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 September 30, 2015

¨ 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 o	No þ
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, 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 o
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	o		Accelerated filer	o
Non-accelerated filer	þ	(Do not check if a smaller reporting company)	Smaller reporting company	o



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

There is no public market for the registrant’s common stock. The number of shares outstanding of the registrant's common stock, $0.0001 par value, as of October 31, 2015 was 100.

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AMERICAN MEDIA, INC.

QUARTERLY REPORT ON FORM 10-Q

For the Fiscal Quarter Ended September 30, 2015

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		Page(s)
Cautionary Statements Regarding Forward-Looking Information		3

	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements.	4
	Unaudited Condensed Consolidated Balance Sheets as of September 30, 2015 and March 31, 2015	4
	Unaudited Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the Three and Six Months Ended September 30, 2015 and 2014	5
	Unaudited Condensed Consolidated Statements of Stockholders' Deficit for the Six Months Ended September 30, 2015 and 2014	6
	Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2015 and 2014	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	49
Item 4.	Controls and Procedures.	50

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings.	51
Item 1A.	Risk Factors.	51
Item 6.	Exhibits.	51
Signatures		52

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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.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

This Quarterly Report for the fiscal quarter ended September 30, 2015 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 dates 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;

	•		our ability to implement our business strategy;

	•		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 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;

	•		changes in discretionary consumer spending patterns;

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

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

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

	•		the effects of possible credit losses;

	•		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;

	•		adverse results in litigation matters or any regulatory proceedings;

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

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

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

	•		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, 2015 (the “2015 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)



	September 30, 2015			March 31, 2015
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ($2,199 and $880 related to VIEs, respectively)	$	3,323		$	3,452
Trade receivables, net of allowance for doubtful accounts of $3,314 and $3,281, respectively ($1 related to VIEs)	21,135			39,412
Inventories ($40 and $95 related to VIEs, respectively)	61			873
Prepaid expenses and other current assets ($1,378 and $198 related to VIEs, respectively)	18,143			11,356
Total current assets	42,662			55,093
PROPERTY AND EQUIPMENT, NET:
Leasehold improvements	3,660			3,801
Furniture, fixtures and equipment	42,372			43,979
Less – accumulated depreciation	(33,310		)	(30,230		)
Total property and equipment, net ($18 and $25 related to VIEs, respectively)	12,722			17,550
OTHER ASSETS:
Deferred debt costs, net	5,194			6,383
Deferred rack costs, net	4,797			4,824
Investments in affiliates	1,056			803
Other long-term assets	3,074			3,193
Total other assets	14,121			15,203
GOODWILL AND OTHER IDENTIFIED INTANGIBLE ASSETS:
Goodwill	153,998			153,998
Other identified intangibles, net of accumulated amortization of $131,307 and $122,791, respectively ($6,000 related to VIEs)	216,605			224,181
Total goodwill and other identified intangible assets, net	370,603			378,179
TOTAL ASSETS	$	440,108		$	466,025
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable ($3 and $43 related to VIEs, respectively)	$	9,448		$	15,781
Accrued expenses and other liabilities ($916 and $194 related to VIEs, respectively)	34,120			44,015
Accrued interest	10,078			10,075
Deferred revenues ($0 and $589 related to VIEs, respectively)	23,588			26,734
Total current liabilities	77,234			96,605
NON-CURRENT LIABILITIES:
Senior secured notes, net	308,053			309,569
Revolving credit facility	13,800			14,700
Other non-current liabilities	8,677			8,352
Deferred income taxes	43,409			70,747
Total liabilities	451,173			499,973
COMMITMENTS AND CONTINGENCIES (see Note 11)
Redeemable noncontrolling interests (see Note 9)	4,000			3,000
STOCKHOLDERS' DEFICIT:
Common stock, $0.0001 par value; 100 shares authorized, issued and outstanding as of September 30, 2015 and March 31, 2015, respectively	—			—
Additional paid-in capital	945,037			945,037
Accumulated deficit	(959,709		)	(981,593		)
Accumulated other comprehensive loss	(393		)	(392		)
Total stockholders' deficit	(15,065		)	(36,948		)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	440,108		$	466,025

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 September 30,						Six Months Ended September 30,
	2015			2014			2015			2014
OPERATING REVENUES:
Circulation	$	38,085		$	38,897		$	74,247		$	83,021
Advertising	16,023			14,149			33,885			31,500
Other	7,824			8,426			9,908			10,289
Total operating revenues	61,932			61,472			118,040			124,810
OPERATING EXPENSES:
Editorial	7,245			7,468			13,165			14,984
Production	15,818			20,196			29,781			36,545
Distribution, circulation and other costs	8,638			10,369			17,674			20,190
Selling, general and administrative	14,637			22,621			30,054			44,996
Depreciation and amortization	6,618			2,917			13,345			6,038
Impairment of goodwill and intangible assets	—			18,458			—			18,458
Total operating expenses	52,956			82,029			104,019			141,211
OPERATING INCOME (LOSS)	8,976			(20,557		)	14,021			(16,401		)
OTHER EXPENSES:
Interest expense	(10,297		)	(13,812		)	(19,700		)	(27,799		)
Amortization of deferred debt costs	(866		)	(1,623		)	(1,716		)	(2,057		)
Other income (expense)	(39		)	(15		)	(39		)	299
Total other expenses, net	(11,202		)	(15,450		)	(21,455		)	(29,557		)
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	(2,226		)	(36,007		)	(7,434		)	(45,958		)
INCOME TAX BENEFIT	(1,032		)	(5,879		)	(30,304		)	(5,147		)
NET INCOME (LOSS) FROM CONTINUING OPERATIONS	(1,194		)	(30,128		)	22,870			(40,811		)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES	—			1,351			—			(4		)
NET INCOME (LOSS)	(1,194		)	(28,777		)	22,870			(40,815		)
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	(992		)	(1,285		)	(986		)	(1,215		)
NET INCOME (LOSS) ATTRIBUTABLE TO AMERICAN MEDIA, INC. AND SUBSIDIARIES	$	(2,186	)	$	(30,062	)	$	21,884		$	(42,030	)

	Three Months Ended September 30,						Six Months Ended September 30,
	2015			2014			2015			2014
NET INCOME (LOSS)	$	(1,194	)	$	(28,777	)	$	22,870		$	(40,815	)
Foreign currency translation adjustment	—			(66		)	(1		)	(48		)
Comprehensive income (loss)	(1,194		)	(28,843		)	22,869			(40,863		)
Less: comprehensive income attributable to noncontrolling interests	(992		)	(1,285		)	(986		)	(1,215		)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO AMERICAN MEDIA, INC. AND SUBSIDIARIES	$	(2,186	)	$	(30,128	)	$	21,883		$	(42,078	)

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 STOCKHOLDERS' DEFICIT

(in thousands, except share information)



	Six Months Ended September 30, 2015
									Accumulated
				Additional					other			Total
	Common stock			paid-in		Accumulated			comprehensive			stockholders'
	Shares	Total		capital		deficit			loss			deficit
BALANCE, BEGINNING OF PERIOD	100	$	—	$	945,037	$	(981,593	)	$	(392	)	$	(36,948	)
Net income	—	—		—		21,884			—			21,884
Foreign currency translation	—	—		—		—			(1		)	(1		)
BALANCE, END OF PERIOD	100	$	—	$	945,037	$	(959,709	)	$	(393	)	$	(15,065	)



