EX-99.3
4
a2155258zex-99_3.htm
EXHIBIT 99.3
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Exhibit 99.3
PRIMEDIA INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Balance Sheet
On September 24, 2004, PRIMEDIA Inc. ("PRIMEDIA") announced that it would explore strategic options for its Workplace Learning division (excluding
the Interactive Medical Network division) ("PWPL"), and was actively pursuing the sale of PWPL. On March 31, 2005, PRIMEDIA completed the sale of Bankers Training &
Consulting Company (BTCC), a division of PWPL, for cash proceeds of $21.3 million to Bank Administration Institute. On April 1, 2005, PRIMEDIA completed the sale of the remaining net
assets of PWPL to Trinity Learning Corporation for the assumption of liabilities.
Pro Forma Condensed Consolidated Balance Sheet
The following unaudited pro forma condensed consolidated balance sheet has been prepared based on the historical consolidated balance sheet of PRIMEDIA after
giving effect to the sale of PWPL and the assumptions and adjustments described in the accompanying notes to this unaudited pro forma condensed consolidated balance sheet. The unaudited pro forma
condensed consolidated balance sheet gives effect to the divestiture of PWPL by PRIMEDIA as if it had occurred on December 31, 2004. The unaudited pro forma condensed consolidated balance sheet
was derived by adjusting the historical consolidated balance sheet of PRIMEDIA for the sale of the assets and liabilities associated with PWPL and the pro forma adjustments described in the notes to
the unaudited pro forma condensed consolidated balance sheet.
The
results of operations of PWPL had been classified as a discontinued operation for all periods presented in the audited historical consolidated financial statements and notes thereto
included in PRIMEDIA's Annual Report on Form 10-K for the fiscal year ended December 31, 2004, filed on March 16, 2005, in accordance with Statement of Financial
Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. As a result, PRIMEDIA has not presented
unaudited pro forma condensed statements of consolidated operations in this Current Report on Form 8-K. The unaudited pro forma condensed consolidated balance sheet, including the
notes thereto, is qualified in its entirety by reference to, and should be read in conjunction with, PRIMEDIA's audited historical consolidated financial statements.
The
unaudited pro forma condensed consolidated balance sheet is presented for illustrative purposes only and is not necessarily indicative of the consolidated financial position that
would have actually been reported had the divestitures occurred as of December 31, 2004, nor is it necessarily indicative of PRIMEDIA's future consolidated financial position. The unaudited pro
forma condensed consolidated balance sheet is based upon estimates and assumptions. These estimates and assumptions are preliminary and have been made solely for the purpose of developing this pro
forma information.
PRIMEDIA INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Balance Sheet
(dollars in thousands)
December 31, 2004
Historical
Consolidated
PWPL
Pro Forma
Adjustments
Pro Forma
Consolidated
Assets
Current assets:
Cash and cash equivalents
$
13,000
$
21,306
(a)
$
34,306
Accounts receivable, net
179,005
179,005
Inventories
22,696
22,696
Prepaid expenses and other
29,423
29,423
Assets held for sale
40,274
$
40,274
-
Total current assets
284,398
40,274
21,306
265,430
Property and equipment, net
79,806
79,806
Other intangible assets, net
242,884
242,884
Goodwill
902,579
902,579
Other non-current assets
49,381
49,381
Total Assets
$
1,559,048
$
40,274
$
21,306
$
1,540,080
Liabilities and Shareholders' Deficiency
Current liabilities:
Accounts payable
$
84,732
$
84,732
Accrued expenses and other
143,112
$
1,373
(b)
144,485
Deferred revenues
157,314
157,314
Current maturities of long-term debt
24,919
24,919
Liabilities of businesses held for sale
26,980
$
26,980
-
Total current liabilities
437,057
26,980
1,373
411,450
Long-term debt
1,635,964
1,635,964
Shares subject to mandatory redemption
474,559
474,559
Deferred revenues
17,093
17,093
Deferred income taxes
75,172
75,172
Other non-current liabilities
64,023
64,023
Total Liabilities
2,703,868
26,980
1,373
2,678,261
Shareholders' deficiency:
Common stock
2,709
2,709
Additional paid-in capital
2,354,778
2,354,778
Accumulated deficit
(3,426,263
)
13,294
13,294
6,639
(c)
(b)
(3,419,624
)
Accumulated other comprehensive loss
(167
)
(167
)
Common stock in treasury, at cost
(75,877
)
(75,877
)
Total shareholders' deficiency
(1,144,820
)
13,294
19,933
(1,138,181
)
Total Liabilities and Shareholders' Deficiency
$
1,559,048
$
40,274
$
21,306
$
1,540,080
See
Notes to the Unaudited Pro Forma Condensed Consolidated Balance Sheet.
