<PAGE>
 
     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 11, 1998
                                                     REGISTRATION NO. 333-
-------------------------------------------------------------------------------
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                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
 
                               ---------------
 
                                   FORM S-1
                            REGISTRATION STATEMENT
                                     UNDER
                          THE SECURITIES ACT OF 1933
 
                               ---------------
 
                         THE FARM JOURNAL CORPORATION
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
                               ---------------
 
<TABLE>
<S>                             <C>                           <C>
           DELAWARE                         2721                        13-3938061
 (STATE OR OTHER JURISDICTION   (PRIMARY STANDARD INDUSTRIAL         (I.R.S. EMPLOYER
 OF INCORPORATION OR ORGANIZA-
             TION)               CLASSIFICATION CODE NUMBER)       IDENTIFICATION NUMBER)
</TABLE>
 
                              1500 MARKET STREET
                              CENTRE SQUARE WEST
                            PHILADELPHIA, PA 19102
                                (215) 557-8900
                        ATTN: MR. STANFORD A. ERICKSON
                     CHAIRMAN AND CHIEF EXECUTIVE OFFICER
  (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
                   REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
 
                               ---------------
 
           IT IS REQUESTED THAT COPIES OF COMMUNICATIONS BE SENT TO:
<TABLE>
<S>                                            <C>
            DONALD B. BRANT, JR.                              R.W. SMITH, JR.
       MILBANK, TWEED, HADLEY & MCCLOY                     PIPER & MARBURY L.L.P.
          ONE CHASE MANHATTAN PLAZA                         CHARLES CENTER SOUTH
          NEW YORK, NEW YORK 10005                        36 SOUTH CHARLES STREET
               (212) 530-5000                            BALTIMORE, MARYLAND 21201
                                                              (410) 539-2530
</TABLE>
 
                               ---------------
 
  APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this registration statement.
 
  If any of the Securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 of the Securities Act of
1933, check the following box: [_]
 
  If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
 
  If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
 
  If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
 
  If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
                        CALCULATION OF REGISTRATION FEE
<TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<CAPTION>
                                                         PROPOSED
                                                          MAXIMUM
                                                         AGGREGATE   AMOUNT OF
                TITLE OF EACH CLASS OF                   OFFERING   REGISTRATION
              SECURITIES TO BE REGISTERED                PRICE(1)       FEE
--------------------------------------------------------------------------------
<S>                                                     <C>         <C>
Class A Common Stock .................................  $35,000,000   $10,325
</TABLE>
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee
    pursuant to Rule 457(c) under the Securities Act of 1933, as amended.
 
                               ---------------
 
  THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
 
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<PAGE>
 
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A         +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE   +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY  +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT        +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR   +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE      +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE    +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF  +
+ANY SUCH STATE.                                                               +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
 
                 SUBJECT TO COMPLETION DATED            , 1998
 
                                     [LOGO]
 
                                       Shares
                          THE FARM JOURNAL CORPORATION
                              Class A Common Stock
                           (par value $.01 per share)
 
                                   --------
 
All of the            shares of Class A Common Stock, par value $0.01 per share
("Class A  Common Stock"), offered  hereby are being  sold by The  Farm Journal
 Corporation ("Farm Journal"  or the  "Company"). Prior to  this offering  (the
 "Offering"), there has been no public market  for the Class A Common Stock of
 Farm   Journal.  It  is   anticipated  that   the  initial  public   offering
  price will be between $    and  $    per share. For information relating  to
  the factors  considered in determining  the initial  public offering price,
  see "Underwriting."
 
The Company's Common  Stock ("Common Stock")  consists of Class  A Common Stock
and Class B Common  Stock, par value $0.01 per share  ("Class B Common Stock").
The  holders of Class  A Common  Stock, voting as  a class,  have the right  to
elect that minimum number of directors constituting 25% of the members of Farm
 Journal's Board  of  Directors. Other  than  such right  to  elect directors,
 unless all of the shares of Class B Common Stock are converted into shares of
 Class A  Common Stock  or otherwise  cease to  be outstanding  and except  as
 required by the laws of the State of Delaware, holders of the Class A Common
 Stock have  no voting rights. Subject to the  foregoing limitation on voting
  rights and  certain other  exceptions, the  rights and  privileges of  each
  class of  Common Stock  are substantially  identical.  See "Description  of
  Capital Stock"  and "Risk  Factors--Control of  the Company; Anti-Takeover
  Impact."
 
Application has  been  made  to have  the  Class  A Common  Stock  approved  for
quotation on The Nasdaq
            Stock Market's National Market under the symbol "FJCO".
 
  FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION
 WITH AN INVESTMENT IN THE COMMON STOCK, SEE "RISK FACTORS" ON PAGE 11 HEREIN.
 
THESE SECURITIES HAVE  NOT BEEN APPROVED  OR DISAPPROVED BY  THE SECURITIES AND
EXCHANGE COMMISSION  OR ANY STATE SECURITIES COMMISSION NOR HAS  THE SECURITIES
 AND EXCHANGE COMMISSION  OR ANY  STATE SECURITIES COMMISSION  PASSED UPON THE
 ACCURACY OR ADEQUACY  OF THIS PROSPECTUS. ANY REPRESENTATION  TO THE CONTRARY
  IS A CRIMINAL OFFENSE.
 
<TABLE>
<CAPTION>
                                                      UNDERWRITING
                                              PRICE    DISCOUNTS
                                               TO         AND      PROCEEDS TO
                                             PUBLIC   COMMISSIONS   COMPANY(1)
                                             ------   ------------ -----------
 <C>                                         <S>      <C>          <C>
 Per Share..................................    $          $            $
 Total(2)...................................  $         $             $
</TABLE>
 
(1) Before deducting expenses payable by the Company estimated at $     .
 
(2) The Company has granted the Underwriters an option, exercisable for 30 days
    from the date of this Prospectus, to purchase a maximum of      additional
    shares to cover over-allotments of shares. If the option is exercised in
    full, the total Price to Public will be $     , Underwriting Discounts and
    Commissions will be $      , and Proceeds to Company will be $        .
 
  The Class A Common Stock is offered by the several Underwriters, when, as and
if issued by the Company, delivered to and accepted by the Underwriters and
subject to their right to reject orders in whole or in part. It is expected
that the shares of Class A Common Stock will be ready for delivery on or about
         , 1998 against payment in immediately available funds.
 
CREDIT SUISSE FIRST BOSTON
                FURMAN SELZ
                                                       MORGAN SCHIFF & CO., INC.
 
                        Prospectus dated         , 1998
<PAGE>
 
 
 
                                   [Artwork]
 
  CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES
OFFERED HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE
SHORT COVERING TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."
 
                               ----------------
 
  The Company's logo and each of the titles of the Company's publications
referenced herein are trademarks of the Company. Each trade name, trademark or
service mark of any other company appearing in this Prospectus is the property
of its holder.
 
                                       2
<PAGE>
 
                               PROSPECTUS SUMMARY
 
  The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere in this Prospectus. Unless otherwise indicated or where the context
otherwise requires, the information contained in this Prospectus gives effect
to the recapitalization described in "Description of Capital Stock--
Recapitalization" and assumes no exercise of the Underwriters' over-allotment
option. The Farm Journal Corporation ("FJC") is a holding company conducting
business through its wholly-owned subsidiaries, including Farm Journal, Inc.
("FJI"), which was acquired in April 1997 (the "Management Purchase"). See
"Management Purchase." The term "Farm Journal" or the "Company" shall refer to
FJC and its consolidated subsidiaries subsequent to the Management Purchase and
FJI and its consolidated subsidiaries prior to the Management Purchase.
 
  Market data used throughout this Prospectus was obtained from surveys
conducted by the Company and from industry publications. These industry
publications generally indicate that the information contained therein has been
obtained from sources believed to be reliable, but that the accuracy and
completeness of such information is not guaranteed. The Company has not
independently verified such market data. These publications were not
commissioned by, or prepared at the request of, the Company or any of its
affiliates. Similarly, surveys conducted by the Company, while believed to be
reliable, have not been verified by an independent source.
 
                                  THE COMPANY
 
  Farm Journal is one of the country's oldest and largest providers of
agricultural information, principally through print and electronic publishing,
data management and related information services. The Company's publishing
operations include its 121 year old flagship publication, Farm Journal, one of
the largest circulation agriculture magazines in the United States; Pro Farmer,
the largest circulation newsletter devoted to the agricultural commodity
markets; several specialty agribusiness magazines, including Top Producer and
the Today livestock publications; the Links business, a satellite-delivered
agricultural commodity news and analysis service; and several agriculture-
oriented Internet sites. The Company's data management and information services
businesses, conducted through the Company's Farm Journal Information Resources
division ("FJIR"), provide proprietary data and analysis about commercial
farming and ranching operations to leading agricultural industry suppliers,
such as equipment manufacturers, seed producers and crop protection suppliers.
The Company believes that the Farm Journal brand is among the most trusted,
respected and authoritative names in American agriculture and that the
Company's database, created through over 30 years of direct communication with
American farmers and ranchers, is unique in its depth and accuracy.
 
  In April 1997, management and an investor group purchased FJI from Tribune
Company. Since the Management Purchase, the Company has begun implementing a
strategy to build on the Farm Journal brand and the Company's unique database
and sophisticated data analysis capabilities to become the worldwide market
leader for serving the large and growing need for quality information by
farmers and ranchers and the businesses that serve them. For the three months
ended March 31, 1998, the Company had pro forma net revenues and EBITDA of
$14.4 million and $4.1 million, respectively. For a description of the pro
forma adjustments and the components of EBITDA, see Notes 1, 2 and 8 to the
Summary Combined Financial Data.
 
MARKET OPPORTUNITY
 
  The United States Department of Agriculture ("USDA") estimates that in 1997
approximately $213 billion of agricultural products were sold in the United
States alone. Management believes worldwide agricultural sales are a multiple
of domestic sales. The size and increasing sophistication and complexity of the
global agricultural business has created a substantial and growing need for
quality information among farmers and ranchers. Farm businesses, to remain
competitive, must understand and adapt to rapid technological advancements,
curtailment
 
                                       3
<PAGE>
 
of government subsidies and other policy changes, volatile commodities markets,
globalization of agricultural trade and other industry developments. Management
believes that the market for information and analysis needed by farm businesses
to address these issues is significant and underserved given the overall size
of the market for agricultural products.
 
  Management also believes that there is a related large and growing need for
quality information and information services among businesses that supply
farmers and ranchers. The increasing complexity of the industry, as well as its
capital intensive nature, has, among other things, resulted in the
consolidation of farms and purchasing power. According to the USDA,
approximately $133 billion of the estimated total of $174 billion in farm
supplies sold in 1996 were purchased by the 18% of all farms that generate
$100,000 or more in annual revenues, farms which the USDA classifies as "Class
1A farms." To reach these largest purchasers, agricultural product suppliers
increasingly are using targeted relationship marketing techniques which require
more detailed information about the most successful farmers and ranchers. Farm
Journal believes it is effectively positioned to satisfy the large and growing
domestic and worldwide demand for such information with the Company's database,
data services expertise and longstanding relationships with farmers and
ranchers.
 
GROWTH STRATEGY
 
  Farm Journal's objective is to aggressively grow revenues and improve
profitability while becoming the leading worldwide provider of agricultural
information and information services to farmers, ranchers, agricultural
suppliers and related constituencies. Farm Journal will continue to pursue
growth through numerous internal initiatives and strategic acquisitions that
leverage the Farm Journal brand and the Company's longstanding relationships in
the agricultural community and that build on the Company's other competitive
strengths, including content development and data services. The elements of
this strategy are set forth below:
 
  Increase Revenues from Existing Business. Management believes that there is
substantial opportunity to increase revenues from existing business and has
commenced a variety of revenue-enhancing initiatives. These initiatives have
included combining data management and market research operations and adding
sales and marketing directors to create new product and cross-selling
opportunities, increasing subscription rates and converting controlled-
circulation publications to partially-paid status, increasing the Company's
sales force, implementing performance-based compensation and emphasizing
classified advertising sales. In addition, management anticipates expanding its
Globalink and FutureLink commodity news and analysis businesses with new
marketing relationships and product introductions.
 
  Develop Related Revenue Opportunities. Farm Journal believes there are
numerous opportunities to develop additional revenues by leveraging the
Company's strong brand identity, data management capabilities and customer and
reader relationships. These opportunities include organization of conferences
and seminars; direct sales of books, videos and other merchandise; event
marketing; custom publishing for agricultural suppliers, trade groups and other
agricultural related constituencies; development of farm management services;
and the launch of new publications, including newsletters, directories, other
agricultural related business-to-business magazines and certain rural-oriented
titles. In launching new publications, management intends to build on its
strong customer relationships by seeking full or partial sponsorship to
minimize start-up costs.
 
  Pursue Strategic Acquisitions. Farm Journal intends to pursue strategic
acquisitions of agricultural related media and information businesses. The
Company's initial strategy will be to focus on acquisitions that will
immediately expand the Company's product and media offerings as well as create
benefits from cross-selling of advertisers, cross-promotion of readership and
expansion of the Farm Journal database. Emphasis will be placed on acquiring
companies that serve the Class 1A farm market. The Company intends to pursue
acquisitions of companies that operate in different media, such as television,
radio and the Internet; that provide coverage of those segments of the
agricultural industry not well-penetrated by Farm Journal, such as fruits,
vegetables and
 
                                       4
<PAGE>
 
nuts; that address agricultural related businesses, such as food processing,
governmental regulation and shipping; and that target interests of rural
readers, such as hunting, gardening and crafts.
 
  Create Co-Branding and Affinity Programs. Management believes that, through
the extension of the Farm Journal brand, there are substantial opportunities to
serve its target audience (as well as other rural residents) through co-
branding and other joint ventures that offer value alternatives to products and
services that have traditionally been unavailable, not competitively priced or
not ideally structured for farmers, ranchers or other residents of rural
communities. Farm Journal has formed and is pursuing several strategic
alliances with selected financial services and consumer products companies to
co-brand and offer tailored or value-priced products and services to its rural
constituency. Initially these offers will include insurance, credit and
investment products and selected consumer items, such as home computers. Farm
Journal intends to expand into other areas in which the Company is able to
identify and offer products and services of superior value to the farming and
rural communities.
 
  Expand Internationally. The United States agricultural industry is the most
productive and technically sophisticated in the world, exporting its technology
and an estimated $57 billion of product in 1997. Given the Company's position
as a leading provider of agricultural information in the United States
agricultural industry and given a trend toward the globalization of
agricultural technology and trade, management believes that there is a
substantial long-term opportunity to expand its business activities overseas.
Initially, Farm Journal will launch a fully sponsored, custom published
international magazine targeted to selected agricultural decision-makers
worldwide and pursue joint ventures and other relationships with foreign
agribusiness information providers.
 
RECENT DEVELOPMENTS
 
  Since the Management Purchase, the Company has taken the following actions to
implement its growth strategy:
 
  PFA Acquisition. In April 1998, the Company acquired Professional Farmers of
America, Inc. and a related company (the "PFA Acquisition"). The businesses
acquired in the PFA Acquisition ("PFA") included the leading agricultural
commodity markets newsletter, Pro Farmer, and a satellite-delivered commodity
news and analysis service marketed under the Globalink and FutureLink brand
names.
 
  Livestock Publication Revenue Increases. Management has achieved significant
advertising sales increases in the Today livestock magazines following several
advertising sales initiatives, including a restructuring of the magazines'
sales force and the naming of a livestock publisher. During the first quarter
of 1998, revenues from these magazines were up more than 12% over the
comparable period in 1997.
 
  New Information Services Product. In November 1997, the Company was awarded a
contract for a new data management product that FJIR designed for a consortium
of members of the American Crop Protection Association. This project ("RAPID")
will result in a comprehensive farmer directory that will provide the
foundation of a system to capture point-of-sale information for manufacturers.
The Company also has realized incremental sales through leads initiated from
RAPID. The Company anticipates that technologies utilized for RAPID can be
applied to additional directory development projects.
 
  Co-Branding Agreements. In March 1998, the Company entered into an agreement
with The Member Companies of American International Group, Inc. to jointly
market private passenger automobile insurance to the Company's subscriber base.
Most recently, Farm Journal entered into an agreement with CIGNA Property and
Casualty to explore the sale of a variety of insurance products through a
cooperative marketing effort. Services that could be incorporated in such
marketing effort include data management, product advertising and the
organization of farmer seminars.
 
                                       5
<PAGE>
 
 
  Policy Conferences. In November 1997, Farm Journal organized a trade policy
conference in Washington, D.C. Speakers at the conference included Unites
States government cabinet members, members of the United States Congress and
several chief executives of major agricultural companies. The Company held a
second conference on clean water and food quality legislation in March 1998.
These conferences were sponsored and profitable.
 
  Top Producer Seminar Series. In the first quarter of 1998, the Company held
its first two Top Producer Executive Farmer Seminars targeted at farmers and
ranchers who generate high annual revenues. Each seminar featured high-profile
Top Producer columnists and large-scale farmers previously featured in the
magazine. Seminar revenue was generated through admission fees and
sponsorships. Each seminar attracted approximately 100 attendees whose average
annual sales of over $1.0 million placed them in the top 1% of commercial
farmers and ranchers. The Company intends to offer this seminar series at
additional locations as well as to expand its seminar offerings.
 
  International Developments. In January 1998, Farm Journal retained JFA
International Marketing Services, an international agribusiness consulting
firm, to launch a sponsored international magazine targeted to agricultural
decision-makers worldwide. In November 1997, the Company entered into an
editorial agreement with a Japanese publication to reprint Dairy Today
editorial in Dairy Japan. Recently, the Company's Rockwood Research unit
participated in a joint project with German-based Kleffman Market Research on a
project which assessed agricultural technology adaptation in various countries.
 
MANAGEMENT
 
  The Company believes that one of its most important assets is its experienced
and aggressive, growth-oriented management team. Stanford Erickson, Chairman
and Chief Executive Officer, has over 30 years of publishing and advertising
experience. Prior to joining Farm Journal in 1997, Mr. Erickson was President
and Chief Operating Officer of the Journal of Commerce magazine group where he
acquired or launched six business-to-business trade publications. Roger
Randall, President and Chief Operating Officer, has over 22 years of experience
in the agrimedia business and 13 years of experience at Farm Journal. Sonja
Hillgren, editor of Farm Journal, has over 20 years experience in agricultural
journalism and is a past President of the National Press Club. Each of the
other senior managers of Farm Journal has on average over 20 years of
experience in such areas as publishing, marketing and finance.
 
  The Farm Journal Corporation is a Delaware corporation, its executive offices
are located at 1500 Market Street, Centre Square West, Philadelphia,
Pennsylvania 19102 and its telephone number is (215) 557-8900. The Farm Journal
Internet site can be found at www.farmjournal.com.
 
                                       6
<PAGE>
 
                                  THE OFFERING
 
Common Stock offered........          shares of Class A Common Stock
 
Common Stock to be
 outstanding after the                shares of Class A Common Stock (1)(2)
 Offering...................          shares of Class B Common Stock
                                      total shares of Common Stock
 
Use of proceeds.............  To repay indebtedness and to fund the Company's
                               business expansion plans, including
                               acquisitions, and for working capital and other
                               general corporate purposes.
 
Voting rights...............  Holders of Class A Common Stock, voting as a
                               class, are entitled to elect that minimum number
                               of directors constituting 25% of the members of
                               the Company's Board of Directors. Other than
                               such right to elect directors, unless all of the
                               shares of Class B Common Stock are converted
                               into shares of Class A Common Stock or otherwise
                               cease to be issued and outstanding and except as
                               required by the laws of the State of Delaware,
                               holders of Class A Common Stock have no voting
                               rights. See "Description of Capital Stock."
 
Proposed Nasdaq National
 Market symbol..............  FJCO
--------
(1) Excludes    shares of Class A Common Stock issuable upon exercise of
    outstanding options granted pursuant to the Company's Stock Option Plan.
    See "Management" and "Principal Stockholders."
 
(2) Includes shares of Class A Common Stock issuable upon conversion of the
    preferred stock issued in connection with the PFA Acquisition (the "PFA
    Preferred Stock"). See "Management's Discussion and Analysis of Financial
    Condition and Results of Operations--PFA Acquisition."
 
                                       7
<PAGE>
 
                        SUMMARY COMBINED FINANCIAL DATA
 
HISTORICAL DATA:
 
  The following table presents summary combined historical financial and other
data derived (a) from the audited consolidated financial statements of: (i)
Farm Journal, Inc., a predecessor corporation (the "Prior Predecessor"), for
the year ended December 31, 1993 and the period from January 1, 1994 to June
24, 1994, (ii) Farm Journal, Inc., a subsidiary of Tribune Company and a
predecessor corporation (the "Predecessor"), for the period from June 25, 1994
to December 31, 1994, the two years in the period ended December 29, 1996 and
the period from December 30, 1996 to March 31, 1997 and (iii) the Company for
the period from April 1, 1997 to December 31, 1997; and (b) from the unaudited
consolidated financial statements of the Company for the three months ended
March 31, 1998. The summary combined historical financial data for the year
ended December 31, 1994 represent the combined financial data of the Prior
Predecessor for the period from January 1, 1994 to June 24, 1994 and the
Predecessor for the period from June 25, 1994 to December 31, 1994. The summary
combined historical data for the year ended December 31, 1997 represents the
combined financial data of the Predecessor for the period from December 30,
1996 to March 31, 1997 and the Company for the period from April 1, 1997 to
December 31, 1997. The changes in ownership that occurred in 1994 and 1997 were
accounted for using the purchase method of accounting; accordingly, certain of
the historical financial data of the Predecessor and Prior Predecessor are not
comparable to that of the Company.
 
PRO FORMA DATA:
 
  The following table also presents (a) certain unaudited pro forma combined
financial and other data giving effect to the Management Purchase, the PFA
Acquisition and certain related operational changes, and (b) certain unaudited
pro forma as adjusted data giving effect to such pro forma adjustments and the
following adjustments (the "Offering Adjustments"): (i) the completion of the
Offering and application of the estimated net proceeds as described under "Use
of Proceeds," and (ii) the conversion of the PFA Preferred Stock described
under "Capitalization."
 
  The unaudited pro forma financial data may not be indicative of the results
that actually would have occurred if these transactions had been effected on
the dates indicated or the results that may be obtained in the future. This
data is qualified in its entirety by, and should be read in conjunction with,
"Unaudited Pro Forma Combined Financial Data," "Selected Historical Financial
Data," "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and the Company and Predecessor Consolidated Financial
Statements and Notes thereto included elsewhere in this Prospectus.
 
                                       8
<PAGE>
 
                        SUMMARY COMBINED FINANCIAL DATA
 
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
 
<TABLE>
<CAPTION>
                                 COMBINED
                                   PRIOR                        COMBINED
                                PREDECESSOR                    PREDECESSOR
                       PRIOR        AND                          AND THE                            THE
                    PREDECESSOR PREDECESSOR   PREDECESSOR        COMPANY     PRO      PREDECESSOR COMPANY
                    ----------- ----------- -----------------  -----------  FORMA     ----------- -------
                                                       YEAR                  YEAR                             PRO FORMA
                                                      ENDED    YEAR ENDED   ENDED                           THREE MONTHS
                                                     DECEMBER   DECEMBER   DECEMBER   THREE MONTHS ENDED     ENDED MARCH
                        YEAR ENDED DECEMBER 31,        29,         31,       31,           MARCH 31,             31,
                    -------------------------------  --------  ----------- --------   -------------------  ----------------
                       1993        1994      1995      1996       1997     1997(1)       1997      1998    1997(1)  1998(2)
                    ----------- ----------- -------  --------  ----------- --------   ----------- -------  -------  -------
<S>                 <C>         <C>         <C>      <C>       <C>         <C>        <C>         <C>      <C>      <C>
STATEMENT OF
 OPERATIONS DATA:
Revenues:
 Publishing.......    $23,812     $22,191   $20,639  $20,526     $19,440   $28,544      $8,985    $9,471   $11,219  $11,882
 Information
  services........      2,703       4,871     5,617    6,049       5,230     5,230       1,428     2,434     1,428    2,434
 Other............        367         489       319      199         338       338          61       103        61      103
                      -------     -------   -------  -------     -------   -------      ------    ------   -------  -------
  Total revenues..     26,882      27,551    26,575   26,774      25,008    34,112      10,474    12,008    12,708   14,419
Operating
 expenses:
 Cost of
  publishing (3)..     15,145      15,104    15,394   14,228      11,805    13,972       4,578     5,145     5,140    5,685
 Cost of
  information
  services (4)....      1,887       2,108     2,273    2,543       2,135     2,135         527       627       527      627
 Selling, general
  and
  administrative..      7,330       8,280     8,970    9,250       8,612    12,511       2,161     2,728     3,151    3,852
 Depreciation and
  amortization....        586         803     1,056    1,060       1,098     4,790         280       274     1,213    1,306
                      -------     -------   -------  -------     -------   -------      ------    ------   -------  -------
Operating income
 (loss)...........      1,934       1,256    (1,118)    (307)      1,358       704       2,928     3,234     2,677    2,949
 Interest income..         63          76       195       20         228       228           4        70        21       70
 Interest
  expense.........        (32)                           (54)       (853)   (1,761)        (38)     (262)     (432)    (433)
                      -------     -------   -------  -------     -------   -------      ------    ------   -------  -------
 Income (loss)
  before income
  taxes...........      1,965       1,332      (923)    (341)        733      (829)      2,894     3,042     2,266    2,586
 Income tax
  provision
  (benefit).......        498         623      (166)      67         528      (150)      1,208     1,390     1,001    1,207
                      -------     -------   -------  -------     -------   -------      ------    ------   -------  -------
Net income
 (loss)...........    $ 1,467     $   709   $  (757) $  (408)    $   205   $  (679)     $1,686    $1,652   $ 1,265  $ 1,379
                      =======     =======   =======  =======     =======   =======      ======    ======   =======  =======
Basic net income
 (loss) per common                                                         $                      $                 $
 share............                                                         =======                ======            =======
Diluted net income
 (loss) per common                                                         $                      $                 $
 share............                                                         =======                ======            =======
Weighted average
 number of common
 shares
 outstanding (5)..                                                         =======                ======            =======
PRO FORMA AS
 ADJUSTED DATA:
Interest expense
 (6)..............                                                         $  (554)                                 $  (131)
Income tax
 provision........                                                             153                                    1,283
Net income (loss)
 (6)..............                                                            (225)                                   1,492
Basic net income
 (loss) per common                                                         $                                        $
 share (6)........                                                         =======                                  =======
Diluted net income
 (loss) per common                                                         $                                        $
 share (6)........                                                         =======                                  =======
Weighted average
 number of common
 shares
 outstanding(7)...                                                         =======                                  =======
OTHER DATA:
 EBITDA (8).......    $ 2,520     $ 2,059   $   (62) $   753     $ 2,456   $ 5,494      $3,208    $3,508   $ 3,890  $ 4,255
 Capital
  expenditures....        251         232     2,411      554         357       386         179       145       183      263
 Cash flow
  information:
 Operating cash
  flows...........        148         232       321    1,150       1,408     2,152         571       353       997      427
 Investing cash
  flows...........       (251)       (232)   (2,411)    (554)    (16,012)  (26,304)        741      (145)  (10,760) (10,881)
 Financing cash
  flows...........       (215)         79     1,819   (1,474)     19,169    26,117      (1,488)              6,512    7,948
</TABLE>
 
<TABLE>
<CAPTION>
                                                            MARCH 31, 1998
                                                     -----------------------------
                                                              PRO     PRO FORMA
                                                     ACTUAL  FORMA  AS ADJUSTED(9)
                                                     ------- ------ --------------
<S>                  <C> <C> <C> <C> <C> <C> <C> <C> <C>     <C>    <C>
BALANCE SHEET DATA:
 Working capital...................................  $ 8,249 $1,215    $18,915
 Total assets......................................   27,946 42,457     59,809
 Total long-term debt, including current portion...   11,000 19,632      5,832
 Preferred stock...................................      --   1,000        --
 Total shareholders' equity........................   10,464 10,464     42,964
</TABLE>
 
                                       9
<PAGE>
 
                    NOTES TO SUMMARY COMBINED FINANCIAL DATA
 
(1) Presented to give pro forma effect to the Management Purchase, the PFA
    Acquisition, the related financings and certain related operational changes
    as if such transactions had been consummated on December 30, 1996. The
    unaudited pro forma data give effect to the following adjustments (the "Pro
    Forma Adjustments") as of the beginning of each period presented: (i) an
    increase in interest expense attributable to financings related to the
    Management Purchase and PFA Acquisition; (ii) the elimination of
    compensation expense to certain officers of the Company that will no longer
    be incurred after February 26, 1998; and (iii) an adjustment to the pro
    forma provision (benefit) for income taxes to reflect the tax effect of the
    adjustments described in clauses (i) and (ii).
 
(2) Presented to give pro forma effect to the PFA Acquisition, the related
    financings and certain related operational changes as if they had occurred
    on December 30, 1996. The unaudited pro forma data also give effect to the
    Pro Forma Adjustments as of the beginning of each period presented.
 
(3) Cost of publishing includes paper, printing, postage, editorial and
    circulation.
 
(4) Cost of information services includes account service, programming and
    demographic updates.
 
(5) Based on the weighted average number of shares of Common Stock outstanding
    for the periods presented after giving effect to the Recapitalization. See
    "Description of Capital Stock--Recapitalization."
 
(6) The pro forma as adjusted interest expense, net income (loss) and the per
    share amounts reflect the reduction of interest expense as a result of the
    reduced level of borrowings due to the application of the net proceeds of
    the Offering as described under "Use of Proceeds."
 
(7) Based on the weighted average number of shares of Common Stock, including
    Common Stock equivalents outstanding, and includes (i) 7,892 additional
    shares representing stock options issued on February 26, 1998, (ii) the
    conversion of the PFA Preferred Stock and (iii) the shares of Class A
    Common Stock to be issued by the Company in the Offering.
 
(8) EBITDA represents income (loss) before provision (benefit) for income taxes
    plus depreciation and amortization plus net interest (income) expense.
    EBITDA is not intended to represent cash flows from operations and should
    not be considered as an alternative to net income as an indicator of the
    Company's operating performance or to cash flows as a measure of liquidity.
    The Company believes that EBITDA is a standard measure commonly reported
    and widely used by analysts, investors and other interested parties in the
    publishing industry. Accordingly, this information has been disclosed
    herein to permit a more complete comparative analysis of the Company's
    performance relative to other companies in the industry. The Company's
    definition of EBITDA may not be identical to similarly titled measures of
    other companies and, therefore, may not necessarily be an accurate basis of
    comparison.
 
(9) The pro forma as adjusted balance sheet data reflects the application of
    the net proceeds of the Offering as described under "Use of Proceeds."
 
                                       10
<PAGE>
 
                                 RISK FACTORS
 
  Certain statements concerning the Company's operations, economic performance
and financial condition including, without limitation, those concerning the
Company's business and operating strategy, contained herein under the captions
"Prospectus Summary," "Use of Proceeds," "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and "Business" are forward-
looking statements. While the Company believes these statements are
reasonable, prospective purchasers of the Class A Common Stock offered hereby
should be aware that actual results could differ materially from those stated
or suggested by such forward-looking statements as a result of the risk
factors set forth below or other factors. In addition to the other information
in this Prospectus, the following factors should be considered carefully in
evaluating an investment in the Class A Common Stock offered hereby.
 
HISTORICAL FINANCIAL PERFORMANCE
 
  The Company has experienced variations in revenues and net income as a
result of a variety of factors. Annual revenues of the Company declined from
$26.9 million in 1993 to $25.0 million in 1997 while net income declined from
$1.5 million to $0.2 million over the same period. In addition, EBITDA
fluctuated from a high of $2.5 million in 1993 to a low of $(0.1) million in
1995, before increasing to $2.5 million in 1997. Although the Company has
developed and is implementing a strategic plan designed to improve its
operating performance, no assurance can be given that this declining trend in
revenues and net income and erratic EBITDA performance can be reversed.
Improved future performance will be dependent upon, among other things, the
Company's successful expansion of its existing business and development of new
sources of revenues.
 
DEPENDENCE UPON ADVERTISING REVENUES
 
  Advertising revenues comprised approximately 73% of the Company's revenues
in 1997. Advertising in Farm Journal contributed 65% of total advertising
revenues in 1997. Although the Company's advertising revenues will decline as
a percentage of total revenues as a result of the PFA Acquisition, advertising
revenues will continue to be a significant component of the Company's total
revenues. The Company's advertising sales are not subject to long-term
contracts. Advertising revenues of the Company are cyclical and dependent upon
general economic conditions as well as factors specific to the Company.
Historically, increases in advertising revenues have corresponded with
economic recoveries, while decreases and changes in advertising mix have
corresponded with economic downturns and regional and local economic
recessions. It is, therefore, difficult to project anticipated future
advertising revenues.
 
  Competition for advertising dollars is primarily based on advertising rates,
the nature and scope of readership, reader response to advertisers' products
and services and the effectiveness of sales efforts. If the Company is unable
to compete successfully for advertisers and readers or its advertising
revenues are negatively impacted by general economic conditions or otherwise,
the Company's business, financial condition and results of operations would be
adversely affected.
 
DEPENDENCE UPON KEY CUSTOMERS
 
  The Company's ten largest advertisers accounted for approximately 49% of
advertising revenues in 1997. Such advertisers are also customers of the
Company's FJIR division, its market research and data management business,
accounting for approximately 35% of the revenues of FJIR in 1997. Although no
single customer was responsible for more than 10% of the Company's revenues,
the Company is currently highly dependent upon its largest advertisers, the
loss of any of which would have a material adverse effect on its business,
financial condition and results of operations. In 1997, the decision of one
advertiser to redirect advertising expenditures reduced that advertiser's
expenditures with the Company by $344,000 compared with the prior year. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." There can be no assurance that similar adverse changes will not
occur in future years.
 
 
                                      11
<PAGE>
 
CONTROL OF THE COMPANY; ANTI-TAKEOVER IMPACT
 
  MS Farm International Limited Partnership (the "Partnership") will
beneficially own 100% of the outstanding shares of the Class B Common Stock
immediately after the Offering. So long as any shares of Class B Common Stock
are outstanding, the Class B Common Stock will represent 100% of the Company's
total voting power (other than with respect to the election of directors)
after giving effect to the Offering. The Partnership is controlled by Phillip
Ean Cohen through his sole ownership of the general partner. See "Management
Purchase." Other than the right of the holders of the Class A Common Stock to
elect 25% of the members of the Company's Board of Directors, unless all of
the shares of Class B Common Stock are converted into Class A Common Stock or
otherwise cease to be outstanding and except as may be required by the laws of
the State of Delaware, holders of Class A Common Stock have no voting rights.
Consequently, the Partnership and Mr. Cohen control the outcome of
substantially all matters submitted to a vote of the Company's stockholders.
 
  There are no restrictions on the Partnership's ability to transfer shares of
Class B Common Stock. So long as any shares of Class B Common Stock are
outstanding, the Partnership and Mr. Cohen have the right to transfer control
of the Company to a third party by transferring the Partnership's shares of
Class B Common Stock, and any such transfer could be effected at a premium
without such premium being shared with or paid to holders of Class A Common
Stock.
 
  The disproportionate voting rights between the Class A Common Stock and the
Class B Common Stock could have an adverse effect on the market price of the
Class A Common Stock. Such disproportionate voting rights may make the Company
a less attractive target for a takeover than it otherwise might be, or render
more difficult or discourage a merger proposal, a tender offer or a proxy
contest, even if such actions were favored by holders of the Company's Class A
Common Stock. Such disproportionate voting rights may also deprive holders of
Class A Common Stock of an opportunity to sell their shares at a premium over
then prevailing market prices for the Class A Common Stock. There also is no
prohibition or limitation on the Partnership's ownership of Class A Common
Stock. If, following the Offering, all of the outstanding shares of Class B
Common Stock were converted into shares of Class A Common Stock, the
Partnership would own approximately   % of the Class A Common Stock. In that
event, the Partnership would continue to control the outcome of virtually all
matters submitted to a vote of the Company's stockholders, including the
election of all of the Company's directors.
 
UNPROVEN GROWTH OPPORTUNITIES
 
  The Company's business strategy contemplates growth through the development
of a variety of new sources of revenue, including through the sale of products
and services to its publication subscriber base, the participation in new
media, the substantial increase in paid circulation and subscription rates of
certain magazines, acquisitions and other ventures, new publications and
international expansion. There can be no assurance that the Company can
generate revenues or profits from any of its new revenue initiatives, or do so
within the time frame contemplated by the Company. Failure to successfully
develop and implement a revenue growth strategy, or to do so in a timely
manner, may materially and adversely affect the ability of the Company to
achieve an attractive rate of return for its equity investors.
 
  A component of the Company's growth strategy is expansion into international
markets. The Company has limited experience in developing foreign publications
and services and in marketing and distributing them internationally. In
addition, there are certain risks inherent in doing business in international
markets, such as the uncertainty of product acceptance by different cultures,
the risks of divergent business expectations or cultural incompatibility
inherent in establishing joint ventures with foreign partners, difficulties in
staffing and managing multinational operations, currency fluctuations, state-
imposed restrictions on the repatriation of funds and potentially adverse tax
consequences. There can be no assurance that one or more of such factors will
not have a material adverse effect on the Company's future international
operations. See "Business--Growth Strategy."
 
 
                                      12
<PAGE>
 
CHALLENGE OF GROWTH THROUGH ACQUISITIONS
 
  The Company intends to pursue growth through acquisitions. There can be no
assurance, however, that suitable acquisition candidates will be identified
or, if identified, that such acquisitions will be consummated. Further, there
can be no assurance that any newly-acquired businesses will be successfully
integrated into the Company's operations. The Company may face competing
offers for acquisition candidates identified by it, which the Company may be
unable to match or which may result in higher acquisition costs. There can be
no assurance that companies that may be acquired will achieve sales and
profitability that justify the investment in them. Acquisitions may involve a
number of risks, including adverse short-term effects on the Company's
reported operating results; diversion of management's attention; dependence on
retention, hiring and training of key personnel; risks associated with
unanticipated problems or legal liabilities; and amortization of acquired
intangible assets, some or all of which could have a material adverse effect
on the Company's operations and financial performance. The Company may issue
additional shares of Class A Common Stock (which could result in dilution to
the purchasers of the Class A Common Stock offered hereby) or may incur
substantial additional indebtedness, or a combination thereof, to fund future
acquisitions. There can be no assurance that the Company will be able to
obtain any such additional equity or debt financing or do so within the time
frame contemplated by the Company.
 
FLUCTUATIONS IN PAPER COSTS AND POSTAL RATES
 
  Paper is the principal raw material for the Company's publishing operations.
The Company purchases paper from R.R. Donnelley and Sons Company ("Donnelley")
pursuant to a long-term printing contract. Donnelley purchases the paper in
the spot market and passes on that cost to the Company. Paper costs
represented approximately 21%, 22% and 18% of the Company's cost of publishing
for each of the fiscal years ended December 31, 1995, 1996 and 1997,
respectively. During those three years, total expenditures by the Company for
paper were $3.3 million, $3.2 million and $2.1 million, respectively. Although
paper prices have experienced long periods of stability, the price of paper
stock used in all the Company's publications has experienced substantial
volatility since January 1994. Multiple increases in the price of the
Company's body stock (#36) paper resulted in an overall increase of 10% in
1994 and another 34% in 1995, materially and adversely affecting the Company's
results of operations in 1995.
 
  Postage is also a significant cost of the Company's publishing operations.
Postage costs represented approximately 18%, 18% and 19% of total costs of
publishing for each of the fiscal years ended December 31, 1995, 1996 and
1997, respectively. During those same years, total expenditures by the Company
for postage were $2.8 million, $2.6 million and $2.2 million, respectively. In
May 1998, the United States Postal Rate Commission authorized a 4.5% rate
increase that is expected to become effective later in 1998.
 
  No assurance can be given that the price of paper or postage will not
increase, substantially or otherwise, or that the Company will be able to
recoup any such paper or postage cost increases by passing them through to its
customers. Any substantial cost increase in paper or postage will have a
material adverse affect on the results of operations of the Company. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Overview" and "Business--Raw Materials."
 
CYCLICALITY AND SEASONALITY OF REVENUE
 
  The Company's business is highly seasonal, resulting in a disproportionate
share of revenues and net income being generated in the first fiscal quarter.
For example, net revenues for the three-month period ended March 31, 1997
accounted for 42% of the Company's total 1997 net revenues. This seasonality
is primarily due to the high level of advertising revenues generated by the
increased number of issues published by the Company during the winter (crop
planning) months as well as the greater number of advertising pages per issue
carried during those months. The seasonality of the Company's business places
a significant demand for cash in the latter part of the fourth quarter to
support production and sales costs and a buildup in customer receivables. Any
substantial decrease in first quarter net revenues could have a material
adverse effect on the Company's profitability for the
 
                                      13
<PAGE>
 
entire fiscal year or its ability to fund its operations during the remainder
of such fiscal year. The Company has incurred and may in the future incur
losses during the second and third quarters of its fiscal year. In addition,
there can be no assurance that the Company will be able to finance its
seasonal working capital needs or balance efficiently the seasonal
requirements of its business. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
 
RELIANCE ON KEY SUPPLIER
 
  The Company's magazines are printed, bound and organized for shipment
pursuant to a multi-year contract with Donnelley which is currently scheduled
to expire in 2001. In addition, Donnelley provides specialized binding
services to the Company and purchases all of the Company's paper needs through
a consortium of other Donnelley customers. Although the Company believes that
other printers of similar quality could be engaged on similar terms, engaging
a replacement printer could cause delays in the Company's operations. Any
interruption or delay in printing the Company's periodicals, the loss of
purchasing power afforded to the Company through Donnelley's paper purchases
or the loss of access at reasonable prices to the binding process may have a
material adverse effect on the Company's business, financial condition and
results of operations.
 
COMPETITION
 
  The domestic market for agricultural print advertising is mature and there
is substantial competition for advertising revenue among farming periodicals.
In addition, paid circulation farming periodicals must compete with a variety
of free alternatives. Most of the Company's significant competitors are units
of large publishing groups which have substantially greater financial and
other resources than the Company. In addition, the Company is subject to
competition in its data management business, where competitors have and may
continue to offer services similar to those offered by the Company. As a
result of such competition and the Company's comparatively limited resources,
there can be no assurance that competitive factors will not impair the ability
of the Company to pursue its growth initiatives or maintain its existing
market share in its respective businesses.
 
RISKS ASSOCIATED WITH POTENTIAL SIGNIFICANT INDEBTEDNESS AND COVENANT
RESTRICTIONS
 
  Although the Company is not currently highly leveraged, the Company may
incur additional indebtedness to fund its growth strategy, including the
financing of future acquisitions. If the Company were to incur substantial
additional indebtedness, the Company would become exposed to certain risks,
including reduced financial flexibility, greater vulnerability to economic
downturns and competitive pressures and diversion of cash flow from the
implementation of its growth strategy to debt service. The agreements
governing the outstanding indebtedness of the Company's operating subsidiary,
FJI, impose, and agreements covering future indebtedness would likely contain,
operating and financial restrictions. Specifically, the note purchase
agreement (the "Note Purchase Agreement") pursuant to which the 9.5% Senior
Subordinated Notes due 2007 of FJI (the "Senior Subordinated Notes") were
issued, and FJI's $15,000,000 Reducing Revolving Credit Facility (the "Bank
Facility") with First Union National Bank, contain certain restrictive
covenants, including, but not limited to, restrictions on incurrence of debt,
dividend payments, certain asset sales, transactions with affiliates, liens
and investments. A failure to comply with the obligations in the Note Purchase
Agreement, the Bank Facility or agreements covering future indebtedness could
result in an event of default under such agreements, which, if not cured or
waived, would permit acceleration of the indebtedness thereunder and
acceleration of indebtedness under any other instruments then in effect that
may contain cross-acceleration or cross-default provisions, resulting in a
material adverse effect on the Company.
 
DEPENDENCE ON KEY PERSONNEL
 
  The Company is dependent on the continued services of its executive
officers. The loss of any of these key personnel could have a material adverse
effect on the Company. The Company does not expect to maintain key person life
insurance for any of its key personnel. See "Management."
 
 
                                      14
<PAGE>
 
ABSENCE OF PRIOR PUBLIC MARKET; MARKET PRICE FLUCTUATIONS
 
  Prior to the Offering, there has been no public market for the Class A
Common Stock. The initial public offering price of the Class A Common Stock
will be determined by negotiation among the Company and the representatives of
the several Underwriters (see "Underwriting") and may not be indicative of the
market price for shares of the Class A Common Stock after the Offering. While
application has been made for the listing of the Class A Common Stock on
Nasdaq's National Market, there can be no assurance that an active trading
market for the Class A Common Stock will develop or that any such market will
be sustained. The market price for shares of the Class A Common Stock may be
significantly affected by numerous factors, including quarter-to-quarter
variations in the Company's results of operations, announcements by the
Company or others and developments affecting the Company and its industry. In
addition, broad market fluctuations and general economic and political
conditions may adversely affect the market price of the Class A Common Stock,
regardless of the Company's actual performance or circumstance.
 
IMPACT OF SHARES ELIGIBLE FOR FUTURE SALE
 
  Sales of a substantial number of shares of Common Stock into the public
market could adversely affect the market price for the Class A Common Stock.
Upon completion of the Offering, the Company expects to have      shares of
Common Stock outstanding. Of these shares, the      shares of Class A Common
Stock sold in the Offering will be freely tradable without restriction under
the Securities Act of 1933, as amended (the "Securities Act"), except for any
such shares which may be acquired by an "affiliate" of the Company within the
meaning of the Securities Act. In addition,    million shares of Class B
Common Stock may be converted on a one-for-one basis into an aggregate of
million shares of Class A Common Stock at any time and     shares of Class A
Common Stock may be issued upon exercise of vested options. Commencing 180
days after the closing of the Offering (or sooner with the consent of the
Underwriters), any of such shares so converted or issued will be eligible for
sale in the public market, subject to compliance with the resale volume
limitations and other restrictions of Rule 144 under the Securities Act.
Moreover, on April 2, 1999, an additional    shares of Class A Common Stock,
to be issued upon conversion of the PFA Preferred Stock, will also be eligible
for sale in the public market, subject to compliance with the restrictions of
Rule 144. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--PFA Acquisition." Future sales of the shares of Common
Stock held by existing stockholders could have an adverse effect on the price
of the Class A Common Stock. See "Shares Eligible for Future Sale."
 
SUBSTANTIAL AND IMMEDIATE DILUTION
 
  Based upon the Company's pro forma net tangible book value deficit as of
December 31, 1997, purchasers of the Class A Common Stock offered hereby will
experience an immediate dilution of $   in the tangible net book value per
share of Class A Common Stock from the initial public offering price of $
per share. See "Dilution."
 
RISKS ASSOCIATED WITH THE YEAR 2000
 
  The Year 2000 issue is the result of computer programs which were written
using two digits rather than four to define the applicable year. For example,
date-sensitive software may recognize a date using "00" as the Year 1900
rather than the Year 2000. Such misrecognition could result in system failures
or miscalculations causing disruptions of operations, including, among others,
a temporary inability to process transactions, send invoices or engage in
similar normal business activities.
 
  The Company has identified all of its significant internal software
applications which contain source code that may be unable to appropriately
interpret the Year 2000 and has already begun to modify or replace those
applications. The Company has determined that its accounting system and
employee network system are Year 2000 compliant. The Company's advertising
acknowledgment system is the only operating program that is
 
                                      15
<PAGE>
 
not Year 2000 compliant. Management believes that the estimated costs to
modify or replace this system are not material to the Company.
 
  In addition, the Company has inquired of its major suppliers about their
progress in identifying and addressing problems related to the Year 2000.
Certain of the Company's major suppliers have informed the Company that such
suppliers do not anticipate problems in their business operations due to Year
2000 compliance issues. The Company is currently unable to determine the
extent to which Year 2000 issues will affect its other suppliers, or the
extent to which it would be vulnerable to the suppliers' failure to remediate
any of their Year 2000 problems. Although no assurance can be given that all
of the Company's major suppliers' systems will be Year 2000 compliant, the
Company believes that the risk is not significant.
 
                                      16
<PAGE>
 
                                USE OF PROCEEDS
 
  The net proceeds to the Company from the sale of      shares of Class A
Common Stock in the Offering after payment of expenses of the Offering are
estimated to be approximately $     million ($     if the Underwriters' over-
allotment option is exercised in full), assuming an initial public offering
price of $     per share, the midpoint of the range set forth on the cover
page of this Prospectus. The Company intends to apply a portion of the net
proceeds to prepay $5.5 million of principal, plus accrued interest, of the
$11 million outstanding principal amount of the Senior Subordinated Notes and
to repay the outstanding borrowings under FJI's Bank Facility. As of April 2,
1998, the outstanding balance under the Bank Facility was $8.3 million and the
interest rate was 8.2% per annum. The Company intends to use the remaining net
proceeds for the implementation of the Company's growth strategy, including
the cost of acquisitions, and for working capital and other general corporate
purposes. Pending such uses the Company intends to invest the net proceeds in
an institutional money market fund investing in short-term debt securities and
other money market instruments. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources."
 
                              MANAGEMENT PURCHASE
 
  In April 1997, the Partnership, whose investors include members of the
Company's current management and individuals associated with Morgan Schiff &
Co., Inc. ("Morgan Schiff"), organized FJC for the purpose of purchasing FJI
from Tribune Company. The purchase price of $17.0 million (prior to giving
effect to $0.3 million of working capital adjustments and $0.2 million of
transaction costs) was financed through the issuance by FJI of $11.0 million
of Senior Subordinated Notes unconditionally guaranteed by FJC and the
issuance by FJC of its Class B Common Stock to the Partnership. The
Partnership invested approximately $10.1 million in the purchase of shares of
Class B Common Stock. Proceeds of such investment in excess of the purchase
price, or approximately $4.4 million, were retained for the working capital of
the Company and to finance expansion of the business. Phillip Ean Cohen wholly
owns the general partner of the Partnership (the "General Partner") and is the
sole owner of Morgan Schiff. See "Certain Relationships and Related
Transactions," "Principal Stockholders" and "Underwriting."
 
                                      17
<PAGE>
 
                                CAPITALIZATION
 
  The following table sets forth at March 31, 1998: (i) the actual
capitalization of the Company after giving effect to the recapitalization
(the "Recapitalization") described in "Description of Capital Stock--
Recapitalization," (ii) the pro forma capitalization of the Company after
giving effect to the PFA Acquisition and the financing thereof and (iii) the
pro forma capitalization of the Company as adjusted to reflect the sale by the
Company of        shares of Class A Common Stock pursuant to the Offering,
assuming an initial public offering price of $   per share (the midpoint of
the range set forth on the cover page of this Prospectus), the application of
the net proceeds therefrom as described under "Use of Proceeds" and the
conversion of Convertible Redeemable Preferred Stock issued in connection with
the PFA Acquisition (the "PFA Preferred Stock") into     shares of Class A
Common Stock at such assumed initial public offering price (the "Offering
Adjustments"). This table should be read in conjunction with "Selected
Historical Financial Data," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Unaudited Pro Forma Combined Financial
Data" and the audited financial statements and the notes thereto included
elsewhere in this Prospectus.
 
<TABLE>
<CAPTION>
                                                       MARCH 31, 1998
                                             ----------------------------------
                                                                     PRO FORMA
                                             ACTUAL(1) PRO FORMA(1) AS ADJUSTED
                                             --------- ------------ -----------
                                                       (IN THOUSANDS)
<S>                                          <C>       <C>          <C>
Long-term debt:
  Note payable.............................   $   --     $   332      $   332
  Senior Subordinated Notes................    11,000     11,000        5,500
  Bank Facility............................       --       8,300          --
Convertible Redeemable Preferred Stock, par
 value $.01 per share, 2,725 shares autho-
 rized, 2,725 issued and outstanding.......       --       1,000          --
Shareholders' equity:
  Class A Common Stock, par value $0.01 per
   share,       shares
   authorized,     shares issued and out-
   standing actual and pro forma;
   shares authorized,     shares issued and
   outstanding pro forma as adjusted.......       --         --
  Class B Common Stock, par value $0.01 per
   share,       shares authorized,
   shares issued and outstanding actual and
   pro forma;       shares authorized,
   shares issued and outstanding pro forma
   as adjusted.............................         1          1            1
  Additional paid-in capital...............    10,292     10,292       42,792
  Retained earnings........................       171        171          171
                                              -------    -------      -------
    Total shareholders' equity.............    10,464     10,464       42,964
                                              -------    -------      -------
    Total capitalization...................   $21,464    $31,096      $48,796
                                              =======    =======      =======
</TABLE>
 
                                      18
<PAGE>
 
                                DIVIDEND POLICY
 
  Since the Management Purchase, the Company has not declared or paid any cash
or other dividends on its capital stock and does not expect to pay dividends
for the foreseeable future. The Company anticipates that all of its earnings
in the foreseeable future will be used for the operation of its business, to
support its growth strategy and reduce indebtedness. Any future determination
to pay dividends will be at the discretion of the Board of Directors and will
depend upon, among other factors, the Company's results of operations,
financial condition and capital requirements. In addition, as a holding
company, the ability of the Company to pay dividends in the future is
dependent upon the receipt of dividends or other payments from its operating
subsidiary, FJI. The Note Purchase Agreement and the Bank Facility contain
certain restrictions on the payment of dividends by FJI. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources."
 
                                   DILUTION
 
  The pro forma net tangible book value of the Company as of March 31, 1998,
after giving effect to the Recapitalization, the PFA Acquisition and the
conversion of the PFA Preferred Stock into     shares of Class A Common Stock
was $     million, or $     per share of Common Stock. Pro forma net tangible
book value per share is determined by dividing the tangible net worth of the
Company (total assets less intangible assets and total liabilities) by the
aggregate number of shares of Common Stock outstanding. After giving effect to
the sale of      shares of Class A Common Stock offered hereby (at an assumed
initial public offering price of $     per share, the midpoint of the range
set forth on the cover page of this Prospectus), and the application of the
net proceeds therefrom, pro forma net tangible book value of the Company as of
March 31, 1998 would have been approximately $     million, or $     per
share. This represents an immediate increase in pro forma net tangible book
value of $     per share to the current stockholders of the Company and an
immediate dilution in pro forma net tangible book value of $     per share to
purchasers of Class A Common Stock in the Offering. The following table
illustrates this per share dilution.
 
<TABLE>
   <S>                                                                  <C>
   Assumed initial public offering price per share....................  $
                                                                        ------
   Pro forma net tangible book value per share of Common Stock at
    March 31, 1998....................................................
   Increase in pro forma net tangible book value per share of Common
    Stock attributable to purchasers in the Offering..................
   Pro forma net tangible book value per share of Common Stock after
    the Offering......................................................   (    )
                                                                        ------
   Dilution in pro forma net tangible book value per share to purchas-
    ers of Class A Common Stock in the Offering(1)....................  $
                                                                        ======
</TABLE>
--------
(1) Dilution is determined by subtracting pro forma net tangible book value
    per share after the Offering from the initial public offering price per
    share.
 
  The following table summarizes, on the pro forma basis described above, as
of March 31, 1998, the number of shares purchased, the total consideration
paid (or to be paid) and the average price per share paid (or to be paid) by
the existing stockholders and the purchasers of Class A Common Stock in the
Offering, at an assumed initial public offering price of $     per share (the
midpoint of the range set forth on the cover page of this Prospectus), before
deducting the estimated offering expenses and underwriting discounts and
commissions:
 
<TABLE>
<CAPTION>
                               SHARES
                             PURCHASED                                  AVERAGE
                           --------------     TOTAL      CONSIDERATION   PRICE
                           NUMBER PERCENT     AMOUNT        PERCENT    PER SHARE
                           ------ ------- -------------- ------------- ---------
                                          (IN THOUSANDS)
<S>                        <C>    <C>     <C>            <C>           <C>
Existing common stock-
 holders.................
Holders of Class A Common
 Stock issued upon con-
 version of PFA Preferred
 Stock...................
Purchasers of Class A
 Common Stock in the Of-
 fering..................
  Total..................
</TABLE>
 
                                      19
<PAGE>
 
                  UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
 
  The following Unaudited Pro Forma Combined Financial Data sets forth the pro
forma combined statements of operations of the Company for the year ended
December 31, 1997 and the three months ended March 31, 1998 and 1997 and the
pro forma combined balance sheet as of March 31, 1998. The pro forma combined
statement of operations data for the three months ended March 31, 1998 give
effect to the PFA Acquisition, and certain related operational changes as if
such transactions had occurred on December 30, 1996. The pro forma combined
statements of operations data for the year ended December 31, 1997 and the
three months ended March 31, 1997 give effect to the Management Purchase the
PFA Acquisition and certain related operational changes as if such
transactions had occurred on December 30, 1996. The pro forma combined balance
sheet data give effect to such transactions as if they occurred on March 31,
1998.
 
  The pro forma combined financial data for the year ended December 31, 1997
and for the three months ended March 31, 1997 includes the results of
operations of the Company, the Predecessor and PFA. The pro forma combined
financial data for the three months ended March 31, 1998 includes the results
of the Company and PFA. The consolidated financial information with respect to
the Predecessor and the Company has been derived from their audited
consolidated financial statements for the three months ended March 31, 1997
and for the nine months ended December 31, 1997, respectively. The Predecessor
was acquired on April 1, 1997. All operating results from the time of
acquisition are included in the Company's historical financial statements. The
financial information with respect to PFA has been derived from its audited
financial statements for the year ended December 31, 1997. PFA was acquired on
April 2, 1998. The pro forma combined financial data as of and for the three
months ended March 31, 1998 includes the results of operations of the Company
and PFA. The financial information has been derived from their unaudited
consolidated financial statements.
 
  The pro forma, as adjusted, combined data for the year ended December 31,
1997 and the three months ended March 31, 1997 and 1998 give effect to the
acquisitions discussed above, the conversion of the PFA Preferred Stock and
the application of the net proceeds to the Company from the Offering. See "Use
of Proceeds."
 
  The unaudited pro forma financial data may not be indicative of the results
that actually would have occurred if these transactions had been effected on
the dates indicated or the results that may be obtained in the future. The
adjustments are based on available information and upon certain assumptions
that the Company believes are reasonable in the circumstances. The pro forma
combined statements of operations, balance sheet and accompanying notes should
be read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the Company and Predecessor
Consolidated Financial Statements and Notes thereto included elsewhere in this
Prospectus.
 
                                      20
<PAGE>
 
                       UNAUDITED PRO FORMA BALANCE SHEET
                                MARCH 31, 1998
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
 
<TABLE>
<CAPTION>
                            THE       PFA     ACQUISITION     PRO    OFFERING      PRO FORMA
                          COMPANY ACQUISITION ADJUSTMENTS    FORMA  ADJUSTMENTS   AS ADJUSTED
                          ------- ----------- -----------   ------- -----------   -----------
<S>                       <C>     <C>         <C>           <C>     <C>           <C>
ASSETS
CURRENT ASSETS:
 Cash and cash
  equivalents...........  $ 4,949               $(3,030)(1) $ 1,919   $31,500 (2)   $19,271
                                                                      (13,800)(4)
                                                                         (348)(4)
 Accounts receivable....    8,796   $  360                    9,156                   9,156
 Inventories............      121                               121                     121
 Prepaid and other
  current assets........      552      241         (162)(1)     631                     631
                          -------   ------      -------     -------   -------       -------
  Total current assets..   14,418      601       (3,192)     11,827    17,352        29,179
DUE FROM RELATED
 PARTIES................             3,919       (3,919)(1)
PROPERTY AND EQUIPMENT,
 NET....................    2,221      182                    2,403                   2,403
DEFERRED CUSTOMER
 ACQUISITION COSTS,
 NET....................             1,312                    1,312                   1,312
INTANGIBLE ASSETS, NET..   10,648                15,402 (1)  26,050                  26,050
OTHER ASSETS............               206                      206                     206
DEFERRED TAX ASSETS.....      659                               659                     659
                          -------   ------      -------     -------   -------       -------
    TOTAL...............  $27,946   $6,220      $ 8,291     $42,457   $17,352       $59,809
                          =======   ======      =======     =======   =======       =======
LIABILITIES AND
 SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
 Accounts payable.......  $ 1,833   $  283                  $ 2,116                 $ 2,116
 Accrued expenses and
  other liabilities.....    2,008      467                    2,475     $(348)(4)     2,127
 Income taxes payable...    1,390                             1,390                   1,390
 Current portion of
  long-term debt........                56                       56                      56
 Current portion of
  deferred subscription
  income................      938    3,637                    4,575                   4,575
                          -------   ------                  -------   -------       -------
   Total current
    liabilities.........    6,169    4,443                   10,612      (348)       10,264
DEFERRED SUBSCRIPTION
 INCOME,
 Less current portion...      313      492                      805                     805
LONG-TERM DEBT..........   11,000      276      $ 8,300 (3)  19,576   (13,800)(4)     5,776
PREFERRED STOCK.........                          1,000 (1)   1,000    (1,000)(5)
SHAREHOLDERS' EQUITY:
 Class A Common Stock...        1       87          (87)(1)       1                       1
 Additional paid-in
  capital...............   10,292                            10,292    31,500 (2)    42,792
                                                                        1,000 (5)
 Retained earnings......      171      922         (922)(1)     171                     171
                          -------   ------      -------     -------   -------       -------
   Total shareholders'
    equity..............   10,464    1,009       (1,009)     10,464    32,500        42,964
                          -------   ------      -------     -------   -------       -------
   TOTAL................  $27,946   $6,220      $ 8,291     $42,457   $17,352       $59,809
                          =======   ======      =======     =======   =======       =======
</TABLE>
 
(1) Represents the PFA Acquisition based on a purchase price of $12,000. The
    PFA Acquisition has been accounted for using the purchase method. The
    purchase price has been allocated on a preliminary basis to the tangible
    assets acquired based on the fair values of such assets, which are
    estimated to equal their book value. The balance of the purchase price was
    preliminarily allocated as follows: $3,366 to subscriber lists, $4,000 to
    covenant not-to-compete, $2,232 to trademarks and $5,804 to goodwill. The
    intangible assets will be amortized on a straight-line basis over periods
    ranging from 5-15 years and goodwill will be amortized on a straight-line
    basis over 15 years.
(2) Represents net proceeds from the Offering as described under "Use of
    Proceeds."
(3) Represents borrowings of $8,300 under the Bank Facility used to effect the
    PFA Acquisition as if it had occurred on March 31, 1998.
(4) Represents the payment of $13,800 of the Company's borrowings and $348 of
    accrued interest with proceeds from the Offering. See "Use of Proceeds."
(5) Represents conversion of the PFA Preferred Stock. See "Capitalization."
 
                                      21
<PAGE>
 
           UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS DATA
                          YEAR ENDED DECEMBER 31, 1997
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
 
<TABLE>
<CAPTION>
                              HISTORICAL RESULTS
                          ---------------------------
                            THE                        ACQUISITION      PRO     OFFERING      PRO FORMA
                          COMPANY  PREDECESSOR  PFA    ADJUSTMENTS     FORMA   ADJUSTMENTS   AS ADJUSTED
                          -------  ----------- ------  -----------    -------  -----------   -----------
<S>                       <C>      <C>         <C>     <C>            <C>      <C>           <C>
Revenues:
  Publishing............  $10,455    $8,985    $9,104                 $28,544                  $28,544
  Information services..    3,802     1,428                             5,230                    5,230
  Other.................      277        61                               338                      338
                          -------    ------    ------                 -------                  -------
    Total revenues......   14,534    10,474     9,104                  34,112                   34,112
Operating expenses:
  Cost of publishing....    7,227     4,578     2,167                  13,972                   13,972
  Cost of information
   services.............    1,608       527                             2,135                    2,135
  Selling, general and
   administrative.......    6,451     2,161     4,984    $  (107)(2)   12,511     $ 450 (1)     12,961
                                                            (978)(3)
  Depreciation and amor-
   tization.............      818       280     1,820        (18)(4)    4,790                    4,790
                                                           1,890 (5)
                          -------    ------    ------    -------      -------     -----        -------
Operating income
 (loss).................   (1,570)    2,928       133       (787)         704      (450)           254
Interest income.........      224         4       444       (444)(6)      228                      228
Interest expense........     (815)      (38)      (20)      (223)(7)   (1,761)    1,207 (9)       (554)
                                                            (665)(8)
                          -------    ------    ------    -------      -------     -----        -------
Income (loss) before in-
 come taxes.............   (2,161)    2,894       557     (2,119)        (829)      757            (72)
Income tax provision
 (benefit)..............     (680)    1,208                 (678)(10)    (150)      303 (10)       153
                          -------    ------    ------    -------      -------     -----        -------
Net income (loss).......  $(1,481)   $1,686    $  557    $(1,441)     $  (679)    $ 454        $  (225)
                          =======    ======    ======    =======      =======     =====        =======
Basic and diluted income
 (loss) per common
 share..................                                                                       $
                                                                                               =======
Weighted average number
 of common shares out-
 standing(11)...........
                                                                                               =======
</TABLE>
 
                                       22
<PAGE>
 
                              NOTES TO PRO FORMA
                         STATEMENT OF OPERATIONS DATA
 
                         YEAR ENDED DECEMBER 31, 1997
 
 (1) Represents the incremental cost associated with being a public reporting
     company.
 
 (2) Represents compensation expense incurred under the Equity Incentive
     Awards, which were replaced on February 26, 1998 with an incentive stock
     option plan. See Note 19 of the Notes to the Consolidated Financial
     Statements.
 
 (3) Represents: (i) $572 of management fees and $95 of excess general and
     administrative costs paid by PFA to its former owner; (ii) $107 of
     reduction in rent expense related to PFA entering into a new lease with
     its former owner; and (iii) $204 of compensation, bonuses and fringe
     benefit packages paid to employees of Pro Farmer who were terminated
     after the PFA Acquisition.
 
 (4) Represents reduction in amortization expense recorded in the Predecessor
     financial statements as a result of fewer intangible assets recorded in
     conjunction with the Management Purchase.
 
 (5) Represents an increase in amortization expense of goodwill and other
     intangible assets acquired by the Company in the PFA Acquisition.
 
 (6) Represents the reduction of interest income earned on PFA amounts due
     from related parties.
 
 (7) Represents additional interest expense of $261 associated with the Senior
     Subordinated Notes used to finance the Management Purchase and reflects
     elimination of $38 of intercompany interest expense charged by Tribune
     Company, as if the Management Purchase had occurred on December 30, 1996.
 
 (8) Represents the increase in interest expense as a result of bank
     borrowings of $8.3 million under a new credit agreement bearing interest
     at 8.2%, as if the PFA Acquisition had occurred on December 30, 1996.
 
 (9) Represents reduction in interest expense resulting from the assumed use
     of Offering proceeds to repay $13.8 million of the Company's borrowings,
     including $8.3 million incurred after December 31, 1997 in conjunction
     with the PFA Acquisition.
 
(10) Prior to the PFA Acquisition, PFA had elected to be taxed as a Subchapter
     S corporation for federal and state income tax purposes. Pro forma
     information has been subject to federal and state corporate income taxes
     for each period presented.
 
(11) Based on the weighted average number of shares of Common Stock, including
     Common Stock equivalents outstanding, and (i) 7,892 additional shares
     representing stock options issued on February 26, 1998, (ii) the
     conversion of the PFA Preferred Stock and (iii) the shares of Class A
     Common Stock to be issued by the Company in the Offering.
 
                                      23
<PAGE>
 
           UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS DATA
                          QUARTER ENDED MARCH 31, 1998
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
 
<TABLE>
<CAPTION>
                            HISTORICAL
                             RESULTS
                          ---------------
                            THE            ACQUISITION    PRO     OFFERING     PRO FORMA
                          COMPANY   PFA    ADJUSTMENTS   FORMA   ADJUSTMENTS  AS ADJUSTED
                          -------  ------  -----------  -------  -----------  -----------
<S>                       <C>      <C>     <C>          <C>      <C>          <C>
Revenues:
  Publishing............  $9,471   $2,411               $11,882                 $11,882
  Information services..   2,434                          2,434                   2,434
  Other.................     103                            103                     103
                          ------   ------               -------                 -------
    Total revenues......  12,008    2,411                14,419                  14,419
Operating expenses:
  Cost of publishing....   5,145      540                 5,685                   5,685
  Cost of information
   services.............     627                            627                     627
  Selling, general and
   administrative.......   2,728    1,539     $(157)(2)   3,852     $ 113 (1)     3,965
                                               (258)(3)
  Depreciation and amor-
   tization.............     274      559       473 (4)   1,306                   1,306
                          ------   ------     -----     -------     -----       -------
Operating income
 (loss).................   3,234     (227)      (58)      2,949      (113)        2,836
Interest income.........      70      112      (112)(5)      70                      70
Interest expense........    (262)              (171)(6)    (433)      302 (7)      (131)
                          ------   ------     -----     -------     -----       -------
Income (loss) before in-
 come taxes.............   3,042     (115)     (341)      2,586       189         2,775
Income tax provision
 (benefit)..............   1,390               (183)(8)   1,207        76 (8)     1,283
                          ------   ------     -----     -------     -----       -------
Net income (loss).......  $1,652   $ (115)    $(158)    $ 1,379     $ 113       $ 1,492
                          ======   ======     =====     =======     =====       =======
Basic and diluted income
 (loss) per common
 share..................                                                        $
                                                                                =======
Weighted average number
 of common shares out-
 standing(9)............
                                                                                =======
</TABLE>
 
                                       24
<PAGE>
 
                              NOTES TO PRO FORMA
                         STATEMENT OF OPERATIONS DATA
 
                         QUARTER ENDED MARCH 31, 1998
 
(1) Represents the incremental cost associated with being a public reporting
    company.
 