	Six Months Ended September 30, 2014
											Accumulated
						Additional					other			Total
	Common stock					paid-in		Accumulated			comprehensive			stockholders'
	Shares		Total			capital		deficit			loss			deficit
BALANCE, BEGINNING OF PERIOD	10,000,000		$	1		$	822,723	$	(954,466	)	$	(231	)	$	(131,973	)
Net loss	—		—			—		(42,030		)	—			(42,030		)
Foreign currency translation	—		—			—		—			(48		)	(48		)
Issuance of common stock	1,172,250		—			205		—			—			205
Retirement of common stock	(11,172,150	)	(1		)	1		—			—			—
Debt for equity conversion, net of expenses	—		—			121,535		—			—			121,535
Capital contribution	—		—			573		—			—			573
BALANCE, END OF PERIOD	100		$	—		$	945,037	$	(996,496	)	$	(279	)	$	(51,738	)

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)



	Six Months Ended September 30,
	2015			2014
OPERATING ACTIVITIES
Net income (loss)	$	22,870		$	(40,815	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	13,345			6,548
Impairment of goodwill and intangible assets	—			18,458
Amortization of deferred debt costs	1,716			2,057
Amortization of deferred rack costs	2,703			2,793
Deferred income tax benefit	(31,039		)	(2,537		)
Non-cash payment-in-kind interest accretion	—			4,809
Provision for doubtful accounts	8			5,805
Other	(147		)	1,727
Changes in operating assets and liabilities:
Trade receivables	18,269			7,768
Inventories	812			8,117
Prepaid expenses and other current assets	(3,087		)	(6,972		)
Deferred rack costs	(2,676		)	(2,216		)
Other long-term assets	119			217
Accounts payable	(6,330		)	87
Accrued expenses and other liabilities	(9,831		)	7,299
Accrued interest	3			(680		)
Other non-current liabilities	325			(502		)
Deferred revenues	(3,146		)	12,507
Total changes in operating assets and liabilities	(5,542		)	25,625
Net cash provided by operating activities	3,914			24,470
INVESTING ACTIVITIES
Purchases of property and equipment	(90		)	(5,114		)
Purchases of intangible assets	(861		)	(2,167		)
Other	18			9
Net cash used in investing activities	(933		)	(7,272		)
FINANCING ACTIVITIES
Proceeds from revolving credit facility	33,400			28,300
Repayments to revolving credit facility	(34,300		)	(49,700		)
Proceeds from issuance of senior secured notes	—			12,500
Senior secured notes repurchases	(2,000		)	—
Capital contribution	—			573
Costs incurred in restructuring	—			(4,315		)
Redemption premium payment	(118		)	—
Payment of debt costs	(43		)	—
Payments to noncontrolling interest holders of Olympia	(50		)	—
Net cash used in financing activities	(3,111		)	(12,642		)
Effect of exchange rate changes on cash	1			(26		)
Net (decrease) increase in cash and cash equivalents	(129		)	4,530
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	3,452			3,030
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	3,323		$	7,560

Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Non-cash debt for equity exchange	$	—		$	123,960

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

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AMERICAN MEDIA, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2015

Note 1 - Nature of the Business

Description of the Business

American Media, Inc. and its subsidiaries (collectively, the "Company", "AMI", "we", "our" or "us") owns and operates the leading celebrity and health and fitness media brands in the United States. AMI was incorporated under the laws of the State of Delaware in 1990 and is headquartered in Boca Raton, Florida. The Company is a wholly-owned subsidiary of AMI Parent Holdings, LLC, a Delaware limited liability company (the "Parent"), which is controlled by certain investors of the Company (collectively, the "Investors") pursuant to the merger consummated in August 2014 (the "Merger"). As a result of the Merger, the Parent acquired 100% of the issued and outstanding shares of common stock of the Company.

In January 2015, we sold our Shape, Fit Pregnancy and Natural Health publications, which comprised our Women's Active Lifestyle segment, for approximately $60 million in cash plus an earn-out of up to $60 million. See Note 10, "Dispositions" for further information. After giving effect to the divestiture of our Women's Active Lifestyle segment, the Company operates and reports financial and operating information in the following two segments: Celebrity Brands and Men's Active Lifestyle. The Company also provides general corporate services to its segments which is reported as a third, non-operating segment, Corporate and Other. See Note 12, "Business Segment Information" for further information regarding the Company's reporting segments.

As of September 30, 2015, we own and operate a diversified portfolio of 10 publications; National Enquirer, Star, Globe, National Examiner, OK! and Soap Opera Digest are published weekly; Men's Fitness, Muscle & Fitness and Flex are published 10 times per year and Muscle & Fitness Hers is published bi-monthly. Total circulation of these print publications were approximately 3.2 million copies per issue during six months ended September 30, 2015.

Our fiscal year ends on March 31, 2016 and may be referred to herein as fiscal 2016.

Liquidity

The Company is highly leveraged. As of September 30, 2015, the Company had approximately $321.9 million of outstanding indebtedness, consisting of $308.1 million of senior secured notes and $13.8 million under the revolving credit facility.

Over the next year, the cash interest payments due under the Company's debt agreements are approximately $35.9 million and there are no scheduled principal payments due. As of September 30, 2015, the Company has $3.3 million of cash and $16.8 million available for borrowing pursuant to the revolving credit facility. The Company's revolving credit facility matures in December 2016.

Several of our smaller wholesalers, including the second-largest wholesaler, Source Interlink Distribution ("Source"), ceased operations during fiscal 2015. Since then we have transitioned the previous wholesalers' newsstand distribution to the two remaining major wholesalers. This transition had an immediate adverse impact on single copy newsstand sales and liquidity during fiscal 2015 and into the first half of fiscal 2016.

The Company's substantial indebtedness could adversely affect the business, financial condition and results of operations. Specifically, the Company's level of indebtedness could have important consequences for the business and operations, including the following:


•	requiring the Company to dedicate a substantial portion of its cash flow from operations for payments on indebtedness, thereby reducing the availability of such cash flow to fund working capital, capital expenditures and general corporate requirements or to carry out other aspects of the business;


•	placing the Company at a potential disadvantage compared to its competitors that have less debt;


•	increasing the Company's vulnerability to general adverse economic and industry conditions;


•	limiting the Company's ability to make material acquisitions or take advantage of business opportunities that may arise;


•	limiting the Company's flexibility in planning for, or reacting to, changes in the business industry;

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•	limiting the Company's ability to obtain additional financing to fund future working capital, capital expenditures and other general corporate requirements or to carry out other aspects of the business; and


•	exposing the Company to fluctuations in interest rates as the revolving credit facility has a variable rate of interest.

The Company plans to refinance all or a portion of its indebtedness on or before maturity. The Company cannot assure that it will be able to refinance any of its indebtedness on commercially reasonable terms or at all.

Although the Company is significantly leveraged, it expects that the current cash balances, liquidity provided in connection with the revolving credit facility and cash generated from operations, should be sufficient to meet working capital, capital expenditures, debt service, and other cash needs for the next year.

Note 2 - Summary of 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, 2015 (the "2015 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 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 interests in our 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.

