) and its name was changed to Odyssey Magazine Publishing Group, Inc. (“Odyssey Corporation”). Upon the Conversion, Odyssey Corporation was authorized to issue 1,000 shares of $0.0001 par value common stock (the “Common Stock”) and 1,000 shares of $0.0001 par value preferred stock designated as Series A preferred stock (the “Series A Preferred Stock”). The Series A Preferred Stock, among other rights, ranks senior and prior to the shares of Common Stock upon the distribution of assets upon a liquidation, dissolution or winding up of Odyssey Corporation; is not redeemable; is non-transferable, except in accordance with the preferred stock purchase agreement described below; and has no voting rights. Concurrent with the Conversion, the membership interest held by each of the Company and the LLC Member in Odyssey was canceled and converted into (i) for the Company, 1,000 shares of Common Stock and 731 shares of Series A Preferred Stock in Odyssey Corporation, and (ii) for the LLC Member, 269 shares of Series A Preferred Stock in Odyssey Corporation.

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In connection with the Conversion, the Company and the LLC Member entered into a preferred stock purchase agreement (the “Preferred Stock Purchase Agreement”) wherein the Company will purchase the LLC Member’s shares of Series A Preferred Stock in Odyssey Corporation for approximately $7.2 million, payable on a quarterly basis through March 31, 2014. In accordance with the Preferred Stock Purchase Agreement, the Membership Interest Purchase Agreement was terminated. All other terms of the Preferred Stock Purchase Agreement are substantially the same as the Membership Interest Purchase Agreement.

The Company has paid approximately $6.2 million and the remaining discounted obligation under the Preferred Stock Purchase Agreement is reflected as a redeemable financial instrument in the accompanying financial statements. The remaining undiscounted obligation of $1.0 million will be paid during the remainder of fiscal 2014.

Redeemable Noncontrolling Interest

The following table reconciles equity attributable to the redeemable noncontrolling interest (in thousands):

	Three Months Ended						Nine Months Ended
	December 31,						December 31,
	2013			2012			2013			2012
Balance, beginning of period	$	4,076		$	3,781		$	3,000		$	15,620
Capital distribution	(1,004		)	(679		)	(1,004		)	(679		)
Net income (loss) attributable to noncontrolling interests	(23		)	(42		)	1,053			739
Reduction in noncontrolling interest	—			—			—			(12,500		)
Other	(49		)	(60		)	(49		)	(180		)
Balance, end of period	$	3,000		$	3,000		$	3,000		$	3,000

The reduction in noncontrolling interests during the nine months endedDecember 31, 2012 of approximately $12.5 million represents the exercise of the Odyssey Put Option by the LLC Member of Odyssey.

Unconsolidated Joint Ventures

We have other joint ventures that we do not consolidate as we lack the power to direct the activities that significantly impact the economic performance of these entities. The Company's investments in affiliates are carried at the fair value of the investment consideration at the date acquired, plus the Company's equity in undistributed earnings from that date. Financial information of the affiliates is reported with a one-month lag in the reporting period. The impacts of the lag on the Company's investment and results of operations are not significant.

Radar Online, LLC

In October 2008, the Company entered into a limited liability company agreement to form Radar Online, LLC, a joint venture ("Radar"), to manage Radar Online, a website focusing on celebrity and entertainment news. Though the Company owns 50% of Radar and can exercise significant influence, it does not control the activities that most significantly impact the economic performance of this joint venture. As a result, the Company accounts for the investment in Radar using the equity method. The operating results of Radar were insignificant to the Company’s consolidated financial statements for the nine months endedDecember 31, 2013 and 2012.

The management fees receivable from Radar totaled $2.2 million as of December 31, 2013 and March 31, 2013. Historically, the management fees were fully reserved due to Radar's inability to pay the management fees and revenue had not been recognized. At December 31, 2013, based on management's reassessment of Radar, the Company's management determined that collectibility was reasonably assured. As a result, during the three months ended December 31, 2013, the reserve was released and recognized into operating income in the accompanying financial statements.

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Media Brands, LLC

In August 2011, the Company entered into a limited liability company agreement to form Media Brands, LLC, a joint venture ("Media Brands"), to produce, market, sell and distribute various nutritional supplement product lines branded with certain of the Company's health and fitness brands. Media Brands was initially capitalized by the Company and the other limited liability company member (the "Media Brands Member") and the Company and the Media Brands Member each received an initial ownership interest of 50% in Media Brands. Though the Company owns 50% of Media Brands and can exercise significant influence, it does not control the activities that most significantly impact the economic performance of this joint venture. As a result, the Company accounts for the investment in Media Brands using the equity method. The operations of Media Brands commenced during the second quarter of fiscal 2014 and the operating results were insignificant to the Company's consolidated financial statements for the nine months endedDecember 31, 2013.

Odyssey/Unconventional Partners Entertainment, LLC

In March 2013, Odyssey Magazine Publishing Group, Inc. (“Odyssey Corporation”), a wholly-owned subsidiary of American Media, Inc., entered into a limited liability company agreement to form Odyssey/UnConventional Partners Entertainment, LLC, a joint venture (“OUPE”), to develop and produce a television show based on OK! magazine ("OK!TV"). OUPE was initially capitalized by Odyssey Corporation and the other limited liability company member (the "OUPE Member") and Odyssey Corporation and the OUPE Member each received an initial ownership interest of approximately 50% in OUPE. In August 2013, Odyssey Corporation and the OUPE Member amended the limited liability company agreement to provide for an additional limited liability company member to receive a membership interest in OUPE (the "Additional OUPE Member") in exchange for its capital contribution to OUPE.

Odyssey Corporation owns 33.3% of OUPE and can exercise significant influence but does not control the activities that most significantly impact the economic performance of this joint venture. As a result, the Company accounts for the investment in OUPE using the equity method. The operations of OUPE commenced during the second quarter of fiscal 2014 when the television show OK!TV was launched and the operating results were insignificant to the Company's consolidated financial statements for the nine months endedDecember 31, 2013.

Select Media Services, LLC

In September 2013, DSI contributed substantially all of its assets, comprising its distribution and merchandising businesses, and $2.3 million in cash in exchange for a 27.5% membership interest in Select Media Services, LLC ("Select"), which operates as a merchandising and in-store services business. The ownership interest in Select may be adjusted on August 31, 2014, if required, pursuant to a one-time retro-active adjustment, which would be effective as of September 1, 2013.

DSI can exercise significant influence but does not control the activities that most significantly impact the economic performance of this joint venture. As a result, the Company accounts for the investment in Select using the equity method. The operating results were insignificant to the Company's consolidated financial statements for the nine months endedDecember 31, 2013.

Note 11 - Commitments and Contingencies

Litigation

On March 10, 2009, Anderson News, L.L.C. and Anderson Services, L.L.C., magazine wholesalers (collectively, “Anderson”), filed a lawsuit against American Media, Inc., DSI, and various magazine publishers, wholesalers and distributors in the Federal District Court for the Southern District of New York (the “Anderson Action”). Anderson's complaint alleged that the defendants violated Section 1 of the Sherman Act by engaging in a purported industry-wide conspiracy to boycott Anderson and drive it out of business. Plaintiffs also purported to assert claims for defamation, tortious interference with contract and civil conspiracy. The complaint did not specify the amount of damages sought. On August 2, 2010, the District Court dismissed the action in its entirety with prejudice and without leave to replead and, on October 25, 2010, denied Anderson's motion for reconsideration of the dismissal decision. Anderson appealed the District Court's decisions.

On April 3, 2012, the Second Circuit issued a decision reversing the dismissal of the lawsuit and reinstating the antitrust and state law claims (except the defamation claim, which Anderson withdrew), and, on January 7, 2013, the United States Supreme Court declined to review the Second Circuit decision. Following the Second Circuit decision, the case has been proceeding in the District Court and the parties are engaged in discovery, which is scheduled to be completed in June 2014.

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Anderson is in chapter 11 bankruptcy proceedings in Delaware bankruptcy court. On June 10, 2010, American Media, Inc. filed a proof of claim in that proceeding for $5.6 million (which it amended on December 3, 2013 to reflect the counterclaim (described below) it planned to file in the Anderson Action), but Anderson asserts that it has no assets to pay unsecured creditors like American Media, Inc. An independent court-appointed examiner has identified claims that Anderson could assert against Anderson insiders in excess of $340.0 million.

In an order of the Delaware bankruptcy court, entered on November 14, 2011, American Media, Inc. and four other creditors (collectively, the “Creditors”), which also are defendants in the Anderson Action, were granted the right to file lawsuits against Anderson insiders asserting Anderson's claims identified by the examiner. The Creditors' retention of counsel to pursue the claims on a contingency fee basis was also approved. On November 14, 2011, pursuant to this order, a complaint was filed against 10 defendants. The bankruptcy court, however, has entered a stay of discovery pending conclusion of fact discovery in the Anderson Action. By order dated November 6, 2013, the Delaware bankruptcy court granted American Media, Inc. and four of its co-defendants relief from the automatic bankruptcy stay of litigation against Anderson News, L.L.C. so that they could file a counterclaim in the Anderson Action against Anderson News, L.L.C. alleging that Anderson News, L.L.C. had violated the antitrust laws by engaging in a conspiracy to fix prices that wholesalers would pay publishers for their magazines and seeking an unspecified amount of damages to be proved at trial.  Permission was obtained on January 23, 2014 from the District Court to file the counterclaim against Charles Anderson, Jr. and Anderson News, L.L.C.

While it is not possible to predict the outcome of the Anderson Action or to estimate the impact on American Media, Inc. and DSI of a final judgment against American Media, Inc. and DSI (if that were to occur), American Media, Inc. and DSI believe that the claims asserted by Anderson, in the Anderson Action, are meritless. American Media, Inc. and DSI have antitrust claim insurance that covers defense costs. American Media, Inc. and DSI have filed a claim for insurance coverage with regard to the Anderson Action and certain of their defense costs are being paid by the insurer, and, in the event of a settlement or a damages award by the Court and subject to the applicable policy limits, American Media, Inc. and DSI anticipate seeking reimbursement from the insurer for payment of such settlement or damages. American Media, Inc. and DSI will continue to vigorously defend the case.

In addition, because the focus of some of our publications often involves celebrities and controversial subjects, the risk of defamation or invasion of privacy litigation exists. Our experience indicates that the claims for damages made in celebrity lawsuits are usually inflated and such lawsuits are usually defensible and, in any event, any reasonably foreseeable material liability or settlement would likely be covered by insurance, subject to any applicable deductible. We also periodically evaluate and assess the risks and uncertainties associated with our pending litigation disregarding the existence of insurance that would cover liability for such litigation. At present, in the opinion of management, after consultation with outside legal counsel, the liability resulting from pending litigation, even if insurance were not available, is not expected to have a material effect on our consolidated financial statements.

Note 12 - Business Segment Information

The Company has four reporting segments: Celebrity Brands, Women’s Active Lifestyle, Men’s Active Lifestyle and Corporate and Other. The operating segments are based on each having the following characteristics: the operating segments engage in similar business activities from which they earn revenues and incur expenses; the operating results are regularly reviewed by the chief operating decision maker (the "CODM"), and there is discrete financial information. The Company does not aggregate any of its operating segments.

After the divestiture of the DSI business, which was included in and comprised the majority of our publishing services segment, the publishing services segment has been combined with the corporate and other segment effective with the quarter ended September 30, 2013. Given this change, the Company has restated prior period segment information to correspond to the current segment reporting structure. See Note 1, "Nature of the Business."

The Celebrity Brands segment includes National Enquirer, Star, OK!, Globe, National Examiner, Soap Opera Digest and Country Weekly.

The Women’s Active Lifestyle segment includes Shape, Fit Pregnancy and Natural Health.

The Men’s Active Lifestyle segment includes Men’s Fitness, Muscle & Fitness, Flex and Muscle & Fitness Hers.

The Corporate and Other segment includes international licensing, photo syndication to third parties and corporate overhead. Corporate overhead expenses are not allocated to other segments and include production, circulation, executive staff, information technology, accounting, legal, human resources and administration department costs. The Corporate and Other segment also includes print and digital advertising sales and strategic management direction in the following areas: manufacturing, subscription circulation, logistics, event marketing and full back office financial functions.  Playboy is one of many publishers who have taken advantage of these additional services. 

18

The Company uses operating income (loss) as a primary basis for the chief operating decision maker to evaluate the performance of each of our operating segments. The financial results of the each operating segment are prepared on a basis that is consistent with the manner in which we internally disaggregate financial information to assist in making internal operating decisions. These calculations of operating income (loss) herein may be different from the calculations used by other companies, therefore comparability may be limited. The accounting policies of the operating segments are the same as those applied in the consolidated financial statements included in Note 2, "Summary of Significant Accounting Policies" in the 2013 Form 10-K.