(2) Represents compensation expense incurred under the Equity Incentive
    Awards, which were replaced on February 26, 1998 with an incentive stock
    option plan. See Note 19 of the Notes to the Consolidated Financial
    Statements.
 
(3) Represents: (i) $150 of management fees and $47 of excess general and
    administrative costs paid by PFA to its former owner; (ii) $29 of
    reduction in rent expense related to PFA entering into new lease with its
    former owner; and (iii) $32 of compensation, bonuses and fringe benefit
    packages paid to employees of PFA who were terminated after the PFA
    Acquisition.
 
(4) Represents an increase in amortization expense of goodwill and other
    intangible assets acquired by the Company in the PFA Acquisition.
 
(5) Represents the reduction of interest income earned on PFA's amounts due
    from related parties.
 
(6) Represents the increase in interest expense as a result of borrowings of
    $8.3 million under the Bank Facility credit agreement bearing interest at
    8.2%, as if the PFA Acquisition had occurred on December 30, 1996.
 
(7) Represents reduction in interest expense resulting from the assumed use of
    Offering proceeds to repay $13.8 million of the Company's borrowings
    including $8.3 million incurred after December 31, 1997 in conjunction
    with the PFA Acquisition.
 
(8) Prior to the PFA Acquisition, PFA had elected to be taxed as a Subchapter
    S corporation for federal and state income tax purposes. Pro forma
    information has been subject to federal and state corporate income taxes
    for each period presented.
 
(9) Based on the weighted average number of shares of Common Stock, including
    Common Stock equivalents outstanding, and (i) 7,892 additional shares
    representing stock options issued on February 26, 1998, (ii) the
    conversion of the PFA Preferred Stock and (iii) the shares of Class A
    Common Stock to be issued by the Company in the Offering.
 
                                      25
<PAGE>
 
           UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS DATA
                          QUARTER ENDED MARCH 31, 1997
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                          HISTORICAL RESULTS
                          ------------------
                                              ACQUISITION    PRO     OFFERING     PRO FORMA
                          PREDECESSOR  PFA    ADJUSTMENTS   FORMA   ADJUSTMENTS  AS ADJUSTED
                          ----------- ------  -----------  -------  -----------  -----------
<S>                       <C>         <C>     <C>          <C>      <C>          <C>         <C>
Revenues:
  Publishing............    $8,985    $2,234               $11,219                 $11,219
  Information services..     1,428                           1,428                   1,428
  Other.................        61                              61                      61
                            ------    ------               -------                 -------
    Total revenues......    10,474     2,234                12,708                  12,708
Operating expenses:
  Cost of publishing....     4,578       562                 5,140                   5,140
  Cost of information
   services.............       527                             527                     527
  Selling, general and
   administrative.......     2,161     1,228     $(238)(2)   3,151     $ 113 (1)     3,264
Depreciation and
 amortization...........       280       478       (18)(3)   1,213                   1,213
                                                   473 (4)
                            ------    ------     -----     -------     -----       -------
Operating income
 (loss).................     2,928       (34)     (217)      2,677      (113)        2,564
Interest income.........         4       122      (105)(5)      21                      21
Interest expense........       (38)               (223)(6)    (432)      302 (8)      (130)
                                                  (171)(7)
                            ------    ------     -----     -------     -----       -------
Income (loss) before in-
 come taxes.............     2,894        88      (716)      2,266       189         2,455
Income tax provision
 (benefit)..............     1,208                (207)(9)   1,001        76 (9)     1,077
                            ------    ------     -----     -------     -----       -------
Net income (loss).......    $1,686    $   88     $(509)    $ 1,265     $ 113       $ 1,378
                            ======    ======     =====     =======     =====       =======
</TABLE>
 
                                       26
<PAGE>
 
                              NOTES TO PRO FORMA
                         STATEMENT OF OPERATIONS DATA
 
                         QUARTER ENDED MARCH 31, 1997
 
(1) Represents the incremental cost associated with being a public reporting
    company.
 
(2) Represents: (i) $143 of management fees and $24 of excess general and
    administrative costs paid by PFA to its former owner; (ii) $20 of
    reduction in rent expense related to PFA entering into new lease with its
    former owner; and (iii) $51 of compensation, bonuses and fringe benefit
    packages paid to employees who were terminated after the PFA Acquisition.
 
(3) Represents reduction in amortization expense recorded in the Predecessor
    financial statements as a result of fewer intangible assets recorded in
    conjunction with the Management Purchase.
 
(4) Represents an increase in amortization expense of goodwill and other
    intangible assets acquired by the Company in the PFA Acquisition.
 
(5) Represents the reduction of interest income earned on PFA's amounts due
    from related parties.
 
(6) Represents additional interest expense of $261 associated with the Senior
    Subordinated Notes used to finance the Management Purchase and reflects
    elimination of $38 of intercompany interest expense charged by Tribune
    Company, as if the Management Purchase had occurred on December 30, 1996.
 
(7) Represents the increase in interest expense as a result of bank borrowings
    of $8.3 million under a new credit agreement bearing interest at 8.2% as
    if the PFA Acquisition had occurred on December 30, 1996.
 
(8) Represents reduction in interest expense resulting from the assumed use of
    Offering proceeds to retire $13.8 million of the Company's borrowings
    including $8.3 million incurred after December 31, 1997 in conjunction
    with the PFA Acquisition.
 
(9) Prior to the PFA Acquisition, PFA had elected to be taxed as a Subchapter
    S corporation for federal and state income tax purposes. Pro forma
    information has been subject to federal and state corporate income taxes
    for each period presented.
 
                                      27
<PAGE>
 
                      SELECTED HISTORICAL FINANCIAL DATA
 
  The following table presents selected combined historical financial and
other data derived (a) from the audited consolidated financial statements of:
(i) Farm Journal, Inc., a predecessor corporation (the "Prior Predecessor"),
for the year ended December 31, 1993 and the period from January 1, 1994 to
June 24, 1994, (ii) Farm Journal, Inc., a subsidiary of Tribune Company and a
predecessor corporation (the "Predecessor"), for the period from June 25, 1994
to December 31, 1994, the two years in the period ended December 29, 1996 and
the period from December 30, 1996 to March 31, 1997 and (iii) the Company for
the period from April 1, 1997 to December 31, 1997; and (b) from the unaudited
consolidated financial statements of the Company for the three months ended
March 31, 1998. The summary historical combined financial data for the year
ended December 31, 1994 represent the combined financial data of the Prior
Predecessor for the period from January 1, 1994 to June 24, 1994 and the
Predecessor for the period from June 25, 1994 to December 31, 1994. The
summary historical combined data for the year ended December 31, 1997
represent the combined financial data of the Predecessor for the period from
December 30, 1996 to March 31, 1997 and the Company for the period from April
1, 1997 to December 31, 1997. The audited financial statements of the
Predecessor for each of the two years in the period ended December 29, 1996
and for the period from December 30, 1996 to March 31, 1997 and of the Company
for the period from April 1, 1997 to December 31, 1997 (collectively, the
"Company and Predecessor Consolidated Financial Statements"), and the
unaudited consolidated financial statements of the Company for the three
months ended March 31, 1998, appear elsewhere in this Prospectus. The
unaudited historical consolidated financial data reflects all adjustments
(consisting of normal, recurring adjustments) which are, in the opinion of
management, necessary for a fair summary of the Company's financial position,
results of operations and cash flows for and as of the end of the periods
presented. The historical consolidated results of operations of the Company
for the three months ended March 31, 1998 are unaudited and not necessarily
indicative of the results of operations for the full year. The changes in
ownership that occurred in 1994 and 1997 were accounted for using the purchase
method of accounting; accordingly, certain of the historical financial data of
Predecessor and Prior Predecessor are not comparable to that of the Company.
The selected consolidated financial data set forth below are qualified by
reference to, and should be read in conjunction with, "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and the Company
and Predecessor Consolidated Financial Statements and Notes thereto included
elsewhere in this Prospectus.
 
                                      28
<PAGE>
 
                       SELECTED HISTORICAL FINANCIAL DATA
 
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
<TABLE>
<CAPTION>
                         PRIOR                     HISTORICAL                                THE     HISTORICAL
                      PREDECESSOR      PREDECESSOR  COMBINED         PREDECESSOR           COMPANY    COMBINED
                    -----------------  ----------- ---------- ---------------------------- --------  ----------
                              JANUARY
                      YEAR    1, 1994   JUNE 25,   JANUARY 1,   YEAR      YEAR    DECEMBER APRIL 1,  JANUARY 1,
                     ENDED    TO JUNE    1994 TO    1994 TO    ENDED     ENDED    30, 1996 1997 TO    1997 TO
                    DECEMBER    24,     DECEMBER    DECEMBER  DECEMBER  DECEMBER  TO MARCH DECEMBER   DECEMBER
                    31, 1993   1994     31, 1994    31, 1994  31, 1995  29, 1996  31, 1997 31, 1997   31, 1997
                    --------  -------  ----------- ---------- --------  --------  -------- --------  ----------
<S>                 <C>       <C>      <C>         <C>        <C>       <C>       <C>      <C>       <C>
STATEMENT OF
 OPERATIONS DATA:
Revenues:
 Publishing.......  $23,812   $15,286    $ 6,905    $22,191   $20,639   $20,526    $8,985  $10,455    $19,440
 Information
  services........    2,703     2,142      2,729      4,871     5,617     6,049     1,428    3,802      5,230
 Other............      367       214        275        489       319       199        61      277        338
                    -------   -------    -------    -------   -------   -------    ------  -------    -------
  Total revenues..   26,882    17,642      9,909     27,551    26,575    26,774    10,474   14,534     25,008
Operating
 expenses:
 Cost of
  publishing......   15,145     9,255      5,849     15,104    15,394    14,228     4,578    7,227     11,805
 Cost of
  information
  services........    1,887       760      1,348      2,108     2,273     2,543       527    1,608      2,135
 Selling, general
  and
  administrative..    7,330     4,139      4,141      8,280     8,970     9,250     2,161    6,451      8,612
 Depreciation and
  amortization....      586       289        514        803     1,056     1,060       280      818      1,098
                    -------   -------    -------    -------   -------   -------    ------  -------    -------
Operating income
 (loss)...........    1,934     3,199     (1,943)     1,256    (1,118)     (307)    2,928   (1,570)     1,358
 Interest income..       63        33         43         76       195        20         4      224        228
 Interest
  expense.........      (32)                                                (54)      (38)    (815)      (853)
                    -------   -------    -------    -------   -------   -------    ------  -------    -------
 Income (loss)
  before income
  taxes...........    1,965     3,232     (1,900)     1,332      (923)     (341)    2,894   (2,161)       733
 Income tax
  provision
  (benefit).......      498     1,281       (658)       623      (166)       67     1,208     (680)       528
                    -------   -------    -------    -------   -------   -------    ------  -------    -------
Net income
 (loss)...........  $ 1,467   $ 1,951    $(1,242)   $   709   $  (757)  $  (408)   $1,686  $(1,481)   $   205
                    =======   =======    =======    =======   =======   =======    ======  =======    =======
Basic net income
 (loss) per common                                                                         $
 share............                                                                         =======
Diluted net income
 (loss) per common                                                                         $
 share............                                                                         =======
Weighted average
 number of common
 shares                                                                                    107,318
 outstanding (1)..                                                                         =======
OTHER DATA:
 EBITDA (2).......  $ 2,520   $ 3,488    $(1,429)   $ 2,059   $   (62)  $   753    $3,208  $  (752)   $ 2,456
 Capital
  expenditures....      251        96        136        232     2,411       554       179      178        357
 Cash flow
  information:
 Operating cash
  flows...........      148     2,049     (1,817)       232       321     1,150       571      837      1,408
 Investing cash
  flows...........     (251)      (96)      (136)      (232)   (2,411)     (554)      741  (16,753)   (16,012)
 Financing cash
  flows...........     (215)                  79         79     1,819    (1,474)   (1,488)  20,657     19,169




















<CAPTION>
                                  THE
                    PREDECESSOR COMPANY
                    ----------- --------
                    THREE MONTHS ENDED
                         MARCH 31,
                    --------------------
                       1997      1998
                    ----------- --------
<S>                 <C>         <C>
STATEMENT OF
 OPERATIONS DATA:
Revenues:
 Publishing.......    $8,985    $9,471
 Information
  services........     1,428     2,434
 Other............        61       103
                    ----------- --------
  Total revenues..    10,474    12,008
Operating
 expenses:
 Cost of
  publishing......     4,578     5,145
 Cost of
  information
  services........       527       627
 Selling, general
  and
  administrative..     2,161     2,728
 Depreciation and
  amortization....       280       274
                    ----------- --------
Operating income
 (loss)...........     2,928     3,234
 Interest income..         4        70
 Interest
  expense.........       (38)     (262)
                    ----------- --------
 Income (loss)
  before income
  taxes...........     2,894     3,042
 Income tax
  provision
  (benefit).......     1,208     1,390
                    ----------- --------
Net income
 (loss)...........    $1,686    $1,652
                    =========== ========
Basic net income
 (loss) per common              $
 share............              ========
Diluted net income
 (loss) per common              $
 share............              ========
Weighted average
 number of common
 shares
 outstanding (1)..              ========
OTHER DATA:
 EBITDA (2).......    $3,208    $3,508
 Capital
  expenditures....       179       145
 Cash flow
  information:
 Operating cash
  flows...........       571       353
 Investing cash
  flows...........       741      (145)
 Financing cash
  flows...........    (1,488)
</TABLE>
 
<TABLE>
<CAPTION>
                                                            DECEMBER DECEMBER
                                          DECEMBER 31,        29,      31,       MARCH 31,
                                     ---------------------- -------- -------- ---------------
                                      1993   1994    1995     1996     1997    1997    1998
                                      ----   ----    ----     ----     ----    ----    ----
<S>                  <C> <C> <C> <C> <C>    <C>     <C>     <C>      <C>      <C>     <C>
BALANCE SHEET DATA:
 Working capital...................  $1,887 $ 4,184 $ 1,061 $ 1,507  $ 6,126  $ 7,502 $ 8,249
 Total assets......................   7,714  21,357  22,923  21,069   22,508   24,732  27,946
 Total long-term debt..............                                   11,000   11,000  11,000
 Total shareholders' equity........   3,803  16,399  15,642  15,234    8,449    9,849  10,464
</TABLE>
 
                                       29
<PAGE>
 
                       NOTES TO SELECTED FINANCIAL DATA
 
(1) Based on the weighted average number of shares of Common Stock outstanding
    for the periods presented after giving effect to the Recapitalization. See
    "Description of Capital Stock--Recapitalization."
 
(2) EBITDA represents income (loss) before provision (benefit) for income
    taxes plus depreciation and amortization plus net interest (income)
    expense. EBITDA is not intended to represent cash flows from operations
    and should not be considered as an alternative to net income as an
    indicator of the Company's operating performance or to cash flows as a
    measure of liquidity. The Company believes that EBITDA is a standard
    measure commonly reported and widely used by analysts, investors and other
    interested parties in the publishing industry. Accordingly, this
    information has been disclosed herein to permit a more complete
    comparative analysis of the Company's performance relative to other
    companies in the industry. The Company's definition of EBITDA may not be
    identical to similarly titled measures of other companies and, therefore,
    may not necessarily be an accurate basis of comparison.
 
                                      30
<PAGE>
 
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
  The following discussion should be read in conjunction with the Selected
Consolidated Financial Data and the Consolidated Financial Statements and
Notes thereto included in this Prospectus.
 
OVERVIEW
 
  Farm Journal is one of the country's oldest and largest providers of
agricultural information, principally through print and electronic publishing,
data management and related information services. The Company's publishing
operations include its 121 year old flagship publication, Farm Journal, one of
the largest circulation agriculture magazines in the United States; Pro
Farmer, the largest circulation newsletter devoted to the agricultural
commodity markets; several specialty agribusiness magazines; the Links
business, a satellite-delivered commodity news and analysis service; and
several agriculture-oriented Internet sites. The Company's data management and
information services businesses provide proprietary data and analysis about
commercial farming and ranching operations to leading agricultural industry
suppliers, such as equipment manufacturers, seed producers and crop protection
suppliers.
 
  The Company's principal sources of revenue have been advertising sales,
subscription sales, data management fees and market research sales. For the
year ended December 31, 1997, $18.2 million, or 72.8%, of the Company's
revenues were from advertising and $1.2 million, or 5.0%, were from
circulation, principally Farm Journal subscriptions. The Company's data
management fees represented $2.6 million, or approximately 10.5%, of 1997
revenues and market research sales represented $2.6 million, or approximately
10.5%, of 1997 revenues. Miscellaneous sales accounted for $338,000, or 1.2%,
of 1997 revenues.
 
  The Company's five largest customers accounted for approximately 23% of the
Company's revenues in 1997. Such customers generated revenues for the Company
not only by advertising but also by utilizing the Company's data management
and market research services. Over the past five years, approximately 66% of
the Company's advertising revenues per year has been derived from 20
customers.
 
  The Company anticipates that its revenue mix and customer concentration will
change as it implements its growth strategy. Initiatives that may change the
composition of the Company's revenues and customer base include the
development of new businesses, such as conferences and seminars; farm
management services; new subscription-based publications; strategic
acquisitions; co-branding and affinity ventures; and international expansion.
See "--PFA Acquisition."
 
  In addition to revenue initiatives, the Company also has identified and
implemented operational changes that have resulted in significant savings and
efficiency improvements since 1996, shortly after the appointment of Roger
Randall as President of FJI. Certain of these changes, such as the
consolidation and regionalization of certain issues of its publications, have
had a negative effect on total advertising revenues. Other changes have
included a staff reduction resulting in an approximately 14% decrease in
salary and related expenses from 1996 to 1997. Together, these changes have
enhanced operating margins and increased EBITDA through reduced production and
distribution costs. In addition, the Company has recently retained the
services of a consulting firm to recommend additional efficiencies and cost
reduction measures.
 
  The Company's cost of revenues for the year ended December 31, 1997
consisted of $11.8 million in publishing costs and $2.1 million in cost of
information services provided. The principal components of the Company's
publishing costs, and the approximate percentage each represented of total
publishing costs for the year ended December 31, 1997, were paper (18%),
printing and binding (29%), postage (19%), editorial expense (29%), and in-
house production and other product development costs (6%). The cost of
information services is predominantly staff-related labor and associated
fringe benefit and payroll tax expenses.
 
  The Company's principal publishing-related raw material is paper. Although
paper prices have experienced long periods of stability, the price of paper
stock used in all the Company's publications has experienced
 
                                      31
<PAGE>
 
substantial volatility since January 1994. Multiple increases in the price of
the Company's body stock (#36) paper resulted in an overall increase of 10% in
1994 and another 34% in 1995, materially and adversely affecting the Company's
results of operations in 1995. Editorial costs include: (i) internal staff
expenses for content development and art services; (ii) the cost of purchased
content, such as freelance articles, engravings and photos; (iii) preliminary
offset production costs; and (iv) other editorial-related expenses such as
travel, entertainment and supplies. These costs represented approximately 52%,
28%, 5% and 15%, respectively, of total 1997 editorial cost.
 
  The principal components of the Company's selling, general and
administrative expenses include salaries, travel and entertainment, rent,
direct mail material and postage. Most administrative costs are shared
expenses of the publishing and information services businesses.
 
PFA ACQUISITION
 
  On April 2, 1998, Farm Journal acquired all of the outstanding stock of PFA
and PFA's affiliate, Professional Market Management, Inc. ("PMM"). For the
twelve months ended December 31, 1997, PFA and PMM generated pro forma EBITDA
of approximately $3.0 million after giving effect, as of December 31, 1996, to
continuing operational changes related to the PFA Acquisition. The purchase
price of the PFA Acquisition consisted of $11.0 million in cash and $1.0
million in PFA Preferred Stock that converts automatically at the closing of
this Offering into $1.0 million in Class A Common Stock valued at the price
offered to the public in this Offering. See "--Liquidity and Capital
Resources" for a description of the financing of the PFA Acquisition.
 
  The consummation of the PFA Acquisition affected the Company's results of
operations in certain significant respects. The PFA Acquisition will be
reflected using purchase accounting. Accordingly, the depreciation and
amortization expense of the Company will be significantly higher than the
corresponding amounts were for the Company prior to the PFA Acquisition.
Additionally, interest expense will increase due to debt used to finance the
PFA Acquisition. Management anticipates that the PFA Acquisition will result
in some moderation of the seasonality of the Company's future results of
operations. See "--Seasonality." Furthermore, PFA's revenues are predominantly
subscription-derived and, therefore, are expected to increase the Company's
subscription revenues. In addition, the PFA Acquisition is expected to
increase the Company's promotion, production and editorial costs.
 
  The Company's results of operations may be affected by a number of risks and
uncertainties, including changes in advertising, customer purchasing patterns,
consolidation among advertisers, increases in paper and postage prices (which
in certain years have exceeded amounts which could reasonably be passed along
to customers), competitive pressures from similar businesses and other
businesses advertising to the Company's magazine readership, the ability of
management to execute its business plan, and business conditions in the
agriculture industry and the general economy.
 
                                      32
<PAGE>
 
RESULTS OF OPERATIONS
 
  The following table sets forth, for the periods indicated, items within the
Company's consolidated statements of income as a percentage of revenues for
each period.
 
<TABLE>
<CAPTION>
                                                      COMBINED
                                                    COMPANY AND
                                 PREDECESSOR        PREDECESSOR  PREDECESSOR COMPANY
                          ------------------------- ------------ ----------- -------
                                                                    FOR THE THREE
                                    FOR THE YEAR ENDED              MONTHS ENDED
                          --------------------------------------      MARCH 31,
                          DECEMBER 31, DECEMBER 29, DECEMBER 31, -------------------
                              1995         1996         1997        1997      1998
                          ------------ ------------ ------------ ----------- -------
<S>                       <C>          <C>          <C>          <C>         <C>
Publishing..............      77.7%        76.7%        77.7%        85.8%     78.9%
Information services....      21.1         22.6         20.9         13.6      20.3
Other...................       1.2          0.7          1.4          0.6       0.8
                             -----        -----        -----        -----     -----
Total revenues..........     100.0%       100.0%       100.0%       100.0%    100.0%
Operating expenses(1):
  Cost of revenues......      66.4%        62.7%        55.8%        48.8%     48.1%
  Selling, general and
   administrative.......      33.8         34.5         34.4         20.6      22.7
  Depreciation and amor-
   tization.............       4.0          4.0          4.4          2.7       2.3
                             -----        -----        -----        -----     -----
Total operating
 expenses...............     104.2%       101.2%        94.6%        72.1%     73.1%
Operating income
 (loss).................      (4.2)%       (1.2)%        5.4%        27.9%     26.9%
Interest income (ex-
 pense).................       0.7         (0.1)        (2.5)        (0.3)     (1.6)
                             -----        -----        -----        -----     -----
Income (loss) before in-
 come taxes.............      (3.5)%       (1.3)%        2.9%        27.6%     25.3%
Income tax provision
 (benefit)..............      (0.7)         0.2          2.1         11.5      11.5
                             -----        -----        -----        -----     -----
Net income (loss).......      (2.8)%       (1.5)%        0.8%        16.1%     13.8%
                             =====        =====        =====        =====     =====
EBITDA..................      (0.2)%        2.8%         9.8%        30.6%     29.2%
                             =====        =====        =====        =====     =====
</TABLE>
--------
(1) All expenses are a percentage of total revenues.
 
THREE MONTHS ENDED MARCH 31, 1998 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1997
 
  Revenues. Revenues for the three months ended March 31, 1998 increased by
$1.5 million, or 14.6%, to $12.0 million from $10.5 million for the three
months ended March 31, 1997. Publishing revenues increased by $486,000, or
5.4%, due principally to an increase in advertising pages sold in Farm
Journal. Information services revenues increased over the comparable period by
$1.0 million, or 70.4%, which was attributable to revenue recognized on the
completion of the first milestone of RAPID. No revenues for RAPID was reported
in the comparable quarter of 1997.
 
  Operating Expenses. Cost of publishing increased by $567,000, or 12.4%, from
$4.6 million for the three months ended March 31, 1997 to $5.1 million for the
three months ended March 31, 1998. This increase was principally due to
$372,000 of costs relating to a higher number of advertising pages sold (with
an unusual concentration in a single issue that further increased production
costs) and to $195,000 in additional paper expenses resulting from a 20.3%
increase in paper prices. The cost of information services increased by
$100,000, or 19.0%, over the comparable period principally due to the
recognition of certain costs relating to RAPID.
 
  Selling, general and administrative expense increased by $567,000, or 26.2%,
from $2.2 million for the three months ended March 31, 1997 to $2.7 million
for the three months ended March 31, 1998. This increase reflects the lower
administrative expenses of the comparable period when certain senior
management positions remained open prior to the Management Purchase, a non-
cash charge for stock-based compensation of $178,000 incurred in the 1998
period and a cost of $252,000 for the hiring of additional sales associates in
1998 with the restructuring and refocusing of the Company's sales efforts.
 
 
                                      33
<PAGE>
 
  Operating Income. Operating income increased by approximately $306,000, or
10.5%, from $2.9 million for the three months ended March 31, 1997 to $3.2
million for the three months ended March 31, 1998. The increase in operating
income was due to the recognition during the 1998 period of a substantial
portion of the profit generated by RAPID, offset by an increase in paper costs
and the increase in sales, general and administrative expense discussed above.
 
  Interest Expense. Net interest expense increased by $158,000 from $34,000
for the three months ended March 31, 1997 to $192,000 for the three months
ended March 31, 1998. This increase was due to interest expense arising from
the debt incurred in connection with the Management Purchase.
 
  Income Tax Provision. Income tax provision increased by $182,000 from $1.2
million for the three months ended March 31, 1997 to $1.4 million for the
three months ended March 31, 1998. This increase was due to an increase in
income before income taxes and to an increase in certain non-deductible
expenses.
 
  Net Income. Net income decreased by $34,000, or 2.0%, from $1.69 million for
the three months ended March 31, 1997 to $1.65 million for the three months
ended March 31, 1998 for the reasons set forth above. Net income as a
percentage of net revenues decreased 2.3% from 16.1% for the three months
ended March 31, 1997 to 13.8% for the three months ended March 31, 1998,
reflecting, among other things, costs incurred in implementing the Company's
business strategy.
 
1997 COMPARED WITH 1996
 
  Revenues. Revenues for 1997 decreased $1.8 million, or 6.6%, to $25.0
million from $26.8 million in 1996. The $1.1 million, or 5.3%, reduction in
publishing revenues was due principally to initiatives taken to increase
operating margins and to enhance the Company's competitive position. These
initiatives included the repositioning of three Farm Journal mid-month issues
from national to regional publications, the elimination of one issue of Top
Producer and an average reduction of 4% in Farm Journal advertising rates in
order to increase advertising sales. Publishing revenues in 1997 also
reflected the decision of a key customer to shift its advertising from a
product focus to a national image focus, resulting in a reduction in
publishing revenue of $344,000. The $819,000, or 13.5%, reduction in
information services revenues in 1997 was principally a result of a decline in
market research sales reflecting a decision to eliminate certain low margin
market research projects and the loss of sales management personnel prior to
the Management Purchase.
 
  Operating Expenses. Cost of publishing for 1997 decreased by $2.4 million,
or 17.0%, to $11.8 million compared with $14.2 million for 1996. This decrease
was predominantly due to the initiatives taken to increase operating margins
discussed above, lower paper costs in 1997 and the full year impact of
editorial staff reductions made in 1996. Cost of information services
decreased by $408,000, or 16.0%, to $2.1 million compared with $2.5 million
for 1996, principally due to a reduction in marketing research costs
consistent with lower sales. Cost of publishing and information services as a
percentage of total revenues decreased to 55.8% in 1997 from 62.7% in 1996 due
to a greater reduction of costs than revenue decline.
 
  Selling, general and administrative expense for 1997 decreased $638,000, or
6.9%, to $8.6 million. This decrease was primarily attributable to lower costs
associated with the full year impact of support staff reductions and office
expense savings from the consolidation of the Chicago, Minneapolis and New
York satellite offices, offset by $195,000 in non-cash stock based
compensation costs. Selling, general and administrative expense as a
percentage of sales remained constant at 34.4%.
 
  Operating Income. Operating income increased $1.7 million to $1.4 million
for 1997 from a loss of $307,000 for the year ended December 29, 1996 for the
reasons stated above. Operating income as a percentage of net revenues
increased to 5.4% from (1.1%) for the same period.
 
  Interest Expense. Net interest expense was $625,000 in 1997 compared with
net interest expense of $34,000 in 1996 resulting from interest expense
incurred on the Senior Subordinated Notes issued on April 1, 1997 to finance
the Management Purchase.
 
                                      34
<PAGE>
 
  Income Tax Provision. From June 25, 1994 through March 30, 1997, the Company
was a party to a tax-sharing agreement with Tribune Company and was included
in the consolidated tax returns of Tribune Company. Under the agreement, the
Company was required to pay Tribune Company an amount equal to the amount of
tax the Company would have paid if it had filed a separate federal income tax
return.
 
  Net Income. Net income increased $613,000 to $205,000 for 1997 from a loss
of $408,000 for the year ended December 29, 1996 for the reasons stated above.
Net income as a percentage of net revenues increased to 0.8% from (1.5%) for
the same period.
 
1996 COMPARED WITH 1995
 
  Revenues. Revenues for 1996 increased $199,000, or 0.7%, to $26.8 million
compared with $26.6 million for 1995. This improvement was attributable to an
increase in information services revenue of $432,000 principally as a result
of database management contracts with new clients. This increase was offset
slightly by declines in publishing revenues of $113,000, principally due to a
decline in Farm Journal circulation revenues. Circulation revenues was
adversely affected by a decision to pursue renewals without circulation agency
support. Advertising revenues was stable in both the number of advertising
pages sold and per page price.
 
  Operating Expenses. Cost of publishing for 1996 decreased by $1.2 million,
or 7.6%, to $14.2 million compared with $15.4 million for 1995. This decrease
was due to lower paper, printing and postage costs of $800,000 attributable to
planned declines in circulation copies and lower editorial costs of $365,000
attributable to staff reductions and a reduction in purchased content (such as
freelance copy and photographs). Cost of information services increased by
$270,000 consistent with increased sales. Cost of publishing and information
services as a percentage of total revenues decreased to 62.7% in 1996 from
66.4% in 1995 due to a decline in costs and an increase in sales.
 
  Selling, general and administrative expense for 1996 increased $280,000, or
3.1%, to $9.3 million compared with $9.0 million for 1995. This increase was
primarily attributable to increased general and administrative expenses of
$514,000 associated with the full-year impact of rental charges at the
Company's new location offset by $269,000 in lower sales expenses due to
support staff reductions and satellite office consolidations.
 
  Operating Loss. Operating loss improved $811,000 to a loss of $307,000 for
1996 from a loss of $1.1 million for 1995. The improvement was the result of
cost reduction measures and revenue improvements discussed above. Operating
loss as a percentage of net revenues improved to (1.1%) from (4.2%) for the
same period.
 
  Interest Expense. Net interest expense was $34,000 in 1996 compared with
interest income of $195,000 in 1995, reflecting lower cash levels in 1996 due
to higher capital expenditures for computer and leasehold improvements
incurred throughout 1995.
 
  Income Tax Provision. Income tax provision increased by $233,000 from a
benefit of $166,000 to a provision of $67,000 due to the earnings improvement
in 1996 over 1995.
 
  Net Loss. Net loss improved $349,000 to a loss of $408,000 for 1996 from a
loss of $757,000 for 1995 for the reasons stated above. Net loss as a
percentage of net revenues improved to (1.5%) from (2.8%) for the same period.
 
LIQUIDITY AND CAPITAL RESOURCES
 
  Working capital (including cash) totaled $8.2 million as of March 31, 1998,
$6.1 million as of December 31, 1997, and $1.5 million as of December 29,
1996. The increase in working capital from December 29, 1996 to December 31,
1997 resulted primarily from the contribution of $4.4 million in cash for
working capital purposes as part of the Management Purchase. The increase in
working capital from December 31, 1997 to March 31,
 
                                      35
<PAGE>
 
1998 was primarily due to the build-up of accounts receivable that typically
occurs during the winter months, reflecting an increase in publications issued
during this period.
 
  Cash and cash equivalents totaled $4.9 million as of March 31, 1998, $4.7
million at December 31, 1997, and $277,000 as of December 29, 1996.
 
  Cash provided from operations was $353,000 for the three months ended March
31, 1998, as compared to $571,000 for the three months ended March 31, 1997.
More cash was required in the first quarter of 1998 to support higher
receivables resulting from higher sales and slower collections than in the
comparable period immediately before the Management Purchase. The Company's
net cash provided by operations was approximately $1.4 million for the year
ended December 31, 1997, as compared to $1.1 million for the year ended
December 29, 1996. Of this difference, $612,000 was related to an increase in
net income.
 
  Cash used for investing activities was $145,000 for the three months ended
March 31, 1998, representing the purchase of office equipment, furniture and
leasehold improvements. This compares to $741,000 in cash provided by
investing activities for the three months ended March 31, 1997 resulting
predominantly from the receipt of $920,000 from the sale of the Company's
former headquarters building. The Company's net cash provided by investing
activities for the year ended December 31, 1997 was $523,000 (excluding the
use of $16.5 million relating to the Management Purchase), as compared to a
use of cash for the year ended December 29, 1996 of $554,000. Cash increased
in 1997 due to the receipt at the beginning of the year of $920,000 from the
sale of the Company's former headquarters building.
 
  There were no financing activities in the quarter ended March 31, 1998. The
Company's net cash provided by financing activities for the year ended
December 31, 1997 was $19.2 million compared to a use of cash of $1.5 million
for the year ended December 29, 1996. Of the amount provided in 1997, $11.0
million represented proceeds of the Senior Subordinated Notes and $10.1
million represented proceeds from the issuance of equity, such amounts being
offset by $424,000 of related financing costs.
 
 Financing Arrangements
 
  The Senior Subordinated Notes provided partial financing for the Management
Purchase. See "Management Purchase." Interest on the Senior Subordinated Notes
is payable semi-annually in arrears on June 1 and December 1 of each year
commencing December 1, 1997. Principal payments of $2.2 million are due on
June 1 of each year from 2003 through 2006, with the entire remaining unpaid
principal amount of the notes together with interest accrued thereon due April
1, 2007. The Note Purchase Agreement includes requirements as to the
maintenance of financial ratios and tangible net worth and certain other
financial restrictions. The agreement also has dividend restriction covenants
that limit dividend payments by FJI based upon calculations described in the
agreement.
 
  The Bank Facility provides FJI with a revolving facility of up to $15.0
million, reducing annually commencing in 1999 by $1.5 million through 2001 and
by $2.25 million from 2002 through 2004 and terminating in 2005. Amounts
outstanding are guaranteed by FJC and its subsidiaries, are secured by certain
of FJI's assets and bear interest at either the London Interbank Offered Rate
plus from 1.75% to 2.50% or the greater of the lending bank's prime rate and
the federal funds rate plus 0.5%, depending on a leverage ratio formula. The
facility also requires the Company to comply with certain financial covenants,
including with respect to limitations on funded debt and minimum levels of
interest and fixed charge coverage, and with certain other affirmative and
negative covenants customary for similar transactions. The Company borrowed
$8.3 million under the Bank Facility and used $3.1 million of cash to fund the
$11.0 million cash portion of the purchase price of the PFA Acquisition and to
pay related expenses. The Company has no other cash borrowings under the Bank
Facility and will pay down outstanding cash borrowings with the proceeds of
the Offering. See "Use of Proceeds." The Company also has an outstanding
$300,000 letter of credit under the Bank Facility.
 
 
                                      36
<PAGE>
 
  The Company believes that the net proceeds of the Offering together with
internally generated cash will be sufficient to satisfy its funding
requirements for the forseeable future, excluding possible needs relating to
significant acquisitions or other expansion activities. Additional funds may
be required to finance acquisitions or other expansion activities of the
Company. Such funds may be obtained through bank borrowings and the issuance
of debt or equity securities. There can be no assurance that such additional
funds can be obtained or, if so, at what cost.
 
SEASONALITY
 
  The Company's business historically has been seasonal. During 1997, revenues
were $10.5 million in the first quarter (representing 42% of annual revenues),
$3.8 million in the second quarter, $4.4 million in the third quarter and $6.3
million in the fourth quarter. In addition, 46% of total 1997 advertising
revenues were recorded in the first quarter of the year. This seasonality is
primarily due to the increased number of issues published by the Company
during the winter (crop planning) months as well as the greater number of
advertising pages sold per issue during those months. The Company's profits
follow the seasonality of revenues. The seasonality of the Company's business
places a peak demand on cash requirements during the fourth quarter of each
year to support production and sales costs and a buildup in customer
receivables. Any substantial decrease in first quarter advertising revenues
could have a material adverse effect on the Company's profitability for the
entire fiscal year.
 
  The following table sets forth the unaudited revenues, operating costs and
expenses, net income (loss) and EBITDA of the Company for the four quarters of
1997.
 
<TABLE>
<CAPTION>
                                             QUARTERS ENDED
                          -----------------------------------------------------
                          MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,  TOTAL
                            1997      1997       1997          1997      1997
                          --------- -------- ------------- ------------ -------
                                             (IN THOUSANDS)
   <S>                    <C>       <C>      <C>           <C>          <C>
   Revenues..............  $10,474   $3,799     $4,371        $6,364    $25,008
   Operating expenses....  $ 7,546   $5,046     $4,976        $6,082    $23,650
   Net income (loss).....  $ 1,686   $ (891)    $ (463)       $ (127)   $   205
   EBITDA................  $ 3,208   $ (972)    $ (330)       $  550    $ 2,456
</TABLE>
 
INFLATION
 
  The Company believes that inflation has not had a material impact on its
results of operations for the periods discussed herein.
 
NEW ACCOUNTING PRONOUNCEMENTS
 
  In February 1997, the FASB issued Statement of Accounting Standards No. 129,
Disclosure of Information about Capital Structure ("SFAS No. 129"), which
establishes new standards for disclosing information about an entity's capital
structure. Adoption of SFAS No. 129 did not have a significant impact on the
Company's financial statements.
 
  In June 1997, the FASB issued Statement of Accounting Standards No. 130,
Reporting Comprehensive Income ("SFAS No. 130"). This statement, which
establishes standards for reporting and disclosure of comprehensive income, is
effective for interim and annual periods beginning after December 15, 1997,
although earlier adoption is permitted. Reclassification of financial
information for earlier periods presented for comparative purposes is required
under SFAS No. 130. As this statement only requires additional disclosures in
the Company's consolidated financial statements, its adoption will not have
any impact on the Company's consolidated financial position or results of
operations. The Company has adopted SFAS No. 130 effective January 1, 1998.
 
  In June 1997, the FASB issued Statement of Accounting Standards No. 131,
Disclosures about Segments of an Enterprise and Related Information ("SFAS No.
131"). This statement, which establishes standards for the
 
                                      37
<PAGE>
 
reporting of information about operating segments and requires the reporting
of selected information about operating segments in interim financial
statements, is effective for fiscal years beginning after December 15, 1997,
although earlier application is permitted. Reclassification of segment
information for earlier periods presented for comparative purposes is required
under SFAS No. 131. The Company does not expect adoption of this statement to
result in significant changes to its presentation of financial data by
business segment. The Company adopted SFAS No. 131 effective January 1, 1998.
 
IMPACT OF THE YEAR 2000 ISSUE
 
  The Year 2000 issue is the result of computer programs which were written
using two digits rather than four to define the applicable year. For example,
date-sensitive software may recognize a date using "00" as the Year 1900
rather than the Year 2000. Such misrecognition could result in system failures
or miscalculations causing disruptions of operations, including, among others,
a temporary inability to process transactions, send invoices or engage in
similar normal business activities.
 
  The Company has established a committee to develop a comprehensive Year 2000
plan with the goal of completing updates to key systems by December 31, 1998.
The Company has assessed the scope of the Company's risks related to problems
its computer systems may have in processing date information related to the
Year 2000 and believes such risks are not significant.
 
  The Company has identified all of its significant internal software
applications which contain source code that may be unable to appropriately
interpret the Year 2000 and has already begun to modify or replace those
applications. The Company has determined that its accounting system and
employee network system are Year 2000 compliant. The Company's advertising
acknowledgment system is the only operating program that is not Year 2000
compliant. Management believes that the estimated costs to modify or replace
this system are not material to the Company.
 
  In addition, the Company has inquired of its major suppliers about their
progress in identifying and addressing problems related to the Year 2000.
Certain of the Company's major suppliers have informed the Company that such
suppliers do not anticipate problems in their business operations due to Year
2000 compliance issues. The Company is currently unable to determine the
extent to which Year 2000 issues will affect its other suppliers, or the
extent to which it would be vulnerable to the suppliers' failure to remediate
any of their Year 2000 problems. Although no assurance can be given that all
of the Company's major suppliers' systems will be Year 2000 compliant, the
Company believes that the risk is not significant.
 
                                      38
<PAGE>
 
                                   BUSINESS
 
  Farm Journal is one of the country's oldest and largest providers of
agricultural information, principally through print and electronic publishing,
data management and related information services. The Company's publishing
operations include its 121 year old flagship publication, Farm Journal, one of
the largest circulation agriculture magazines in the United States; Pro
Farmer, the largest circulation newsletter devoted to the agricultural
commodity markets; several specialty agribusiness magazines, including Top
Producer and the Today livestock publications; the Links business, a
satellite-delivered agricultural commodity news and analysis service; and
several agriculture-oriented Internet sites. The Company's data management and
information services businesses, conducted through the Company's FJIR
division, provide proprietary data and analysis about commercial farming and
ranching operations to leading agricultural industry suppliers, such as
equipment manufacturers, seed producers and crop protection suppliers. The
Company believes that the Farm Journal brand is among the most trusted,
respected and authoritative names in American agriculture and that the
Company's database, created through over 30 years of direct communication with
American farmers and ranchers, is unique in its depth and accuracy.
 
  In April 1997, management and an investor group purchased FJI from Tribune
Company. Since the Management Purchase, the Company has begun implementing a
strategy to build on the Farm Journal brand and the Company's unique database
and sophisticated data analysis capabilities to become the worldwide market
leader for serving the large and growing need for quality information by
farmers and ranchers and the businesses that serve them.
 
MARKET OPPORTUNITY
 
  The USDA estimates that in 1997, approximately $213 billion of agricultural
products were sold in the United States alone. Management believes worldwide
agricultural sales figures are a multiple of domestic sales. The size and
increasing sophistication and complexity of the global agricultural business
has created a substantial and growing need for quality information among
farmers and ranchers. Farm businesses, to remain competitive, must understand
and adapt to rapid technological advancements, curtailment of government
subsidies and other policy changes, volatile commodities markets,
globalization of agricultural trade and other industry developments.
Management believes that the market for information and analysis needed by
farm businesses to address these issues is significant and underserved given
the overall size of the market for agricultural products.
 
  Management also believes that there is a related large and growing need for
quality information and information services among businesses that supply
farmers and ranchers. The increasing complexity of the industry, as well as
its capital intensive nature, has, among other things, resulted in the
consolidation of farms and purchasing power. According to the USDA,
approximately $133 billion of the estimated total of $170 billion in farm
supplies sold in 1996 were purchased by the 18% of all farms that generate
$100,000 or more in annual revenues,farms which the USDA classifies as "Class
1A farms." To reach these largest purchasers, agricultural product suppliers
increasingly are using targeted relationship marketing techniques which
require more detailed information about the most successful farmers and
ranchers. Farm Journal believes it is effectively positioned to satisfy the
large and growing domestic and worldwide demand for such information services
with the Company's database, data services expertise and longstanding
relationships with farmers and ranchers.
 
GROWTH STRATEGY
 
  Farm Journal's objective is to aggressively grow revenues and improve
profitability while becoming the leading worldwide provider of agricultural
information and information services to farmers, ranchers, agricultural
suppliers and related constituencies. Farm Journal will continue to pursue
growth through numerous internal initiatives and strategic acquisitions that
leverage the Farm Journal brand and the Company's longstanding relationships
in the agricultural community and that build on the Company's other
competitive strengths, including content development and data services. The
elements of this strategy are set forth below:
 
  Increase Revenue from Existing Business. Management believes that there is
substantial opportunity to increase revenues from existing business and has
commenced a variety of revenue-enhancing initiatives. These initiatives have
included combining data management and market research operations and adding
sales and
 
                                      39
<PAGE>
 
marketing directors to create new product and cross-selling opportunities,
increasing subscription rates and converting controlled-circulation
publications to partially-paid status, increasing the Company's sales force,
implementing performance-based compensation and emphasizing classified
advertising sales. In addition, management anticipates expanding its Links
commodity news and analysis businesses with new marketing relationships and
product introductions.
 
  Develop Related Revenue Opportunities. Farm Journal believes there are
numerous opportunities to develop additional revenues by leveraging the
Company's strong brand identity, data management capabilities and customer and
reader relationships. These opportunities include organization of conferences
and seminars; direct sales of books, videos and other merchandise; event
marketing; custom publishing for agricultural suppliers, trade groups and
other agricultural related constituencies; development of farm management
services; and the launch of new publications, including newsletters,
directories, other agricultural related business-to-business magazines and
certain rural-oriented titles. In launching new publications, management
intends to build on its strong customer relationships by seeking full or
partial sponsorship to minimize start-up costs.
 
  Pursue Strategic Acquisitions. Farm Journal intends to pursue strategic
acquisitions of agricultural related media and information businesses. The
Company's initial strategy will be to focus on acquisitions that will
immediately expand the Company's product and media offerings as well as create
benefits from cross-selling of advertisers, cross-promotion of readership and
expansion of the Farm Journal database. Emphasis will be placed on acquiring
companies that serve the Class 1A farm market. The Company intends to pursue
acquisitions of companies that operate in different media, such as television,
radio and the Internet; that provide coverage of those segments of the
agricultural industry not well-penetrated by Farm Journal, such as fruits,
vegetables and nuts; that address agricultural related businesses, such as
food processing, governmental regulation and shipping; and that target
interests of rural readers, such as hunting, gardening and crafts.
 
  Create Co-Branding and Affinity Programs. Management believes that, through
the extension of the Farm Journal brand, there are substantial opportunities
to serve its target audience (as well as other rural residents) through co-
branding and other joint ventures that offer value alternatives to products
and services that have traditionally been unavailable, not competitively
priced or not ideally structured for farmers, ranchers or other residents of
rural communities. Farm Journal has formed and is pursuing several strategic
alliances with selected financial services and consumer products companies to
co-brand and offer tailored or value-priced products and services to its rural
constituency. Initially these offers will include insurance, credit and
investment products and selected consumer items, such as home computers. Farm
Journal intends to expand into other areas in which the Company is able to
identify and offer products and services of superior value to the farming and
rural communities.
 
  Expand Internationally. The United States agricultural industry is the most
productive and technically sophisticated in the world, exporting its
technology and an estimated $57 billion of product in 1997. Given the
Company's position as a leading provider of agricultural information in the
United States agricultural industry and given a trend toward the globalization
of agricultural technology and trade, management believes that there is a
substantial long-term opportunity to expand its business activities overseas.
Initially, Farm Journal will launch a fully sponsored, custom published
international magazine targeted to selected agricultural decision-makers
worldwide and pursue joint ventures and other relationships with foreign
agribusiness information providers.
 
                                      40
<PAGE>
 
PUBLISHING OPERATIONS
 
  The following table sets forth selected information relating to the
Company's current portfolio of print and electronic publications as of
December 31, 1997.
<TABLE>
<CAPTION>
                                                           NUMBER OF
                                                            ISSUES
                                       CIRCULATION         PER YEAR
                               --------------------------- ---------    1997
                         FIRST                                       ADVERTISING
PRINT PUBLICATIONS       ISSUE       TYPE(1)       AMOUNT               PAGES
------------------       ----- ------------------- -------           -----------
<S>                      <C>   <C>                 <C>     <C>       <C>
Farm Journal............ 1877  Controlled and Paid 630,266     13        381
Top Producer............ 1984      Controlled      221,015      9        295
Beef Today.............. 1964      Controlled      135,956     10        259
Dairy Today............. 1964      Controlled       99,997     10        204
Hogs Today.............. 1962      Controlled       73,557     10        188
Pro Farmer.............. 1973         Paid          21,484     50        N/A
LandOwner............... 1979         Paid           2,683     24        N/A
ELECTRONIC PUBLICATIONS
-----------------------
FutureLink.............. 1988         Paid           3,654
Globalink............... 1988         Paid           1,840
Farm Journal Today at
 www.farmjournal.com.... 1995         Free             N/A
Pro Farmer at
 www.profarmer.com...... 1996         Free             N/A
</TABLE>
--------
(1) Controlled circulation refers to a pre-determined limited number of
    subscribers who have certified to the publisher that their job functions
    include purchasing authority in the particular market served by the
    publication. The Company collects subscriber demographics to verify such
    purchasing authority. See "--Circulation."
 
Print Publications
 
  Farm Journal
 
  The Company's flagship publication is Farm Journal, which is published 13
times annually and is the largest circulation farm magazine in the United
States. Farm Journal was first published in 1877. Based on FARMS '97 data from
Roper Starch Worldwide ("Roper"), the Company estimates that Farm Journal's
average issue readership is composed of 59% of all domestic farmers and 70% of
all domestic farmers on Class 1A farms. In addition, based on such Roper data,
the Company estimates that 89% of all American farmers read at least one out
of every five issues of the magazine. The magazine's circulation, comprised of
paid and controlled subscribers, was 630,266 as of December 31, 1997, with
readers in all fifty states. In addition to farmers and ranchers, Farm
Journal's subscribers consist of members of related professional groups,
including, professional farm managers, agricultural bankers, farm supply
dealers, educators and government officials.
 
  In 1996, Farm Journal had an estimated 23% advertising market share among
competing magazines. Management believes that among the magazine's principal
competitive strengths are its editorial quality and integrity and its
reputation as a prominent policy leader among farmers and ranchers, government
officials, rural bankers and other professionals involved in the domestic
agricultural business. Farm Journal is the only agricultural magazine to have
won the prestigious "Calder Award" from the American Society of Magazine
Editors, which it received in 1986. In 1997, Farm Journal won first place in
four out of nine categories, including "Story of the Year," in the American
Agricultural Editors Association's annual journalism awards program. The
current editor of Farm Journal is also a past president of the National Press
Club. Farm Journal has been a leading advocate of numerous successful
agricultural policy initiatives, such as livestock quarantine procedures and
farm tax benefits. The magazine's position on various legislative matters is
frequently cited in legislative hearings and quoted in the
Congressional Record.
 
 
                                      41
<PAGE>
 
  Top Producer
 
  The Company also publishes Top Producer, a magazine published nine times per
year and targeted to the managers of American farms ranking in the top 20%
based on sales. Since the Management Purchase, the Company has redesigned this
magazine to further differentiate it from Farm Journal and to transform it
into a partially paid circulation magazine. As of December 31, 1997, the
magazine's controlled circulation was 221,015. Top Producer focuses on farming
as a business, concentrating on management and business strategies. In
contrast to Farm Journal's editorial focus on production and policy issues,
Top Producer explores such topics as running a small business, planning for
retirement and managing crop risk. The magazine often uses personal profiles
to demonstrate successful farming business strategies. Top Producer also
retains the services of some of the country's foremost tax, law and finance
experts as regular contributors. In 1998, the magazine began a series of
sponsored seminars for farmers.
 
  Pro Farmer
 
  PFA's newsletter, Pro Farmer, is the largest circulation agricultural
commodity markets newsletter in the United States. The newsletter provides
specific concise news on major agricultural commodities and includes commodity
market forecasts applying both fundamental and technical analysis. Pro Farmer
is published fifty times per year and has over 20,000 subscribers to its
printed version, which currently sells for $119 annually. Approximately 3,760
additional subscribers obtain summary Pro Farmer content from the Data
Transmission Network Corporation ("DTN"), from whom PFA receives a royalty.
Pro Farmer's annual renewal rate for readers who have subscribed for at least
two years is currently approximately 90% and the number of subscribers has
grown approximately 5% per year over the last three years. Merrill Lynch,
which annually assesses commodity newsletters, has generally ranked Pro Farmer
as one of the top three advisory services for "advisory quality" and has
similarly ranked the newsletter number one in certain specialty crop areas.
 
  Pro Farmer currently has nine editors whose sources for the newsletter's
content include, in addition to publicly available information, contacts
developed over the years among its readership base, at the USDA and in the
grain-export merchandising system. Ancillary Pro Farmer services include
reader access to a 900 number hotline where subscribers may receive
agriculture information tips and answers to their questions, distributions of
special reports on important changes in farming or marketing strategies, and
financial institution-sponsored agriculture seminars for farmers. The seminars
provide the editors of Pro Farmer an opportunity to interact with their
readership, who pay a fee to attend such seminars.
 
  Today Magazines
 
  Other periodicals published by the Company include the controlled
circulation Today series of magazines that focus on the livestock markets.
This series includes Beef Today, Dairy Today and Hogs Today, each of which is
published ten times per year. Beef Today, originally a beef producer
demographic section of Farm Journal, was first published as an individual
magazine in 1985. As of December 31, 1997, the magazine had a controlled
circulation of 135,956 readers, each of whom is a cattle producer who meets
certain qualifications regarding beef sold or cattle ownership. The
publication's editorial content includes contributions from columnists writing
on topics such as animal health, market outlook and regulatory issues. Dairy
Today, originally a dairy producer demographic section of Farm Journal, was
first published separately in 1985. As of December 31, 1997, the magazine's
controlled circulation of 99,997 readers was comprised of dairy producers
meeting certain milk production qualifications. The publication's editorial
content includes contributions from columnists writing on topics such as
nutrition, genetics and economics. As with Beef Today and Dairy Today, Hogs
Today was originally introduced as a pork producer demographic section of Farm
Journal. Hogs Today was first published separately in 1985. As of December 31,
1997, the magazine was sent to 73,557 pork producers, each of whom met certain
qualifications regarding ownership and marketing of hogs. The magazine's
content includes production, marketing and management stories, including
contributions from columnists writing on herd health, nutrition and marketing.
 
 
                                      42
<PAGE>
 
Electronic Publishing
 
  Globalink and FutureLink
 
  The Company provides two satellite-delivered information services for
personal computer users: (i) Globalink, which provides farmers and ranchers
with commodity and agribusiness news and weather forecasts, and (ii)
FutureLink, which delivers agricultural commodity news to non-farmers who
trade in commodities markets but are not professional traders.
 
  In 1988, PFA launched a satellite-transmitted version of Globalink.
Approximately 1,850 farmers currently subscribe to Globalink, which is sold
through direct mail and telemarketing efforts targeting the top revenue-
producing Pro Farmer subscribers. New subscribers buy and install the
satellite dish and pay the Company a monthly fee of $54.95 for ongoing
service. If a subscriber does not own a computer, the Company facilitates its
acquisition and financing. Principal features of Globalink include: (i)
snapshot futures and options quotations available every ten minutes from a
former affiliate of the business, FutureSource Information Systems, Inc.
("FutureSource"); (ii) real-time market news that covers all North American
and major international exchanges from a division of FutureSource, Future
World News; (iii) weather forecasts from Strategic Weather Services; and (iv)
the entire package of Pro Farmer news.
 
  In response to increased use of the Internet, the Company plans to offer
Globalink over a combined service that enables subscribers to receive data
both via satellite and over the Internet. In this hybrid system, both the
satellite and Internet transmitted data will contain "hyperlinks" that enable
the user to explore related topics of interest. Information received from
hyperlinking will be delivered directly from the Internet. PFA plans to
implement the new hybrid system during 1998 as part of an upgrade written for
use with Windows. The Company expects that this upgrade will also
substantially improve Globalink's ease of use.
 
  FutureLink provides snapshot futures and options quotations every ten
minutes. FutureLink subscribers are primarily non-farmer commodity traders.
Currently there are approximately 3,650 subscribers to FutureLink. The data
service is largely sold through endorsements by third party commodity advisors
who receive a $20 per month royalty for each subscription sold. FutureLink
users pay $115 per month for the service. FutureLink has all the features of
Globalink but contains certain differences in format and substance to make it
more appealing to commodity traders. The Company also plans to upgrade
Futurelink to the Windows based hybrid architecture currently in development.
 
  Internet
 
  Farm Journal Today is the Company's Internet site on the World Wide Web,
accessible at www.farmjournal.com. The site was introduced in 1995 and
attracted more than 2,500,000 hits and over 50,000 user sessions in March
1998. In 1996 the site was designated as a "partner site" by Microsoft
Corporation when it introduced its Internet Explorer World Wide Web browser. A
regular feature on the site includes stories abstracted from the Company's
magazines. The site provides updates of breaking agriculture news stories and
a forum for farmer and rancher communications through bulletin board postings
and live chat sessions. A regular program on the site, First Tuesday, features
leading agribusiness executives and provides an opportunity for live chat
questions and answers.
 
  Commercial activity on the site includes banner advertising which allows
visitors to link with agribusiness companies' home pages. The Company is
introducing a store on its Web site which will provide customers the
opportunity to order a wide variety of Farm Journal merchandise. Farm Journal
Today is actively promoted through cross-references in the Company's
publications.
 
  The Company's Pro Farmer newsletter also maintains an active Internet site
at www.profarmer.com. The site averages 17,000 hits per day and serves both
existing and prospective Pro Farmer subscribers. Visitors receive story
abstracts and the opportunity to order subscriptions. Future plans include
offering users the ability to run personalized news searches based on a
particular profile of interest to the user. The Company will explore
 
                                      43
<PAGE>
 
positioning the site as a global trading post where commodity buyers and
sellers can meet and evaluate bids and offers. The Company intends to explore
a commission arrangement for providing this service.
 
Other Publications and Publishing Related Services
 
  The Company is in the process of developing several new publications as well
as certain publishing and publishing related services, such as custom
publishing, conferences and seminars.
 
  LandOwner and Land Stewardship
 
  As part of the PFA Acquisition, Farm Journal acquired LandOwner, a
newsletter covering investments in real property, international agriculture
and land use. LandOwner sells for $84 for a one-year subscription and has a
subscriber base of 2,600. The Company plans to publish part of the content of
LandOwner in a new publication, Land Stewardship. Land Stewardship will be
directed at individuals interested in environmental land protection.
Management is currently planning to publish 12 issues of each of the two
newsletters annually.
 
  Other New Publications
 
  The Company is also developing several other new publications, including
those in the areas of agricultural commodities and rural lifestyles. Part of
the Company's strategy for new publications includes seeking immediate
profitability through subscription fees and, as necessary, full or partial
sponsorship. The Company anticipates that such sponsorship will ultimately be
replaced by an established advertising base.
 
  Custom Publishing
 
  The Company also recently began a focused approach to generating sponsored
custom publishing programs, which includes publishing journals for trade shows
and conferences, translation of agricultural articles for international
distribution and corporate newsletters and customer service material for the
Company's corporate advertisers. Additional areas to be targeted include
creating special focus publications for customers.
 
  Conferences and Seminars
 
  Recently, the Company has organized several sponsored conferences and
seminars that build on the editorial positions of Farm Journal, Top Producer
and Pro Farmer.
 
  In November 1997 and March 1998, the Company organized policy conferences in
Washington, D.C. on the topics of trade policy and food quality legislation.
Speakers at the conferences included United States government cabinet members,
members of Congress and several chief executives of major agricultural
companies and associations. The conferences generated over $100,000 in
revenues and were profitable. The Company intends to implement additional
conferences on agricultural policy issues in the future.
 
  The Company also organized two Top Producer Executive Farmer Seminars which
were held in January and March 1998. The seminars, which were sponsored and
required registration fees, featured high-profile Top Producer columnists and
large-scale farmers that had been featured in the magazine. The initial two
seminars were profitable and the Company intends to offer this seminar series
at additional locations as well as to expand its seminar offerings.
 
  A third series of seminars is being re-introduced under the Pro Farmer
brand. These seminars focus on the strategies for marketing farm products and
feature Pro Farmer market analysts. Revenues are generated from both seminar
sponsors as well as registration sales.
 
  Cash Master
 
  In conjunction with its Pro Farmer newsletter, the Company is also
developing an agricultural marketing service for grain farmers under the brand
Cash Master. Under this service, a Company subsidiary executes spot
 
                                      44
<PAGE>
 
market crop sales for participating farmers according to advice given via Pro
Farmer electronic services in the Pro Farmer newsletter. This enables farmers
who wish to focus on production to use an agent to market a specific portion
of their crop.
 
Editorial
 
  Farm Journal believes that its publications have a reputation among their
readers and within the agricultural industry for authoritative and reliable
journalism. One of the former owners of the Company was a foundation which was
committed to public service and the needs of domestic farmers. This commitment
was reflected in Farm Journal's editorial content and quality. The Company's
magazines are among the most frequent recipients of editorial awards in
agricultural journalism. Farm Journal is the only agricultural magazine to
have won the prestigious "Calder Award" from the American Society of Magazine
Editors, which it received in 1986. Each year the Company's magazines are
cited in various categories of excellence by the American Agricultural Editors
Association and by the Livestock Publications Council, organizations which
recognize outstanding editorial achievement.
 
  Farm Journal's editorial staff currently includes editors, designers and
production personnel. The editorial staff makes significant efforts to
understand the information needs and interests of its readers and thereby
serve them more effectively. The Company devotes considerable resources to the
study of trends in its readership communities and strives to make its
publications the most widely read amongst its target audiences. The Company
also uses high-quality design graphics, illustrations, photography and other
artistic elements to make its publications visually attractive and accessible
to readers. The Company believes that its reputation for objective, fair and
credible editorial content contributes significantly to Farm Journal's
success.
 
Advertising
 
  Farm Journal has a strong market position with nearly all major agricultural
product advertisers in such areas as seed, automotive products, crop
protection chemicals and equipment. The largest advertisers in the Company's
publications are major agriculture suppliers, including American Cyanamid,
Asgrow Seed, BASF, Bayer, Case, Caterpillar, Chevrolet, Deere & Company,
Dodge, Dow AgroSciences, DuPont, Farm Credit Services, FMC, Ford, Hoechst
Roussell, Monsanto, Novartis, Pharmacia & Upjohn, Pioneer Hi-Bred
International, Terra International and Zeneca Ag Products. Several of these
advertisers have had relationships with the Company for over 50 years. Through
acquisitions, strategic alliances and co-branding, the Company expects to
increase the number and type of its advertising relationships.
 
  Advertising sales accounted for approximately 73% of the Company's total
revenues in 1997. The suppliers and purchasers of agricultural print
advertising are a highly concentrated group. Six publishers currently account
for approximately two-thirds of the market. Fifteen companies in the general
farm interest category have accounted for approximately 35% of all advertising
expenditures. The Company estimates that it commands on average a 27% market
share of advertising expenditures by its top 15 advertisers compared with
approximately 23% market share in the general farm interest category. Farm
Journal advertisers represent approximately 110 companies, many working
through advertising agencies, with the Company's 50 largest customers
representing nearly 90% of total Company advertising revenues. Customer
duplication between Farm Journal and Top Producer is quite extensive while
minimal duplication exists between advertisers in those two publications and
advertisers in Beef Today, Dairy Today and Hogs Today.
 
  The Company's unique and extensive subscriber database enables the Company
to sell advertising space by offering a target audience to the advertiser
through varying versions of its publications. The Company uses its subscriber
database to tailor editorial content and advertising to specific reader
interests. Farm Journal uses computerized binding technology to create
multiple versions of an individual issue, enabling it to target editorial
content and advertisements to distinct subgroups of subscribers.
 
  Management believes that the continued increase in agricultural production
and productivity will lead to increased agricultural advertising expenditures,
including expenditures for print, direct, Internet, radio and
 
                                      45
<PAGE>
 
television. The Company expects to profit from its ability to enable
advertisers to reach end product buyers through the Company's publication and
information services product offerings.
 
  The Company's advertising sales strategy also includes an initiative
designed to increase revenues from box display and classified advertising.
Both categories represent markets that the Company has not actively pursued in
recent years. Farm Journal added three sales positions in these areas during
1997. The Company believes that relative to its market share in other
categories, box display and classified advertising present significant
opportunity to increase its advertising revenues.
 
  The Company's advertising is sold through an internal sales organization and
a customer support group. Although some account and territory overlap exists,
the sales organization is divided between crop (Farm Journal and Top Producer)
and livestock (Beef Today, Dairy Today and Hogs Today). The Company employs 20
sales and customer support personnel. In order to increase accountability, the
Company has decentralized sales responsibilities for its crop and livestock
magazines under three publishers.
 
Circulation
 
  The Company's magazines are primarily controlled-circulation, business-to-
business publications which are distributed free of charge to qualified
subscribers. Subscribers must provide production information (crops by acre
size and livestock by herd size, in addition to various production data) in
order to receive the publications. Demographic information and subscription
requests are collected both in written form, including cover wraps and direct
mail solicitations, and through the Company's telemarketing center located in
Webster City, Iowa. Once Farm Journal accepts a potential subscriber as a
qualified recipient for a controlled circulation publication, that reader
receives the particular publication for up to three years. The process of
updating demographic data and collecting reader requests, however, occurs on a
more frequent cycle. The Company currently updates demographic data for over
70% of its subscribers each year and updates data for 94% at least every two
years.
 
  Circulation information for Farm Journal and Top Producer is audited each
year by the Audit Bureau of Circulations ("ABC") and circulation information
for Beef Today, Dairy Today and Hogs Today is audited by BPA International
("BPA"). ABC and BPA audits verify that the Company's subscription information
accurately identifies the number and demographic characteristics of qualified
recipients and that the qualified recipients are in fact eligible to receive
the relevant publication under the standards established by Farm Journal for
such publication. Both ABC and BPA are nationally recognized auditors of
periodical subscription lists.
 
  Although Farm Journal is primarily a controlled circulation publication, 32%
of its subscriber base is paid. In recent years, the Company has pursued an
aggressive program to increase subscription rates on the paid circulation
segment. Those initiatives, which increased average issue sale prices by
approximately 11% in first-quarter 1997 solicitations and by approximately 29%
in fourth-quarter 1997 solicitations, each over the comparable prior year
period, have not negatively affected either renewal rates or subscription term
periods.
 
  The Company is currently in the process of converting Top Producer from a
controlled-circulation publication to a partially-paid subscription magazine.
Subscription revenues will be generated through a mix of direct mail marketing
programs, on-line promotions and other promotional methods. The Company does
not employ a field-based subscription sales organization.
 
  Pro Farmer and LandOwner are paid circulation newsletters that do not
contain advertising. Subscription sales are procured through a number of
methods with emphasis on direct marketing solicitations. Direct mail
promotions often feature publication samples and extend trial subscription
programs. The Company also promotes subscription sales on its Internet sites
and in the Company's other magazines.
 
Production, Distribution and Fulfillment
 
  The Company currently employs a staff of seven professionals to manage the
production and oversee the printing, distribution and fulfillment of its
periodicals.
 
                                      46
<PAGE>
 
  For the last 60 years, the Company has outsourced magazine printing services
to Donnelley. The Company's magazines are printed, bound and organized for
shipment pursuant to a contract with Donnelley which is currently scheduled to
expire in 2001. Printing of magazines is performed in Donnelley's facilities
in Danville, Kentucky. In addition, Donnelley purchases most of the Company's
paper needs through a consortium that includes other Donnelley customers.
Paper is purchased principally on the spot market. Donnelley binds certain of
the Company's magazines using a sophisticated binding process that allows
individual issues to be custom-tailored for readers based on geographic and
demographic information from the Company's circulation database. Using this
form of selective binding enables the Company's advertisers to create
advertisements directed only to those readers identified as probable
customers. The Company also outsources the printing of its newsletters to a
commercial printer in Cedar Falls, Iowa.
 
  The Company believes that its relationship with Donnelley is good and that
its high volume of printing with Donnelley enables the Company to receive
favorable printing rates. The Company believes, however, that other printers
of similar quality could be engaged on similar terms.
 
  The Company maintains numerous circulation and fulfillment processes,
including: (i) the receipt, verification, and deposit of payments from
subscribers; (ii) the maintenance of master files on all subscribers by
publication and the issuance of invoices and renewal notices to subscribers;
and (iii) the issuance of address labels for individual publications.
 
  Farm Journal has a contract with ACS Advantage Computing Systems ("ACS")
which provides licensing, support and upgrades for the Company's magazine
circulation fulfillment software. The Company's existing agreement with ACS
may be terminated by either party after 2000.
 
Raw Materials
 
  The Company's principal raw material is paper. Paper costs represented
approximately 30% and 25% of the Company's manufacturing costs for 1996 and
1997, respectively. The Company believes that its arrangement with Donnelley
enables it to obtain favorable pricing as a result of Donnelley's large volume
of paper purchasing. The available sources of paper have been, and the Company
believes will continue to be, adequate to supply the Company's needs. Certain
commodity grades of paper have shown considerable price volatility over the
last decade, including the commodity grade used by the Company. The price of
the Company's primary paper increased 10% in 1994 and another 34% in 1995, to
its high in October of that year. From October 1995 to the end of 1996, the
price of the Company's primary paper declined 34%. See "Risk Factors--
Fluctuations in Paper Costs and Postal Rates" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Overview."
 
FARM JOURNAL INFORMATION RESOURCES
 
  In addition to its publishing operations, Farm Journal provides data
management and related information services, including market research
services, through its FJIR division. FJIR's customers include each of the
Company's top five advertisers and many of the other leading agricultural
industry suppliers.
 