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.

See Note 9, “Investments in Affiliates and Redeemable Noncontrolling Interests.”

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 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.

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Inventories

Inventories are stated at the lower of cost or market. Cost is determined on the first-in, first-out method. The Company writes down inventory for estimated obsolescence and/or excess or damaged inventory. Inventory write-downs during the six months ended September 30, 2015 and 2014 were insignificant.

The Company is party to a long-term paper supply and purchasing agreement pursuant to which a third party manages all aspects of the Company's raw material paper inventory. As a result, the Company does not maintain raw material paper inventory. The finished product inventory, comprised of paper, production and distribution costs of future issues totaled $0.1 million and $0.9 million, respectively, at September 30, 2015 and March 31, 2015.

Concentrations

We rely on wholesalers for the retail distribution of our magazines. Several of our smaller wholesalers, including the second-largest wholesaler, Source, ceased operations during fiscal 2015. A small number of wholesalers are responsible for a substantial percentage of the wholesale magazine distribution business. As of September 30, 2015, single copy revenues consisted of copies distributed to retailers primarily by two major wholesalers.

During the six months ended September 30, 2015 and 2014, The News Group accounted for approximately 26% and 21%, respectively, of our total operating revenues and The Hudson Group accounted for approximately 6% and 5%, respectively, 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 April 2014, the FASB issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (Topic 205 and Topic 360) ("ASU 2014-08") which raises the threshold for disposals to qualify as discontinued operations. Under this new guidance, a discontinued operation is (1) a component of an entity or group of components that has been disposed of or is classified as held for sale that represents a strategic shift that has or will have a major effect on an entity's operations and financial results or (2) an acquired business that is classified as held for sale on the acquisition date. This guidance also requires expanded or new disclosures for discontinued operations, individually material disposals that do not meet the definition of a discontinued operation, an entity's continuing involvement with a discontinued operation following disposal, and retained equity method investments in a discontinued operation. ASU 2014-08 was effective for the Company on April 1, 2015. The adoption of ASU 2014-08 did not have an impact on the consolidated financial position, results of operations or cash flows.

Recently Issued Accounting Pronouncements

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties About an Entity's Ability to Continue as a Going Concern (Topic 205) ("ASU 2014-15") which establishes management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and setting rules for how this information should be disclosed in the financial statements. This guidance is effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2016, with early adoption permitted. The Company does not expect the adoption of this guidance to have an impact on the consolidated financial position results of operations or cash flows.

In January 2015, the FASB issued ASU No. 2015-01, Income Statement - Extraordinary and Unusual Items (Subtopic 225-20) ("ASU 2015-01") which simplifies the income statement presentation by eliminating the concept of extraordinary items. The guidance is effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2015, with early adoption permitted. The Company does not expect the adoption of this guidance to have an impact on the consolidated financial position, results of operations or cash flows.

In February 2015, the FASB issued ASU 2015-02, Consolidations, Amendments to the Consolidation Analysis (Topic 810) ("ASU 2015-02"), which changes the identification of variable interests, the variable interest characteristic for a limited partnership or similar entity and the primary beneficiary determination all of which are intended to improve the consolidation guidance as well as increase transparency and consistency of financial reporting. The guidance is effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2015, with early adoption permitted. The Company does not expect the adoption of this guidance to have an impact on the consolidated financial position, results of operations or cash flows.

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In April 2015, the FASB issued a proposal for a one-year deferral of the effective date for ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). Under this proposal, the standard would be effective for public entities for annual reporting periods beginning after December 15, 2017 and interim periods therein. ASU 2014-09 supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. As a result of the one-year deferral, ASU 2014-09 will now be effective for the Company on April 1, 2018 using one of two retrospective application methods. The Company has not determined the potential effects on the consolidated financial position, results of operations or cash flows.

In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest, Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30) ("ASU 2015-03"), which requires the presentation of debt issuance costs to be reflected as a reduction from the face amount of the related debt, with amortization recorded as interest expense, rather than recording as a deferred asset. The guidance is effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2015, and requires retrospective application. The Company does not expect the adoption of this guidance to have a significant impact on the consolidated financial position, results of operations or cash flows, although it will change the financial statement classification of the deferred debt cost. As of September 30, 2015 and March 31, 2015, the Company had $5.2 million and $6.4 million of net deferred debt costs, respectively, included on the consolidated balance sheets. Under the new guidance, the net deferred debt costs would offset the carrying amount of the respective debt on the consolidated balance sheets.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330) ("ASU 2015-11"), which simplifies the measurement of inventory by requiring certain inventory to be subsequently measured at the lower of cost and net realizable value. The guidance is effective for fiscal years, and interim period within those years, beginning on or after December 15, 2016. The Company does not expect the adoption of this guidance to have an impact on the consolidated financial position, results of operations or cash flows.

In August 2015, the FASB issued ASU 2015-15, Interest-Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements-Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting, to clarify that an entity may elect to present debt issuance costs related to a line-of-credit arrangement as an asset, regardless of whether or not there are any outstanding borrowings on the line-of-credit arrangement.

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.

Note 3 - Goodwill and Other Identified Intangible Assets

Goodwill

As of September 30, 2015 and March 31, 2015, the Company had goodwill with a carrying value of $154.0 million. The gross carrying amount and accumulated impairment losses of goodwill, as of September 30, 2015 and March 31, 2015, by reportable segment are as follows (in thousands):



	Celebrity Brands			Men's Active Lifestyle Group			Corporate and Other			Total
Goodwill	$	428,518		$	112,296		$	18,190		$	559,004
Accumulated impairment losses	(304,595		)	(89,336		)	(11,075		)	(405,006		)
Goodwill, net of impairment losses	$	123,923		$	22,960		$	7,115		$	153,998

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Other Identified Intangible Assets

Other identified intangible assets are comprised of the following (in thousands):



	Range of lives (in years)	September 30, 2015			March 31, 2015
Intangible assets subject to amortization:
Tradenames	15 - 27	$	220,527		$	46,166
Subscriber lists	3 - 15	32,702			32,702
Customer relationships	5 - 10	2,300			2,300
Other intangible assets	3	8,573			7,620
Total gross intangible assets subject to amortization		264,102			88,788
Accumulated amortization		(53,497		)	(44,970		)
Total net intangible assets subject to amortization		210,605			43,818
Intangible assets not subject to amortization	Indefinite	6,000			180,363
Total other identified intangible assets, net		$	216,605		$	224,181

Effective April 1, 2015, certain tradenames with a net carrying value totaling approximately $174.4 million that were previously assigned indefinite lives have been assigned finite lives of 15 years. During the six months ended September 30, 2015, the amortization expense of these tradenames totaled approximately $5.8 million.

Amortization expense of intangible assets was $8.5 million and $1.6 million during the six months ended September 30, 2015 and 2014, respectively. Based on the carrying value of identified intangible assets recorded at September 30, 2015, and assuming no subsequent impairment of the underlying assets, the amortization expense is expected to be as follows (in thousands):



Fiscal Year	Amortization Expense
2016	$	8,565
2017	16,043
2018	15,133
2019	14,617
2020	14,501
Thereafter	141,746
	$	210,605

Impairments

The Company did not record any impairment charges during the six months ended September 30, 2015. The Company continues to evaluate goodwill and other identified intangible assets for impairment. Goodwill and other identified intangible assets are material components of the Company's financial statements and impairment charges to the Company's goodwill or other identified intangible assets in future periods could be material to the Company's results of operations.