2
Note 1. Basis of Pro Forma Presentation
The pro forma condensed consolidated balance sheet included herein has been prepared pursuant to Article 11 of Regulation S-X of the
United States Securities and Exchange Commission.
The
unaudited pro forma condensed consolidated balance sheet of PRIMEDIA has been prepared based on the historical consolidated balance sheets of PRIMEDIA and PWPL as of
December 31, 2004, after giving effect to the adjustments and assumptions described below.
PRIMEDIA
and PWPL employ accounting policies that are in accordance with accounting principles generally accepted in the United States of America. In management's opinion, all material
adjustments necessary to present fairly the pro forma financial position of PRIMEDIA have been made.
The
ongoing activity presented in this pro forma condensed consolidated balance sheet represents PRIMEDIA's assets and liabilities that were not divested in the sale of PWPL.
Note 2. Pro Forma Adjustments
On March 31, 2005, PRIMEDIA completed the sale of BTCC, a division of PWPL, for cash proceeds of $21.3 million to Bank Administration Institute. On
April 1, 2005, PRIMEDIA completed the sale of the remaining net assets of PWPL to Trinity Learning Corporation for the assumption of liabilities.
The
accompanying unaudited pro forma condensed consolidated balance sheet has been prepared as if the divestitures were completed on December 31, 2004 and reflects the following
pro forma adjustments:
(a) To
record the cash proceeds of the sale of BTCC to be used for general corporate purposes.
(b) To
record the combined pro forma net gain as a result of the divestitures of BTCC and the remaining net assets of PWPL.
Total cash consideration (excluding any adjustment for changes in net working capital)
$
21,306
Transaction costs
1,373
Net cash proceeds
19,933
Carrying value of the net assets sold
13,294
Combined pro forma net gain before income tax expense
6,639
Income tax expense
0
Combined pro forma net gain
$
6,639
No
income tax expense has been recorded on the divestitures of BTCC and the remaining net assets of PWPL as no current federal, state or local income taxes will be
payable as a result of the divestitures and any associated deferred income tax provision would be offset by a corresponding change to PRIMEDIA's valuation allowance.
(c) To
eliminate PWPL's equity from PRIMEDIA's consolidated shareholders' deficiency as a result of the divestitures.