Segment information for the three and nine months endedDecember 31, 2013 and 2012 and the assets employed as of December 31, 2013 and March 31, 2013 are as follows:

	Three Months Ended						Nine Months Ended
	December 31,						December 31,
(in thousands)	2013			2012			2013			2012
Operating revenues
Celebrity Brands	$	45,990		$	57,653		$	152,494		$	167,283
Women's Active Lifestyle Group	9,936			8,707			39,459			35,594
Men's Active Lifestyle Group	13,267			14,227			48,892			45,294
Corporate and Other	5,455			4,732			14,799			14,258
Total operating revenues	$	74,648		$	85,319		$	255,644		$	262,429
Operating income (loss)
Celebrity Brands	$	13,853		$	(21,677	)	$	51,966		$	15,304
Women's Active Lifestyle Group	(1,978		)	(6,059		)	1,134			(2,969		)
Men's Active Lifestyle Group	(6,346		)	(3,902		)	4,705			5,197
Corporate and Other	(6,073		)	(10,600		)	(30,980		)	(33,927		)
Total operating income (loss)	$	(544	)	$	(42,238	)	$	26,825		$	(16,395	)
Depreciation and amortization
Celebrity Brands	$	882		$	809		$	2,615		$	2,355
Women's Active Lifestyle Group	208			113			528			242
Men's Active Lifestyle Group	218			104			567			241
Corporate and Other	2,428			1,405			6,743			4,381
Total depreciation and amortization	$	3,736		$	2,431		$	10,453		$	7,219
Impairment of goodwill and intangible assets
Celebrity Brands	$	—		$	42,801		$	—		$	42,801
Women's Active Lifestyle Group	—			3,925			—			3,925
Men's Active Lifestyle Group	9,238			7,797			9,238			7,797
Total impairment of goodwill and intangible assets	$	9,238		$	54,523		$	9,238		$	54,523
Amortization of deferred rack costs
Celebrity Brands	$	1,320		$	1,851		$	4,486		$	6,240
Women's Active Lifestyle Group	79			63			229			222
Men's Active Lifestyle Group	17			5			40			22
Total amortization of deferred rack costs	$	1,416		$	1,919		$	4,755		$	6,484

Total Assets	December 31, 2013		March 31, 2013
Celebrity Brands	$	331,031	$	336,722
Women's Active Lifestyle Group	66,167		70,956
Men's Active Lifestyle Group	102,591		113,539
Corporate and Other (1)	66,054		56,234
Total assets	$	565,843	$	577,451

19

(1) Amounts are primarily comprised of inventories, prepaid expenses, property and equipment, deferred debt costs and certain other assets.

Geographic Data

The Company operates principally in two geographic areas, the United States of America and Europe (primarily the United Kingdom). There were no significant transfers between geographic areas during the three and nine months endedDecember 31, 2013 and 2012. The following table presents revenue by geographical area for the three and nine months endedDecember 31, 2013 and 2012 and all identifiable assets related to the operations in each geographic area as of December 31, 2013 and March 31, 2013:

	Three Months Ended				Nine Months Ended
	December 31,				December 31,
(in thousands)	2013		2012		2013		2012
Operating revenues:
United States of America	$	71,807	$	82,126	$	246,568	$	252,794
Europe	2,841		3,193		9,076		9,635
Total operating revenues	$	74,648	$	85,319	$	255,644	$	262,429

(in thousands)	December 31, 2013		March 31, 2013
Assets:
United States of America	$	557,147	$	568,733
Europe	8,696		8,718
Total assets	$	565,843	$	577,451

Note 13 - Supplemental Condensed Consolidating Financial Information

The following tables present unaudited condensed consolidating financial statements of (a) the parent company, American Media, Inc., as issuer of the Senior Secured Notes; (b) on a combined basis, the subsidiary guarantors of the Senior Secured Notes; and (c) on a combined basis, the subsidiaries that are not guarantors of the Senior Secured Notes. Separate financial statements of the subsidiary guarantors are not presented because the parent company owns all outstanding voting stock of each of the subsidiary guarantors and the guarantee by each subsidiary guarantor is full and unconditional and joint and several. As a result and in accordance with Rule 3-10(f) of Regulation S-X under the Securities Exchange Act of 1934, as amended, the Company includes the following tables in these notes to the unaudited condensed consolidated financial statements:

20

SUPPLEMENTAL UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2013

(in thousands)

ASSETS	Parent			Guarantors			Non Guarantors			Eliminations			Condensed Consolidated
CURRENT ASSETS:
Cash and cash equivalents	$	—		$	2,152		$	2,054		$	—		$	4,206
Trade receivables, net	—			30,608			1,675			—			32,283
Inventories	—			13,137			593			—			13,730
Prepaid expenses and other current assets	—			23,835			765			(5,487		)	19,113
Total current assets	—			69,732			5,087			(5,487		)	69,332
PROPERTY AND EQUIPMENT, NET:
Leasehold improvements	—			3,843			—			—			3,843
Furniture, fixtures and equipment	—			41,632			759			—			42,391
Less – accumulated depreciation	—			(26,248		)	(640		)	—			(26,888		)
Total property and equipment, net	—			19,227			119			—			19,346
OTHER ASSETS:
Deferred debt costs, net	8,587			—			—			—			8,587
Deferred rack costs, net	—			5,114			—			—			5,114
Investment in affiliates	—			2,615			—			—			2,615
Other long-term assets	—			3,791			—			—			3,791
Investment in subsidiaries	532,112			(167		)	—			(531,945		)	—
Total other assets	540,699			11,353			—			(531,945		)	20,107
GOODWILL AND OTHER IDENTIFIED INTANGIBLE ASSETS:
Goodwill	—			182,388			4,510			—			186,898
Other identified intangibles, net	—			264,160			6,000			—			270,160
Total goodwill and other identified intangible assets	—			446,548			10,510			—			457,058
Due from affiliates	—			168,574			—			(168,574		)	—
TOTAL ASSETS	$	540,699		$	715,434		$	15,716		$	(706,006	)	$	565,843
LIABILITIES AND STOCKHOLDER'S DEFICIT
CURRENT LIABILITIES:
Accounts payable	$	—		$	19,573		$	329		$	—		$	19,902
Accrued expenses and other liabilities	—			27,320			5,821			(4,153		)	28,988
Accrued interest	2,643			—			—			—			2,643
Redeemable financial instruments	807			—			—			—			807
Deferred revenues	—			32,469			767			—			33,236
Total current liabilities	3,450			79,362			6,917			(4,153		)	85,576
NON-CURRENT LIABILITIES:
Senior secured notes, net	471,801			—			—			—			471,801
Revolving credit facility	31,000			—			—			—			31,000
Other non-current liabilities	—			3,870			—			—			3,870
Deferred income taxes	—			101,855			45			(1,334		)	100,566
Due to affiliates	164,418			—			4,156			(168,574		)	—
Total liabilities	670,669			185,087			11,118			(174,061		)	692,813
Redeemable noncontrolling interest	—			—			3,000			—			3,000
STOCKHOLDER'S (DEFICIT) EQUITY:
Total stockholder's (deficit) equity	(129,970		)	$	530,347		$	1,598		$	(531,945	)	(129,970		)
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT	$	540,699		$	715,434		$	15,716		$	(706,006	)	$	565,843

21

SUPPLEMENTAL UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET

AS OF MARCH 31, 2013

(in thousands)

ASSETS	Parent			Guarantors			Non Guarantors			Eliminations			Condensed Consolidated
CURRENT ASSETS:
Cash and cash equivalents	$	—		$	683		$	1,692		$	—		$	2,375
Trade receivables, net	—			41,169			1,916			—			43,085
Inventories	—			12,600			556			—			13,156
Prepaid expenses and other current assets	—			21,000			646			(5,487		)	16,159
Total current assets	—			75,452			4,810			(5,487		)	74,775
PROPERTY AND EQUIPMENT, NET:
Leasehold improvements	—			3,867			—			—			3,867
Furniture, fixtures and equipment	—			40,666			685			—			41,351
Less – accumulated depreciation	—			(25,418		)	(532		)	—			(25,950		)
Total property and equipment, net	—			19,115			153			—			19,268
OTHER ASSETS:
Deferred debt costs, net	9,789			—			—			—			9,789
Deferred rack costs, net	—			6,604			—			—			6,604
Other long-term assets	—			1,631			—			—			1,631
Investment in subsidiaries	520,082			(242		)	—			(519,840		)	—
Total other assets	529,871			7,993			—			(519,840		)	18,024
GOODWILL AND OTHER IDENTIFIED INTANGIBLE ASSETS:
Goodwill	—			182,388			4,510			—			186,898
Other identified intangibles, net	—			272,486			6,000			—			278,486
Total goodwill and other identified intangible assets	—			454,874			10,510			—			465,384
TOTAL ASSETS	$	529,871		$	557,434		$	15,473		$	(525,327	)	$	577,451
LIABILITIES AND STOCKHOLDER'S DEFICIT
CURRENT LIABILITIES:
Accounts payable	$	—		$	17,261		$	559		$	—		$	17,820
Accrued expenses and other liabilities	—			2,012			5,389			17,363			24,764
Accrued interest	16,823			—			—			—			16,823
Redeemable financial instruments	3,447			—			—			—			3,447
Deferred revenues	—			33,621			923			—			34,544
Total current liabilities	20,270			52,894			6,871			17,363			97,398
NON-CURRENT LIABILITIES:
Senior secured notes, net	469,889			—			—			—			469,889
Revolving credit facility	12,000			—			—			—			12,000
Other non-current liabilities	—			3,959			—			—			3,959
Deferred income taxes	—			91,823			(6		)	(22,850		)	68,967
Due (from) to affiliates	105,474			(109,607		)	4,133			—			—
Total liabilities	607,633			39,069			10,998			(5,487		)	652,213
Redeemable noncontrolling interest	—			—			3,000			—			3,000
STOCKHOLDER'S (DEFICIT) EQUITY:
Total stockholder's (deficit) equity	(77,762		)	518,365			1,475			(519,840		)	(77,762		)
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT	$	529,871		$	557,434		$	15,473		$	(525,327	)	$	577,451

22

SUPPLEMENTAL UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)

AND COMPREHENSIVE INCOME (LOSS)

FOR THE THREE MONTHS ENDED DECEMBER 31, 2013

(in thousands)

	Parent			Guarantors			Non Guarantors		Eliminations		Condensed Consolidated
OPERATING REVENUES:
Circulation	$	—		$	43,342		$	1,261	$	—	$	44,603
Advertising	—			21,327			1,442		—		22,769
Other	—			7,015			261		—		7,276
Total operating revenues	—			71,684			2,964		—		74,648
OPERATING EXPENSES:
Editorial	—			9,629			350		—		9,979
Production	—			19,971			918		—		20,889
Distribution, circulation and other cost of sales	—			11,673			657		—		12,330
Selling, general and administrative	—			18,345			675		—		19,020
Depreciation and amortization	—			3,716			20		—		3,736
Impairment of goodwill and intangible assets	—			9,238			—		—		9,238
Total operating expenses	—			72,572			2,620		—		75,192
OPERATING (LOSS) INCOME	—			(888		)	344		—		(544		)
OTHER INCOME (EXPENSE):
Interest expense	(14,087		)	(12		)	—		—		(14,099		)
Amortization of deferred debt costs	(414		)	—			—		—		(414		)
Other income, net	—			63			—		—		63
Total other income (expense), net	(14,501		)	51			—		—		(14,450		)
(LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES, AND EQUITY IN (LOSSES) EARNINGS OF CONSOLIDATED SUBSIDIARIES	(14,501		)	(837		)	344		—		(14,994		)
PROVISION FOR INCOME TAXES	33,200			2,107			103		—		35,410
EQUITY IN (LOSSES) EARNINGS OF CONSOLIDATED SUBSIDIARIES	(2,680		)	291			—		2,389		—
NET (LOSS) INCOME	(50,381		)	(2,653		)	241		2,389		(50,404		)
LESS: NET LOSS (INCOME) ATTRIBUTABLE TO THE NONCONTROLLING INTEREST	—			—			23		—		23
NET (LOSS) INCOME ATTRIBUTABLE TO AMERICAN MEDIA, INC.	$	(50,381	)	$	(2,653	)	$	264	$	2,389	$	(50,381	)
	Parent			Guarantors			Non Guarantors		Eliminations		Condensed Consolidated
NET (LOSS) INCOME	$	(50,381	)	$	(2,653	)	$	241	$	2,389	$	(50,404	)
Foreign currency translation adjustment	—			—			71		—		71
Comprehensive (loss) income	(50,381		)	(2,653		)	312		2,389		(50,333		)
Less: comprehensive loss (income) attributable to the noncontrolling interest	—			—			23		—		23
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO AMERICAN MEDIA, INC.	$	(50,381	)	$	(2,653	)	$	335	$	2,389	$	(50,310	)