During an evaluation of goodwill and other identified intangible assets at September 30, 2014, 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 impacted consumer spending, including further declines in certain advertising markets, resulting in lowered future cash flow projections.

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As a result, an interim impairment test of goodwill and other indefinite-lived intangible assets was performed as of September 30, 2014 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 performed, as of September 30, 2014, resulted in the carrying value of goodwill and tradenames for certain reporting units to exceed the estimated fair value. As a result, the Company recorded a pre-tax non-cash impairment charge of $8.9 million and $8.5 million to reduce the carrying value of goodwill and tradenames, respectively, during the quarter ended September 30, 2014.

Note 4 - Revolving Credit Facility

The Company maintains a revolving credit facility that provides for borrowing up to $35.0 million, less outstanding letters of credit, which matures in December 2016 (the "Revolving Credit Facility"), of which the Investors became a lending party thereto in March 2015. The Investors commitment is approximately 42% of the Revolving Credit Facility.

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 Revolving Credit Facility has ranged from 8.00% to 8.25% during the six months ended September 30, 2015 and 2014. 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 six months ended September 30, 2015 and 2014 were insignificant.

During the six months ended September 30, 2015, the Company borrowed $33.4 million and repaid $34.3 million under the Revolving Credit Facility. At September 30, 2015, the Company has available borrowing capacity of $16.8 million after considering the $13.8 million outstanding balance and the $4.4 million outstanding letter of credit. The outstanding balance at September 30, 2015 of $13.8 million is included in non-current liabilities, as the maturity date of the Revolving Credit Facility is December 2016.

The indebtedness under the 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.

Covenants

The Revolving Credit Facility includes certain representations and warranties, conditions precedent, affirmative covenants, negative covenants and events of default. The negative covenants in the Revolving Credit Facility include financial maintenance covenants comprised of a first lien leverage ratio, a consolidated leverage ratio and an interest coverage ratio. The 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 Revolving Credit Facility includes a cap on the total amount of cash available for distribution to our common stockholders.

With regard to the financial maintenance covenants, the first lien leverage ratio covenant must be equal to or less than 4.50 to 1.00 from April 1, 2015 through December 2016. The consolidated leverage ratio covenant must be equal to or less than 4.75 to 1.00 from April 1, 2015 through September 30, 2015 and 5.50 to 1.00 from October 1, 2015 through December 2016. The interest coverage ratio must be equal to or greater than 1.50 to 1.00 from April 1, 2015 through December 2016.

As of September 30, 2015, the Company was in compliance with its covenants under the Revolving Credit Facility.

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Although there can be no assurances, management believes that, based on current expectations (including expected borrowings and repayments under the Revolving Credit Facility), its operating results for fiscal 2016 will be sufficient to satisfy the financial covenants under the Revolving Credit Facility. The Company’s ability to satisfy the financial covenants is dependent on the business performing in accordance with its expectations. If the performance of the Company’s business deviates significantly from its expectations, the Company may not be able to satisfy such financial covenants. The Company's expectations 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 expectations. If the Company does not comply with its financial covenants, the Company will be in default under the Revolving Credit Facility.

Note 5 - Senior Secured Notes

Our senior secured notes are comprised of the first lien notes, the second lien notes and the new second lien notes and are collectively referred to herein as the "Senior Secured Notes" and consisted of the following (in thousands):



	September 30, 2015			March 31, 2015
First Lien Notes	$	273,175		$	275,175
Second Lien Notes	2,198			2,198
New Second Lien Notes	39,024			39,024
Unamortized discount	(6,344		)	(6,828		)
Total debt obligations	308,053			309,569
Less: current portion of long-term debt	—			—
Noncurrent debt obligations	$	308,053		$	309,569

The future maturities of the Senior Secured Notes as of September 30, 2015 are as follows (in thousands):



Fiscal Year	Amount
2016	$	—
2017	—
2018	273,175
2019	2,198
2020	—
Thereafter	39,024
Total future maturities	314,397
Unamortized discount	(6,344		)
Total debt obligations	$	308,053

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 and mature in December 2017 (the "First Lien Notes"). Interest on the First 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 fiscal 2012, the Company redeemed $20.0 million in aggregate principal amount of First Lien Notes. During fiscal 2014, the Company repurchased approximately $2.3 million in aggregate principal amount of First Lien Notes. During fiscal 2015, the Company repurchased approximately $55.5 million in aggregate principal amount of First Lien Notes. In addition, during fiscal 2015, the Company exchanged approximately $32.0 million in aggregate principal amount of First Lien Notes, plus accrued and unpaid interest, for approximately $39.0 million aggregate principal amount of new second lien senior secured notes, which bear interest at a rate of 7.0% per annum and mature in July 2020 (the "New Second Lien Notes"), pursuant to an exchange agreement (the "New Second Lien Notes Exchange Agreement"), as further described below. During the first quarter of fiscal 2016, the Company repurchased approximately $2.0 million in aggregate principal amount of First Lien Notes, at a price equal to 105.9% of the aggregate principal amount thereof, plus accrued and unpaid interest in the open market.

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The First Lien Notes are guaranteed on a first lien senior secured basis by the same subsidiaries of the Company that guarantee the 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 Revolving Credit Facility, provided that in the event of a foreclosure on the collateral or insolvency proceedings, obligations under our Revolving Credit Facility will be repaid in full with proceeds from the collateral prior to the obligations under the First Lien Notes.

Under the First Lien Notes Indenture, the Company has the option to redeem the First Lien Notes, 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
2014		105.75%
2015		102.875%
2016 and thereafter		100%

Second Lien Notes

In December 2010, we issued $104.9 million aggregate principal amounts 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 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.

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 “Second Lien PIK Notes Exchange Agreement”).

In September 2014, pursuant to the debt for equity exchange agreement with the Parent and the Investors, the Investors exchanged approximately $7.8 million aggregate principal amount of Second Lien Notes and all of the outstanding Second Lien PIK Notes, plus accrued and unpaid interest, for equity interest in the Parent. As a result, the Company's obligation under the Second Lien PIK Notes were satisfied in full.

During fiscal 2015, the Company repurchased approximately $0.6 million in aggregate principal amount of Second Lien Notes.

The Second Lien Notes are guaranteed on a second lien senior secured basis by the same subsidiaries of the Company that guarantee our 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).

Under the Second Lien Notes Indenture, the Company has the option to redeem the Second Lien Notes, 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
2014		106.75%
2015		103.375%
2016 and thereafter		100%

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New Second Lien Notes

In January 2015, we issued approximately $39.0 million aggregate principal amount of New Second Lien Notes, which bear interest at a rate of 7.0% per annum and mature in July 2020. Interest on the New Second Lien Notes is payable semi-annually on July 15th and January 15th of each year and is computed on the basis of a 360-day year comprised of twelve 30-day months. As described above, the New Second Lien Notes were issued in exchange for $32.0 million aggregate principal amount of First Lien Notes pursuant to the New Second Lien Notes Exchange Agreement.