Database
 
  The foundation of the FJIR business is the Company's unique database of over
3.8 million records. The Company believes that its database, which contains
demographic and production information for most United States farmers and
ranchers, is the most accurate and comprehensive database in the agricultural
industry. Unlike competing databases, information in the Company's database is
obtained directly from farmers and ranchers rather than through lists obtained
or purchased from other sources. The Company's magazine subscribers must fill
out a written survey packaged with the magazine in order to receive the
publication. Subscribers who do not respond to the written survey are called
by one of the Company's 82 telephone operators located at its in-house
telemarketing facility in Webster City, Iowa. The telephone interview response
rate is nearly 97%. Over 70% of the Company's magazine subscribers are
contacted through these methods once a year and 94% are contacted
 
                                      47
<PAGE>
 
every two years, with each contact resulting in a complete record update.
Information collected includes demographic, management, crop production,
livestock ownership, cropping practices and similar data. The Company also
retains record histories that confirm and enhance the data with respect to
current farmers and ranchers names. In 1997, the Company updated over 700,000
of the records in its database.
 
Data Management and Other Services
 
  FJIR uses the Farm Journal database in a variety of ways. FJIR analyzes and
categorizes the information on the basis of farmer demographics, crops grown
and livestock raised. The information can be sorted, filtered or otherwise
organized to provide meaningful data for licensing to advertisers and other
companies targeting the agricultural industry. FJIR also offers data
maintenance and enhancement services to agricultural suppliers. In one
arrangement, the FJIR client will provide its customer database to the Company
pursuant to a licensing and maintenance agreement. Updated production
demographics from Farm Journal's database are appended to clients' databases
containing proprietary customer purchase information. This service allows
marketers to obtain information about existing and potential customers. FJIR's
relationships range from data licensing and warehousing to full service
agreements in which a client's own customer database is updated, enhanced and
maintained by FJIR. Many FJIR clients have multi-year agreements with the
Company. Income is derived on a "fee for services" or "fee for data" basis.
Ultimately, access to client customer databases provides Farm Journal with an
additional means to increase circulation for its publications.
 
  FJIR is also actively pursuing new data services products and relationships
that leverage the Farm Journal brand and its unique circulation database.
 
  A significant product is a multi-client survey referred to as Smart Market
Database Enhancement ("Smart Market(TM)"). FJIR clients pay the Company to
gather specific information from farmers and ranchers that will be used in the
client's marketing programs. Smart Market(TM) surveys combine several clients'
information requests in a single mailing to target farmers and ranchers,
thereby reducing data collection costs, reducing survey target fatigue and,
management believes, producing greater customer response. Management believes
the relatively high response rates for Smart Market(TM), which are generally
in excess of 20%, are the result of association with the Farm Journal name and
recognition of the technique's efficiency. The Company maintains all
information obtained in its database and can respond to an individual client's
needs while maintaining confidentiality about other client requests and
information. The information gathered is the property of Farm Journal and may
be used to enhance the Farm Journal database.
 
  In addition, in November 1997, Farm Journal was awarded a contract to
develop a North American Purchaser Directory (the "Directory") for a
consortium of members of the American Crop Protection Association. This
project, referred to as RAPID, will result in a comprehensive farmer directory
that will provide the foundation for a system to capture point-of-sale
information for manufacturing members. The directory will be a single list
resource for use throughout the agricultural industry and will provide for
every commercial farmer a common set of data elements, including
identification number, owner/operator name, business name and address. This
information may be used by the participating members of the consortium to
facilitate accurate and timely electronic information exchange and processing
among such members, retailers and distributors. Planned enhancements to RAPID
include a product directory, material and safety information, and a retailer
database. In addition to an initial development fee, Farm Journal anticipates
ongoing revenues from RAPID in the form of user fees, database licensing and
advertising contracts. The Directory is expected to include information on
approximately 1.5 million farmers and 14,000 agricultural product retail
outlets located throughout the United States, Canada and Mexico. Management
believes that development of the Directory will substantially increase the
size of the Company's database, expand its coverage into foreign markets and
provide additional opportunities for database development and management in
other agricultural sectors.
 
 Market Research
 
  The Company offers market research through Rockwood Research, a division of
FJIR ("Rockwood"). Rockwood, located in New Brighton, Minnesota, is a full-
service marketing research organization specializing in
 
                                      48
<PAGE>
 
agricultural research. Rockwood conducts focus groups, performs telephone and
mail surveys and creates on-line market research projects. Rockwood's products
include both proprietary and syndicated research studies, including
SmartShare(TM) brand share studies. Rockwood's primary focus is on
psychographic segmentation, customer satisfaction, price sensitivity and
awareness-tracking studies.
 
ACQUISITION STRATEGY
 
  Farm Journal intends to pursue strategic acquisitions of agricultural and
related media and information services businesses. The Company's initial
strategy will be to focus on acquisitions that will complement or extend Farm
Journal's existing publications and information services businesses, as well
as create benefits from cross-selling to advertisers, cross-promotion of
readership and expansion of the Farm Journal database. Management has
identified several categories of acquisition candidates, each one of which it
believes offers the potential for significant growth.
 
  Management believes the highly fragmented agricultural publishing category
offers a number of acquisition candidates. In the United States there are over
270 agricultural publications. A number of these would provide geographic or
market segment enhancements to the Company's current publications and
database. Over 40% of these magazines are owned by small or family-owned
publishing companies which serve niche agricultural markets, such as fruit,
vegetable, poultry and other specialty crop and livestock producers. The
Company believes that many of these smaller participants would also complement
and extend Farm Journal's existing publications and data management services
and offer compatibility in subscribers, advertisers and content.
 
  Another category of acquisitions includes companies that would extend the
communications media used by the Company. These companies are involved in,
among other things, television or radio production, newsletter publishing,
trade show organization, event marketing and internet site development. The
Links business acquired in the PFA Acquisition is an example of an acquisition
in this category.
 
  Farm Journal will also target rural-related consumer publications and media
that overlap with the reader profile of the farm audience and cover such
subjects as hunting, fishing, gardening, crafts, sewing and baking. Management
believes that certain publications in this area, as in others, would benefit
from the Farm Journal's premier brand name, quality editorial content and
industry or subscriber relationships. Operational savings, such as in overhead
and publishing costs, should also be achievable and the addition of such
titles should mitigate seasonal fluctuations in the Company's revenues.
 
 Another category of acquisition includes other business-to-business
publications in fields within or directly related to the agricultural
industry. This category would include publications in areas such as food
processing, governmental regulation, health sciences, international trade and
commerce and shipping and transportation. The Company's Chairman and Chief
Executive Officer, Mr. Erickson, brings extensive acquisition experience in
certain of these areas. Prior to joining Farm Journal in April 1997, Mr.
Erickson was President and Publisher of the Journal of Commerce magazine
group, where over a six-year period he acquired or started six publications
and an electronic information services in the areas of transportation and
international commerce.
 
  Finally, other categories of strategic acquisitions would include selected
market research and data management businesses. Management also believes there
are many opportunities to pursue its acquisition strategy overseas. See "--
International Publications and Data Management."
 
CO-BRANDING AND AFFINITY MARKETING
 
  Management believes that it will be able to increase revenues by utilizing
Farm Journal's reputation to market, in conjunction with other companies, a
broad range of high-quality, specifically tailored products and services to
its circulation base at favorable prices. Management believes that its
extensive database and data management capabilities, in combination with the
name recognition and reputation for quality it has with its subscriber base,
make the Company a particularly effective affinity marketing and co-branding
partner for
 
                                      49
<PAGE>
 
providers of products and services desiring to target the rural marketplace.
Through co-branding and affinity marketing arrangements, the Company will be
able to offer at a discount services such as credit cards, insurance and other
financial services to its customer base. In such co-branding joint ventures,
the Company expects to increase its name recognition in another medium and
thereby expand the depth and breadth of its relationship with members of the
agricultural community. In addition, because participating in the delivery of
these services will result in additional "data-capture" by the Company, these
initiatives should augment its FJIR division.
 
  In March 1998, the Company entered into an agreement with The Member
Companies of American International Group, Inc. to jointly market private
passenger automobile insurance to the Company's subscriber base. Under the
long-term agreement Farm Journal will receive marketing royalties for policy
sales and renewals.
 
  The Company recently entered into an agreement with CIGNA Property &
Casualty to explore the sale of a variety of insurance products through a
cooperative marketing effort. A number of the Company's services could be
incorporated in potential marketing approaches, including data management
services, product advertising and farmer seminar sponsorship.
 
  The Company has also retained Kessler Financial Services, a leading
marketing consultant of affinity credit cards, to design and introduce a
credit card program which will offer special value for farmers and ranchers.
The Company expects that the credit card would include a "club" approach
offering a variety of products and services at group discount prices. As with
other affinity group sponsors, the Company would receive income from the
acquisition of cardholders by its affinity group, fees for activating card-
holding members and commissions on purchases made with the Farm Journal card.
 
  The Company anticipates expanding activities to include a broad range of
consumer and small business products and services targeted at the agricultural
and rural communities. Such offerings may include mutual funds and other
financial products, computer and telecommunications equipment and other
products and services characteristically used by small business owners.
 
INTERNATIONAL PUBLICATIONS AND DATA MANAGEMENT
 
  Given its position as a leading provider of agricultural information in the
United States and the trend toward the globalization of agricultural
technology and trade, management believes that there are substantial long-term
opportunities to expand its business overseas. The Company is involved in a
number of initiatives to capitalize on international market opportunities.
 
  In January 1998, Farm Journal retained JFA International Marketing Services,
an international agribusiness consulting firm, to launch a sponsored
international magazine targeted to agricultural decision-makers worldwide. In
November 1997, the Company entered into an editorial agreement with a Japanese
publication to reprint Dairy Today editorial in Dairy Japan. Recently, the
Company's Rockwood unit participated in a joint project with German-based
Kleffman Market Research on a project which assessed agricultural technology
adaptation in various countries. The Company has also held initial discussions
with a European publisher with respect to joint venture publishing and
international data management projects. Most recently, several FJIR clients
have discussed obtaining data management services for their foreign databases.
 
  Management also believes there are various opportunities for expansion
through acquisitions of foreign agricultural media companies. The Company
intends to explore these opportunities initially in North America and has held
initial discussions with a potential strategic partner in that regard.
 
COMPETITION
 
  According to AGRICOM, Farm Journal had an advertising revenue market share
at the beginning of 1997 of approximately 23% among the geographic and market
category farm magazines with which it competes.
 
                                      50
<PAGE>
 
Farm Journal's principal competitors include Successful Farming (published by
Meredith Corporation), Progressive Farmer (published by Time Warner) and
certain state specific magazines published by Rural Press USA.
 
  Also based on data available from AGRICOM, Top Producer had at that time an
advertising market share of approximately 24% among selective large-acreage
publications, including Farm Industry News and Soybean Digest (published by
PRIMEDIA) and Farm Futures (published by Rural Press USA). In their respective
livestock categories the advertising market share for Beef Today was 25%,
Dairy Today was 19% and Hogs Today was 17%. In each of the livestock species
areas, the Company evaluates market share as compared with the leading
publications in each category.
 
  The primary competitors to the Pro Farmer newsletter are the Doanes Report,
the Kiplinger Agriculture Letter and the Brock Report. Farm Journal believes
that Pro Farmer compares favorably with those competitors on the basis of
depth, breadth and quality of editorial product.
 
  The principal competitor to the Links business is DTN. DTN offers general
commodity information and also distributes certain Pro Farmer information
services. DTN has a significantly larger subscription base than Globalink. DTN
distributes, through dedicated terminals that it supplies, general commodity
market information and other news, reports on weather and commodity quotes for
a basic fee and offers a variety of services for additional fees.
 
  Other publishers maintain farmer demographic information databases. The
Company believes, however, that its database contains more developed and
detailed information than its competitors due to its direct communication with
the reader. The majority of the Company's competitors in this field maintain
data management services solely on an in-house basis, as opposed to the
Company which offers its services to third parties.
 
INTELLECTUAL PROPERTY
 
  The Company believes that it has developed strong brand awareness for its
magazines and newsletters. The Company regards its titles and logos as
valuable assets, and the Company has registered certain trademarks, service
marks and logos used in its publishing business. In addition, each one of the
Company's publications is protected under United States copyright laws. The
Company believes that it owns or licenses all the intellectual property rights
necessary to conduct its business.
 
PROPERTIES
 
  All of the Company's properties are leased. The Company has a lease for its
headquarters facilities in Philadelphia, Pennsylvania which expires in 2005.
The Farm Journal facilities consist of approximately 48,000 square feet and
were improved in 1995. The Company also leases the headquarters for Rockwood
Research, an FJIR facility, in New Brighton, Minnesota, space in Mexico,
Missouri for its crops and equipment editorial field office and in Monticello,
Minnesota for its dairy editorial office. Telephone center space for
circulation and FJIR calling operations are in Webster City, Iowa and River
Falls, Wisconsin.
 
EMPLOYEES
 
  As of May 29, 1998, the Company had 177 full-time employees and 222 part-
time employees. Part-time employees are primarily telephone operators who
conduct demographic surveys and data entry personnel. In addition to the
Company's employees, the Company relies on a network of freelance and contract
writers to provide additional editorial content. All work done by such writers
is on an independent contractor basis. None of the Company's employees are
members of unions. The Company believes that its relations with its employees
are good.
 
                                      51
<PAGE>
 
                                  MANAGEMENT
 
DIRECTORS AND EXECUTIVE OFFICERS
 
  The following table sets forth certain information as of June   , 1998 with
respect to the persons who are members of the Board of Directors, executive
officers or key employees of the Company.
 
<TABLE>
<CAPTION>
             NAME            AGE                         TITLE
             ----            ---                         -----
   <S>                       <C> <C>
   Stanford A.
    Erickson(1)............   59 Chairman of the Board and Chief Executive Officer
   Roger D. Randall(1).....   44 President, Chief Operating Officer and Director
   Richard K. Stanislaw....   48 Chief Financial Officer, Vice President and Treasurer
   John E. Lafferty........   46 President, FJIR
   Earl P. Ainsworth.......   50 Publisher, Farm Journal and Top Producer
   Sonja Hillgren..........   49 Editor of Farm Journal
   David J. Joerger........   35 General Manager of Professional Farmers of America
   J. Carr Gamble, III(1)..   44 Secretary and Director
   Sterling B. Brinkley,
    Jr.(1).................   46 Director
   Mark C. Pickup(2)(3)....   47 Director
   David J. Bates(3).......   51 Director
   Richard S.
    Werdiger(2)(3).........   50 Director
</TABLE>
--------
(1) Member of Executive Committee
 
(2) Member of Compensation Committee
 
(3) Member of Audit Committee
 
DIRECTORS AND EXECUTIVE OFFICERS
 
  STANFORD A. ERICKSON--Mr. Erickson has served as Chairman of the Board and
Chief Executive Officer of the Company since the Management Purchase in April
1997. Mr. Erickson was the President and Chief Operating Officer from 1991 to
1997 of the Journal of Commerce which is publisher of The Journal of Commerce
and a division of the Economist Group, publisher of Economist magazine. At the
Journal of Commerce, Mr. Erickson acquired or started six business-to-business
publications in the transportation and commerce industries. Prior to 1991, Mr.
Erickson held various positions with the Journal of Commerce, including
editor, publisher and President of the Journal of Commerce. Mr. Erickson
received a B.A. from the University of California, Berkeley, an M.A. from San
Francisco State University and an M.S. from Columbia University Graduate
Business School.
 
  ROGER D. RANDALL--Mr. Randall has served as President and Chief Operating
Officer and a Director of the Company since the Management Purchase in April
1997. He is currently the President of FJI, having assumed that position in
late 1995. Mr. Randall has been an employee of the Company since 1984 serving
in various marketing and sales management positions. As President and Chief
Operating Officer of the Company, he manages, among other things, the
Company's external sales programs and various internal growth initiatives. Mr.
Randall received his B.A. in Art and Political Science from Morningside
College.
 
  RICHARD K. STANISLAW--Mr. Stanislaw joined the Company as Chief Financial
Officer, Vice President and Treasurer in June 1997. Prior to joining the
Company, Mr. Stanislaw served as President of The Rose Corporation, a heavy
steel industrial equipment builder, metal service, machinery and mechanical
contracting business, from August 1995 to June 1997, and as a financial
consultant to The Rose Corporation (including Chief Financial Officer
responsibilities) from October 1994 to August 1995. Mr. Stanislaw was employed
by Collegeville Imagineering Inc., a manufacturer of seasonal consumer goods,
from August 1991 to October 1994,
 
                                      52
<PAGE>
 
serving as Chief Financial Officer from August 1991 to July 1992 and as
Executive Vice President and General Manager from July 1992 to October 1994.
Prior to August 1991, Mr. Stanislaw served in various capacities including
Vice President, Finance and Vice President Group Controller of public
companies. Mr. Stanislaw is also a certified public accountant and a graduate
of Pennsylvania State University, where he earned his M.S. and B.S. in
business and accounting.
 
  JOHN E. LAFFERTY--Mr. Lafferty has served as President of FJIR since the
group was formed in 1997. Mr. Lafferty joined the Company in 1992 as Vice
President of Marketing and served from 1994 to 1997 as Senior Vice President
of Marketing. Prior to joining the Company, he was Senior Vice President and
Account Supervisor for Richardson, Myers and Donofrio, a Baltimore-based
advertising agency, from 1985 to 1991. Mr. Lafferty received his B.A. from the
University of Delaware.
 
  EARL P. AINSWORTH--Mr. Ainsworth has served as Publisher of Farm Journal and
Top Producer since 1995. Prior to being named to that position he served for
20 years in various editorial capacities at the Company, including as
Editorial Director for the Company's five magazines and Editor of Farm
Journal. Mr. Ainsworth has served as President of the American Agricultural
Editors Association and is a graduate of Cornell University.
 
  SONJA HILLGREN--Ms. Hillgren has been the Editor of Farm Journal since 1995
and served as its Washington Editor from 1990 to 1995. Ms. Hillgren is a
prominent figure in the agricultural community. She is currently a director of
the Winrock Foundation, a charitable foundation, and a recent past President
of the National Press Club. Ms. Hillgren received her M.S. and B.S. from the
University of Missouri. Ms. Hillgren was a Nieman Fellow at Harvard University
from 1982 to 1983.
 
  DAVID J. JOERGER--Mr. Joerger has served as General Manager and Chief
Financial Officer of PFA since the PFA Acquisition. Prior to the PFA
Acquisition, Mr. Joerger served as Chief Financial Officer of Oster
Communications, Inc., a privately-held international communications company
specializing in the futures industry, from June 1996 to April 1998, and as its
Treasurer from March 1990 to June 1996. Prior to March 1990, Mr. Joerger was
employed in public accounting, serving clients in the food processing,
technology, financial services and agriculture industries. Mr. Joerger
received a B.A. from the University of Northern Iowa and is a certified public
accountant.
 
  J. CARR GAMBLE, III--Mr. Gamble has been the Secretary and a Director of the
Company since June 1997. Since 1994, Mr. Gamble has been a Managing Director
of Morgan Schiff, and serves as a consultant to various companies that are
affiliates of Morgan Schiff. From 1989 to 1994, Mr. Gamble was Of Counsel to
the law firm of Milbank, Tweed, Hadley & McCloy and from 1981 to 1989 was
associated with the law firm of Cravath, Swaine & Moore. Mr. Gamble received a
B.A. from Amherst College, an M.S. in mathematics from the University of
California at Berkeley and a J.D. from the University of Virginia School of
Law.
 
  STERLING B. BRINKLEY, JR.--Mr. Brinkley serves as a Director of the Company
and is Chairman of the Executive Committee. Mr. Brinkley was a Managing
Director of Morgan Schiff from 1986 to 1990. Since 1990, Mr. Brinkley has been
a consultant to Morgan Schiff. Prior to 1986, Mr. Brinkley was a Managing
Director in the Corporate Finance Department of Shearson Lehman Brothers, Inc.
Mr. Brinkley is also Chairman of the Board of Directors of EZCORP, Inc., a
publicly-traded pawnshop chain, and Chairman of the Executive Committee of the
Board of Directors of Friedman's Inc., a publicly-traded retail jewelry chain.
Both companies are affiliates of the Company and Morgan Schiff. Mr. Brinkley
also serves on the boards of directors of various privately held companies
that are affiliates of Morgan Schiff. Mr. Brinkley received a B.A. from Yale
University and an M.B.A. from the Stanford Graduate School of Business.
 
  MARK C. PICKUP--Mr. Pickup serves as a Director of the Company and is
Chairman of the Audit Committee. Mr. Pickup is also a director of EZCORP, Inc.
and Friedman's Inc. Since 1995 he has served as an independent business
consultant with a variety of companies. Mr. Pickup served as Vice Chairman of
Crescent Jewelers, a privately-held retail jewelry chain which is an affiliate
of Morgan Schiff and the Company, from December 1994 until February 1995, and
served as President and Chief Executive Officer of Crescent Jewelers
 
                                      53
<PAGE>
 
from August 1993 to December 1994. From October 1992 until August 1993, Mr.
Pickup served as the Senior Vice President and Chief Financial Officer for
Crescent Jewelers. For more than five years prior to October 1992, Mr. Pickup
held various positions with the predecessors of Ernst & Young LLP, leaving as
a partner in its San Francisco, California office in October 1992. Mr. Pickup
received a B.S. in mathematics from Brigham Young University.
 
  DAVID J. BATES--Mr. Bates became a Director of the Company in June 1998.
Since 1994, he has been a self-employed private investor and businessman and
is President of Casey Enterprises, Inc., a privately-held business consulting
firm which he founded in 1994. From 1983 to 1993, he was a Senior Investment
Officer at International Finance Corporation ("IFC"), the private sector
affiliate of the World Bank Group headquartered in Washington, D.C. where he
specialized in project finance (including agribusiness projects) with area
responsibilities in Europe, the Middle East and Eastern Europe. Prior to
joining IFC, Mr. Bates held various positions in the Agriculture Department of
the World Bank involved in global agricultural development policies and
investment. He received a B.A. and an M. Phil. (Economics) from George
Washington University and an M.B.A. from the University of Pennsylvania,
Wharton Business School.
 
  RICHARD S. WERDIGER--Mr. Werdiger became a Director of the Company in June
1998. Since 1980, Mr. Werdiger has served as President and Chief Executive
Officer of Michael Werdiger, Inc., a wholesale diamond company. Since 1980, he
has also served as Chairman of the Board and Vice President of Diamond
Abrasives Corporation, a distributor of industrial abrasives. Mr. Werdiger is
currently on the board of a privately-held company which is an affiliate of
Morgan Schiff. He received a B.A. in Economics from Middlebury College.
 
  Directors of the Company are currently elected annually by its stockholders
to serve during the ensuing year or until their respective successors are duly
elected and qualified. Officers of the Company serve at the discretion of the
Board of Directors (the "Board"). For a description of class voting rights see
"Description of Capital Stock."
 
COMMITTEES OF THE BOARD OF DIRECTORS
 
  The Board currently has three committees: (i) an Audit Committee; (ii) an
Executive Committee; and (iii) a Compensation Committee.
 
  The Audit Committee is comprised of Messrs. Bates, Werdiger and Pickup, with
Mr. Pickup as Chairman. The Audit Committee recommends the independent
accountants appointed by the Board to audit the financial statements of the
Company, which includes an inspection of the books and accounts of the
Company, and reviews with such accountants the scope of their audit and their
report thereon, including any questions and recommendations that may arise
relating to such audit and report or the Company's internal accounting and
auditing procedures. The composition of the Audit Committee complies with the
independent director requirements of Nasdaq.
 
  The Executive Committee is comprised of Messrs. Erickson, Randall, Gamble
and Brinkley, with Mr. Brinkley as Chairman. The Executive Committee exercises
the authority of the Board, to the extent permitted by law, in the management
of the business of the Company between meetings of the Board. The Executive
Committee of the Board also serves as the nominating committee in connection
with annual meetings of stockholders.
 
  The Compensation Committee is comprised of Messrs. Werdiger and Pickup, with
Mr. Werdiger as Chairman. The function of the Compensation Committee is to
review and approve the compensation of executive officers and establish
targets and incentive awards under incentive compensation plans of the
Company. The Compensation Committee reports to the Board.
 
COMPENSATION OF THE BOARD OF DIRECTORS
 
  Directors who are not current employees of the Company will receive
directors fees of $8,000 per year. Committee Chairmen who are not current
employees of the Company will receive an additional $2,000 per year.
 
                                      54
<PAGE>
 
The Company will reimburse directors for travel and other out-of-pocket
expenses incurred in connection with their services as directors.
 
COMPENSATION OF EXECUTIVE OFFICERS
 
  The following table presents certain summary information concerning
compensation paid or accrued by the Company for services rendered in all
capacities during the fiscal year ended December 31, 1997 for (i) the Chairman
of the Board and Chief Executive Officer of the Company; (ii) the President
and Chief Operating Officer; and (iii) the two other executive officers of the
Company (determined as of the end of the last fiscal year) whose total annual
salary and bonus for the fiscal year ended December 31, 1997 exceeded $100,000
(collectively, the "Named Executive Officers").
 
                         SUMMARY COMPENSATION TABLE(1)
 
<TABLE>
<CAPTION>
                                                       LONG-TERM
                                    ANNUAL            COMPENSATION
                                 COMPENSATION            AWARDS
                               -------------------    ------------
   NAME AND PRINCIPAL                                  RESTRICTED    ALL OTHER
        POSITION          YEAR  SALARY      BONUS     STOCK AWARDS  COMPENSATION
   ------------------     ---- --------    -------    ------------  ------------
<S>                       <C>  <C>         <C>        <C>           <C>
Stanford A. Erickson....  1997 $127,500(2) $55,159(3)   $10,911(4)       $297(5)
 Chairman and Chief Ex-
 ecutive Officer
Roger D. Randall........  1997 $163,750    $20,159      $ 8,730(4)    $57,767(6)(7)
 President and Chief Op-
 erating Officer
John E. Lafferty........  1997 $117,167    $15,157          --         $5,843(7)
 President of Farm Jour-
 nal Information Re-
 sources
Earl P. Ainsworth.......  1997 $115,000    $10,238          --         $5,616(7)
 Publisher of Farm Jour-
 nal and Top Producer
</TABLE>
--------
(1) No Named Executive Officer received perquisites and other personal
    benefits valued in excess of the lesser of $50,000 or 10% of such
    officer's total salary and bonus reported for fiscal 1997.
 
(2) Mr. Erickson commenced employment with the Company in April 1997 at an
    annual base salary of $170,000.
 
(3) Includes a $25,000 bonus paid by the Company upon the consummation of the
    Management Purchase.
 
(4) Represents the value of partnership interests issued to Messrs. Erickson
    and Randall in connection with their employment by the Company. Subsequent
    to December 31, 1997, Messrs. Erickson and Randall received a Partnership
    distribution of $    and $   , respectively, and currently have an
    indirect interest in 1,098 and 879 shares of Class B Common Stock,
    respectively.
 
(5) Includes cost of life insurance premium paid by the Company.
 
(6) Includes a $50,000 severance payment from Tribune Company in connection
    with the Management Purchase.
 
(7) Includes cost of life insurance premium paid by the Company and
    contributions made by the Company under the Company's retirement savings
    plan.
 
OPTIONS/STOCK APPRECIATION RIGHTS EXERCISES
 
  No options to purchase Common Stock were outstanding and no stock
appreciation rights were exercised by the Named Executive Officers during the
year ended December 31, 1997.
 
EMPLOYMENT AGREEMENTS
 
  Mr. Erickson, Chairman of the Board and Chief Executive Officer, and Mr.
Randall, President and Chief Operating Officer, are each a party to a written
employment agreement with FJI having a term of five years (the
 
                                      55
<PAGE>
 
"Employment Agreements"). The Employment Agreements include annual base
compensation of $170,000 in the case of Mr. Erickson and $160,000 in the case
of Mr. Randall and provide for an annual performance-based incentive bonus.
The Employment Agreements require such officers to maintain the
confidentiality of the Company's proprietary information and to refrain from
competing with the Company for specified periods after termination of
employment for any reason. If the officer is terminated by the Company without
cause (as defined in the Employment Agreements) or at such officer's election
due to the Company's material breach of the Employment Agreement, such officer
is entitled to receive his base salary for a period of three months following
the date of such termination, provided that such number of months shall
increase by one month for each completed full year of such officer's
employment with the Company.
 
  As permitted under the Employment Agreements, Messrs. Erickson and Randall
also purchased 5.483 and 4.387 Class B limited partnership units,
respectively, in the Partnership. These units provide Messrs. Erickson and
Randall with an indirect beneficial ownership interest, through the
Partnership, in 2,098 and 2,879 shares of the Class B Common Stock,
respectively. As a result of and subject to the terms of the Partnership
Agreement, any income, gain or loss to the Partnership generated by or
attributable to these shares will inure and be allocated to the benefit of
Messrs. Erickson and Randall.
 
  In addition, pursuant to the Employment Agreements, Mr. Erickson and Mr.
Randall each purchased Class A limited partnership units in the Partnership
(the "Class A Units"). Mr. Erickson purchased one Class A Unit for a purchase
price of $25,000 in cash and delivery of a full recourse promissory note to
the Partnership in the amount of $75,000 (the "Note") bearing interest at the
prime rate and secured by Mr. Erickson's primary residence. Mr. Erickson has
fully paid the amount due on the Note. Mr. Randall purchased two Class A Units
for a purchase price of $200,000.
 
  Under the Company's Incentive Stock Option Plan, Messrs. Erickson and
Randall have been granted options expiring on April 1, 2007 (the "Options") to
acquire     and     shares of the Class A Common Stock, respectively, at a
price per share equal to $   . Options to purchase     and     shares are
currently exercisable by each of Messrs. Erickson and Randall, respectively.
The balance of the Options will become exercisable by Messrs. Erickson and
Randall in four equal installments on each of April 1, 1999, 2000, 2001 and
2002. The exercise of any vested options requires that such executives
continue to be employed on the date of exercise.
 
 
                                      56
<PAGE>
 
                CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
  The Company is controlled by Phillip Ean Cohen through his sole ownership of
MS Farm Journal Corporation, the General Partner of the Partnership. Morgan
Schiff, which is owned by Mr. Cohen, is one of the managing underwriters of
the Offering. FJI reimbursed the Partnership and the General Partner for out-
of-pocket expenses, principally for legal and accounting services, in
connection with FJI's formation and the Management Purchase and will continue
to reimburse the Partnership and the General Partner for ongoing
administrative expenses, principally legal and accounting services. In the
future, the Company may engage Morgan Schiff for business and financial
advisory services. Subsequent to June 1997, Mr. Gamble, an affiliate of Morgan
Schiff, accepted a position with the Company.
 
  Teachers Insurance and Annuity Association of America ("Teachers") has an
indirect interest in 17,400 shares of Class B Common Stock through its
ownership of limited partnership interests in the Partnership. As part of the
financing of the Management Purchase, Teachers purchased $11.0 million of
Senior Subordinated Notes pursuant to a Note Purchase Agreement. The Senior
Subordinated Notes bear interest at a rate of 9.5% per annum and are due April
1, 2007. The interest rate on the Senior Subordinated Notes was based upon
negotiations with Teachers as well as the market rate for senior subordinated
debt of comparable borrowers at the time of the Management Purchase. Interest
on the Senior Subordinated Notes is payable semi-annually on June 1 and
December 1. The Company has the option to prepay $5.5 million principal amount
plus accrued interest thereon of the Senior Subordinated Notes in part, at any
time after an initial public offering.
 
  The terms of the Note Purchase Agreement impose restrictions that affect,
among other things, the Company's ability to (i) engage in certain
transactions with affiliates, (ii) effect a merger, consolidation or transfer
or sale of assets, (iii) create liens on assets, (iv) engage in any line of
business substantially different than that currently carried on by the
Partnership, (v) incur certain additional indebtedness, (vi) make certain
restricted payments, including dividends, and (vii) amend or modify certain
agreements executed in connection with the Management Purchase. The terms of
the Note Purchase Agreement also require that the Company maintain at least
two independent directors on its Board of Directors (defined as a person who
does not own, directly or indirectly, more than 5% of the outstanding capital
stock or partnership interests of the Partnership or the General Partner or
any affiliate thereof, and who is not an officer, director, partner,
principal, associate, employee or consultant, or a family member of any of the
foregoing, of Morgan Schiff, the General Partner or any of their affiliates),
and require the Company to comply with certain financial ratios relating to
funded indebtedness, minimum net worth and interest coverage.
 
  See also "Management," "Principal Stockholders," "Management Purchase" and
"Underwriting."
 
                                      57
<PAGE>
 
                             PRINCIPAL STOCKHOLDERS
 
  The table below sets forth certain information as of June 1, 1998 regarding
the beneficial ownership of Class A Common Stock and Class B Common Stock as
well as the percentage ownership of all of the capital stock of the Company
(Class A Common Stock and Class B Common Stock), assuming the recapitalization
and the conversion of the PFA Preferred Stock to Class A Common Stock as
described in "Description of Capital Stock." Information is provided as to each
of the Company's Directors, the Named Executive Officers, each person known to
the Company to own beneficially more than 5% of the outstanding shares of Class
A Common Stock and Class B Common Stock and all Directors and executive
officers of the Company as a group. Except as noted below, the persons named in
the table have sole voting and investment power with respect to all shares of
Common Stock shown as beneficially owned by them.
 
<TABLE>
<CAPTION>
                        SHARES OF CLASS A    SHARES OF CLASS B
                          COMMON STOCK          COMMON STOCK        PERCENTAGE OF
                        -------------------- ---------------------     CLASS A
  NAME AND ADDRESS OF                                                AND CLASS B
   BENEFICIAL OWNER     NUMBER    PERCENTAGE NUMBER     PERCENTAGE COMMON STOCK(1)
  -------------------   ------    ---------- -------    ---------- ---------------
<S>                     <C>       <C>        <C>        <C>        <C>
MS Farm International
 Limited...............   (2)         --%    102,786        --%           --
 Partnership
MS Farm Journal Corpo-
 ration(3)
Phillip Ean Cohen
 350 Park Avenue
 8th Floor
 New York, New York
  10022
Teachers Insurance and
 Annuity...............   --          --      17,500(4)     --            --
 Association of America
 730 Third Avenue
 New York, New York
  10017
Stanford A. Erickson... 1,533(5)      --       2,098(4)     --            --
 1500 Market Street
 Centre Square West
 28th Floor
 Philadelphia, Pennsyl-
  vania 19102
Roger D. Randall....... 1,227(5)      --       2,879(4)     --            --
 1500 Market Street
 Centre Square West
 28th Floor
 Philadelphia, Pennsyl-
  vania 19102
John E. Lafferty.......   --          --         250(4)     --            --
 1500 Market Street
 Centre Square West
 28th Floor
 Philadelphia, Pennsyl-
  vania 19102
Earl Ainsworth.........   --          --         100(4)     --            --
 1500 Market Street
 Centre Square West
 28th Floor
 Philadelphia, Pennsyl-
  vania 19102
</TABLE>
 
 
                                       58
<PAGE>
 
<TABLE>
<CAPTION>
                              SHARES OF CLASS A SHARES OF CLASS B
                                COMMON STOCK      COMMON STOCK
                              ----------------- --------------------
                                                                      PERCENTAGE OF
                                                                         CLASS A
    NAME AND ADDRESS OF                                                AND CLASS B
      BENEFICIAL OWNER        NUMBER PERCENTAGE NUMBER    PERCENTAGE COMMON STOCK(1)
    -------------------       ------ ---------- ------    ---------- ---------------
<S>                           <C>    <C>        <C>       <C>        <C>
Sonja Hillgren..............   --        --       350(4)      --            --
 1500 Market Street
 Centre Square West
 28th Floor
 Philadelphia, Pennsylvania
  19102
J. Carr Gamble, III.........   --        --     3,250(4)      --            --
 350 Park Avenue
 8th Floor
 New York, New York 10022
Sterling B. Brinkley........   --        --     7,500(4)      --            --
 350 Park Avenue
 8th Floor
 New York, New York 10022
Mark C. Pickup..............   --        --       250(4)      --            --
 6734 Coret Segunda
 Martinez, CA 94553
Richard S. Werdiger.........   --               5,000(4)
 Walled Brook Farm
 8 Cottage Avenue
 Purchase, New York 10577
All executive officers and
 directors
 as a group (12 persons)(6)..  --       --        --         --             --
</TABLE>
--------
(1) Based upon     shares of Class A Common Stock outstanding immediately
    following the Offering and     shares of Class B Common Stock outstanding
    prior to and immediately following the Offering.
 
(2) Shares of Class B Common Stock are convertible into an equal number of
    shares of Class A Common Stock at any time. See "Description of Capital
    Stock."
 
(3) MS Farm Journal Corporation is the General Partner of the Partnership and
    has the sole right to vote the shares of Class B Common Stock and to
    direct their disposition. Mr. Phillip Ean Cohen is the sole stockholder of
    MS Farm Journal Corporation.
 
(4) Represents shares of Class B Common Stock which Teachers, Messrs.
    Erickson, Randall, Lafferty, Ainsworth, Gamble, Brinkley, Pickup and
    Werdiger and Ms. Hillgren, respectively, have an indirect interest through
    their ownership of limited partnership interests in the Partnership. Such
    persons have no right to vote or to direct the disposition of these shares
    . For a description of certain rights of a limited partner to withdraw
    from the Partnership and to obtain Class A Common Stock upon such
    withdrawal, see "Shares Eligible for Future Sale."
 
(5) Represents shares underlying options which are exercisable within sixty
    days. Does not include   shares underlying options which are not
    exercisable within sixty days.
 
(6) Includes     shares of Class B Common Stock held indirectly through
    ownership of limited partnership interests in the Partnership.
 
 
                                      59
<PAGE>
 
                         DESCRIPTION OF CAPITAL STOCK
 
GENERAL
 
  The following summary of certain provisions of the FJC's capital stock
describes all material provisions, but does not purport to be complete and is
subject to, and qualified in its entirety by, the Amended and Restated
Certificate of Incorporation and the By-laws of the FJC (the "By-laws") that
are included as exhibits to the Registration Statement of which this
Prospectus is a part and by the provisions of applicable law.
 
RECAPITALIZATION
 
  FJC has amended and restated its Certificate of Incorporation (the "Amended
and Restated Certificate of Incorporation") to (i) change the authorized
capital stock of the FJC to      shares of Class A Common Stock, par value
$0.01 per share,      shares of Class B Common Stock, par value $0.01 per
share, and 2,725 shares of Convertible Redeemable Preferred Stock, par value
$0.01 per share; (ii) reclassify each outstanding share of original Class A
Common Stock into     shares of its newly created Class B Common Stock; (iii)
reclassify each outstanding share of original Class B Common Stock into
shares of its newly created Class A Common Stock; and (iv) change the rights
and privileges of the Class A Common Stock and Class B Common Stock to those
described below. The Amended and Restated Certificate of Incorporation also
provides that upon the conversion of the PFA Preferred Stock following the
Offering, the Convertible Redeemable Preferred Stock will be eliminated. Upon
completion of the Offering,      shares of Class A Common Stock and
shares of Class B Common Stock will be issued and outstanding, including
shares of Class A Common Stock into which all 2,725 outstanding shares of PFA
Preferred Stock will be converted. The discussion herein describes the FJC's
capital stock, the Amended and Restated Certificate of Incorporation and the
By-laws in effect upon effectiveness of the Registration Statement of which
this Prospectus is a part and assuming conversion of the Preferred Stock.
 
CLASS A AND CLASS B COMMON STOCK
 
  The holders of shares of Class A Common Stock and Class B Common Stock have
identical rights and privileges on a per share basis, except as set forth
below. The holders of shares of Common Stock have no preemptive rights to
maintain their respective percentage ownership interest in FJC or other
subscription rights for other securities of FJC. Shares of Common Stock are
not redeemable or subject to further calls or assessments. The shares of
Common Stock to be outstanding after the Offering, including the shares of
Class A Common Stock to be issued hereby when paid for and issued, will be
fully paid and non-assessable. Holders of shares of Common Stock are entitled
to share pro rata in such dividends, if any, as may be declared by the Board
out of funds legally available therefor; provided, however, that any dividend
upon the Common Stock that is payable in Common Stock shall be paid only in
Class A Common Stock to the holders of Class A Common Stock, but is payable in
Class A or Class B Common Stock to the holders of Class B Common Stock. Upon
liquidation, dissolution and winding up of the FJC, holders of shares of
Common Stock are entitled to share ratably in the net assets available for
distribution to such holders. The consent of the holder or holders of a
majority of the Class B Common Stock is required to authorize the issuance of
Class B Common Stock.
 
  Limited Voting Rights. The holders of Class A Common Stock have the right as
a class to elect that minimum number of directors constituting 25% of the
members of the Board (rounding the number of such directors to the next
highest whole number if such percentage is not equal to a whole number of
directors), which presently represents two of the seven directors. Directors
elected by the holders of Class A Common Stock will first be elected at the
annual meeting of stockholders to be held in 1999.
 
  Except as stated above and as otherwise required by the laws of the State of
Delaware, holders of shares of Class A Common Stock have no voting rights;
provided, however, that from and after the time that all of the outstanding
shares of Class B Common Stock are converted into shares of Class A Common
Stock or are
 
                                      60
<PAGE>
 
otherwise no longer outstanding, the holders of Class A Common Stock shall be
entitled to vote on all matters submitted to a vote of the stockholders of FJC
and shall be entitled to one vote per share held. Generally, the vote of the
majority of the shares represented at a meeting of the stockholders and
entitled to vote is sufficient for actions that require a vote of the
stockholders. The Amended and Restated Certificate of Incorporation does not
provide for cumulative voting. Because sole voting power has been granted to
the Class B Common Stock, except as stated above and as otherwise required by
the laws of the State of Delaware, substantially all corporate actions can be
taken without any vote by the holders of the Class A Common Stock including,
without limitation, amending the Amended and Restated Certificate of
Incorporation or By-laws of FJC (including authorizing more shares of Class A
Common Stock); authorizing stock options, restricted stock and other
compensation plans for employees, executives and directors; authorizing a
merger or disposition of FJC or change in control of FJC; approving
indemnification of directors, officers and employees (and related parties) of
FJC; and approving conflict of interest transactions involving affiliates of
FJC. The holders of the outstanding shares of Class A Common Stock will be
entitled, however, to vote as a class upon any proposed amendment to the
Amended and Restated Certificate of Incorporation which would increase or
decrease the par value of the shares of Class A Common Stock, or alter or
change the powers, preferences or special rights of the shares of the Class A
Common Stock so as to affect them adversely. See "Risk Factors--Control of the
Company; Anti-Takeover Impact."
 
  Immediately following the Offering, all of the shares of the Class B Common
Stock will be owned by the Partnership and can be voted by the General
Partner, which is wholly-owned by Mr. Cohen. See "Principal Stockholders" and
"Underwriting."
 
  Conversion Rights. At the option of any holder of shares of Class B Common
Stock, which option may be exercised at any time and from time to time, such
holder may convert all or part of such holder's shares of Class B Common Stock
into an equal number of shares of Class A Common Stock. The Shares of Class B
Common Stock are also subject to mandatory conversion into an equal number of
shares of Class A Common Stock, in whole or in part, at any time and from time
to time, at the option of the holder or holders of a majority of the shares of
Class B Common Stock. If, and only if, all the outstanding shares of Class B
Common Stock were converted into Class A Common Stock or otherwise were no
longer outstanding, the holders of the Class A Common Stock would have general
voting power in the election of all members of the Board and in all other
matters upon which stockholders of FJC are entitled to vote. Holders of shares
of Class A Common Stock have no right to convert Class A Common Stock into any
other securities of FJC.
 
INDEMNIFICATION AND LIMITATION OF LIABILITY
 
  The Amended and Restated Certificate of Incorporation limits the liability
of directors to the maximum extent permitted by Delaware law as currently or
hereafter in effect. Delaware law provides that directors of a corporation
will not be personally liable for monetary damages for breach of their
fiduciary duty as a director, except for liability (i) for breach of their
duty of loyalty to the corporation or its stockholders; (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) for unlawful payments of dividends or unlawful
stock repurchases or redemptions as provided in Section 174 of the General
Corporation Law of the State of Delaware (the "DGCL"); or (iv) for any
transaction from which the director derives an improper personal benefit.
 
  The Amended and Restated Certificate of Incorporation provides for the
mandatory indemnification of, and advancement of expenses to, directors and
officers of FJC.
 
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
 
  FJC is subject to Section 203 of the DGCL, which prevents an "interested
stockholder" (defined in Section 203, generally, as a person owning 15% or
more of a corporation's outstanding voting stock) from engaging in a "business
combination" with a publicly-held Delaware corporation for three years
following the date such
 
                                      61
<PAGE>
 
person became an interested stockholder, unless (i) before such person became
an interested stockholder, the board of directors of the corporation approved
the transaction in which the interested stockholder became an interested
stockholder or approved the business combination; (ii) upon consummation of
the transaction that resulted in the interested stockholder's becoming an
interested stockholder, the interested stockholder owns at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced (subject to certain exceptions); or (iii) following the transaction
in which such person became an interested stockholder, the business
combination is approved by the board of directors of the corporation and
authorized at a meeting of stockholders by the affirmative vote of the holders
of 66 2/3% of the outstanding voting stock of the corporation not owned by the
interested stockholder. A "business combination" includes mergers, stock or
asset sales and other transactions resulting in a financial benefit to the
interested stockholder.
 
  The disproportionate voting rights between the Class A Common Stock and the
Class B Common Stock and the provisions of Section 203 of the DGCL could have
the effect of delaying, deferring or preventing a change in control of FJC.
See "Risk Factors--Control of the Company; Anti-Takeover Impact."
 
TRANSFER AGENT
 
  The transfer agent and registrar for the Class A Common Stock is First Union
National Bank, Charlotte, North Carolina.
 
                                      62
<PAGE>
 
                        SHARES ELIGIBLE FOR FUTURE SALE
 
  Upon completion of the Offering, the Company will have a total of
shares of Class A Common Stock outstanding. All shares of Class A Common Stock
sold in the Offering will be freely tradable by persons other than
"affiliates" of the Company without restriction under the Securities Act. All
other shares of Class A Common Stock and all shares of Class B Common Stock,
and any shares of Class A Common Stock issued upon conversion of shares of
Class B Common Stock, will be "restricted" securities within the meaning of
Rule 144 under the Securities Act and may not be sold in the absence of
registration under the Securities Act unless an exemption from registration is
available, including the exemption provided by Rule 144.
 
  In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this Prospectus, a person (or persons whose shares are aggregated)
who has beneficially owned "restricted" shares for at least one year,
including a person who may be deemed an affiliate of the Company, is entitled
to sell within any three-month period a number of shares of Class A Common
Stock that does not exceed the greater of 1% of the then-outstanding shares of
Class A Common Stock of the Company or the average weekly trading volume of
the Class A Common Stock on Nasdaq during the four calendar weeks preceding
such sale. Sales under Rule 144 are subject to certain restrictions relating
to manner of sale, notice and the availability of current public information
about the Company. A person who is not an affiliate of the Company and has not
been such at any time during the 90 days preceding a sale, and who has
beneficially owned "restricted" shares for at least two years, would be
entitled to sell such shares immediately following the Offering without regard
to the volume limitations, manner of sale provisions or notice or other
requirements of Rule 144 of the Securities Act. However, the transfer agent
may require an opinion of counsel that a proposed sale of "restricted" shares
comes within the terms of Rule 144 of the Securities Act prior to effecting a
transfer of such shares. Such opinion would be provided by and at the cost of
the transferor.
 
  Any employee of the Company who purchased his or her shares of Class A
Common Stock or received an option to purchase Class A Common Stock pursuant
to a written compensation plan or contract while the Company was not subject
to the reporting requirements of the Exchange Act may be entitled to rely on
the resale provisions of Rule 701 under the Securities Act, which permits
nonaffiliates to sell their Rule 701 shares without having to comply with the
current public information, holding period, volume limitations or notice
provision of Rule 144 and permits affiliates to sell their Rule 701 shares
without having to comply with the holding period provision of Rule 144, in
each case beginning 90 days after the date of this Prospectus. Upon completion
of the Offering, there will be outstanding options to purchase     shares of
Class A Common Stock, which shares may, upon exercise, be resold pursuant to
Rule 701.
 
  The Company and its existing stockholders have agreed pursuant to the
Underwriting Agreement and other agreements that they will not sell any shares
of capital stock of the Company, either publicly or privately, without the
prior consent of the Representatives (as defined in "Underwriting") for a
period of 180 days from the date of this Prospectus (the "Lock-Up Period").
See "Underwriting."
 
  The Partnership has offered its limited partners the right to withdraw from
the Partnership under the Agreement of Limited Partnership dated April 1, 1997
(the "Limited Partnership Agreement") and receive a distribution of Class A
Common Stock (a "Withdrawal Election"). Such Withdrawal Election may be made
at any time between the consummation of the Offering and fourteen days before
the expiration of the Lock-Up Period. The Withdrawal Election will be
effective at the end of the month in which the Lock-Up Period expires. The
shares acquired through a limited partner's Withdrawal Election will be
subject to the resale limitations under Rule 144.
 
  Limited partners making a Withdrawal Election will generally be deemed to
have held the shares of Class A Common Stock distributed to them from the date
they acquired their partnership interest. Accordingly, original investors in
the Partnership will be entitled to sell such shares pursuant to the volume
and other limitation of Rule 144 immediately upon distribution of such shares
from the Partnership. Shares of Class A Common Stock distributed upon
conversion of the PFA Preferred Stock will be similarly saleable on April 2,
1999.
 
                                      63
<PAGE>
 
  Prior to the Offering, there has been no public market for either class of
Common Stock of the Company and no predictions can be made of the effect, if
any, that the sale or availability for sale of additional shares of Common
Stock, or the development of a public trading market for the Class B Common
Stock, will have on the market price of the Class A Common Stock.
Nevertheless, sales of substantial amounts of shares of Class A Common Stock
in the public market, the perception that such sales could occur, or the
development of a public trading market for the Class B Common Stock, could
adversely affect the market price of the Class A Common Stock and could impair
the Company's future ability to raise capital through an offering of its
equity securities.
 
                                      64
<PAGE>
 
                                 UNDERWRITING
 
  Under the terms and subject to the conditions contained in an Underwriting
Agreement dated          (the "Underwriting Agreement"), the underwriters
named below (the "Underwriters"), for whom Credit Suisse First Boston
Corporation, Furman Selz LLC and Morgan Schiff & Co., Inc. are acting as
representatives (the "Representatives"), have severally but not jointly agreed
to purchase from the Company the following respective numbers of shares of
Class A Common Stock:
 
<TABLE>
<CAPTION>
                                                                       NUMBER
   UNDERWRITER                                                        OF SHARES
   -----------                                                        ---------
    <S>                                                               <C>
    Credit Suisse First Boston Corporation...........................
    Furman Selz LLC..................................................
    Morgan Schiff & Co., Inc. .......................................
                                                                        ----
      Total..........................................................
                                                                        ====
</TABLE>
 
  The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will be
obligated to purchase all of the shares of Class A Common Stock offered hereby
(other than those shares covered by the over-allotment option described below)
if any are purchased. The Underwriting Agreement provides that, in the event
of a default by an Underwriter, in certain circumstances the purchase
commitments of non-defaulting Underwriters may be increased or the
Underwriting Agreement may be terminated.
 
  The Company has granted to the Underwriters an option, expiring at the close
of business on the 30th day after the date of this Prospectus, to purchase up
to         additional shares of the Class A Common Stock at the initial public
offering price less the underwriting discounts and commissions, all as set
forth on the cover page of this Prospectus. Such option may be exercised only
to cover over-allotments in the sale of the shares of Class A Common Stock. To
the extent such option is exercised, each Underwriter will become obligated,
subject to certain conditions, to purchase approximately the same percentage
of such additional shares of Class A Common Stock as it was obligated to
purchase pursuant to the Underwriting Agreement.
 
  The Company has been advised by the Representatives that the Underwriters
propose to offer the Class A Common Stock to the public initially at the
public offering price set forth on the cover page of this Prospectus and,
through the Representatives, to certain dealers at such price less a
concession of $    per share, and the Underwriters and such dealers may allow
a discount of $    per share on sales to certain other dealers. After the
initial public offering, the public offering price and concession and discount
to dealers may be changed by the Representatives.
 
  The Company and its existing shareholders have agreed that they will not
offer, sell, contract to sell, announce their intention to sell, pledge or
otherwise dispose of, directly or indirectly, or file or cause to be filed
with the Securities and Exchange Commission (the "Commission") a registration
statement under the Securities Act relating to, any additional shares of the
Company's Class A Common Stock or securities convertible into or exchangeable
or exercisable for any shares of the Company's Class A Common Stock without
the prior written consent of Credit Suisse First Boston Corporation for a
period of 180 days after the date of this Prospectus.
 
  The Company has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act, or
contribute to payments which the Underwriters may be required to make in
respect thereof.
 
  Application has been made to list the shares of Class A Common Stock on The
Nasdaq Stock Market's National Market.
 
  The Representatives have advised the Company that the Underwriters do not
intend to confirm sales to any account over which they exercise discretionary
authority.
 
                                      65
<PAGE>
 
  Prior to this Offering, there has been no public market for the Class A
Common Stock. Consequently, the initial public offering price for the Class A
Common Stock will be determined by negotiations among the Company and the
Representatives. Among the factors which will be considered in such
negotiations will be the prevailing market conditions, the results of
operations of the Company in recent periods, the market capitalizations and
stages of development of other companies which the Company and the
Representatives believe to be comparable to the Company, estimates of the
business potential of the Company, the present state of the Company's
development and other factors which may be deemed relevant by the Company and
the Representatives.
 
  One of the Representatives, Morgan Schiff, may be deemed to be an affiliate
(as defined in Rule 2710(b)(1) of the Conduct Rules of the National
Association of Securities Dealers, Inc. (the "Conduct Rules")) of the Company
because, among other things, the Partnership owns 100% of the outstanding
Class B Common Stock of the Company and the sole stockholder of the General
Partner controls Morgan Schiff. See "Principal Stockholders" and "Certain
Relationships and Related Transactions." Accordingly, the shares of Class A
Common Stock being offered hereby are being offered in accordance with the
provisions of Rule 2710(c)(8) of the Conduct Rules. In accordance with such
provisions. Credit Suisse First Boston Corporation has agreed to act as
qualified independent underwriter (as defined in Rule 2720(b)(15) of the
Conduct Rules) for the Offering and has agreed to assume the responsibilities
of acting as qualified independent underwriter in pricing the Offering and
conducting due diligence. The initial public offering price of the Class A
Common Stock will not be higher than the maximum initial public offering price
recommended by such qualified independent underwriter.
 
  Morgan Schiff has acted as financial advisor to the Company for which it
received fees. See "Certain Relationships and Related Transactions."
 
  The Representatives, on behalf of the Underwriters, may engage in over-
allotment, stabilizing transactions, syndicate covering transactions and
penalty bids. Over-allotment involves syndicate sales in excess of the
offering size, which creates a syndicate short position. Stabilizing
transactions permit bids to purchase the Class A Common Stock being offered so
long as the stabilizing bids do not exceed a specified maximum. Syndicate
covering transactions involve purchases of the Class A Common Stock in the
open market after the distribution has been completed in order to cover
syndicate short positions. Penalty bids permit the Representatives to reclaim
a selling concession from a syndicate member when the Class A Common Stock
originally sold by such syndicate member are purchased in a syndicate covering
transaction to cover syndicate short positions. Such stabilizing transactions,
syndicate covering transactions and penalty bids may cause the price of the
Class A Common Stock to be higher than it would otherwise be in the absence of
such transactions. These transactions may be effected on the Nasdaq National
Market or otherwise and, if commenced, may be discontinued at any time.
 
                         NOTICE TO CANADIAN RESIDENTS
 
RESALE RESTRICTIONS
 
  The distribution of the Class A Common Stock in Canada is being made only on
a private placement basis exempt from the requirement that the Company prepare
and file a prospectus with the securities regulatory authorities in each
province where trades of Common Stock are effected. Accordingly, any resale of
the Class A Common Stock in Canada must be made in accordance with applicable
securities laws which will vary depending on the relevant jurisdiction, and
which may require resales to be made in accordance with available statutory
exemptions or pursuant to a discretionary exemption granted by the applicable
Canadian securities regulatory authority. Purchasers are advised to seek legal
advice prior to any resale of the Class A Common Stock.
 
REPRESENTATIONS OF PURCHASERS
 
  Each purchaser of Class A Common Stock in Canada who receives a purchase
confirmation will be deemed to represent to the Company and the dealer from
whom such purchase confirmation is received that (i) such
 
                                      66
<PAGE>
 
purchaser is entitled under applicable provincial securities laws to purchase
such Class A Common Stock without the benefit of a prospectus qualified under
such securities laws, (ii) where required by law, that such purchaser is
purchasing as principal and not as agent, and (iii) such purchaser has
reviewed the text above under "Resale Restrictions."
 
RIGHTS OF ACTION (ONTARIO PURCHASERS)
 
  The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
section 32 of the Regulation under the Securities Act (Ontario). As a result,
Ontario purchasers must rely on other remedies that may be available,
including common law rights of action for damages or rescission or rights of
action under the civil liability provisions of the U.S. federal securities
laws.
 
ENFORCEMENT OF LEGAL RIGHTS
 
  All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be
possible for Canadian purchasers to effect service of process within Canada
upon the issuer or such persons. All or a substantial portion of the assets of
the issuer and such persons may be located outside of Canada and, as a result,
it may not be possible to satisfy a judgment against the issuer or such
persons in Canada or to enforce a judgment obtained in Canadian courts against
such issuer or persons outside of Canada.
 
NOTICE TO BRITISH COLUMBIA RESIDENTS
 
  A purchaser of Class A Common Stock to whom the Securities Act (British
Columbia) applies is advised that such purchaser is required to file with the
British Columbia Securities Commission a report within ten days of the sale of
any Class A Common Stock acquired by such purchaser pursuant to this Offering.
Such report must be in the form attached to British Columbia Securities
Commission Blanket Order BOR #95/17, a copy of which may be obtained from the
Company. Only one such report must be filed in respect of Class A Common Stock
acquired on the same date and under the same prospectus exemption.
 
TAXATION AND ELIGIBILITY FOR INVESTMENT
 
  Canadian purchasers of Class A Common Stock should consult their own legal
and tax advisors with respect to the tax consequences of an investment in the
Class A Common Stock in their particular circumstances and with respect to the
eligibility of the Class A Common Stock for investment by the purchaser under
relevant Canadian Legislation.
 
                                 LEGAL MATTERS
 
  The validity of the Class A Common Stock offered hereby will be passed upon
for the Company by Milbank, Tweed, Hadley & McCloy. Certain legal matters will
be passed upon for the Underwriters by Piper & Marbury L.L.P.
 
                                    EXPERTS
 
  The Consolidated Financial Statements of the Company as of December 31, 1997
and for the period from April 1, 1997 through December 31, 1997 and the
Consolidated Financial Statements of the Predecessor as of December 31, 1995
and December 30, 1996 and for the years ended December 31, 1995 and December
29, 1996 and the period from January 1, 1997 through March 31, 1997 included
elsewhere in this Prospectus and the related financial statement schedules
included elsewhere in the Registration Statement have been audited by
 
                                      67
<PAGE>
 
Deloitte & Touche LLP, independent auditors, as stated in their reports (which
express an unqualified opinion and include an explanatory paragraph relating
to the new cost basis for assets and liabilities when the Company acquired the
Predecessor), appearing herein and elsewhere in the registration statement,
and are included in reliance upon the reports of such firm, given upon their
authority as experts in accounting and auditing. The financial statements of
PFA, as of December 31, 1996 and 1997 and for each of the two years in the
period ended December 31, 1997 included in this Prospectus and in the
Registration Statement are included in reliance upon the report of McGladrey &
Pullen, LLP, independent certified public accountants, appearing elsewhere
herein, and upon the authority of that firm as experts in accounting auditing.
 
                            ADDITIONAL INFORMATION
 
  The Company has filed with the Commission a Registration Statement on Form
S-1 (the "Registration Statement," which term shall encompass all amendments,
exhibits, annexes and schedules thereto) pursuant to the Securities Act, and
the rules and regulations promulgated thereunder, with respect to the Class A
Common Stock being offered in the Offering. This Prospectus does not contain
all the information set forth in the Registration Statement. For further
information with respect to the Company and the securities offered hereby,
reference is made to the Registration Statement. Statements made in this
Prospectus as to the contents of any contract, agreement or other document
referred to are not necessarily complete. With respect to each such contract,
agreement or other document filed as an exhibit to the Registration Statement,
reference is made to the exhibit for a more complete description of the
document or matter involved, and each such statement shall be deemed qualified
in its entirety by such reference. The Registration Statement, may be
inspected, without charge, and copies may be obtained, at prescribed rates, at
the public reference facilities of the Commission maintained at Judiciary
Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Copies of
the Registration Statement may also be inspected, without charge, at the
Commission's regional office at Seven World Trade Center, Suite 1300, New
York, New York 10048 and Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661. In addition, copies of the Registration Statement may be
obtained by mail at prescribed rates, from the Commission's Public Reference
Section at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
The Commission maintains a Web site at www.sec.gov that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission.
 
  Upon completion of the Offering, the Company will become subject to the
informational requirements of the Exchange Act, and in accordance therewith
will be required to file periodic reports and other information with the
Commission. Such periodic reports, proxy statements and other information will
be available for inspection and copying at the public reference facilities,
regional offices and Web site referred to above.
 
  The Company intends to furnish its stockholders with annual reports
containing consolidated financial statements audited by independent certified
public accountants.
 
                                      68
<PAGE>
 
                 THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
<TABLE>
<CAPTION>
                                                                           PAGE
                                                                           ----
<S>                                                                        <C>
THE FARM JOURNAL CORPORATION (Formerly Farm Journal Holdings Inc.)
 Independent Auditors' Report.............................................  F-2
 Consolidated Balance Sheets as of December 29, 1996 of the Predecessor
  and
  December 31, 1997 and (Unaudited) March 31, 1998 of the Company.........  F-3
 Consolidated Statements of Operations for the Two Years Ended December
  29, 1996 and the Period from December 30, 1996 to March 31, 1997 of the
  Predecessor and the Period from April 1, 1997 to December 31, 1997 and
  (Unaudited) for the Three Months Ended March 31, 1998 of the Company....  F-4
 Consolidated Statements of Shareholder's Equity for the Two Years Ended
  December 29, 1996 and the Period from December 30, 1996 to March 31,
  1997 of the Predecessor and the Period from April 1, 1997 to December
  31, 1997 and (Unaudited) for the Three Months Ended March 31, 1998 of
  the Company.............................................................  F-5
 Consolidated Statements of Cash Flows for the Two Years Ended December
  29, 1996 and the Period from December 30, 1996 to March 31, 1997 of the
  Predecessor and the Period from April 1, 1997 to December 31, 1997 and
  (Unaudited) for the Three Months Ended March 31, 1998 of the Company....  F-6
 Notes to Consolidated Financial Statements...............................  F-7
PROFESSIONAL FARMERS OF AMERICA, INC. AND PROFESSIONAL MARKET MANAGEMENT,
 INC.
 Independent Auditor's Report............................................. F-19
 Combined Balance Sheets as of December 31, 1996 and 1997 and (Unaudited)
  March 31, 1998.......................................................... F-20
 Combined Statements of Income for the Years Ended December 31, 1996 and
  1997 and (Unaudited) for the Three Months Ended March 31, 1997 and
  1998.................................................................... F-21
 Combined Statements of Stockholder's Equity for the Years Ended December
  31, 1996 and 1997 and (Unaudited) for the Three Months Ended March 31,
  1997 and 1998........................................................... F-22
 Combined Statements of Cash Flows for the Years Ended December 31, 1996
  and 1997 and (Unaudited) for the Three Months Ended March 31, 1997 and
  1998.................................................................... F-23
 Notes to Combined Financial Statements................................... F-24
</TABLE>
 
 
                                      F-1
<PAGE>
 
  THE ACCOMPANYING FINANCIAL STATEMENTS REFLECT CHANGES TO THE TYPE AND NUMBER
OF COMMON SHARES AUTHORIZED AND A CONVERSION OF PREVIOUSLY OUTSTANDING COMMON
STOCK INTO NEWLY CREATED CLASSES OF COMMON STOCK, ALL OF WHICH IS TO BE
EFFECTED PRIOR TO THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT. THE
FOLLOWING OPINION IS IN THE FORM WHICH WILL BE SIGNED BY DELOITTE & TOUCHE LLP
UPON CONSUMMATION OF THE ABOVE EVENTS, WHICH ARE DESCRIBED IN NOTE 19 OF NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AND ASSUMING THAT FROM JANUARY 23, 1998
TO THE DATE OF SUCH EVENTS, NO OTHER EVENTS HAVE OCCURRED WHICH WOULD AFFECT
THE ACCOMPANYING FINANCIAL STATEMENTS AND NOTES THERETO.
 
Deloitte & Touche llp
Philadelphia, Pennsylvania
June 10, 1998
 
                         INDEPENDENT AUDITORS' REPORT
 
Board of Directors
The Farm Journal Corporation
Philadelphia, Pennsylvania
 
We have audited the accompanying consolidated balance sheet of the Farm
Journal Corporation (formerly Farm Journal Holdings, Inc.) and subsidiaries
(the "Company") as of December 31, 1997 and the related consolidated
statements of operations, shareholder's equity, and of cash flows for the
period from April 1, 1997 to December 31, 1997, as well as the consolidated
balance sheet of the Predecessor (see Note 1), as of December 29, 1996 and the
consolidated related statements of operations, shareholder's equity, and of
cash flows for the years ended December 31, 1995 and December 29, 1996 and the
period from December 30, 1996 to March 31, 1997. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
 
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company and the Predecessor
as of December 29, 1996 and December 31, 1997, and the results of their
operations and their cash flows for the periods stated above.
 
As discussed in Note 2 to the consolidated financial statements, on April 1,
1997, the Company acquired the Predecessor which resulted in the establishment
of a new cost basis for the assets and liabilities of the acquired entity.
 
Philadelphia, Pennsylvania
January 23, 1998
(    , 1998 as to Note 19)
 
                                      F-2
<PAGE>
 
                 THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
                          CONSOLIDATED BALANCE SHEETS
 
<TABLE>
<CAPTION>
                                                                                         PREDECESSOR
                                                                                         CORPORATION
                                                                                         ------------
                                                                                         DECEMBER 29,  DECEMBER 31,   MARCH 31,
                                                                                             1996          1997         1998
                                                                                         ------------  ------------  -----------
                                                                                                                     (UNAUDITED)
<S>                                                                                      <C>           <C>           <C>
ASSETS
CURRENT ASSETS:
 Cash and cash equivalents.............................................................. $   276,622   $ 4,741,380   $ 4,949,325
 Accounts receivable, less allowances for doubtful accounts of $116,000 in 1996,
  $148,000 in 1997 and $227,000 in 1998.................................................   3,183,279     3,506,670     8,796,079
 Inventories............................................................................     197,391       150,354       120,997
 Prepaid and other current assets.......................................................     129,676       453,771       551,813
 Assets held for sale...................................................................     919,949
                                                                                         -----------   -----------   -----------
   Total current assets.................................................................   4,706,917     8,852,175    14,418,214
PROPERTY AND EQUIPMENT, Net.............................................................   2,527,982     2,241,940     2,220,593
INTANGIBLE ASSETS, Net..................................................................  12,985,382    10,755,429    10,648,096
DEFERRED TAX ASSETS.....................................................................     848,932       658,681       658,681
                                                                                         -----------   -----------   -----------
TOTAL................................................................................... $21,069,213   $22,508,225   $27,945,584
                                                                                         ===========   ===========   ===========
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES:
 Accounts payable....................................................................... $   417,327   $   529,090   $ 1,832,663
 Accrued expenses and other liabilities.................................................   1,222,868     1,202,399     2,008,121
 Income taxes payable...................................................................     195,794                   1,390,371
 Current portion of deferred subscription income........................................     940,157       994,251       937,633
 Due to Tribune.........................................................................     423,901
                                                                                         -----------   -----------   -----------
   Total current liabilities............................................................   3,200,047     2,725,740     6,168,788
DEFERRED SUBSCRIPTION INCOME, Less current portion......................................     305,971       333,729       312,544
SENIOR SUBORDINATED NOTES...............................................................                11,000,000    11,000,000
RETIREMENT BENEFITS OTHER THAN PENSIONS.................................................   2,328,744
COMMITMENTS AND CONTINGENCIES (Note 16).................................................
PREFERRED STOCK, $.01 par value, 2,725 shares authorized, none issued and outstanding...
SHAREHOLDER'S EQUITY:
Common Stock:
 Class A, $.01 par value,      shares authorized,       issued and outstanding..........
 Class B, $.01 par value,      shares authorized, 102,786 issued and outstanding........                                   1,028
 Class A, $.01 par value; 111,000 shares authorized; 100,808 issued and outstanding at
  December 31, 1997 and none at March 31, 1998..........................................                     1,008
 Class B, convertible into Class A common stock, $.01 par value, 99,000 shares
  authorized, 9,870 issued and outstanding at December 31, 1997 and none at March  31,
  1998..................................................................................                        99
 Common stock of Predecessor Corporation, $.01 par value, 100 shares authorized, issued
  and outstanding.......................................................................           1
Additional paid-in capital..............................................................  17,639,987     9,928,533    10,291,722
Retained earnings (Accumulated deficit).................................................  (2,405,537)   (1,480,884)      171,502
                                                                                         -----------   -----------   -----------
   Total shareholder's equity...........................................................  15,234,451     8,448,756    10,464,252
                                                                                         -----------   -----------   -----------
TOTAL................................................................................... $21,069,213   $22,508,225   $27,945,584
--------------------------------------------------
                                                                                         ===========   ===========   ===========
</TABLE>
 
                See notes to consolidated financial statements.
 