23

SUPPLEMENTAL UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)

AND COMPREHENSIVE INCOME (LOSS)

FOR THE NINE MONTHS ENDED DECEMBER 31, 2013

(in thousands)

	Parent			Guarantors			Non Guarantors			Eliminations			Condensed Consolidated
OPERATING REVENUES:
Circulation	$	—		$	143,794		$	3,688		$	—		$	147,482
Advertising	—			79,734			4,492			—			84,226
Other	—			18,000			5,936			—			23,936
Total operating revenues	—			241,528			14,116			—			255,644
OPERATING EXPENSES:
Editorial	—			28,038			1,025			—			29,063
Production	—			64,638			5,089			—			69,727
Distribution, circulation and other cost of sales	—			43,134			1,913			—			45,047
Selling, general and administrative	—			62,942			2,349			—			65,291
Depreciation and amortization	—			10,393			60			—			10,453
Impairment of goodwill and intangible assets	—			9,238			—			—			9,238
Total operating expenses	—			218,383			10,436			—			228,819
OPERATING INCOME	—			23,145			3,680			—			26,825
OTHER INCOME (EXPENSE):
Interest expense	(43,867		)	29			—			—			(43,838		)
Amortization of deferred debt costs	(1,202		)	—			—			—			(1,202		)
Other expenses, net	—			(188		)	—			—			(188		)
Total other expense, net	(45,069		)	(159		)	—			—			(45,228		)
(LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES, AND EQUITY IN EARNINGS OF CONSOLIDATED SUBSIDIARIES	(45,069		)	22,986			3,680			—			(18,403		)
PROVISION FOR INCOME TAXES	22,473			10,094			387			—			32,954
EQUITY IN EARNINGS OF CONSOLIDATED SUBSIDIARIES	15,132			1,191			—			(16,323		)	—
NET (LOSS) INCOME	(52,410		)	14,083			3,293			(16,323		)	(51,357		)
LESS: NET INCOME ATTRIBUTABLE TO THE NONCONTROLLING INTEREST	—			—			(1,053		)	—			(1,053		)
NET (LOSS) INCOME ATTRIBUTABLE TO AMERICAN MEDIA, INC.	$	(52,410	)	$	14,083		$	2,240		$	(16,323	)	$	(52,410	)
	Parent			Guarantors			Non Guarantors			Eliminations			Condensed Consolidated
NET (LOSS) INCOME	$	(52,410	)	$	14,083		$	3,293		$	(16,323	)	$	(51,357	)
Foreign currency translation adjustment	—			—			202			—			202
Comprehensive (loss) income	(52,410		)	14,083			3,495			(16,323		)	(51,155		)
Less: comprehensive income attributable to the noncontrolling interest	—			—			(1,053		)	—			(1,053		)
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO AMERICAN MEDIA, INC.	$	(52,410	)	$	14,083		$	2,442		$	(16,323	)	$	(52,208	)

24

SUPPLEMENTAL UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)

AND COMPREHENSIVE INCOME (LOSS)

FOR THE THREE MONTHS ENDED DECEMBER 31, 2012

(in thousands)

	Parent			Guarantors			Non Guarantors		Eliminations		Condensed Consolidated
OPERATING REVENUES:
Circulation	$	—		$	55,419		$	1,137	$	—	$	56,556
Advertising	—			21,154			1,634		—		22,788
Other	—			5,766			209		—		5,975
Total operating revenues	—			82,339			2,980		—		85,319
OPERATING EXPENSES:
Editorial	—			9,832			220		—		10,052
Production	—			23,099			798		—		23,897
Distribution, circulation and other cost of sales	—			16,081			587		—		16,668
Selling, general and administrative	—			19,316			670		—		19,986
Depreciation and amortization	—			2,413			18		—		2,431
Impairment of goodwill and intangible assets	—			54,523			—				54,523
Total operating expenses	—			125,264			2,293		—		127,557
OPERATING (LOSS) INCOME	—			(42,925		)	687		—		(42,238		)
OTHER INCOME (EXPENSE):
Interest expense	(15,202		)	(29		)	—		—		(15,231		)
Amortization of deferred debt costs	(367		)	—			—		—		(367		)
Other income (expense), net	—			(241		)	—		—		(241		)
Total other expense, net	(15,569		)	(270		)	—		—		(15,839		)
LOSS (INCOME) BEFORE (BENEFIT) PROVISION FOR INCOME TAXES, AND EQUITY IN EARNINGS OF CONSOLIDATED SUBSIDIARIES	(15,569		)	(43,195		)	687		—		(58,077		)
(BENEFIT) PROVISION FOR INCOME TAXES	(5,545		)	5,358			47		—		(140		)
EQUITY IN (LOSSES) EARNINGS OF CONSOLIDATED SUBSIDIARIES	(47,871		)	712			—		47,159		—
NET (LOSS) INCOME	(57,895		)	(47,841		)	640		47,159		(57,937		)
LESS: NET LOSS (INCOME) ATTRIBUTABLE TO THE NONCONTROLLING INTEREST	—			—			42		—		42
NET (LOSS) INCOME ATTRIBUTABLE TO AMERICAN MEDIA, INC.	$	(57,895	)	$	(47,841	)	$	682	$	47,159	$	(57,895	)
	Parent			Guarantors			Non Guarantors		Eliminations		Condensed Consolidated
NET INCOME (LOSS)	$	(57,895	)	$	(47,841	)	$	640	$	47,159	$	(57,937	)
Foreign currency translation adjustment	—			—			3		—		3
Comprehensive income (loss)	(57,895		)	(47,841		)	643		47,159		(57,934		)
Less: comprehensive loss (income) attributable to the noncontrolling interest	—			—			42		—		42
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO AMERICAN MEDIA, INC. AND SUBSIDIARIES	$	(57,895	)	$	(47,841	)	$	685	$	47,159	$	(57,892	)

25

SUPPLEMENTAL UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)

AND COMPREHENSIVE INCOME (LOSS)

FOR THE NINE MONTHS ENDED DECEMBER 31, 2012

(in thousands)

	Parent			Guarantors			Non Guarantors			Eliminations		Condensed Consolidated
OPERATING REVENUES:
Circulation	$	—		$	160,244		$	3,699		$	—	$	163,943
Advertising	—			71,396			5,029			—		76,425
Other	—			17,352			4,709			—		22,061
Total operating revenues	—			248,992			13,437			—		262,429
OPERATING EXPENSES:
Editorial	—			30,077			1,081			—		31,158
Production	—			69,194			4,285			—		73,479
Distribution, circulation and other cost of sales	—			48,970			1,926			—		50,896
Selling, general and administrative	—			58,508			3,041			—		61,549
Depreciation and amortization	—			7,164			55			—		7,219
Impairment of goodwill and intangible assets	—			54,523			—					54,523
Total operating expenses	—			268,436			10,388			—		278,824
OPERATING INCOME	—			(19,444		)	3,049			—		(16,395		)
OTHER INCOME (EXPENSE):
Interest expense	(44,985		)	(29		)	—			—		(45,014		)
Amortization of deferred debt costs	(1,063		)	—			—			—		(1,063		)
Other expenses, net	—			(251		)	—			—		(251		)
Total other expense, net	(46,048		)	(280		)	—			—		(46,328		)
(LOSS) INCOME BEFORE (BENEFIT) PROVISION FOR INCOME TAXES, AND EQUITY IN EARNINGS OF CONSOLIDATED SUBSIDIARIES	(46,048		)	(19,724		)	3,049			—		(62,723		)
(BENEFIT) PROVISION FOR INCOME TAXES	(17,441		)	15,627			244			—		(1,570		)
EQUITY IN EARNINGS OF CONSOLIDATED SUBSIDIARIES	(33,285		)	1,323			—			31,962		—
NET (LOSS) INCOME	(61,892		)	(34,028		)	2,805			31,962		(61,153		)
LESS: NET INCOME ATTRIBUTABLE TO THE NONCONTROLLING INTEREST	—			—			(739		)	—		(739		)
NET (LOSS) INCOME ATTRIBUTABLE TO AMERICAN MEDIA, INC.	$	(61,892	)	$	(34,028	)	$	2,066		$	31,962	$	(61,892	)
	Parent			Guarantors			Non Guarantors			Eliminations		Condensed Consolidated
NET (LOSS) INCOME	$	(61,892	)	$	(34,028	)	$	2,805		$	31,962	$	(61,153	)
Foreign currency translation adjustment	—			—			(17		)	—		(17		)
Comprehensive (loss) income	(61,892		)	(34,028		)	2,788			31,962		(61,170		)
Less: comprehensive income attributable to the noncontrolling interest	—			—			(739		)	—		(739		)
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO AMERICAN MEDIA, INC.	$	(61,892	)	$	(34,028	)	$	2,049		$	31,962	$	(61,909	)

26

SUPPLEMENTAL UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED DECEMBER 31, 2013

(in thousands)

	Parent			Guarantors			Non Guarantors			Eliminations			Condensed Consolidated
Cash Flows from Operating Activities:
Net cash (used in) provided by operating activities	$	(52,467	)	$	51,227		$	2,142		$	(476	)	$	426
Cash Flows from Investing Activities:
Purchases of property and equipment	—			(6,521		)	—			—			(6,521		)
Purchase of intangible assets	—			(4,654		)	—			—			(4,654		)
Proceeds from sale of assets	—			120			—			—			120
Investment in affiliates	—			(2,536		)	—			—			(2,536		)
Other	—			—			(300		)	—			(300		)
Net cash used in investing activities	—			(13,591		)	(300		)	—			(13,891		)
Cash Flows from Financing Activities:
Proceeds from revolving credit facility	79,600			—			—			—			79,600
Repayment to revolving credit facility	(60,600		)	—			—			—			(60,600		)
Payments to noncontrolling interest holders of Olympia	—			—			(1,004		)	—			(1,004		)
Payments for redemption of Odyssey preferred stock	(3,002		)	—			—			—			(3,002		)
Due to (from) affiliates	36,469			(36,469		)	—			—			—
Dividends paid to parent	—			—			(476		)	476			—
Net cash provided by (used in) financing activities	52,467			(36,469		)	(1,480		)	476			14,994
Effect of exchange rate changes on cash	—			302			—			—			302
Net increase in Cash and Cash Equivalents	—			1,469			362			—			1,831
Cash and Cash Equivalents, Beginning of Period	—			683			1,692			—			2,375
Cash and Cash Equivalents, End of Period	$	—		$	2,152		$	2,054		$	—		$	4,206

27

SUPPLEMENTAL UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED DECEMBER 31, 2012

(in thousands)

	Parent			Guarantors			Non Guarantors			Eliminations			Condensed Consolidated
Cash Flows from Operating Activities:
Net cash (used in) provided by operating activities	$	(50,868	)	$	59,641		$	1,124		$	(310	)	$	9,587
Cash Flows from Investing Activities:
Purchases of property and equipment	—			(6,985		)	—			—			(6,985		)
Purchase of intangible assets	—			(1,785		)	—			—			(1,785		)
Proceeds from sale of assets	—			80			—			—			80
Investment in Radar	—			(350		)	—			—			(350		)
Other	—			—			(300		)	—			(300		)
Net cash used in investing activities	—			(9,040		)	(300		)	—			(9,340		)
Cash Flows from Financing Activities:
Proceeds from revolving credit facility	60,500			—			—			—			60,500
Repayments to revolving credit facility	(47,500		)	—			—			—			(47,500		)
Payments to noncontrolling interest holders of Odyssey	(8,279		)	—			—			—			(8,279		)
Payments to noncontrolling interest holders of Olympia	—			—			(679		)	—			(679		)
Due to (from) affiliates	46,147			(46,147		)	—			—			—
Dividends paid to parent	—			—			(310		)	310			—
Net cash provided by (used in) financing activities	50,868			(46,147		)	(989		)	310			4,042
Effect of exchange rate changes on cash	—			14			—			—			14
Net increase (decrease) in Cash and Cash Equivalents	—			4,468			(165		)	—			4,303
Cash and Cash Equivalents, Beginning of Period	—			3,185			2,041			—			5,226
Cash and Cash Equivalents, End of Period	$	—		$	7,653		$	1,876		$	—		$	9,529

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

ORGANIZATION OF INFORMATION

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) was prepared to provide the reader with a view and perspective of our business through the eyes of management and should be read in conjunction with our 2013 Form 10-K and the unaudited condensed consolidated financial statements and the accompanying notes included elsewhere in this Quarterly Report. In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, assumptions and uncertainties. Our actual results may differ materially from those discussed in these forward-looking statements as a result of various factors, including, but not limited to, those discussed in "Cautionary Statements Regarding Forward-Looking Information" and "Risk Factors" included in this Quarterly Report and the 2013 Form 10-K. Our MD&A is presented in the following sections:

• Executive Summary

• Current Developments and Management Action Plans

• Results of Operations

• Operating Segments

• Liquidity and Capital Resources

• Contractual Obligations

• Off-Balance Sheet Financing

• Application of Critical Accounting Estimates

• Recently Adopted and Recently Issued Accounting Pronouncements

EXECUTIVE SUMMARY

We are the largest publisher of celebrity and health magazines in the United States and operate a diversified portfolio of 14 publications. Our celebrity titles together are number one in market share in newsstand circulation in the celebrity category and, on-line, are the fastest growing brands in the category. Our health and active lifestyle titles together have the highest market share of national magazine advertising pages in their competitive set in the United States. Total circulation of our print publications with a frequency of six or more times per year were approximately 5.9 million copies per issue during the nine months endedDecember 31, 2013.