The New Second Lien Notes are guaranteed on a second lien senior secured basis by the same subsidiaries of the Company that guarantee our Revolving Credit Facility, the First Lien Notes and the Second Lien Notes. The New 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).

Under the New Second Lien Notes Indenture, the Company has the option to redeem the New Second Lien Notes at any time prior to January 15, 2018 at a redemption price equal to 100% of the principal amount, plus a “make-whole” premium and accrued and unpaid interest through the redemption date. At any time prior to January 15, 2018, the Company may redeem up to 35% of the New Second Lien Notes from the net cash proceeds of one or more qualified equity offerings at a redemption price of 107% of the principal amount, plus accrued and unpaid interest through the redemption date, provided that at least 65% of the aggregate principal amount of the New Second Lien Notes remains outstanding after the redemption. The Company has the option to redeem the New Second Lien Notes on or after January 15, 2018, 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 January 15th of each of the years indicated below:



Year		Percentage
2018		107%
2019		103.5%
2020 and thereafter		100%

Note 6 - 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):



		September 30, 2015				March 31, 2015
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
First Lien Notes	Level 2	$	273,175	$	281,370	$	275,175	$	282,742
Second Lien Notes	Level 2	2,198		2,288		2,198		2,337
New Second Lien Notes	Level 2	32,680		23,489		32,196		33,655

The fair value of the First Lien Notes, the Second Lien Notes and the New Second Lien Notes is estimated using quoted market prices for the same or similar issues.

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As of September 30, 2015 and March 31, 2015, 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, and the Revolving Credit Facility. 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. The Company did not record any impairment charges during the six months ended September 30, 2015. During an evaluation of goodwill and other identified intangible assets at September 30, 2014, the carrying value of goodwill and tradenames for certain reporting units exceeded fair value. See Note 3, "Goodwill and Other Identified Intangible Assets," for further discussion on measuring the Company's non-financial assets, specifically goodwill and tradenames.

Note 7 - 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. The Company's valuation allowance related to its deferred tax assets, which was $27.1 million at March 31, 2015, was released during the first quarter of fiscal 2016 based on the weight of positive evidence that the deferred tax assets will be realized due to the reclassification of certain tradenames from indefinite-lived to finite-lived, effective April 1, 2015. In the past, the Company's deferred tax liabilities related to indefinite-lived intangible assets were not considered a future source of income to support the realization of deferred tax assets within the net operating loss carryforward period.

Note 8 - Related Party Transactions

As discussed in Note 5, "Senior Secured Notes," during the first quarter of fiscal 2016, the Company repurchased approximately $2.0 million in aggregate principal amount of First Lien Notes, plus accrued and unpaid interest, in the open market from the Investors.

Mr. Elkins, a former member of our Board of Directors provided certain financial advisory services to the Company through Roxbury Advisory, LLC ("Roxbury"), a company controlled by Mr. Elkins, while he was a member of our Board of Directors. In August 2014, the consulting agreement between Roxbury and the Company was terminated. Payments for the services received from Roxbury totaled $50,000 during six months ended September 30, 2014 and the Company had no outstanding payables to Roxbury at September 30, 2015 or March 31, 2015.

Note 9 - Investments in Affiliates and Redeemable Noncontrolling Interests

Consolidated Joint Ventures

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. At any time prior to October 2019, the Company could be required to purchase all the limited liability company units, from the other limited liability company member, for a fixed price of $3.0 million cash (the "Olympia Put Option"). Any time from October 2019 through April 2020, the Company could require the other limited liability company member to sell, to the Company, all its limited liability company units 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 interests” in the accompanying financial statements.

Effective September 2015, the Company and the other limited liability company member agreed that the distributions made, by Olympia, to the other limited liability company member would be $1.0 million per year, without deduction or offset, and would represent the only distribution payments to which the other limited liability company member would be entitled to as a member of Olympia. Olympia's net income attributable to noncontrolling interests during the three and six months ended September 30, 2015 was $1.0 million and during the three and six months ended September 30, 2014 was $1.3 million.

Zinczenko-AMI Ventures, LLC

In February 2013, the Company entered into a limited liability company agreement to form a joint venture, Zinczenko-AMI Media Ventures, LLC ("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 is 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 unaudited condensed consolidated financial statements during the three and six months ended September 30, 2015 and 2014.

Redeemable Noncontrolling Interests

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



	Three Months Ended September 30,				Six Months Ended September 30,
	2015		2014		2015		2014
Balance, beginning of year	$	3,000	$	3,000	$	3,000	$	3,000
Net income attributable to noncontrolling interests	1,000		1,259		1,000		1,259
Balance, end of year	$	4,000	$	4,259	$	4,000	$	4,259

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. Unless otherwise disclosed below, the operating results of our unconsolidated joint ventures were insignificant to the Company's unaudited condensed consolidated financial statements during the three and six months ended September 30, 2015 and 2014.

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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 unaudited condensed consolidated financial statements for the six months ended September 30, 2015 and 2014. The management fees receivable from Radar totaled $2.0 million and $1.9 million as of September 30, 2015 and March 31, 2015, respectively, and is presented within other long-term assets in the accompanying unaudited condensed consolidated financial statements.

Select Media Services, LLC

In September 2013, the Company contributed substantially all of its assets comprising the Company's distribution and merchandising businesses operated by In Store Services, Inc., formerly known as Distribution Services, Inc. ("DSI"), a wholly-owned subsidiary of American Media, Inc., and $2.3 million in cash in exchange for a 27.5% membership interest in Select Media Services, LLC, a joint venture ("Select"), which operates as a merchandising and in-store services business. Though the Company 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 Select using the equity method.

The membership interest and cash contribution in Select was adjusted in September 2014, pursuant to a one-time retroactive adjustment back to September 2013. The Company's membership interest was replaced with a participation interest in the earnings of Select and the initial capital contribution was refunded to the Company in October 2014 along with the distribution of the Company's participation interest for the twelve months ended August 31, 2014.

In June 2015, the Company's participation interest in Select was modified and Select redeemed the Company's interest in Select for approximately $1.7 million, which is reflected in other revenues in the accompanying unaudited condensed consolidated financial statements. The proceeds were received in July 2015.

Note 10 - Dispositions

Shape, Fit Pregnancy and Natural Health

In January 2015, the Company and Weider Publications, LLC, a wholly-owned subsidiary of the Company, entered into an asset purchase agreement (the "Purchase Agreement") with Meredith Corporation ("Meredith"). The Purchase Agreement provides for the sale of the Company's Shape, Fit Pregnancy and Natural Health brands and magazines, which comprised its Women's Active Lifestyle segment. The Company received the initial cash consideration of $60.0 million on January 30, 2015 when the transaction closed. The Company is further entitled to additional consideration (the "Additional Consideration"), in the form of a one-time payment, following the completion of Meredith's 2018 fiscal year on June 30, 2018. The Additional Consideration, up to $60.0 million, will be based upon 40% of the adjusted operating profit of the combination of the Company's Shape brand and Meredith's Fitness brand.

Pursuant to the Purchase Agreement, the Company continued to publish the Shape, Fit Pregnancy and Natural Health magazines with on-sale dates through March 31, 2015, after which Meredith assumed publishing responsibilities for such titles. Effective as of the closing, Meredith assumed control over the digital assets used with Shape, Fit Pregnancy and Natural Health. The Company will have no continuing involvement in the operations of these publications subsequent to March 31, 2015.