                                      F-3
<PAGE>
 
                 THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
<TABLE>
<CAPTION>
                                PREDECESSOR CORPORATION
                          --------------------------------------
                                                        PERIOD
                                                         FROM     PERIOD FROM   PERIOD FROM
                                                       DECEMBER     APRIL 1,    JANUARY 1,
                                                       30, 1996     1997 TO       1998 TO
                          DECEMBER 31,  DECEMBER 29,   TO MARCH   DECEMBER 31,   MARCH 31,
                              1995          1996       31, 1997       1997         1998
                          ------------  ------------  ----------  ------------  -----------
                                                                                (UNAUDITED)
<S>                       <C>           <C>           <C>         <C>           <C>
REVENUES:
  Advertising, Net......  $19,333,079   $19,371,898   $8,430,871  $ 9,764,636   $8,939,617
  Subscription income...    1,305,541     1,154,421      554,243      690,555      531,822
  Information services..    5,617,253     6,048,772    1,428,387    3,801,602    2,433,571
  Other.................      318,648       199,034       60,558      277,278      103,376
                          -----------   -----------   ----------  -----------   ----------
    Total revenues......   26,574,521    26,774,125   10,474,059   14,534,071   12,008,386
                          -----------   -----------   ----------  -----------   ----------
OPERATING EXPENSES:
  Cost of publishing....   15,393,878    14,228,486    4,578,127    7,227,012    5,145,018
  Cost of information
   services.............    2,273,510     2,542,657      527,194    1,607,539      627,377
  Selling, general and
   administrative.......    8,969,847     9,250,310    2,160,573    6,451,313    2,728,105
  Depreciation and amor-
   tization.............    1,055,545     1,060,079      279,996      818,336      273,671
                          -----------   -----------   ----------  -----------   ----------
    Total operating ex-
     penses.............   27,692,780    27,081,532    7,545,890   16,104,200    8,774,171
                          -----------   -----------   ----------  -----------   ----------
OPERATING INCOME (LOSS)    (1,118,259)     (307,407)   2,928,169   (1,570,129)   3,234,215
OTHER INCOME (EXPENSE):
  Interest income.......      195,537        19,983        3,921      224,217       70,060
  Interest expense......                    (53,525)     (38,106)    (814,800)    (261,518)
                          -----------   -----------   ----------  -----------   ----------
INCOME (LOSS) BEFORE IN-
 COME TAXES ............     (922,722)     (340,949)   2,893,984   (2,160,712)   3,042,757
INCOME TAX PROVISION
 (BENEFIT)..............     (166,013)       66,696    1,208,362     (679,828)   1,390,371
                          -----------   -----------   ----------  -----------   ----------
NET INCOME (LOSS).......  $  (756,709)  $  (407,645)  $1,685,622  $(1,480,884)  $1,652,386
                          ===========   ===========   ==========  ===========   ==========
BASIC AND DILUTED NET
 LOSS PER COMMON SHARE..                                          $    (13.80)  $
                                                                  ===========   ==========
WEIGHTED AVERAGE NUMBER
 OF COMMON SHARES OUT-
 STANDING...............                                              107,318
                                                                  ===========   ==========
</TABLE>
 
                See notes to consolidated financial statements.
 
                                      F-4
<PAGE>
 
                 THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
                CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
 
<TABLE>
<CAPTION>
                                                                           COMMON STOCK
                                                                         ---------------- ADDITIONAL
                                                                          NUMBER            PAID-IN    ACCUMULATED
   PREDECESSOR                                                           OF SHARES AMOUNT   CAPITAL      DEFICIT        TOTAL
   -----------                                                           --------- ------ -----------  ------------  -----------
<S>                <C>       <C>     <C>       <C>    <C>        <C>     <C>       <C>    <C>          <C>           <C>
BALANCE, JANUARY
1, 1995..........                                                            100    $  1  $17,639,987  $(1,241,183)  $16,398,805
 Net loss........                                                                                         (756,709)     (756,709)
                                                                          ------    ----  -----------  -----------   -----------
BALANCE, DECEMBER
31, 1995.........                                                            100       1   17,639,987   (1,997,892)   15,642,096
 Net loss........                                                                                         (407,645)     (407,645)
                                                                          ------    ----  -----------  -----------   -----------
BALANCE, DECEMBER
29, 1996.........                                                            100       1   17,639,987   (2,405,537)   15,234,451
 Net income......                                                                                        1,685,622     1,685,622
                                                                          ------    ----  -----------  -----------   -----------
BALANCE, MARCH
31, 1997.........                                                            100    $  1  $17,639,987  $  (719,915)  $16,920,073
                                                                          ======    ====  ===========  ===========   ===========
<CAPTION>
                       NEWLY CREATED COMMON STOCK               COMMON STOCK
                   ---------------------------------- -----------------------------------
                        CLASS A          CLASS B          CLASS A            CLASS B                     RETAINED
                   ----------------- ---------------- -----------------  ---------------- ADDITIONAL     EARNINGS
                    NUMBER            NUMBER           NUMBER             NUMBER            PAID-IN    (ACCUMULATED
   THE COMPANY     OF SHARES AMOUNT  OF SHARES AMOUNT OF SHARES  AMOUNT  OF SHARES AMOUNT   CAPITAL      DEFICIT)       TOTAL
   -----------     --------- ------- --------- ------ ---------  ------  --------- ------ -----------  ------------  -----------
<S>                <C>       <C>     <C>       <C>    <C>        <C>     <C>       <C>    <C>          <C>           <C>
 Issuance of
 Class A Common
 Stock...........                                      100,808   $1,008                   $ 9,928,533                $ 9,929,541
 Issuance of
 Class B Common
 Stock...........                                                          9,870    $ 99                                      99
 Net loss........                                                                                      $(1,480,884)   (1,480,884)
                    ------   -------  -------  ------ --------   ------   ------    ----  -----------  -----------   -----------
BALANCE, DECEMBER
31, 1997.........                                      100,808    1,008    9,870      99    9,928,533   (1,480,884)    8,448,756
 Conversion of
 Class B Common
 Stock to Class A
 Common Stock
 (Unaudited).....                                        1,978       20   (4,738)    (48)     373,402                    373,374
 Redemption of
 Class B Common
 Stock
 (Unaudited).....                                                         (5,132)    (51)     (10,213)                   (10,264)
 Net income
 (Unaudited).....                                                                                        1,652,386     1,652,386
 Recapitalization
 and conversion
 of Common Stock
 (Unaudited).....                     102,786  $1,028 (102,786)  (1,028)                                                     --
                    ------   -------  -------  ------ --------   ------   ------    ----  -----------  -----------   -----------
BALANCE, MARCH
31, 1998
(Unaudited)......            $        102,786  $1,028    --      $ --       --      $ --  $10,291,722  $   171,502   $10,464,252
                    ======   =======  =======  ====== ========   ======   ======    ====  ===========  ===========   ===========
</TABLE>
 
                See notes to consolidated financial statements.
 
                                      F-5
<PAGE>
 
                 THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                                                     PREDECESSOR CORPORATION
                                                              -------------------------------------
                                                                                        PERIOD FROM  PERIOD FROM   PERIOD FROM
                                                                 FISCAL YEARS ENDED      DECEMBER      APRIL 1,    JANUARY 1,
                                                              ------------------------- 30, 1996 TO    1997 TO       1998 TO
                                                              DECEMBER 31, DECEMBER 29,  MARCH 31,   DECEMBER 31,   MARCH 31,
                                                                  1995         1996        1997          1997         1998
                                                              ------------ ------------ -----------  ------------  -----------
                                                                                                                   (UNAUDITED)
<S>                                                           <C>          <C>          <C>          <C>           <C>
OPERATING ACTIVITIES:
 Net income (loss)...........................................  $ (756,709)  $ (407,645) $1,685,622   $(1,480,884)  $1,652,386
 Adjustments to reconcile net income (loss) to net cash
  provided by operating activities:
  Depreciation and amortization of fixed assets..............     547,856      552,389     153,074       490,331      166,338
  Amortization of intangibles................................     507,689      507,690     126,922       328,005      107,333
  Provision for postretirement benefits......................      74,354       94,390      22,497
  Changes in assets and liabilities which provided (used)
   cash:
   Accounts receivable.......................................    (721,116)      71,935  (2,868,567)    2,545,176   (5,289,409)
   Other receivables.........................................    (172,563)     172,563
   Inventories...............................................      28,771      (51,752)     69,336       (22,299)      29,357
   Prepaid and other current assets..........................   1,386,887      121,751    (244,669)       (4,426)     (98,042)
   Deferred taxes............................................  (1,003,492)     154,560     948,342      (679,828)
   Accounts payable..........................................     800,438   (1,023,392)    549,834       453,600    1,293,309
   Accrued expenses and other liabilities....................     193,094      512,823     420,728      (530,152)   1,179,096
   Income taxes payable......................................    (375,430)     189,358    (120,857)     (515,421)   1,390,371
   Deferred subscription income..............................    (188,882)     255,075    (171,545)      253,397      (77,803)
                                                               ----------   ----------  ----------   -----------   ----------
   Net cash provided by operating activities.................     320,897    1,149,745     570,717       837,499      352,936
                                                               ----------   ----------  ----------   -----------   ----------
INVESTING ACTIVITIES:
 Purchase of assets, net of disposals........................  (2,410,924)    (553,535)   (178,896)     (178,467)    (144,991)
 Acquisition of stock of Farm Journal, Inc., net of cash re-
  ceived.....................................................                                        (16,534,613)
 Organization costs..........................................                                            (40,000)
 Sale of assets held for sale................................                              919,949
                                                               ----------   ----------  ----------   -----------   ----------
 Net cash provided by (used in) investing activities.........  (2,410,924)    (553,535)    741,053   (16,753,080)    (144,991)
                                                               ----------   ----------  ----------   -----------   ----------
FINANCING ACTIVITIES:
 Due to Tribune..............................................   1,819,110   (1,473,978) (1,488,013)
 Proceeds from issuance of Class A Common Stock..............                                          9,929,541
 Proceeds from issuance of Class B Common Stock..............                                                 99
 Deferred financing costs....................................                                           (272,679)
 Borrowings from senior subordinated notes...................                                         11,000,000
                                                               ----------   ----------  ----------   -----------
 Net cash provided by (used in) financing activities.........   1,819,110   (1,473,978) (1,488,013)   20,656,961
                                                               ----------   ----------  ----------   -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.........    (270,917)    (877,768)   (176,243)    4,741,380      207,945
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD...............   1,425,307    1,154,390     276,622           --     4,741,380
                                                               ----------   ----------  ----------   -----------   ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD.....................  $1,154,390   $  276,622  $  100,379   $ 4,741,380   $4,949,325
                                                               ==========   ==========  ==========   ===========   ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
 Cash paid (received) during period for taxes................  $   60,451   $ (272,685) $  248,729   $   515,421   $      --
                                                               ==========   ==========  ==========   ===========   ==========
 Cash paid during period for interest........................  $      --    $   53,525  $   38,106   $   727,192   $      --
--------------------------------------------------
                                                               ==========   ==========  ==========   ===========   ==========
</TABLE>
 
                See notes to consolidated financial statements.
 
                                      F-6
<PAGE>
 
                 THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1995 AND DECEMBER 29, 1996, AND
             THE PERIODS FROM DECEMBER 30, 1996 TO MARCH 31, 1997
            AND APRIL 1, 1997 TO DECEMBER 31, 1997 AND (UNAUDITED)
                   FOR THE THREE MONTHS ENDED MARCH 31, 1998
 
1. ORGANIZATION
 
  The Farm Journal Corporation ("FJC") was incorporated on March 25, 1997 as
  a Delaware corporation and is owned by MS Farm International Limited
  Partnership. FJC is a holding company conducting business through its
  wholly-owned subsidiary, Farm Journal, Inc. ("FJI"). Prior to April 1,
  1997, FJI was a wholly- owned subsidiary of Tribune Company ("Tribune").
  During the periods that FJI was owned by Tribune, it is referred to as the
  "Predecessor." The term "Company" shall refer to FJC and its subsidiary,
  FJI, subsequent to the Management Purchase (defined below).
 
  The Company and the Predecessor are primarily publishers of magazines
  devoted to various aspects of the farming industry. The Company's and the
  Predecessor's businesses also include a proprietary market research
  organization and agricultural data management business.
 
  The Company's and the Predecessor's flagship publication is the Farm
  Journal. In addition, the Company and the Predecessor publish Top Producer
  and the Today series of magazines that focus on the livestock markets. The
  series include Beef Today, Dairy Today and Hogs Today. The Company's and
  the Predecessor's market research organization uses the Company's and the
  Predecessor's readership to create and conduct demographic studies for
  agricultural product producers and other businesses. The Company's and the
  Predecessor's data services business is principally conducted through
  licensing agreements with a number of major agricultural marketers.
 
2. ACQUISITION OF FARM JOURNAL
 
  Effective April 1, 1997, the Company entered into a Stock Purchase
  Agreement (the "Agreement") with Tribune whereby the Company acquired FJI,
  a wholly-owned subsidiary of Tribune. Under the terms of the Agreement, FJI
  repurchased 65 of its own shares of common stock from Tribune for
  $11,000,000. The repurchase was funded with the proceeds from the issuance
  of $11,000,000 of senior subordinated notes (see Note 8). Simultaneously,
  the Company acquired the remaining 35 shares of FJI common stock for
  approximately $5,635,000 in cash. The acquisition of FJI is referred to as
  the "Management Purchase." The acquisition was accounted for using the
  purchase method of accounting with the purchase price allocated to the
  assets acquired and liabilities assumed based on their respective fair
  values at the date of acquisition.
 
  The following summarized unaudited pro forma financial information shows
  the results of the Company's operations for each of the fiscal years
  presented assuming that the Management Purchase occurred as of January 1,
  1995. The pro forma results have been prepared for comparative purposes
  only and do not purport to be indicative of the results of operations which
  actually would have resulted had the significant acquisitions been in
  effect on the dates indicated or which may result in the future.
 
<TABLE>
<CAPTION>
                                         FISCAL YEARS
                            ---------------------------------------- -----------
                                1995          1996          1997
                            ------------  ------------  ------------
   <S>                      <C>           <C>           <C>          <C> <C> <C> <C>
   Revenues................ $ 26,574,521  $ 26,774,125  $ 25,008,130
   Operating income (loss)
    .......................   (1,047,910)     (237,057)    1,375,627
   Net income (loss).......   (1,284,159)     (915,686)       40,675
   Basic and diluted net
    income (loss)
    per common share....... $     (11.60) $      (8.27) $       0.37
   Number of common
    shares.................      110,678       110,678       110,678
</TABLE>
 
 
                                      F-7
<PAGE>
 
                 THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
3.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  BASIS OF PRESENTATION--The consolidated balance sheet as of December 31,
  1997 and the consolidated statements of operations, cash flows and
  shareholder's equity for the period from April 1, 1997 to December 31, 1997
  represent the consolidated financial position, results of operations,
  changes in shareholder's equity and cash flows of the Company subsequent to
  the Management Purchase. The consolidated balance sheet as of December 29,
  1996 and the related statements of operations, shareholder's equity and
  cash flows for the years ended December 31, 1995 and December 29, 1996 and
  the period December 30, 1996 to March 31, 1997 represent the consolidated
  financial position, results of operations, changes in shareholder's equity
  and cash flows of the Predecessor. All significant intercompany accounts
  and transactions among consolidated entities have been eliminated.
 
  UNAUDITED INTERIM FINANCIAL INFORMATION--The consolidated financial
  statements and related notes for the three months ended March 31, 1998 are
  unaudited, but include all adjustments (consisting solely of normal
  recurring adjustments) which are, in the opinion of management, necessary
  for a fair presentation of the financial position and results of operations
  for the interim periods. The results of operations for the three-month
  periods ended March 31, 1997 and 1998 are not necessarily indicative of the
  operating results to be expected for the full fiscal year.
 
  PURCHASE ACCOUNTING--With respect to the Management Purchase, the total
  purchase price has been allocated to the tangible and intangible assets and
  liabilities based on their respective fair values.
 
  CASH AND CASH EQUIVALENTS--The Company and the Predecessor consider all
  highly liquid investments with original maturities of three months or less
  to be cash and cash equivalents.
 
  INVENTORIES--Inventories, including purchased manuscripts, photographs and
  art, are valued at the lower of cost or market principally on a first-in,
  first-out ("FIFO") basis.
 
  PROPERTY AND EQUIPMENT--Property and equipment are stated at cost less
  accumulated depreciation and amortization. Depreciation of property and
  equipment and the amortization of leasehold improvements are provided at
  rates based on the estimated useful lives or lease terms, if shorter, using
  primarily the straight-line and a declining balance method. Improvements
  are capitalized while maintenance and repairs are expensed as incurred.
 
  INTANGIBLE ASSETS--Intangible assets are comprised of subscription lists,
  excess purchase price over net assets acquired ("goodwill"), deferred
  financing costs and organization costs.
 
  The subscription list is being amortized on a straight-line basis over a
  life of 25 years. Goodwill is being amortized on a straight-line basis over
  a life of 40 years. Organization costs are amortized on a straight-line
  basis over their estimated useful life of 5 years. Deferred financing costs
  are stated at cost and amortized by the straight-line method over the life
  of the related debt from 3.25 to 10 years.
 
  LONG-LIVED ASSETS--In March 1995, the Financial Accounting Standards Board
  ("FASB") issued Statement of Financial Accounting Standards No. 121,
  Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to
  be Disposed Of ("SFAS No. 121"), which is effective for fiscal years
  beginning after December 15, 1995. SFAS No. 121 specifies the recognition
  and measurement criteria for such impairments. Adoption of SFAS No. 121 on
  January 1, 1996 had no impact on the Predecessor's financial position,
  results of operations or cash flows.
 
  INCOME TAXES--The Company and the Predecessor account for income taxes in
  accordance with SFAS No. 109, Accounting for Income Taxes. Under SFAS No.
  109, the deferred tax provision is determined under
 
                                      F-8
<PAGE>
 
                 THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
  the liability method. Under this method, deferred tax assets and
  liabilities are recognized based on differences between financial statement
  and tax bases of assets and liabilities using presently enacted tax rates.
 
  REVENUE RECOGNITION--Advertising revenues for all magazines are recognized
  as income when the magazines are published and distributed, net of
  provisions for estimated rebates, adjustments and discounts. Subscriptions
  are recorded as deferred revenue when received and recognized as income
  over the term of the subscription. Information service revenues are
  recognized either when the finished product is delivered or based on
  contractually agreed-upon terms.
 
  USE OF ESTIMATES--The preparation of financial statements in conformity
  with generally accepted accounting principles requires management to make
  estimates and assumptions that affect the reported amounts of assets and
  liabilities and disclosure of contingent assets and liabilities at the date
  of the financial statements and the reported amounts of revenues and
  expenses during the reporting period. Actual results could differ from
  those estimates.
 
  FAIR VALUES--The estimated fair value amounts presented in these notes to
  consolidated financial statements have been determined by the Company and
  the Predecessor using available market information and appropriate
  methodologies. However, considerable judgment is required in interpreting
  market data to develop the estimates of fair value. The estimates presented
  herein are not necessarily indicative of the amounts that the Company and
  the Predecessor could realize in a current market exchange. The use of
  different market assumptions and/or estimation methodologies may have a
  material effect on the estimated fair value amounts. Such fair value
  estimates are based on pertinent information available to management as of
  December 29, 1996 and December 31, 1997, and have not been comprehensively
  revalued for purposes of these consolidated financial statements since such
  date. Current estimates of fair value may differ significantly from the
  amounts presented herein.
 
  The following disclosure of the estimated fair value of financial
  instruments is made in accordance with the provisions of SFAS No. 107,
  Disclosures About Fair Value of Financial Instruments:
 
   Cash and Cash Equivalents, Accounts Receivable, Accounts Payable, and
   Other Current Assets and Liabilities--The carrying amounts of these items
   approximate fair value because of the short maturity of these
   instruments.
 
   Senior Subordinated Notes--Rates currently available to the Company for
   debt with similar terms and maturity are used to estimate the fair value
   of the debt issued. Accordingly, the fair value of the senior
   subordinated notes approximates the carrying value of $11,000,000.
 
  POSTRETIREMENT BENEFIT PLAN--Some former employees participated in a
  postretirement benefit plan sponsored by Tribune for the period from June
  25, 1994 to December 31, 1994 and for the years ended December 31, 1995,
  December 29, 1996 and the period from December 30, 1996 to March 31, 1997.
  Amounts contributed by the Farm Journal were determined by Tribune based
  principally on the aggregate cost method. Tribune assumed all liabilities
  accrued under the plan as of March 31, 1997.
 
  STOCK-BASED COMPENSATION--SFAS No. 123, Accounting for Stock-Based
  Compensation, encourages, but does not require companies to record
  compensation cost for stock-based employee compensation plans at fair
  value. The Company has chosen to continue to account for stock-based
  compensation in accordance with Accounting Principles Board Opinion No. 25,
  Accounting for Stock Issued to Employees.
 
  EARNINGS PER SHARE--In February 1997, the FASB issued SFAS No. 128,
  Earnings Per Share. This new standard requires dual presentation of basic
  and diluted earnings per share ("EPS") on the face of the
 
                                      F-9
<PAGE>
 
                 THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
  statement of operations and the reconciliation of the numerators and
  denominators of the basic and diluted EPS calculations. The Company adopted
  this standard in the period ended December 31, 1997.
 
  NEW ACCOUNTING PRONOUNCEMENTS--In February 1997, the FASB issued SFAS No.
  129, Disclosure of Information About Capital Structure, which establishes
  new standards for disclosing information about an entity's capital
  structure. Adoption of SFAS No. 129 did not have a significant impact on
  the Company's financial statements.
 
  In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income.
  This statement, which establishes standards for reporting and disclosure of
  comprehensive income, is effective for interim and annual periods beginning
  after December 15, 1997, although earlier adoption is permitted.
  Reclassification of financial information for earlier periods presented for
  comparative purposes is required under SFAS No. 130. As this statement only
  requires additional disclosures in the Company's consolidated financial
  statements, its adoption did not have any impact on the Company's
  consolidated financial position or results of operations. The Company will
  adopt SFAS No. 130 effective January 1, 1998.
 
  In June 1997, the FASB issued SFAS No. 131, Disclosures about Segments of
  an Enterprise and Related Information. This statement, which establishes
  standards for the reporting of information about operating segments and
  requires the reporting of selected information about operating segments in
  interim financial statements, is effective for fiscal years beginning after
  December 15, 1997, although earlier application is permitted.
  Reclassification of segment information for earlier periods presented for
  comparative purposes is required under SFAS No. 131. The Company has
  adopted SFAS No. 131 effective January 1, 1998; adoption of this statement
  did not result in significant changes to the presentation of financial data
  by business segment.
 
4.INVENTORIES
 
  The components of inventories are as follows:
<TABLE>
<CAPTION>
                                           PREDECESSOR
                                           CORPORATION
                                           ------------
                                           DECEMBER 29, DECEMBER 31,  MARCH 31,
                                               1996         1997        1998
                                           ------------ ------------ -----------
                                                                     (UNAUDITED)
<S>                                        <C>          <C>          <C>
   Art work and manuscripts...............  $  88,250    $  93,600    $  78,045
   Work-in-process........................    109,141       56,754       42,952
                                            ---------    ---------    ---------
                                            $ 197,391    $ 150,354    $ 120,997
                                            =========    =========    =========
</TABLE>
 
5. PROPERTY AND EQUIPMENT
 
  The components of property and equipment are as follows:
<TABLE>
<CAPTION>
                                          PREDECESSOR
                                          CORPORATION
                                          ------------
                                          DECEMBER 29,  DECEMBER 31,   MARCH 31,
                                              1996          1997         1998
                                          ------------  ------------  -----------
                                                                      (UNAUDITED)
<S>                                       <C>           <C>           <C>
   Equipment and furniture............... $ 1,416,851   $ 1,013,726   $ 1,011,212
   Computer..............................   2,170,005     1,340,177     1,416,694
   Leasehold improvements................     177,022       378,368       449,356
                                          -----------   -----------   -----------
                                            3,763,878     2,732,271     2,877,262
   Less accumulated depreciation
    and amortization.....................  (1,235,896)     (490,331)     (656,669)
                                          -----------   -----------   -----------
                                          $ 2,527,982   $ 2,241,940   $ 2,220,593
                                          ===========   ===========   ===========
</TABLE>
 
                                     F-10
<PAGE>
 
                 THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
6.INTANGIBLE ASSETS
 
  Intangible assets consist of the following:
 
<TABLE>
<CAPTION>
                                        PREDECESSOR
                                        CORPORATION
                                        ------------
                           AMORTIZATION
                              PERIOD    DECEMBER 29,  DECEMBER 31,   MARCH 31,
                             (YEARS)        1996          1997          1998
                           ------------ ------------  ------------  ------------
                                                                    (UNAUDITED)
<S>                        <C>          <C>           <C>           <C>
   Subscription list....        25      $  7,850,000  $  7,131,000  $  7,131,000
   Goodwill.............        40         6,404,606     3,639,755     3,639,755
   Deferred financing
   costs................    3.25 to 10                     272,679       272,679
   Organization costs...        5                           40,000        40,000
                                        ------------  ------------  ------------
                                          14,254,606    11,083,434    11,083,434
   Less accumulated
   amortization.........                  (1,269,224)     (328,005)     (435,338)
                                        ------------  ------------  ------------
                                        $ 12,985,382  $ 10,755,429  $ 10,648,096
                                        ============  ============  ============
</TABLE>
 
  The Company and the Predecessor periodically evaluate the fair value of
  goodwill and other intangible assets and recognize an impairment when it is
  probable that estimated future undiscounted cash flows will be less than
  the carrying value of the asset. No writedowns of goodwill or other
  intangible assets were made in any of the periods presented.
 
7.REVOLVING CREDIT AGREEMENT
 
  FJI entered into a revolving credit and security agreement with its bank
  which provides for aggregate collateralized borrowings of up to $3,000,000
  which mature June 30, 2000. Interest shall accrue at the prime based rate,
  as defined in the agreement, provided however, that FJI by giving
  notification may have all or a portion of the outstanding principal accrue
  interest at the LIBOR based rate, as defined in the agreement. FJI had no
  amounts outstanding under the agreement at December 31, 1997. The borrower
  under the revolving credit and security agreement is FJI. Repayment of the
  debt is guaranteed by FJC.
 
  The agreement includes requirements as to the maintenance of financial
  ratios and tangible net worth and restrictions of certain financial
  conditions. The agreement also includes certain dividend restrictions as
  part of its covenants that prohibit dividend payments as well as other
  restrictions.
 
8.SENIOR SUBORDINATED NOTES
 
  The senior subordinated notes bear interest at 9.5% and mature April 1,
  2007. Interest is payable semi-annually in arrears on June 1 and December 1
  of each year commencing with December 1, 1997. Aggregate maturities of debt
  are $2,200,000 each year payable June 1, 2003 through June 1, 2006, with
  the entire remaining unpaid principal amount of notes together with
  interest accrued thereon due April 1, 2007. The borrower under the senior
  subordinated notes is FJI. Repayment of the debt is guaranteed by FJC.
 
  The note agreement includes requirements as to the maintenance of financial
  ratios and minimum tangible net worth amounts and restrictions of certain
  asset sales, mergers and other significant transactions, as well as certain
  reporting requirements. As of October 1, 1997, FJI was in violation of the
  agreement because it did not deliver audited financial statements to the
  note holder until after that date. On March 27, 1998, FJI received a waiver
  of this debt covenant violation. As a result, the entire balance has been
  reflected as a long-term liability in the accompanying consolidated
  financial statements.
 
                                     F-11
<PAGE>
 
                 THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
  The ability of the Company to pay dividends is dependent upon the receipt
  of dividends or other payments from FJI. However, the senior subordinated
  notes and the revolving credit agreement described in Note 7 have certain
  dividend restrictions as part of their covenants that prohibit dividend
  payments on or prior to April 1, 1998. Thereafter, FJI will not authorize,
  declare, pay, or make any restricted payment unless no event of default
  shall have occurred and be continuing and the aggregate amount of all sums
  and property included in all restricted payments, plus the total of all
  payments made to the general partner of MS Farm International Limited
  Partnership by FJI shall not exceed the sum of 50% (or 100% in the case of
  a deficit) of adjusted consolidated net income (as defined in the note
  agreement) plus an amount equal to the net proceeds received by FJI from
  the sale of capital stock of FJI.
 
9.INCOME TAXES
 
  FJC and FJI will file a consolidated federal income tax return for the
  period from April 1, 1997 through December 31, 1997. From June 25, 1994
  through March 31, 1997, the Predecessor was a party to a tax-sharing
  agreement with Tribune and was included in the consolidated tax returns of
  Tribune. Tribune allocated income tax expense or benefit to the Predecessor
  as if the Predecessor was filing a separate federal income tax return. Tax
  benefits from losses were made available to the Predecessor as it is able
  to realize such benefits on a separate return basis. The Predecessor was
  required to pay to Tribune, for income taxes, an amount equal to that
  amount of tax the Predecessor would pay if it filed a separate federal
  income tax return.
 
  Components of the income tax provision (benefit) are as follows:
 
<TABLE>
<CAPTION>
                                         PREDECESSOR
                            ----------------------------------------
                                                         PERIOD FROM
                                                          DECEMBER    PERIOD FROM
                               FISCAL YEARS ENDED            30,        APRIL 1,
                            ----------------------------   1996 TO      1997 TO
                            DECEMBER 31,    DECEMBER 29,  MARCH 31,   DECEMBER 31,
                                1995            1996        1997          1997
<S>                         <C>             <C>          <C>          <C>          <C> <C>
                             ---------        --------   ----------    ---------   ---
    Current:
     Federal............     $(221,013)       $(87,304)  $1,089,000
     State and local....          --               --       189,362
                             ---------        --------   ----------
                              (221,013)        (87,304)   1,278,362
    Deferred:
     Federal............        93,000         139,000     (140,000)   $(516,014)
     State and local....       (38,000)         15,000       70,000     (163,814)
                             ---------        --------   ----------    ---------
                                55,000         154,000      (70,000)    (679,828)
                             ---------        --------   ----------    ---------
  Income tax provision
   (benefit)............     $(166,013)       $ 66,696   $1,208,362    $(679,828)
                             =========        ========   ==========    =========
</TABLE>
 
                                     F-12
<PAGE>
 
                 THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
  The reconciliation from the statutory federal income tax rate is as
  follows:
 
<TABLE>
<CAPTION>
                                          PREDECESSOR
                             -------------------------------------
                                                       PERIOD FROM
                                                        DECEMBER   PERIOD FROM
                                FISCAL YEARS ENDED         30,       APRIL 1,
                             -------------------------   1996 TO     1997 TO
                             DECEMBER 31, DECEMBER 29,  MARCH 31,  DECEMBER 31,
                                 1995         1996        1997         1997
                             ------------ ------------ ----------- ------------
   <S>                       <C>          <C>          <C>         <C>          <C> <C>
   Federal income tax pro-
    vision
    (benefit) at statutory
    rate...................     (34.0)%      (34.0)%      34.0%       (34.0)%
   State income taxes, net
     of federal income tax
    benefit................      (2.7)         2.9         6.3         (5.0)
   Amortization of excess
    cost
     of net assets ac-
    quired.................      18.7         50.6         1.5          4.5
   Stock-based compensation
    and other..............                                             3.0
                                -----        -----        ----        -----
   Income tax provision
    (benefit)..............     (18.0)%      19.5 %       41.8%       (31.5)%
                                =====        =====        ====        =====
</TABLE>
 
  Components of the net deferred tax assets and liability are as follows:
 
<TABLE>
<CAPTION>
                                                       PREDECESSOR
                                                       ------------
                                                       DECEMBER 29, DECEMBER 31,
                                                           1996         1997
                                                       ------------ ------------
   <S>                                                 <C>          <C>
   Deferred tax assets:
    Retirement benefits...............................  $ 931,600    $     --
    Accruals and reserves.............................    338,000      133,468
    Inventories.......................................     37,600       50,170
    Operating loss carryforward.......................        --       654,704
    Other.............................................     37,332        7,739
                                                        ---------    ---------
   Total..............................................  1,344,532      846,081
   Deferred tax liability - property and equipment....    495,600      187,400
                                                        ---------    ---------
   Net deferred tax assets............................  $ 848,932    $ 658,681
                                                        =========    =========
</TABLE>
 
  Management does not believe that a valuation allowance on its deferred tax
  assets is necessary because it is more likely than not that the deferred
  tax assets will be realized.
 
  As of December 31, 1997, the Company has a net operating loss carryforward
  of approximately $1,600,000 for federal income tax purposes which expires
  in 2012.
 
  The Company has recorded a provision for income taxes for the period from
  January 1, 1998 to March 31, 1998 (unaudited) in an amount equal to the
  anticipated effective tax rate of the Company for the year ending December
  31, 1998.
 
                                     F-13
<PAGE>
 
                 THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
10.LEASES
 
  The Company leases its corporate office and computer equipment. Future
  minimum lease payments under noncancellable operating leases with initial
  or remaining terms in excess of one year are as follows:
 
<TABLE>
      <S>                                                             <C>
           1998...................................................... $  787,618
           1999......................................................    785,434
           2000......................................................    863,957
           2001......................................................    944,305
           2002......................................................    944,305
           Thereafter................................................  2,220,698
                                                                      ----------
                                                                      $6,546,317
                                                                      ==========
</TABLE>
 
  Rental expense under operating leases was $432,820, $923,621, $214,977,
  $700,458 and $235,413 (unaudited) for the years ended December 31, 1995 and
  December 29, 1996, and the periods from December 30, 1996 to March 31,
  1997, April 1, 1997 to December 31, 1997 and January 1, 1998 to March 31,
  1998 (unaudited).
 
11.BENEFIT PLANS
 
  401(K) SAVINGS PLAN--The Company has a 401(k) retirement plan for the
  benefit of qualified employees. Those employees who have completed one year
  of service and have attained age 21 are eligible to participate and may
  contribute a portion of their compensation to the plan. The Company makes
  matching contributions at the rate of 100% of the first 3% of each
  participant's elective deferral and 50% of the next 3% of such elective
  deferral. The Company's expense related to the plan amounted to $302,344,
  $447,764, $46,028, $148,045 and $58,321 for the years ended December 31,
  1995 and December 29, 1996, and the periods from December 30, 1996 to March
  31, 1997, April 1, 1997 to December 31, 1997 and January 1, 1998 to March
  31, 1998 (unaudited), respectively.
 
  RETIREMENT BENEFITS OTHER THAN PENSIONS--For some former employees of the
  Predecessor, retirement benefits other than pensions are paid. SFAS No. 106
  Employers' Accounting for Postretirement Benefits Other Than Pensions,
  requires disclosure of the net periodic postretirement benefit cost
  separately showing the service cost component, the interest cost component,
  the actual return on plan assets for the period, a reconciliation of the
  funded status of the plan with amounts reported in the consolidated balance
  sheets, the assumed health trend rates, and the effect of a one-percentage-
  point increase in the assumed health care cost trend rates for each future
  year. Such disclosures are not presented for the Predecessor because the
  structure of the plan does not allow for determination of this information
  on an individual company basis. No contributions were made by the
  Predecessor in fiscal year ended December 31, 1995. For the fiscal year
  ended December 29, 1996, contributions totaled $73,610. For the period from
  December 30, 1996 to March 31, 1997, contributions totaled $18,403.
 
  As part of the Management Purchase, Tribune assumed all liabilities accrued
  under the plan. The Company has no additional liability under that
  postretirement plan.
 
12.EQUITY INCENTIVE AWARDS
 
  On April 1, 1997, the Company established an equity appreciation plan
  ("Equity Incentives") for certain key employees. The Equity Incentives
  provide the employees an opportunity to realize the appreciation over up to
  a 10-year period on 9,870 shares of the Company's Class B Common Stock
  which approximates 10% of the Company's outstanding Common Stock. The
  employees' interest in the Class B Common Stock vest
 
                                     F-14
<PAGE>
 
                 THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
  based upon the achievement of certain performance goals. The vested shares
  of Class B Common Stock are convertible into the Company's Class A Common
  Stock pursuant to a formula contained in the Equity Incentives agreement at
  the election of the employee, at any time up to April 1, 2007. Based on the
  conversion formula, the Class B Common Stock will convert to Class A Common
  Stock at a rate of less than 1:1. If all Class B Common Stock are converted
  to Class A Common Stock, the key employees will hold a combined total of
  approximately 10% of the Company's Class A Common Stock. The Company
  applies Accounting Principles Board Opinion No. 25, Accounting for Stock
  Issued to Employees, and related interpretations in accounting for the
  Equity Incentives. Accordingly, $194,565 of compensation expense, based on
  a third-party independent appraisal at the measurement date, was charged to
  operations in the period from April 1, 1997 to December 31, 1997. As of
  December 31, 1997, $194,565 has been accrued for payment related to the
  Equity Incentives. Had compensation cost for the Equity Incentives been
  determined consistent with SFAS No. 123, the Company's net loss and net
  loss per share would have remained unchanged as the variable nature of the
  Equity Incentives required the use of intrinsic value. As described in Note
  19, the Equity Incentives were terminated in February 1998, a stock option
  plan was adopted and the employees were awarded stock options. (See Note
  19).
 
13.EARNINGS PER SHARE
 
  The numerator and denominator for the basic and diluted earnings per share
  calculation were the same because of the absence of dilutive securities at
  December 31, 1997. The options issued in February 1998, described in Note
  19, would have had an antidilutive impact on the earnings per share
  calculation.
 
14.SALES TO MAJOR CUSTOMERS
 
  Sales to the five largest unaffiliated customers totaled $6,612,287 or
  24.9%, $6,281,115 or 23.5%, and $3,239,679 or 30.9% of the Predecessor's
  revenues for fiscal years 1995 and 1996, and for the period from December
  30, 1996 to March 31, 1997 and $2,423,000 or 16.7% and $3,778,422 or 31.5%
  of the Company's revenues for the period from April 1, 1997 to December 31,
  1997 and the period from January 1, 1998 to March 31, 1998 (unaudited),
  respectively.
 
  SEASONALITY--Revenues of the Company and the Predecessor tend to be
  seasonal, with higher sales in the first and fourth fiscal quarters,
  corresponding with the winter planning season.
 
  CYCLICALITY--Revenues of the Company and Predecessor are subject to changes
  in the overall level of domestic economic activity and changes in certain
  sectors of the agricultural economy, which may be influenced by climate
  changes and governmental policy.
 
15.COMMON STOCK
 
  The Company has authorized 111,000 shares of Class A Common Stock, $.01 par
  value, with a liquidation preference of $100 per share and 99,000 shares of
  Class B Common Stock, $.01 par value, convertible into Class A Common Stock
  in the event of the Company's achievement of certain financial results.
  Holders of Class A or Class B Common Stock are each entitled to one vote
  for each share held and both classes vote as if there is one class. (See
  Note 19).
 
                                     F-15
<PAGE>
 
                 THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
16.COMMITMENTS AND CONTINGENCIES
 
  The Company has commitment letters of credit amounting to approximately
  $300,000 at December 31, 1997. The letters of credit are maintained as
  guarantees to the landlord from whom the Company has leased its corporate
  offices.
 
  EMPLOYMENT AGREEMENTS--The Company has entered into employment agreements
  with its Chief Executive Officer and Chief Operating Officer. The terms of
  these agreements extend through 2002 and provide for a base salary plus
  annual bonus payments at the discretion of the Compensation Committee of
  the Board.
 
17.RELATED PARTY TRANSACTIONS
 
  Due to Tribune--The Predecessor was part of Tribune's cash management
  system. As a result, the Due to Tribune amount fluctuated due to timing of
  cash payments and receipts.
 
                                     F-16
<PAGE>
 
                 THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
18.SEGMENT INFORMATION
 
  The operations of the Company and the Predecessor have been classified into
  two business segments: publishing and information services. The publishing
  segment includes Farm Journal, Top Producer, Beef Today, Dairy Today and
  Hogs Today which publishes articles appealing to farmers. The information
  services segment performs studies for agricultural product producers and
  other businesses and provides specialized information. Summarized financial
  information by business segment is set forth below:
 
<TABLE>
<CAPTION>
                                       PREDECESSOR
                          ---------------------------------------
                                                      PERIOD FROM
                                                       DECEMBER   PERIOD FROM   PERIOD FROM
                             FISCAL YEARS ENDED           30,       APRIL 1,    JANUARY 1,
                          --------------------------    1996 TO     1997 TO       1998 TO
                          DECEMBER 31,  DECEMBER 29,   MARCH 31,  DECEMBER 31,   MARCH 31,
                              1995          1996         1997         1997         1998
<S>                       <C>           <C>           <C>         <C>           <C>         <C> <C> <C>
                          -----------   -----------   ----------  -----------   ----------
   Revenues, Net
    Publishing..........  $20,957,268   $20,725,353   $9,045,672  $10,732,469   $9,574,815
    Information servic-
    es..................    5,617,253     6,048,772    1,428,387    3,801,602    2,433,571
                          -----------   -----------   ----------  -----------   ----------
       Total............   26,574,521    26,774,125   10,474,059   14,534,071   12,008,386
   Operating income
   (loss):
    Publishing..........     (886,807)     (282,381)   2,844,962   (1,398,099)   2,268,948
    Information servic-
    es..................     (231,452)      (25,026)      83,207     (172,030)     965,267
                          -----------   -----------   ----------  -----------   ----------
       Total............   (1,118,259)     (307,407)   2,928,169   (1,570,129)   3,234,215
   Total assets:
    Publishing..........   17,936,882    16,181,689   21,093,629   16,884,593   22,353,227
    Information servic-
    es..................    4,985,700     4,887,524    3,638,242    5,623,632    5,592,357
                          -----------   -----------   ----------  -----------   ----------
       Total............   22,922,582    21,069,213   24,731,871   22,508,225   27,945,584
   Depreciation and am-
   ortization:
    Publishing..........      868,984       842,597      236,406      653,455      226,433
    Information servic-
    es..................      186,561       217,482       43,590      164,881       47,238
                          -----------   -----------   ----------  -----------   ----------
       Total............    1,055,545     1,060,079      279,996      818,336      273,671
   Capital expenditures:
    Publishing..........    2,192,981       503,408       28,604      149,734      129,374
    Information servic-
    es..................      217,943        50,127      150,292       28,733       15,617
                          -----------   -----------   ----------  -----------   ----------
       Total............  $ 2,410,924   $   553,535   $  178,896  $   178,467   $  144,991
                          ===========   ===========   ==========  ===========   ==========
</TABLE>
 
  There were no significant intersegment sales or transfers during these
  periods. Operating income (loss) by business segment excludes interest
  income and interest expense.
 
19.SUBSEQUENT EVENTS
 
  EQUITY INCENTIVES--On February 26, 1998, the shareholder of the Company and
  the executives agreed to convert the 4,738 vested Class B Common Stock into
  1,978 shares of Class A Common Stock using the conversion formula contained
  in the Equity Incentives agreement, redeem the remaining 5,132 shares of
 
                                     F-17
<PAGE>
 
                 THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
  Class B Common Stock for $10,264 and terminate the Equity Incentives. A
  stock option plan (the "1998 Stock Option Plan") was adopted and the
  executives were awarded options to purchase 7,892 shares of Class A Common
  Stock for $171.67 per share. The exercise price of $171.67 per share was
  based on a third-party independent appraisal as of the date of grant. The
  termination of the Equity Incentives resulted in a charge to compensation
  expense of $178,809 in the three month period ended March 31, 1998. In
  addition, $344,730 of compensation expense will be recognized ratably over
  the four-year vesting period of the stock options in the amount of $22,982
  per fiscal quarter.
 
  DEBT WAIVER--On March 27, 1998 the Company obtained a waiver of the debt
  covenant violation described in Note 8.
 
  ACQUISITION AND RELATED FINANCING--On April 1, 1998, the Company entered
  into a $15,000,000 Reducing Revolving Credit Facility (the "Bank
  Facility"). The interest rate on the Bank Facility is 8.2% annually subject
  to adjustment from time to time, with a term that expires in 2005. The Bank
  Facility includes requirements as to the maintenance of financial ratios
  and minimum tangible net worth amounts and restrictions of certain asset
  sales, other significant transactions, as well as certain reporting
  requirements. On April 2, 1998, the Company consummated an acquisition of
  the assets of Professional Farmers of America, Inc. and Professional Market
  Management, Inc. (collectively, the "PFA Acquisition"). The total
  consideration paid for the PFA Acquisition included $11,000,000 in cash and
  $1,000,000 in liquidation value of an issue of preferred stock of the
  Company that was approved by the Board of Directors on March 17, 1998. The
  preferred stock is cumulative, non-voting, convertible automatically into
  shares of common stock issued by the Company through an initial public
  offering, and if outstanding at the time, putable to the Company during a
  30-day period beginning on the third anniversary of issuance for
  $1,100,000. The conversion feature provides that the preferred stock will
  be converted at the closing of an initial public offering into $1,000,000
  of shares of the class of common stock issued to the public at the price
  sold to the public. The acquisition was completed with a cash payment of
  $3,000,000 and an $8,000,000 drawdown of the Bank Facility.
 
  LETTER OF INTENT--On June 2, 1998 FJC entered into a letter of intent to
  purchase the assets of another media company for $4,750,000, including
  $1,000,000 of shares of the class of common stock issued to the public at
  the price sold to the public. The consummation of the acquisition is
  dependent upon the satisfaction of certain significant contingencies.
 
  NAME CHANGE--On June 5, 1998, FJC amended its Certificate of Incorporation
  to change its name to The Farm Journal Corporation.
 
  INITIAL PUBLIC OFFERING--The Company has entered into a letter of intent
  with representatives of underwriters to sell in an Offering shares of its
  common stock. The proceeds of the Offering will be used to repay
  $13,800,000 of debt and to fund the Company's business expansion plans,
  including acquisitions, and for working capital and other general corporate
  purposes.
 
  RECAPITALIZATION--On        1998, FJC amended and restated its Certificate
  of Incorporation to (i) change the authorized capital stock of FJC to
  shares of Class A Common Stock, par value $0.01 per share,    shares of
  Class B Common Stock, par value $0.01 per share and 2,725 shares of
  Convertible Redeemable Preferred Stock, par value $0.01 per share; (ii)
  reclassify each outstanding share of original Class A Common Stock into
  shares of its newly-created Class B Common Stock; (iii) reclassify each
  outstanding share of original Class B Common Stock into    shares of its
  newly created Class A Common Stock; and (iv) change the rights and
  privileges of the Class A Common Stock and Class B Common Stock. This stock
  conversion has been given retroactive recognition in the accompanying
  financial statements as of March 31, 1998.
 
                                     *****
 
                                     F-18
<PAGE>
 
                         INDEPENDENT AUDITOR'S REPORT
 
To the Board of Directors
Professional Farmers of America, Inc. and
 Professional Market Management, Inc.
Cedar Falls, Iowa
 
We have audited the accompanying combined balance sheets of Professional
Farmers of America, Inc. and Professional Market Management, Inc. as of
December 31, 1996 and 1997, and the related combined statements of income,
stockholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Companies' management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
 
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of Professional
Farmers of America, Inc. and Professional Market Management, Inc. as of
December 31, 1996 and 1997, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted
accounting principles.
 
McGLADREY & PULLEN, LLP
Des Moines, Iowa
January 20, 1998, except for Note 7
as to which the date is April 2, 1998
 
                                     F-19
<PAGE>
 
                   PROFESSIONAL FARMERS OF AMERICA, INC. AND
                      PROFESSIONAL MARKET MANAGEMENT, INC.
 
                            COMBINED BALANCE SHEETS
 
<TABLE>
<CAPTION>
                                                  DECEMBER 31,
                                             ----------------------  MARCH 31,
                                                1996       1997        1998
                                             ---------- ----------- -----------
                                                                    (UNAUDITED)
<S>                                          <C>        <C>         <C>
ASSETS
CURRENT ASSETS
 Cash....................................... $      350 $       350 $      450
 Certificate of deposit.....................    200,000         --         --
 Accounts receivable, net of allowance for
  doubtful accounts December 31, 1996
  $65,000; 1997 $75,000.....................    321,392     451,256    360,216
 Prepaid expenses...........................     54,772     228,638    240,646
                                             ---------- ----------- ----------
    Total current assets....................    576,514     680,244    601,312
                                             ---------- ----------- ----------
DUE FROM RELATED PARTY (Note 3).............  3,797,410   4,330,548  3,918,829
                                             ---------- ----------- ----------
IMPROVEMENTS AND EQUIPMENT, at cost
 Leasehold improvements.....................    128,742     128,742    128,742
 Production equipment.......................    445,103     462,493    580,707
 Transportation equipment...................      8,937       8,937      8,937
                                             ---------- ----------- ----------
                                                582,782     600,172    718,386
 Less accumulated depreciation..............    509,232     528,112    536,385
                                             ---------- ----------- ----------
                                                 73,550      72,060    182,001
                                             ---------- ----------- ----------
INVESTMENT AND OTHER ASSETS
 Certificate of deposit.....................  1,100,000         --         --
 Deferred customer acquisition costs, net of
  accumulated amortization December 31, 1996
  $5,904,605; 1997 $7,693,883...............  1,286,365   1,457,301  1,311,902
 Prepaid advertising........................         --     248,114    205,849
                                             ---------- ----------- ----------
                                              2,386,365   1,705,415  1,517,751
                                             ---------- ----------- ----------
                                             $6,833,839 $ 6,788,267 $6,219,893
                                             ========== =========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
 Current maturities of long-term debt (Note
  3)........................................ $      --  $    95,242 $   56,340
 Accounts payable...........................    437,663     273,586    282,876
 Accrued expenses...........................    340,787     200,674    183,559
 Unearned subscription revenue..............  4,000,034   4,066,968  3,637,096
 Customer deposits..........................    325,521     318,414    282,790
                                             ---------- ----------- ----------
    Total current liabilities...............  5,104,005   4,954,884  4,442,661
                                             ---------- ----------- ----------
LONG-TERM DEBT, less current maturities
 (Note 3)...................................        --      289,467    276,403
                                             ---------- ----------- ----------
DEFERRED COMPENSATION (Note 6)..............     92,713     125,001        --
                                             ---------- ----------- ----------
UNEARNED SUBSCRIPTION REVENUE...............     69,608     294,683    491,662
                                             ---------- ----------- ----------
CONTINGENT LIABILITIES (Note 3)
STOCKHOLDERS' EQUITY
 Common stock, no par value; authorized
  10,000 shares; issued 2,725 shares (Note
  3)........................................     85,829      85,829     85,829
 Common stock, no par value; authorized
  1,000 shares; issued 500 shares...........      1,000       1,000      1,000
 Retained earnings..........................  1,480,684   1,037,403    922,338
                                             ---------- ----------- ----------
                                              1,567,513   1,124,232  1,009,167
                                             ---------- ----------- ----------
                                             $6,833,839 $ 6,788,267 $6,219,893
                                             ========== =========== ==========
</TABLE>
 
                  See Notes to Combined Financial Statements.
 
                                      F-20
<PAGE>
 
                   PROFESSIONAL FARMERS OF AMERICA, INC. AND
                      PROFESSIONAL MARKET MANAGEMENT, INC.
 
                         COMBINED STATEMENTS OF INCOME
 
<TABLE>
<CAPTION>
                                FOR THE YEAR ENDED     FOR THE THREE MONTHS
                                   DECEMBER 31,           ENDED MARCH 31,
                               ---------------------  ------------------------
                                  1996       1997        1997         1998
                               ---------- ----------  -----------  -----------
                                (NOTE 7)              (UNAUDITED)  (UNAUDITED)
<S>                            <C>        <C>         <C>          <C>
Net revenues.................. $8,040,629 $9,103,607  $2,234,039   $2,410,671
                               ---------- ----------  ----------   ----------
Operating expenses (Note 3):
 Production...................  1,823,376  2,166,995     562,310      540,127
 Promotion and sales..........  2,981,871  3,166,243     807,462      967,481
 Circulation..................    529,515    600,666     165,486      143,585
 General and administrative...  2,386,920  3,036,530     733,113      986,527
                               ---------- ----------  ----------   ----------
                                7,721,682  8,970,434   2,268,371    2,637,720
                               ---------- ----------  ----------   ----------
    Operating income (loss)...    318,947    133,173     (34,332)    (227,049)
                               ---------- ----------  ----------   ----------
Financial income (expense)
 (Note 3):
 Interest income..............    375,377    443,565     122,462      111,995
 Interest expense.............               (20,019)                     (11)
                               ---------- ----------  ----------   ----------
                                  375,377    423,546     122,462      111,984
                               ---------- ----------  ----------   ----------
    Net income (loss).........    694,324    556,719      88,130     (115,065)
 Pro forma taxes on income....    304,000    250,000      35,000      (33,000)
                               ---------- ----------  ----------   ----------
    Pro forma net income
     (loss)................... $  390,324  $ 306,719  $   53,130   $  (82,065)
                               ========== ==========  ==========   ==========
</TABLE>
 
 
                  See Notes to Combined Financial Statements.
 
                                      F-21
<PAGE>
 
                   PROFESSIONAL FARMERS OF AMERICA, INC. AND
                      PROFESSIONAL MARKET MANAGEMENT, INC.
 
                  COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY
 
<TABLE>
<CAPTION>
                                    PROFESSIONAL    PROFESSIONAL
                                     FARMERS OF        MARKET
                                    AMERICA, INC. MANAGEMENT, INC.  COMBINED
                                    ------------- ---------------- -----------
<S>                                 <C>           <C>              <C>
Common stock, no par value:
 Authorized 10,000 shares; issued
  December 31, 1995, 1996 and 1997
  and March 31, 1998 (unaudited)
  2,725 shares.....................  $    85,829     $      --     $    85,829
                                     ===========     ==========    ===========
Common stock, no par value:
 Authorized 1,000 shares;
  Issued December 31, 1995, none...  $       --      $      --     $       --
  Issuance of 500 shares...........          --           1,000          1,000
                                     -----------     ----------    -----------
  Issued December 31, 1996, 1997
   and March 31, 1998 (unaudited)
   500 shares......................  $       --      $    1,000    $     1,000
                                     ===========     ==========    ===========
Retained earnings (deficit):
 Balance, December 31, 1995........  $ 1,016,360     $      --      $1,016,360
  Net income (loss)................      760,469        (66,145)       694,324
  Dividends on common stock, $84.40
   per share.......................     (230,000)           --        (230,000)
                                     -----------     ----------    -----------
 Balance, December 31, 1996........    1,546,829        (66,145)     1,480,684
  Net income (loss)................      625,009        (68,290)       556,719
  Dividends on common stock,
   $366.97 per share...............   (1,000,000)           --      (1,000,000)
                                     -----------     ----------    -----------
 Balance, December 31, 1997........    1,171,838       (134,435)     1,037,403
  Net (loss) (unaudited)...........     (108,979)        (6,086)      (115,065)
                                     -----------     ----------    -----------
 Balance, March 31, 1998 (unau-
  dited)...........................  $ 1,062,859     $ (140,521)   $   922,338
                                     ===========     ==========    ===========
</TABLE>
 
 
                  See Notes to Combined Financial Statements.
 
                                      F-22
<PAGE>
 
                   PROFESSIONAL FARMERS OF AMERICA, INC. AND
                      PROFESSIONAL MARKET MANAGEMENT, INC.
 
                       COMBINED STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                           FOR THE YEAR ENDED     FOR THE THREE MONTHS ENDED
                              DECEMBER 31,                 MARCH 31,
                          ----------------------  ------------------------------
                             1996        1997         1997            1998
                          ----------  ----------  -------------   --------------
                                                   (UNAUDITED)     (UNAUDITED)
<S>                       <C>         <C>         <C>             <C>
CASH FLOWS FROM OPERAT-
 ING ACTIVITIES
 Net income (loss)......  $  694,324  $  556,719   $     88,130   $     (115,065)
 Adjustments to recon-
  cile net income (loss)
  to net cash
  provided by (used in)
  operating activities:
  Depreciation..........      39,906      30,525          7,940            8,273
  Amortization..........   1,884,519   1,789,278        469,969          550,942
  Provision for doubtful
   accounts.............      62,325      55,989         19,237           21,836
  Deferred compensa-
   tion.................      30,112      32,288          7,862         (125,001)
  Change in operating
   assets and liabili-
   ties:
   Accounts receivable..     (17,434)   (185,853)       (78,723)          69,204
   Prepaid expenses.....      16,818      14,468        (24,249)          30,257
   Deferred customer ac-
    quisition costs.....  (1,915,482) (1,960,214)      (664,864)        (405,543)
   Accounts payable and
    accrued expenses....     107,026    (304,190)       (13,013)          (7,825)
   Unearned subscription
    revenue.............     809,029     292,009        641,071         (232,893)
   Customer deposit.....      74,994      (7,107)        28,110          (35,624)
                          ----------  ----------   ------------   --------------
    Net cash provided by
     (used in) operating
     activities.........   1,786,137     313,912        481,470         (241,439)
                          ----------  ----------   ------------   --------------
CASH FLOWS FROM INVEST-
 ING ACTIVITIES
 Purchase of improve-
  ments and equipment...      (3,813)    (29,035)        (4,414)        (118,214)
 Redemption of certifi-
  cate of deposit.......     200,000   1,300,000         50,000              --
 (Increase) decrease in
  due from related par-
  ty....................  (1,752,324)   (533,138)      (516,448)         411,719
                          ----------  ----------   ------------   --------------
    Net cash provided by
     (used in) investing
     activities.........  (1,556,137)    737,827       (470,862)         293,505
                          ----------  ----------   ------------   --------------
CASH FLOWS FROM FINANC-
 ING ACTIVITIES
 Principal payments on
  long-term debt........         --      (51,739)           --           (51,966)
 Cash dividends paid....    (230,000) (1,000,000)           --               --
                          ----------  ----------   ------------   --------------
    Net cash (used in)
     financing activi-
     ties...............    (230,000) (1,051,739)           --           (51,966)
                          ----------  ----------   ------------   --------------
    Net increase in
     cash...............         --          --          10,608              100
CASH
 Beginning..............         350         350            350              350
                          ----------  ----------   ------------   --------------
 Ending.................  $      350  $      350   $     10,958   $          450
                          ==========  ==========   ============   ==============
SUPPLEMENTAL DISCLOSURES
 OF CASH FLOW
 INFORMATION, cash pay-
 ments for interest.....  $      --   $   20,019   $        --    $          --
SUPPLEMENTAL SCHEDULE OF
 NONCASH
 INVESTING AND FINANCING
 ACTIVITIES,
 Prepaid advertising ac-
 quired in exchange for
 long-term debt (Note
 3).....................  $      --   $  436,448   $        --    $          --
</TABLE>
 
                  See Notes to Combined Financial Statements.
 
                                      F-23
<PAGE>
 
                   PROFESSIONAL FARMERS OF AMERICA, INC. AND
                     PROFESSIONAL MARKET MANAGEMENT, INC.
 
                    NOTES TO COMBINED FINANCIAL STATEMENTS
 
NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
 
NATURE OF BUSINESS: Professional Farmers of America, Inc. provides
agricultural market and management advisory news services through printed and
electronic media to agribusiness and futures industry clients located
primarily in the United States and Canada. Professional Market Management,
Inc. coordinates the marketing of producers' grain through local elevators
executing Professional Farmers of America, Inc.'s grain marketing advice for
the producers.
 
SIGNIFICANT ACCOUNTING POLICIES:
 
PRINCIPLES OF COMBINATION: The accompanying combined financial statements
include the accounts of Professional Farmers of America, Inc. ("PFA") and
Professional Market Management, Inc. ("PMM"), which are each owned by the same
individual stockholder. All material related party balances and transactions
have been eliminated in combination.
 
ACCOUNTING ESTIMATES AND ASSUMPTIONS: The preparation of financial statements
in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ from
those estimates.
 
DEPRECIATION: Depreciation is computed principally by accelerated methods over
estimated useful lives.
 
DEFERRED CUSTOMER ACQUISITION COSTS: Deferred customer acquisition costs
consist of direct response advertising costs and other direct costs associated
with the acquisition of a customer. Direct response advertising costs consist
primarily of the costs of direct mail promotional pieces incurred to acquire
new subscribers to PFA's printed products. Other customer acquisition costs
consist of hardware and software costs and sales commissionS incurred to
acquire new subscribers to PFA's electronic products. These costs are
capitalized and amortized using the straight-line method over the initial
subscription period of twelve months.
 
The capitalized costs are amortized using the revenue forecast method over the
estimated renewal lives. Lives are determined using PFA's historical
subscriber renewal data which indicates that approximately 20% (one-half year
convention), 35%, 25% and 20% of the revenues are generated in years one
through four, respectively, after a customer is acquired. Costs and related
accumulated amortization are eliminated as they become fully amortized.
 
PFA's policy is to evaluate the remaining life and recoverability of these
costs in light of current conditions and estimates of future cash flows. Based
on these evaluations, PFA has concluded that it is reasonably possible that
those estimates will change in the near term, particularly with respect to
more recently incurred customer acquisition costs which tend to have less
historical customer retention data and thus require more subjectivity in
estimating future activity.
 
PREPAID ADVERTISING: PFA has purchased advertising rights in an industry
magazine and recognizes expense as the magazine is published. The portion to
be expensed in the next twelve months is included in current assets.
 
SUBSCRIPTION REVENUE: Subscription revenue is recognized as publications and
services are delivered to subscribers. Unearned subscription revenue
represents paid subscriptions from publications and services to be delivered
in future periods.
 
                                     F-24
<PAGE>
 
                   PROFESSIONAL FARMERS OF AMERICA, INC. AND
                     PROFESSIONAL MARKET MANAGEMENT, INC.
 
              NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
 
UNAUDITED INTERIM FINANCIAL STATEMENTS: The accompanying unaudited combined
financial statements have been prepared in accordance with the requirements
for presentation of interim financial statements and, therefore, do not
include all information and footnotes necessary for a fair presentation of
financial position, results of operations, and cash flows in conformity with
generally accepted accounting principles. In the opinion of management, all
adjustments, consisting only of normal recurring adjustments, that are
necessary for a fair presentation for interim periods presented have been
reflected. The results of operations for interim periods are not necessarily
indicative of the results of operations for the entire year.
 
PRO FORMA INCOME TAXES: The Companies, with the consent of their stockholders,
have elected to be taxed as an S Corporation under Section 1372 of the
Internal Revenue Code and a similar section of the state income tax law, which
provide that, in lieu of corporate income taxes, the stockholders separately
account for their proportionate share of the Companies' items of income, gain,
losses, deductions and credits. The financial statements include pro forma
provisions for corporate income taxes as if the Companies were taxable C
Corporations.
 
NOTE 2. ADVERTISING COSTS
 
At December 31, 1996 and 1997, $688,842 and $1,087,159, respectively, of
advertising costs were reported as assets. Advertising expense for the years
ended December 31, 1996 and 1997, was approximately $631,000 and $774,000,
including amortization of direct response advertising of approximately
$401,000 and $449,000, respectively.
 
NOTE 3. RELATED PARTY TRANSACTIONS, LONG-TERM DEBT AND COMMON STOCK PLEDGED
 
The Companies are affiliated with Oster Communications, Inc., FutureSource
Information Systems, Inc. and several other entities through a common
stockholder group and common management. The companies in the group provide
certain services to one another and to stockholders at cost. Approximately 25%
and 27% of 1996 and 1997 operating expenses, respectively, represent cost
allocations from related parties for these services. Balances due from Oster
Communications, Inc. bear interest at 10%. Interest income on the amounts due
from Oster Communications, Inc. for the years ended December 31, 1996 and 1997
was $300,497 and $418,081, respectively.
 
PFA, Oster Communications, Inc., FutureSource Information Systems, Inc. and a
stockholder have jointly entered into a credit agreement with a bank for the
following revolving credit loans.
 
    Loan A: $1,000,000 line of credit facility. Interest is payable monthly
  through June 30, 1998 when all remaining principal and interest is due.
  This loan bears interest at the bank's prime rate (8.5% at December 31,
  1997). Oster Communications, Inc. had outstanding borrowings of $1,000,000
  at December 31, 1997.
 
    Loan B: $3,750,000 line of credit facility. Interest is payable monthly
  through June 30, 1998 when all remaining principal and interest are due.
  This loan bears interest at the bank's prime rate plus 1% (9.5% at December
  31, 1997). Oster Communications, Inc. had outstanding borrowings of
  $685,000 at December 31, 1997.
 
All of PFA's common stock has been pledged as collateral on these outstanding
borrowings and the Company has guaranteed repayment of all outstanding
borrowings.
 
                                     F-25
<PAGE>
 
                   PROFESSIONAL FARMERS OF AMERICA, INC. AND
                     PROFESSIONAL MARKET MANAGEMENT, INC.
 
              NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
 
PFA entered into an agreement with its stockholder to purchase advertising
rights in an industry magazine. PFA recorded a $436,448 note payable to the
stockholder as well as prepaid advertising expense. The note is unsecured and
requires monthly payments of $10,500 including interest at 9% through July
2001.
 
Aggregate maturities by year as of December 31, 1997 are as follows:
 
<TABLE>
   <S>                                                                  <C>
   1998................................................................ $ 95,242
   1999................................................................  104,176
   2000................................................................  113,948
   2001................................................................   71,343
                                                                        --------
                                                                        $384,709
                                                                        ========
</TABLE>
 
NOTE 4. LEASE AGREEMENTS AND RENT EXPENSE
 
PFA leases certain communication services used to transmit information to its
customers under noncancelable operating lease agreements expiring from
December 31, 1999 to March 2001. PFA also leases equipment under noncancelable
operating lease agreements expiring in December 1999.
 
Following are approximate future minimum payments required under the
agreements as of December 31, 1997:
 
<TABLE>
   <S>                                                                 <C>
   Year ending December 31:
    1998.............................................................. $246,000
    1999..............................................................  228,000
    2000..............................................................  143,000
    2001..............................................................   29,000
                                                                       --------
                                                                       $646,000
                                                                       ========
</TABLE>
 
Total rental expense was $175,931 and $190,130 for the years ended December
31, 1996 and 1997, respectively.
 
NOTE 5. 401(K) PLAN
 
Substantially all employees of the Companies may participate in Oster
Communications, Inc.'s 401(k) plan. Contributions by the Companies are made at
the discretion of their Boards of Directors. Contributions by the Companies to
the plan for the years ended December 31, 1996 and 1997 were $3,569 and
$4,654, respectively.
 
NOTE 6. DEFERRED COMPENSATION AGREEMENT
 
PFA has entered into a deferred compensation agreement with an employee which
provides benefits payable at age 65 or if he becomes totally disabled. Under
certain circumstances, benefits are payable to his designated beneficiary. The
deferred compensation charged to expense totaled $30,112 and $32,288 for the
years ended December 31, 1996 and 1997, respectively.
 
NOTE 7. SUBSEQUENT EVENT
 
On April 2, 1998, the Companies' stockholder sold his shares of the Companies'
stock for $10,900,000 in cash plus approximately $1,000,000 of preferred stock
of the acquiring Company.
 
                                     F-26
<PAGE>
 
--------------------------------------------------------------------------------
 
 NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UN-
LAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSE-
QUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE SUCH DATE.
 
                                  -----------
 
                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
Prospectus Summary........................................................    3
Risk Factors..............................................................   11
Use of Proceeds...........................................................   17
Management Purchase.......................................................   17
Capitalization............................................................   18
Dividend Policy...........................................................   19
Dilution..................................................................   19
Unaudited Pro Forma Combined Financial Data...............................   20
Selected Consolidated Financial Data......................................   28
Management's Discussion and Analysis of Financial Condition and Results of
 Operations...............................................................   31
Business..................................................................   39
Management................................................................   52
Certain Relationships and Related Transactions............................   57
Principal Stockholders....................................................   58
Description of Capital Stock..............................................   60
Shares Eligible for Future Sale...........................................   63
Underwriting..............................................................   65
Notice to Canadian Residents..............................................   66
Legal Matters.............................................................   67
Experts...................................................................   67
Additional Information....................................................   68
Index to Financial Statements.............................................  F-1
</TABLE>
 
                                  -----------
 
 UNTIL     , 1998 (25 DAYS AFTER THE COMMENCEMENT OF THIS OFFERING), ALL DEAL-
ERS EFFECTING TRANSACTIONS IN THE CLASS A COMMON STOCK OFFERED HEREBY, WHETHER
OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PRO-
SPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPEC-
TUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
 
--------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------
 
                                        Shares
 
                          THE FARM JOURNAL CORPORATION
 
                              Class A Common Stock
                          (par value $0.01 per share)
 
 
                                   PROSPECTUS
 
 
 
                           CREDIT SUISSE FIRST BOSTON
 
                                  FURMAN SELZ
 
                           MORGAN SCHIFF & CO., INC.
 
 
 
--------------------------------------------------------------------------------
<PAGE>
 
                                    PART II
 
                    INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
 
  The following is an itemization of all estimated expenses incurred or
expected to be incurred by the Registrant in connection with the issuance and
distribution of the securities being registered hereby, other than
underwriting discounts and commissions.
 