Our well-known publications span three primary operating segments: Celebrity, Women's Active Lifestyle and Men's Active Lifestyle. Within our Celebrity segment, our portfolio of brands includes: National Enquirer, Star, OK!, Globe, National Examiner, Soap Opera Digest and Country Weekly. Within our Women's Active Lifestyle segment, our portfolio of brands includes: Shape, Fit Pregnancy and Natural Health. Within our Men's Active Lifestyle segment, our portfolio of brands include: Men's Fitness, Muscle & Fitness, Muscle & Fitness Hers and Flex.

We believe our leadership position in these segments provides us with strong competitive advantages in the publishing market. Our iconic brands have enabled us to build a loyal readership and establish relationships with major advertisers and distributors. We have leveraged the strength of our portfolio of brands through joint ventures and licensing opportunities and strategic partnerships with several national retailers. We believe the combination of our well-known brands, established relationship with advertisers and distributors, and ability to leverage our brands with major retailers and to monetize content across multiple platforms creates a competitive position that is difficult to replicate.

Our brands go beyond the printed page. We engage an audience of men and women every month through not only books and magazines, but also social media, television, and on all digital platforms, from phones and tablets to laptops and desktops. We are embarking on a transformation from a leading media company to a lifestyle brand that informs and entertains while also selling apparel, nutritional products, and recreational activities.

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Our largest revenue stream comes from single copy newsstand sales. Our print circulation revenue represented 58% of our total operating revenues for the nine months endedDecember 31, 2013, of which 78% was generated by single copy sales and the remaining 22% was generated by subscriptions. Single copy newsstand units are sold through national distributors, wholesalers and retailers, and subscription copies are mailed to subscribers and sold as digital copies. As of December 31, 2013, our digital subscriptions represent 28% of our 4.2 million paid subscriptions, the highest percentage among our competitive set. Our digital subscription revenue represented 1% of our total operating revenues during the nine months endedDecember 31, 2013.

Our second largest revenue stream comes from multi-platform advertising. Our print advertising revenue, generated primarily by national advertisers, represented 30% of our total operating revenues and our digital advertising revenue represented 3% of our total operating revenues during the nine months endedDecember 31, 2013. Advertising revenue is typically highest in the fourth quarter of our fiscal year due to seasonality.

Our primary operating expenses consist of production, distribution, circulation, editorial and selling, general and administrative. We incur most of our operating expenses during the production of our printed magazines, which includes costs for printing and paper. Distribution and circulation expenses primarily consist of postage and other costs associated with fulfilling subscriptions and newsstand transportation. Editorial expenses represent costs associated with manuscripts, photographs and related salaries.

Paper is the principal raw material utilized in our publications. We purchase paper directly from suppliers and ship it to third-party printing companies. The price of paper is driven by market conditions and therefore difficult to predict. Changes in paper prices could significantly affect our business. We believe adequate supplies of paper are available to fulfill our planned, as well as future, publishing requirements. We have long-term printing contracts with three major third-party printing companies. Our production expenses, including paper and printing costs, accounted for approximately 30% and 26% of our operating expenses for the nine months endedDecember 31, 2013 and 2012, respectively.

Sales and marketing of the magazines to retailers is handled by third-party wholesalers through multi-year arrangements. In the nine months endedDecember 31, 2013 and 2012, approximately 45% and 44%, respectively, of our circulation revenue was derived from two of these third-party wholesalers. Billing, collection and distribution services for retail sales of the magazines are handled by a national distributor.

Our financial performance depends, in large part, on varying conditions in the markets we serve. Demand in these markets tends to fluctuate in response to overall economic conditions and current events. Economic downturns in the markets we serve generally result in reductions in revenue as a result of lower consumer spending, which can lead to a reduction in advertising revenue.

Our fiscal year ends on March 31, 2014 and is referred to herein as fiscal 2014.

CURRENT DEVELOPMENTS AND MANAGEMENT ACTION PLANS

Current Developments

Digital Initiatives

We continue to expand the availability of our print content on digital platforms. Our digital revenue for the nine months endedDecember 31, 2013 increased 74%, to $15.6 million, over the comparable prior year period driven by our digital team of senior executives hired from companies such as Fox Mobile, Microsoft and Google and the continued implementation of our digital investment strategy. We now have a fully integrated print and digital sales team of more than 90 employees, with a dozen digital brand champions across all the websites. We believe we have the optimal structure to respond to our advertisers' requests for integrated marketing solutions for combined print and digital, as well as digital-only programs. In April 2013, we became the first publisher to partner with Walmart on digital edition subscription sales. Shape and OK! customers are able to download a free digital copy of the current issue while at Walmart, which will extend to the customer a special offer for a one-year digital subscription.

We continue to expand our digital distribution platform across our other well-known brands by launching digital magazines, or "digi-mags," and building out our other websites. We have launched digital editions for all our brands on the Apple and Google newsstands, Zinio, Amazon Kindle and Barnes & Noble Nook. We are also launching single-subject, single-sponsored "digi-mags" for both Apple and Android operating systems, and we are currently syndicating Shape content on Yahoo! Shine, AOL, Huffington Post, StyleList and Kitchen Daily. As a result, our fiscal year 2014 video strategy will now encompass programming, marketing, distribution, sales and hosting.

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Print Initiatives

The relaunch of Men's Fitness and Shape in both print and digital formats continues to be successful as advertising revenues continue to increase. During the nine months endedDecember 31, 2013, advertising revenue increased 40% over the comparable prior year period for Men's Fitness, which was due, in part, to publishing one additional issue during fiscal 2014. Shape's advertising revenue increased 20% during the nine months endedDecember 31, 2013, which published one less issue, over the comparable prior year period.

In April 2013, we redesigned Men's Fitness, taking it from a gym-focused, work-out only magazine to one targeting young men with active lifestyles and have positioned fitness as the new measure of success; how being fit allows you to succeed in all aspects of your life. The new vision of Men's Fitness has continued to attract new luxury goods advertisers and through December 31, 2013 we have more than 30 new advertisers who had not previously invested in Men's Fitness.

In May 2013, Shape magazine regained the number one share-of-market position in newsstand sales growth and print advertising pages and is the category leader in print ad pages within its competitive set against Self, Fitness and Women's Health. The relaunch of Shape magazine continues to attract new advertising clients, and through December 31, 2013 has more than 33 new clients. Shape.com, was number one in total unique visitors and total number of page views during the nine months ended December 31, 2013 against its competitive set.

Arnold Schwarzenegger has returned to AMI as the Group Executive Editor for Muscle & Fitness and Flex upon the completion of his term as governor of California. Since Mr. Schwarzenegger's return, we have experienced an increase in advertising revenues at Muscle & Fitness. During the nine months endedDecember 31, 2013, advertising revenue increased 8% for Muscle & Fitness over the comparable prior year period. One of our nutritional supplement advertisers has launched an Arnold Schwarzenegger branded line of supplements supporting the four pillars of fitness: performance, power and strength, nutrient support and recovery. These supplements are available at most major health and nutrition specialty stores as well as through on-line retailers. To support this launch, we have secured an exclusive commitment for both print and digital advertising starting with the October 2013 edition of Muscle & Fitness.

Branded Products

In the beginning of fiscal 2014, we became a preferred digital content partner for Microsoft and entered into agreements to produce Shape, Men's Fitness and Muscle & Fitness branded exercise and workout videos. All of these videos will be incorporated into Microsoft's Bing Health and Fitness application.

We are continuing to promote the Shape branded products, and in August 2013 launched Shape branded nutritional products in CVS, Rite Aid and Drugstore.com. Based on the success of the launch, we will expand the Shape nutritional products to be on sale in Walmart, Target, Walgreens and QVC in 2014. In July 2013, we signed a licensing agreement for a line of Shape branded women’s active wear which will be designed by a major apparel designer and is expected to be in retail stores by Spring 2014. Together with our Shape apparel licensee, we plan to open a flagship retail store in New York City in the summer of 2014.

We entered into a long-term agreement with David Zinczenko and his company, Galvanized Media, to work exclusively on Men's Fitness and to launch a branded book division for AMI utilizing the Men's Fitness, Shape and Natural Health brands. Mr. Zinczenko's first initiative was to redesign and relaunch Men's Fitness and to publish the Shape branded book Beach Body Diet, which went on sale in September 2013. The Men's Fitness branded book The 101 Greatest Workouts of all Time, was published in December 2013. Mr. Zinczenko spent more than 20 years at Rodale, where he served as editor-in-chief of Men's Health and general manager of Women's Health and Rodale Books.

In September 2013, together with our strategic partners, REELZ Channel, owned by Hubbard Broadcasting, and UnConventional Studios, LLC, we launched OK!TV, a television show based on OK! magazine, which was syndicated in approximately 80% of the United States. In addition to the syndication market, the REELZ channel airs the show the day after it runs in syndication, to approximately 70 million households.

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Other Developments

In September 2013, we divested substantially all of the assets primarily used in the distribution and merchandising businesses operated by Distribution Services, Inc. (“DSI”), a wholly-owned subsidiary of American Media, Inc. DSI was an in-store product merchandising and marketing company doing business in the U.S. and Canada. DSI serviced the Company by placing and monitoring its print publications, as well as third-party publications, to ensure prominent display in major national and regional retail, drug and supermarket chains. DSI also provided marketing, merchandising and information gathering services to third parties, including non-magazine clients. The divested assets, which consisted primarily of working capital (exclusive of $3.7 million in accounts receivable which are being collected by AMI), the sales and support workforce and certain other related assets, were contributed together with $2.3 million cash in exchange for a membership interest in a limited liability company.

In October 2013, we exchanged approximately $94.3 million aggregate principal amount of our 13.5% second lien notes due June 2018 (the "Second Lien Notes") for an equal aggregate principal amount of new senior secured notes, which bear interest at a rate of 10.0% per annum, payable in kind, and mature in June 2018 (the “Second Lien PIK Notes”), pursuant to an exchange agreement (the “Exchange Agreement”). The Exchange Agreement provides for, among other things, interest payments, in kind, at a rate of 10% per annum for approximately the next three years. We will utilize the cash interest savings to repurchase certain of our 11.5% first lien notes due December 2017. After giving effect to this exchange, approximately $10.6 million principal amount of Second Lien Notes remain outstanding. See Liquidity and Capital Resources for further discussion regarding the Second Lien Notes and the Second Lien PIK Notes.

Management Action Plans for Revenue Enhancements and Cost Savings

During fiscal 2013, we developed and implemented management action plans that resulted in revenue enhancements of $8.4 million and operating income of $3.1 million from the publishing of 27 additional pop-iconic special issues, primarily in the Celebrity Brands segment. In addition to the revenue enhancements, we developed and implemented management action plans that resulted in $13.7 million of cost savings in fiscal 2013 (the "2013 Management Action Plans"). The expense improvements were primarily in the manufacturing area related to the ongoing benefits from our RR Donnelly printing contract, print order efficiency plans, paper rate savings based on our in-house purchasing strategy, efficient book sizes and reduced employee-related expenses. We realized the benefits from the 2013 Management Action Plan in fiscal 2013 and are continuing to receive cost savings in fiscal 2014.

Reference to Management Action Plans refers to the 2013 Management Action Plans.