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Discontinued Operations

Net revenue, pre-tax income from discontinued operations, income tax (benefit) provision and income (loss) from discontinued operations, net of income taxes are as follows, in thousands:



	Three Months Ended			Six Months Ended
	September 30, 2014
Net revenue	$	12,715		$	27,631
Pre-tax income from discontinued operations	1,338			2,872
Income tax (benefit) provision	(13		)	2,876
Income (loss) from discontinued operations, net of income taxes	$	1,351		$	(4	)

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 (now known as In-Store Services, Inc.), 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 engaged in discovery. On February 14, 2014, American Media, Inc. filed an amended answer and counterclaim in the Anderson Action asserting an antitrust claim against Anderson News. L.L.C. and Charles Anderson, Jr. based on the same events as Anderson’s claims. Two other defendants also filed the same counterclaim. Fact discovery was completed in May 2014 and expert discovery was completed in October 2014. Anderson submitted an expert report calculating that damages are approximately $470 million, which would be subject to trebling should Anderson prevail against the defendants in the lawsuit. Defendants, including American Media, Inc. and DSI, also have submitted an expert report on damages, which opines that, separate and apart from the question of liability, Anderson has suffered no damages.

On December 15, 2014, the parties in the Anderson Action filed motions for summary judgment and to strike certain proposed expert testimony. On August 20, 2015, the District Court granted the summary judgment filed by American Media, Inc., DSI and the other defendants, dismissing all of Anderson’s claims against defendants, and granted in part the motions to strike certain of Anderson’s proposed expert testimony. The court also granted summary judgment dismissing the counterclaims filed by American Media, Inc. and the two other defendants, but did not grant Anderson’s motion to strike defendants’ expert testimony. On August 25, 2015, Anderson filed its notice of appeal of the District Court’s decision granting defendants’ motions. On September 15, 2015, American Media, Inc. filed its notice of appeal of the District Court’s decision granting the motion for summary judgment dismissing the counterclaim.

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.

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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. After a temporary stay of discovery pending conclusion of fact discovery in the Anderson Action, discovery in the bankruptcy action proceeded. On December 12, 2014, defendants in the adversary action moved for partial summary judgment seeking dismissal of certain of the Creditors’ claims. The motion was denied on June 11, 2015.

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 three reporting segments: Celebrity Brands, 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.

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

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.

The Company’s accounting policies for the business segments are the same as those described in Note 2, "Summary of Significant Accounting Policies." The following information includes certain intersegment transactions and is, therefore, not necessarily indicative of the results had the operations existed as stand-alone businesses. Intersegment transactions represent intercompany services, which are billed at what management believes are prevailing market rates. These intersegment transactions, which represent transactions between operating units in different business segments, are eliminated in consolidation.

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Segment information for the three and six months ended September 30, 2015 and 2014 and the assets employed as of September 30, 2015 and March 31, 2015 are as follows (in thousands):



	Three Months Ended September 30,						Six Months Ended September 30,
	2015			2014			2015			2014
Operating revenues
Celebrity Brands	$	43,033		$	42,763		$	83,934		$	89,610
Men's Active Lifestyle Group	18,556			17,495			31,697			32,648
Corporate and Other	343			1,214			2,409			2,552
Total operating revenues	$	61,932		$	61,472		$	118,040		$	124,810

Operating income (loss)
Celebrity Brands	$	15,353		$	12,858		$	28,591		$	30,751
Men's Active Lifestyle Group	5,697			(13,566		)	8,524			(9,873		)
Corporate and Other	(12,074		)	(19,849		)	(23,094		)	(37,279		)
Total operating income (loss)	$	8,976		$	(20,557	)	$	14,021		$	(16,401	)

Depreciation and amortization
Celebrity Brands	$	3,287		$	399		$	6,569		$	957
Men's Active Lifestyle Group	964			275			1,927			528
Corporate and Other	2,367			2,243			4,849			4,553
Total depreciation and amortization	$	6,618		$	2,917		$	13,345		$	6,038

Impairment of goodwill and intangible assets
Men's Active Lifestyle Group	$	—		$	17,403		$	—		$	17,403
Corporate and Other	—			1,055			—			1,055
Total impairment of goodwill and intangible assets	$	—		$	18,458		$	—		$	18,458

Amortization of deferred rack costs
Celebrity Brands	$	1,211		$	1,226		$	2,680		$	2,586
Men's Active Lifestyle Group	17			10			23			28
Total amortization of deferred rack costs	$	1,228		$	1,236		$	2,703		$	2,614



Total Assets	September 30, 2015		March 31, 2015
Celebrity Brands	$	317,059	$	330,850
Men's Active Lifestyle Group	86,320		86,775
Corporate and Other (1)	36,729		48,400
Total assets	$	440,108	$	466,025

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

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Geographic Data

The Company operates principally in two geographic areas, the United States of America and Europe. There were no significant transfers between geographic areas during the three and six months ended September 30, 2015 and 2014. The following tables present revenue by geographic area for the three and six months ended September 30, 2015 and 2014 and the assets employed as of September 30, 2015 and March 31, 2015 are as follows (in thousands):



	Three Months Ended September 30,				Six Months Ended September 30,
	2015		2014		2015		2014
Operating revenues:
United States of America	$	60,383	$	58,710	$	114,904	$	119,017
Europe	1,549		2,762		3,136		5,793
Total operating revenues	$	61,932	$	61,472	$	118,040	$	124,810



	September 30, 2015		March 31, 2015
Assets:
United States of America	$	432,843	$	458,197
Europe	7,265		7,828
Total assets	$	440,108	$	466,025

Note 13 - Capital Structure

The Company has authorized 100 shares of $0.0001 par value common stock. At September 30, 2015, there were 100 shares of common stock issued and outstanding. As discussed in Note 1, "Nature of the Business," the Company is a wholly-owned subsidiary of the Parent, which is controlled by the Investors pursuant to the Merger.

We did not make any dividend payments during the six months ended September 30, 2015 and 2014, and we do not anticipate paying any dividends on our common stock in the foreseeable future. The terms of our Revolving Credit Facility restrict our ability to pay dividends, and any future indebtedness that we may incur could preclude us from paying dividends. With respect to the dividend restriction, the Revolving Credit Facility and the indentures governing the Senior Secured Notes include a cap on the total amount of cash available for distribution to our common stockholders.