<TABLE>
<CAPTION>
        ITEM                                                           AMOUNT
        ----                                                          ---------
   <S>                                                                <C>
   SEC Registration Fee.............................................. $  10,325
   NASD Filing Fee...................................................     4,000
   Nasdaq Listing Fee................................................     *
   Blue Sky Fees and Expenses........................................     5,000
   Printing and Engraving Costs......................................   250,000
   Transfer Agent Fees...............................................     *
   Legal Fees and Expenses...........................................     *
   Accounting Fees and Expenses......................................     *
   Miscellaneous.....................................................     *
                                                                      ---------
     Total........................................................... $   *
                                                                      =========
</TABLE>
--------
*To be filed by amendment.
 
  All amounts are estimated except for the SEC Registration Fee and the NASD
filing fee.
 
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
 
  The Company is incorporated under the laws of the State of Delaware. Section
145 of the General Corporation Law of the State of Delaware ("Section 145")
provides that a Delaware corporation may indemnify any person who is, or is
threatened to be made, a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of such corporation), by reason of
the fact that such person was an officer, director, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding, provided such person acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the corporation's best interests and, with respect to any criminal action
or proceeding, had no reasonable cause to believe that his conduct was
illegal. A Delaware corporation may indemnify any person who is, or is
threatened to be made, a party to any threatened, pending or completed action
or suit by or in the right of the corporation by reason of the fact that such
person was a director, officer, employee or agent of such corporation, or is
or was serving at the request of such corporation as a director, officer,
employee or agent of another corporation or enterprise. The indemnity may
include expenses (including attorneys' fees) actually and reasonably incurred
by such person in connection with the defense or settlement of such action or
suit, provided such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the corporation's best interests except
that no indemnification is permitted without judicial approval if the officer
or director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against the expenses
which such officer or director has actually and reasonably incurred.
 
  The Company's Amended and Restated Certificate of Incorporation provides for
the indemnification of directors and officers of the Company to the fullest
extent permitted by Section 145. In that regard, the Amended and Restated
Certificate of Incorporation provides that the Company shall indemnify any
person who was or is a
 
                                     II-1
<PAGE>
 
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director or officer of such
corporation, or is or was serving at the request of such corporation as a
director, officer or member of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorney's
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of such corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. Indemnification in connection with an action or suit by or in the
right of such corporation to procure a judgment in its favor is limited to
payment of settlement of such an action or suit except that no such
indemnification may be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the indemnifying corporation
unless and only to the extent that the Court of Chancery of Delaware or the
court in which such action or suit was brought shall determine that, despite
the adjudication of liability but in consideration of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper.
 
  In addition, the By-laws of the Company provide that the Company shall
indemnify to the full extent authorized by law any person made or threatened
to be made a party to an action, suit or proceeding, whether criminal, civil,
administrative or investigative, by reason of the fact that he, his testator
or intestate is or was a director, officer, employee or agent of the Company
or is or was serving, at the request of the Company, as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise.
 
  The Company has purchased an insurance policy effective upon consummation of
the Offering covering indemnification of directors and officers of the
Registrant against certain liabilities arising under the Securities Act that
might be incurred by them in such capacities.
 
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
 
  The Company issued the following securities (not adjusted for the
Recapitalization):
 
<TABLE>
<CAPTION>
                            NO. OF
         PURCHASER          SHARES     DATE           CLASS/TYPE      PAR VALUE
         ---------          ------     ----           ----------      ---------
   <S>                      <C>    <C>           <C>                  <C>
   MS Farm International
    Limited Partnership.... 92,800 April 1, 1997 Class A Common Stock   $0.01
   MS Farm International
    Limited Partnership....  9,079 July 15, 1997 Class B Common Stock   $0.01
   MS Farm International
    Limited Partnership....  8,008 April 1, 1997 Class A Common Stock   $0.01
   MS Farm International
    Limited Partnership....    791 July 15, 1997 Class B Common Stock   $0.01
   Professional Farmers of
    America, Inc. .........  2,725 April 2, 1998 Preferred Stock        $0.01
</TABLE>
 
  The issuances cited above were exempt from registration under the Securities
Act pursuant to Section 4(2) of the Securities Act.
 
                                     II-2
<PAGE>
 
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 
  (a) Exhibits.
 
<TABLE>
<CAPTION>
 NUMBER                               DESCRIPTION
 ------                               -----------
 <C>    <S>
   *1   Form of Underwriting Agreement
   2.1  Stock Purchase Agreement dated as of January 23, 1997 between MS Farm
        Journal Corporation and Tribune Company
   2.2  Assignment and Assumption Agreement dated as of April 1, 1997 between
        MS Farm Journal Corporation and Farm Journal Holdings Inc.
   2.3  Note Purchase Agreement dated as of April 1, 1997 among Farm Journal,
        Inc., Farm Journal Holdings Inc. and Teachers Insurance and Annuity
        Association of America
   2.4  Stock Purchase Agreement dated as of March 17, 1998 among Farm Journal
        Holdings Inc. and the Stockholders of Professional Farmers of America,
        Inc
   2.5  Stock Purchase Agreement dated as of March 17, 1998 among Farm Journal
        Holdings Inc. and Professional Market Management, Inc.
  *3.1  Articles of Incorporation of Registrant
  *3.2  By-Laws of Registrant
   *4   Form of Common Stock Certificate
   *5   Opinion of Milbank, Tweed, Hadley & McCloy
  10.1  Employment Agreement dated as of March 28, 1997 between MS Farm Journal
        Corporation and Stanford Erickson
  10.2  Assignment and Assumption Agreement dated as of April 1, 1997 between
        MS Farm Journal Corporation and Farm Journal, Inc. relating to Stanford
        Erickson Employment Agreement
  10.3  Employment Agreement dated as of March 27, 1997 between MS Farm Journal
        Corporation and Roger Randall
  10.4  Assignment and Assumption Agreement dated as of April 1, 1997 between
        MS Farm Journal Corporation and Farm Journal, Inc. relating to Roger
        Randall Employment Agreement
  10.5  $15,000,000 Credit Facility Agreement dated as of April 2, 1998 among
        Farm Journal, Inc., Farm Journal Holdings Inc. and First Union National
        Bank
  10.6  Lease dated July 17, 1995 for property located in Centre Square
        Complex, Philadelphia, PA
  10.7  Farm Journal Holdings Inc. Incentive Stock Option Plan
 *11    Statement re computation of per share earnings
  21    Subsidiaries of Registrant
  23.1  Consent of Deloitte & Touche LLP
  23.2  Consent of McGladrey & Pullen, LLP
 *23.3  Consent of Milbank, Tweed, Hadley & McCloy (included in its opinion
        filed as Exhibit 5 hereto)
  24    Power of Attorney (included on signature pages hereto)
  27    Financial Data Schedule
</TABLE>
--------
*To be filed by amendment.
 
                                      II-3
<PAGE>
 
  (b) Financial Statement Schedules.
 
    Schedule I--Condensed Financial Information of Registrant
 
    Schedule II--Valuation and Qualifying Accounts
 
  All other schedules have been omitted as they are inapplicable, or the other
information is included in the financial statements.
 
ITEM 17. UNDERTAKINGS
 
  (a) The undersigned registrant hereby undertakes to provide the Underwriters
at the Closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
 
  (b) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission, such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel that matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
 
  (c) The undersigned Registrant hereby undertakes that:
 
    (1) For purposes of determining any liability under the Act, the
  information omitted from the form of prospectus filed as part of this
  Registration Statement in reliance upon Rule 430A and contained in a form
  of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
  497(h) under the Act shall be deemed to be part of this Registration
  Statement as of the time it was declared effective.
 
    (2) For the purpose of determining any liability under the Act, each
  post-effective amendment that contains a form of prospectus shall be deemed
  to be a new registration statement relating to the securities offered
  therein, and the offering of such securities at that time shall be deemed
  to be the initial bona fide offering thereof.
 
                                     II-4
<PAGE>
 
                                  SIGNATURES
 
  Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Philadelphia,
Pennsylvania on this 10th day of June, 1998.
 
                                          THE FARM JOURNAL CORPORATION
 
                                                /s/ Stanford A. Erickson
                                          By: _________________________________
                                            Name: Stanford A. Erickson
                                            Title: Chairman of the Board,
                                                 Chief Executive Officer
 
                               POWER OF ATTORNEY
 
  KNOW ALL MEN AND WOMEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Stanford A. Erickson and Richard K.
Stanislaw and each or any of them, as his true and lawful attorney-in-fact and
agent, with full power of substitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments or post-
effective amendments to this Registration Statement, and to file the same,
with all exhibits thereto, which amendments may make such changes in this
Registration Statement as such agent deems appropriate, and to file any new
registration statement (and any post-effective amendment thereto) which
registers additional securities of the same class and for the same offering as
this Registration Statement in accordance with Rule 462(b) under the
Securities Act (each, a "462(b) Registration Statement"), and the Registrant
and each such person hereby appoints each such Agent as attorney-in-fact to
execute in the name and on behalf of the Registrant and each such person,
individually and in each capacity stated below, any such amendments to this
registration statement and any such 462(b) Registration Statements, and other
documents in connection therewith, with the Commission.
 
  Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
 
<TABLE>
<CAPTION>
              SIGNATURE                         TITLE                 DATE
              ---------                         -----                 ----
 
 <C>                                  <S>                         <C>
       /s/ Stanford A. Erickson       Chairman of the Board and   June 10, 1998
 ____________________________________  Chief Executive Officer
         Stanford A. Erickson          (Principal
                                       Executive Officer)
 
         /s/ Roger D. Randall         President and Chief         June 10, 1998
 ____________________________________  Operating Officer and
           Roger D. Randall            Director
 
       /s/ Richard K. Stanislaw       Chief Financial Officer     June 10, 1998
 ____________________________________  (Principal Financial and
         Richard K. Stanislaw          Accounting Officer)
 
       /s/ J. Carr Gamble, III        Secretary and Director      June 10, 1998
 ____________________________________
         J. Carr Gamble, III
</TABLE>
 
                                     II-5
<PAGE>
 
<TABLE>
<CAPTION>
              SIGNATURE                 TITLE        DATE
              ---------                 -----        ----
 
 <C>                                  <S>        <C>
    /s/ Sterling B. Brinkley, Jr.     Director   June 10, 1998
 ____________________________________
      Sterling B. Brinkley, Jr.
 
                                      Director         , 1998
 ____________________________________
            Mark C. Pickup
 
                                      Director         , 1998
 ____________________________________
            David J. Bates
 
                                      Director         , 1998
 ____________________________________
         Richard S. Werdiger
</TABLE>
 
                                      II-6
<PAGE>
 
  THE ACCOMPANYING FINANCIAL STATEMENTS REFLECT CHANGES TO THE TYPE AND NUMBER
OF COMMON SHARES AUTHORIZED AND A CONVERSION OF PREVIOUSLY OUTSTANDING COMMON
STOCK INTO NEWLY CREATED CLASSES OF COMMON STOCK, ALL OF WHICH IS TO BE
EFFECTED PRIOR TO THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT. THE
FOLLOWING OPINION IS IN THE FORM WHICH WILL BE SIGNED BY DELOITTE & TOUCHE LLP
UPON CONSUMMATION OF THE ABOVE EVENTS, WHICH ARE DESCRIBED IN NOTE 19 OF NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AND ASSUMING THAT FROM JANUARY 23, 1998
TO THE DATE OF SUCH EVENTS, NO OTHER EVENTS HAVE OCCURRED WHICH WOULD AFFECT
THE ACCOMPANYING FINANCIAL STATEMENTS AND NOTES THERETO.
 
Deloitte & Touche LLP
 
Philadelphia, Pennsylvania
June 10, 1998
 
                         INDEPENDENT AUDITORS' REPORT
 
The Farm Journal Corporation
 
  We have audited the consolidated financial statements of the Farm Journal
Corporation and Subsidiaries as of December 29, 1996 and December 31, 1997 and
for each of the three years in the period ended December 31, 1997 and have
issued our report thereon dated January 23, 1998, except for Note 19 as to
which the date is     , 1998, (included elsewhere in this Registration
Statement). Our audits also included the financial statement schedules listed
in Item 21 of this Registration Statement. These financial statement schedules
are the responsibility of the Company's management. Our responsibility is to
express an opinion based on our audits. In our opinion, the financial
statement schedules, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.
 
 
Philadelphia, Pennsylvania
January 23, 1998
(     as to Note 19)
 
                                      S-1
<PAGE>
 
                          THE FARM JOURNAL CORPORATION
 
                 CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                            CONDENSED BALANCE SHEETS
                             (PARENT COMPANY ONLY)
 
                                                                      SCHEDULE I
 
 
<TABLE>
<CAPTION>
                                                       DECEMBER 31,   MARCH 31,
                                                           1997         1998
                                                       ------------  -----------
                                                                     (UNAUDITED)
<S>                                                    <C>           <C>
ASSETS--Investment in equity of subsidiaries.......... $ 8,448,756   $10,464,252
                                                       ===========   ===========
TOTAL................................................. $ 8,448,756   $10,464,252
                                                       ===========   ===========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Preferred Stock $.01 par value, 2,725 shares
 authorized     issued and outstanding at March 31,
 1998.................................................
Shareholders' equity:
Common Stock:
  Class A, $.01 par value,     shares authorized,
   issued and outstanding.............................
  Class B, $.01 par value,     shares authorized,
   102,786 issued and outstanding.....................               $     1,028
  Class A, $.01 par value, 111,000 shares authorized;
   issued and outstanding 100,808 shares in 1997, none
   at March 31 1998................................... $     1,008
  Class B, convertible into Class A common stock, $.01
   par value, 99,000 shares authorized, 9,870 shares
   issued and outstanding 1997, none at March 31,
   1998...............................................          99
Additional paid-in capital............................   9,928,533    10,291,722
Retained earnings.....................................  (1,480,884)      171,502
                                                       -----------   -----------
    Total shareholders' equity........................   8,448,756    10,464,252
                                                       -----------   -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY............ $ 8,448,756   $10,464,252
                                                       ===========   ===========
</TABLE>
 
 
                       See notes to financial statements.
 
                                      S-2
<PAGE>
 
                          THE FARM JOURNAL CORPORATION
 
                 CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                       CONDENSED STATEMENTS OF OPERATIONS
                             (PARENT COMPANY ONLY)
 
                                                                      SCHEDULE I
 
 
<TABLE>
<CAPTION>
                                                      NINE MONTHS   THREE MONTHS
                                                         ENDED         ENDED
                                                      DECEMBER 31,   MARCH 31,
                                                          1997          1998
                                                      ------------  ------------
                                                                    (UNAUDITED)
<S>                                                   <C>           <C>
Equity in net income (loss) of subsidiaries.......... $(1,480,884)   $1,652,386
                                                      -----------    ----------
NET INCOME (LOSS).................................... $(1,480,884)   $1,652,386
                                                      ===========    ==========
</TABLE>
 
 
 
                       See notes to financial statements.
 
                                      S-3
<PAGE>
 
                          THE FARM JOURNAL CORPORATION
 
                 CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                       CONDENSED STATEMENTS OF CASH FLOWS
                             (PARENT COMPANY ONLY)
 
                                                                      SCHEDULE I
 
 
<TABLE>
<CAPTION>
                                                      NINE MONTHS   THREE MONTHS
                                                         ENDED         ENDED
                                                      DECEMBER 31,   MARCH 31,
                                                          1997          1998
                                                      ------------  ------------
                                                                    (UNAUDITED)
<S>                                                   <C>           <C>
OPERATING ACTIVITIES:
  Net income (loss).................................. $(1,480,884)   $1,652,386
  Adjustment to reconcile net income to net cash pro-
   vided by operating activities.....................   1,480,884    (1,652,386)
                                                      -----------    ----------
    Net cash provided by operating activities........         --            --
                                                      -----------    ----------
INVESTING ACTIVITIES:
  Contribution of capital to subsidiaries............  (4,445,808)
  Acquisition of stock of Farm Journal, Inc. net of
   acquisition costs.................................  (5,483,832)
                                                      -----------
    Net cash used in investing activities............  (9,929,640)
                                                      -----------
FINANCIAL ACTIVITIES:
  Proceeds from issuance of Class A stock............   9,929,541
  Proceeds from issuance of Class B stock............          99
                                                      -----------
    Net cash provided by financing activities........   9,929,640
                                                      -----------    ----------
NET CHANGE IN CASH................................... $       --     $      --
                                                      ===========    ==========
</TABLE>
 
 
 
                       See notes to financial statements.
 
                                      S-4
<PAGE>
 
                                                                     SCHEDULE I
                         THE FARM JOURNAL CORPORATION
 
            NOTES TO CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                             (PARENT COMPANY ONLY)
1. BASIS OF PRESENTATION
 
  The accompanying condensed financial statements include the accounts of The
  Farm Journal Corporation (the Parent) and on an equity basis its
  subsidiaries and should be read in conjunction with the consolidated
  financial statements of The Farm Journal Corporation and Subsidiaries (the
  "Company") and the notes thereto.
 
2. SUBSEQUENT EVENT
 
  DEBT WAIVER--On March 27, 1998 the Company obtained a waiver of the debt
  covenant violation described in Note 8.
 
  ACQUISITION AND RELATED FINANCING--On April 1, 1998, the Company entered
  into a $15,000,000 Reducing Revolving Credit Facility (the "Bank
  Facility"). The interest rate on the Bank Facility is 8.5% annually,
  subject to adjustment from time to time with a term that expires in 2005.
  The Bank Facility includes requirements as to the maintenance of financial
  ratios and minimum tangible net worth amounts and restrictions of certain
  asset sales, other significant transactions, as well as certain reporting
  requirements. On April 2, 1998, the Company consummated an acquisition of
  the assets of Professional Farmers of America, Inc. and Professional Market
  Management, Inc. (collectively, the "PFA Acquisition"). The total
  consideration paid for the PFA Acquisition included $11,000,000 in cash and
  $1,000,000 in liquidation value of an issue of preferred stock of the
  Company that was approved by the Board of Directors on March 17, 1998. The
  preferred stock is cumulative, non-voting, convertible automatically into
  shares of common stock issued by the Company through an initial public
  offering, and if outstanding at the time, putable to the Company during a
  30-day period beginning on the third anniversary of issuance for
  $1,100,000. The conversion feature provides that the preferred stock will
  be converted at the closing of an initial public offering into $1,000,000
  of common stock at the price sold to the public. The acquisition was
  completed with a cash payment of $3,000,000 and an $8,000,000 drawdown of
  the Bank Facility.
 
  LETTER OF INTENT--On June 2, 1998 the Company entered into a letter of
  intent to purchase the assets of another media company for $4,750,000,
  including $1,000,000 of shares of the class of common stock issued to the
  public at the price sold to the public.
 
  NAME CHANGE--On June 5, 1998, FJC amended its Certificate of Incorporation
  to change its name to The Farm Journal Corporation.
 
  INITIAL PUBLIC OFFERING--The Company has entered into a letter of intent
  with representatives of underwriters to sell in an Offering shares of its
  common stock. The proceeds of the Offering will be used to repay
  $13,800,000 of debt and to find the Company's business expansion plans,
  including acquisitions, and for working capital and other general corporate
  purposes.
 
  RECAPITALIZATION--On      1998, FJC amended and restated its Certificate of
  Incorporation to (i) change the authorized capital stock of FJC to
  shares of Class A Common Stock, par value $0.01 per share,     shares of
  Class B Common Stock, par value $0.01 per share and 2,725 shares of
  Convertible Redeemable Preferred Stock, par value $0.01 per share; (ii)
  reclassify each outstanding share of original Class A Common Stock into
  shares of its newly created Class B Common Stock; (iii) reclassify each
  outstanding share of original Class B Common Stock into     shares of its
  newly created Class A Common Stock; and (iv) change the rights and
  privileges of the Class A Common Stock and Class B Common Stock. This stock
  conversion has been given retroactive recognition in the accompanying
  financial statements as of March 31, 1998.
 
                                     *****
 
                                      S-5
<PAGE>
 
                          THE FARM JOURNAL CORPORATION
 
                       VALUATION AND QUALIFYING ACCOUNTS
 
                                                                     SCHEDULE II
 
 
<TABLE>
<CAPTION>
                                                                       BALANCE
                                BALANCE AT  CHARGED TO                   AT
                               BEGINNING OF  COST AND                  END OF
                                  PERIOD     EXPENSES  DEDUCTIONS (A)  PERIOD
                               ------------ ---------- -------------- ---------
<S>                            <C>          <C>        <C>            <C>
For the year ended December
 31, 1995
  Accounts receivable allow-
   ances......................   $163,653    $121,541    $(125,289)   $ 159,905
For the year ended December
 29, 1996
  Accounts receivable allow-
   ances......................    159,905      55,001      (98,551)     116,355
For the year ended December
 31, 1997
  Accounts receivable allow-
   ances......................    116,355      74,206      (42,731)     147,830
For the three months ended
 March 31, 1998
  Accounts receivable allow-
   ances (Unaudited)..........    147,830      79,032                   226,862
</TABLE>
--------
(a) Amounts written off against related assets
 
                                      S-6
<PAGE>
 
                                 EXHIBIT INDEX
 
 
<TABLE>
<CAPTION>
 NUMBER                               DESCRIPTION
 ------                               -----------
 <C>    <S>
  *1    Form of Underwriting Agreement
   2.1  Stock Purchase Agreement dated as of January 23, 1997 between MS Farm
        Journal Corporation and Tribune Company
   2.2  Assignment and Assumption Agreement dated as of April 1, 1997 between
        MS Farm Journal Corporation and Farm Journal Holdings Inc.
   2.3  Note Purchase Agreement dated as of April 1, 1997 among Farm Journal,
        Inc., Farm Journal Holdings Inc. and Teachers Insurance and Annuity
        Association of America
   2.4  Stock Purchase Agreement dated as of March 17, 1998 among Farm Journal
        Holdings Inc. and the Stockholders of Professional Farmers of America,
        Inc.
   2.5  Stock Purchase Agreement dated as of March 17, 1998 among Farm Journal
        Holdings Inc. and Professional Market Management, Inc.
  *3.1  Articles of Incorporation of Registrant
  *3.2  By-Laws of Registrant
  *4    Form of Common Stock Certificate
  *5    Opinion of Milbank, Tweed, Hadley & McCloy
  10.1  Employment Agreement dated as of March 28, 1997 between MS Farm Journal
        Corporation and Stanford Erickson
  10.2  Assignment and Assumption Agreement dated as of April 1, 1997 between
        MS Farm Journal Corporation and Farm Journal, Inc. relating to Stanford
        Erickson Employment Agreement
  10.3  Employment Agreement dated as of March 27, 1997 between MS Farm Journal
        Corporation and Roger Randall
  10.4  Assignment and Assumption Agreement dated as of April 1, 1997 between
        MS Farm Journal Corporation and Farm Journal, Inc. relating to Roger
        Randall Employment Agreement
  10.5  $15,000,000 Credit Facility Agreement dated as of April 2, 1998 among
        Farm Journal, Inc., Farm Journal Holdings Inc. and First Union National
        Bank
  10.6  Lease dated July 17, 1995 for property located in Centre Square
        Complex, Philadelphia, PA
  10.7  Farm Journal Holdings Inc. Incentive Stock Option Plan
  *11   Statement re computation of per share earnings
  21    Subsidiaries of Registrant
  23.1  Consent of Deloitte & Touche LLP
  23.2  Consent of McGladrey & Pullen, LLP
 *23.3  Consent of Milbank, Tweed, Hadley & McCloy (included in its opinion
        filed as Exhibit 5 hereto)
  24    Power of Attorney (included on signature pages hereto)
  27    Financial Data Schedule
</TABLE>
--------
*To be filed by amendment.
[{"type": "S-1", "sequence": "1", "description": "FORM S-1", "secsgml_size_bytes": 402451}]
{"company-data": {"conformed-name": "FARM JOURNAL CORP", "cik": "0001059662", "assigned-sic": "", "irs-number": "133938061", "state-of-incorporation": "DE"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-56563", "film-number": "98646170"}, "business-address": {"street1": "1500 MARKET ST", "street2": "CENTRE SQUARE W", "city": "PHILADELPHIA", "state": "PA", "zip": "19102", "phone": "2155578900"}, "former-company": {"former-conformed-name": "FARM JOURNAL HOLDINGS INC", "date-changed": "19980520"}}
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 11, 1998
                                                     REGISTRATION NO. 333-
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
 
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
 
                               ---------------
 
                                   FORM S-1
                            REGISTRATION STATEMENT
                                     UNDER
                          THE SECURITIES ACT OF 1933
 
                               ---------------
 
                         THE FARM JOURNAL CORPORATION
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
                               ---------------
DELAWARE                         2721                        13-3938061
 (STATE OR OTHER JURISDICTION   (PRIMARY STANDARD INDUSTRIAL         (I.R.S. EMPLOYER
 OF INCORPORATION OR ORGANIZA-
             TION)               CLASSIFICATION CODE NUMBER)       IDENTIFICATION NUMBER)
1500 MARKET STREET
                              CENTRE SQUARE WEST
                            PHILADELPHIA, PA 19102
                                (215) 557-8900
                        ATTN: MR. STANFORD A. ERICKSON
                     CHAIRMAN AND CHIEF EXECUTIVE OFFICER
  (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
                   REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
 
                               ---------------
 
           IT IS REQUESTED THAT COPIES OF COMMUNICATIONS BE SENT TO:
DONALD B. BRANT, JR.                              R.W. SMITH, JR.
       MILBANK, TWEED, HADLEY & MCCLOY                     PIPER & MARBURY L.L.P.
          ONE CHASE MANHATTAN PLAZA                         CHARLES CENTER SOUTH
          NEW YORK, NEW YORK 10005                        36 SOUTH CHARLES STREET
               (212) 530-5000                            BALTIMORE, MARYLAND 21201
                                                              (410) 539-2530
---------------
 
  APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this registration statement.
 
  If any of the Securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 of the Securities Act of
1933, check the following box: [_]
 
  If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
 
  If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
 
  If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
 
  If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
                        CALCULATION OF REGISTRATION FEE

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PROPOSED
                                                          MAXIMUM
                                                         AGGREGATE   AMOUNT OF
                TITLE OF EACH CLASS OF                   OFFERING   REGISTRATION
              SECURITIES TO BE REGISTERED                PRICE(1)       FEE
--------------------------------------------------------------------------------
Class A Common Stock .................................  $35,000,000   $10,325
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee
    pursuant to Rule 457(c) under the Securities Act of 1933, as amended.
 
                               ---------------
 
  THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
 
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A         +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE   +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY  +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT        +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR   +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE      +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE    +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF  +
+ANY SUCH STATE.                                                               +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
 
                 SUBJECT TO COMPLETION DATED            , 1998
 
                                     [LOGO]
 
                                       Shares
                          THE FARM JOURNAL CORPORATION
                              Class A Common Stock
                           (par value $.01 per share)
 
                                   --------
 
All of the            shares of Class A Common Stock, par value $0.01 per share
("Class A  Common Stock"), offered  hereby are being  sold by The  Farm Journal
 Corporation ("Farm Journal"  or the  "Company"). Prior to  this offering  (the
 "Offering"), there has been no public market  for the Class A Common Stock of
 Farm   Journal.  It  is   anticipated  that   the  initial  public   offering
  price will be between $    and  $    per share. For information relating  to
  the factors  considered in determining  the initial  public offering price,
  see "Underwriting."
 
The Company's Common  Stock ("Common Stock")  consists of Class  A Common Stock
and Class B Common  Stock, par value $0.01 per share  ("Class B Common Stock").
The  holders of Class  A Common  Stock, voting as  a class,  have the right  to
elect that minimum number of directors constituting 25% of the members of Farm
 Journal's Board  of  Directors. Other  than  such right  to  elect directors,
 unless all of the shares of Class B Common Stock are converted into shares of
 Class A  Common Stock  or otherwise  cease to  be outstanding  and except  as
 required by the laws of the State of Delaware, holders of the Class A Common
 Stock have  no voting rights. Subject to the  foregoing limitation on voting
  rights and  certain other  exceptions, the  rights and  privileges of  each
  class of  Common Stock  are substantially  identical.  See "Description  of
  Capital Stock"  and "Risk  Factors--Control of  the Company; Anti-Takeover
  Impact."
 
Application has  been  made  to have  the  Class  A Common  Stock  approved  for
quotation on The Nasdaq
            Stock Market's National Market under the symbol "FJCO".
 
  FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION
 WITH AN INVESTMENT IN THE COMMON STOCK, SEE "RISK FACTORS" ON PAGE 11 HEREIN.
 
THESE SECURITIES HAVE  NOT BEEN APPROVED  OR DISAPPROVED BY  THE SECURITIES AND
EXCHANGE COMMISSION  OR ANY STATE SECURITIES COMMISSION NOR HAS  THE SECURITIES
 AND EXCHANGE COMMISSION  OR ANY  STATE SECURITIES COMMISSION  PASSED UPON THE
 ACCURACY OR ADEQUACY  OF THIS PROSPECTUS. ANY REPRESENTATION  TO THE CONTRARY
  IS A CRIMINAL OFFENSE.
UNDERWRITING
                                              PRICE    DISCOUNTS
                                               TO         AND      PROCEEDS TO
                                             PUBLIC   COMMISSIONS   COMPANY(1)
                                             ------   ------------ -----------
Per Share..................................    $          $            $
 Total(2)...................................  $         $             $
(1) Before deducting expenses payable by the Company estimated at $     .
 
(2) The Company has granted the Underwriters an option, exercisable for 30 days
    from the date of this Prospectus, to purchase a maximum of      additional
    shares to cover over-allotments of shares. If the option is exercised in
    full, the total Price to Public will be $     , Underwriting Discounts and
    Commissions will be $      , and Proceeds to Company will be $        .
 
  The Class A Common Stock is offered by the several Underwriters, when, as and
if issued by the Company, delivered to and accepted by the Underwriters and
subject to their right to reject orders in whole or in part. It is expected
that the shares of Class A Common Stock will be ready for delivery on or about
         , 1998 against payment in immediately available funds.
 
CREDIT SUISSE FIRST BOSTON
                FURMAN SELZ
                                                       MORGAN SCHIFF & CO., INC.
 
                        Prospectus dated         , 1998
[Artwork]
 
  CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES
OFFERED HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE
SHORT COVERING TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."
 
                               ----------------
 
  The Company's logo and each of the titles of the Company's publications
referenced herein are trademarks of the Company. Each trade name, trademark or
service mark of any other company appearing in this Prospectus is the property
of its holder.
 
                                       2
PROSPECTUS SUMMARY
 
  The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere in this Prospectus. Unless otherwise indicated or where the context
otherwise requires, the information contained in this Prospectus gives effect
to the recapitalization described in "Description of Capital Stock--
Recapitalization" and assumes no exercise of the Underwriters' over-allotment
option. The Farm Journal Corporation ("FJC") is a holding company conducting
business through its wholly-owned subsidiaries, including Farm Journal, Inc.
("FJI"), which was acquired in April 1997 (the "Management Purchase"). See
"Management Purchase." The term "Farm Journal" or the "Company" shall refer to
FJC and its consolidated subsidiaries subsequent to the Management Purchase and
FJI and its consolidated subsidiaries prior to the Management Purchase.
 
  Market data used throughout this Prospectus was obtained from surveys
conducted by the Company and from industry publications. These industry
publications generally indicate that the information contained therein has been
obtained from sources believed to be reliable, but that the accuracy and
completeness of such information is not guaranteed. The Company has not
independently verified such market data. These publications were not
commissioned by, or prepared at the request of, the Company or any of its
affiliates. Similarly, surveys conducted by the Company, while believed to be
reliable, have not been verified by an independent source.
 
                                  THE COMPANY
 
  Farm Journal is one of the country's oldest and largest providers of
agricultural information, principally through print and electronic publishing,
data management and related information services. The Company's publishing
operations include its 121 year old flagship publication, Farm Journal, one of
the largest circulation agriculture magazines in the United States; Pro Farmer,
the largest circulation newsletter devoted to the agricultural commodity
markets; several specialty agribusiness magazines, including Top Producer and
the Today livestock publications; the Links business, a satellite-delivered
agricultural commodity news and analysis service; and several agriculture-
oriented Internet sites. The Company's data management and information services
businesses, conducted through the Company's Farm Journal Information Resources
division ("FJIR"), provide proprietary data and analysis about commercial
farming and ranching operations to leading agricultural industry suppliers,
such as equipment manufacturers, seed producers and crop protection suppliers.
The Company believes that the Farm Journal brand is among the most trusted,
respected and authoritative names in American agriculture and that the
Company's database, created through over 30 years of direct communication with
American farmers and ranchers, is unique in its depth and accuracy.
 
  In April 1997, management and an investor group purchased FJI from Tribune
Company. Since the Management Purchase, the Company has begun implementing a
strategy to build on the Farm Journal brand and the Company's unique database
and sophisticated data analysis capabilities to become the worldwide market
leader for serving the large and growing need for quality information by
farmers and ranchers and the businesses that serve them. For the three months
ended March 31, 1998, the Company had pro forma net revenues and EBITDA of
$14.4 million and $4.1 million, respectively. For a description of the pro
forma adjustments and the components of EBITDA, see Notes 1, 2 and 8 to the
Summary Combined Financial Data.
 
MARKET OPPORTUNITY
 
  The United States Department of Agriculture ("USDA") estimates that in 1997
approximately $213 billion of agricultural products were sold in the United
States alone. Management believes worldwide agricultural sales are a multiple
of domestic sales. The size and increasing sophistication and complexity of the
global agricultural business has created a substantial and growing need for
quality information among farmers and ranchers. Farm businesses, to remain
competitive, must understand and adapt to rapid technological advancements,
curtailment
 
                                       3
of government subsidies and other policy changes, volatile commodities markets,
globalization of agricultural trade and other industry developments. Management
believes that the market for information and analysis needed by farm businesses
to address these issues is significant and underserved given the overall size
of the market for agricultural products.
 
  Management also believes that there is a related large and growing need for
quality information and information services among businesses that supply
farmers and ranchers. The increasing complexity of the industry, as well as its
capital intensive nature, has, among other things, resulted in the
consolidation of farms and purchasing power. According to the USDA,
approximately $133 billion of the estimated total of $174 billion in farm
supplies sold in 1996 were purchased by the 18% of all farms that generate
$100,000 or more in annual revenues, farms which the USDA classifies as "Class
1A farms." To reach these largest purchasers, agricultural product suppliers
increasingly are using targeted relationship marketing techniques which require
more detailed information about the most successful farmers and ranchers. Farm
Journal believes it is effectively positioned to satisfy the large and growing
domestic and worldwide demand for such information with the Company's database,
data services expertise and longstanding relationships with farmers and
ranchers.
 
GROWTH STRATEGY
 
  Farm Journal's objective is to aggressively grow revenues and improve
profitability while becoming the leading worldwide provider of agricultural
information and information services to farmers, ranchers, agricultural
suppliers and related constituencies. Farm Journal will continue to pursue
growth through numerous internal initiatives and strategic acquisitions that
leverage the Farm Journal brand and the Company's longstanding relationships in
the agricultural community and that build on the Company's other competitive
strengths, including content development and data services. The elements of
this strategy are set forth below:
 
  Increase Revenues from Existing Business. Management believes that there is
substantial opportunity to increase revenues from existing business and has
commenced a variety of revenue-enhancing initiatives. These initiatives have
included combining data management and market research operations and adding
sales and marketing directors to create new product and cross-selling
opportunities, increasing subscription rates and converting controlled-
circulation publications to partially-paid status, increasing the Company's
sales force, implementing performance-based compensation and emphasizing
classified advertising sales. In addition, management anticipates expanding its
Globalink and FutureLink commodity news and analysis businesses with new
marketing relationships and product introductions.
 
  Develop Related Revenue Opportunities. Farm Journal believes there are
numerous opportunities to develop additional revenues by leveraging the
Company's strong brand identity, data management capabilities and customer and
reader relationships. These opportunities include organization of conferences
and seminars; direct sales of books, videos and other merchandise; event
marketing; custom publishing for agricultural suppliers, trade groups and other
agricultural related constituencies; development of farm management services;
and the launch of new publications, including newsletters, directories, other
agricultural related business-to-business magazines and certain rural-oriented
titles. In launching new publications, management intends to build on its
strong customer relationships by seeking full or partial sponsorship to
minimize start-up costs.
 
  Pursue Strategic Acquisitions. Farm Journal intends to pursue strategic
acquisitions of agricultural related media and information businesses. The
Company's initial strategy will be to focus on acquisitions that will
immediately expand the Company's product and media offerings as well as create
benefits from cross-selling of advertisers, cross-promotion of readership and
expansion of the Farm Journal database. Emphasis will be placed on acquiring
companies that serve the Class 1A farm market. The Company intends to pursue
acquisitions of companies that operate in different media, such as television,
radio and the Internet; that provide coverage of those segments of the
agricultural industry not well-penetrated by Farm Journal, such as fruits,
vegetables and
 
                                       4
nuts; that address agricultural related businesses, such as food processing,
governmental regulation and shipping; and that target interests of rural
readers, such as hunting, gardening and crafts.
 
  Create Co-Branding and Affinity Programs. Management believes that, through
the extension of the Farm Journal brand, there are substantial opportunities to
serve its target audience (as well as other rural residents) through co-
branding and other joint ventures that offer value alternatives to products and
services that have traditionally been unavailable, not competitively priced or
not ideally structured for farmers, ranchers or other residents of rural
communities. Farm Journal has formed and is pursuing several strategic
alliances with selected financial services and consumer products companies to
co-brand and offer tailored or value-priced products and services to its rural
constituency. Initially these offers will include insurance, credit and
investment products and selected consumer items, such as home computers. Farm
Journal intends to expand into other areas in which the Company is able to
identify and offer products and services of superior value to the farming and
rural communities.
 
  Expand Internationally. The United States agricultural industry is the most
productive and technically sophisticated in the world, exporting its technology
and an estimated $57 billion of product in 1997. Given the Company's position
as a leading provider of agricultural information in the United States
agricultural industry and given a trend toward the globalization of
agricultural technology and trade, management believes that there is a
substantial long-term opportunity to expand its business activities overseas.
Initially, Farm Journal will launch a fully sponsored, custom published
international magazine targeted to selected agricultural decision-makers
worldwide and pursue joint ventures and other relationships with foreign
agribusiness information providers.
 
RECENT DEVELOPMENTS
 
  Since the Management Purchase, the Company has taken the following actions to
implement its growth strategy:
 
  PFA Acquisition. In April 1998, the Company acquired Professional Farmers of
America, Inc. and a related company (the "PFA Acquisition"). The businesses
acquired in the PFA Acquisition ("PFA") included the leading agricultural
commodity markets newsletter, Pro Farmer, and a satellite-delivered commodity
news and analysis service marketed under the Globalink and FutureLink brand
names.
 
  Livestock Publication Revenue Increases. Management has achieved significant
advertising sales increases in the Today livestock magazines following several
advertising sales initiatives, including a restructuring of the magazines'
sales force and the naming of a livestock publisher. During the first quarter
of 1998, revenues from these magazines were up more than 12% over the
comparable period in 1997.
 
  New Information Services Product. In November 1997, the Company was awarded a
contract for a new data management product that FJIR designed for a consortium
of members of the American Crop Protection Association. This project ("RAPID")
will result in a comprehensive farmer directory that will provide the
foundation of a system to capture point-of-sale information for manufacturers.
The Company also has realized incremental sales through leads initiated from
RAPID. The Company anticipates that technologies utilized for RAPID can be
applied to additional directory development projects.
 
  Co-Branding Agreements. In March 1998, the Company entered into an agreement
with The Member Companies of American International Group, Inc. to jointly
market private passenger automobile insurance to the Company's subscriber base.
Most recently, Farm Journal entered into an agreement with CIGNA Property and
Casualty to explore the sale of a variety of insurance products through a
cooperative marketing effort. Services that could be incorporated in such
marketing effort include data management, product advertising and the
organization of farmer seminars.
 
                                       5
Policy Conferences. In November 1997, Farm Journal organized a trade policy
conference in Washington, D.C. Speakers at the conference included Unites
States government cabinet members, members of the United States Congress and
several chief executives of major agricultural companies. The Company held a
second conference on clean water and food quality legislation in March 1998.
These conferences were sponsored and profitable.
 
  Top Producer Seminar Series. In the first quarter of 1998, the Company held
its first two Top Producer Executive Farmer Seminars targeted at farmers and
ranchers who generate high annual revenues. Each seminar featured high-profile
Top Producer columnists and large-scale farmers previously featured in the
magazine. Seminar revenue was generated through admission fees and
sponsorships. Each seminar attracted approximately 100 attendees whose average
annual sales of over $1.0 million placed them in the top 1% of commercial
farmers and ranchers. The Company intends to offer this seminar series at
additional locations as well as to expand its seminar offerings.
 
  International Developments. In January 1998, Farm Journal retained JFA
International Marketing Services, an international agribusiness consulting
firm, to launch a sponsored international magazine targeted to agricultural
decision-makers worldwide. In November 1997, the Company entered into an
editorial agreement with a Japanese publication to reprint Dairy Today
editorial in Dairy Japan. Recently, the Company's Rockwood Research unit
participated in a joint project with German-based Kleffman Market Research on a
project which assessed agricultural technology adaptation in various countries.
 
MANAGEMENT
 
  The Company believes that one of its most important assets is its experienced
and aggressive, growth-oriented management team. Stanford Erickson, Chairman
and Chief Executive Officer, has over 30 years of publishing and advertising
experience. Prior to joining Farm Journal in 1997, Mr. Erickson was President
and Chief Operating Officer of the Journal of Commerce magazine group where he
acquired or launched six business-to-business trade publications. Roger
Randall, President and Chief Operating Officer, has over 22 years of experience
in the agrimedia business and 13 years of experience at Farm Journal. Sonja
Hillgren, editor of Farm Journal, has over 20 years experience in agricultural
journalism and is a past President of the National Press Club. Each of the
other senior managers of Farm Journal has on average over 20 years of
experience in such areas as publishing, marketing and finance.
 
  The Farm Journal Corporation is a Delaware corporation, its executive offices
are located at 1500 Market Street, Centre Square West, Philadelphia,
Pennsylvania 19102 and its telephone number is (215) 557-8900. The Farm Journal
Internet site can be found at www.farmjournal.com.
 
                                       6
THE OFFERING
 
Common Stock offered........          shares of Class A Common Stock
 
Common Stock to be
 outstanding after the                shares of Class A Common Stock (1)(2)
 Offering...................          shares of Class B Common Stock
                                      total shares of Common Stock
 
Use of proceeds.............  To repay indebtedness and to fund the Company's
                               business expansion plans, including
                               acquisitions, and for working capital and other
                               general corporate purposes.
 
Voting rights...............  Holders of Class A Common Stock, voting as a
                               class, are entitled to elect that minimum number
                               of directors constituting 25% of the members of
                               the Company's Board of Directors. Other than
                               such right to elect directors, unless all of the
                               shares of Class B Common Stock are converted
                               into shares of Class A Common Stock or otherwise
                               cease to be issued and outstanding and except as
                               required by the laws of the State of Delaware,
                               holders of Class A Common Stock have no voting
                               rights. See "Description of Capital Stock."
 
Proposed Nasdaq National
 Market symbol..............  FJCO
--------
(1) Excludes    shares of Class A Common Stock issuable upon exercise of
    outstanding options granted pursuant to the Company's Stock Option Plan.
    See "Management" and "Principal Stockholders."
 
(2) Includes shares of Class A Common Stock issuable upon conversion of the
    preferred stock issued in connection with the PFA Acquisition (the "PFA
    Preferred Stock"). See "Management's Discussion and Analysis of Financial
    Condition and Results of Operations--PFA Acquisition."
 
                                       7
SUMMARY COMBINED FINANCIAL DATA
 
HISTORICAL DATA:
 
  The following table presents summary combined historical financial and other
data derived (a) from the audited consolidated financial statements of: (i)
Farm Journal, Inc., a predecessor corporation (the "Prior Predecessor"), for
the year ended December 31, 1993 and the period from January 1, 1994 to June
24, 1994, (ii) Farm Journal, Inc., a subsidiary of Tribune Company and a
predecessor corporation (the "Predecessor"), for the period from June 25, 1994
to December 31, 1994, the two years in the period ended December 29, 1996 and
the period from December 30, 1996 to March 31, 1997 and (iii) the Company for
the period from April 1, 1997 to December 31, 1997; and (b) from the unaudited
consolidated financial statements of the Company for the three months ended
March 31, 1998. The summary combined historical financial data for the year
ended December 31, 1994 represent the combined financial data of the Prior
Predecessor for the period from January 1, 1994 to June 24, 1994 and the
Predecessor for the period from June 25, 1994 to December 31, 1994. The summary
combined historical data for the year ended December 31, 1997 represents the
combined financial data of the Predecessor for the period from December 30,
1996 to March 31, 1997 and the Company for the period from April 1, 1997 to
December 31, 1997. The changes in ownership that occurred in 1994 and 1997 were
accounted for using the purchase method of accounting; accordingly, certain of
the historical financial data of the Predecessor and Prior Predecessor are not
comparable to that of the Company.
 
PRO FORMA DATA:
 
  The following table also presents (a) certain unaudited pro forma combined
financial and other data giving effect to the Management Purchase, the PFA
Acquisition and certain related operational changes, and (b) certain unaudited
pro forma as adjusted data giving effect to such pro forma adjustments and the
following adjustments (the "Offering Adjustments"): (i) the completion of the
Offering and application of the estimated net proceeds as described under "Use
of Proceeds," and (ii) the conversion of the PFA Preferred Stock described
under "Capitalization."
 
  The unaudited pro forma financial data may not be indicative of the results
that actually would have occurred if these transactions had been effected on
the dates indicated or the results that may be obtained in the future. This
data is qualified in its entirety by, and should be read in conjunction with,
"Unaudited Pro Forma Combined Financial Data," "Selected Historical Financial
Data," "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and the Company and Predecessor Consolidated Financial
Statements and Notes thereto included elsewhere in this Prospectus.
 
                                       8
SUMMARY COMBINED FINANCIAL DATA
 
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
COMBINED
                                   PRIOR                        COMBINED
                                PREDECESSOR                    PREDECESSOR
                       PRIOR        AND                          AND THE                            THE
                    PREDECESSOR PREDECESSOR   PREDECESSOR        COMPANY     PRO      PREDECESSOR COMPANY
                    ----------- ----------- -----------------  -----------  FORMA     ----------- -------
                                                       YEAR                  YEAR                             PRO FORMA
                                                      ENDED    YEAR ENDED   ENDED                           THREE MONTHS
                                                     DECEMBER   DECEMBER   DECEMBER   THREE MONTHS ENDED     ENDED MARCH
                        YEAR ENDED DECEMBER 31,        29,         31,       31,           MARCH 31,             31,
                    -------------------------------  --------  ----------- --------   -------------------  ----------------
                       1993        1994      1995      1996       1997     1997(1)       1997      1998    1997(1)  1998(2)
                    ----------- ----------- -------  --------  ----------- --------   ----------- -------  -------  -------
STATEMENT OF
 OPERATIONS DATA:
Revenues:
 Publishing.......    $23,812     $22,191   $20,639  $20,526     $19,440   $28,544      $8,985    $9,471   $11,219  $11,882
 Information
  services........      2,703       4,871     5,617    6,049       5,230     5,230       1,428     2,434     1,428    2,434
 Other............        367         489       319      199         338       338          61       103        61      103
                      -------     -------   -------  -------     -------   -------      ------    ------   -------  -------
  Total revenues..     26,882      27,551    26,575   26,774      25,008    34,112      10,474    12,008    12,708   14,419
Operating
 expenses:
 Cost of
  publishing (3)..     15,145      15,104    15,394   14,228      11,805    13,972       4,578     5,145     5,140    5,685
 Cost of
  information
  services (4)....      1,887       2,108     2,273    2,543       2,135     2,135         527       627       527      627
 Selling, general
  and
  administrative..      7,330       8,280     8,970    9,250       8,612    12,511       2,161     2,728     3,151    3,852
 Depreciation and
  amortization....        586         803     1,056    1,060       1,098     4,790         280       274     1,213    1,306
                      -------     -------   -------  -------     -------   -------      ------    ------   -------  -------
Operating income
 (loss)...........      1,934       1,256    (1,118)    (307)      1,358       704       2,928     3,234     2,677    2,949
 Interest income..         63          76       195       20         228       228           4        70        21       70
 Interest
  expense.........        (32)                           (54)       (853)   (1,761)        (38)     (262)     (432)    (433)
                      -------     -------   -------  -------     -------   -------      ------    ------   -------  -------
 Income (loss)
  before income
  taxes...........      1,965       1,332      (923)    (341)        733      (829)      2,894     3,042     2,266    2,586
 Income tax
  provision
  (benefit).......        498         623      (166)      67         528      (150)      1,208     1,390     1,001    1,207
                      -------     -------   -------  -------     -------   -------      ------    ------   -------  -------
Net income
 (loss)...........    $ 1,467     $   709   $  (757) $  (408)    $   205   $  (679)     $1,686    $1,652   $ 1,265  $ 1,379
                      =======     =======   =======  =======     =======   =======      ======    ======   =======  =======
Basic net income
 (loss) per common                                                         $                      $                 $
 share............                                                         =======                ======            =======
Diluted net income
 (loss) per common                                                         $                      $                 $
 share............                                                         =======                ======            =======
Weighted average
 number of common
 shares
 outstanding (5)..                                                         =======                ======            =======
PRO FORMA AS
 ADJUSTED DATA:
Interest expense
 (6)..............                                                         $  (554)                                 $  (131)
Income tax
 provision........                                                             153                                    1,283
Net income (loss)
 (6)..............                                                            (225)                                   1,492
Basic net income
 (loss) per common                                                         $                                        $
 share (6)........                                                         =======                                  =======
Diluted net income
 (loss) per common                                                         $                                        $
 share (6)........                                                         =======                                  =======
Weighted average
 number of common
 shares
 outstanding(7)...                                                         =======                                  =======
OTHER DATA:
 EBITDA (8).......    $ 2,520     $ 2,059   $   (62) $   753     $ 2,456   $ 5,494      $3,208    $3,508   $ 3,890  $ 4,255
 Capital
  expenditures....        251         232     2,411      554         357       386         179       145       183      263
 Cash flow
  information:
 Operating cash
  flows...........        148         232       321    1,150       1,408     2,152         571       353       997      427
 Investing cash
  flows...........       (251)       (232)   (2,411)    (554)    (16,012)  (26,304)        741      (145)  (10,760) (10,881)
 Financing cash
  flows...........       (215)         79     1,819   (1,474)     19,169    26,117      (1,488)              6,512    7,948
MARCH 31, 1998
                                                     -----------------------------
                                                              PRO     PRO FORMA
                                                     ACTUAL  FORMA  AS ADJUSTED(9)
                                                     ------- ------ --------------
BALANCE SHEET DATA:
 Working capital...................................  $ 8,249 $1,215    $18,915
 Total assets......................................   27,946 42,457     59,809
 Total long-term debt, including current portion...   11,000 19,632      5,832
 Preferred stock...................................      --   1,000        --
 Total shareholders' equity........................   10,464 10,464     42,964
9
NOTES TO SUMMARY COMBINED FINANCIAL DATA
 
(1) Presented to give pro forma effect to the Management Purchase, the PFA
    Acquisition, the related financings and certain related operational changes
    as if such transactions had been consummated on December 30, 1996. The
    unaudited pro forma data give effect to the following adjustments (the "Pro
    Forma Adjustments") as of the beginning of each period presented: (i) an
    increase in interest expense attributable to financings related to the
    Management Purchase and PFA Acquisition; (ii) the elimination of
    compensation expense to certain officers of the Company that will no longer
    be incurred after February 26, 1998; and (iii) an adjustment to the pro
    forma provision (benefit) for income taxes to reflect the tax effect of the
    adjustments described in clauses (i) and (ii).
 
(2) Presented to give pro forma effect to the PFA Acquisition, the related
    financings and certain related operational changes as if they had occurred
    on December 30, 1996. The unaudited pro forma data also give effect to the
    Pro Forma Adjustments as of the beginning of each period presented.
 
(3) Cost of publishing includes paper, printing, postage, editorial and
    circulation.
 
(4) Cost of information services includes account service, programming and
    demographic updates.
 
(5) Based on the weighted average number of shares of Common Stock outstanding
    for the periods presented after giving effect to the Recapitalization. See
    "Description of Capital Stock--Recapitalization."
 
(6) The pro forma as adjusted interest expense, net income (loss) and the per
    share amounts reflect the reduction of interest expense as a result of the
    reduced level of borrowings due to the application of the net proceeds of
    the Offering as described under "Use of Proceeds."
 
(7) Based on the weighted average number of shares of Common Stock, including
    Common Stock equivalents outstanding, and includes (i) 7,892 additional
    shares representing stock options issued on February 26, 1998, (ii) the
    conversion of the PFA Preferred Stock and (iii) the shares of Class A
    Common Stock to be issued by the Company in the Offering.
 
(8) EBITDA represents income (loss) before provision (benefit) for income taxes
    plus depreciation and amortization plus net interest (income) expense.
    EBITDA is not intended to represent cash flows from operations and should
    not be considered as an alternative to net income as an indicator of the
    Company's operating performance or to cash flows as a measure of liquidity.
    The Company believes that EBITDA is a standard measure commonly reported
    and widely used by analysts, investors and other interested parties in the
    publishing industry. Accordingly, this information has been disclosed
    herein to permit a more complete comparative analysis of the Company's
    performance relative to other companies in the industry. The Company's
    definition of EBITDA may not be identical to similarly titled measures of
    other companies and, therefore, may not necessarily be an accurate basis of
    comparison.
 
(9) The pro forma as adjusted balance sheet data reflects the application of
    the net proceeds of the Offering as described under "Use of Proceeds."
 
                                       10
RISK FACTORS
 
  Certain statements concerning the Company's operations, economic performance
and financial condition including, without limitation, those concerning the
Company's business and operating strategy, contained herein under the captions
"Prospectus Summary," "Use of Proceeds," "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and "Business" are forward-
looking statements. While the Company believes these statements are
reasonable, prospective purchasers of the Class A Common Stock offered hereby
should be aware that actual results could differ materially from those stated
or suggested by such forward-looking statements as a result of the risk
factors set forth below or other factors. In addition to the other information
in this Prospectus, the following factors should be considered carefully in
evaluating an investment in the Class A Common Stock offered hereby.
 
HISTORICAL FINANCIAL PERFORMANCE
 
  The Company has experienced variations in revenues and net income as a
result of a variety of factors. Annual revenues of the Company declined from
$26.9 million in 1993 to $25.0 million in 1997 while net income declined from
$1.5 million to $0.2 million over the same period. In addition, EBITDA
fluctuated from a high of $2.5 million in 1993 to a low of $(0.1) million in
1995, before increasing to $2.5 million in 1997. Although the Company has
developed and is implementing a strategic plan designed to improve its
operating performance, no assurance can be given that this declining trend in
revenues and net income and erratic EBITDA performance can be reversed.
Improved future performance will be dependent upon, among other things, the
Company's successful expansion of its existing business and development of new
sources of revenues.
 
DEPENDENCE UPON ADVERTISING REVENUES
 
  Advertising revenues comprised approximately 73% of the Company's revenues
in 1997. Advertising in Farm Journal contributed 65% of total advertising
revenues in 1997. Although the Company's advertising revenues will decline as
a percentage of total revenues as a result of the PFA Acquisition, advertising
revenues will continue to be a significant component of the Company's total
revenues. The Company's advertising sales are not subject to long-term
contracts. Advertising revenues of the Company are cyclical and dependent upon
general economic conditions as well as factors specific to the Company.
Historically, increases in advertising revenues have corresponded with
economic recoveries, while decreases and changes in advertising mix have
corresponded with economic downturns and regional and local economic
recessions. It is, therefore, difficult to project anticipated future
advertising revenues.
 
  Competition for advertising dollars is primarily based on advertising rates,
the nature and scope of readership, reader response to advertisers' products
and services and the effectiveness of sales efforts. If the Company is unable
to compete successfully for advertisers and readers or its advertising
revenues are negatively impacted by general economic conditions or otherwise,
the Company's business, financial condition and results of operations would be
adversely affected.
 
DEPENDENCE UPON KEY CUSTOMERS
 
  The Company's ten largest advertisers accounted for approximately 49% of
advertising revenues in 1997. Such advertisers are also customers of the
Company's FJIR division, its market research and data management business,
accounting for approximately 35% of the revenues of FJIR in 1997. Although no
single customer was responsible for more than 10% of the Company's revenues,
the Company is currently highly dependent upon its largest advertisers, the
loss of any of which would have a material adverse effect on its business,
financial condition and results of operations. In 1997, the decision of one
advertiser to redirect advertising expenditures reduced that advertiser's
expenditures with the Company by $344,000 compared with the prior year. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." There can be no assurance that similar adverse changes will not
occur in future years.
 
 
                                      11
CONTROL OF THE COMPANY; ANTI-TAKEOVER IMPACT
 
  MS Farm International Limited Partnership (the "Partnership") will
beneficially own 100% of the outstanding shares of the Class B Common Stock
immediately after the Offering. So long as any shares of Class B Common Stock
are outstanding, the Class B Common Stock will represent 100% of the Company's
total voting power (other than with respect to the election of directors)
after giving effect to the Offering. The Partnership is controlled by Phillip
Ean Cohen through his sole ownership of the general partner. See "Management
Purchase." Other than the right of the holders of the Class A Common Stock to
elect 25% of the members of the Company's Board of Directors, unless all of
the shares of Class B Common Stock are converted into Class A Common Stock or
otherwise cease to be outstanding and except as may be required by the laws of
the State of Delaware, holders of Class A Common Stock have no voting rights.
Consequently, the Partnership and Mr. Cohen control the outcome of
substantially all matters submitted to a vote of the Company's stockholders.
 
  There are no restrictions on the Partnership's ability to transfer shares of
Class B Common Stock. So long as any shares of Class B Common Stock are
outstanding, the Partnership and Mr. Cohen have the right to transfer control
of the Company to a third party by transferring the Partnership's shares of
Class B Common Stock, and any such transfer could be effected at a premium
without such premium being shared with or paid to holders of Class A Common
Stock.
 
  The disproportionate voting rights between the Class A Common Stock and the
Class B Common Stock could have an adverse effect on the market price of the
Class A Common Stock. Such disproportionate voting rights may make the Company
a less attractive target for a takeover than it otherwise might be, or render
more difficult or discourage a merger proposal, a tender offer or a proxy
contest, even if such actions were favored by holders of the Company's Class A
Common Stock. Such disproportionate voting rights may also deprive holders of
Class A Common Stock of an opportunity to sell their shares at a premium over
then prevailing market prices for the Class A Common Stock. There also is no
prohibition or limitation on the Partnership's ownership of Class A Common
Stock. If, following the Offering, all of the outstanding shares of Class B
Common Stock were converted into shares of Class A Common Stock, the
Partnership would own approximately   % of the Class A Common Stock. In that
event, the Partnership would continue to control the outcome of virtually all
matters submitted to a vote of the Company's stockholders, including the
election of all of the Company's directors.
 
UNPROVEN GROWTH OPPORTUNITIES
 
  The Company's business strategy contemplates growth through the development
of a variety of new sources of revenue, including through the sale of products
and services to its publication subscriber base, the participation in new
media, the substantial increase in paid circulation and subscription rates of
certain magazines, acquisitions and other ventures, new publications and
international expansion. There can be no assurance that the Company can
generate revenues or profits from any of its new revenue initiatives, or do so
within the time frame contemplated by the Company. Failure to successfully
develop and implement a revenue growth strategy, or to do so in a timely
manner, may materially and adversely affect the ability of the Company to
achieve an attractive rate of return for its equity investors.
 
  A component of the Company's growth strategy is expansion into international
markets. The Company has limited experience in developing foreign publications
and services and in marketing and distributing them internationally. In
addition, there are certain risks inherent in doing business in international
markets, such as the uncertainty of product acceptance by different cultures,
the risks of divergent business expectations or cultural incompatibility
inherent in establishing joint ventures with foreign partners, difficulties in
staffing and managing multinational operations, currency fluctuations, state-
imposed restrictions on the repatriation of funds and potentially adverse tax
consequences. There can be no assurance that one or more of such factors will
not have a material adverse effect on the Company's future international
operations. See "Business--Growth Strategy."
 
 
                                      12
CHALLENGE OF GROWTH THROUGH ACQUISITIONS
 
  The Company intends to pursue growth through acquisitions. There can be no
assurance, however, that suitable acquisition candidates will be identified
or, if identified, that such acquisitions will be consummated. Further, there
can be no assurance that any newly-acquired businesses will be successfully
integrated into the Company's operations. The Company may face competing
offers for acquisition candidates identified by it, which the Company may be
unable to match or which may result in higher acquisition costs. There can be
no assurance that companies that may be acquired will achieve sales and
profitability that justify the investment in them. Acquisitions may involve a
number of risks, including adverse short-term effects on the Company's
reported operating results; diversion of management's attention; dependence on
retention, hiring and training of key personnel; risks associated with
unanticipated problems or legal liabilities; and amortization of acquired
intangible assets, some or all of which could have a material adverse effect
on the Company's operations and financial performance. The Company may issue
additional shares of Class A Common Stock (which could result in dilution to
the purchasers of the Class A Common Stock offered hereby) or may incur
substantial additional indebtedness, or a combination thereof, to fund future
acquisitions. There can be no assurance that the Company will be able to
obtain any such additional equity or debt financing or do so within the time
frame contemplated by the Company.
 
FLUCTUATIONS IN PAPER COSTS AND POSTAL RATES
 
  Paper is the principal raw material for the Company's publishing operations.
The Company purchases paper from R.R. Donnelley and Sons Company ("Donnelley")
pursuant to a long-term printing contract. Donnelley purchases the paper in
the spot market and passes on that cost to the Company. Paper costs
represented approximately 21%, 22% and 18% of the Company's cost of publishing
for each of the fiscal years ended December 31, 1995, 1996 and 1997,
respectively. During those three years, total expenditures by the Company for
paper were $3.3 million, $3.2 million and $2.1 million, respectively. Although
paper prices have experienced long periods of stability, the price of paper
stock used in all the Company's publications has experienced substantial
volatility since January 1994. Multiple increases in the price of the
Company's body stock (#36) paper resulted in an overall increase of 10% in
1994 and another 34% in 1995, materially and adversely affecting the Company's
results of operations in 1995.
 
  Postage is also a significant cost of the Company's publishing operations.
Postage costs represented approximately 18%, 18% and 19% of total costs of
publishing for each of the fiscal years ended December 31, 1995, 1996 and
1997, respectively. During those same years, total expenditures by the Company
for postage were $2.8 million, $2.6 million and $2.2 million, respectively. In
May 1998, the United States Postal Rate Commission authorized a 4.5% rate
increase that is expected to become effective later in 1998.
 
  No assurance can be given that the price of paper or postage will not
increase, substantially or otherwise, or that the Company will be able to
recoup any such paper or postage cost increases by passing them through to its
customers. Any substantial cost increase in paper or postage will have a
material adverse affect on the results of operations of the Company. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Overview" and "Business--Raw Materials."
 
CYCLICALITY AND SEASONALITY OF REVENUE
 
  The Company's business is highly seasonal, resulting in a disproportionate
share of revenues and net income being generated in the first fiscal quarter.
For example, net revenues for the three-month period ended March 31, 1997
accounted for 42% of the Company's total 1997 net revenues. This seasonality
is primarily due to the high level of advertising revenues generated by the
increased number of issues published by the Company during the winter (crop
planning) months as well as the greater number of advertising pages per issue
carried during those months. The seasonality of the Company's business places
a significant demand for cash in the latter part of the fourth quarter to
support production and sales costs and a buildup in customer receivables. Any
substantial decrease in first quarter net revenues could have a material
adverse effect on the Company's profitability for the
 
                                      13
entire fiscal year or its ability to fund its operations during the remainder
of such fiscal year. The Company has incurred and may in the future incur
losses during the second and third quarters of its fiscal year. In addition,
there can be no assurance that the Company will be able to finance its
seasonal working capital needs or balance efficiently the seasonal
requirements of its business. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
 
RELIANCE ON KEY SUPPLIER
 
  The Company's magazines are printed, bound and organized for shipment
pursuant to a multi-year contract with Donnelley which is currently scheduled
to expire in 2001. In addition, Donnelley provides specialized binding
services to the Company and purchases all of the Company's paper needs through
a consortium of other Donnelley customers. Although the Company believes that
other printers of similar quality could be engaged on similar terms, engaging
a replacement printer could cause delays in the Company's operations. Any
interruption or delay in printing the Company's periodicals, the loss of
purchasing power afforded to the Company through Donnelley's paper purchases
or the loss of access at reasonable prices to the binding process may have a
material adverse effect on the Company's business, financial condition and
results of operations.
 
COMPETITION
 
  The domestic market for agricultural print advertising is mature and there
is substantial competition for advertising revenue among farming periodicals.
In addition, paid circulation farming periodicals must compete with a variety
of free alternatives. Most of the Company's significant competitors are units
of large publishing groups which have substantially greater financial and
other resources than the Company. In addition, the Company is subject to
competition in its data management business, where competitors have and may
continue to offer services similar to those offered by the Company. As a
result of such competition and the Company's comparatively limited resources,
there can be no assurance that competitive factors will not impair the ability
of the Company to pursue its growth initiatives or maintain its existing
market share in its respective businesses.
 
RISKS ASSOCIATED WITH POTENTIAL SIGNIFICANT INDEBTEDNESS AND COVENANT
RESTRICTIONS
 
  Although the Company is not currently highly leveraged, the Company may
incur additional indebtedness to fund its growth strategy, including the
financing of future acquisitions. If the Company were to incur substantial
additional indebtedness, the Company would become exposed to certain risks,
including reduced financial flexibility, greater vulnerability to economic
downturns and competitive pressures and diversion of cash flow from the
implementation of its growth strategy to debt service. The agreements
governing the outstanding indebtedness of the Company's operating subsidiary,
FJI, impose, and agreements covering future indebtedness would likely contain,
operating and financial restrictions. Specifically, the note purchase
agreement (the "Note Purchase Agreement") pursuant to which the 9.5% Senior
Subordinated Notes due 2007 of FJI (the "Senior Subordinated Notes") were
issued, and FJI's $15,000,000 Reducing Revolving Credit Facility (the "Bank
Facility") with First Union National Bank, contain certain restrictive
covenants, including, but not limited to, restrictions on incurrence of debt,
dividend payments, certain asset sales, transactions with affiliates, liens
and investments. A failure to comply with the obligations in the Note Purchase
Agreement, the Bank Facility or agreements covering future indebtedness could
result in an event of default under such agreements, which, if not cured or
waived, would permit acceleration of the indebtedness thereunder and
acceleration of indebtedness under any other instruments then in effect that
may contain cross-acceleration or cross-default provisions, resulting in a
material adverse effect on the Company.
 
DEPENDENCE ON KEY PERSONNEL
 
  The Company is dependent on the continued services of its executive
officers. The loss of any of these key personnel could have a material adverse
effect on the Company. The Company does not expect to maintain key person life
insurance for any of its key personnel. See "Management."
 
 
                                      14
ABSENCE OF PRIOR PUBLIC MARKET; MARKET PRICE FLUCTUATIONS
 
  Prior to the Offering, there has been no public market for the Class A
Common Stock. The initial public offering price of the Class A Common Stock
will be determined by negotiation among the Company and the representatives of
the several Underwriters (see "Underwriting") and may not be indicative of the
market price for shares of the Class A Common Stock after the Offering. While
application has been made for the listing of the Class A Common Stock on
Nasdaq's National Market, there can be no assurance that an active trading
market for the Class A Common Stock will develop or that any such market will
be sustained. The market price for shares of the Class A Common Stock may be
significantly affected by numerous factors, including quarter-to-quarter
variations in the Company's results of operations, announcements by the
Company or others and developments affecting the Company and its industry. In
addition, broad market fluctuations and general economic and political
conditions may adversely affect the market price of the Class A Common Stock,
regardless of the Company's actual performance or circumstance.
 
IMPACT OF SHARES ELIGIBLE FOR FUTURE SALE
 
  Sales of a substantial number of shares of Common Stock into the public
market could adversely affect the market price for the Class A Common Stock.
Upon completion of the Offering, the Company expects to have      shares of
Common Stock outstanding. Of these shares, the      shares of Class A Common
Stock sold in the Offering will be freely tradable without restriction under
the Securities Act of 1933, as amended (the "Securities Act"), except for any
such shares which may be acquired by an "affiliate" of the Company within the
meaning of the Securities Act. In addition,    million shares of Class B
Common Stock may be converted on a one-for-one basis into an aggregate of
million shares of Class A Common Stock at any time and     shares of Class A
Common Stock may be issued upon exercise of vested options. Commencing 180
days after the closing of the Offering (or sooner with the consent of the
Underwriters), any of such shares so converted or issued will be eligible for
sale in the public market, subject to compliance with the resale volume
limitations and other restrictions of Rule 144 under the Securities Act.
Moreover, on April 2, 1999, an additional    shares of Class A Common Stock,
to be issued upon conversion of the PFA Preferred Stock, will also be eligible
for sale in the public market, subject to compliance with the restrictions of
Rule 144. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--PFA Acquisition." Future sales of the shares of Common
Stock held by existing stockholders could have an adverse effect on the price
of the Class A Common Stock. See "Shares Eligible for Future Sale."
 