RESULTS OF OPERATIONS

The following table summarizes our operating results on a consolidated basis:

	Three Months Ended								Nine Months Ended
	December 31,						%		December 31,						%
(in thousands)	2013			2012			Change		2013			2012			Change
Operating revenues:
Circulation	$	44,603		$	56,556		(21.1	)%	$	147,482		$	163,943		(10.0	)%
Advertising	22,769			$	22,788		(0.1	)%	84,226			$	76,425		10.2	%
Other	7,276			$	5,975		21.8	%	23,936			$	22,061		8.5	%
Total operating revenues	$	74,648		$	85,319		(12.5	)%	$	255,644		$	262,429		(2.6	)%
Operating expenses	75,192			127,557			(41.1	)%	228,819			278,824			(17.9	)%
Operating (loss) income	(544		)	(42,238		)	(98.7	)%	26,825			(16,395		)	*
Other expense, net	(14,450		)	(15,839		)	(8.8	)%	(45,228		)	(46,328		)	(2.4	)%
Loss before income taxes	(14,994		)	(58,077		)	(74.2	)%	(18,403		)	(62,723		)	(70.7	)%
Income tax provision (benefit)	35,410			(140		)	*		32,954			(1,570		)	*
Net loss	(50,404		)	(57,937		)	(13.0	)%	(51,357		)	(61,153		)	(16.0	)%
Less: net (income) loss attributable to the noncontrolling interest	23			42			(45.2	)%	(1,053		)	(739		)	42.5	%
Net loss attributable to American Media, Inc. and subsidiaries	$	(50,381	)	$	(57,895	)	(13.0	)%	$	(52,410	)	$	(61,892	)	(15.3	)%

* Represents an increase or decrease in excess of 100%.

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Operating Revenues

Total operating revenues decreased during the three and nine months endedDecember 31, 2013 primarily due to a decline in circulation revenue, partially offset by an increase in advertising and other revenue.

Circulation Revenue

Our circulation revenue represented 60% and 58% of our total operating revenues during the three and nine months endedDecember 31, 2013, respectively, and 66% and 62% of our total operating revenues during the comparable prior year periods.

Single copy sales accounted for 77% and 78% of our circulation revenue during the three and nine months endedDecember 31, 2013 and 2012, respectively, with the remaining 23% and 22%, respectively, from subscription sales. Digital subscription revenue represented 2% of our circulation revenue and 1% of our total operating revenues for the three and nine months endedDecember 31, 2013 and 1% of both our circulation revenue and our total operating revenues for the comparable prior year periods.

Circulation revenue declined $12.0 million and $16.5 million, respectively during the three and nine months endedDecember 31, 2013 compared with the same prior year periods due to a reduction in the frequency of certain publications during the three months ended December 31, 2013 coupled with an 11% decline in the celebrity magazine market.

Advertising Revenue

Print advertising revenue represented 26% and 30% of our total operating revenues for the three and nine months endedDecember 31, 2013, respectively and 24% and 27% of our total operating revenue during the comparable prior year periods, respectively.

Digital advertising revenue represented 13% and 10% of our advertising revenue during the three and nine months endedDecember 31, 2013, respectively, and 9% of our advertising revenue during the comparable prior year periods. Digital advertising revenues represented 4% and 3% of our total operating revenues during three and nine months endedDecember 31, 2013, respectively, and 2% and 3%, respectively, during the comparable prior year periods.

Advertising revenue decreased slightly during the three months ended December 31, 2013 due to the reduction in the frequency of certain publications and one sports nutritional advertiser who decreased their advertising spending due to a delay of a product launch. Advertising revenue increased $7.8 million during the nine months endedDecember 31, 2013 as compared to the prior year periods due to higher ad spending by beauty, packaged goods, luxury goods and pharmaceutical advertisers, primarily in Men's Fitness and Shape as a result of the market acceptance for the repositioning of these magazines.

Other Revenue

Other revenue increased during the three and nine months endedDecember 31, 2013 as compared with the prior year period from the video projects with Microsoft, the Mr. Olympia event and management fees from certain joint ventures. These increases were partially offset by a decline in revenue from the DSI divestiture in September 2013.

Operating Expenses

Operating expenses for the three and nine months endedDecember 31, 2013 and 2012 were as follows:

	Three Months Ended						Nine Months Ended
	December 31,				%		December 31,				%
(in thousands)	2013		2012		Change		2013		2012		Change
Operating Expenses:
Editorial	$	9,979	$	10,052	(0.7	)%	$	29,063	$	31,158	(6.7	)%
Production	20,889		23,897		(12.6	)%	69,727		73,479		(5.1	)%
Distribution, circulation and other cost of sales	12,330		16,668		(26.0	)%	45,047		50,896		(11.5	)%
Total production related costs	43,198		50,617		(14.7	)%	143,837		155,533		(7.5	)%
Selling, general and administrative	19,020		19,986		(4.8	)%	65,291		61,549		6.1	%
Depreciation and amortization	3,736		2,431		53.7	%	10,453		7,219		44.8	%
Impairment of goodwill and intangible assets	9,238		54,523		(83.1	)%	9,238		54,523		(83.1	)%
Total operating expenses	$	75,192	127,557		(41.1	)%	$	228,819	278,824		(17.9	)%

33

Production Related Costs

Production related costs decreased during the three and nine months endedDecember 31, 2013 compared to the prior period primarily due to planned expense reductions pursuant to the 2013 Management Action Plans in the following areas: $0.1 million in editorial expenses, $3.0 million in production expenses and $4.3 million in distribution and circulation during the three months ended December 31, 2013 and $2.1 million in editorial expenses, $3.8 million in production and $5.8 million in distribution and circulation during the nine months endedDecember 31, 2013.

Selling, general and administrative

Selling, general and administrative costs decreased $1.0 million but increased $3.7 million during the three and nine months endedDecember 31, 2013, respectively, as compared to the prior period. Expenses decreased during the three months ended December 31, 2013 primarily due to the divestiture of DSI in September 2013 and increased during the nine months endedDecember 31, 2013 due to the continued investment in digital, primarily for employee related expenses.

Depreciation and amortization

Depreciation and amortization expenses, which are non-cash, increased $1.3 million and $3.2 million during the three and nine months endedDecember 31, 2013, respectively, as compared to the prior period due to the increases in property and equipment and intangible assets.

Impairment of goodwill and intangible assets

During an evaluation of goodwill and other identified intangible assets at December 31, 2013 and 2012, we determined that indicators were present in certain reporting units that would suggest the fair value of the reporting unit may have declined below the carrying value. This decline was primarily the result of the near-term advertising revenue shortfall coupled with the continued softness in the print publication industry overall, which resulted in lowered future cash flow projections.

As a result, an interim impairment test of goodwill and other indefinite-lived intangible assets was performed as of December 31, 2013 and 2012 for certain reporting units. The evaluation resulted in the carrying value of goodwill and tradenames for certain reporting units to exceed the fair value. As a result, the Company recorded a pre-tax non-cash impairment charge totaling $9.2 million for tradenames and $54.5 million for goodwill and tradenames during the three months ended December 31, 2013 and 2012, respectively.

Non-Operating Items

Interest Expense

Interest expense decreased $1.1 million and $1.2 million during the three and nine months endedDecember 31, 2013, respectively, primarily due to the higher interest rates during the comparable prior year periods due to the registration default on the 11.5% first lien notes during the period from February to November 2012.

Amortization of Deferred Debt Costs

Amortization of deferred debt costs has remained consistent during the three and nine months endedDecember 31, 2013 and 2012.

Income Taxes

We recorded an income tax provision of $35.4 million and $33.0 million during the three and nine months endedDecember 31, 2013, respectively, due to the $30.5 million valuation allowance which was recorded against the Company's net deferred tax assets.

During the three and nine months ended December 31, 2012 we recorded an income tax benefit of $0.1 million and $1.6 million due to a lower effective tax rate which was a direct result of the non-cash charge for impairment of goodwill and tradenames.

34

Net Loss Attributable to American Media, Inc.

The $50.4 million of net loss attributable to American Media, Inc. for the three months ended December 31, 2013 represents a $7.5 million decrease from the comparable prior year period. This decrease is primarily attributable to the $41.7 million decrease in operating loss and the $1.1 million decrease in interest expense, partially offset by the $35.6 million increase in income tax provision.

The $52.4 million of net loss attributable to American Media, Inc. for the nine months endedDecember 31, 2013 represents a $9.5 million decrease from the comparable prior year period. This decrease is primarily due to the $43.2 million decrease in operating loss and the $1.2 million decrease in interest expense, partially offset by the $34.5 million increase in income tax provision and the $0.3 million change in income attributable to the noncontrolling interest.

OPERATING SEGMENTS

Our operating segments consist of: Celebrity Brands, Women’s Active Lifestyle, Men’s Active Lifestyle and Corporate and Other. After the divestiture of the DSI business, which was included in and comprised the majority of our publishing services segment, the publishing services segment has been combined with the Corporate and Other segment effective with the quarter ended September 30, 2013. This reporting structure is organized according to the markets each segment serves and allows management to focus its efforts on providing the best content to a wide range of consumers. Our operating segments consist of the following brands in print and digital:

Celebrity Brands Segment

• National Enquirer, a weekly, hard news, investigating tabloid covering all celebrities, crime, human interest, health, fashion and beauty;

• Star, a weekly, celebrity-focused, news-based, glossy magazine covering movie, television, reality series and music celebrities. Star's editorial content includes fashion, beauty, accessories and health sections;

• OK!, a younger weekly, celebrity-friendly, news-based, glossy magazine covering the stars of movies, television, reality and music. OK!’s editorial content has fashion, beauty and accessories sections; OKMagazine.com differentiates itself through its use of online communities and social media to encourage a dialog between users, including their editorial point of view;

• Globe, a weekly tabloid that focuses on older movie and television celebrities, the royal family, political scandals and investigative crime stories that are less mainstream and more salacious than the National Enquirer;

• National Examiner, a weekly tabloid (currently only available in print format) consisting of celebrity and human interest stories, differentiating it from the other titles through its upbeat positioning as the source for gossip, contests, women’s service and good news for an older tabloid audience;

• Soap Opera Digest, a weekly magazine that provides behind-the-scenes scoop and breaking news to passionate soap opera fans every week; SoapOperaDigest.com is a companion site that mirrors the magazine's editorial point of view; and

• Country Weekly, a weekly magazine that for almost two decades has been the authority on the music and lifestyle of country's biggest stars; CountryWeekly.com is a companion site that focuses on music and news.

Women’s Active Lifestyle Segment

• Shape, which provides information on the cutting edge of fitness, nutrition, health, lifestyle and other inspirational topics to help women lead healthier lives and offers extensive beauty, celebrity and fashion coverage; Shape.com, which mirrors the magazine’s editorial point of view, features daily coverage for today’s women in the blog “Shape Your Life” and videos such as “The Victoria’s Secret Core Workout,” Shape cover shoots with celebrities, and exercise tips from celebrity personal trainers;

• Fit Pregnancy, which delivers information on health, maternity fashion, food, parenting and fitness to women during pregnancy and the postpartum period; FitPregnancy.com features the content of the magazine and also contains news and updates to guide expectant mothers through each stage of pregnancy; and

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• Natural Health, which offers readers practical information to benefit from the latest advancements in the fields of health, food, beauty, pets, exercise and advice to improve fitness and the environment; NaturalHealthMag.com is a companion site to the magazine that features health blogs, recipe finders, and various videos that focus on the latest news and updates in the wellness category.

Men’s Active Lifestyle Segment

• Men’s Fitness, an active lifestyle magazine for men 18-34 years old, which positions fitness as the new measure of success, as reflected in its editorial coverage of men’s fashion, grooming, automotive, finance, travel and other lifestyle categories; Men’s Fitness is also home to the latest in exercise techniques, sports training, nutrition and health; Men’sFitness.com provides everything for every man in terms of a healthy and fit lifestyle;

• Muscle & Fitness, a fitness physique training magazine appealing to exercise enthusiasts and athletes of all ages, especially those focused on resistance training, body fat control, sports nutrition and supplements; MuscleandFitness.com provides workout videos and nutritional advice, and hosts an on-line store for users to buy the products they see on the website;

• Flex, a magazine devoted to professional bodybuilding featuring nutrition, supplement, and performance science content for bodybuilding enthusiasts and coverage of all professional and amateur bodybuilding contests; Flexonline.com features online coverage of all the major bodybuilding competitions, as well as training videos with today’s top bodybuilders;

• Muscle & Fitness Hers, a fitness physique training magazine designed for the active woman who wants more out of fitness, especially those who work extra hard to achieve a "super-fit" lifestyle and covers training, nutrition, health, beauty and fashion for today's women;

• Muscle & Fitness e-commerce, a store selling pre- and post-workout sports nutritional supplements supported by Muscle & Fitness magazine;

• Mr. Olympia, a four-day event held annually in September in Las Vegas attracting over 50,000 fans that appeals to bodybuilding and fitness experts from around the world; includes a two-day health and fitness expo with 340 exhibitors including physical exercise challenges and merchandising opportunities that culminates with the most prestigious and largest event in bodybuilding and fitness, the Mr. Olympia contest; and

• Weider UK, a wholly-owned subsidiary, publishes Muscle & Fitness and Flex in the United Kingdom, France, Italy, Germany, Holland and Australia, which are excluded from the table below. Each market edition is in a local language with local content and has its own website.