Note 14 - Supplemental Condensed Consolidating Financial Information

The following tables present 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 condensed consolidated financial statements:

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SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

AS OF SEPTEMBER 30, 2015

(in thousands)



	Parent			Guarantors			Non Guarantors			Eliminations			Condensed Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	—		$	2,033		$	1,290		$	—		$	3,323
Trade receivables, net	—			20,460			675			—			21,135
Inventories	—			—			61			—			61
Prepaid expenses and other current assets	—			22,082			1,548			(5,487		)	18,143
Total current assets	—			44,575			3,574			(5,487		)	42,662
PROPERTY AND EQUIPMENT, NET:
Leasehold improvements	—			3,660			—			—			3,660
Furniture, fixtures and equipment	—			42,332			40			—			42,372
Less – accumulated depreciation	—			(33,288		)	(22		)	—			(33,310		)
Total property and equipment, net	—			12,704			18			—			12,722
OTHER ASSETS:
Deferred debt costs, net	5,194			—			—			—			5,194
Deferred rack costs, net	—			4,797			—			—			4,797
Investments in affiliates	610,545			(634		)	—			(608,855		)	1,056
Other long-term assets	—			3,074			—			—			3,074
Due from affiliates	—			303,005			—			(303,005		)	—
Total other assets	615,739			310,242			—			(911,860		)	14,121
GOODWILL AND OTHER IDENTIFIED INTANGIBLE ASSETS:
Goodwill	—			149,488			4,510			—			153,998
Other identified intangibles, net	—			210,605			6,000			—			216,605
Total goodwill and other identified intangible assets	—			360,093			10,510			—			370,603
TOTAL ASSETS	$	615,739		$	727,614		$	14,102		$	(917,347	)	$	440,108

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Accounts payable
Accounts payable	$	—		$	9,287		$	161		$	—		$	9,448
Accrued expenses and other liabilities	—			35,505			4,405			(5,790		)	34,120
Accrued interest	10,078			—			—			—			10,078
Deferred revenues	—			23,303			285			—			23,588
Total current liabilities	10,078			68,095			4,851			(5,790		)	77,234
NON-CURRENT LIABILITIES:
Senior secured notes	308,053			—			—			—			308,053
Revolving credit facility	13,800			—			—			—			13,800
Other non-current liabilities	—			8,677			—			—			8,677
Deferred income taxes	—			43,080			26			303			43,409
Due to affiliates	298,873			—			4,132			(303,005		)	—
Total liabilities	630,804			119,852			9,009			(308,492		)	451,173
COMMITMENTS AND CONTINGENCIES
Redeemable noncontrolling interests	—			—			4,000			—			4,000
STOCKHOLDERS' (DEFICIT) EQUITY:
Total stockholders' (deficit) equity	(15,065		)	607,762			1,093			(608,855		)	(15,065		)
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY	$	615,739		$	727,614		$	14,102		$	(917,347	)	$	440,108

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SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

AS OF MARCH 31, 2015

(in thousands)



	Parent			Guarantors			Non Guarantors			Eliminations			Condensed Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	—		$	1,040		$	2,412		$	—		$	3,452
Trade receivables, net	—			38,058			1,354			—			39,412
Inventories	—			739			134			—			873
Prepaid expenses and other current assets	—			16,207			636			(5,487		)	11,356
Total current assets	—			56,044			4,536			(5,487		)	55,093
PROPERTY AND EQUIPMENT, NET:
Leasehold improvements	—			3,801			—			—			3,801
Furniture, fixtures and equipment	—			43,189			790			—			43,979
Less – accumulated depreciation	—			(29,465		)	(765		)	—			(30,230		)
Total property and equipment, net	—			17,525			25			—			17,550
OTHER ASSETS:
Deferred debt costs, net	6,383			—			—			—			6,383
Deferred rack costs, net	—			4,824			—			—			4,824
Investments in affiliates	587,126			224			—			(586,547		)	803
Other long-term assets	—			3,193			—			—			3,193
Due from affiliates	—			300,246			—			(300,246		)	—
Total other assets	593,509			308,487			—			(886,793		)	15,203
GOODWILL AND OTHER IDENTIFIED INTANGIBLE ASSETS:
Goodwill	—			149,488			4,510			—			153,998
Other identified intangibles, net	—			218,181			6,000			—			224,181
Total goodwill and other identified intangible assets	—			367,669			10,510			—			378,179
TOTAL ASSETS	$	593,509		$	749,725		$	15,071		$	(892,280	)	$	466,025
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES:
Accounts payable	$	—		$	15,434		$	347		$	—		$	15,781
Accrued expenses and other liabilities	—			104,580			5,393			(65,958		)	44,015
Accrued interest	10,075			—			—			—			10,075
Deferred revenues	—			25,718			1,016			—			26,734
Total current liabilities	10,075			145,732			6,756			(65,958		)	96,605
NON-CURRENT LIABILITIES:
Senior secured notes	309,569			—			—			—			309,569
Revolving credit facility	14,700			—			—			—			14,700
Other non-current liabilities	—			8,352			—			—			8,352
Deferred income taxes	—			10,250			26			60,471			70,747
Due to affiliates	296,113			—			4,133			(300,246		)	—
Total liabilities	630,457			164,334			10,915			(305,733		)	499,973
COMMITMENTS AND CONTINGENCIES
Redeemable noncontrolling interests	—			—			3,000			—			3,000
STOCKHOLDERS' (DEFICIT) EQUITY:
Total stockholders' (deficit) equity	(36,948		)	585,391			1,156			(586,547		)	(36,948		)
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY	$	593,509		$	749,725		$	15,071		$	(892,280	)	$	466,025

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SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)

AND COMPREHENSIVE INCOME (LOSS)

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2015

(in thousands)



	Parent			Guarantors			Non Guarantors			Eliminations		Condensed Consolidated
OPERATING REVENUES:
Circulation	$	—		$	37,961		$	124		$	—	$	38,085
Advertising	—			16,023			—			—		16,023
Other	—			1,018			6,806			—		7,824
Total operating revenues	—			55,002			6,930			—		61,932
OPERATING EXPENSES:
Editorial	—			6,976			269			—		7,245
Production	—			12,225			3,593			—		15,818
Distribution, circulation and other cost of sales	—			8,606			32			—		8,638
Selling, general and administrative	—			14,263			374			—		14,637
Depreciation and amortization	—			6,614			4			—		6,618
Impairment of goodwill and intangible assets	—			—			—			—		—
Total operating expenses	—			48,684			4,272			—		52,956
OPERATING INCOME	—			6,318			2,658			—		8,976
OTHER EXPENSES:
Interest expense	(9,369		)	(880		)	(48		)	—		(10,297		)
Amortization of deferred debt costs	(866		)	—			—			—		(866		)
Other expenses, net	—			1			(40		)	—		(39		)
Total other expense, net	(10,235		)	(879		)	(88		)	—		(11,202		)
(LOSS) INCOME BEFORE PROVISION (BENEFIT) FOR INCOME TAXES, AND EQUITY IN EARNINGS OF CONSOLIDATED SUBSIDIARIES	(10,235		)	5,439			2,570			—		(2,226		)
PROVISION FOR INCOME TAXES	(7,576		)	6,513			31			—		(1,032		)
EQUITY (LOSSES) IN EARNINGS OF CONSOLIDATED SUBSIDIARIES	473			(553		)	—			80		—
NET INCOME (LOSS) FROM CONTINUING OPERATIONS	(2,186		)	(1,627		)	2,539			80		(1,194		)
INCOME FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES	—			—			—			—		—
NET INCOME (LOSS)	(2,186		)	(1,627		)	2,539			80		(1,194		)
LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS	—			—			(992		)	—		(992		)
NET INCOME (LOSS) ATTRIBUTABLE TO AMERICAN MEDIA, INC AND SUBSIDIARIES	$	(2,186	)	$	(1,627	)	$	1,547		$	80	$	(2,186	)
	Parent			Guarantors			Non Guarantors			Eliminations		Condensed Consolidated
NET INCOME (LOSS)	$	(2,186	)	$	(1,627	)	$	2,539		$	80	$	(1,194	)
Foreign currency translation adjustment	—			—			—			—		—
Comprehensive income (loss)	$	(2,186	)	$	(1,627	)	$	2,539		$	80	$	(1,194	)
Less: comprehensive loss attributable to noncontrolling interests	—			—			(992		)	—		(992		)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO AMERICAN MEDIA, INC. AND SUBSIDIARIES	$	(2,186	)	$	(1,627	)	$	1,547		$	80	$	(2,186	)