SUBSTANTIAL AND IMMEDIATE DILUTION
 
  Based upon the Company's pro forma net tangible book value deficit as of
December 31, 1997, purchasers of the Class A Common Stock offered hereby will
experience an immediate dilution of $   in the tangible net book value per
share of Class A Common Stock from the initial public offering price of $
per share. See "Dilution."
 
RISKS ASSOCIATED WITH THE YEAR 2000
 
  The Year 2000 issue is the result of computer programs which were written
using two digits rather than four to define the applicable year. For example,
date-sensitive software may recognize a date using "00" as the Year 1900
rather than the Year 2000. Such misrecognition could result in system failures
or miscalculations causing disruptions of operations, including, among others,
a temporary inability to process transactions, send invoices or engage in
similar normal business activities.
 
  The Company has identified all of its significant internal software
applications which contain source code that may be unable to appropriately
interpret the Year 2000 and has already begun to modify or replace those
applications. The Company has determined that its accounting system and
employee network system are Year 2000 compliant. The Company's advertising
acknowledgment system is the only operating program that is
 
                                      15
not Year 2000 compliant. Management believes that the estimated costs to
modify or replace this system are not material to the Company.
 
  In addition, the Company has inquired of its major suppliers about their
progress in identifying and addressing problems related to the Year 2000.
Certain of the Company's major suppliers have informed the Company that such
suppliers do not anticipate problems in their business operations due to Year
2000 compliance issues. The Company is currently unable to determine the
extent to which Year 2000 issues will affect its other suppliers, or the
extent to which it would be vulnerable to the suppliers' failure to remediate
any of their Year 2000 problems. Although no assurance can be given that all
of the Company's major suppliers' systems will be Year 2000 compliant, the
Company believes that the risk is not significant.
 
                                      16
USE OF PROCEEDS
 
  The net proceeds to the Company from the sale of      shares of Class A
Common Stock in the Offering after payment of expenses of the Offering are
estimated to be approximately $     million ($     if the Underwriters' over-
allotment option is exercised in full), assuming an initial public offering
price of $     per share, the midpoint of the range set forth on the cover
page of this Prospectus. The Company intends to apply a portion of the net
proceeds to prepay $5.5 million of principal, plus accrued interest, of the
$11 million outstanding principal amount of the Senior Subordinated Notes and
to repay the outstanding borrowings under FJI's Bank Facility. As of April 2,
1998, the outstanding balance under the Bank Facility was $8.3 million and the
interest rate was 8.2% per annum. The Company intends to use the remaining net
proceeds for the implementation of the Company's growth strategy, including
the cost of acquisitions, and for working capital and other general corporate
purposes. Pending such uses the Company intends to invest the net proceeds in
an institutional money market fund investing in short-term debt securities and
other money market instruments. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources."
 
                              MANAGEMENT PURCHASE
 
  In April 1997, the Partnership, whose investors include members of the
Company's current management and individuals associated with Morgan Schiff &
Co., Inc. ("Morgan Schiff"), organized FJC for the purpose of purchasing FJI
from Tribune Company. The purchase price of $17.0 million (prior to giving
effect to $0.3 million of working capital adjustments and $0.2 million of
transaction costs) was financed through the issuance by FJI of $11.0 million
of Senior Subordinated Notes unconditionally guaranteed by FJC and the
issuance by FJC of its Class B Common Stock to the Partnership. The
Partnership invested approximately $10.1 million in the purchase of shares of
Class B Common Stock. Proceeds of such investment in excess of the purchase
price, or approximately $4.4 million, were retained for the working capital of
the Company and to finance expansion of the business. Phillip Ean Cohen wholly
owns the general partner of the Partnership (the "General Partner") and is the
sole owner of Morgan Schiff. See "Certain Relationships and Related
Transactions," "Principal Stockholders" and "Underwriting."
 
                                      17
CAPITALIZATION
 
  The following table sets forth at March 31, 1998: (i) the actual
capitalization of the Company after giving effect to the recapitalization
(the "Recapitalization") described in "Description of Capital Stock--
Recapitalization," (ii) the pro forma capitalization of the Company after
giving effect to the PFA Acquisition and the financing thereof and (iii) the
pro forma capitalization of the Company as adjusted to reflect the sale by the
Company of        shares of Class A Common Stock pursuant to the Offering,
assuming an initial public offering price of $   per share (the midpoint of
the range set forth on the cover page of this Prospectus), the application of
the net proceeds therefrom as described under "Use of Proceeds" and the
conversion of Convertible Redeemable Preferred Stock issued in connection with
the PFA Acquisition (the "PFA Preferred Stock") into     shares of Class A
Common Stock at such assumed initial public offering price (the "Offering
Adjustments"). This table should be read in conjunction with "Selected
Historical Financial Data," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Unaudited Pro Forma Combined Financial
Data" and the audited financial statements and the notes thereto included
elsewhere in this Prospectus.
MARCH 31, 1998
                                             ----------------------------------
                                                                     PRO FORMA
                                             ACTUAL(1) PRO FORMA(1) AS ADJUSTED
                                             --------- ------------ -----------
                                                       (IN THOUSANDS)
Long-term debt:
  Note payable.............................   $   --     $   332      $   332
  Senior Subordinated Notes................    11,000     11,000        5,500
  Bank Facility............................       --       8,300          --
Convertible Redeemable Preferred Stock, par
 value $.01 per share, 2,725 shares autho-
 rized, 2,725 issued and outstanding.......       --       1,000          --
Shareholders' equity:
  Class A Common Stock, par value $0.01 per
   share,       shares
   authorized,     shares issued and out-
   standing actual and pro forma;
   shares authorized,     shares issued and
   outstanding pro forma as adjusted.......       --         --
  Class B Common Stock, par value $0.01 per
   share,       shares authorized,
   shares issued and outstanding actual and
   pro forma;       shares authorized,
   shares issued and outstanding pro forma
   as adjusted.............................         1          1            1
  Additional paid-in capital...............    10,292     10,292       42,792
  Retained earnings........................       171        171          171
                                              -------    -------      -------
    Total shareholders' equity.............    10,464     10,464       42,964
                                              -------    -------      -------
    Total capitalization...................   $21,464    $31,096      $48,796
                                              =======    =======      =======
18
DIVIDEND POLICY
 
  Since the Management Purchase, the Company has not declared or paid any cash
or other dividends on its capital stock and does not expect to pay dividends
for the foreseeable future. The Company anticipates that all of its earnings
in the foreseeable future will be used for the operation of its business, to
support its growth strategy and reduce indebtedness. Any future determination
to pay dividends will be at the discretion of the Board of Directors and will
depend upon, among other factors, the Company's results of operations,
financial condition and capital requirements. In addition, as a holding
company, the ability of the Company to pay dividends in the future is
dependent upon the receipt of dividends or other payments from its operating
subsidiary, FJI. The Note Purchase Agreement and the Bank Facility contain
certain restrictions on the payment of dividends by FJI. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources."
 
                                   DILUTION
 
  The pro forma net tangible book value of the Company as of March 31, 1998,
after giving effect to the Recapitalization, the PFA Acquisition and the
conversion of the PFA Preferred Stock into     shares of Class A Common Stock
was $     million, or $     per share of Common Stock. Pro forma net tangible
book value per share is determined by dividing the tangible net worth of the
Company (total assets less intangible assets and total liabilities) by the
aggregate number of shares of Common Stock outstanding. After giving effect to
the sale of      shares of Class A Common Stock offered hereby (at an assumed
initial public offering price of $     per share, the midpoint of the range
set forth on the cover page of this Prospectus), and the application of the
net proceeds therefrom, pro forma net tangible book value of the Company as of
March 31, 1998 would have been approximately $     million, or $     per
share. This represents an immediate increase in pro forma net tangible book
value of $     per share to the current stockholders of the Company and an
immediate dilution in pro forma net tangible book value of $     per share to
purchasers of Class A Common Stock in the Offering. The following table
illustrates this per share dilution.
Assumed initial public offering price per share....................  $
                                                                        ------
   Pro forma net tangible book value per share of Common Stock at
    March 31, 1998....................................................
   Increase in pro forma net tangible book value per share of Common
    Stock attributable to purchasers in the Offering..................
   Pro forma net tangible book value per share of Common Stock after
    the Offering......................................................   (    )
                                                                        ------
   Dilution in pro forma net tangible book value per share to purchas-
    ers of Class A Common Stock in the Offering(1)....................  $
                                                                        ======
--------
(1) Dilution is determined by subtracting pro forma net tangible book value
    per share after the Offering from the initial public offering price per
    share.
 
  The following table summarizes, on the pro forma basis described above, as
of March 31, 1998, the number of shares purchased, the total consideration
paid (or to be paid) and the average price per share paid (or to be paid) by
the existing stockholders and the purchasers of Class A Common Stock in the
Offering, at an assumed initial public offering price of $     per share (the
midpoint of the range set forth on the cover page of this Prospectus), before
deducting the estimated offering expenses and underwriting discounts and
commissions:
SHARES
                             PURCHASED                                  AVERAGE
                           --------------     TOTAL      CONSIDERATION   PRICE
                           NUMBER PERCENT     AMOUNT        PERCENT    PER SHARE
                           ------ ------- -------------- ------------- ---------
                                          (IN THOUSANDS)
Existing common stock-
 holders.................
Holders of Class A Common
 Stock issued upon con-
 version of PFA Preferred
 Stock...................
Purchasers of Class A
 Common Stock in the Of-
 fering..................
  Total..................
19
UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
 
  The following Unaudited Pro Forma Combined Financial Data sets forth the pro
forma combined statements of operations of the Company for the year ended
December 31, 1997 and the three months ended March 31, 1998 and 1997 and the
pro forma combined balance sheet as of March 31, 1998. The pro forma combined
statement of operations data for the three months ended March 31, 1998 give
effect to the PFA Acquisition, and certain related operational changes as if
such transactions had occurred on December 30, 1996. The pro forma combined
statements of operations data for the year ended December 31, 1997 and the
three months ended March 31, 1997 give effect to the Management Purchase the
PFA Acquisition and certain related operational changes as if such
transactions had occurred on December 30, 1996. The pro forma combined balance
sheet data give effect to such transactions as if they occurred on March 31,
1998.
 
  The pro forma combined financial data for the year ended December 31, 1997
and for the three months ended March 31, 1997 includes the results of
operations of the Company, the Predecessor and PFA. The pro forma combined
financial data for the three months ended March 31, 1998 includes the results
of the Company and PFA. The consolidated financial information with respect to
the Predecessor and the Company has been derived from their audited
consolidated financial statements for the three months ended March 31, 1997
and for the nine months ended December 31, 1997, respectively. The Predecessor
was acquired on April 1, 1997. All operating results from the time of
acquisition are included in the Company's historical financial statements. The
financial information with respect to PFA has been derived from its audited
financial statements for the year ended December 31, 1997. PFA was acquired on
April 2, 1998. The pro forma combined financial data as of and for the three
months ended March 31, 1998 includes the results of operations of the Company
and PFA. The financial information has been derived from their unaudited
consolidated financial statements.
 
  The pro forma, as adjusted, combined data for the year ended December 31,
1997 and the three months ended March 31, 1997 and 1998 give effect to the
acquisitions discussed above, the conversion of the PFA Preferred Stock and
the application of the net proceeds to the Company from the Offering. See "Use
of Proceeds."
 
  The unaudited pro forma financial data may not be indicative of the results
that actually would have occurred if these transactions had been effected on
the dates indicated or the results that may be obtained in the future. The
adjustments are based on available information and upon certain assumptions
that the Company believes are reasonable in the circumstances. The pro forma
combined statements of operations, balance sheet and accompanying notes should
be read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the Company and Predecessor
Consolidated Financial Statements and Notes thereto included elsewhere in this
Prospectus.
 
                                      20
UNAUDITED PRO FORMA BALANCE SHEET
                                MARCH 31, 1998
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
THE       PFA     ACQUISITION     PRO    OFFERING      PRO FORMA
                          COMPANY ACQUISITION ADJUSTMENTS    FORMA  ADJUSTMENTS   AS ADJUSTED
                          ------- ----------- -----------   ------- -----------   -----------
ASSETS
CURRENT ASSETS:
 Cash and cash
  equivalents...........  $ 4,949               $(3,030)(1) $ 1,919   $31,500 (2)   $19,271
                                                                      (13,800)(4)
                                                                         (348)(4)
 Accounts receivable....    8,796   $  360                    9,156                   9,156
 Inventories............      121                               121                     121
 Prepaid and other
  current assets........      552      241         (162)(1)     631                     631
                          -------   ------      -------     -------   -------       -------
  Total current assets..   14,418      601       (3,192)     11,827    17,352        29,179
DUE FROM RELATED
 PARTIES................             3,919       (3,919)(1)
PROPERTY AND EQUIPMENT,
 NET....................    2,221      182                    2,403                   2,403
DEFERRED CUSTOMER
 ACQUISITION COSTS,
 NET....................             1,312                    1,312                   1,312
INTANGIBLE ASSETS, NET..   10,648                15,402 (1)  26,050                  26,050
OTHER ASSETS............               206                      206                     206
DEFERRED TAX ASSETS.....      659                               659                     659
                          -------   ------      -------     -------   -------       -------
    TOTAL...............  $27,946   $6,220      $ 8,291     $42,457   $17,352       $59,809
                          =======   ======      =======     =======   =======       =======
LIABILITIES AND
 SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
 Accounts payable.......  $ 1,833   $  283                  $ 2,116                 $ 2,116
 Accrued expenses and
  other liabilities.....    2,008      467                    2,475     $(348)(4)     2,127
 Income taxes payable...    1,390                             1,390                   1,390
 Current portion of
  long-term debt........                56                       56                      56
 Current portion of
  deferred subscription
  income................      938    3,637                    4,575                   4,575
                          -------   ------                  -------   -------       -------
   Total current
    liabilities.........    6,169    4,443                   10,612      (348)       10,264
DEFERRED SUBSCRIPTION
 INCOME,
 Less current portion...      313      492                      805                     805
LONG-TERM DEBT..........   11,000      276      $ 8,300 (3)  19,576   (13,800)(4)     5,776
PREFERRED STOCK.........                          1,000 (1)   1,000    (1,000)(5)
SHAREHOLDERS' EQUITY:
 Class A Common Stock...        1       87          (87)(1)       1                       1
 Additional paid-in
  capital...............   10,292                            10,292    31,500 (2)    42,792
                                                                        1,000 (5)
 Retained earnings......      171      922         (922)(1)     171                     171
                          -------   ------      -------     -------   -------       -------
   Total shareholders'
    equity..............   10,464    1,009       (1,009)     10,464    32,500        42,964
                          -------   ------      -------     -------   -------       -------
   TOTAL................  $27,946   $6,220      $ 8,291     $42,457   $17,352       $59,809
                          =======   ======      =======     =======   =======       =======
(1) Represents the PFA Acquisition based on a purchase price of $12,000. The
    PFA Acquisition has been accounted for using the purchase method. The
    purchase price has been allocated on a preliminary basis to the tangible
    assets acquired based on the fair values of such assets, which are
    estimated to equal their book value. The balance of the purchase price was
    preliminarily allocated as follows: $3,366 to subscriber lists, $4,000 to
    covenant not-to-compete, $2,232 to trademarks and $5,804 to goodwill. The
    intangible assets will be amortized on a straight-line basis over periods
    ranging from 5-15 years and goodwill will be amortized on a straight-line
    basis over 15 years.
(2) Represents net proceeds from the Offering as described under "Use of
    Proceeds."
(3) Represents borrowings of $8,300 under the Bank Facility used to effect the
    PFA Acquisition as if it had occurred on March 31, 1998.
(4) Represents the payment of $13,800 of the Company's borrowings and $348 of
    accrued interest with proceeds from the Offering. See "Use of Proceeds."
(5) Represents conversion of the PFA Preferred Stock. See "Capitalization."
 
                                      21
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS DATA
                          YEAR ENDED DECEMBER 31, 1997
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
HISTORICAL RESULTS
                          ---------------------------
                            THE                        ACQUISITION      PRO     OFFERING      PRO FORMA
                          COMPANY  PREDECESSOR  PFA    ADJUSTMENTS     FORMA   ADJUSTMENTS   AS ADJUSTED
                          -------  ----------- ------  -----------    -------  -----------   -----------
Revenues:
  Publishing............  $10,455    $8,985    $9,104                 $28,544                  $28,544
  Information services..    3,802     1,428                             5,230                    5,230
  Other.................      277        61                               338                      338
                          -------    ------    ------                 -------                  -------
    Total revenues......   14,534    10,474     9,104                  34,112                   34,112
Operating expenses:
  Cost of publishing....    7,227     4,578     2,167                  13,972                   13,972
  Cost of information
   services.............    1,608       527                             2,135                    2,135
  Selling, general and
   administrative.......    6,451     2,161     4,984    $  (107)(2)   12,511     $ 450 (1)     12,961
                                                            (978)(3)
  Depreciation and amor-
   tization.............      818       280     1,820        (18)(4)    4,790                    4,790
                                                           1,890 (5)
                          -------    ------    ------    -------      -------     -----        -------
Operating income
 (loss).................   (1,570)    2,928       133       (787)         704      (450)           254
Interest income.........      224         4       444       (444)(6)      228                      228
Interest expense........     (815)      (38)      (20)      (223)(7)   (1,761)    1,207 (9)       (554)
                                                            (665)(8)
                          -------    ------    ------    -------      -------     -----        -------
Income (loss) before in-
 come taxes.............   (2,161)    2,894       557     (2,119)        (829)      757            (72)
Income tax provision
 (benefit)..............     (680)    1,208                 (678)(10)    (150)      303 (10)       153
                          -------    ------    ------    -------      -------     -----        -------
Net income (loss).......  $(1,481)   $1,686    $  557    $(1,441)     $  (679)    $ 454        $  (225)
                          =======    ======    ======    =======      =======     =====        =======
Basic and diluted income
 (loss) per common
 share..................                                                                       $
                                                                                               =======
Weighted average number
 of common shares out-
 standing(11)...........
                                                                                               =======
22
NOTES TO PRO FORMA
                         STATEMENT OF OPERATIONS DATA
 
                         YEAR ENDED DECEMBER 31, 1997
 
 (1) Represents the incremental cost associated with being a public reporting
     company.
 
 (2) Represents compensation expense incurred under the Equity Incentive
     Awards, which were replaced on February 26, 1998 with an incentive stock
     option plan. See Note 19 of the Notes to the Consolidated Financial
     Statements.
 
 (3) Represents: (i) $572 of management fees and $95 of excess general and
     administrative costs paid by PFA to its former owner; (ii) $107 of
     reduction in rent expense related to PFA entering into a new lease with
     its former owner; and (iii) $204 of compensation, bonuses and fringe
     benefit packages paid to employees of Pro Farmer who were terminated
     after the PFA Acquisition.
 
 (4) Represents reduction in amortization expense recorded in the Predecessor
     financial statements as a result of fewer intangible assets recorded in
     conjunction with the Management Purchase.
 
 (5) Represents an increase in amortization expense of goodwill and other
     intangible assets acquired by the Company in the PFA Acquisition.
 
 (6) Represents the reduction of interest income earned on PFA amounts due
     from related parties.
 
 (7) Represents additional interest expense of $261 associated with the Senior
     Subordinated Notes used to finance the Management Purchase and reflects
     elimination of $38 of intercompany interest expense charged by Tribune
     Company, as if the Management Purchase had occurred on December 30, 1996.
 
 (8) Represents the increase in interest expense as a result of bank
     borrowings of $8.3 million under a new credit agreement bearing interest
     at 8.2%, as if the PFA Acquisition had occurred on December 30, 1996.
 
 (9) Represents reduction in interest expense resulting from the assumed use
     of Offering proceeds to repay $13.8 million of the Company's borrowings,
     including $8.3 million incurred after December 31, 1997 in conjunction
     with the PFA Acquisition.
 
(10) Prior to the PFA Acquisition, PFA had elected to be taxed as a Subchapter
     S corporation for federal and state income tax purposes. Pro forma
     information has been subject to federal and state corporate income taxes
     for each period presented.
 
(11) Based on the weighted average number of shares of Common Stock, including
     Common Stock equivalents outstanding, and (i) 7,892 additional shares
     representing stock options issued on February 26, 1998, (ii) the
     conversion of the PFA Preferred Stock and (iii) the shares of Class A
     Common Stock to be issued by the Company in the Offering.
 
                                      23
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS DATA
                          QUARTER ENDED MARCH 31, 1998
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
HISTORICAL
                             RESULTS
                          ---------------
                            THE            ACQUISITION    PRO     OFFERING     PRO FORMA
                          COMPANY   PFA    ADJUSTMENTS   FORMA   ADJUSTMENTS  AS ADJUSTED
                          -------  ------  -----------  -------  -----------  -----------
Revenues:
  Publishing............  $9,471   $2,411               $11,882                 $11,882
  Information services..   2,434                          2,434                   2,434
  Other.................     103                            103                     103
                          ------   ------               -------                 -------
    Total revenues......  12,008    2,411                14,419                  14,419
Operating expenses:
  Cost of publishing....   5,145      540                 5,685                   5,685
  Cost of information
   services.............     627                            627                     627
  Selling, general and
   administrative.......   2,728    1,539     $(157)(2)   3,852     $ 113 (1)     3,965
                                               (258)(3)
  Depreciation and amor-
   tization.............     274      559       473 (4)   1,306                   1,306
                          ------   ------     -----     -------     -----       -------
Operating income
 (loss).................   3,234     (227)      (58)      2,949      (113)        2,836
Interest income.........      70      112      (112)(5)      70                      70
Interest expense........    (262)              (171)(6)    (433)      302 (7)      (131)
                          ------   ------     -----     -------     -----       -------
Income (loss) before in-
 come taxes.............   3,042     (115)     (341)      2,586       189         2,775
Income tax provision
 (benefit)..............   1,390               (183)(8)   1,207        76 (8)     1,283
                          ------   ------     -----     -------     -----       -------
Net income (loss).......  $1,652   $ (115)    $(158)    $ 1,379     $ 113       $ 1,492
                          ======   ======     =====     =======     =====       =======
Basic and diluted income
 (loss) per common
 share..................                                                        $
                                                                                =======
Weighted average number
 of common shares out-
 standing(9)............
                                                                                =======
24
NOTES TO PRO FORMA
                         STATEMENT OF OPERATIONS DATA
 
                         QUARTER ENDED MARCH 31, 1998
 
(1) Represents the incremental cost associated with being a public reporting
    company.
 
(2) Represents compensation expense incurred under the Equity Incentive
    Awards, which were replaced on February 26, 1998 with an incentive stock
    option plan. See Note 19 of the Notes to the Consolidated Financial
    Statements.
 
(3) Represents: (i) $150 of management fees and $47 of excess general and
    administrative costs paid by PFA to its former owner; (ii) $29 of
    reduction in rent expense related to PFA entering into new lease with its
    former owner; and (iii) $32 of compensation, bonuses and fringe benefit
    packages paid to employees of PFA who were terminated after the PFA
    Acquisition.
 
(4) Represents an increase in amortization expense of goodwill and other
    intangible assets acquired by the Company in the PFA Acquisition.
 
(5) Represents the reduction of interest income earned on PFA's amounts due
    from related parties.
 
(6) Represents the increase in interest expense as a result of borrowings of
    $8.3 million under the Bank Facility credit agreement bearing interest at
    8.2%, as if the PFA Acquisition had occurred on December 30, 1996.
 
(7) Represents reduction in interest expense resulting from the assumed use of
    Offering proceeds to repay $13.8 million of the Company's borrowings
    including $8.3 million incurred after December 31, 1997 in conjunction
    with the PFA Acquisition.
 
(8) Prior to the PFA Acquisition, PFA had elected to be taxed as a Subchapter
    S corporation for federal and state income tax purposes. Pro forma
    information has been subject to federal and state corporate income taxes
    for each period presented.
 
(9) Based on the weighted average number of shares of Common Stock, including
    Common Stock equivalents outstanding, and (i) 7,892 additional shares
    representing stock options issued on February 26, 1998, (ii) the
    conversion of the PFA Preferred Stock and (iii) the shares of Class A
    Common Stock to be issued by the Company in the Offering.
 
                                      25
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS DATA
                          QUARTER ENDED MARCH 31, 1997
                                 (IN THOUSANDS)
HISTORICAL RESULTS
                          ------------------
                                              ACQUISITION    PRO     OFFERING     PRO FORMA
                          PREDECESSOR  PFA    ADJUSTMENTS   FORMA   ADJUSTMENTS  AS ADJUSTED
                          ----------- ------  -----------  -------  -----------  -----------
Revenues:
  Publishing............    $8,985    $2,234               $11,219                 $11,219
  Information services..     1,428                           1,428                   1,428
  Other.................        61                              61                      61
                            ------    ------               -------                 -------
    Total revenues......    10,474     2,234                12,708                  12,708
Operating expenses:
  Cost of publishing....     4,578       562                 5,140                   5,140
  Cost of information
   services.............       527                             527                     527
  Selling, general and
   administrative.......     2,161     1,228     $(238)(2)   3,151     $ 113 (1)     3,264
Depreciation and
 amortization...........       280       478       (18)(3)   1,213                   1,213
                                                   473 (4)
                            ------    ------     -----     -------     -----       -------
Operating income
 (loss).................     2,928       (34)     (217)      2,677      (113)        2,564
Interest income.........         4       122      (105)(5)      21                      21
Interest expense........       (38)               (223)(6)    (432)      302 (8)      (130)
                                                  (171)(7)
                            ------    ------     -----     -------     -----       -------
Income (loss) before in-
 come taxes.............     2,894        88      (716)      2,266       189         2,455
Income tax provision
 (benefit)..............     1,208                (207)(9)   1,001        76 (9)     1,077
                            ------    ------     -----     -------     -----       -------
Net income (loss).......    $1,686    $   88     $(509)    $ 1,265     $ 113       $ 1,378
                            ======    ======     =====     =======     =====       =======
26
NOTES TO PRO FORMA
                         STATEMENT OF OPERATIONS DATA
 
                         QUARTER ENDED MARCH 31, 1997
 
(1) Represents the incremental cost associated with being a public reporting
    company.
 
(2) Represents: (i) $143 of management fees and $24 of excess general and
    administrative costs paid by PFA to its former owner; (ii) $20 of
    reduction in rent expense related to PFA entering into new lease with its
    former owner; and (iii) $51 of compensation, bonuses and fringe benefit
    packages paid to employees who were terminated after the PFA Acquisition.
 
(3) Represents reduction in amortization expense recorded in the Predecessor
    financial statements as a result of fewer intangible assets recorded in
    conjunction with the Management Purchase.
 
(4) Represents an increase in amortization expense of goodwill and other
    intangible assets acquired by the Company in the PFA Acquisition.
 
(5) Represents the reduction of interest income earned on PFA's amounts due
    from related parties.
 
(6) Represents additional interest expense of $261 associated with the Senior
    Subordinated Notes used to finance the Management Purchase and reflects
    elimination of $38 of intercompany interest expense charged by Tribune
    Company, as if the Management Purchase had occurred on December 30, 1996.
 
(7) Represents the increase in interest expense as a result of bank borrowings
    of $8.3 million under a new credit agreement bearing interest at 8.2% as
    if the PFA Acquisition had occurred on December 30, 1996.
 
(8) Represents reduction in interest expense resulting from the assumed use of
    Offering proceeds to retire $13.8 million of the Company's borrowings
    including $8.3 million incurred after December 31, 1997 in conjunction
    with the PFA Acquisition.
 
(9) Prior to the PFA Acquisition, PFA had elected to be taxed as a Subchapter
    S corporation for federal and state income tax purposes. Pro forma
    information has been subject to federal and state corporate income taxes
    for each period presented.
 
                                      27
SELECTED HISTORICAL FINANCIAL DATA
 
  The following table presents selected combined historical financial and
other data derived (a) from the audited consolidated financial statements of:
(i) Farm Journal, Inc., a predecessor corporation (the "Prior Predecessor"),
for the year ended December 31, 1993 and the period from January 1, 1994 to
June 24, 1994, (ii) Farm Journal, Inc., a subsidiary of Tribune Company and a
predecessor corporation (the "Predecessor"), for the period from June 25, 1994
to December 31, 1994, the two years in the period ended December 29, 1996 and
the period from December 30, 1996 to March 31, 1997 and (iii) the Company for
the period from April 1, 1997 to December 31, 1997; and (b) from the unaudited
consolidated financial statements of the Company for the three months ended
March 31, 1998. The summary historical combined financial data for the year
ended December 31, 1994 represent the combined financial data of the Prior
Predecessor for the period from January 1, 1994 to June 24, 1994 and the
Predecessor for the period from June 25, 1994 to December 31, 1994. The
summary historical combined data for the year ended December 31, 1997
represent the combined financial data of the Predecessor for the period from
December 30, 1996 to March 31, 1997 and the Company for the period from April
1, 1997 to December 31, 1997. The audited financial statements of the
Predecessor for each of the two years in the period ended December 29, 1996
and for the period from December 30, 1996 to March 31, 1997 and of the Company
for the period from April 1, 1997 to December 31, 1997 (collectively, the
"Company and Predecessor Consolidated Financial Statements"), and the
unaudited consolidated financial statements of the Company for the three
months ended March 31, 1998, appear elsewhere in this Prospectus. The
unaudited historical consolidated financial data reflects all adjustments
(consisting of normal, recurring adjustments) which are, in the opinion of
management, necessary for a fair summary of the Company's financial position,
results of operations and cash flows for and as of the end of the periods
presented. The historical consolidated results of operations of the Company
for the three months ended March 31, 1998 are unaudited and not necessarily
indicative of the results of operations for the full year. The changes in
ownership that occurred in 1994 and 1997 were accounted for using the purchase
method of accounting; accordingly, certain of the historical financial data of
Predecessor and Prior Predecessor are not comparable to that of the Company.
The selected consolidated financial data set forth below are qualified by
reference to, and should be read in conjunction with, "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and the Company
and Predecessor Consolidated Financial Statements and Notes thereto included
elsewhere in this Prospectus.
 
                                      28
SELECTED HISTORICAL FINANCIAL DATA
 
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
PRIOR                     HISTORICAL                                THE     HISTORICAL
                      PREDECESSOR      PREDECESSOR  COMBINED         PREDECESSOR           COMPANY    COMBINED
                    -----------------  ----------- ---------- ---------------------------- --------  ----------
                              JANUARY
                      YEAR    1, 1994   JUNE 25,   JANUARY 1,   YEAR      YEAR    DECEMBER APRIL 1,  JANUARY 1,
                     ENDED    TO JUNE    1994 TO    1994 TO    ENDED     ENDED    30, 1996 1997 TO    1997 TO
                    DECEMBER    24,     DECEMBER    DECEMBER  DECEMBER  DECEMBER  TO MARCH DECEMBER   DECEMBER
                    31, 1993   1994     31, 1994    31, 1994  31, 1995  29, 1996  31, 1997 31, 1997   31, 1997
                    --------  -------  ----------- ---------- --------  --------  -------- --------  ----------
STATEMENT OF
 OPERATIONS DATA:
Revenues:
 Publishing.......  $23,812   $15,286    $ 6,905    $22,191   $20,639   $20,526    $8,985  $10,455    $19,440
 Information
  services........    2,703     2,142      2,729      4,871     5,617     6,049     1,428    3,802      5,230
 Other............      367       214        275        489       319       199        61      277        338
                    -------   -------    -------    -------   -------   -------    ------  -------    -------
  Total revenues..   26,882    17,642      9,909     27,551    26,575    26,774    10,474   14,534     25,008
Operating
 expenses:
 Cost of
  publishing......   15,145     9,255      5,849     15,104    15,394    14,228     4,578    7,227     11,805
 Cost of
  information
  services........    1,887       760      1,348      2,108     2,273     2,543       527    1,608      2,135
 Selling, general
  and
  administrative..    7,330     4,139      4,141      8,280     8,970     9,250     2,161    6,451      8,612
 Depreciation and
  amortization....      586       289        514        803     1,056     1,060       280      818      1,098
                    -------   -------    -------    -------   -------   -------    ------  -------    -------
Operating income
 (loss)...........    1,934     3,199     (1,943)     1,256    (1,118)     (307)    2,928   (1,570)     1,358
 Interest income..       63        33         43         76       195        20         4      224        228
 Interest
  expense.........      (32)                                                (54)      (38)    (815)      (853)
                    -------   -------    -------    -------   -------   -------    ------  -------    -------
 Income (loss)
  before income
  taxes...........    1,965     3,232     (1,900)     1,332      (923)     (341)    2,894   (2,161)       733
 Income tax
  provision
  (benefit).......      498     1,281       (658)       623      (166)       67     1,208     (680)       528
                    -------   -------    -------    -------   -------   -------    ------  -------    -------
Net income
 (loss)...........  $ 1,467   $ 1,951    $(1,242)   $   709   $  (757)  $  (408)   $1,686  $(1,481)   $   205
                    =======   =======    =======    =======   =======   =======    ======  =======    =======
Basic net income
 (loss) per common                                                                         $
 share............                                                                         =======
Diluted net income
 (loss) per common                                                                         $
 share............                                                                         =======
Weighted average
 number of common
 shares                                                                                    107,318
 outstanding (1)..                                                                         =======
OTHER DATA:
 EBITDA (2).......  $ 2,520   $ 3,488    $(1,429)   $ 2,059   $   (62)  $   753    $3,208  $  (752)   $ 2,456
 Capital
  expenditures....      251        96        136        232     2,411       554       179      178        357
 Cash flow
  information:
 Operating cash
  flows...........      148     2,049     (1,817)       232       321     1,150       571      837      1,408
 Investing cash
  flows...........     (251)      (96)      (136)      (232)   (2,411)     (554)      741  (16,753)   (16,012)
 Financing cash
  flows...........     (215)                  79         79     1,819    (1,474)   (1,488)  20,657     19,169
THE
                    PREDECESSOR COMPANY
                    ----------- --------
                    THREE MONTHS ENDED
                         MARCH 31,
                    --------------------
                       1997      1998
                    ----------- --------
STATEMENT OF
 OPERATIONS DATA:
Revenues:
 Publishing.......    $8,985    $9,471
 Information
  services........     1,428     2,434
 Other............        61       103
                    ----------- --------
  Total revenues..    10,474    12,008
Operating
 expenses:
 Cost of
  publishing......     4,578     5,145
 Cost of
  information
  services........       527       627
 Selling, general
  and
  administrative..     2,161     2,728
 Depreciation and
  amortization....       280       274
                    ----------- --------
Operating income
 (loss)...........     2,928     3,234
 Interest income..         4        70
 Interest
  expense.........       (38)     (262)
                    ----------- --------
 Income (loss)
  before income
  taxes...........     2,894     3,042
 Income tax
  provision
  (benefit).......     1,208     1,390
                    ----------- --------
Net income
 (loss)...........    $1,686    $1,652
                    =========== ========
Basic net income
 (loss) per common              $
 share............              ========
Diluted net income
 (loss) per common              $
 share............              ========
Weighted average
 number of common
 shares
 outstanding (1)..              ========
OTHER DATA:
 EBITDA (2).......    $3,208    $3,508
 Capital
  expenditures....       179       145
 Cash flow
  information:
 Operating cash
  flows...........       571       353
 Investing cash
  flows...........       741      (145)
 Financing cash
  flows...........    (1,488)
DECEMBER DECEMBER
                                          DECEMBER 31,        29,      31,       MARCH 31,
                                     ---------------------- -------- -------- ---------------
                                      1993   1994    1995     1996     1997    1997    1998
                                      ----   ----    ----     ----     ----    ----    ----
BALANCE SHEET DATA:
 Working capital...................  $1,887 $ 4,184 $ 1,061 $ 1,507  $ 6,126  $ 7,502 $ 8,249
 Total assets......................   7,714  21,357  22,923  21,069   22,508   24,732  27,946
 Total long-term debt..............                                   11,000   11,000  11,000
 Total shareholders' equity........   3,803  16,399  15,642  15,234    8,449    9,849  10,464
29
NOTES TO SELECTED FINANCIAL DATA
 
(1) Based on the weighted average number of shares of Common Stock outstanding
    for the periods presented after giving effect to the Recapitalization. See
    "Description of Capital Stock--Recapitalization."
 
(2) EBITDA represents income (loss) before provision (benefit) for income
    taxes plus depreciation and amortization plus net interest (income)
    expense. EBITDA is not intended to represent cash flows from operations
    and should not be considered as an alternative to net income as an
    indicator of the Company's operating performance or to cash flows as a
    measure of liquidity. The Company believes that EBITDA is a standard
    measure commonly reported and widely used by analysts, investors and other
    interested parties in the publishing industry. Accordingly, this
    information has been disclosed herein to permit a more complete
    comparative analysis of the Company's performance relative to other
    companies in the industry. The Company's definition of EBITDA may not be
    identical to similarly titled measures of other companies and, therefore,
    may not necessarily be an accurate basis of comparison.
 
                                      30
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
  The following discussion should be read in conjunction with the Selected
Consolidated Financial Data and the Consolidated Financial Statements and
Notes thereto included in this Prospectus.
 
OVERVIEW
 
  Farm Journal is one of the country's oldest and largest providers of
agricultural information, principally through print and electronic publishing,
data management and related information services. The Company's publishing
operations include its 121 year old flagship publication, Farm Journal, one of
the largest circulation agriculture magazines in the United States; Pro
Farmer, the largest circulation newsletter devoted to the agricultural
commodity markets; several specialty agribusiness magazines; the Links
business, a satellite-delivered commodity news and analysis service; and
several agriculture-oriented Internet sites. The Company's data management and
information services businesses provide proprietary data and analysis about
commercial farming and ranching operations to leading agricultural industry
suppliers, such as equipment manufacturers, seed producers and crop protection
suppliers.
 
  The Company's principal sources of revenue have been advertising sales,
subscription sales, data management fees and market research sales. For the
year ended December 31, 1997, $18.2 million, or 72.8%, of the Company's
revenues were from advertising and $1.2 million, or 5.0%, were from
circulation, principally Farm Journal subscriptions. The Company's data
management fees represented $2.6 million, or approximately 10.5%, of 1997
revenues and market research sales represented $2.6 million, or approximately
10.5%, of 1997 revenues. Miscellaneous sales accounted for $338,000, or 1.2%,
of 1997 revenues.
 
  The Company's five largest customers accounted for approximately 23% of the
Company's revenues in 1997. Such customers generated revenues for the Company
not only by advertising but also by utilizing the Company's data management
and market research services. Over the past five years, approximately 66% of
the Company's advertising revenues per year has been derived from 20
customers.
 
  The Company anticipates that its revenue mix and customer concentration will
change as it implements its growth strategy. Initiatives that may change the
composition of the Company's revenues and customer base include the
development of new businesses, such as conferences and seminars; farm
management services; new subscription-based publications; strategic
acquisitions; co-branding and affinity ventures; and international expansion.
See "--PFA Acquisition."
 
  In addition to revenue initiatives, the Company also has identified and
implemented operational changes that have resulted in significant savings and
efficiency improvements since 1996, shortly after the appointment of Roger
Randall as President of FJI. Certain of these changes, such as the
consolidation and regionalization of certain issues of its publications, have
had a negative effect on total advertising revenues. Other changes have
included a staff reduction resulting in an approximately 14% decrease in
salary and related expenses from 1996 to 1997. Together, these changes have
enhanced operating margins and increased EBITDA through reduced production and
distribution costs. In addition, the Company has recently retained the
services of a consulting firm to recommend additional efficiencies and cost
reduction measures.
 
  The Company's cost of revenues for the year ended December 31, 1997
consisted of $11.8 million in publishing costs and $2.1 million in cost of
information services provided. The principal components of the Company's
publishing costs, and the approximate percentage each represented of total
publishing costs for the year ended December 31, 1997, were paper (18%),
printing and binding (29%), postage (19%), editorial expense (29%), and in-
house production and other product development costs (6%). The cost of
information services is predominantly staff-related labor and associated
fringe benefit and payroll tax expenses.
 
  The Company's principal publishing-related raw material is paper. Although
paper prices have experienced long periods of stability, the price of paper
stock used in all the Company's publications has experienced
 
                                      31
substantial volatility since January 1994. Multiple increases in the price of
the Company's body stock (#36) paper resulted in an overall increase of 10% in
1994 and another 34% in 1995, materially and adversely affecting the Company's
results of operations in 1995. Editorial costs include: (i) internal staff
expenses for content development and art services; (ii) the cost of purchased
content, such as freelance articles, engravings and photos; (iii) preliminary
offset production costs; and (iv) other editorial-related expenses such as
travel, entertainment and supplies. These costs represented approximately 52%,
28%, 5% and 15%, respectively, of total 1997 editorial cost.
 
  The principal components of the Company's selling, general and
administrative expenses include salaries, travel and entertainment, rent,
direct mail material and postage. Most administrative costs are shared
expenses of the publishing and information services businesses.
 
PFA ACQUISITION
 
  On April 2, 1998, Farm Journal acquired all of the outstanding stock of PFA
and PFA's affiliate, Professional Market Management, Inc. ("PMM"). For the
twelve months ended December 31, 1997, PFA and PMM generated pro forma EBITDA
of approximately $3.0 million after giving effect, as of December 31, 1996, to
continuing operational changes related to the PFA Acquisition. The purchase
price of the PFA Acquisition consisted of $11.0 million in cash and $1.0
million in PFA Preferred Stock that converts automatically at the closing of
this Offering into $1.0 million in Class A Common Stock valued at the price
offered to the public in this Offering. See "--Liquidity and Capital
Resources" for a description of the financing of the PFA Acquisition.
 
  The consummation of the PFA Acquisition affected the Company's results of
operations in certain significant respects. The PFA Acquisition will be
reflected using purchase accounting. Accordingly, the depreciation and
amortization expense of the Company will be significantly higher than the
corresponding amounts were for the Company prior to the PFA Acquisition.
Additionally, interest expense will increase due to debt used to finance the
PFA Acquisition. Management anticipates that the PFA Acquisition will result
in some moderation of the seasonality of the Company's future results of
operations. See "--Seasonality." Furthermore, PFA's revenues are predominantly
subscription-derived and, therefore, are expected to increase the Company's
subscription revenues. In addition, the PFA Acquisition is expected to
increase the Company's promotion, production and editorial costs.
 
  The Company's results of operations may be affected by a number of risks and
uncertainties, including changes in advertising, customer purchasing patterns,
consolidation among advertisers, increases in paper and postage prices (which
in certain years have exceeded amounts which could reasonably be passed along
to customers), competitive pressures from similar businesses and other
businesses advertising to the Company's magazine readership, the ability of
management to execute its business plan, and business conditions in the
agriculture industry and the general economy.
 
                                      32
RESULTS OF OPERATIONS
 
  The following table sets forth, for the periods indicated, items within the
Company's consolidated statements of income as a percentage of revenues for
each period.
COMBINED
                                                    COMPANY AND
                                 PREDECESSOR        PREDECESSOR  PREDECESSOR COMPANY
                          ------------------------- ------------ ----------- -------
                                                                    FOR THE THREE
                                    FOR THE YEAR ENDED              MONTHS ENDED
                          --------------------------------------      MARCH 31,
                          DECEMBER 31, DECEMBER 29, DECEMBER 31, -------------------
                              1995         1996         1997        1997      1998
                          ------------ ------------ ------------ ----------- -------
Publishing..............      77.7%        76.7%        77.7%        85.8%     78.9%
Information services....      21.1         22.6         20.9         13.6      20.3
Other...................       1.2          0.7          1.4          0.6       0.8
                             -----        -----        -----        -----     -----
Total revenues..........     100.0%       100.0%       100.0%       100.0%    100.0%
Operating expenses(1):
  Cost of revenues......      66.4%        62.7%        55.8%        48.8%     48.1%
  Selling, general and
   administrative.......      33.8         34.5         34.4         20.6      22.7
  Depreciation and amor-
   tization.............       4.0          4.0          4.4          2.7       2.3
                             -----        -----        -----        -----     -----
Total operating
 expenses...............     104.2%       101.2%        94.6%        72.1%     73.1%
Operating income
 (loss).................      (4.2)%       (1.2)%        5.4%        27.9%     26.9%
Interest income (ex-
 pense).................       0.7         (0.1)        (2.5)        (0.3)     (1.6)
                             -----        -----        -----        -----     -----
Income (loss) before in-
 come taxes.............      (3.5)%       (1.3)%        2.9%        27.6%     25.3%
Income tax provision
 (benefit)..............      (0.7)         0.2          2.1         11.5      11.5
                             -----        -----        -----        -----     -----
Net income (loss).......      (2.8)%       (1.5)%        0.8%        16.1%     13.8%
                             =====        =====        =====        =====     =====
EBITDA..................      (0.2)%        2.8%         9.8%        30.6%     29.2%
                             =====        =====        =====        =====     =====
--------
(1) All expenses are a percentage of total revenues.
 
THREE MONTHS ENDED MARCH 31, 1998 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1997
 
  Revenues. Revenues for the three months ended March 31, 1998 increased by
$1.5 million, or 14.6%, to $12.0 million from $10.5 million for the three
months ended March 31, 1997. Publishing revenues increased by $486,000, or
5.4%, due principally to an increase in advertising pages sold in Farm
Journal. Information services revenues increased over the comparable period by
$1.0 million, or 70.4%, which was attributable to revenue recognized on the
completion of the first milestone of RAPID. No revenues for RAPID was reported
in the comparable quarter of 1997.
 
  Operating Expenses. Cost of publishing increased by $567,000, or 12.4%, from
$4.6 million for the three months ended March 31, 1997 to $5.1 million for the
three months ended March 31, 1998. This increase was principally due to
$372,000 of costs relating to a higher number of advertising pages sold (with
an unusual concentration in a single issue that further increased production
costs) and to $195,000 in additional paper expenses resulting from a 20.3%
increase in paper prices. The cost of information services increased by
$100,000, or 19.0%, over the comparable period principally due to the
recognition of certain costs relating to RAPID.
 
  Selling, general and administrative expense increased by $567,000, or 26.2%,
from $2.2 million for the three months ended March 31, 1997 to $2.7 million
for the three months ended March 31, 1998. This increase reflects the lower
administrative expenses of the comparable period when certain senior
management positions remained open prior to the Management Purchase, a non-
cash charge for stock-based compensation of $178,000 incurred in the 1998
period and a cost of $252,000 for the hiring of additional sales associates in
1998 with the restructuring and refocusing of the Company's sales efforts.
 
 
                                      33
Operating Income. Operating income increased by approximately $306,000, or
10.5%, from $2.9 million for the three months ended March 31, 1997 to $3.2
million for the three months ended March 31, 1998. The increase in operating
income was due to the recognition during the 1998 period of a substantial
portion of the profit generated by RAPID, offset by an increase in paper costs
and the increase in sales, general and administrative expense discussed above.
 
  Interest Expense. Net interest expense increased by $158,000 from $34,000
for the three months ended March 31, 1997 to $192,000 for the three months
ended March 31, 1998. This increase was due to interest expense arising from
the debt incurred in connection with the Management Purchase.
 
  Income Tax Provision. Income tax provision increased by $182,000 from $1.2
million for the three months ended March 31, 1997 to $1.4 million for the
three months ended March 31, 1998. This increase was due to an increase in
income before income taxes and to an increase in certain non-deductible
expenses.
 
  Net Income. Net income decreased by $34,000, or 2.0%, from $1.69 million for
the three months ended March 31, 1997 to $1.65 million for the three months
ended March 31, 1998 for the reasons set forth above. Net income as a
percentage of net revenues decreased 2.3% from 16.1% for the three months
ended March 31, 1997 to 13.8% for the three months ended March 31, 1998,
reflecting, among other things, costs incurred in implementing the Company's
business strategy.
 
1997 COMPARED WITH 1996
 
  Revenues. Revenues for 1997 decreased $1.8 million, or 6.6%, to $25.0
million from $26.8 million in 1996. The $1.1 million, or 5.3%, reduction in
publishing revenues was due principally to initiatives taken to increase
operating margins and to enhance the Company's competitive position. These
initiatives included the repositioning of three Farm Journal mid-month issues
from national to regional publications, the elimination of one issue of Top
Producer and an average reduction of 4% in Farm Journal advertising rates in
order to increase advertising sales. Publishing revenues in 1997 also
reflected the decision of a key customer to shift its advertising from a
product focus to a national image focus, resulting in a reduction in
publishing revenue of $344,000. The $819,000, or 13.5%, reduction in
information services revenues in 1997 was principally a result of a decline in
market research sales reflecting a decision to eliminate certain low margin
market research projects and the loss of sales management personnel prior to
the Management Purchase.
 
  Operating Expenses. Cost of publishing for 1997 decreased by $2.4 million,
or 17.0%, to $11.8 million compared with $14.2 million for 1996. This decrease
was predominantly due to the initiatives taken to increase operating margins
discussed above, lower paper costs in 1997 and the full year impact of
editorial staff reductions made in 1996. Cost of information services
decreased by $408,000, or 16.0%, to $2.1 million compared with $2.5 million
for 1996, principally due to a reduction in marketing research costs
consistent with lower sales. Cost of publishing and information services as a
percentage of total revenues decreased to 55.8% in 1997 from 62.7% in 1996 due
to a greater reduction of costs than revenue decline.
 
  Selling, general and administrative expense for 1997 decreased $638,000, or
6.9%, to $8.6 million. This decrease was primarily attributable to lower costs
associated with the full year impact of support staff reductions and office
expense savings from the consolidation of the Chicago, Minneapolis and New
York satellite offices, offset by $195,000 in non-cash stock based
compensation costs. Selling, general and administrative expense as a
percentage of sales remained constant at 34.4%.
 
  Operating Income. Operating income increased $1.7 million to $1.4 million
for 1997 from a loss of $307,000 for the year ended December 29, 1996 for the
reasons stated above. Operating income as a percentage of net revenues
increased to 5.4% from (1.1%) for the same period.
 
  Interest Expense. Net interest expense was $625,000 in 1997 compared with
net interest expense of $34,000 in 1996 resulting from interest expense
incurred on the Senior Subordinated Notes issued on April 1, 1997 to finance
the Management Purchase.
 
                                      34
Income Tax Provision. From June 25, 1994 through March 30, 1997, the Company
was a party to a tax-sharing agreement with Tribune Company and was included
in the consolidated tax returns of Tribune Company. Under the agreement, the
Company was required to pay Tribune Company an amount equal to the amount of
tax the Company would have paid if it had filed a separate federal income tax
return.
 
  Net Income. Net income increased $613,000 to $205,000 for 1997 from a loss
of $408,000 for the year ended December 29, 1996 for the reasons stated above.
Net income as a percentage of net revenues increased to 0.8% from (1.5%) for
the same period.
 
1996 COMPARED WITH 1995
 
  Revenues. Revenues for 1996 increased $199,000, or 0.7%, to $26.8 million
compared with $26.6 million for 1995. This improvement was attributable to an
increase in information services revenue of $432,000 principally as a result
of database management contracts with new clients. This increase was offset
slightly by declines in publishing revenues of $113,000, principally due to a
decline in Farm Journal circulation revenues. Circulation revenues was
adversely affected by a decision to pursue renewals without circulation agency
support. Advertising revenues was stable in both the number of advertising
pages sold and per page price.
 
  Operating Expenses. Cost of publishing for 1996 decreased by $1.2 million,
or 7.6%, to $14.2 million compared with $15.4 million for 1995. This decrease
was due to lower paper, printing and postage costs of $800,000 attributable to
planned declines in circulation copies and lower editorial costs of $365,000
attributable to staff reductions and a reduction in purchased content (such as
freelance copy and photographs). Cost of information services increased by
$270,000 consistent with increased sales. Cost of publishing and information
services as a percentage of total revenues decreased to 62.7% in 1996 from
66.4% in 1995 due to a decline in costs and an increase in sales.
 
  Selling, general and administrative expense for 1996 increased $280,000, or
3.1%, to $9.3 million compared with $9.0 million for 1995. This increase was
primarily attributable to increased general and administrative expenses of
$514,000 associated with the full-year impact of rental charges at the
Company's new location offset by $269,000 in lower sales expenses due to
support staff reductions and satellite office consolidations.
 
  Operating Loss. Operating loss improved $811,000 to a loss of $307,000 for
1996 from a loss of $1.1 million for 1995. The improvement was the result of
cost reduction measures and revenue improvements discussed above. Operating
loss as a percentage of net revenues improved to (1.1%) from (4.2%) for the
same period.
 
  Interest Expense. Net interest expense was $34,000 in 1996 compared with
interest income of $195,000 in 1995, reflecting lower cash levels in 1996 due
to higher capital expenditures for computer and leasehold improvements
incurred throughout 1995.
 
  Income Tax Provision. Income tax provision increased by $233,000 from a
benefit of $166,000 to a provision of $67,000 due to the earnings improvement
in 1996 over 1995.
 
  Net Loss. Net loss improved $349,000 to a loss of $408,000 for 1996 from a
loss of $757,000 for 1995 for the reasons stated above. Net loss as a
percentage of net revenues improved to (1.5%) from (2.8%) for the same period.
 
LIQUIDITY AND CAPITAL RESOURCES
 
  Working capital (including cash) totaled $8.2 million as of March 31, 1998,
$6.1 million as of December 31, 1997, and $1.5 million as of December 29,
1996. The increase in working capital from December 29, 1996 to December 31,
1997 resulted primarily from the contribution of $4.4 million in cash for
working capital purposes as part of the Management Purchase. The increase in
working capital from December 31, 1997 to March 31,
 
                                      35
1998 was primarily due to the build-up of accounts receivable that typically
occurs during the winter months, reflecting an increase in publications issued
during this period.
 
  Cash and cash equivalents totaled $4.9 million as of March 31, 1998, $4.7
million at December 31, 1997, and $277,000 as of December 29, 1996.
 
  Cash provided from operations was $353,000 for the three months ended March
31, 1998, as compared to $571,000 for the three months ended March 31, 1997.
More cash was required in the first quarter of 1998 to support higher
receivables resulting from higher sales and slower collections than in the
comparable period immediately before the Management Purchase. The Company's
net cash provided by operations was approximately $1.4 million for the year
ended December 31, 1997, as compared to $1.1 million for the year ended
December 29, 1996. Of this difference, $612,000 was related to an increase in
net income.
 
  Cash used for investing activities was $145,000 for the three months ended
March 31, 1998, representing the purchase of office equipment, furniture and
leasehold improvements. This compares to $741,000 in cash provided by
investing activities for the three months ended March 31, 1997 resulting
predominantly from the receipt of $920,000 from the sale of the Company's
former headquarters building. The Company's net cash provided by investing
activities for the year ended December 31, 1997 was $523,000 (excluding the
use of $16.5 million relating to the Management Purchase), as compared to a
use of cash for the year ended December 29, 1996 of $554,000. Cash increased
in 1997 due to the receipt at the beginning of the year of $920,000 from the
sale of the Company's former headquarters building.
 
  There were no financing activities in the quarter ended March 31, 1998. The
Company's net cash provided by financing activities for the year ended
December 31, 1997 was $19.2 million compared to a use of cash of $1.5 million
for the year ended December 29, 1996. Of the amount provided in 1997, $11.0
million represented proceeds of the Senior Subordinated Notes and $10.1
million represented proceeds from the issuance of equity, such amounts being
offset by $424,000 of related financing costs.
 
 Financing Arrangements
 
  The Senior Subordinated Notes provided partial financing for the Management
Purchase. See "Management Purchase." Interest on the Senior Subordinated Notes
is payable semi-annually in arrears on June 1 and December 1 of each year
commencing December 1, 1997. Principal payments of $2.2 million are due on
June 1 of each year from 2003 through 2006, with the entire remaining unpaid
principal amount of the notes together with interest accrued thereon due April
1, 2007. The Note Purchase Agreement includes requirements as to the
maintenance of financial ratios and tangible net worth and certain other
financial restrictions. The agreement also has dividend restriction covenants
that limit dividend payments by FJI based upon calculations described in the
agreement.
 
  The Bank Facility provides FJI with a revolving facility of up to $15.0
million, reducing annually commencing in 1999 by $1.5 million through 2001 and
by $2.25 million from 2002 through 2004 and terminating in 2005. Amounts
outstanding are guaranteed by FJC and its subsidiaries, are secured by certain
of FJI's assets and bear interest at either the London Interbank Offered Rate
plus from 1.75% to 2.50% or the greater of the lending bank's prime rate and
the federal funds rate plus 0.5%, depending on a leverage ratio formula. The
facility also requires the Company to comply with certain financial covenants,
including with respect to limitations on funded debt and minimum levels of
interest and fixed charge coverage, and with certain other affirmative and
negative covenants customary for similar transactions. The Company borrowed
$8.3 million under the Bank Facility and used $3.1 million of cash to fund the
$11.0 million cash portion of the purchase price of the PFA Acquisition and to
pay related expenses. The Company has no other cash borrowings under the Bank
Facility and will pay down outstanding cash borrowings with the proceeds of
the Offering. See "Use of Proceeds." The Company also has an outstanding
$300,000 letter of credit under the Bank Facility.
 
 
                                      36
The Company believes that the net proceeds of the Offering together with
internally generated cash will be sufficient to satisfy its funding
requirements for the forseeable future, excluding possible needs relating to
significant acquisitions or other expansion activities. Additional funds may
be required to finance acquisitions or other expansion activities of the
Company. Such funds may be obtained through bank borrowings and the issuance
of debt or equity securities. There can be no assurance that such additional
funds can be obtained or, if so, at what cost.
 
SEASONALITY
 
  The Company's business historically has been seasonal. During 1997, revenues
were $10.5 million in the first quarter (representing 42% of annual revenues),
$3.8 million in the second quarter, $4.4 million in the third quarter and $6.3
million in the fourth quarter. In addition, 46% of total 1997 advertising
revenues were recorded in the first quarter of the year. This seasonality is
primarily due to the increased number of issues published by the Company
during the winter (crop planning) months as well as the greater number of
advertising pages sold per issue during those months. The Company's profits
follow the seasonality of revenues. The seasonality of the Company's business
places a peak demand on cash requirements during the fourth quarter of each
year to support production and sales costs and a buildup in customer
receivables. Any substantial decrease in first quarter advertising revenues
could have a material adverse effect on the Company's profitability for the
entire fiscal year.
 
  The following table sets forth the unaudited revenues, operating costs and
expenses, net income (loss) and EBITDA of the Company for the four quarters of
1997.
QUARTERS ENDED
                          -----------------------------------------------------
                          MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,  TOTAL
                            1997      1997       1997          1997      1997
                          --------- -------- ------------- ------------ -------
                                             (IN THOUSANDS)
Revenues..............  $10,474   $3,799     $4,371        $6,364    $25,008
   Operating expenses....  $ 7,546   $5,046     $4,976        $6,082    $23,650
   Net income (loss).....  $ 1,686   $ (891)    $ (463)       $ (127)   $   205
   EBITDA................  $ 3,208   $ (972)    $ (330)       $  550    $ 2,456
INFLATION
 
  The Company believes that inflation has not had a material impact on its
results of operations for the periods discussed herein.
 
NEW ACCOUNTING PRONOUNCEMENTS
 
  In February 1997, the FASB issued Statement of Accounting Standards No. 129,
Disclosure of Information about Capital Structure ("SFAS No. 129"), which
establishes new standards for disclosing information about an entity's capital
structure. Adoption of SFAS No. 129 did not have a significant impact on the
Company's financial statements.
 
  In June 1997, the FASB issued Statement of Accounting Standards No. 130,
Reporting Comprehensive Income ("SFAS No. 130"). This statement, which
establishes standards for reporting and disclosure of comprehensive income, is
effective for interim and annual periods beginning after December 15, 1997,
although earlier adoption is permitted. Reclassification of financial
information for earlier periods presented for comparative purposes is required
under SFAS No. 130. As this statement only requires additional disclosures in
the Company's consolidated financial statements, its adoption will not have
any impact on the Company's consolidated financial position or results of
operations. The Company has adopted SFAS No. 130 effective January 1, 1998.
 
  In June 1997, the FASB issued Statement of Accounting Standards No. 131,
Disclosures about Segments of an Enterprise and Related Information ("SFAS No.
131"). This statement, which establishes standards for the
 
                                      37
reporting of information about operating segments and requires the reporting
of selected information about operating segments in interim financial
statements, is effective for fiscal years beginning after December 15, 1997,
although earlier application is permitted. Reclassification of segment
information for earlier periods presented for comparative purposes is required
under SFAS No. 131. The Company does not expect adoption of this statement to
result in significant changes to its presentation of financial data by
business segment. The Company adopted SFAS No. 131 effective January 1, 1998.
 
IMPACT OF THE YEAR 2000 ISSUE
 
  The Year 2000 issue is the result of computer programs which were written
using two digits rather than four to define the applicable year. For example,
date-sensitive software may recognize a date using "00" as the Year 1900
rather than the Year 2000. Such misrecognition could result in system failures
or miscalculations causing disruptions of operations, including, among others,
a temporary inability to process transactions, send invoices or engage in
similar normal business activities.
 
  The Company has established a committee to develop a comprehensive Year 2000
plan with the goal of completing updates to key systems by December 31, 1998.
The Company has assessed the scope of the Company's risks related to problems
its computer systems may have in processing date information related to the
Year 2000 and believes such risks are not significant.
 
  The Company has identified all of its significant internal software
applications which contain source code that may be unable to appropriately
interpret the Year 2000 and has already begun to modify or replace those
applications. The Company has determined that its accounting system and
employee network system are Year 2000 compliant. The Company's advertising
acknowledgment system is the only operating program that is not Year 2000
compliant. Management believes that the estimated costs to modify or replace
this system are not material to the Company.
 
  In addition, the Company has inquired of its major suppliers about their
progress in identifying and addressing problems related to the Year 2000.
Certain of the Company's major suppliers have informed the Company that such
suppliers do not anticipate problems in their business operations due to Year
2000 compliance issues. The Company is currently unable to determine the
extent to which Year 2000 issues will affect its other suppliers, or the
extent to which it would be vulnerable to the suppliers' failure to remediate
any of their Year 2000 problems. Although no assurance can be given that all
of the Company's major suppliers' systems will be Year 2000 compliant, the
Company believes that the risk is not significant.
 
                                      38
BUSINESS
 
  Farm Journal is one of the country's oldest and largest providers of
agricultural information, principally through print and electronic publishing,
data management and related information services. The Company's publishing
operations include its 121 year old flagship publication, Farm Journal, one of
the largest circulation agriculture magazines in the United States; Pro
Farmer, the largest circulation newsletter devoted to the agricultural
commodity markets; several specialty agribusiness magazines, including Top
Producer and the Today livestock publications; the Links business, a
satellite-delivered agricultural commodity news and analysis service; and
several agriculture-oriented Internet sites. The Company's data management and
information services businesses, conducted through the Company's FJIR
division, provide proprietary data and analysis about commercial farming and
ranching operations to leading agricultural industry suppliers, such as
equipment manufacturers, seed producers and crop protection suppliers. The
Company believes that the Farm Journal brand is among the most trusted,
respected and authoritative names in American agriculture and that the
Company's database, created through over 30 years of direct communication with
American farmers and ranchers, is unique in its depth and accuracy.
 
  In April 1997, management and an investor group purchased FJI from Tribune
Company. Since the Management Purchase, the Company has begun implementing a
strategy to build on the Farm Journal brand and the Company's unique database
and sophisticated data analysis capabilities to become the worldwide market
leader for serving the large and growing need for quality information by
farmers and ranchers and the businesses that serve them.
 
MARKET OPPORTUNITY
 
  The USDA estimates that in 1997, approximately $213 billion of agricultural
products were sold in the United States alone. Management believes worldwide
agricultural sales figures are a multiple of domestic sales. The size and
increasing sophistication and complexity of the global agricultural business
has created a substantial and growing need for quality information among
farmers and ranchers. Farm businesses, to remain competitive, must understand
and adapt to rapid technological advancements, curtailment of government
subsidies and other policy changes, volatile commodities markets,
globalization of agricultural trade and other industry developments.
Management believes that the market for information and analysis needed by
farm businesses to address these issues is significant and underserved given
the overall size of the market for agricultural products.
 
  Management also believes that there is a related large and growing need for
quality information and information services among businesses that supply
farmers and ranchers. The increasing complexity of the industry, as well as
its capital intensive nature, has, among other things, resulted in the
consolidation of farms and purchasing power. According to the USDA,
approximately $133 billion of the estimated total of $170 billion in farm
supplies sold in 1996 were purchased by the 18% of all farms that generate
$100,000 or more in annual revenues,farms which the USDA classifies as "Class
1A farms." To reach these largest purchasers, agricultural product suppliers
increasingly are using targeted relationship marketing techniques which
require more detailed information about the most successful farmers and
ranchers. Farm Journal believes it is effectively positioned to satisfy the
large and growing domestic and worldwide demand for such information services
with the Company's database, data services expertise and longstanding
relationships with farmers and ranchers.
 
GROWTH STRATEGY
 
  Farm Journal's objective is to aggressively grow revenues and improve
profitability while becoming the leading worldwide provider of agricultural
information and information services to farmers, ranchers, agricultural
suppliers and related constituencies. Farm Journal will continue to pursue
growth through numerous internal initiatives and strategic acquisitions that
leverage the Farm Journal brand and the Company's longstanding relationships
in the agricultural community and that build on the Company's other
competitive strengths, including content development and data services. The
elements of this strategy are set forth below:
 
  Increase Revenue from Existing Business. Management believes that there is
substantial opportunity to increase revenues from existing business and has
commenced a variety of revenue-enhancing initiatives. These initiatives have
included combining data management and market research operations and adding
sales and
 
                                      39
marketing directors to create new product and cross-selling opportunities,
increasing subscription rates and converting controlled-circulation
publications to partially-paid status, increasing the Company's sales force,
implementing performance-based compensation and emphasizing classified
advertising sales. In addition, management anticipates expanding its Links
commodity news and analysis businesses with new marketing relationships and
product introductions.
 
  Develop Related Revenue Opportunities. Farm Journal believes there are
numerous opportunities to develop additional revenues by leveraging the
Company's strong brand identity, data management capabilities and customer and
reader relationships. These opportunities include organization of conferences
and seminars; direct sales of books, videos and other merchandise; event
marketing; custom publishing for agricultural suppliers, trade groups and
other agricultural related constituencies; development of farm management
services; and the launch of new publications, including newsletters,
directories, other agricultural related business-to-business magazines and
certain rural-oriented titles. In launching new publications, management
intends to build on its strong customer relationships by seeking full or
partial sponsorship to minimize start-up costs.
 
  Pursue Strategic Acquisitions. Farm Journal intends to pursue strategic
acquisitions of agricultural related media and information businesses. The
Company's initial strategy will be to focus on acquisitions that will
immediately expand the Company's product and media offerings as well as create
benefits from cross-selling of advertisers, cross-promotion of readership and
expansion of the Farm Journal database. Emphasis will be placed on acquiring
companies that serve the Class 1A farm market. The Company intends to pursue
acquisitions of companies that operate in different media, such as television,
radio and the Internet; that provide coverage of those segments of the
agricultural industry not well-penetrated by Farm Journal, such as fruits,
vegetables and nuts; that address agricultural related businesses, such as
food processing, governmental regulation and shipping; and that target
interests of rural readers, such as hunting, gardening and crafts.
 
  Create Co-Branding and Affinity Programs. Management believes that, through
the extension of the Farm Journal brand, there are substantial opportunities
to serve its target audience (as well as other rural residents) through co-
branding and other joint ventures that offer value alternatives to products
and services that have traditionally been unavailable, not competitively
priced or not ideally structured for farmers, ranchers or other residents of
rural communities. Farm Journal has formed and is pursuing several strategic
alliances with selected financial services and consumer products companies to
co-brand and offer tailored or value-priced products and services to its rural
constituency. Initially these offers will include insurance, credit and
investment products and selected consumer items, such as home computers. Farm
Journal intends to expand into other areas in which the Company is able to
identify and offer products and services of superior value to the farming and
rural communities.
 
  Expand Internationally. The United States agricultural industry is the most
productive and technically sophisticated in the world, exporting its
technology and an estimated $57 billion of product in 1997. Given the
Company's position as a leading provider of agricultural information in the
United States agricultural industry and given a trend toward the globalization
of agricultural technology and trade, management believes that there is a
substantial long-term opportunity to expand its business activities overseas.
Initially, Farm Journal will launch a fully sponsored, custom published
international magazine targeted to selected agricultural decision-makers
worldwide and pursue joint ventures and other relationships with foreign
agribusiness information providers.
 
                                      40
PUBLISHING OPERATIONS
 
  The following table sets forth selected information relating to the
Company's current portfolio of print and electronic publications as of
December 31, 1997.
NUMBER OF
                                                            ISSUES
                                       CIRCULATION         PER YEAR
                               --------------------------- ---------    1997
                         FIRST                                       ADVERTISING
PRINT PUBLICATIONS       ISSUE       TYPE(1)       AMOUNT               PAGES
------------------       ----- ------------------- -------           -----------
Farm Journal............ 1877  Controlled and Paid 630,266     13        381
Top Producer............ 1984      Controlled      221,015      9        295
Beef Today.............. 1964      Controlled      135,956     10        259
Dairy Today............. 1964      Controlled       99,997     10        204
Hogs Today.............. 1962      Controlled       73,557     10        188
Pro Farmer.............. 1973         Paid          21,484     50        N/A
LandOwner............... 1979         Paid           2,683     24        N/A
ELECTRONIC PUBLICATIONS
-----------------------
FutureLink.............. 1988         Paid           3,654
Globalink............... 1988         Paid           1,840
Farm Journal Today at
 www.farmjournal.com.... 1995         Free             N/A
Pro Farmer at
 www.profarmer.com...... 1996         Free             N/A
--------
(1) Controlled circulation refers to a pre-determined limited number of
    subscribers who have certified to the publisher that their job functions
    include purchasing authority in the particular market served by the
    publication. The Company collects subscriber demographics to verify such
    purchasing authority. See "--Circulation."
 