Corporate and Other Segment

This segment includes the international licensing of certain health and fitness publications, photo syndication for all our media content platforms, strategic management services for publishers including back office functions, as well as corporate overhead. Also included in this segment are the video content services we provide to Microsoft and the services provided by our former distribution services group to publishing and non-publishing clients, such as placement and monitoring of supermarket racks, marketing and merchandising. Corporate overhead expenses are not allocated to other segments. This includes corporate executives, production, circulation, information technology, accounting, legal, human resources, business development and administrative department costs.

Financial Information Regarding Our Operating Segments

The tables below disclose revenue and operating income (loss) for our reportable segments. We use operating income (loss) as a primary basis for the chief operating decision maker to evaluate the performance of each of our operating segments. We prepared the financial results of our operating segments on a basis that is consistent with the manner in which we internally disaggregate financial information to assist in making internal operating decisions. Our calculations of operating income (loss) herein may be different from the calculations used by other companies, therefore comparability may be limited. The accounting policies of our operating segments are the same as those applied in our consolidated financial statements included in Note 2, "Summary of Significant Accounting Policies" in the 2013 Form 10-K. The information in the following tables has been derived from the accompanying financial statements.

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The following table summarizes our total operating revenues by segment:

	Three Months Ended						Nine Months Ended
	December 31,				%		December 31,				%
(in thousands)	2013		2012		Change		2013		2012		Change
Segment operating revenues:
Celebrity Brands	$	45,990	$	57,653	(20	)%	$	152,494	$	167,283	(9	)%
Women's Active Lifestyle	9,936		8,707		14	%	39,459		35,594		11	%
Men's Active Lifestyle	13,267		14,227		(7	)%	48,892		45,294		8	%
Corporate and Other	5,455		4,732		15	%	14,799		14,258		4	%
Total operating revenues	$	74,648	$	85,319	(13	)%	$	255,644	$	262,429	(3	)%

Total operating revenues decreased $10.7 million, or 13%, during the three months ended December 31, 2013 primarily due to the 11% decline in the celebrity newsstand market and publishing one less issue of our weekly titles in the current year period. This decline impacted the Celebrity Brands segment causing an overall decline in newsstand sales. The Men's Active Lifestyle segment experienced a decline in circulation and advertising revenue primarily due to one less issue of Men's Fitness published during the three months ended December 31, 2013 and the decrease in advertising spending by a specific sports nutrition company due to a delay of launching a new product. These declines were partially offset by the increased advertising in the Women’s Active Lifestyle and increased revenues in the Corporate and Other segment.

Total operating revenues decreased $6.8 million, or 3%, during the nine months ended December 31, 2013 primarily due to the 11% decline in the celebrity newsstand market, which impacted the Celebrity Brands segment. This was partially offset by higher advertising in the Women’s Active Lifestyle and Men's Active Lifestyle segments.

The following table summarizes the percentage of segment operating revenues:

	Three Months Ended				Nine Months Ended
	December 31,				December 31,
	2013		2012		2013		2012
Segment operating revenues:
Celebrity Brands	62	%	68	%	60	%	64	%
Women's Active Lifestyle	13	%	10	%	15	%	14	%
Men's Active Lifestyle	18	%	17	%	19	%	17	%
Corporate and Other	7	%	5	%	6	%	5	%
Total	100	%	100	%	100	%	100	%

The following table summarizes our segment operating income (loss) before impairment for goodwill and intangible assets:

	Three Months Ended								Nine Months Ended
	December 31,						%		December 31,						%
(in thousands)	2013			2012			Change		2013			2012			Change
Operating income (loss) before impairment:
Celebrity Brands	$	13,853		$	21,124		(34	)%	$	51,966		$	58,105		(11	)%
Women's Active Lifestyle	(1,978		)	(2,134		)	(7	)%	1,134			956			19	%
Men's Active Lifestyle	2,892			3,895			(26	)%	13,943			12,994			7	%
Corporate and Other	(6,073		)	(10,600		)	(43	)%	(30,980		)	(33,927		)	(9	)%
Total operating income before impairment	8,694			12,285			(29	)%	36,063			38,128			(5	)%
Impairment of goodwill and intangible assets	9,238			54,523					9,238			54,523
Total operating income (loss)	$	(544	)	$	(42,238	)			$	26,825		$	(16,395	)

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Total operating income before impairment decreased $3.6 million, or 29%, during the three months ended December 31, 2013 primarily due to a decrease in the number of issues published in the Celebrity Brands and the Men's Actively Lifestyle segments. This was coupled by a decline in advertising revenue in the Men's Active Lifestyle segment which was partially offset by a decrease in operating expenses due to the divestiture of DSI in September 2013.

Total operating income before impairment decreased $2.1 million, or 5%, during the nine months ended December 31, 2013 primarily due to the lower operating revenues previously mentioned. This was partially offset by lower operating expenses related to the divestiture of DSI and the 2013 Management Actions Plans.

The pre-tax non-cash impairment charge for goodwill and intangible assets was $9.2 million and $54.5 million during the three months ended December 31, 2013 and 2012, respectively. The current period charge of $9.2 million impacted the Men's Active Lifestyle segment tradenames. The comparable prior year period charge impacted the Celebrity Brands segment goodwill by $42.8 million, the Women's Active Lifestyle segment tradenames by $3.9 million and the Men's Active Lifestyle segment goodwill and tradenames by $7.8 million.

Celebrity Brands Segment

The Celebrity Brands segment comprised 62% and 68% of our consolidated operating revenue for the three months ended December 31, 2013 and 2012, respectively, and represented 60% and 64% for the nine months ended December 31, 2013 and 2012, respectively.

Operating Revenues

Total operating revenues in the Celebrity Brands segment were $46.0 million for the three months ended December 31, 2013, representing a decrease of $11.7 million, or 20%, over the comparable prior year period. Circulation revenue decreased $11.2 million which was caused by an 11% decline in the celebrity newsstand market ($5.5 million) and the publishing of one less issue of our weekly titles in the current year period ($4.2 million), coupled with the discontinuance and reduction of special publications ($1.5 million).

Total operating revenues in the Celebrity Brands segment were $152.5 million for the nine months endedDecember 31, 2013 representing a decrease of $14.8 million, or 9%, over the comparable prior year period. Circulation revenue decreased $15.6 million which was caused by an 11% decline in the celebrity newsstand market ($13.3 million), coupled with the discontinuance and reduction of special publications ($2.3 million). This decline was partially offset by the $1.0 million increase in advertising revenue primarily due to the performance of Star and OK!'s superior marketing programs, content integration and greater efficiencies in reaching our target audience.

Operating Income

The Celebrity Brands segment operating income before impairment decreased $7.3 million, or 34%, to $13.9 million during the three months ended December 31, 2013 and decreased $6.1 million, or 11%, to $52.0 million during the nine months endedDecember 31, 2013 versus the comparable prior year period. This decline was due to the reasons mentioned above. This was partially offset by our Management Action Plans implemented in fiscal 2013, which reduced expenses by $4.4 million and $8.7 million during the three and nine months endedDecember 31, 2013, respectively.

Women’s Active Lifestyle Segment

The Women’s Active Lifestyle segment represented 13% and 10% of our consolidated operating revenue for the three months ended December 31, 2013 and 2012, respectively and represented 15% and 14% for the nine months endedDecember 31, 2013 and 2012, respectively.

Operating Revenues

Total operating revenues in the Women’s Active Lifestyle segment were $9.9 million during the three months ended December 31, 2013, an increase of $1.2 million, or 14%, from prior year. This increase was primarily due to the repositioning of Shape magazine which successfully generated revenue from beauty, fashion and retail advertisers.

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Total operating revenues in the Women’s Active Lifestyle segment during the nine months endedDecember 31, 2013 were $39.5 million, an increase of $3.9 million, or 11%, from prior year primarily due to the repositioning of Shape magazine. The $4.3 million increase in advertising revenue over prior year was accomplished with only seven issues of Shape magazine compared to eight issues published in the prior year period. This increase in advertising revenue was partially offset by a $0.4 million decline in circulation revenue due to publishing one less issue of Shape magazine.

Operating Income (Loss)

Operating loss before impairment in the Women’s Active Lifestyle segment decreased during the three months endedDecember 31, 2013 from prior year by $0.2 million to $(2.0) million. This improvement was primarily attributable to the increase in operating revenues discussed above.

Operating income before impairment in the Women’s Active Lifestyle segment increased during the nine months endedDecember 31, 2013 from prior year by 19% to $1.1 million. The operating expenses increased $3.7 million, primarily due to an investment in Shape's book size, which resulted in higher production costs. This was more than offset by the increase in operating revenues discussed above.

Men’s Active Lifestyle Segment

The Men’s Active Lifestyle segment represented 18% and 17% of our consolidated operating revenue for the three months ended December 31, 2013 and 2012, respectively, and represented 19% and 17% for the nine months endedDecember 31, 2013 and 2012, respectively.

Operating Revenues

Total operating revenues in the Men’s Active Lifestyle segment were $13.3 million during the three months ended December 31, 2013, a decrease of $1.0 million, or 7%, from prior year. Circulation and advertising revenues declined $0.4 million and $0.6 million, respectively, due to one less issue of Men's Fitness published during the three months ended December 31, 2013.

Total operating revenues in the Men’s Active Lifestyle segment were $48.9 million during the nine months endedDecember 31, 2013, an increase of $3.6 million, or 8%, from prior year. Advertising revenue increased $2.8 million, which is directly attributable to the relaunch and repositioning of Men's Fitness magazine and the related website. In addition, the revenue from the September 2013 Mr. Olympia event increased $1.2 million, or 32%, from prior year. This was partially offset by a $0.3 million decline in circulation revenue.

Operating Income

Operating income before impairment in the Men’s Active Lifestyle segment decreased during the three months ended December 31, 2013 by $1.0 million, or 26%, to $2.9 million. This decrease was directly attributable to the publishing of one less issue of Men's Fitness in the current year period.

Operating income before impairment in the Men’s Active Lifestyle segment increased during the nine months endedDecember 31, 2013 from prior year by $0.9 million, or 7%, to $13.9 million. This increase was attributable to higher advertising volume, as discussed above, partially offset by the increase in costs associated with the Mr. Olympia event.

Corporate and Other Segment

The Corporate and Other segment was 7% and 5% of our consolidated operating revenue for the three months ended December 31, 2013 and 2012, respectively, and represented 6% and 5% for the nine months endedDecember 31, 2013 and 2012, respectively.

Operating Revenues

Total operating revenues in the Corporate and Other segment were $5.5 million for the three months ended December 31, 2013, representing an increase of $0.7 million, or 15%, from prior year. This increase was due to $3.0 million from the video projects with Microsoft and $1.5 million in management fees from certain joint ventures, partially offset by the $3.8 million decline in revenue due to the DSI divestiture in September 2013.

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Total operating revenues in the Corporate and Other segment were $14.8 million for the nine months endedDecember 31, 2013, representing an increase of $0.5 million, or 4%, from prior year. This increase was due to $4.8 million from the video projects with Microsoft and $1.5 million in management fees from certain joint ventures, partially offset by the $5.9 million decline in revenue due to the DSI divestiture in September 2013.

Operating Loss

Total operating loss decreased by $4.5 million, or 43%, to $6.1 million during the three months ended December 31, 2013. This improvement is primarily due to the $5.1 million decrease in operating expenses related to the DSI divestiture and the implementation of our 2013 Management Action Plans, partially offset by the non-cash increase in depreciation and amortization expenses of $0.9 million.

Total operating loss decreased by $2.9 million, or 9%, to $31.0 million during the nine months endedDecember 31, 2013. This improvement is primarily due to the $4.9 million decrease in operating expenses related to the DSI divestiture and the implementation of our 2013 Management Action Plans, partially offset by the non-cash increase in depreciation and amortization expense of $2.2 million.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2013, we had cash and cash equivalents of $4.2 million and a working capital deficit of $16.2 million.