3
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PRIMEDIA INC. AND SUBSIDIARIES Unaudited Pro Forma Condensed Consolidated Balance Sheet
PRIMEDIA INC. AND SUBSIDIARIES Unaudited Pro Forma Condensed Consolidated Balance Sheet (dollars in thousands)

EX - 99 . 3 4 a2155258zex - 99 _ 3 . htm EXHIBIT 99 . 3 QuickLinks -- Click here to rapidly navigate through this document Exhibit 99 . 3 PRIMEDIA INC . AND SUBSIDIARIES Unaudited Pro Forma Condensed Consolidated Balance Sheet On September 24 , 2004 , PRIMEDIA Inc . ( " PRIMEDIA " ) announced that it would explore strategic options for its Workplace Learning division ( excluding the Interactive Medical Network division ) ( " PWPL " ) , and was actively pursuing the sale of PWPL . On March 31 , 2005 , PRIMEDIA completed the sale of Bankers Training & Consulting Company ( BTCC ) , a division of PWPL , for cash proceeds of $ 21.3 million to Bank Administration Institute . On April 1 , 2005 , PRIMEDIA completed the sale of the remaining net assets of PWPL to Trinity Learning Corporation for the assumption of liabilities . Pro Forma Condensed Consolidated Balance Sheet The following unaudited pro forma condensed consolidated balance sheet has been prepared based on the historical consolidated balance sheet of PRIMEDIA after giving effect to the sale of PWPL and the assumptions and adjustments described in the accompanying notes to this unaudited pro forma condensed consolidated balance sheet . The unaudited pro forma condensed consolidated balance sheet gives effect to the divestiture of PWPL by PRIMEDIA as if it had occurred on December 31 , 2004 . The unaudited pro forma condensed consolidated balance sheet was derived by adjusting the historical consolidated balance sheet of PRIMEDIA for the sale of the assets and liabilities associated with PWPL and the pro forma adjustments described in the notes to the unaudited pro forma condensed consolidated balance sheet . The results of operations of PWPL had been classified as a discontinued operation for all periods presented in the audited historical consolidated financial statements and notes thereto included in PRIMEDIA 's Annual Report on Form 10 - K for the fiscal year ended December 31 , 2004 , filed on March 16 , 2005 , in accordance with Statement of Financial Accounting Standards No . 144 , Accounting for the Impairment or Disposal of Long - Lived Assets . As a result , PRIMEDIA has not presented unaudited pro forma condensed statements of consolidated operations in this Current Report on Form 8 - K . The unaudited pro forma condensed consolidated balance sheet , including the notes thereto , is qualified in its entirety by reference to , and should be read in conjunction with , PRIMEDIA ' s audited historical consolidated financial statements . The unaudited pro forma condensed consolidated balance sheet is presented for illustrative purposes only and is not necessarily indicative of the consolidated financial position that would have actually been reported had the divestitures occurred as of December 31 , 2004 , nor is it necessarily indicative of PRIMEDIA 's future consolidated financial position . The unaudited pro forma condensed consolidated balance sheet is based upon estimates and assumptions . These estimates and assumptions are preliminary and have been made solely for the purpose of developing this pro forma information . PRIMEDIA INC . AND SUBSIDIARIES Unaudited Pro Forma Condensed Consolidated Balance Sheet ( dollars in thousands ) December 31 , 2004 Historical Consolidated PWPL Pro Forma Adjustments Pro Forma Consolidated Assets Current assets : Cash and cash equivalents $ 13,000 $ 21,306 ( a ) $ 34,306 Accounts receivable , net 179,005 179,005 Inventories 22,696 22,696 Prepaid expenses and other 29,423 29,423 Assets held for sale 40,274 $ 40,274 - Total current assets 284,398 40,274 21,306 265,430 Property and equipment , net 79,806 79,806 Other intangible assets , net 242,884 242,884 Goodwill 902,579 902,579 Other non - current assets 49,381 49,381 Total Assets $ 1,559,048 $ 40,274 $ 21,306 $ 1,540,080 Liabilities and Shareholders ' Deficiency Current liabilities : Accounts payable $ 84,732 $ 84,732 Accrued expenses and other 143,112 $ 1,373 ( b ) 144,485 Deferred revenues 157,314 157,314 Current maturities of long - term debt 24,919 24,919 Liabilities of businesses held for sale 26,980 $ 26,980 - Total