Print Publications
 
  Farm Journal
 
  The Company's flagship publication is Farm Journal, which is published 13
times annually and is the largest circulation farm magazine in the United
States. Farm Journal was first published in 1877. Based on FARMS '97 data from
Roper Starch Worldwide ("Roper"), the Company estimates that Farm Journal's
average issue readership is composed of 59% of all domestic farmers and 70% of
all domestic farmers on Class 1A farms. In addition, based on such Roper data,
the Company estimates that 89% of all American farmers read at least one out
of every five issues of the magazine. The magazine's circulation, comprised of
paid and controlled subscribers, was 630,266 as of December 31, 1997, with
readers in all fifty states. In addition to farmers and ranchers, Farm
Journal's subscribers consist of members of related professional groups,
including, professional farm managers, agricultural bankers, farm supply
dealers, educators and government officials.
 
  In 1996, Farm Journal had an estimated 23% advertising market share among
competing magazines. Management believes that among the magazine's principal
competitive strengths are its editorial quality and integrity and its
reputation as a prominent policy leader among farmers and ranchers, government
officials, rural bankers and other professionals involved in the domestic
agricultural business. Farm Journal is the only agricultural magazine to have
won the prestigious "Calder Award" from the American Society of Magazine
Editors, which it received in 1986. In 1997, Farm Journal won first place in
four out of nine categories, including "Story of the Year," in the American
Agricultural Editors Association's annual journalism awards program. The
current editor of Farm Journal is also a past president of the National Press
Club. Farm Journal has been a leading advocate of numerous successful
agricultural policy initiatives, such as livestock quarantine procedures and
farm tax benefits. The magazine's position on various legislative matters is
frequently cited in legislative hearings and quoted in the
Congressional Record.
 
 
                                      41
Top Producer
 
  The Company also publishes Top Producer, a magazine published nine times per
year and targeted to the managers of American farms ranking in the top 20%
based on sales. Since the Management Purchase, the Company has redesigned this
magazine to further differentiate it from Farm Journal and to transform it
into a partially paid circulation magazine. As of December 31, 1997, the
magazine's controlled circulation was 221,015. Top Producer focuses on farming
as a business, concentrating on management and business strategies. In
contrast to Farm Journal's editorial focus on production and policy issues,
Top Producer explores such topics as running a small business, planning for
retirement and managing crop risk. The magazine often uses personal profiles
to demonstrate successful farming business strategies. Top Producer also
retains the services of some of the country's foremost tax, law and finance
experts as regular contributors. In 1998, the magazine began a series of
sponsored seminars for farmers.
 
  Pro Farmer
 
  PFA's newsletter, Pro Farmer, is the largest circulation agricultural
commodity markets newsletter in the United States. The newsletter provides
specific concise news on major agricultural commodities and includes commodity
market forecasts applying both fundamental and technical analysis. Pro Farmer
is published fifty times per year and has over 20,000 subscribers to its
printed version, which currently sells for $119 annually. Approximately 3,760
additional subscribers obtain summary Pro Farmer content from the Data
Transmission Network Corporation ("DTN"), from whom PFA receives a royalty.
Pro Farmer's annual renewal rate for readers who have subscribed for at least
two years is currently approximately 90% and the number of subscribers has
grown approximately 5% per year over the last three years. Merrill Lynch,
which annually assesses commodity newsletters, has generally ranked Pro Farmer
as one of the top three advisory services for "advisory quality" and has
similarly ranked the newsletter number one in certain specialty crop areas.
 
  Pro Farmer currently has nine editors whose sources for the newsletter's
content include, in addition to publicly available information, contacts
developed over the years among its readership base, at the USDA and in the
grain-export merchandising system. Ancillary Pro Farmer services include
reader access to a 900 number hotline where subscribers may receive
agriculture information tips and answers to their questions, distributions of
special reports on important changes in farming or marketing strategies, and
financial institution-sponsored agriculture seminars for farmers. The seminars
provide the editors of Pro Farmer an opportunity to interact with their
readership, who pay a fee to attend such seminars.
 
  Today Magazines
 
  Other periodicals published by the Company include the controlled
circulation Today series of magazines that focus on the livestock markets.
This series includes Beef Today, Dairy Today and Hogs Today, each of which is
published ten times per year. Beef Today, originally a beef producer
demographic section of Farm Journal, was first published as an individual
magazine in 1985. As of December 31, 1997, the magazine had a controlled
circulation of 135,956 readers, each of whom is a cattle producer who meets
certain qualifications regarding beef sold or cattle ownership. The
publication's editorial content includes contributions from columnists writing
on topics such as animal health, market outlook and regulatory issues. Dairy
Today, originally a dairy producer demographic section of Farm Journal, was
first published separately in 1985. As of December 31, 1997, the magazine's
controlled circulation of 99,997 readers was comprised of dairy producers
meeting certain milk production qualifications. The publication's editorial
content includes contributions from columnists writing on topics such as
nutrition, genetics and economics. As with Beef Today and Dairy Today, Hogs
Today was originally introduced as a pork producer demographic section of Farm
Journal. Hogs Today was first published separately in 1985. As of December 31,
1997, the magazine was sent to 73,557 pork producers, each of whom met certain
qualifications regarding ownership and marketing of hogs. The magazine's
content includes production, marketing and management stories, including
contributions from columnists writing on herd health, nutrition and marketing.
 
 
                                      42
Electronic Publishing
 
  Globalink and FutureLink
 
  The Company provides two satellite-delivered information services for
personal computer users: (i) Globalink, which provides farmers and ranchers
with commodity and agribusiness news and weather forecasts, and (ii)
FutureLink, which delivers agricultural commodity news to non-farmers who
trade in commodities markets but are not professional traders.
 
  In 1988, PFA launched a satellite-transmitted version of Globalink.
Approximately 1,850 farmers currently subscribe to Globalink, which is sold
through direct mail and telemarketing efforts targeting the top revenue-
producing Pro Farmer subscribers. New subscribers buy and install the
satellite dish and pay the Company a monthly fee of $54.95 for ongoing
service. If a subscriber does not own a computer, the Company facilitates its
acquisition and financing. Principal features of Globalink include: (i)
snapshot futures and options quotations available every ten minutes from a
former affiliate of the business, FutureSource Information Systems, Inc.
("FutureSource"); (ii) real-time market news that covers all North American
and major international exchanges from a division of FutureSource, Future
World News; (iii) weather forecasts from Strategic Weather Services; and (iv)
the entire package of Pro Farmer news.
 
  In response to increased use of the Internet, the Company plans to offer
Globalink over a combined service that enables subscribers to receive data
both via satellite and over the Internet. In this hybrid system, both the
satellite and Internet transmitted data will contain "hyperlinks" that enable
the user to explore related topics of interest. Information received from
hyperlinking will be delivered directly from the Internet. PFA plans to
implement the new hybrid system during 1998 as part of an upgrade written for
use with Windows. The Company expects that this upgrade will also
substantially improve Globalink's ease of use.
 
  FutureLink provides snapshot futures and options quotations every ten
minutes. FutureLink subscribers are primarily non-farmer commodity traders.
Currently there are approximately 3,650 subscribers to FutureLink. The data
service is largely sold through endorsements by third party commodity advisors
who receive a $20 per month royalty for each subscription sold. FutureLink
users pay $115 per month for the service. FutureLink has all the features of
Globalink but contains certain differences in format and substance to make it
more appealing to commodity traders. The Company also plans to upgrade
Futurelink to the Windows based hybrid architecture currently in development.
 
  Internet
 
  Farm Journal Today is the Company's Internet site on the World Wide Web,
accessible at www.farmjournal.com. The site was introduced in 1995 and
attracted more than 2,500,000 hits and over 50,000 user sessions in March
1998. In 1996 the site was designated as a "partner site" by Microsoft
Corporation when it introduced its Internet Explorer World Wide Web browser. A
regular feature on the site includes stories abstracted from the Company's
magazines. The site provides updates of breaking agriculture news stories and
a forum for farmer and rancher communications through bulletin board postings
and live chat sessions. A regular program on the site, First Tuesday, features
leading agribusiness executives and provides an opportunity for live chat
questions and answers.
 
  Commercial activity on the site includes banner advertising which allows
visitors to link with agribusiness companies' home pages. The Company is
introducing a store on its Web site which will provide customers the
opportunity to order a wide variety of Farm Journal merchandise. Farm Journal
Today is actively promoted through cross-references in the Company's
publications.
 
  The Company's Pro Farmer newsletter also maintains an active Internet site
at www.profarmer.com. The site averages 17,000 hits per day and serves both
existing and prospective Pro Farmer subscribers. Visitors receive story
abstracts and the opportunity to order subscriptions. Future plans include
offering users the ability to run personalized news searches based on a
particular profile of interest to the user. The Company will explore
 
                                      43
positioning the site as a global trading post where commodity buyers and
sellers can meet and evaluate bids and offers. The Company intends to explore
a commission arrangement for providing this service.
 
Other Publications and Publishing Related Services
 
  The Company is in the process of developing several new publications as well
as certain publishing and publishing related services, such as custom
publishing, conferences and seminars.
 
  LandOwner and Land Stewardship
 
  As part of the PFA Acquisition, Farm Journal acquired LandOwner, a
newsletter covering investments in real property, international agriculture
and land use. LandOwner sells for $84 for a one-year subscription and has a
subscriber base of 2,600. The Company plans to publish part of the content of
LandOwner in a new publication, Land Stewardship. Land Stewardship will be
directed at individuals interested in environmental land protection.
Management is currently planning to publish 12 issues of each of the two
newsletters annually.
 
  Other New Publications
 
  The Company is also developing several other new publications, including
those in the areas of agricultural commodities and rural lifestyles. Part of
the Company's strategy for new publications includes seeking immediate
profitability through subscription fees and, as necessary, full or partial
sponsorship. The Company anticipates that such sponsorship will ultimately be
replaced by an established advertising base.
 
  Custom Publishing
 
  The Company also recently began a focused approach to generating sponsored
custom publishing programs, which includes publishing journals for trade shows
and conferences, translation of agricultural articles for international
distribution and corporate newsletters and customer service material for the
Company's corporate advertisers. Additional areas to be targeted include
creating special focus publications for customers.
 
  Conferences and Seminars
 
  Recently, the Company has organized several sponsored conferences and
seminars that build on the editorial positions of Farm Journal, Top Producer
and Pro Farmer.
 
  In November 1997 and March 1998, the Company organized policy conferences in
Washington, D.C. on the topics of trade policy and food quality legislation.
Speakers at the conferences included United States government cabinet members,
members of Congress and several chief executives of major agricultural
companies and associations. The conferences generated over $100,000 in
revenues and were profitable. The Company intends to implement additional
conferences on agricultural policy issues in the future.
 
  The Company also organized two Top Producer Executive Farmer Seminars which
were held in January and March 1998. The seminars, which were sponsored and
required registration fees, featured high-profile Top Producer columnists and
large-scale farmers that had been featured in the magazine. The initial two
seminars were profitable and the Company intends to offer this seminar series
at additional locations as well as to expand its seminar offerings.
 
  A third series of seminars is being re-introduced under the Pro Farmer
brand. These seminars focus on the strategies for marketing farm products and
feature Pro Farmer market analysts. Revenues are generated from both seminar
sponsors as well as registration sales.
 
  Cash Master
 
  In conjunction with its Pro Farmer newsletter, the Company is also
developing an agricultural marketing service for grain farmers under the brand
Cash Master. Under this service, a Company subsidiary executes spot
 
                                      44
market crop sales for participating farmers according to advice given via Pro
Farmer electronic services in the Pro Farmer newsletter. This enables farmers
who wish to focus on production to use an agent to market a specific portion
of their crop.
 
Editorial
 
  Farm Journal believes that its publications have a reputation among their
readers and within the agricultural industry for authoritative and reliable
journalism. One of the former owners of the Company was a foundation which was
committed to public service and the needs of domestic farmers. This commitment
was reflected in Farm Journal's editorial content and quality. The Company's
magazines are among the most frequent recipients of editorial awards in
agricultural journalism. Farm Journal is the only agricultural magazine to
have won the prestigious "Calder Award" from the American Society of Magazine
Editors, which it received in 1986. Each year the Company's magazines are
cited in various categories of excellence by the American Agricultural Editors
Association and by the Livestock Publications Council, organizations which
recognize outstanding editorial achievement.
 
  Farm Journal's editorial staff currently includes editors, designers and
production personnel. The editorial staff makes significant efforts to
understand the information needs and interests of its readers and thereby
serve them more effectively. The Company devotes considerable resources to the
study of trends in its readership communities and strives to make its
publications the most widely read amongst its target audiences. The Company
also uses high-quality design graphics, illustrations, photography and other
artistic elements to make its publications visually attractive and accessible
to readers. The Company believes that its reputation for objective, fair and
credible editorial content contributes significantly to Farm Journal's
success.
 
Advertising
 
  Farm Journal has a strong market position with nearly all major agricultural
product advertisers in such areas as seed, automotive products, crop
protection chemicals and equipment. The largest advertisers in the Company's
publications are major agriculture suppliers, including American Cyanamid,
Asgrow Seed, BASF, Bayer, Case, Caterpillar, Chevrolet, Deere & Company,
Dodge, Dow AgroSciences, DuPont, Farm Credit Services, FMC, Ford, Hoechst
Roussell, Monsanto, Novartis, Pharmacia & Upjohn, Pioneer Hi-Bred
International, Terra International and Zeneca Ag Products. Several of these
advertisers have had relationships with the Company for over 50 years. Through
acquisitions, strategic alliances and co-branding, the Company expects to
increase the number and type of its advertising relationships.
 
  Advertising sales accounted for approximately 73% of the Company's total
revenues in 1997. The suppliers and purchasers of agricultural print
advertising are a highly concentrated group. Six publishers currently account
for approximately two-thirds of the market. Fifteen companies in the general
farm interest category have accounted for approximately 35% of all advertising
expenditures. The Company estimates that it commands on average a 27% market
share of advertising expenditures by its top 15 advertisers compared with
approximately 23% market share in the general farm interest category. Farm
Journal advertisers represent approximately 110 companies, many working
through advertising agencies, with the Company's 50 largest customers
representing nearly 90% of total Company advertising revenues. Customer
duplication between Farm Journal and Top Producer is quite extensive while
minimal duplication exists between advertisers in those two publications and
advertisers in Beef Today, Dairy Today and Hogs Today.
 
  The Company's unique and extensive subscriber database enables the Company
to sell advertising space by offering a target audience to the advertiser
through varying versions of its publications. The Company uses its subscriber
database to tailor editorial content and advertising to specific reader
interests. Farm Journal uses computerized binding technology to create
multiple versions of an individual issue, enabling it to target editorial
content and advertisements to distinct subgroups of subscribers.
 
  Management believes that the continued increase in agricultural production
and productivity will lead to increased agricultural advertising expenditures,
including expenditures for print, direct, Internet, radio and
 
                                      45
television. The Company expects to profit from its ability to enable
advertisers to reach end product buyers through the Company's publication and
information services product offerings.
 
  The Company's advertising sales strategy also includes an initiative
designed to increase revenues from box display and classified advertising.
Both categories represent markets that the Company has not actively pursued in
recent years. Farm Journal added three sales positions in these areas during
1997. The Company believes that relative to its market share in other
categories, box display and classified advertising present significant
opportunity to increase its advertising revenues.
 
  The Company's advertising is sold through an internal sales organization and
a customer support group. Although some account and territory overlap exists,
the sales organization is divided between crop (Farm Journal and Top Producer)
and livestock (Beef Today, Dairy Today and Hogs Today). The Company employs 20
sales and customer support personnel. In order to increase accountability, the
Company has decentralized sales responsibilities for its crop and livestock
magazines under three publishers.
 
Circulation
 
  The Company's magazines are primarily controlled-circulation, business-to-
business publications which are distributed free of charge to qualified
subscribers. Subscribers must provide production information (crops by acre
size and livestock by herd size, in addition to various production data) in
order to receive the publications. Demographic information and subscription
requests are collected both in written form, including cover wraps and direct
mail solicitations, and through the Company's telemarketing center located in
Webster City, Iowa. Once Farm Journal accepts a potential subscriber as a
qualified recipient for a controlled circulation publication, that reader
receives the particular publication for up to three years. The process of
updating demographic data and collecting reader requests, however, occurs on a
more frequent cycle. The Company currently updates demographic data for over
70% of its subscribers each year and updates data for 94% at least every two
years.
 
  Circulation information for Farm Journal and Top Producer is audited each
year by the Audit Bureau of Circulations ("ABC") and circulation information
for Beef Today, Dairy Today and Hogs Today is audited by BPA International
("BPA"). ABC and BPA audits verify that the Company's subscription information
accurately identifies the number and demographic characteristics of qualified
recipients and that the qualified recipients are in fact eligible to receive
the relevant publication under the standards established by Farm Journal for
such publication. Both ABC and BPA are nationally recognized auditors of
periodical subscription lists.
 
  Although Farm Journal is primarily a controlled circulation publication, 32%
of its subscriber base is paid. In recent years, the Company has pursued an
aggressive program to increase subscription rates on the paid circulation
segment. Those initiatives, which increased average issue sale prices by
approximately 11% in first-quarter 1997 solicitations and by approximately 29%
in fourth-quarter 1997 solicitations, each over the comparable prior year
period, have not negatively affected either renewal rates or subscription term
periods.
 
  The Company is currently in the process of converting Top Producer from a
controlled-circulation publication to a partially-paid subscription magazine.
Subscription revenues will be generated through a mix of direct mail marketing
programs, on-line promotions and other promotional methods. The Company does
not employ a field-based subscription sales organization.
 
  Pro Farmer and LandOwner are paid circulation newsletters that do not
contain advertising. Subscription sales are procured through a number of
methods with emphasis on direct marketing solicitations. Direct mail
promotions often feature publication samples and extend trial subscription
programs. The Company also promotes subscription sales on its Internet sites
and in the Company's other magazines.
 
Production, Distribution and Fulfillment
 
  The Company currently employs a staff of seven professionals to manage the
production and oversee the printing, distribution and fulfillment of its
periodicals.
 
                                      46
For the last 60 years, the Company has outsourced magazine printing services
to Donnelley. The Company's magazines are printed, bound and organized for
shipment pursuant to a contract with Donnelley which is currently scheduled to
expire in 2001. Printing of magazines is performed in Donnelley's facilities
in Danville, Kentucky. In addition, Donnelley purchases most of the Company's
paper needs through a consortium that includes other Donnelley customers.
Paper is purchased principally on the spot market. Donnelley binds certain of
the Company's magazines using a sophisticated binding process that allows
individual issues to be custom-tailored for readers based on geographic and
demographic information from the Company's circulation database. Using this
form of selective binding enables the Company's advertisers to create
advertisements directed only to those readers identified as probable
customers. The Company also outsources the printing of its newsletters to a
commercial printer in Cedar Falls, Iowa.
 
  The Company believes that its relationship with Donnelley is good and that
its high volume of printing with Donnelley enables the Company to receive
favorable printing rates. The Company believes, however, that other printers
of similar quality could be engaged on similar terms.
 
  The Company maintains numerous circulation and fulfillment processes,
including: (i) the receipt, verification, and deposit of payments from
subscribers; (ii) the maintenance of master files on all subscribers by
publication and the issuance of invoices and renewal notices to subscribers;
and (iii) the issuance of address labels for individual publications.
 
  Farm Journal has a contract with ACS Advantage Computing Systems ("ACS")
which provides licensing, support and upgrades for the Company's magazine
circulation fulfillment software. The Company's existing agreement with ACS
may be terminated by either party after 2000.
 
Raw Materials
 
  The Company's principal raw material is paper. Paper costs represented
approximately 30% and 25% of the Company's manufacturing costs for 1996 and
1997, respectively. The Company believes that its arrangement with Donnelley
enables it to obtain favorable pricing as a result of Donnelley's large volume
of paper purchasing. The available sources of paper have been, and the Company
believes will continue to be, adequate to supply the Company's needs. Certain
commodity grades of paper have shown considerable price volatility over the
last decade, including the commodity grade used by the Company. The price of
the Company's primary paper increased 10% in 1994 and another 34% in 1995, to
its high in October of that year. From October 1995 to the end of 1996, the
price of the Company's primary paper declined 34%. See "Risk Factors--
Fluctuations in Paper Costs and Postal Rates" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Overview."
 
FARM JOURNAL INFORMATION RESOURCES
 
  In addition to its publishing operations, Farm Journal provides data
management and related information services, including market research
services, through its FJIR division. FJIR's customers include each of the
Company's top five advertisers and many of the other leading agricultural
industry suppliers.
 
Database
 
  The foundation of the FJIR business is the Company's unique database of over
3.8 million records. The Company believes that its database, which contains
demographic and production information for most United States farmers and
ranchers, is the most accurate and comprehensive database in the agricultural
industry. Unlike competing databases, information in the Company's database is
obtained directly from farmers and ranchers rather than through lists obtained
or purchased from other sources. The Company's magazine subscribers must fill
out a written survey packaged with the magazine in order to receive the
publication. Subscribers who do not respond to the written survey are called
by one of the Company's 82 telephone operators located at its in-house
telemarketing facility in Webster City, Iowa. The telephone interview response
rate is nearly 97%. Over 70% of the Company's magazine subscribers are
contacted through these methods once a year and 94% are contacted
 
                                      47
every two years, with each contact resulting in a complete record update.
Information collected includes demographic, management, crop production,
livestock ownership, cropping practices and similar data. The Company also
retains record histories that confirm and enhance the data with respect to
current farmers and ranchers names. In 1997, the Company updated over 700,000
of the records in its database.
 
Data Management and Other Services
 
  FJIR uses the Farm Journal database in a variety of ways. FJIR analyzes and
categorizes the information on the basis of farmer demographics, crops grown
and livestock raised. The information can be sorted, filtered or otherwise
organized to provide meaningful data for licensing to advertisers and other
companies targeting the agricultural industry. FJIR also offers data
maintenance and enhancement services to agricultural suppliers. In one
arrangement, the FJIR client will provide its customer database to the Company
pursuant to a licensing and maintenance agreement. Updated production
demographics from Farm Journal's database are appended to clients' databases
containing proprietary customer purchase information. This service allows
marketers to obtain information about existing and potential customers. FJIR's
relationships range from data licensing and warehousing to full service
agreements in which a client's own customer database is updated, enhanced and
maintained by FJIR. Many FJIR clients have multi-year agreements with the
Company. Income is derived on a "fee for services" or "fee for data" basis.
Ultimately, access to client customer databases provides Farm Journal with an
additional means to increase circulation for its publications.
 
  FJIR is also actively pursuing new data services products and relationships
that leverage the Farm Journal brand and its unique circulation database.
 
  A significant product is a multi-client survey referred to as Smart Market
Database Enhancement ("Smart Market(TM)"). FJIR clients pay the Company to
gather specific information from farmers and ranchers that will be used in the
client's marketing programs. Smart Market(TM) surveys combine several clients'
information requests in a single mailing to target farmers and ranchers,
thereby reducing data collection costs, reducing survey target fatigue and,
management believes, producing greater customer response. Management believes
the relatively high response rates for Smart Market(TM), which are generally
in excess of 20%, are the result of association with the Farm Journal name and
recognition of the technique's efficiency. The Company maintains all
information obtained in its database and can respond to an individual client's
needs while maintaining confidentiality about other client requests and
information. The information gathered is the property of Farm Journal and may
be used to enhance the Farm Journal database.
 
  In addition, in November 1997, Farm Journal was awarded a contract to
develop a North American Purchaser Directory (the "Directory") for a
consortium of members of the American Crop Protection Association. This
project, referred to as RAPID, will result in a comprehensive farmer directory
that will provide the foundation for a system to capture point-of-sale
information for manufacturing members. The directory will be a single list
resource for use throughout the agricultural industry and will provide for
every commercial farmer a common set of data elements, including
identification number, owner/operator name, business name and address. This
information may be used by the participating members of the consortium to
facilitate accurate and timely electronic information exchange and processing
among such members, retailers and distributors. Planned enhancements to RAPID
include a product directory, material and safety information, and a retailer
database. In addition to an initial development fee, Farm Journal anticipates
ongoing revenues from RAPID in the form of user fees, database licensing and
advertising contracts. The Directory is expected to include information on
approximately 1.5 million farmers and 14,000 agricultural product retail
outlets located throughout the United States, Canada and Mexico. Management
believes that development of the Directory will substantially increase the
size of the Company's database, expand its coverage into foreign markets and
provide additional opportunities for database development and management in
other agricultural sectors.
 
 Market Research
 
  The Company offers market research through Rockwood Research, a division of
FJIR ("Rockwood"). Rockwood, located in New Brighton, Minnesota, is a full-
service marketing research organization specializing in
 
                                      48
agricultural research. Rockwood conducts focus groups, performs telephone and
mail surveys and creates on-line market research projects. Rockwood's products
include both proprietary and syndicated research studies, including
SmartShare(TM) brand share studies. Rockwood's primary focus is on
psychographic segmentation, customer satisfaction, price sensitivity and
awareness-tracking studies.
 
ACQUISITION STRATEGY
 
  Farm Journal intends to pursue strategic acquisitions of agricultural and
related media and information services businesses. The Company's initial
strategy will be to focus on acquisitions that will complement or extend Farm
Journal's existing publications and information services businesses, as well
as create benefits from cross-selling to advertisers, cross-promotion of
readership and expansion of the Farm Journal database. Management has
identified several categories of acquisition candidates, each one of which it
believes offers the potential for significant growth.
 
  Management believes the highly fragmented agricultural publishing category
offers a number of acquisition candidates. In the United States there are over
270 agricultural publications. A number of these would provide geographic or
market segment enhancements to the Company's current publications and
database. Over 40% of these magazines are owned by small or family-owned
publishing companies which serve niche agricultural markets, such as fruit,
vegetable, poultry and other specialty crop and livestock producers. The
Company believes that many of these smaller participants would also complement
and extend Farm Journal's existing publications and data management services
and offer compatibility in subscribers, advertisers and content.
 
  Another category of acquisitions includes companies that would extend the
communications media used by the Company. These companies are involved in,
among other things, television or radio production, newsletter publishing,
trade show organization, event marketing and internet site development. The
Links business acquired in the PFA Acquisition is an example of an acquisition
in this category.
 
  Farm Journal will also target rural-related consumer publications and media
that overlap with the reader profile of the farm audience and cover such
subjects as hunting, fishing, gardening, crafts, sewing and baking. Management
believes that certain publications in this area, as in others, would benefit
from the Farm Journal's premier brand name, quality editorial content and
industry or subscriber relationships. Operational savings, such as in overhead
and publishing costs, should also be achievable and the addition of such
titles should mitigate seasonal fluctuations in the Company's revenues.
 
 Another category of acquisition includes other business-to-business
publications in fields within or directly related to the agricultural
industry. This category would include publications in areas such as food
processing, governmental regulation, health sciences, international trade and
commerce and shipping and transportation. The Company's Chairman and Chief
Executive Officer, Mr. Erickson, brings extensive acquisition experience in
certain of these areas. Prior to joining Farm Journal in April 1997, Mr.
Erickson was President and Publisher of the Journal of Commerce magazine
group, where over a six-year period he acquired or started six publications
and an electronic information services in the areas of transportation and
international commerce.
 
  Finally, other categories of strategic acquisitions would include selected
market research and data management businesses. Management also believes there
are many opportunities to pursue its acquisition strategy overseas. See "--
International Publications and Data Management."
 
CO-BRANDING AND AFFINITY MARKETING
 
  Management believes that it will be able to increase revenues by utilizing
Farm Journal's reputation to market, in conjunction with other companies, a
broad range of high-quality, specifically tailored products and services to
its circulation base at favorable prices. Management believes that its
extensive database and data management capabilities, in combination with the
name recognition and reputation for quality it has with its subscriber base,
make the Company a particularly effective affinity marketing and co-branding
partner for
 
                                      49
providers of products and services desiring to target the rural marketplace.
Through co-branding and affinity marketing arrangements, the Company will be
able to offer at a discount services such as credit cards, insurance and other
financial services to its customer base. In such co-branding joint ventures,
the Company expects to increase its name recognition in another medium and
thereby expand the depth and breadth of its relationship with members of the
agricultural community. In addition, because participating in the delivery of
these services will result in additional "data-capture" by the Company, these
initiatives should augment its FJIR division.
 
  In March 1998, the Company entered into an agreement with The Member
Companies of American International Group, Inc. to jointly market private
passenger automobile insurance to the Company's subscriber base. Under the
long-term agreement Farm Journal will receive marketing royalties for policy
sales and renewals.
 
  The Company recently entered into an agreement with CIGNA Property &
Casualty to explore the sale of a variety of insurance products through a
cooperative marketing effort. A number of the Company's services could be
incorporated in potential marketing approaches, including data management
services, product advertising and farmer seminar sponsorship.
 
  The Company has also retained Kessler Financial Services, a leading
marketing consultant of affinity credit cards, to design and introduce a
credit card program which will offer special value for farmers and ranchers.
The Company expects that the credit card would include a "club" approach
offering a variety of products and services at group discount prices. As with
other affinity group sponsors, the Company would receive income from the
acquisition of cardholders by its affinity group, fees for activating card-
holding members and commissions on purchases made with the Farm Journal card.
 
  The Company anticipates expanding activities to include a broad range of
consumer and small business products and services targeted at the agricultural
and rural communities. Such offerings may include mutual funds and other
financial products, computer and telecommunications equipment and other
products and services characteristically used by small business owners.
 
INTERNATIONAL PUBLICATIONS AND DATA MANAGEMENT
 
  Given its position as a leading provider of agricultural information in the
United States and the trend toward the globalization of agricultural
technology and trade, management believes that there are substantial long-term
opportunities to expand its business overseas. The Company is involved in a
number of initiatives to capitalize on international market opportunities.
 
  In January 1998, Farm Journal retained JFA International Marketing Services,
an international agribusiness consulting firm, to launch a sponsored
international magazine targeted to agricultural decision-makers worldwide. In
November 1997, the Company entered into an editorial agreement with a Japanese
publication to reprint Dairy Today editorial in Dairy Japan. Recently, the
Company's Rockwood unit participated in a joint project with German-based
Kleffman Market Research on a project which assessed agricultural technology
adaptation in various countries. The Company has also held initial discussions
with a European publisher with respect to joint venture publishing and
international data management projects. Most recently, several FJIR clients
have discussed obtaining data management services for their foreign databases.
 
  Management also believes there are various opportunities for expansion
through acquisitions of foreign agricultural media companies. The Company
intends to explore these opportunities initially in North America and has held
initial discussions with a potential strategic partner in that regard.
 
COMPETITION
 
  According to AGRICOM, Farm Journal had an advertising revenue market share
at the beginning of 1997 of approximately 23% among the geographic and market
category farm magazines with which it competes.
 
                                      50
Farm Journal's principal competitors include Successful Farming (published by
Meredith Corporation), Progressive Farmer (published by Time Warner) and
certain state specific magazines published by Rural Press USA.
 
  Also based on data available from AGRICOM, Top Producer had at that time an
advertising market share of approximately 24% among selective large-acreage
publications, including Farm Industry News and Soybean Digest (published by
PRIMEDIA) and Farm Futures (published by Rural Press USA). In their respective
livestock categories the advertising market share for Beef Today was 25%,
Dairy Today was 19% and Hogs Today was 17%. In each of the livestock species
areas, the Company evaluates market share as compared with the leading
publications in each category.
 
  The primary competitors to the Pro Farmer newsletter are the Doanes Report,
the Kiplinger Agriculture Letter and the Brock Report. Farm Journal believes
that Pro Farmer compares favorably with those competitors on the basis of
depth, breadth and quality of editorial product.
 
  The principal competitor to the Links business is DTN. DTN offers general
commodity information and also distributes certain Pro Farmer information
services. DTN has a significantly larger subscription base than Globalink. DTN
distributes, through dedicated terminals that it supplies, general commodity
market information and other news, reports on weather and commodity quotes for
a basic fee and offers a variety of services for additional fees.
 
  Other publishers maintain farmer demographic information databases. The
Company believes, however, that its database contains more developed and
detailed information than its competitors due to its direct communication with
the reader. The majority of the Company's competitors in this field maintain
data management services solely on an in-house basis, as opposed to the
Company which offers its services to third parties.
 
INTELLECTUAL PROPERTY
 
  The Company believes that it has developed strong brand awareness for its
magazines and newsletters. The Company regards its titles and logos as
valuable assets, and the Company has registered certain trademarks, service
marks and logos used in its publishing business. In addition, each one of the
Company's publications is protected under United States copyright laws. The
Company believes that it owns or licenses all the intellectual property rights
necessary to conduct its business.
 
PROPERTIES
 
  All of the Company's properties are leased. The Company has a lease for its
headquarters facilities in Philadelphia, Pennsylvania which expires in 2005.
The Farm Journal facilities consist of approximately 48,000 square feet and
were improved in 1995. The Company also leases the headquarters for Rockwood
Research, an FJIR facility, in New Brighton, Minnesota, space in Mexico,
Missouri for its crops and equipment editorial field office and in Monticello,
Minnesota for its dairy editorial office. Telephone center space for
circulation and FJIR calling operations are in Webster City, Iowa and River
Falls, Wisconsin.
 
EMPLOYEES
 
  As of May 29, 1998, the Company had 177 full-time employees and 222 part-
time employees. Part-time employees are primarily telephone operators who
conduct demographic surveys and data entry personnel. In addition to the
Company's employees, the Company relies on a network of freelance and contract
writers to provide additional editorial content. All work done by such writers
is on an independent contractor basis. None of the Company's employees are
members of unions. The Company believes that its relations with its employees
are good.
 
                                      51
MANAGEMENT
 
DIRECTORS AND EXECUTIVE OFFICERS
 
  The following table sets forth certain information as of June   , 1998 with
respect to the persons who are members of the Board of Directors, executive
officers or key employees of the Company.
NAME            AGE                         TITLE
             ----            ---                         -----
Stanford A.
    Erickson(1)............   59 Chairman of the Board and Chief Executive Officer
   Roger D. Randall(1).....   44 President, Chief Operating Officer and Director
   Richard K. Stanislaw....   48 Chief Financial Officer, Vice President and Treasurer
   John E. Lafferty........   46 President, FJIR
   Earl P. Ainsworth.......   50 Publisher, Farm Journal and Top Producer
   Sonja Hillgren..........   49 Editor of Farm Journal
   David J. Joerger........   35 General Manager of Professional Farmers of America
   J. Carr Gamble, III(1)..   44 Secretary and Director
   Sterling B. Brinkley,
    Jr.(1).................   46 Director
   Mark C. Pickup(2)(3)....   47 Director
   David J. Bates(3).......   51 Director
   Richard S.
    Werdiger(2)(3).........   50 Director
--------
(1) Member of Executive Committee
 
(2) Member of Compensation Committee
 
(3) Member of Audit Committee
 
DIRECTORS AND EXECUTIVE OFFICERS
 
  STANFORD A. ERICKSON--Mr. Erickson has served as Chairman of the Board and
Chief Executive Officer of the Company since the Management Purchase in April
1997. Mr. Erickson was the President and Chief Operating Officer from 1991 to
1997 of the Journal of Commerce which is publisher of The Journal of Commerce
and a division of the Economist Group, publisher of Economist magazine. At the
Journal of Commerce, Mr. Erickson acquired or started six business-to-business
publications in the transportation and commerce industries. Prior to 1991, Mr.
Erickson held various positions with the Journal of Commerce, including
editor, publisher and President of the Journal of Commerce. Mr. Erickson
received a B.A. from the University of California, Berkeley, an M.A. from San
Francisco State University and an M.S. from Columbia University Graduate
Business School.
 
  ROGER D. RANDALL--Mr. Randall has served as President and Chief Operating
Officer and a Director of the Company since the Management Purchase in April
1997. He is currently the President of FJI, having assumed that position in
late 1995. Mr. Randall has been an employee of the Company since 1984 serving
in various marketing and sales management positions. As President and Chief
Operating Officer of the Company, he manages, among other things, the
Company's external sales programs and various internal growth initiatives. Mr.
Randall received his B.A. in Art and Political Science from Morningside
College.
 
  RICHARD K. STANISLAW--Mr. Stanislaw joined the Company as Chief Financial
Officer, Vice President and Treasurer in June 1997. Prior to joining the
Company, Mr. Stanislaw served as President of The Rose Corporation, a heavy
steel industrial equipment builder, metal service, machinery and mechanical
contracting business, from August 1995 to June 1997, and as a financial
consultant to The Rose Corporation (including Chief Financial Officer
responsibilities) from October 1994 to August 1995. Mr. Stanislaw was employed
by Collegeville Imagineering Inc., a manufacturer of seasonal consumer goods,
from August 1991 to October 1994,
 
                                      52
serving as Chief Financial Officer from August 1991 to July 1992 and as
Executive Vice President and General Manager from July 1992 to October 1994.
Prior to August 1991, Mr. Stanislaw served in various capacities including
Vice President, Finance and Vice President Group Controller of public
companies. Mr. Stanislaw is also a certified public accountant and a graduate
of Pennsylvania State University, where he earned his M.S. and B.S. in
business and accounting.
 
  JOHN E. LAFFERTY--Mr. Lafferty has served as President of FJIR since the
group was formed in 1997. Mr. Lafferty joined the Company in 1992 as Vice
President of Marketing and served from 1994 to 1997 as Senior Vice President
of Marketing. Prior to joining the Company, he was Senior Vice President and
Account Supervisor for Richardson, Myers and Donofrio, a Baltimore-based
advertising agency, from 1985 to 1991. Mr. Lafferty received his B.A. from the
University of Delaware.
 
  EARL P. AINSWORTH--Mr. Ainsworth has served as Publisher of Farm Journal and
Top Producer since 1995. Prior to being named to that position he served for
20 years in various editorial capacities at the Company, including as
Editorial Director for the Company's five magazines and Editor of Farm
Journal. Mr. Ainsworth has served as President of the American Agricultural
Editors Association and is a graduate of Cornell University.
 
  SONJA HILLGREN--Ms. Hillgren has been the Editor of Farm Journal since 1995
and served as its Washington Editor from 1990 to 1995. Ms. Hillgren is a
prominent figure in the agricultural community. She is currently a director of
the Winrock Foundation, a charitable foundation, and a recent past President
of the National Press Club. Ms. Hillgren received her M.S. and B.S. from the
University of Missouri. Ms. Hillgren was a Nieman Fellow at Harvard University
from 1982 to 1983.
 
  DAVID J. JOERGER--Mr. Joerger has served as General Manager and Chief
Financial Officer of PFA since the PFA Acquisition. Prior to the PFA
Acquisition, Mr. Joerger served as Chief Financial Officer of Oster
Communications, Inc., a privately-held international communications company
specializing in the futures industry, from June 1996 to April 1998, and as its
Treasurer from March 1990 to June 1996. Prior to March 1990, Mr. Joerger was
employed in public accounting, serving clients in the food processing,
technology, financial services and agriculture industries. Mr. Joerger
received a B.A. from the University of Northern Iowa and is a certified public
accountant.
 
  J. CARR GAMBLE, III--Mr. Gamble has been the Secretary and a Director of the
Company since June 1997. Since 1994, Mr. Gamble has been a Managing Director
of Morgan Schiff, and serves as a consultant to various companies that are
affiliates of Morgan Schiff. From 1989 to 1994, Mr. Gamble was Of Counsel to
the law firm of Milbank, Tweed, Hadley & McCloy and from 1981 to 1989 was
associated with the law firm of Cravath, Swaine & Moore. Mr. Gamble received a
B.A. from Amherst College, an M.S. in mathematics from the University of
California at Berkeley and a J.D. from the University of Virginia School of
Law.
 
  STERLING B. BRINKLEY, JR.--Mr. Brinkley serves as a Director of the Company
and is Chairman of the Executive Committee. Mr. Brinkley was a Managing
Director of Morgan Schiff from 1986 to 1990. Since 1990, Mr. Brinkley has been
a consultant to Morgan Schiff. Prior to 1986, Mr. Brinkley was a Managing
Director in the Corporate Finance Department of Shearson Lehman Brothers, Inc.
Mr. Brinkley is also Chairman of the Board of Directors of EZCORP, Inc., a
publicly-traded pawnshop chain, and Chairman of the Executive Committee of the
Board of Directors of Friedman's Inc., a publicly-traded retail jewelry chain.
Both companies are affiliates of the Company and Morgan Schiff. Mr. Brinkley
also serves on the boards of directors of various privately held companies
that are affiliates of Morgan Schiff. Mr. Brinkley received a B.A. from Yale
University and an M.B.A. from the Stanford Graduate School of Business.
 
  MARK C. PICKUP--Mr. Pickup serves as a Director of the Company and is
Chairman of the Audit Committee. Mr. Pickup is also a director of EZCORP, Inc.
and Friedman's Inc. Since 1995 he has served as an independent business
consultant with a variety of companies. Mr. Pickup served as Vice Chairman of
Crescent Jewelers, a privately-held retail jewelry chain which is an affiliate
of Morgan Schiff and the Company, from December 1994 until February 1995, and
served as President and Chief Executive Officer of Crescent Jewelers
 
                                      53
from August 1993 to December 1994. From October 1992 until August 1993, Mr.
Pickup served as the Senior Vice President and Chief Financial Officer for
Crescent Jewelers. For more than five years prior to October 1992, Mr. Pickup
held various positions with the predecessors of Ernst & Young LLP, leaving as
a partner in its San Francisco, California office in October 1992. Mr. Pickup
received a B.S. in mathematics from Brigham Young University.
 
  DAVID J. BATES--Mr. Bates became a Director of the Company in June 1998.
Since 1994, he has been a self-employed private investor and businessman and
is President of Casey Enterprises, Inc., a privately-held business consulting
firm which he founded in 1994. From 1983 to 1993, he was a Senior Investment
Officer at International Finance Corporation ("IFC"), the private sector
affiliate of the World Bank Group headquartered in Washington, D.C. where he
specialized in project finance (including agribusiness projects) with area
responsibilities in Europe, the Middle East and Eastern Europe. Prior to
joining IFC, Mr. Bates held various positions in the Agriculture Department of
the World Bank involved in global agricultural development policies and
investment. He received a B.A. and an M. Phil. (Economics) from George
Washington University and an M.B.A. from the University of Pennsylvania,
Wharton Business School.
 
  RICHARD S. WERDIGER--Mr. Werdiger became a Director of the Company in June
1998. Since 1980, Mr. Werdiger has served as President and Chief Executive
Officer of Michael Werdiger, Inc., a wholesale diamond company. Since 1980, he
has also served as Chairman of the Board and Vice President of Diamond
Abrasives Corporation, a distributor of industrial abrasives. Mr. Werdiger is
currently on the board of a privately-held company which is an affiliate of
Morgan Schiff. He received a B.A. in Economics from Middlebury College.
 
  Directors of the Company are currently elected annually by its stockholders
to serve during the ensuing year or until their respective successors are duly
elected and qualified. Officers of the Company serve at the discretion of the
Board of Directors (the "Board"). For a description of class voting rights see
"Description of Capital Stock."
 
COMMITTEES OF THE BOARD OF DIRECTORS
 
  The Board currently has three committees: (i) an Audit Committee; (ii) an
Executive Committee; and (iii) a Compensation Committee.
 
  The Audit Committee is comprised of Messrs. Bates, Werdiger and Pickup, with
Mr. Pickup as Chairman. The Audit Committee recommends the independent
accountants appointed by the Board to audit the financial statements of the
Company, which includes an inspection of the books and accounts of the
Company, and reviews with such accountants the scope of their audit and their
report thereon, including any questions and recommendations that may arise
relating to such audit and report or the Company's internal accounting and
auditing procedures. The composition of the Audit Committee complies with the
independent director requirements of Nasdaq.
 
  The Executive Committee is comprised of Messrs. Erickson, Randall, Gamble
and Brinkley, with Mr. Brinkley as Chairman. The Executive Committee exercises
the authority of the Board, to the extent permitted by law, in the management
of the business of the Company between meetings of the Board. The Executive
Committee of the Board also serves as the nominating committee in connection
with annual meetings of stockholders.
 
  The Compensation Committee is comprised of Messrs. Werdiger and Pickup, with
Mr. Werdiger as Chairman. The function of the Compensation Committee is to
review and approve the compensation of executive officers and establish
targets and incentive awards under incentive compensation plans of the
Company. The Compensation Committee reports to the Board.
 
COMPENSATION OF THE BOARD OF DIRECTORS
 
  Directors who are not current employees of the Company will receive
directors fees of $8,000 per year. Committee Chairmen who are not current
employees of the Company will receive an additional $2,000 per year.
 
                                      54
The Company will reimburse directors for travel and other out-of-pocket
expenses incurred in connection with their services as directors.
 
COMPENSATION OF EXECUTIVE OFFICERS
 
  The following table presents certain summary information concerning
compensation paid or accrued by the Company for services rendered in all
capacities during the fiscal year ended December 31, 1997 for (i) the Chairman
of the Board and Chief Executive Officer of the Company; (ii) the President
and Chief Operating Officer; and (iii) the two other executive officers of the
Company (determined as of the end of the last fiscal year) whose total annual
salary and bonus for the fiscal year ended December 31, 1997 exceeded $100,000
(collectively, the "Named Executive Officers").
 
                         SUMMARY COMPENSATION TABLE(1)
LONG-TERM
                                    ANNUAL            COMPENSATION
                                 COMPENSATION            AWARDS
                               -------------------    ------------
   NAME AND PRINCIPAL                                  RESTRICTED    ALL OTHER
        POSITION          YEAR  SALARY      BONUS     STOCK AWARDS  COMPENSATION
   ------------------     ---- --------    -------    ------------  ------------
Stanford A. Erickson....  1997 $127,500(2) $55,159(3)   $10,911(4)       $297(5)
 Chairman and Chief Ex-
 ecutive Officer
Roger D. Randall........  1997 $163,750    $20,159      $ 8,730(4)    $57,767(6)(7)
 President and Chief Op-
 erating Officer
John E. Lafferty........  1997 $117,167    $15,157          --         $5,843(7)
 President of Farm Jour-
 nal Information Re-
 sources
Earl P. Ainsworth.......  1997 $115,000    $10,238          --         $5,616(7)
 Publisher of Farm Jour-
 nal and Top Producer
--------
(1) No Named Executive Officer received perquisites and other personal
    benefits valued in excess of the lesser of $50,000 or 10% of such
    officer's total salary and bonus reported for fiscal 1997.
 
(2) Mr. Erickson commenced employment with the Company in April 1997 at an
    annual base salary of $170,000.
 
(3) Includes a $25,000 bonus paid by the Company upon the consummation of the
    Management Purchase.
 
(4) Represents the value of partnership interests issued to Messrs. Erickson
    and Randall in connection with their employment by the Company. Subsequent
    to December 31, 1997, Messrs. Erickson and Randall received a Partnership
    distribution of $    and $   , respectively, and currently have an
    indirect interest in 1,098 and 879 shares of Class B Common Stock,
    respectively.
 
(5) Includes cost of life insurance premium paid by the Company.
 
(6) Includes a $50,000 severance payment from Tribune Company in connection
    with the Management Purchase.
 
(7) Includes cost of life insurance premium paid by the Company and
    contributions made by the Company under the Company's retirement savings
    plan.
 
OPTIONS/STOCK APPRECIATION RIGHTS EXERCISES
 
  No options to purchase Common Stock were outstanding and no stock
appreciation rights were exercised by the Named Executive Officers during the
year ended December 31, 1997.
 
EMPLOYMENT AGREEMENTS
 
  Mr. Erickson, Chairman of the Board and Chief Executive Officer, and Mr.
Randall, President and Chief Operating Officer, are each a party to a written
employment agreement with FJI having a term of five years (the
 
                                      55
"Employment Agreements"). The Employment Agreements include annual base
compensation of $170,000 in the case of Mr. Erickson and $160,000 in the case
of Mr. Randall and provide for an annual performance-based incentive bonus.
The Employment Agreements require such officers to maintain the
confidentiality of the Company's proprietary information and to refrain from
competing with the Company for specified periods after termination of
employment for any reason. If the officer is terminated by the Company without
cause (as defined in the Employment Agreements) or at such officer's election
due to the Company's material breach of the Employment Agreement, such officer
is entitled to receive his base salary for a period of three months following
the date of such termination, provided that such number of months shall
increase by one month for each completed full year of such officer's
employment with the Company.
 
  As permitted under the Employment Agreements, Messrs. Erickson and Randall
also purchased 5.483 and 4.387 Class B limited partnership units,
respectively, in the Partnership. These units provide Messrs. Erickson and
Randall with an indirect beneficial ownership interest, through the
Partnership, in 2,098 and 2,879 shares of the Class B Common Stock,
respectively. As a result of and subject to the terms of the Partnership
Agreement, any income, gain or loss to the Partnership generated by or
attributable to these shares will inure and be allocated to the benefit of
Messrs. Erickson and Randall.
 
  In addition, pursuant to the Employment Agreements, Mr. Erickson and Mr.
Randall each purchased Class A limited partnership units in the Partnership
(the "Class A Units"). Mr. Erickson purchased one Class A Unit for a purchase
price of $25,000 in cash and delivery of a full recourse promissory note to
the Partnership in the amount of $75,000 (the "Note") bearing interest at the
prime rate and secured by Mr. Erickson's primary residence. Mr. Erickson has
fully paid the amount due on the Note. Mr. Randall purchased two Class A Units
for a purchase price of $200,000.
 
  Under the Company's Incentive Stock Option Plan, Messrs. Erickson and
Randall have been granted options expiring on April 1, 2007 (the "Options") to
acquire     and     shares of the Class A Common Stock, respectively, at a
price per share equal to $   . Options to purchase     and     shares are
currently exercisable by each of Messrs. Erickson and Randall, respectively.
The balance of the Options will become exercisable by Messrs. Erickson and
Randall in four equal installments on each of April 1, 1999, 2000, 2001 and
2002. The exercise of any vested options requires that such executives
continue to be employed on the date of exercise.
 
 
                                      56
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
  The Company is controlled by Phillip Ean Cohen through his sole ownership of
MS Farm Journal Corporation, the General Partner of the Partnership. Morgan
Schiff, which is owned by Mr. Cohen, is one of the managing underwriters of
the Offering. FJI reimbursed the Partnership and the General Partner for out-
of-pocket expenses, principally for legal and accounting services, in
connection with FJI's formation and the Management Purchase and will continue
to reimburse the Partnership and the General Partner for ongoing
administrative expenses, principally legal and accounting services. In the
future, the Company may engage Morgan Schiff for business and financial
advisory services. Subsequent to June 1997, Mr. Gamble, an affiliate of Morgan
Schiff, accepted a position with the Company.
 
  Teachers Insurance and Annuity Association of America ("Teachers") has an
indirect interest in 17,400 shares of Class B Common Stock through its
ownership of limited partnership interests in the Partnership. As part of the
financing of the Management Purchase, Teachers purchased $11.0 million of
Senior Subordinated Notes pursuant to a Note Purchase Agreement. The Senior
Subordinated Notes bear interest at a rate of 9.5% per annum and are due April
1, 2007. The interest rate on the Senior Subordinated Notes was based upon
negotiations with Teachers as well as the market rate for senior subordinated
debt of comparable borrowers at the time of the Management Purchase. Interest
on the Senior Subordinated Notes is payable semi-annually on June 1 and
December 1. The Company has the option to prepay $5.5 million principal amount
plus accrued interest thereon of the Senior Subordinated Notes in part, at any
time after an initial public offering.
 
  The terms of the Note Purchase Agreement impose restrictions that affect,
among other things, the Company's ability to (i) engage in certain
transactions with affiliates, (ii) effect a merger, consolidation or transfer
or sale of assets, (iii) create liens on assets, (iv) engage in any line of
business substantially different than that currently carried on by the
Partnership, (v) incur certain additional indebtedness, (vi) make certain
restricted payments, including dividends, and (vii) amend or modify certain
agreements executed in connection with the Management Purchase. The terms of
the Note Purchase Agreement also require that the Company maintain at least
two independent directors on its Board of Directors (defined as a person who
does not own, directly or indirectly, more than 5% of the outstanding capital
stock or partnership interests of the Partnership or the General Partner or
any affiliate thereof, and who is not an officer, director, partner,
principal, associate, employee or consultant, or a family member of any of the
foregoing, of Morgan Schiff, the General Partner or any of their affiliates),
and require the Company to comply with certain financial ratios relating to
funded indebtedness, minimum net worth and interest coverage.
 
  See also "Management," "Principal Stockholders," "Management Purchase" and
"Underwriting."
 
                                      57
PRINCIPAL STOCKHOLDERS
 
  The table below sets forth certain information as of June 1, 1998 regarding
the beneficial ownership of Class A Common Stock and Class B Common Stock as
well as the percentage ownership of all of the capital stock of the Company
(Class A Common Stock and Class B Common Stock), assuming the recapitalization
and the conversion of the PFA Preferred Stock to Class A Common Stock as
described in "Description of Capital Stock." Information is provided as to each
of the Company's Directors, the Named Executive Officers, each person known to
the Company to own beneficially more than 5% of the outstanding shares of Class
A Common Stock and Class B Common Stock and all Directors and executive
officers of the Company as a group. Except as noted below, the persons named in
the table have sole voting and investment power with respect to all shares of
Common Stock shown as beneficially owned by them.
SHARES OF CLASS A    SHARES OF CLASS B
                          COMMON STOCK          COMMON STOCK        PERCENTAGE OF
                        -------------------- ---------------------     CLASS A
  NAME AND ADDRESS OF                                                AND CLASS B
   BENEFICIAL OWNER     NUMBER    PERCENTAGE NUMBER     PERCENTAGE COMMON STOCK(1)
  -------------------   ------    ---------- -------    ---------- ---------------
MS Farm International
 Limited...............   (2)         --%    102,786        --%           --
 Partnership
MS Farm Journal Corpo-
 ration(3)
Phillip Ean Cohen
 350 Park Avenue
 8th Floor
 New York, New York
  10022
Teachers Insurance and
 Annuity...............   --          --      17,500(4)     --            --
 Association of America
 730 Third Avenue
 New York, New York
  10017
Stanford A. Erickson... 1,533(5)      --       2,098(4)     --            --
 1500 Market Street
 Centre Square West
 28th Floor
 Philadelphia, Pennsyl-
  vania 19102
Roger D. Randall....... 1,227(5)      --       2,879(4)     --            --
 1500 Market Street
 Centre Square West
 28th Floor
 Philadelphia, Pennsyl-
  vania 19102
John E. Lafferty.......   --          --         250(4)     --            --
 1500 Market Street
 Centre Square West
 28th Floor
 Philadelphia, Pennsyl-
  vania 19102
Earl Ainsworth.........   --          --         100(4)     --            --
 1500 Market Street
 Centre Square West
 28th Floor
 Philadelphia, Pennsyl-
  vania 19102
58
SHARES OF CLASS A SHARES OF CLASS B
                                COMMON STOCK      COMMON STOCK
                              ----------------- --------------------
                                                                      PERCENTAGE OF
                                                                         CLASS A
    NAME AND ADDRESS OF                                                AND CLASS B
      BENEFICIAL OWNER        NUMBER PERCENTAGE NUMBER    PERCENTAGE COMMON STOCK(1)
    -------------------       ------ ---------- ------    ---------- ---------------
Sonja Hillgren..............   --        --       350(4)      --            --
 1500 Market Street
 Centre Square West
 28th Floor
 Philadelphia, Pennsylvania
  19102
J. Carr Gamble, III.........   --        --     3,250(4)      --            --
 350 Park Avenue
 8th Floor
 New York, New York 10022
Sterling B. Brinkley........   --        --     7,500(4)      --            --
 350 Park Avenue
 8th Floor
 New York, New York 10022
Mark C. Pickup..............   --        --       250(4)      --            --
 6734 Coret Segunda
 Martinez, CA 94553
Richard S. Werdiger.........   --               5,000(4)
 Walled Brook Farm
 8 Cottage Avenue
 Purchase, New York 10577
All executive officers and
 directors
 as a group (12 persons)(6)..  --       --        --         --             --
--------
(1) Based upon     shares of Class A Common Stock outstanding immediately
    following the Offering and     shares of Class B Common Stock outstanding
    prior to and immediately following the Offering.
 
(2) Shares of Class B Common Stock are convertible into an equal number of
    shares of Class A Common Stock at any time. See "Description of Capital
    Stock."
 
(3) MS Farm Journal Corporation is the General Partner of the Partnership and
    has the sole right to vote the shares of Class B Common Stock and to
    direct their disposition. Mr. Phillip Ean Cohen is the sole stockholder of
    MS Farm Journal Corporation.
 
(4) Represents shares of Class B Common Stock which Teachers, Messrs.
    Erickson, Randall, Lafferty, Ainsworth, Gamble, Brinkley, Pickup and
    Werdiger and Ms. Hillgren, respectively, have an indirect interest through
    their ownership of limited partnership interests in the Partnership. Such
    persons have no right to vote or to direct the disposition of these shares
    . For a description of certain rights of a limited partner to withdraw
    from the Partnership and to obtain Class A Common Stock upon such
    withdrawal, see "Shares Eligible for Future Sale."
 
(5) Represents shares underlying options which are exercisable within sixty
    days. Does not include   shares underlying options which are not
    exercisable within sixty days.
 
(6) Includes     shares of Class B Common Stock held indirectly through
    ownership of limited partnership interests in the Partnership.
 
 
                                      59
DESCRIPTION OF CAPITAL STOCK
 
GENERAL
 
  The following summary of certain provisions of the FJC's capital stock
describes all material provisions, but does not purport to be complete and is
subject to, and qualified in its entirety by, the Amended and Restated
Certificate of Incorporation and the By-laws of the FJC (the "By-laws") that
are included as exhibits to the Registration Statement of which this
Prospectus is a part and by the provisions of applicable law.
 
RECAPITALIZATION
 
  FJC has amended and restated its Certificate of Incorporation (the "Amended
and Restated Certificate of Incorporation") to (i) change the authorized
capital stock of the FJC to      shares of Class A Common Stock, par value
$0.01 per share,      shares of Class B Common Stock, par value $0.01 per
share, and 2,725 shares of Convertible Redeemable Preferred Stock, par value
$0.01 per share; (ii) reclassify each outstanding share of original Class A
Common Stock into     shares of its newly created Class B Common Stock; (iii)
reclassify each outstanding share of original Class B Common Stock into
shares of its newly created Class A Common Stock; and (iv) change the rights
and privileges of the Class A Common Stock and Class B Common Stock to those
described below. The Amended and Restated Certificate of Incorporation also
provides that upon the conversion of the PFA Preferred Stock following the
Offering, the Convertible Redeemable Preferred Stock will be eliminated. Upon
completion of the Offering,      shares of Class A Common Stock and
shares of Class B Common Stock will be issued and outstanding, including
shares of Class A Common Stock into which all 2,725 outstanding shares of PFA
Preferred Stock will be converted. The discussion herein describes the FJC's
capital stock, the Amended and Restated Certificate of Incorporation and the
By-laws in effect upon effectiveness of the Registration Statement of which
this Prospectus is a part and assuming conversion of the Preferred Stock.
 
CLASS A AND CLASS B COMMON STOCK
 
  The holders of shares of Class A Common Stock and Class B Common Stock have
identical rights and privileges on a per share basis, except as set forth
below. The holders of shares of Common Stock have no preemptive rights to
maintain their respective percentage ownership interest in FJC or other
subscription rights for other securities of FJC. Shares of Common Stock are
not redeemable or subject to further calls or assessments. The shares of
Common Stock to be outstanding after the Offering, including the shares of
Class A Common Stock to be issued hereby when paid for and issued, will be
fully paid and non-assessable. Holders of shares of Common Stock are entitled
to share pro rata in such dividends, if any, as may be declared by the Board
out of funds legally available therefor; provided, however, that any dividend
upon the Common Stock that is payable in Common Stock shall be paid only in
Class A Common Stock to the holders of Class A Common Stock, but is payable in
Class A or Class B Common Stock to the holders of Class B Common Stock. Upon
liquidation, dissolution and winding up of the FJC, holders of shares of
Common Stock are entitled to share ratably in the net assets available for
distribution to such holders. The consent of the holder or holders of a
majority of the Class B Common Stock is required to authorize the issuance of
Class B Common Stock.
 
  Limited Voting Rights. The holders of Class A Common Stock have the right as
a class to elect that minimum number of directors constituting 25% of the
members of the Board (rounding the number of such directors to the next
highest whole number if such percentage is not equal to a whole number of
directors), which presently represents two of the seven directors. Directors
elected by the holders of Class A Common Stock will first be elected at the
annual meeting of stockholders to be held in 1999.
 
  Except as stated above and as otherwise required by the laws of the State of
Delaware, holders of shares of Class A Common Stock have no voting rights;
provided, however, that from and after the time that all of the outstanding
shares of Class B Common Stock are converted into shares of Class A Common
Stock or are
 
                                      60
otherwise no longer outstanding, the holders of Class A Common Stock shall be
entitled to vote on all matters submitted to a vote of the stockholders of FJC
and shall be entitled to one vote per share held. Generally, the vote of the
majority of the shares represented at a meeting of the stockholders and
entitled to vote is sufficient for actions that require a vote of the
stockholders. The Amended and Restated Certificate of Incorporation does not
provide for cumulative voting. Because sole voting power has been granted to
the Class B Common Stock, except as stated above and as otherwise required by
the laws of the State of Delaware, substantially all corporate actions can be
taken without any vote by the holders of the Class A Common Stock including,
without limitation, amending the Amended and Restated Certificate of
Incorporation or By-laws of FJC (including authorizing more shares of Class A
Common Stock); authorizing stock options, restricted stock and other
compensation plans for employees, executives and directors; authorizing a
merger or disposition of FJC or change in control of FJC; approving
indemnification of directors, officers and employees (and related parties) of
FJC; and approving conflict of interest transactions involving affiliates of
FJC. The holders of the outstanding shares of Class A Common Stock will be
entitled, however, to vote as a class upon any proposed amendment to the
Amended and Restated Certificate of Incorporation which would increase or
decrease the par value of the shares of Class A Common Stock, or alter or
change the powers, preferences or special rights of the shares of the Class A
Common Stock so as to affect them adversely. See "Risk Factors--Control of the
Company; Anti-Takeover Impact."
 
  Immediately following the Offering, all of the shares of the Class B Common
Stock will be owned by the Partnership and can be voted by the General
Partner, which is wholly-owned by Mr. Cohen. See "Principal Stockholders" and
"Underwriting."
 
  Conversion Rights. At the option of any holder of shares of Class B Common
Stock, which option may be exercised at any time and from time to time, such
holder may convert all or part of such holder's shares of Class B Common Stock
into an equal number of shares of Class A Common Stock. The Shares of Class B
Common Stock are also subject to mandatory conversion into an equal number of
shares of Class A Common Stock, in whole or in part, at any time and from time
to time, at the option of the holder or holders of a majority of the shares of
Class B Common Stock. If, and only if, all the outstanding shares of Class B
Common Stock were converted into Class A Common Stock or otherwise were no
longer outstanding, the holders of the Class A Common Stock would have general
voting power in the election of all members of the Board and in all other
matters upon which stockholders of FJC are entitled to vote. Holders of shares
of Class A Common Stock have no right to convert Class A Common Stock into any
other securities of FJC.
 
INDEMNIFICATION AND LIMITATION OF LIABILITY
 
  The Amended and Restated Certificate of Incorporation limits the liability
of directors to the maximum extent permitted by Delaware law as currently or
hereafter in effect. Delaware law provides that directors of a corporation
will not be personally liable for monetary damages for breach of their
fiduciary duty as a director, except for liability (i) for breach of their
duty of loyalty to the corporation or its stockholders; (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) for unlawful payments of dividends or unlawful
stock repurchases or redemptions as provided in Section 174 of the General
Corporation Law of the State of Delaware (the "DGCL"); or (iv) for any
transaction from which the director derives an improper personal benefit.
 
  The Amended and Restated Certificate of Incorporation provides for the
mandatory indemnification of, and advancement of expenses to, directors and
officers of FJC.
 
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
 
  FJC is subject to Section 203 of the DGCL, which prevents an "interested
stockholder" (defined in Section 203, generally, as a person owning 15% or
more of a corporation's outstanding voting stock) from engaging in a "business
combination" with a publicly-held Delaware corporation for three years
following the date such
 
                                      61
person became an interested stockholder, unless (i) before such person became
an interested stockholder, the board of directors of the corporation approved
the transaction in which the interested stockholder became an interested
stockholder or approved the business combination; (ii) upon consummation of
the transaction that resulted in the interested stockholder's becoming an
interested stockholder, the interested stockholder owns at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced (subject to certain exceptions); or (iii) following the transaction
in which such person became an interested stockholder, the business
combination is approved by the board of directors of the corporation and
authorized at a meeting of stockholders by the affirmative vote of the holders
of 66 2/3% of the outstanding voting stock of the corporation not owned by the
interested stockholder. A "business combination" includes mergers, stock or
asset sales and other transactions resulting in a financial benefit to the
interested stockholder.
 
  The disproportionate voting rights between the Class A Common Stock and the
Class B Common Stock and the provisions of Section 203 of the DGCL could have
the effect of delaying, deferring or preventing a change in control of FJC.
See "Risk Factors--Control of the Company; Anti-Takeover Impact."
 
TRANSFER AGENT
 
  The transfer agent and registrar for the Class A Common Stock is First Union
National Bank, Charlotte, North Carolina.
 
                                      62
SHARES ELIGIBLE FOR FUTURE SALE
 
  Upon completion of the Offering, the Company will have a total of
shares of Class A Common Stock outstanding. All shares of Class A Common Stock
sold in the Offering will be freely tradable by persons other than
"affiliates" of the Company without restriction under the Securities Act. All
other shares of Class A Common Stock and all shares of Class B Common Stock,
and any shares of Class A Common Stock issued upon conversion of shares of
Class B Common Stock, will be "restricted" securities within the meaning of
Rule 144 under the Securities Act and may not be sold in the absence of
registration under the Securities Act unless an exemption from registration is
available, including the exemption provided by Rule 144.
 
  In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this Prospectus, a person (or persons whose shares are aggregated)
who has beneficially owned "restricted" shares for at least one year,
including a person who may be deemed an affiliate of the Company, is entitled
to sell within any three-month period a number of shares of Class A Common
Stock that does not exceed the greater of 1% of the then-outstanding shares of
Class A Common Stock of the Company or the average weekly trading volume of
the Class A Common Stock on Nasdaq during the four calendar weeks preceding
such sale. Sales under Rule 144 are subject to certain restrictions relating
to manner of sale, notice and the availability of current public information
about the Company. A person who is not an affiliate of the Company and has not
been such at any time during the 90 days preceding a sale, and who has
beneficially owned "restricted" shares for at least two years, would be
entitled to sell such shares immediately following the Offering without regard
to the volume limitations, manner of sale provisions or notice or other
requirements of Rule 144 of the Securities Act. However, the transfer agent
may require an opinion of counsel that a proposed sale of "restricted" shares
comes within the terms of Rule 144 of the Securities Act prior to effecting a
transfer of such shares. Such opinion would be provided by and at the cost of
the transferor.
 
  Any employee of the Company who purchased his or her shares of Class A
Common Stock or received an option to purchase Class A Common Stock pursuant
to a written compensation plan or contract while the Company was not subject
to the reporting requirements of the Exchange Act may be entitled to rely on
the resale provisions of Rule 701 under the Securities Act, which permits
nonaffiliates to sell their Rule 701 shares without having to comply with the
current public information, holding period, volume limitations or notice
provision of Rule 144 and permits affiliates to sell their Rule 701 shares
without having to comply with the holding period provision of Rule 144, in
each case beginning 90 days after the date of this Prospectus. Upon completion
of the Offering, there will be outstanding options to purchase     shares of
Class A Common Stock, which shares may, upon exercise, be resold pursuant to
Rule 701.
 
  The Company and its existing stockholders have agreed pursuant to the
Underwriting Agreement and other agreements that they will not sell any shares
of capital stock of the Company, either publicly or privately, without the
prior consent of the Representatives (as defined in "Underwriting") for a
period of 180 days from the date of this Prospectus (the "Lock-Up Period").
See "Underwriting."
 
  The Partnership has offered its limited partners the right to withdraw from
the Partnership under the Agreement of Limited Partnership dated April 1, 1997
(the "Limited Partnership Agreement") and receive a distribution of Class A
Common Stock (a "Withdrawal Election"). Such Withdrawal Election may be made
at any time between the consummation of the Offering and fourteen days before
the expiration of the Lock-Up Period. The Withdrawal Election will be
effective at the end of the month in which the Lock-Up Period expires. The
shares acquired through a limited partner's Withdrawal Election will be
subject to the resale limitations under Rule 144.
 
  Limited partners making a Withdrawal Election will generally be deemed to
have held the shares of Class A Common Stock distributed to them from the date
they acquired their partnership interest. Accordingly, original investors in
the Partnership will be entitled to sell such shares pursuant to the volume
and other limitation of Rule 144 immediately upon distribution of such shares
from the Partnership. Shares of Class A Common Stock distributed upon
conversion of the PFA Preferred Stock will be similarly saleable on April 2,
1999.
 