Cash Flow Summary

The following information has been derived from the accompanying financial statements for the nine months endedDecember 31, 2013 and 2012. Cash and cash equivalents increased by $1.8 million during the nine months endedDecember 31, 2013. The change in cash and cash equivalents is as follows:

	Nine Months Ended
	December 31,						Net
(in thousands)	2013			2012			Change
Net loss	$	(51,357	)	$	(61,153	)	$	9,796
Non-cash items	62,355			68,865			(6,510		)
Net change in operating assets and liabilities	(10,572		)	1,875			(12,447		)
Operating activities	426			9,587			(9,161		)
Investing activities	(13,891		)	(9,340		)	(4,551		)
Financing activities	14,994			4,042			10,952
Effects of exchange rates	302			14			288
Net increase in cash and cash equivalents	$	1,831		$	4,303		$	(2,472	)

Operating Activities

Cash provided by operating activities is primarily driven by our non-cash items, changes in working capital and impact of our results of operations. Non-cash items consist primarily of provision (benefit) for income taxes, depreciation of property and equipment, amortization of other identified intangible assets, amortization of deferred debt costs and deferred rack costs and impairment of goodwill and intangible assets.

Net cash provided by operating activities decreased $9.2 million during the nine months ended December 31, 2013 as compared to the same period in prior year, primarily due to the $12.4 million net change in operating assets and liabilities coupled with the $6.5 million net decrease in non-cash items, partially offset by the $9.8 million increase in our results of operations.

The net change in operating assets and liabilities is primarily due to the $4.8 million net change in trade receivables, the $5.6 million net change in inventories and the $8.4 million net change in prepaid expenses, partially offset by the net change in accounts payable and accrued expenses of $2.8 million, the net change in deferred revenue of $4.9 million and the net change in deferred rack costs of $0.4 million.

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Non-cash items decreased primarily due to the decrease in the impairment charge for goodwill and intangible assets of $45.3 million and the net decrease in amortization of deferred debt and deferred rack costs of $1.6 million, partially offset by the increase in provision for income taxes of $34.6 million, the increase in depreciation and amortization of $3.2 million, the increase in non-cash payment-in-kind interest accretion of $1.9 million and the increase in provision for doubtful accounts of $0.3 million.

Investing activities

Net cash used in investing activities during the nine months endedDecember 31, 2013 was $13.9 million, an increase of $4.6 million, compared to $9.3 million for the nine months endedDecember 31, 2012. The increase is primarily attributable to the $2.5 million investment in affiliates and the $2.9 million increase in purchases of intangible assets. The increase in purchases of intangible assets is due to our continued investment in our digital strategy.

Financing activities

Net cash provided by financing activities for the nine months endedDecember 31, 2013 was $15.0 million, an increase of $11.0 million, compared to $4.0 million of net cash used during the nine months endedDecember 31, 2012. The increase is primarily attributable to the $6.0 million increase in net borrowings from our revolving credit facility and the $5.3 million decrease in payments for the redemption of Odyssey preferred stock.

Credit Facility and Long Term Debt

Revolving Credit Facility

In December 2010, we entered into a revolving credit facility maturing in December 2015 (the “2010 Revolving Credit Facility”). The agreement governing the 2010 Revolving Credit Facility provides for borrowing up to $40.0 million, less outstanding letters of credit.

During the nine months endedDecember 31, 2013, the Company borrowed $79.6 million and repaid $60.6 million under the 2010 Revolving Credit Facility. At December 31, 2013, the Company had available borrowing capacity of $4.6 million after considering the $31.0 million outstanding balance and the $4.4 million outstanding letter of credit. The outstanding balance of the 2010 Revolving Credit Facility on December 31, 2013 of $31.0 million is a non-current liability, as the outstanding balance is not due until December 2015.

Our 2010 Revolving Credit Facility requires mandatory prepayments of the loans outstanding thereunder to the extent that total revolving exposures exceed total revolving commitments. Our 2010 Revolving Credit Facility requires us to pay, from December 22, 2010 until the commitments expire under our 2010 Revolving Credit Facility, a commitment fee ranging from 0.50% to 0.75% of the unused portion of the revolving commitment. We have the option to pay interest on outstanding balances based on (i) a floating base rate option equal to the greatest of (x) the prime rate in effect on such day; (y) the federal funds effective rate in effect on such day plus ½ of 1%; and (z) one month LIBOR (but no less than 2%) plus 1%, or (ii) based on LIBOR, in each case, plus a margin. The interest rate under the 2010 Revolving Credit Facility has ranged from 8.00% to 8.25% during the nine months endedDecember 31, 2013 and 2012.

Our 2010 Revolving Credit Facility includes certain representations and warranties, conditions precedent, affirmative covenants, negative covenants and events of default customary for agreements of this type. The negative covenants include a financial maintenance covenant comprised of a first lien leverage ratio calculated using EBITDA as defined in the 2010 Revolving Credit Facility. Our 2010 Revolving Credit Facility also contains certain covenants that, subject to certain exceptions, restrict paying dividends, incurring additional indebtedness, creating liens, making acquisitions or other investments, entering into certain mergers or consolidations, prepaying junior debt and selling or disposing of assets.

The indebtedness under our 2010 Revolving Credit Facility is guaranteed by certain of our domestic subsidiaries and is secured by liens on substantially all our assets. In addition, our obligations are secured by a pledge of all the issued and outstanding shares of, or other equity interests in, certain of our existing or subsequently acquired or organized domestic subsidiaries and a percentage of the capital stock of, or other equity interests in, certain of our existing or subsequently acquired or organized foreign subsidiaries. The equity interests of American Media, Inc. have not been pledged to the lenders.

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First Lien Notes

In December 2010, we issued $385.0 million aggregate principal amount of senior secured notes, which bear interest at a rate of 11.5% per annum, payable semi-annually, and mature in December 2017 (the “First Lien Notes”). During the first quarter of fiscal 2012, we redeemed $20.0 million in aggregate principal amount of the First Lien Notes at a redemption price equal to 103.0% of the aggregate principal amount thereof, plus accrued and unpaid interest. At December 31, 2013, the First Lien Notes represented an aggregate of $365.0 million of our indebtedness.

The indenture governing the First Lien Notes contains certain affirmative covenants, negative covenants and events of default customary for agreements of this type. For example, the indenture governing the First Lien Notes contains covenants that limit our ability and that of our restricted subsidiaries, subject to important exceptions and qualifications, to: borrow money; guarantee other indebtedness; use assets as security in other transactions; pay dividends on stock, redeem stock or redeem subordinated debt; make investments; enter into agreements that restrict the payment of dividends by subsidiaries; sell assets; enter into affiliate transactions; sell capital stock of subsidiaries; enter into new lines of business; and merge or consolidate. In addition, the indenture governing the First Lien Notes imposes certain requirements as to future subsidiary guarantors.

The First Lien Notes are guaranteed on a first lien senior secured basis by the same subsidiaries of the Company that guarantee our 2010 Revolving Credit Facility. The First Lien Notes and the guarantees thereof are secured by a first-priority lien on substantially all our assets (subject to certain permitted liens and exceptions), pari passu with the liens granted under our 2010 Revolving Credit Facility, provided that in the event of a foreclosure on the collateral or of insolvency proceedings, obligations under our 2010 Revolving Credit Facility will be repaid in full with proceeds from the collateral prior to the obligations under the First Lien Notes.

Second Lien Notes

In December 2010, we issued $104.9 million aggregate principal amount of senior secured notes, which bear interest at a rate of 13.5% per annum, payable semi-annually, and mature in June 2018 (the “Second Lien Notes”). In October 2013, we exchanged approximately $94.3 million aggregate principal amount of Second Lien Notes for an equal aggregate principal amount of new second lien senior secured notes, which bear interest at a rate of 10.0% per annum, are payable in kind, and mature in June 2018 (the “Second Lien PIK Notes”). See description of Second Lien PIK Notes below. At December 31, 2013, the Second Lien Notes represented an aggregate of $10.6 million of our indebtedness.

The indenture governing the Second Lien Notes contains certain affirmative covenants, negative covenants and events of default customary for agreements of this type. For example, the indenture governing the Second Lien Notes contains covenants that limit our ability and that of our restricted subsidiaries, subject to important exceptions and qualifications, to: borrow money; guarantee other indebtedness; use assets as security in other transactions; pay dividends on stock, redeem stock or redeem subordinated debt; make investments; enter into agreements that restrict the payment of dividends by subsidiaries; sell assets; enter into affiliate transactions; sell capital stock of subsidiaries; enter into new lines of business; and merge or consolidate. In addition, the indenture governing the Second Lien Notes imposes certain requirements as to future subsidiary guarantors.

The Second Lien Notes are guaranteed on a second lien senior secured basis by the same subsidiaries of the Company that guarantee our 2010 Revolving Credit Facility and the First Lien Notes. The Second Lien Notes and the guarantees thereof are secured by a second-priority lien on substantially all our assets (subject to certain permitted liens and exceptions).

Second Lien PIK Notes

In October 2013, we exchanged approximately $94.3 million aggregate principal amount of Second Lien Notes for an equal aggregate principal amount of Second Lien PIK Notes, pursuant to an exchange agreement (the “Exchange Agreement”). The Second Lien PIK Notes were issued under a new indenture, by and among American Media, Inc., certain of its subsidiaries listed as guarantors thereto and Wilmington Trust, National Association, as trustee (the “Second Lien PIK Notes Indenture”).

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The Second Lien PIK Notes are payable in kind at a rate of 10% per annum until the earliest of: (a) December 15, 2016, (b) the closing of a refinancing of the First Lien Notes or (c) upon the occurrence of certain specified events of default relating to the application of the cash interest savings and the right of first offer (any such date being the "Cash Interest Rate Conversion Date"), at which point the interest payable on the then outstanding aggregate principal amount of Second Lien PIK Notes will be payable at a cash interest rate of 13.5% per annum until the June 2018 maturity date. Subject to certain exceptions, cash interest savings resulting from the exchange of the Second Lien Notes must be used by the Company to repurchase First Lien Notes until the Cash Interest Rate Conversion Date. The participating holders have a right of first offer to sell any of their First Lien Notes to the Company before the Company makes repurchases of First Lien Notes from any other holders of the First Lien Notes, including those purchases pursuant to open market repurchases.

The interest payment-in-kind due on December 15, 2013 totaled $1.9 million and was recorded as an increase to the Senior Secured Notes in the accompanying financial statements. At December 31, 2013, the Second Lien PIK Notes represented an aggregate of $96.2 million of our indebtedness.

The Exchange Agreement also provides that, should the Company effect a refinancing of the First Lien Notes, under certain circumstances the Company may require additional exchanges at its option. Upon completion of a refinancing of the First Lien Notes, the Company may require (i) the participating holders to exchange up to $55.0 million in aggregate principal amount of the Company’s First Lien Notes for Second Lien PIK Notes or, alternatively, new second lien cash pay notes (the “New Second Lien Cash Pay Notes”) to be issued by the Company at a future date pursuant to the terms of the Exchange Agreement and a new indenture that would govern the New Second Lien Cash Pay Notes (the “Optional First Lien Note Exchange”); and/or (ii) the holders of all Second Lien PIK Notes (including any Second Lien PIK Notes received in the Optional First Lien Note Exchange) to exchange all of their Second Lien PIK Notes for New Second Lien Cash Pay Notes (the "Optional Second Lien Note Exchange"). In the event of the Optional Second Lien Note Exchange, certain of the participating holders may have the right to designate one independent director, in total, to the Board of Directors of the Company under certain conditions.

Covenant Compliance

As discussed above, our 2010 Revolving Credit Facility and the indentures governing the First Lien Notes, the Second Lien Notes and the Second Lien PIK Notes contain various restrictive covenants. Under our 2010 Revolving Credit Facility, the first lien leverage ratio (Total First Lien Debt to EBITDA, each as defined in our 2010 Revolving Credit Facility) must be equal to or less than 4.50 to 1.00 through December 2015, the maturity date of the 2010 Revolving Credit Facility.

As of December 31, 2013, first lien leverage ratio was 4.01 to 1.00 and the Company was in compliance with the first lien leverage ratio and the other covenants under the 2010 Revolving Credit Facility and under the indentures governing the First Lien Notes, the Second Lien Notes and the Second Lien PIK Notes.

Although there can be no assurances, we anticipate that, based on current projections (including projected borrowings and repayments under the 2010 Revolving Credit Facility), our operating results for the next twelve months will be sufficient to satisfy the first lien leverage covenant under the 2010 Revolving Credit Facility. Our ability to satisfy such financial covenant is dependent on our business performing in accordance with our projections.  If the performance of our business deviates from our projections, we may not be able to satisfy such financial covenant.  Our projections are subject to a number of factors, many of which are events beyond our control, which could cause our actual results to differ materially from our projections (see "Cautionary Statements Regarding Forward-Looking Information" and "Risk Factors" included in this Quarterly Report and the 2013 Form 10-K). If we do not comply with our financial covenant, we would be in default under the 2010 Revolving Credit Facility, which could result in all our debt being accelerated due to cross-default provisions in the indentures governing the First Lien Notes, the Second Lien Notes and the Second Lien PIK Notes.