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SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)

AND COMPREHENSIVE INCOME (LOSS)

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2015

(in thousands)



	Parent			Guarantors			Non Guarantors			Eliminations			Condensed Consolidated
OPERATING REVENUES:
Circulation	$	—		$	74,101		$	146		$	—		$	74,247
Advertising	—			33,885			—			—			33,885
Other	—			3,077			6,831			—			9,908
Total operating revenues	—			111,063			6,977			—			118,040
OPERATING EXPENSES:
Editorial	—			12,774			391			—			13,165
Production	—			26,147			3,634			—			29,781
Distribution, circulation and other cost of sales	—			17,585			89			—			17,674
Selling, general and administrative	—			29,444			610			—			30,054
Depreciation and amortization	—			13,338			7			—			13,345
Impairment of goodwill and intangible assets	—			—			—			—			—
Total operating expenses	—			99,288			4,731			—			104,019
OPERATING INCOME	—			11,775			2,246			—			14,021
OTHER EXPENSES:
Interest expense	(18,769		)	(883		)	(48		)	—			(19,700		)
Amortization of deferred debt costs	(1,716		)	—			—			—			(1,716		)
Other expenses, net	—			1			(40		)	—			(39		)
Total other expense, net	(20,485		)	(882		)	(88		)	—			(21,455		)
(LOSS) INCOME BEFORE PROVISION (BENEFIT) FOR INCOME TAXES, AND EQUITY IN EARNINGS OF CONSOLIDATED SUBSIDIARIES	(20,485		)	10,893			2,158			—			(7,434		)
PROVISION FOR INCOME TAXES	(7,576		)	(22,911		)	183			—			(30,304		)
EQUITY (LOSSES) IN EARNINGS OF CONSOLIDATED SUBSIDIARIES	34,793			(1,111		)	—			(33,682		)	—
NET INCOME (LOSS) FROM CONTINUING OPERATIONS	21,884			32,693			1,975			(33,682		)	22,870
INCOME FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES	—			—			—			—			—
NET INCOME (LOSS)	21,884			32,693			1,975			(33,682		)	22,870
LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS	—			—			(986		)	—			(986		)
NET INCOME (LOSS) ATTRIBUTABLE TO AMERICAN MEDIA, INC AND SUBSIDIARIES	$	21,884		$	32,693		$	989		$	(33,682	)	$	21,884
	Parent			Guarantors			Non Guarantors			Eliminations			Condensed Consolidated
NET INCOME (LOSS)	$	21,884		$	32,693		$	1,975		$	(33,682	)	$	22,870
Foreign currency translation adjustment	—			—			(1		)	—			(1		)
Comprehensive income (loss)	21,884			32,693			1,974			(33,682		)	22,869
Less: comprehensive loss attributable to noncontrolling interests	—			—			(986		)	—			(986		)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO AMERICAN MEDIA, INC. AND SUBSIDIARIES	$	21,884		$	32,693		$	988		$	(33,682	)	$	21,883

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SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)

AND COMPREHENSIVE INCOME (LOSS)

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014

(in thousands)



	Parent			Guarantors			Non Guarantors			Eliminations		Condensed Consolidated
OPERATING REVENUES:
Circulation	$	—		$	37,636		$	1,261		$	—	$	38,897
Advertising	—			12,742			1,407			—		14,149
Other	—			1,837			6,589			—		8,426
Total operating revenues	—			52,215			9,257			—		61,472
OPERATING EXPENSES:
Editorial	—			7,137			331			—		7,468
Production	—			15,691			4,505			—		20,196
Distribution, circulation and other cost of sales	—			9,820			549			—		10,369
Selling, general and administrative	—			21,836			785			—		22,621
Depreciation and amortization	—			2,897			20			—		2,917
Impairment of goodwill and intangible assets	—			18,458			—			—		18,458
Total operating expenses	—			75,839			6,190			—		82,029
OPERATING INCOME	—			(23,624		)	3,067			—		(20,557		)
OTHER EXPENSES:
Interest expense	(13,784		)	(11		)	(17		)	—		(13,812		)
Amortization of deferred debt costs	(1,623		)	—			—			—		(1,623		)
Other income	1			(16		)	—			—		(15		)
Total other income (expenses), net	(15,406		)	(27		)	(17		)	—		(15,450		)
(LOSS) INCOME BEFORE PROVISION (BENEFIT) FOR INCOME TAXES, AND EQUITY IN EARNINGS OF CONSOLIDATED SUBSIDIARIES	(15,406		)	(23,651		)	3,050			—		(36,007		)
PROVISION FOR INCOME TAXES	—			(5,977		)	98			—		(5,879		)
EQUITY IN EARNINGS OF CONSOLIDATED SUBSIDIARIES	(13,975		)	374			—			13,601		—
NET LOSS FROM CONTINUING OPERATIONS	(29,381		)	(17,300		)	2,952			13,601		(30,128		)
INCOME FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES	—			1,351			—			—		1,351
NET (LOSS) INCOME	(29,381		)	(15,949		)	2,952			13,601		(28,777		)
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	—			—			(1,285		)	—		(1,285		)
NET (LOSS) INCOME ATTRIBUTABLE TO AMERICAN MEDIA, INC AND SUBSIDIARIES	$	(29,381	)	$	(15,949	)	$	1,667		$	13,601	$	(30,062	)
	Parent			Guarantors			Non Guarantors			Eliminations		Condensed Consolidated
NET (LOSS) INCOME	$	(29,381	)	$	(15,949	)	$	2,952		$	13,601	$	(28,777	)
Foreign currency translation adjustment	—			—			(66		)	—		(66		)
Comprehensive (loss) income	$	(29,381	)	$	(15,949	)	$	2,886		$	13,601	$	(28,843	)
Less: comprehensive income attributable to noncontrolling interests	—			—			(1,285		)	—		(1,285		)
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO AMERICAN MEDIA, INC. AND SUBSIDIARIES	$	(29,381	)	$	(15,949	)	$	1,601		$	13,601	$	(30,128	)

Table of Contents

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)

AND COMPREHENSIVE INCOME (LOSS)

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2014

(in thousands)



	Parent		Guarantors		Non Guarantors		Eliminations		Condensed Consolidated
OPERATING REVENUES:
Circulation	$	—	$	80,286	$	2,735	$	—	$	83,021
Advertising	—		28,587		2,913		—		31,500
Other	—		3,310		6,979		—		10,289
Total operating revenues	—		112,183		12,627		—		124,810
OPERATING EXPENSES:
Editorial	—		14,052		932		—		14,984
Production	—		31,195		5,350		—		36,545
Distribution, circulation and other cost of sales	—		18,922		1,268		—		20,190
Selling, general and administrative	—		43,422		1,574		—

AMERICAN MEDIA INC 10-Q