current liabilities 437,057 26,980 1,373 411,450 Long - term debt 1,635,964 1,635,964 Shares subject to mandatory redemption 474,559 474,559 Deferred revenues 17,093 17,093 Deferred income taxes 75,172 75,172 Other non - current liabilities 64,023 64,023 Total Liabilities 2,703,868 26,980 1,373 2,678,261 Shareholders ' deficiency : Common stock 2,709 2,709 Additional paid - in capital 2,354,778 2,354,778 Accumulated deficit ( 3,426,263 ) 13,294 13,294 6,639 ( c ) ( b ) ( 3,419,624 ) Accumulated other comprehensive loss ( 167 ) ( 167 ) Common stock in treasury , at cost ( 75,877 ) ( 75,877 ) Total shareholders ' deficiency ( 1,144,820 ) 13,294 19,933 ( 1,138,181 ) Total Liabilities and Shareholders ' Deficiency $ 1,559,048 $ 40,274 $ 21,306 $ 1,540,080 See Notes to the Unaudited Pro Forma Condensed Consolidated Balance Sheet . 2 Note 1 . Basis of Pro Forma Presentation The pro forma condensed consolidated balance sheet included herein has been prepared pursuant to Article 11 of Regulation S - X of the United States Securities and Exchange Commission . The unaudited pro forma condensed consolidated balance sheet of PRIMEDIA has been prepared based on the historical consolidated balance sheets of PRIMEDIA and PWPL as of December 31 , 2004 , after giving effect to the adjustments and assumptions described below . PRIMEDIA and PWPL employ accounting policies that are in accordance with accounting principles generally accepted in the United States of America . In management 's opinion , all material adjustments necessary to present fairly the pro forma financial position of PRIMEDIA have been made . The ongoing activity presented in this pro forma condensed consolidated balance sheet represents PRIMEDIA 's assets and liabilities that were not divested in the sale of PWPL . Note 2 . Pro Forma Adjustments On March 31 , 2005 , PRIMEDIA completed the sale of BTCC , a division of PWPL , for cash proceeds of $ 21.3 million to Bank Administration Institute . On April 1 , 2005 , PRIMEDIA completed the sale of the remaining net assets of PWPL to Trinity Learning Corporation for the assumption of liabilities . The accompanying unaudited pro forma condensed consolidated balance sheet has been prepared as if the divestitures were completed on December 31 , 2004 and reflects the following pro forma adjustments : ( a ) To record the cash proceeds of the sale of BTCC to be used for general corporate purposes . ( b ) To record the combined pro forma net gain as a result of the divestitures of BTCC and the remaining net assets of PWPL . Total cash consideration ( excluding any adjustment for changes in net working capital ) $ 21,306 Transaction costs 1,373 Net cash proceeds 19,933 Carrying value of the net assets sold 13,294 Combined pro forma net gain before income tax expense 6,639 Income tax expense 0 Combined pro forma net gain $ 6,639 No income tax expense has been recorded on the divestitures of BTCC and the remaining net assets of PWPL as no current federal , state or local income taxes will be payable as a result of the divestitures and any associated deferred income tax provision would be offset by a corresponding change to PRIMEDIA 's valuation allowance . ( c ) To eliminate PWPL 's equity from PRIMEDIA 's consolidated shareholders ' deficiency as a result of the divestitures . 3 QuickLinks PRIMEDIA INC . AND SUBSIDIARIES Unaudited Pro Forma Condensed Consolidated Balance Sheet PRIMEDIA INC . AND SUBSIDIARIES Unaudited Pro Forma Condensed Consolidated Balance Sheet ( dollars in thousands )
O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O B-Parties.SELLING_COMPANY O O O O B-Parties.ACQUIRED_COMPANY I-Parties.ACQUIRED_COMPANY I-Parties.ACQUIRED_COMPANY I-Parties.ACQUIRED_COMPANY I-Parties.ACQUIRED_COMPANY O O O O O O O O O O O O O O O O B-Parties.BUYING_COMPANY I-Parties.BUYING_COMPANY I-Parties.BUYING_COMPANY O O O O O O O B-Parties.SELLING_COMPANY O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O B-Parties.SELLING_COMPANY O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O B-Parties.SELLING_COMPANY O O O O B-Parties.ACQUIRED_COMPANY O O O O O O O O O O O O O B-Parties.BUYING_COMPANY I-Parties.BUYING_COMPANY I-Parties.BUYING_COMPANY O O O O O O O B-Parties.SELLING_COMPANY O O O O O O O O O O O B-Parties.BUYING_COMPANY I-Parties.BUYING_COMPANY I-Parties.BUYING_COMPANY O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O