We have the ability to incur additional debt, subject to limitations imposed by our 2010 Revolving Credit Facility and the indentures governing the First Lien Notes, the Second Lien Notes and the Second Lien PIK Notes. Under our 2010 Revolving Credit Facility and the indentures governing the First Lien Notes, the Second Lien Notes and the Second Lien PIK Notes, in addition to specified permitted indebtedness, we will be able to incur additional indebtedness as long as on a pro forma basis our consolidated leverage ratio is less than 4.50 to 1.00.

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Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

Adjusted EBITDA, a measure we use to gauge our operating performance, is defined as net income (loss) attributable to the Company plus interest expense, provision (benefit) for income taxes, depreciation of property and equipment, amortization of intangible assets, deferred debt costs and deferred rack costs, provision for impairment of intangible assets and goodwill, adjusted for gains or costs related to closures, launches or re-launches of publications, restructuring costs and severance and certain other costs. We believe that the inclusion of Adjusted EBITDA is appropriate to evaluate our operating performance compared to our operating plans and/or prior years and to value prospective acquisitions. We also believe that Adjusted EBITDA is helpful in highlighting trends because Adjusted EBITDA excludes the impact of certain items that can differ significantly from company to company, depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments.

Management believes our investors use Adjusted EBITDA as a gauge to measure the performance of their investment in the Company. Management compensates for limitations of using non-GAAP financial measures by using them to supplement GAAP results to provide a more complete understanding of the factors and trends affecting our business than GAAP results alone can provide. Adjusted EBITDA is not a recognized term under GAAP and does not purport to be an alternative to income from continuing operations as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Additionally, Adjusted EBITDA is not intended to be a measure of free cash flow available for management’s discretionary use as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. The presentation of Adjusted EBITDA has limitations as an analytical tool, and it should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Because not all companies use identical calculations, our presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies.

Set forth below is a reconciliation of net loss attributable to American Media, Inc. to Adjusted EBITDA for the three months and twelve months ended December 31, 2013 and 2012:

	For the Three Months Ended December 31,						For the Twelve Months Ended December 31,
(in thousands)	2013			2012			2013			2012
Net loss attributable to American Media, Inc.	$	(50,381	)	$	(57,895	)	$	(46,757	)	$	(38,900	)
Add (deduct):
Interest expense	14,099			15,231			58,603			59,601
Provision (benefit) for income taxes	35,410			(140		)	28,530			(18,777		)
Depreciation and amortization	3,736			2,431			13,166			9,384
Impairment of goodwill and intangible assets	9,238			54,523			9,238			54,523
Amortization of deferred debt costs	414			367			1,572			1,394
Amortization of deferred rack costs	1,416			1,919			6,611			9,124
Amortization of short-term racks	2,884			1,948			9,133			8,343
Restructuring costs and severance	1,224			758			3,055			3,833
Costs related to launches and closures of publications	15			391			951			4,309
Costs related to relaunch and repositioning of Shape and Men's Fitness	—			—			2,820			—
Restructuring costs related to divestiture of DSI	384			—			2,413			—
Adjustment for net (income) losses of DSI	(39		)	—			3,274			—
AMI share of bad debt related to wholesaler shutdown	—			—			1,500			—
Investment in new digital strategy	—			—			2,948			—
Proforma adjustment related to acquisition of Soap Opera Digest	—			—			—			439
Proforma adjustment related to investment in affiliates	490			—			490			—
Impact of Superstorm Sandy	—			3,999			594			3,999
Other	1,430			2,422			2,308			8,847
Adjusted EBITDA	$	20,320		$	25,954		$	100,449		$	106,119

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Management’s Assessment of Liquidity

Our primary sources of liquidity are cash on hand and amounts available for borrowing under the 2010 Revolving Credit Facility.

The 2010 Revolving Credit Facility provides for borrowing up to $40.0 million, less outstanding letters of credit, and matures in December 2015. As of December 31, 2013, under the 2010 Revolving Credit Facility we had an outstanding balance of $31.0 million and available borrowing capacity of $4.6 million after giving effect to the $4.4 million outstanding letter of credit.

As of December 31, 2013, in addition to outstanding borrowings under the 2010 Revolving Credit Facility, there was $471.8 million principal amount of outstanding senior secured debt, consisting of $365.0 million principal amount of the First Lien Notes, $10.6 million principal amount of the Second Lien Notes and $96.2 million principal amount of the Second Lien PIK Notes. The Second Lien PIK Notes provide for, among other things, interest payments, in kind, at a rate of 10% per annum for approximately the next three years. We will utilize the cash interest savings from the Second Lien PIK Notes to repurchase certain of our First Lien Notes. The total cash interest savings from the December 15, 2013 interest payment totaled $2.6 million and must be used to repurchase First Lien Notes no later than March 1, 2014.

We believe we have access to sufficient capital to continue our planned operations for the 12 months following the balance sheet date of December 31, 2013. We believe that available cash at December 31, 2013 and amounts available under our 2010 Revolving Credit Facility will provide sufficient funds for operating and recurring cash needs, such as working capital, capital expenditures and debt repayments, for the next twelve months. To the extent we make future acquisitions, we may require new sources of funding, including additional debt, equity financing or some combination thereof. There can be no assurances that we will be able to secure additional sources of funding or that such additional sources of funding will be available to us on acceptable terms.

CONTRACTUAL OBLIGATIONS

There have been no material changes in our contractual obligations since March 31, 2013.

OFF-BALANCE SHEET FINANCING

We do not have any off-balance sheet financing arrangements.

APPLICATION OF CRITICAL ACCOUNTING ESTIMATES

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP). Preparing financial statements requires management to make estimates, judgments and assumptions regarding uncertainties that may affect the reported amounts of assets, liabilities, revenue and expenses. These estimates, judgments and assumptions are affected by management’s application of accounting policies. We base our estimates, judgments and assumptions on historical experience and other relevant factors that are believed to be reasonable under the circumstances. In any given reporting period, our actual results may differ from the estimates, judgments and assumptions used in preparing our consolidated financial statements.

Goodwill and Intangible Assets

During an evaluation of goodwill and other identified intangible assets at December 31, 2013, we determined that indicators were present in certain reporting units which would suggest the fair value of the reporting unit may have declined below the carrying amount. This decline was primarily due to the continuing softness in the U.S. economy, which impacts consumer spending, including further declines in the advertising market, resulting in lowered future cash flow projections.

As a result, an interim impairment test of goodwill and other indefinite lived intangible assets was performed as of December 31, 2013 for certain reporting units in accordance with FASB Accounting Standards Codification (“ASC”) Topic No. 350, “Goodwill and Other Intangible Assets” (“ASC 350”). Impairment testing for goodwill is a two-step process. The first step compares the fair value of the reporting unit to its carrying value, including goodwill. If the carrying value of the reporting unit exceeds its fair value, the second step of the test is performed to measure the amount of the impairment charge, if any. The second step compares the implied fair value of the reporting unit's goodwill with the carrying value of that goodwill and an impairment charge is recorded for the difference. Impairment testing for indefinite lived intangible assets, consisting of tradenames, compares the fair value of the tradename to the carrying value and an impairment charge is recorded for any excess carrying value over fair value.

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The evaluation resulted in the carrying value of goodwill and tradenames for certain reporting units to exceed the estimated fair value. As a result, we recorded a pre-tax non-cash impairment charge of $9.2 million to reduce the carrying value of tradenames during the quarter ended December 31, 2013.

As of December 31, 2013, the fair value for all reporting units is substantially in excess of carrying value. While historical performance and current expectations have resulted in fair values of goodwill and other identified intangible assets in excess of carrying values, if our assumptions are not realized, it is possible that in the future an additional impairment charge may need to be recorded. However, it is not possible at this time to determine if an impairment charge would result or if such a charge would be material. The Company will continue to monitor the recoverability of its remaining goodwill.

Refer to Part II. Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our 2013 Form 10-K for a discussion of our critical accounting estimates.

RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Refer to Part I, Item 1, Note 2, "Significant Accounting Policies" in the notes to consolidated financial statements in this Quarterly Report for a discussion regarding new accounting standards.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

We are exposed to certain financial risks in the ordinary course of our business. These risks primarily result from volatility in interest rates, foreign exchange rates, inflation and other general market risks.

Interest Rate Risk

We are exposed to market risk from fluctuations in interest rates. Our primary interest rate risk exposure relates to: (i) the interest rate risk on long-term borrowings, (ii) the impact of interest rate movements on our ability to meet interest expense requirements and comply with financial covenants, and (iii) the impact of interest rate movements on our ability to obtain adequate financing to fund acquisitions, if any.

We generally manage our exposure to interest rate fluctuations through the use of a combination of fixed and variable rate debt. At December 31, 2013, we had $471.8 million outstanding in fixed rate debt. There are no earnings or liquidity risks associated with the Company’s fixed rate debt. Under the 2010 Revolving Credit Facility, we have $31.0 million outstanding in variable rate debt at December 31, 2013. The Company is subject to earnings and liquidity risks associated with the variable rate debt.

To date, we have not entered into any derivative financial instruments, that are designated as hedges, for the purpose of reducing our exposure to adverse fluctuations in interest rates.

Foreign Currency Exchange Risk

We face exposures to adverse movements in foreign currency exchange rates, as a portion of our revenues, expenses, assets and liabilities are denominated in currencies other than the U.S. dollar, primarily the Canadian dollar, the British pound, and the Euro. These exposures may change over time as our international business practices expand.

We do not believe movements in foreign currencies in which we transact business will significantly affect future net earnings or losses. Foreign currency exchange risk can be quantified by estimating the change in operating revenue resulting from a hypothetical 10% adverse change in foreign exchange rates. We believe such an adverse change would not currently have a material impact on our results of operations. However, if our international operations grow, our risk associated with fluctuations in foreign currency exchange rates could increase.

To date, we have not entered into any derivative financial instruments, that are designated as hedges, for the purpose of reducing our exposure to adverse fluctuations in foreign currency exchange rates.

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Inflationary Risk

We are exposed to fluctuations in operating expenses due to contractual agreements with printers, paper suppliers and wholesale distributors. In addition, we are also exposed to fluctuations in the cost of fuel, paper and postage and certain product placement related costs.

While we do not believe these inflationary risks have had a material effect on our business, financial condition or results of operations, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could have a material impact on our business, financial condition and results of operations.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, we evaluated the effectiveness of our disclosure controls and procedures (as defined in the Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), required by Exchange Act Rules 13a-15(b) or 15d-15(b), as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of that date to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including the principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Evaluation of Changes in Internal Control over Financial Reporting

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we have determined that, during the three months ended December 31, 2013, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

Except as set forth below and in each of American Media Inc.'s Quarterly Report on Form 10-Q for the quarters ended June 30, 2103 and September 30, 2103, there are no material changes to the material pending legal proceedings described in our 2013 Form 10-K, under the heading Part I, Item 3, "Legal Proceedings."

Anderson Litigation

The plaintiffs and the defendants in the action pending before the Federal District Court in the Southern District of New York (the “Anderson Action”) have agreed to extend the discovery period through June 2014.

On January 23, 2014, the District Court granted to American Media, Inc. and four of its co-defendants the right to file a counterclaim against Charles Anderson, Jr. and Anderson News, LLC alleging that Mr. Anderson and Anderson News, LLC violated the antitrust laws by engaging in a conspiracy to fix prices that wholesalers would pay publishers for their magazines.

Item 1A. Risk Factors.

There have been no material changes from the risk factors as previously disclosed in our 2013 Form 10-K, under the heading Part I, Item 1A, "Risk Factors."

Item 6. Exhibits.

See exhibits listed under the Exhibit Index below.

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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.

			AMERICAN MEDIA, INC.
Date:	February 14, 2014	By:	/s/ David J. Pecker
			David J. Pecker
			Chairman, President and Chief Executive Officer
			(Principal Executive Officer)
Date:	February 14, 2014	By:	/s/ Christopher Polimeni
			Christopher Polimeni
			Executive Vice President, Chief Financial Officer and Treasurer
			(Principal Financial and Accounting Officer)

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Exhibit Index

Exhibit Number		Description
10.1	*	Form of Indemnification Agreement by and among the Company and the Indemnitee.
31.1	*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	‡	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
101.INS	%	XBRL Instance Document
101.SCH	%	XBRL Taxonomy Extension Schema Document
101.CAL	%	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	%	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	%	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	%	XBRL Taxonomy Extension Definition Linkbase Document
*		Filed herewith
‡		This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
%		In accordance with Rule 406T of Regulation S-T, these XBRL (eXtensible Business Reporting Language) documents are furnished and not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under these sections.

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