                                      63
Prior to the Offering, there has been no public market for either class of
Common Stock of the Company and no predictions can be made of the effect, if
any, that the sale or availability for sale of additional shares of Common
Stock, or the development of a public trading market for the Class B Common
Stock, will have on the market price of the Class A Common Stock.
Nevertheless, sales of substantial amounts of shares of Class A Common Stock
in the public market, the perception that such sales could occur, or the
development of a public trading market for the Class B Common Stock, could
adversely affect the market price of the Class A Common Stock and could impair
the Company's future ability to raise capital through an offering of its
equity securities.
 
                                      64
UNDERWRITING
 
  Under the terms and subject to the conditions contained in an Underwriting
Agreement dated          (the "Underwriting Agreement"), the underwriters
named below (the "Underwriters"), for whom Credit Suisse First Boston
Corporation, Furman Selz LLC and Morgan Schiff & Co., Inc. are acting as
representatives (the "Representatives"), have severally but not jointly agreed
to purchase from the Company the following respective numbers of shares of
Class A Common Stock:
NUMBER
   UNDERWRITER                                                        OF SHARES
   -----------                                                        ---------
Credit Suisse First Boston Corporation...........................
    Furman Selz LLC..................................................
    Morgan Schiff & Co., Inc. .......................................
                                                                        ----
      Total..........................................................
                                                                        ====
The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will be
obligated to purchase all of the shares of Class A Common Stock offered hereby
(other than those shares covered by the over-allotment option described below)
if any are purchased. The Underwriting Agreement provides that, in the event
of a default by an Underwriter, in certain circumstances the purchase
commitments of non-defaulting Underwriters may be increased or the
Underwriting Agreement may be terminated.
 
  The Company has granted to the Underwriters an option, expiring at the close
of business on the 30th day after the date of this Prospectus, to purchase up
to         additional shares of the Class A Common Stock at the initial public
offering price less the underwriting discounts and commissions, all as set
forth on the cover page of this Prospectus. Such option may be exercised only
to cover over-allotments in the sale of the shares of Class A Common Stock. To
the extent such option is exercised, each Underwriter will become obligated,
subject to certain conditions, to purchase approximately the same percentage
of such additional shares of Class A Common Stock as it was obligated to
purchase pursuant to the Underwriting Agreement.
 
  The Company has been advised by the Representatives that the Underwriters
propose to offer the Class A Common Stock to the public initially at the
public offering price set forth on the cover page of this Prospectus and,
through the Representatives, to certain dealers at such price less a
concession of $    per share, and the Underwriters and such dealers may allow
a discount of $    per share on sales to certain other dealers. After the
initial public offering, the public offering price and concession and discount
to dealers may be changed by the Representatives.
 
  The Company and its existing shareholders have agreed that they will not
offer, sell, contract to sell, announce their intention to sell, pledge or
otherwise dispose of, directly or indirectly, or file or cause to be filed
with the Securities and Exchange Commission (the "Commission") a registration
statement under the Securities Act relating to, any additional shares of the
Company's Class A Common Stock or securities convertible into or exchangeable
or exercisable for any shares of the Company's Class A Common Stock without
the prior written consent of Credit Suisse First Boston Corporation for a
period of 180 days after the date of this Prospectus.
 
  The Company has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act, or
contribute to payments which the Underwriters may be required to make in
respect thereof.
 
  Application has been made to list the shares of Class A Common Stock on The
Nasdaq Stock Market's National Market.
 
  The Representatives have advised the Company that the Underwriters do not
intend to confirm sales to any account over which they exercise discretionary
authority.
 
                                      65
Prior to this Offering, there has been no public market for the Class A
Common Stock. Consequently, the initial public offering price for the Class A
Common Stock will be determined by negotiations among the Company and the
Representatives. Among the factors which will be considered in such
negotiations will be the prevailing market conditions, the results of
operations of the Company in recent periods, the market capitalizations and
stages of development of other companies which the Company and the
Representatives believe to be comparable to the Company, estimates of the
business potential of the Company, the present state of the Company's
development and other factors which may be deemed relevant by the Company and
the Representatives.
 
  One of the Representatives, Morgan Schiff, may be deemed to be an affiliate
(as defined in Rule 2710(b)(1) of the Conduct Rules of the National
Association of Securities Dealers, Inc. (the "Conduct Rules")) of the Company
because, among other things, the Partnership owns 100% of the outstanding
Class B Common Stock of the Company and the sole stockholder of the General
Partner controls Morgan Schiff. See "Principal Stockholders" and "Certain
Relationships and Related Transactions." Accordingly, the shares of Class A
Common Stock being offered hereby are being offered in accordance with the
provisions of Rule 2710(c)(8) of the Conduct Rules. In accordance with such
provisions. Credit Suisse First Boston Corporation has agreed to act as
qualified independent underwriter (as defined in Rule 2720(b)(15) of the
Conduct Rules) for the Offering and has agreed to assume the responsibilities
of acting as qualified independent underwriter in pricing the Offering and
conducting due diligence. The initial public offering price of the Class A
Common Stock will not be higher than the maximum initial public offering price
recommended by such qualified independent underwriter.
 
  Morgan Schiff has acted as financial advisor to the Company for which it
received fees. See "Certain Relationships and Related Transactions."
 
  The Representatives, on behalf of the Underwriters, may engage in over-
allotment, stabilizing transactions, syndicate covering transactions and
penalty bids. Over-allotment involves syndicate sales in excess of the
offering size, which creates a syndicate short position. Stabilizing
transactions permit bids to purchase the Class A Common Stock being offered so
long as the stabilizing bids do not exceed a specified maximum. Syndicate
covering transactions involve purchases of the Class A Common Stock in the
open market after the distribution has been completed in order to cover
syndicate short positions. Penalty bids permit the Representatives to reclaim
a selling concession from a syndicate member when the Class A Common Stock
originally sold by such syndicate member are purchased in a syndicate covering
transaction to cover syndicate short positions. Such stabilizing transactions,
syndicate covering transactions and penalty bids may cause the price of the
Class A Common Stock to be higher than it would otherwise be in the absence of
such transactions. These transactions may be effected on the Nasdaq National
Market or otherwise and, if commenced, may be discontinued at any time.
 
                         NOTICE TO CANADIAN RESIDENTS
 
RESALE RESTRICTIONS
 
  The distribution of the Class A Common Stock in Canada is being made only on
a private placement basis exempt from the requirement that the Company prepare
and file a prospectus with the securities regulatory authorities in each
province where trades of Common Stock are effected. Accordingly, any resale of
the Class A Common Stock in Canada must be made in accordance with applicable
securities laws which will vary depending on the relevant jurisdiction, and
which may require resales to be made in accordance with available statutory
exemptions or pursuant to a discretionary exemption granted by the applicable
Canadian securities regulatory authority. Purchasers are advised to seek legal
advice prior to any resale of the Class A Common Stock.
 
REPRESENTATIONS OF PURCHASERS
 
  Each purchaser of Class A Common Stock in Canada who receives a purchase
confirmation will be deemed to represent to the Company and the dealer from
whom such purchase confirmation is received that (i) such
 
                                      66
purchaser is entitled under applicable provincial securities laws to purchase
such Class A Common Stock without the benefit of a prospectus qualified under
such securities laws, (ii) where required by law, that such purchaser is
purchasing as principal and not as agent, and (iii) such purchaser has
reviewed the text above under "Resale Restrictions."
 
RIGHTS OF ACTION (ONTARIO PURCHASERS)
 
  The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
section 32 of the Regulation under the Securities Act (Ontario). As a result,
Ontario purchasers must rely on other remedies that may be available,
including common law rights of action for damages or rescission or rights of
action under the civil liability provisions of the U.S. federal securities
laws.
 
ENFORCEMENT OF LEGAL RIGHTS
 
  All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be
possible for Canadian purchasers to effect service of process within Canada
upon the issuer or such persons. All or a substantial portion of the assets of
the issuer and such persons may be located outside of Canada and, as a result,
it may not be possible to satisfy a judgment against the issuer or such
persons in Canada or to enforce a judgment obtained in Canadian courts against
such issuer or persons outside of Canada.
 
NOTICE TO BRITISH COLUMBIA RESIDENTS
 
  A purchaser of Class A Common Stock to whom the Securities Act (British
Columbia) applies is advised that such purchaser is required to file with the
British Columbia Securities Commission a report within ten days of the sale of
any Class A Common Stock acquired by such purchaser pursuant to this Offering.
Such report must be in the form attached to British Columbia Securities
Commission Blanket Order BOR #95/17, a copy of which may be obtained from the
Company. Only one such report must be filed in respect of Class A Common Stock
acquired on the same date and under the same prospectus exemption.
 
TAXATION AND ELIGIBILITY FOR INVESTMENT
 
  Canadian purchasers of Class A Common Stock should consult their own legal
and tax advisors with respect to the tax consequences of an investment in the
Class A Common Stock in their particular circumstances and with respect to the
eligibility of the Class A Common Stock for investment by the purchaser under
relevant Canadian Legislation.
 
                                 LEGAL MATTERS
 
  The validity of the Class A Common Stock offered hereby will be passed upon
for the Company by Milbank, Tweed, Hadley & McCloy. Certain legal matters will
be passed upon for the Underwriters by Piper & Marbury L.L.P.
 
                                    EXPERTS
 
  The Consolidated Financial Statements of the Company as of December 31, 1997
and for the period from April 1, 1997 through December 31, 1997 and the
Consolidated Financial Statements of the Predecessor as of December 31, 1995
and December 30, 1996 and for the years ended December 31, 1995 and December
29, 1996 and the period from January 1, 1997 through March 31, 1997 included
elsewhere in this Prospectus and the related financial statement schedules
included elsewhere in the Registration Statement have been audited by
 
                                      67
Deloitte & Touche LLP, independent auditors, as stated in their reports (which
express an unqualified opinion and include an explanatory paragraph relating
to the new cost basis for assets and liabilities when the Company acquired the
Predecessor), appearing herein and elsewhere in the registration statement,
and are included in reliance upon the reports of such firm, given upon their
authority as experts in accounting and auditing. The financial statements of
PFA, as of December 31, 1996 and 1997 and for each of the two years in the
period ended December 31, 1997 included in this Prospectus and in the
Registration Statement are included in reliance upon the report of McGladrey &
Pullen, LLP, independent certified public accountants, appearing elsewhere
herein, and upon the authority of that firm as experts in accounting auditing.
 
                            ADDITIONAL INFORMATION
 
  The Company has filed with the Commission a Registration Statement on Form
S-1 (the "Registration Statement," which term shall encompass all amendments,
exhibits, annexes and schedules thereto) pursuant to the Securities Act, and
the rules and regulations promulgated thereunder, with respect to the Class A
Common Stock being offered in the Offering. This Prospectus does not contain
all the information set forth in the Registration Statement. For further
information with respect to the Company and the securities offered hereby,
reference is made to the Registration Statement. Statements made in this
Prospectus as to the contents of any contract, agreement or other document
referred to are not necessarily complete. With respect to each such contract,
agreement or other document filed as an exhibit to the Registration Statement,
reference is made to the exhibit for a more complete description of the
document or matter involved, and each such statement shall be deemed qualified
in its entirety by such reference. The Registration Statement, may be
inspected, without charge, and copies may be obtained, at prescribed rates, at
the public reference facilities of the Commission maintained at Judiciary
Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Copies of
the Registration Statement may also be inspected, without charge, at the
Commission's regional office at Seven World Trade Center, Suite 1300, New
York, New York 10048 and Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661. In addition, copies of the Registration Statement may be
obtained by mail at prescribed rates, from the Commission's Public Reference
Section at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
The Commission maintains a Web site at www.sec.gov that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission.
 
  Upon completion of the Offering, the Company will become subject to the
informational requirements of the Exchange Act, and in accordance therewith
will be required to file periodic reports and other information with the
Commission. Such periodic reports, proxy statements and other information will
be available for inspection and copying at the public reference facilities,
regional offices and Web site referred to above.
 
  The Company intends to furnish its stockholders with annual reports
containing consolidated financial statements audited by independent certified
public accountants.
 
                                      68
THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
PAGE
                                                                           ----
THE FARM JOURNAL CORPORATION (Formerly Farm Journal Holdings Inc.)
 Independent Auditors' Report.............................................  F-2
 Consolidated Balance Sheets as of December 29, 1996 of the Predecessor
  and
  December 31, 1997 and (Unaudited) March 31, 1998 of the Company.........  F-3
 Consolidated Statements of Operations for the Two Years Ended December
  29, 1996 and the Period from December 30, 1996 to March 31, 1997 of the
  Predecessor and the Period from April 1, 1997 to December 31, 1997 and
  (Unaudited) for the Three Months Ended March 31, 1998 of the Company....  F-4
 Consolidated Statements of Shareholder's Equity for the Two Years Ended
  December 29, 1996 and the Period from December 30, 1996 to March 31,
  1997 of the Predecessor and the Period from April 1, 1997 to December
  31, 1997 and (Unaudited) for the Three Months Ended March 31, 1998 of
  the Company.............................................................  F-5
 Consolidated Statements of Cash Flows for the Two Years Ended December
  29, 1996 and the Period from December 30, 1996 to March 31, 1997 of the
  Predecessor and the Period from April 1, 1997 to December 31, 1997 and
  (Unaudited) for the Three Months Ended March 31, 1998 of the Company....  F-6
 Notes to Consolidated Financial Statements...............................  F-7
PROFESSIONAL FARMERS OF AMERICA, INC. AND PROFESSIONAL MARKET MANAGEMENT,
 INC.
 Independent Auditor's Report............................................. F-19
 Combined Balance Sheets as of December 31, 1996 and 1997 and (Unaudited)
  March 31, 1998.......................................................... F-20
 Combined Statements of Income for the Years Ended December 31, 1996 and
  1997 and (Unaudited) for the Three Months Ended March 31, 1997 and
  1998.................................................................... F-21
 Combined Statements of Stockholder's Equity for the Years Ended December
  31, 1996 and 1997 and (Unaudited) for the Three Months Ended March 31,
  1997 and 1998........................................................... F-22
 Combined Statements of Cash Flows for the Years Ended December 31, 1996
  and 1997 and (Unaudited) for the Three Months Ended March 31, 1997 and
  1998.................................................................... F-23
 Notes to Combined Financial Statements................................... F-24
F-1
THE ACCOMPANYING FINANCIAL STATEMENTS REFLECT CHANGES TO THE TYPE AND NUMBER
OF COMMON SHARES AUTHORIZED AND A CONVERSION OF PREVIOUSLY OUTSTANDING COMMON
STOCK INTO NEWLY CREATED CLASSES OF COMMON STOCK, ALL OF WHICH IS TO BE
EFFECTED PRIOR TO THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT. THE
FOLLOWING OPINION IS IN THE FORM WHICH WILL BE SIGNED BY DELOITTE & TOUCHE LLP
UPON CONSUMMATION OF THE ABOVE EVENTS, WHICH ARE DESCRIBED IN NOTE 19 OF NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AND ASSUMING THAT FROM JANUARY 23, 1998
TO THE DATE OF SUCH EVENTS, NO OTHER EVENTS HAVE OCCURRED WHICH WOULD AFFECT
THE ACCOMPANYING FINANCIAL STATEMENTS AND NOTES THERETO.
 
Deloitte & Touche llp
Philadelphia, Pennsylvania
June 10, 1998
 
                         INDEPENDENT AUDITORS' REPORT
 
Board of Directors
The Farm Journal Corporation
Philadelphia, Pennsylvania
 
We have audited the accompanying consolidated balance sheet of the Farm
Journal Corporation (formerly Farm Journal Holdings, Inc.) and subsidiaries
(the "Company") as of December 31, 1997 and the related consolidated
statements of operations, shareholder's equity, and of cash flows for the
period from April 1, 1997 to December 31, 1997, as well as the consolidated
balance sheet of the Predecessor (see Note 1), as of December 29, 1996 and the
consolidated related statements of operations, shareholder's equity, and of
cash flows for the years ended December 31, 1995 and December 29, 1996 and the
period from December 30, 1996 to March 31, 1997. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
 
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company and the Predecessor
as of December 29, 1996 and December 31, 1997, and the results of their
operations and their cash flows for the periods stated above.
 
As discussed in Note 2 to the consolidated financial statements, on April 1,
1997, the Company acquired the Predecessor which resulted in the establishment
of a new cost basis for the assets and liabilities of the acquired entity.
 
Philadelphia, Pennsylvania
January 23, 1998
(    , 1998 as to Note 19)
 
                                      F-2
THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
                          CONSOLIDATED BALANCE SHEETS
PREDECESSOR
                                                                                         CORPORATION
                                                                                         ------------
                                                                                         DECEMBER 29,  DECEMBER 31,   MARCH 31,
                                                                                             1996          1997         1998
                                                                                         ------------  ------------  -----------
                                                                                                                     (UNAUDITED)
ASSETS
CURRENT ASSETS:
 Cash and cash equivalents.............................................................. $   276,622   $ 4,741,380   $ 4,949,325
 Accounts receivable, less allowances for doubtful accounts of $116,000 in 1996,
  $148,000 in 1997 and $227,000 in 1998.................................................   3,183,279     3,506,670     8,796,079
 Inventories............................................................................     197,391       150,354       120,997
 Prepaid and other current assets.......................................................     129,676       453,771       551,813
 Assets held for sale...................................................................     919,949
                                                                                         -----------   -----------   -----------
   Total current assets.................................................................   4,706,917     8,852,175    14,418,214
PROPERTY AND EQUIPMENT, Net.............................................................   2,527,982     2,241,940     2,220,593
INTANGIBLE ASSETS, Net..................................................................  12,985,382    10,755,429    10,648,096
DEFERRED TAX ASSETS.....................................................................     848,932       658,681       658,681
                                                                                         -----------   -----------   -----------
TOTAL................................................................................... $21,069,213   $22,508,225   $27,945,584
                                                                                         ===========   ===========   ===========
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES:
 Accounts payable....................................................................... $   417,327   $   529,090   $ 1,832,663
 Accrued expenses and other liabilities.................................................   1,222,868     1,202,399     2,008,121
 Income taxes payable...................................................................     195,794                   1,390,371
 Current portion of deferred subscription income........................................     940,157       994,251       937,633
 Due to Tribune.........................................................................     423,901
                                                                                         -----------   -----------   -----------
   Total current liabilities............................................................   3,200,047     2,725,740     6,168,788
DEFERRED SUBSCRIPTION INCOME, Less current portion......................................     305,971       333,729       312,544
SENIOR SUBORDINATED NOTES...............................................................                11,000,000    11,000,000
RETIREMENT BENEFITS OTHER THAN PENSIONS.................................................   2,328,744
COMMITMENTS AND CONTINGENCIES (Note 16).................................................
PREFERRED STOCK, $.01 par value, 2,725 shares authorized, none issued and outstanding...
SHAREHOLDER'S EQUITY:
Common Stock:
 Class A, $.01 par value,      shares authorized,       issued and outstanding..........
 Class B, $.01 par value,      shares authorized, 102,786 issued and outstanding........                                   1,028
 Class A, $.01 par value; 111,000 shares authorized; 100,808 issued and outstanding at
  December 31, 1997 and none at March 31, 1998..........................................                     1,008
 Class B, convertible into Class A common stock, $.01 par value, 99,000 shares
  authorized, 9,870 issued and outstanding at December 31, 1997 and none at March  31,
  1998..................................................................................                        99
 Common stock of Predecessor Corporation, $.01 par value, 100 shares authorized, issued
  and outstanding.......................................................................           1
Additional paid-in capital..............................................................  17,639,987     9,928,533    10,291,722
Retained earnings (Accumulated deficit).................................................  (2,405,537)   (1,480,884)      171,502
                                                                                         -----------   -----------   -----------
   Total shareholder's equity...........................................................  15,234,451     8,448,756    10,464,252
                                                                                         -----------   -----------   -----------
TOTAL................................................................................... $21,069,213   $22,508,225   $27,945,584
--------------------------------------------------
                                                                                         ===========   ===========   ===========
See notes to consolidated financial statements.
 
                                      F-3
THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
PREDECESSOR CORPORATION
                          --------------------------------------
                                                        PERIOD
                                                         FROM     PERIOD FROM   PERIOD FROM
                                                       DECEMBER     APRIL 1,    JANUARY 1,
                                                       30, 1996     1997 TO       1998 TO
                          DECEMBER 31,  DECEMBER 29,   TO MARCH   DECEMBER 31,   MARCH 31,
                              1995          1996       31, 1997       1997         1998
                          ------------  ------------  ----------  ------------  -----------
                                                                                (UNAUDITED)
REVENUES:
  Advertising, Net......  $19,333,079   $19,371,898   $8,430,871  $ 9,764,636   $8,939,617
  Subscription income...    1,305,541     1,154,421      554,243      690,555      531,822
  Information services..    5,617,253     6,048,772    1,428,387    3,801,602    2,433,571
  Other.................      318,648       199,034       60,558      277,278      103,376
                          -----------   -----------   ----------  -----------   ----------
    Total revenues......   26,574,521    26,774,125   10,474,059   14,534,071   12,008,386
                          -----------   -----------   ----------  -----------   ----------
OPERATING EXPENSES:
  Cost of publishing....   15,393,878    14,228,486    4,578,127    7,227,012    5,145,018
  Cost of information
   services.............    2,273,510     2,542,657      527,194    1,607,539      627,377
  Selling, general and
   administrative.......    8,969,847     9,250,310    2,160,573    6,451,313    2,728,105
  Depreciation and amor-
   tization.............    1,055,545     1,060,079      279,996      818,336      273,671
                          -----------   -----------   ----------  -----------   ----------
    Total operating ex-
     penses.............   27,692,780    27,081,532    7,545,890   16,104,200    8,774,171
                          -----------   -----------   ----------  -----------   ----------
OPERATING INCOME (LOSS)    (1,118,259)     (307,407)   2,928,169   (1,570,129)   3,234,215
OTHER INCOME (EXPENSE):
  Interest income.......      195,537        19,983        3,921      224,217       70,060
  Interest expense......                    (53,525)     (38,106)    (814,800)    (261,518)
                          -----------   -----------   ----------  -----------   ----------
INCOME (LOSS) BEFORE IN-
 COME TAXES ............     (922,722)     (340,949)   2,893,984   (2,160,712)   3,042,757
INCOME TAX PROVISION
 (BENEFIT)..............     (166,013)       66,696    1,208,362     (679,828)   1,390,371
                          -----------   -----------   ----------  -----------   ----------
NET INCOME (LOSS).......  $  (756,709)  $  (407,645)  $1,685,622  $(1,480,884)  $1,652,386
                          ===========   ===========   ==========  ===========   ==========
BASIC AND DILUTED NET
 LOSS PER COMMON SHARE..                                          $    (13.80)  $
                                                                  ===========   ==========
WEIGHTED AVERAGE NUMBER
 OF COMMON SHARES OUT-
 STANDING...............                                              107,318
                                                                  ===========   ==========
See notes to consolidated financial statements.
 
                                      F-4
THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
                CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
COMMON STOCK
                                                                         ---------------- ADDITIONAL
                                                                          NUMBER            PAID-IN    ACCUMULATED
   PREDECESSOR                                                           OF SHARES AMOUNT   CAPITAL      DEFICIT        TOTAL
   -----------                                                           --------- ------ -----------  ------------  -----------
BALANCE, JANUARY
1, 1995..........                                                            100    $  1  $17,639,987  $(1,241,183)  $16,398,805
 Net loss........                                                                                         (756,709)     (756,709)
                                                                          ------    ----  -----------  -----------   -----------
BALANCE, DECEMBER
31, 1995.........                                                            100       1   17,639,987   (1,997,892)   15,642,096
 Net loss........                                                                                         (407,645)     (407,645)
                                                                          ------    ----  -----------  -----------   -----------
BALANCE, DECEMBER
29, 1996.........                                                            100       1   17,639,987   (2,405,537)   15,234,451
 Net income......                                                                                        1,685,622     1,685,622
                                                                          ------    ----  -----------  -----------   -----------
BALANCE, MARCH
31, 1997.........                                                            100    $  1  $17,639,987  $  (719,915)  $16,920,073
                                                                          ======    ====  ===========  ===========   ===========
NEWLY CREATED COMMON STOCK               COMMON STOCK
                   ---------------------------------- -----------------------------------
                        CLASS A          CLASS B          CLASS A            CLASS B                     RETAINED
                   ----------------- ---------------- -----------------  ---------------- ADDITIONAL     EARNINGS
                    NUMBER            NUMBER           NUMBER             NUMBER            PAID-IN    (ACCUMULATED
   THE COMPANY     OF SHARES AMOUNT  OF SHARES AMOUNT OF SHARES  AMOUNT  OF SHARES AMOUNT   CAPITAL      DEFICIT)       TOTAL
   -----------     --------- ------- --------- ------ ---------  ------  --------- ------ -----------  ------------  -----------
Issuance of
 Class A Common
 Stock...........                                      100,808   $1,008                   $ 9,928,533                $ 9,929,541
 Issuance of
 Class B Common
 Stock...........                                                          9,870    $ 99                                      99
 Net loss........                                                                                      $(1,480,884)   (1,480,884)
                    ------   -------  -------  ------ --------   ------   ------    ----  -----------  -----------   -----------
BALANCE, DECEMBER
31, 1997.........                                      100,808    1,008    9,870      99    9,928,533   (1,480,884)    8,448,756
 Conversion of
 Class B Common
 Stock to Class A
 Common Stock
 (Unaudited).....                                        1,978       20   (4,738)    (48)     373,402                    373,374
 Redemption of
 Class B Common
 Stock
 (Unaudited).....                                                         (5,132)    (51)     (10,213)                   (10,264)
 Net income
 (Unaudited).....                                                                                        1,652,386     1,652,386
 Recapitalization
 and conversion
 of Common Stock
 (Unaudited).....                     102,786  $1,028 (102,786)  (1,028)                                                     --
                    ------   -------  -------  ------ --------   ------   ------    ----  -----------  -----------   -----------
BALANCE, MARCH
31, 1998
(Unaudited)......            $        102,786  $1,028    --      $ --       --      $ --  $10,291,722  $   171,502   $10,464,252
                    ======   =======  =======  ====== ========   ======   ======    ====  ===========  ===========   ===========
See notes to consolidated financial statements.
 
                                      F-5
THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
PREDECESSOR CORPORATION
                                                              -------------------------------------
                                                                                        PERIOD FROM  PERIOD FROM   PERIOD FROM
                                                                 FISCAL YEARS ENDED      DECEMBER      APRIL 1,    JANUARY 1,
                                                              ------------------------- 30, 1996 TO    1997 TO       1998 TO
                                                              DECEMBER 31, DECEMBER 29,  MARCH 31,   DECEMBER 31,   MARCH 31,
                                                                  1995         1996        1997          1997         1998
                                                              ------------ ------------ -----------  ------------  -----------
                                                                                                                   (UNAUDITED)
OPERATING ACTIVITIES:
 Net income (loss)...........................................  $ (756,709)  $ (407,645) $1,685,622   $(1,480,884)  $1,652,386
 Adjustments to reconcile net income (loss) to net cash
  provided by operating activities:
  Depreciation and amortization of fixed assets..............     547,856      552,389     153,074       490,331      166,338
  Amortization of intangibles................................     507,689      507,690     126,922       328,005      107,333
  Provision for postretirement benefits......................      74,354       94,390      22,497
  Changes in assets and liabilities which provided (used)
   cash:
   Accounts receivable.......................................    (721,116)      71,935  (2,868,567)    2,545,176   (5,289,409)
   Other receivables.........................................    (172,563)     172,563
   Inventories...............................................      28,771      (51,752)     69,336       (22,299)      29,357
   Prepaid and other current assets..........................   1,386,887      121,751    (244,669)       (4,426)     (98,042)
   Deferred taxes............................................  (1,003,492)     154,560     948,342      (679,828)
   Accounts payable..........................................     800,438   (1,023,392)    549,834       453,600    1,293,309
   Accrued expenses and other liabilities....................     193,094      512,823     420,728      (530,152)   1,179,096
   Income taxes payable......................................    (375,430)     189,358    (120,857)     (515,421)   1,390,371
   Deferred subscription income..............................    (188,882)     255,075    (171,545)      253,397      (77,803)
                                                               ----------   ----------  ----------   -----------   ----------
   Net cash provided by operating activities.................     320,897    1,149,745     570,717       837,499      352,936
                                                               ----------   ----------  ----------   -----------   ----------
INVESTING ACTIVITIES:
 Purchase of assets, net of disposals........................  (2,410,924)    (553,535)   (178,896)     (178,467)    (144,991)
 Acquisition of stock of Farm Journal, Inc., net of cash re-
  ceived.....................................................                                        (16,534,613)
 Organization costs..........................................                                            (40,000)
 Sale of assets held for sale................................                              919,949
                                                               ----------   ----------  ----------   -----------   ----------
 Net cash provided by (used in) investing activities.........  (2,410,924)    (553,535)    741,053   (16,753,080)    (144,991)
                                                               ----------   ----------  ----------   -----------   ----------
FINANCING ACTIVITIES:
 Due to Tribune..............................................   1,819,110   (1,473,978) (1,488,013)
 Proceeds from issuance of Class A Common Stock..............                                          9,929,541
 Proceeds from issuance of Class B Common Stock..............                                                 99
 Deferred financing costs....................................                                           (272,679)
 Borrowings from senior subordinated notes...................                                         11,000,000
                                                               ----------   ----------  ----------   -----------
 Net cash provided by (used in) financing activities.........   1,819,110   (1,473,978) (1,488,013)   20,656,961
                                                               ----------   ----------  ----------   -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.........    (270,917)    (877,768)   (176,243)    4,741,380      207,945
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD...............   1,425,307    1,154,390     276,622           --     4,741,380
                                                               ----------   ----------  ----------   -----------   ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD.....................  $1,154,390   $  276,622  $  100,379   $ 4,741,380   $4,949,325
                                                               ==========   ==========  ==========   ===========   ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
 Cash paid (received) during period for taxes................  $   60,451   $ (272,685) $  248,729   $   515,421   $      --
                                                               ==========   ==========  ==========   ===========   ==========
 Cash paid during period for interest........................  $      --    $   53,525  $   38,106   $   727,192   $      --
--------------------------------------------------
                                                               ==========   ==========  ==========   ===========   ==========
See notes to consolidated financial statements.
 
                                      F-6
THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1995 AND DECEMBER 29, 1996, AND
             THE PERIODS FROM DECEMBER 30, 1996 TO MARCH 31, 1997
            AND APRIL 1, 1997 TO DECEMBER 31, 1997 AND (UNAUDITED)
                   FOR THE THREE MONTHS ENDED MARCH 31, 1998
 
1. ORGANIZATION
 
  The Farm Journal Corporation ("FJC") was incorporated on March 25, 1997 as
  a Delaware corporation and is owned by MS Farm International Limited
  Partnership. FJC is a holding company conducting business through its
  wholly-owned subsidiary, Farm Journal, Inc. ("FJI"). Prior to April 1,
  1997, FJI was a wholly- owned subsidiary of Tribune Company ("Tribune").
  During the periods that FJI was owned by Tribune, it is referred to as the
  "Predecessor." The term "Company" shall refer to FJC and its subsidiary,
  FJI, subsequent to the Management Purchase (defined below).
 
  The Company and the Predecessor are primarily publishers of magazines
  devoted to various aspects of the farming industry. The Company's and the
  Predecessor's businesses also include a proprietary market research
  organization and agricultural data management business.
 
  The Company's and the Predecessor's flagship publication is the Farm
  Journal. In addition, the Company and the Predecessor publish Top Producer
  and the Today series of magazines that focus on the livestock markets. The
  series include Beef Today, Dairy Today and Hogs Today. The Company's and
  the Predecessor's market research organization uses the Company's and the
  Predecessor's readership to create and conduct demographic studies for
  agricultural product producers and other businesses. The Company's and the
  Predecessor's data services business is principally conducted through
  licensing agreements with a number of major agricultural marketers.
 
2. ACQUISITION OF FARM JOURNAL
 
  Effective April 1, 1997, the Company entered into a Stock Purchase
  Agreement (the "Agreement") with Tribune whereby the Company acquired FJI,
  a wholly-owned subsidiary of Tribune. Under the terms of the Agreement, FJI
  repurchased 65 of its own shares of common stock from Tribune for
  $11,000,000. The repurchase was funded with the proceeds from the issuance
  of $11,000,000 of senior subordinated notes (see Note 8). Simultaneously,
  the Company acquired the remaining 35 shares of FJI common stock for
  approximately $5,635,000 in cash. The acquisition of FJI is referred to as
  the "Management Purchase." The acquisition was accounted for using the
  purchase method of accounting with the purchase price allocated to the
  assets acquired and liabilities assumed based on their respective fair
  values at the date of acquisition.
 
  The following summarized unaudited pro forma financial information shows
  the results of the Company's operations for each of the fiscal years
  presented assuming that the Management Purchase occurred as of January 1,
  1995. The pro forma results have been prepared for comparative purposes
  only and do not purport to be indicative of the results of operations which
  actually would have resulted had the significant acquisitions been in
  effect on the dates indicated or which may result in the future.
FISCAL YEARS
                            ---------------------------------------- -----------
                                1995          1996          1997
                            ------------  ------------  ------------
Revenues................ $ 26,574,521  $ 26,774,125  $ 25,008,130
   Operating income (loss)
    .......................   (1,047,910)     (237,057)    1,375,627
   Net income (loss).......   (1,284,159)     (915,686)       40,675
   Basic and diluted net
    income (loss)
    per common share....... $     (11.60) $      (8.27) $       0.37
   Number of common
    shares.................      110,678       110,678       110,678
F-7
THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
3.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  BASIS OF PRESENTATION--The consolidated balance sheet as of December 31,
  1997 and the consolidated statements of operations, cash flows and
  shareholder's equity for the period from April 1, 1997 to December 31, 1997
  represent the consolidated financial position, results of operations,
  changes in shareholder's equity and cash flows of the Company subsequent to
  the Management Purchase. The consolidated balance sheet as of December 29,
  1996 and the related statements of operations, shareholder's equity and
  cash flows for the years ended December 31, 1995 and December 29, 1996 and
  the period December 30, 1996 to March 31, 1997 represent the consolidated
  financial position, results of operations, changes in shareholder's equity
  and cash flows of the Predecessor. All significant intercompany accounts
  and transactions among consolidated entities have been eliminated.
 
  UNAUDITED INTERIM FINANCIAL INFORMATION--The consolidated financial
  statements and related notes for the three months ended March 31, 1998 are
  unaudited, but include all adjustments (consisting solely of normal
  recurring adjustments) which are, in the opinion of management, necessary
  for a fair presentation of the financial position and results of operations
  for the interim periods. The results of operations for the three-month
  periods ended March 31, 1997 and 1998 are not necessarily indicative of the
  operating results to be expected for the full fiscal year.
 
  PURCHASE ACCOUNTING--With respect to the Management Purchase, the total
  purchase price has been allocated to the tangible and intangible assets and
  liabilities based on their respective fair values.
 
  CASH AND CASH EQUIVALENTS--The Company and the Predecessor consider all
  highly liquid investments with original maturities of three months or less
  to be cash and cash equivalents.
 
  INVENTORIES--Inventories, including purchased manuscripts, photographs and
  art, are valued at the lower of cost or market principally on a first-in,
  first-out ("FIFO") basis.
 
  PROPERTY AND EQUIPMENT--Property and equipment are stated at cost less
  accumulated depreciation and amortization. Depreciation of property and
  equipment and the amortization of leasehold improvements are provided at
  rates based on the estimated useful lives or lease terms, if shorter, using
  primarily the straight-line and a declining balance method. Improvements
  are capitalized while maintenance and repairs are expensed as incurred.
 
  INTANGIBLE ASSETS--Intangible assets are comprised of subscription lists,
  excess purchase price over net assets acquired ("goodwill"), deferred
  financing costs and organization costs.
 
  The subscription list is being amortized on a straight-line basis over a
  life of 25 years. Goodwill is being amortized on a straight-line basis over
  a life of 40 years. Organization costs are amortized on a straight-line
  basis over their estimated useful life of 5 years. Deferred financing costs
  are stated at cost and amortized by the straight-line method over the life
  of the related debt from 3.25 to 10 years.
 
  LONG-LIVED ASSETS--In March 1995, the Financial Accounting Standards Board
  ("FASB") issued Statement of Financial Accounting Standards No. 121,
  Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to
  be Disposed Of ("SFAS No. 121"), which is effective for fiscal years
  beginning after December 15, 1995. SFAS No. 121 specifies the recognition
  and measurement criteria for such impairments. Adoption of SFAS No. 121 on
  January 1, 1996 had no impact on the Predecessor's financial position,
  results of operations or cash flows.
 
  INCOME TAXES--The Company and the Predecessor account for income taxes in
  accordance with SFAS No. 109, Accounting for Income Taxes. Under SFAS No.
  109, the deferred tax provision is determined under
 
                                      F-8
THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
  the liability method. Under this method, deferred tax assets and
  liabilities are recognized based on differences between financial statement
  and tax bases of assets and liabilities using presently enacted tax rates.
 
  REVENUE RECOGNITION--Advertising revenues for all magazines are recognized
  as income when the magazines are published and distributed, net of
  provisions for estimated rebates, adjustments and discounts. Subscriptions
  are recorded as deferred revenue when received and recognized as income
  over the term of the subscription. Information service revenues are
  recognized either when the finished product is delivered or based on
  contractually agreed-upon terms.
 
  USE OF ESTIMATES--The preparation of financial statements in conformity
  with generally accepted accounting principles requires management to make
  estimates and assumptions that affect the reported amounts of assets and
  liabilities and disclosure of contingent assets and liabilities at the date
  of the financial statements and the reported amounts of revenues and
  expenses during the reporting period. Actual results could differ from
  those estimates.
 
  FAIR VALUES--The estimated fair value amounts presented in these notes to
  consolidated financial statements have been determined by the Company and
  the Predecessor using available market information and appropriate
  methodologies. However, considerable judgment is required in interpreting
  market data to develop the estimates of fair value. The estimates presented
  herein are not necessarily indicative of the amounts that the Company and
  the Predecessor could realize in a current market exchange. The use of
  different market assumptions and/or estimation methodologies may have a
  material effect on the estimated fair value amounts. Such fair value
  estimates are based on pertinent information available to management as of
  December 29, 1996 and December 31, 1997, and have not been comprehensively
  revalued for purposes of these consolidated financial statements since such
  date. Current estimates of fair value may differ significantly from the
  amounts presented herein.
 
  The following disclosure of the estimated fair value of financial
  instruments is made in accordance with the provisions of SFAS No. 107,
  Disclosures About Fair Value of Financial Instruments:
 
   Cash and Cash Equivalents, Accounts Receivable, Accounts Payable, and
   Other Current Assets and Liabilities--The carrying amounts of these items
   approximate fair value because of the short maturity of these
   instruments.
 
   Senior Subordinated Notes--Rates currently available to the Company for
   debt with similar terms and maturity are used to estimate the fair value
   of the debt issued. Accordingly, the fair value of the senior
   subordinated notes approximates the carrying value of $11,000,000.
 
  POSTRETIREMENT BENEFIT PLAN--Some former employees participated in a
  postretirement benefit plan sponsored by Tribune for the period from June
  25, 1994 to December 31, 1994 and for the years ended December 31, 1995,
  December 29, 1996 and the period from December 30, 1996 to March 31, 1997.
  Amounts contributed by the Farm Journal were determined by Tribune based
  principally on the aggregate cost method. Tribune assumed all liabilities
  accrued under the plan as of March 31, 1997.
 
  STOCK-BASED COMPENSATION--SFAS No. 123, Accounting for Stock-Based
  Compensation, encourages, but does not require companies to record
  compensation cost for stock-based employee compensation plans at fair
  value. The Company has chosen to continue to account for stock-based
  compensation in accordance with Accounting Principles Board Opinion No. 25,
  Accounting for Stock Issued to Employees.
 
  EARNINGS PER SHARE--In February 1997, the FASB issued SFAS No. 128,
  Earnings Per Share. This new standard requires dual presentation of basic
  and diluted earnings per share ("EPS") on the face of the
 
                                      F-9
THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
  statement of operations and the reconciliation of the numerators and
  denominators of the basic and diluted EPS calculations. The Company adopted
  this standard in the period ended December 31, 1997.
 
  NEW ACCOUNTING PRONOUNCEMENTS--In February 1997, the FASB issued SFAS No.
  129, Disclosure of Information About Capital Structure, which establishes
  new standards for disclosing information about an entity's capital
  structure. Adoption of SFAS No. 129 did not have a significant impact on
  the Company's financial statements.
 
  In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income.
  This statement, which establishes standards for reporting and disclosure of
  comprehensive income, is effective for interim and annual periods beginning
  after December 15, 1997, although earlier adoption is permitted.
  Reclassification of financial information for earlier periods presented for
  comparative purposes is required under SFAS No. 130. As this statement only
  requires additional disclosures in the Company's consolidated financial
  statements, its adoption did not have any impact on the Company's
  consolidated financial position or results of operations. The Company will
  adopt SFAS No. 130 effective January 1, 1998.
 
  In June 1997, the FASB issued SFAS No. 131, Disclosures about Segments of
  an Enterprise and Related Information. This statement, which establishes
  standards for the reporting of information about operating segments and
  requires the reporting of selected information about operating segments in
  interim financial statements, is effective for fiscal years beginning after
  December 15, 1997, although earlier application is permitted.
  Reclassification of segment information for earlier periods presented for
  comparative purposes is required under SFAS No. 131. The Company has
  adopted SFAS No. 131 effective January 1, 1998; adoption of this statement
  did not result in significant changes to the presentation of financial data
  by business segment.
 
4.INVENTORIES
 
  The components of inventories are as follows:
PREDECESSOR
                                           CORPORATION
                                           ------------
                                           DECEMBER 29, DECEMBER 31,  MARCH 31,
                                               1996         1997        1998
                                           ------------ ------------ -----------
                                                                     (UNAUDITED)
Art work and manuscripts...............  $  88,250    $  93,600    $  78,045
   Work-in-process........................    109,141       56,754       42,952
                                            ---------    ---------    ---------
                                            $ 197,391    $ 150,354    $ 120,997
                                            =========    =========    =========
5. PROPERTY AND EQUIPMENT
 
  The components of property and equipment are as follows:
PREDECESSOR
                                          CORPORATION
                                          ------------
                                          DECEMBER 29,  DECEMBER 31,   MARCH 31,
                                              1996          1997         1998
                                          ------------  ------------  -----------
                                                                      (UNAUDITED)
Equipment and furniture............... $ 1,416,851   $ 1,013,726   $ 1,011,212
   Computer..............................   2,170,005     1,340,177     1,416,694
   Leasehold improvements................     177,022       378,368       449,356
                                          -----------   -----------   -----------
                                            3,763,878     2,732,271     2,877,262
   Less accumulated depreciation
    and amortization.....................  (1,235,896)     (490,331)     (656,669)
                                          -----------   -----------   -----------
                                          $ 2,527,982   $ 2,241,940   $ 2,220,593
                                          ===========   ===========   ===========
F-10
THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
6.INTANGIBLE ASSETS
 
  Intangible assets consist of the following:
PREDECESSOR
                                        CORPORATION
                                        ------------
                           AMORTIZATION
                              PERIOD    DECEMBER 29,  DECEMBER 31,   MARCH 31,
                             (YEARS)        1996          1997          1998
                           ------------ ------------  ------------  ------------
                                                                    (UNAUDITED)
Subscription list....        25      $  7,850,000  $  7,131,000  $  7,131,000
   Goodwill.............        40         6,404,606     3,639,755     3,639,755
   Deferred financing
   costs................    3.25 to 10                     272,679       272,679
   Organization costs...        5                           40,000        40,000
                                        ------------  ------------  ------------
                                          14,254,606    11,083,434    11,083,434
   Less accumulated
   amortization.........                  (1,269,224)     (328,005)     (435,338)
                                        ------------  ------------  ------------
                                        $ 12,985,382  $ 10,755,429  $ 10,648,096
                                        ============  ============  ============
The Company and the Predecessor periodically evaluate the fair value of
  goodwill and other intangible assets and recognize an impairment when it is
  probable that estimated future undiscounted cash flows will be less than
  the carrying value of the asset. No writedowns of goodwill or other
  intangible assets were made in any of the periods presented.
 
7.REVOLVING CREDIT AGREEMENT
 
  FJI entered into a revolving credit and security agreement with its bank
  which provides for aggregate collateralized borrowings of up to $3,000,000
  which mature June 30, 2000. Interest shall accrue at the prime based rate,
  as defined in the agreement, provided however, that FJI by giving
  notification may have all or a portion of the outstanding principal accrue
  interest at the LIBOR based rate, as defined in the agreement. FJI had no
  amounts outstanding under the agreement at December 31, 1997. The borrower
  under the revolving credit and security agreement is FJI. Repayment of the
  debt is guaranteed by FJC.
 
  The agreement includes requirements as to the maintenance of financial
  ratios and tangible net worth and restrictions of certain financial
  conditions. The agreement also includes certain dividend restrictions as
  part of its covenants that prohibit dividend payments as well as other
  restrictions.
 
8.SENIOR SUBORDINATED NOTES
 
  The senior subordinated notes bear interest at 9.5% and mature April 1,
  2007. Interest is payable semi-annually in arrears on June 1 and December 1
  of each year commencing with December 1, 1997. Aggregate maturities of debt
  are $2,200,000 each year payable June 1, 2003 through June 1, 2006, with
  the entire remaining unpaid principal amount of notes together with
  interest accrued thereon due April 1, 2007. The borrower under the senior
  subordinated notes is FJI. Repayment of the debt is guaranteed by FJC.
 
  The note agreement includes requirements as to the maintenance of financial
  ratios and minimum tangible net worth amounts and restrictions of certain
  asset sales, mergers and other significant transactions, as well as certain
  reporting requirements. As of October 1, 1997, FJI was in violation of the
  agreement because it did not deliver audited financial statements to the
  note holder until after that date. On March 27, 1998, FJI received a waiver
  of this debt covenant violation. As a result, the entire balance has been
  reflected as a long-term liability in the accompanying consolidated
  financial statements.
 
                                     F-11
THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
  The ability of the Company to pay dividends is dependent upon the receipt
  of dividends or other payments from FJI. However, the senior subordinated
  notes and the revolving credit agreement described in Note 7 have certain
  dividend restrictions as part of their covenants that prohibit dividend
  payments on or prior to April 1, 1998. Thereafter, FJI will not authorize,
  declare, pay, or make any restricted payment unless no event of default
  shall have occurred and be continuing and the aggregate amount of all sums
  and property included in all restricted payments, plus the total of all
  payments made to the general partner of MS Farm International Limited
  Partnership by FJI shall not exceed the sum of 50% (or 100% in the case of
  a deficit) of adjusted consolidated net income (as defined in the note
  agreement) plus an amount equal to the net proceeds received by FJI from
  the sale of capital stock of FJI.
 
9.INCOME TAXES
 
  FJC and FJI will file a consolidated federal income tax return for the
  period from April 1, 1997 through December 31, 1997. From June 25, 1994
  through March 31, 1997, the Predecessor was a party to a tax-sharing
  agreement with Tribune and was included in the consolidated tax returns of
  Tribune. Tribune allocated income tax expense or benefit to the Predecessor
  as if the Predecessor was filing a separate federal income tax return. Tax
  benefits from losses were made available to the Predecessor as it is able
  to realize such benefits on a separate return basis. The Predecessor was
  required to pay to Tribune, for income taxes, an amount equal to that
  amount of tax the Predecessor would pay if it filed a separate federal
  income tax return.
 
  Components of the income tax provision (benefit) are as follows:
PREDECESSOR
                            ----------------------------------------
                                                         PERIOD FROM
                                                          DECEMBER    PERIOD FROM
                               FISCAL YEARS ENDED            30,        APRIL 1,
                            ----------------------------   1996 TO      1997 TO
                            DECEMBER 31,    DECEMBER 29,  MARCH 31,   DECEMBER 31,
                                1995            1996        1997          1997
---------        --------   ----------    ---------   ---
    Current:
     Federal............     $(221,013)       $(87,304)  $1,089,000
     State and local....          --               --       189,362
                             ---------        --------   ----------
                              (221,013)        (87,304)   1,278,362
    Deferred:
     Federal............        93,000         139,000     (140,000)   $(516,014)
     State and local....       (38,000)         15,000       70,000     (163,814)
                             ---------        --------   ----------    ---------
                                55,000         154,000      (70,000)    (679,828)
                             ---------        --------   ----------    ---------
  Income tax provision
   (benefit)............     $(166,013)       $ 66,696   $1,208,362    $(679,828)
                             =========        ========   ==========    =========
F-12
THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
  The reconciliation from the statutory federal income tax rate is as
  follows:
PREDECESSOR
                             -------------------------------------
                                                       PERIOD FROM
                                                        DECEMBER   PERIOD FROM
                                FISCAL YEARS ENDED         30,       APRIL 1,
                             -------------------------   1996 TO     1997 TO
                             DECEMBER 31, DECEMBER 29,  MARCH 31,  DECEMBER 31,
                                 1995         1996        1997         1997
                             ------------ ------------ ----------- ------------
Federal income tax pro-
    vision
    (benefit) at statutory
    rate...................     (34.0)%      (34.0)%      34.0%       (34.0)%
   State income taxes, net
     of federal income tax
    benefit................      (2.7)         2.9         6.3         (5.0)
   Amortization of excess
    cost
     of net assets ac-
    quired.................      18.7         50.6         1.5          4.5
   Stock-based compensation
    and other..............                                             3.0
                                -----        -----        ----        -----
   Income tax provision
    (benefit)..............     (18.0)%      19.5 %       41.8%       (31.5)%
                                =====        =====        ====        =====
Components of the net deferred tax assets and liability are as follows:
PREDECESSOR
                                                       ------------
                                                       DECEMBER 29, DECEMBER 31,
                                                           1996         1997
                                                       ------------ ------------
Deferred tax assets:
    Retirement benefits...............................  $ 931,600    $     --
    Accruals and reserves.............................    338,000      133,468
    Inventories.......................................     37,600       50,170
    Operating loss carryforward.......................        --       654,704
    Other.............................................     37,332        7,739
                                                        ---------    ---------
   Total..............................................  1,344,532      846,081
   Deferred tax liability - property and equipment....    495,600      187,400
                                                        ---------    ---------
   Net deferred tax assets............................  $ 848,932    $ 658,681
                                                        =========    =========
Management does not believe that a valuation allowance on its deferred tax
  assets is necessary because it is more likely than not that the deferred
  tax assets will be realized.
 
  As of December 31, 1997, the Company has a net operating loss carryforward
  of approximately $1,600,000 for federal income tax purposes which expires
  in 2012.
 
  The Company has recorded a provision for income taxes for the period from
  January 1, 1998 to March 31, 1998 (unaudited) in an amount equal to the
  anticipated effective tax rate of the Company for the year ending December
  31, 1998.
 
                                     F-13
THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
10.LEASES
 
  The Company leases its corporate office and computer equipment. Future
  minimum lease payments under noncancellable operating leases with initial
  or remaining terms in excess of one year are as follows:
1998...................................................... $  787,618
           1999......................................................    785,434
           2000......................................................    863,957
           2001......................................................    944,305
           2002......................................................    944,305
           Thereafter................................................  2,220,698
                                                                      ----------
                                                                      $6,546,317
                                                                      ==========
Rental expense under operating leases was $432,820, $923,621, $214,977,
  $700,458 and $235,413 (unaudited) for the years ended December 31, 1995 and
  December 29, 1996, and the periods from December 30, 1996 to March 31,
  1997, April 1, 1997 to December 31, 1997 and January 1, 1998 to March 31,
  1998 (unaudited).
 
11.BENEFIT PLANS
 
  401(K) SAVINGS PLAN--The Company has a 401(k) retirement plan for the
  benefit of qualified employees. Those employees who have completed one year
  of service and have attained age 21 are eligible to participate and may
  contribute a portion of their compensation to the plan. The Company makes
  matching contributions at the rate of 100% of the first 3% of each
  participant's elective deferral and 50% of the next 3% of such elective
  deferral. The Company's expense related to the plan amounted to $302,344,
  $447,764, $46,028, $148,045 and $58,321 for the years ended December 31,
  1995 and December 29, 1996, and the periods from December 30, 1996 to March
  31, 1997, April 1, 1997 to December 31, 1997 and January 1, 1998 to March
  31, 1998 (unaudited), respectively.
 
  RETIREMENT BENEFITS OTHER THAN PENSIONS--For some former employees of the
  Predecessor, retirement benefits other than pensions are paid. SFAS No. 106
  Employers' Accounting for Postretirement Benefits Other Than Pensions,
  requires disclosure of the net periodic postretirement benefit cost
  separately showing the service cost component, the interest cost component,
  the actual return on plan assets for the period, a reconciliation of the
  funded status of the plan with amounts reported in the consolidated balance
  sheets, the assumed health trend rates, and the effect of a one-percentage-
  point increase in the assumed health care cost trend rates for each future
  year. Such disclosures are not presented for the Predecessor because the
  structure of the plan does not allow for determination of this information
  on an individual company basis. No contributions were made by the
  Predecessor in fiscal year ended December 31, 1995. For the fiscal year
  ended December 29, 1996, contributions totaled $73,610. For the period from
  December 30, 1996 to March 31, 1997, contributions totaled $18,403.
 
  As part of the Management Purchase, Tribune assumed all liabilities accrued
  under the plan. The Company has no additional liability under that
  postretirement plan.
 
12.EQUITY INCENTIVE AWARDS
 
  On April 1, 1997, the Company established an equity appreciation plan
  ("Equity Incentives") for certain key employees. The Equity Incentives
  provide the employees an opportunity to realize the appreciation over up to
  a 10-year period on 9,870 shares of the Company's Class B Common Stock
  which approximates 10% of the Company's outstanding Common Stock. The
  employees' interest in the Class B Common Stock vest
 
                                     F-14
THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
  based upon the achievement of certain performance goals. The vested shares
  of Class B Common Stock are convertible into the Company's Class A Common
  Stock pursuant to a formula contained in the Equity Incentives agreement at
  the election of the employee, at any time up to April 1, 2007. Based on the
  conversion formula, the Class B Common Stock will convert to Class A Common
  Stock at a rate of less than 1:1. If all Class B Common Stock are converted
  to Class A Common Stock, the key employees will hold a combined total of
  approximately 10% of the Company's Class A Common Stock. The Company
  applies Accounting Principles Board Opinion No. 25, Accounting for Stock
  Issued to Employees, and related interpretations in accounting for the
  Equity Incentives. Accordingly, $194,565 of compensation expense, based on
  a third-party independent appraisal at the measurement date, was charged to
  operations in the period from April 1, 1997 to December 31, 1997. As of
  December 31, 1997, $194,565 has been accrued for payment related to the
  Equity Incentives. Had compensation cost for the Equity Incentives been
  determined consistent with SFAS No. 123, the Company's net loss and net
  loss per share would have remained unchanged as the variable nature of the
  Equity Incentives required the use of intrinsic value. As described in Note
  19, the Equity Incentives were terminated in February 1998, a stock option
  plan was adopted and the employees were awarded stock options. (See Note
  19).
 
13.EARNINGS PER SHARE
 
  The numerator and denominator for the basic and diluted earnings per share
  calculation were the same because of the absence of dilutive securities at
  December 31, 1997. The options issued in February 1998, described in Note
  19, would have had an antidilutive impact on the earnings per share
  calculation.
 
14.SALES TO MAJOR CUSTOMERS
 
  Sales to the five largest unaffiliated customers totaled $6,612,287 or
  24.9%, $6,281,115 or 23.5%, and $3,239,679 or 30.9% of the Predecessor's
  revenues for fiscal years 1995 and 1996, and for the period from December
  30, 1996 to March 31, 1997 and $2,423,000 or 16.7% and $3,778,422 or 31.5%
  of the Company's revenues for the period from April 1, 1997 to December 31,
  1997 and the period from January 1, 1998 to March 31, 1998 (unaudited),
  respectively.
 
  SEASONALITY--Revenues of the Company and the Predecessor tend to be
  seasonal, with higher sales in the first and fourth fiscal quarters,
  corresponding with the winter planning season.
 
  CYCLICALITY--Revenues of the Company and Predecessor are subject to changes
  in the overall level of domestic economic activity and changes in certain
  sectors of the agricultural economy, which may be influenced by climate
  changes and governmental policy.
 
15.COMMON STOCK
 
  The Company has authorized 111,000 shares of Class A Common Stock, $.01 par
  value, with a liquidation preference of $100 per share and 99,000 shares of
  Class B Common Stock, $.01 par value, convertible into Class A Common Stock
  in the event of the Company's achievement of certain financial results.
  Holders of Class A or Class B Common Stock are each entitled to one vote
  for each share held and both classes vote as if there is one class. (See
  Note 19).
 
                                     F-15
THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
16.COMMITMENTS AND CONTINGENCIES
 
  The Company has commitment letters of credit amounting to approximately
  $300,000 at December 31, 1997. The letters of credit are maintained as
  guarantees to the landlord from whom the Company has leased its corporate
  offices.
 
  EMPLOYMENT AGREEMENTS--The Company has entered into employment agreements
  with its Chief Executive Officer and Chief Operating Officer. The terms of
  these agreements extend through 2002 and provide for a base salary plus
  annual bonus payments at the discretion of the Compensation Committee of
  the Board.
 
17.RELATED PARTY TRANSACTIONS
 
  Due to Tribune--The Predecessor was part of Tribune's cash management
  system. As a result, the Due to Tribune amount fluctuated due to timing of
  cash payments and receipts.
 
                                     F-16
THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
18.SEGMENT INFORMATION
 
  The operations of the Company and the Predecessor have been classified into
  two business segments: publishing and information services. The publishing
  segment includes Farm Journal, Top Producer, Beef Today, Dairy Today and
  Hogs Today which publishes articles appealing to farmers. The information
  services segment performs studies for agricultural product producers and
  other businesses and provides specialized information. Summarized financial
  information by business segment is set forth below:
PREDECESSOR
                          ---------------------------------------
                                                      PERIOD FROM
                                                       DECEMBER   PERIOD FROM   PERIOD FROM
                             FISCAL YEARS ENDED           30,       APRIL 1,    JANUARY 1,
                          --------------------------    1996 TO     1997 TO       1998 TO
                          DECEMBER 31,  DECEMBER 29,   MARCH 31,  DECEMBER 31,   MARCH 31,
                              1995          1996         1997         1997         1998
-----------   -----------   ----------  -----------   ----------
   Revenues, Net
    Publishing..........  $20,957,268   $20,725,353   $9,045,672  $10,732,469   $9,574,815
    Information servic-
    es..................    5,617,253     6,048,772    1,428,387    3,801,602    2,433,571
                          -----------   -----------   ----------  -----------   ----------
       Total............   26,574,521    26,774,125   10,474,059   14,534,071   12,008,386
   Operating income
   (loss):
    Publishing..........     (886,807)     (282,381)   2,844,962   (1,398,099)   2,268,948
    Information servic-
    es..................     (231,452)      (25,026)      83,207     (172,030)     965,267
                          -----------   -----------   ----------  -----------   ----------
       Total............   (1,118,259)     (307,407)   2,928,169   (1,570,129)   3,234,215
   Total assets:
    Publishing..........   17,936,882    16,181,689   21,093,629   16,884,593   22,353,227
    Information servic-
    es..................    4,985,700     4,887,524    3,638,242    5,623,632    5,592,357
                          -----------   -----------   ----------  -----------   ----------
       Total............   22,922,582    21,069,213   24,731,871   22,508,225   27,945,584
   Depreciation and am-
   ortization:
    Publishing..........      868,984       842,597      236,406      653,455      226,433
    Information servic-
    es..................      186,561       217,482       43,590      164,881       47,238
                          -----------   -----------   ----------  -----------   ----------
       Total............    1,055,545     1,060,079      279,996      818,336      273,671
   Capital expenditures:
    Publishing..........    2,192,981       503,408       28,604      149,734      129,374
    Information servic-
    es..................      217,943        50,127      150,292       28,733       15,617
                          -----------   -----------   ----------  -----------   ----------
       Total............  $ 2,410,924   $   553,535   $  178,896  $   178,467   $  144,991
                          ===========   ===========   ==========  ===========   ==========
There were no significant intersegment sales or transfers during these
  periods. Operating income (loss) by business segment excludes interest
  income and interest expense.
 
19.SUBSEQUENT EVENTS
 
  EQUITY INCENTIVES--On February 26, 1998, the shareholder of the Company and
  the executives agreed to convert the 4,738 vested Class B Common Stock into
  1,978 shares of Class A Common Stock using the conversion formula contained
  in the Equity Incentives agreement, redeem the remaining 5,132 shares of
 
                                     F-17
THE FARM JOURNAL CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
  Class B Common Stock for $10,264 and terminate the Equity Incentives. A
  stock option plan (the "1998 Stock Option Plan") was adopted and the
  executives were awarded options to purchase 7,892 shares of Class A Common
  Stock for $171.67 per share. The exercise price of $171.67 per share was
  based on a third-party independent appraisal as of the date of grant. The
  termination of the Equity Incentives resulted in a charge to compensation
  expense of $178,809 in the three month period ended March 31, 1998. In
  addition, $344,730 of compensation expense will be recognized ratably over
  the four-year vesting period of the stock options in the amount of $22,982
  per fiscal quarter.
 
  DEBT WAIVER--On March 27, 1998 the Company obtained a waiver of the debt
  covenant violation described in Note 8.
 
  ACQUISITION AND RELATED FINANCING--On April 1, 1998, the Company entered
  into a $15,000,000 Reducing Revolving Credit Facility (the "Bank
  Facility"). The interest rate on the Bank Facility is 8.2% annually subject
  to adjustment from time to time, with a term that expires in 2005. The Bank
  Facility includes requirements as to the maintenance of financial ratios
  and minimum tangible net worth amounts and restrictions of certain asset
  sales, other significant transactions, as well as certain reporting
  requirements. On April 2, 1998, the Company consummated an acquisition of
  the assets of Professional Farmers of America, Inc. and Professional Market
  Management, Inc. (collectively, the "PFA Acquisition"). The total
  consideration paid for the PFA Acquisition included $11,000,000 in cash and
  $1,000,000 in liquidation value of an issue of preferred stock of the
  Company that was approved by the Board of Directors on March 17, 1998. The
  preferred stock is cumulative, non-voting, convertible automatically into
  shares of common stock issued by the Company through an initial public
  offering, and if outstanding at the time, putable to the Company during a
  30-day period beginning on the third anniversary of issuance for
  $1,100,000. The conversion feature provides that the preferred stock will
  be converted at the closing of an initial public offering into $1,000,000
  of shares of the class of common stock issued to the public at the price
  sold to the public. The acquisition was completed with a cash payment of
  $3,000,000 and an $8,000,000 drawdown of the Bank Facility.
 
  LETTER OF INTENT--On June 2, 1998 FJC entered into a letter of intent to
  purchase the assets of another media company for $4,750,000, including
  $1,000,000 of shares of the class of common stock issued to the public at
  the price sold to the public. The consummation of the acquisition is
  dependent upon the satisfaction of certain significant contingencies.
 
  NAME CHANGE--On June 5, 1998, FJC amended its Certificate of Incorporation
  to change its name to The Farm Journal Corporation.
 
  INITIAL PUBLIC OFFERING--The Company has entered into a letter of intent
  with representatives of underwriters to sell in an Offering shares of its
  common stock. The proceeds of the Offering will be used to repay
  $13,800,000 of debt and to fund the Company's business expansion plans,
  including acquisitions, and for working capital and other general corporate
  purposes.
 
  RECAPITALIZATION--On        1998, FJC amended and restated its Certificate
  of Incorporation to (i) change the authorized capital stock of FJC to
  shares of Class A Common Stock, par value $0.01 per share,    shares of
  Class B Common Stock, par value $0.01 per share and 2,725 shares of
  Convertible Redeemable Preferred Stock, par value $0.01 per share; (ii)
  reclassify each outstanding share of original Class A Common Stock into
  shares of its newly-created Class B Common Stock; (iii) reclassify each
  outstanding share of original Class B Common Stock into    shares of its
  newly created Class A Common Stock; and (iv) change the rights and
  privileges of the Class A Common Stock and Class B Common Stock. This stock
  conversion has been given retroactive recognition in the accompanying
  financial statements as of March 31, 1998.
 
                                     *****
 
                                     F-18
INDEPENDENT AUDITOR'S REPORT
 
To the Board of Directors
Professional Farmers of America, Inc. and
 Professional Market Management, Inc.
Cedar Falls, Iowa
 
We have audited the accompanying combined balance sheets of Professional
Farmers of America, Inc. and Professional Market Management, Inc. as of
December 31, 1996 and 1997, and the related combined statements of income,
stockholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Companies' management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
 
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of Professional
Farmers of America, Inc. and Professional Market Management, Inc. as of
December 31, 1996 and 1997, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted
accounting principles.
 
McGLADREY & PULLEN, LLP
Des Moines, Iowa
January 20, 1998, except for Note 7
as to which the date is April 2, 1998
 
                                     F-19
PROFESSIONAL FARMERS OF AMERICA, INC. AND
                      PROFESSIONAL MARKET MANAGEMENT, INC.
 
                            COMBINED BALANCE SHEETS
DECEMBER 31,
                                             ----------------------  MARCH 31,
                                                1996       1997        1998
                                             ---------- ----------- -----------
                                                                    (UNAUDITED)
ASSETS
CURRENT ASSETS
 Cash....................................... $      350 $       350 $      450
 Certificate of deposit.....................    200,000         --         --
 Accounts receivable, net of allowance for
  doubtful accounts December 31, 1996
  $65,000; 1997 $75,000.....................    321,392     451,256    360,216
 Prepaid expenses...........................     54,772     228,638    240,646
                                             ---------- ----------- ----------
    Total current assets....................    576,514     680,244    601,312
                                             ---------- ----------- ----------
DUE FROM RELATED PARTY (Note 3).............  3,797,410   4,330,548  3,918,829
                                             ---------- ----------- ----------
IMPROVEMENTS AND EQUIPMENT, at cost
 Leasehold improvements.....................    128,742     128,742    128,742
 Production equipment.......................    445,103     462,493    580,707
 Transportation equipment...................      8,937       8,937      8,937
                                             ---------- ----------- ----------
                                                582,782     600,172    718,386
 Less accumulated depreciation..............    509,232     528,112    536,385
                                             ---------- ----------- ----------
                                                 73,550      72,060    182,001
                                             ---------- ----------- ----------
INVESTMENT AND OTHER ASSETS
 Certificate of deposit.....................  1,100,000         --         --
 Deferred customer acquisition costs, net of
  accumulated amortization December 31, 1996
  $5,904,605; 1997 $7,693,883...............  1,286,365   1,457,301  1,311,902
 Prepaid advertising........................         --     248,114    205,849
                                             ---------- ----------- ----------
                                              2,386,365   1,705,415  1,517,751
                                             ---------- ----------- ----------
                                             $6,833,839 $ 6,788,267 $6,219,893
                                             ========== =========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
 Current maturities of long-term debt (Note
  3)........................................ $      --  $    95,242 $   56,340
 Accounts payable...........................    437,663     273,586    282,876
 Accrued expenses...........................    340,787     200,674    183,559
 Unearned subscription revenue..............  4,000,034   4,066,968  3,637,096
 Customer deposits..........................    325,521     318,414    282,790
                                             ---------- ----------- ----------
    Total current liabilities...............  5,104,005   4,954,884  4,442,661
                                             ---------- ----------- ----------
LONG-TERM DEBT, less current maturities
 (Note 3)...................................        --      289,467    276,403
                                             ---------- ----------- ----------
DEFERRED COMPENSATION (Note 6)..............     92,713     125,001        --
                                             ---------- ----------- ----------
UNEARNED SUBSCRIPTION REVENUE...............     69,608     294,683    491,662
                                             ---------- ----------- ----------
CONTINGENT LIABILITIES (Note 3)
STOCKHOLDERS' EQUITY
 Common stock, no par value; authorized
  10,000 shares; issued 2,725 shares (Note
  3)........................................     85,829      85,829     85,829
 Common stock, no par value; authorized
  1,000 shares; issued 500 shares...........      1,000       1,000      1,000
 Retained earnings..........................  1,480,684   1,037,403    922,338
                                             ---------- ----------- ----------
                                              1,567,513   1,124,232  1,009,167
                                             ---------- ----------- ----------
                                             $6,833,839 $ 6,788,267 $6,219,893
                                             ========== =========== ==========
See Notes to Combined Financial Statements.
 
                                      F-20
PROFESSIONAL FARMERS OF AMERICA, INC. AND
                      PROFESSIONAL MARKET MANAGEMENT, INC.
 
                         COMBINED STATEMENTS OF INCOME
FOR THE YEAR ENDED     FOR THE THREE MONTHS
                                   DECEMBER 31,           ENDED MARCH 31,
                               ---------------------  ------------------------
                                  1996       1997        1997         1998
                               ---------- ----------  -----------  -----------
                                (NOTE 7)              (UNAUDITED)  (UNAUDITED)
Net revenues.................. $8,040,629 $9,103,607  $2,234,039   $2,410,671
                               ---------- ----------  ----------   ----------
Operating expenses (Note 3):
 Production...................  1,823,376  2,166,995     562,310      540,127
 Promotion and sales..........  2,981,871  3,166,243     807,462      967,481
 Circulation..................    529,515    600,666     165,486      143,585
 General and administrative...  2,386,920  3,036,530     733,113      986,527
                               ---------- ----------  ----------   ----------
                                7,721,682  8,970,434   2,268,371    2,637,720
                               ---------- ----------  ----------   ----------
    Operating income (loss)...    318,947    133,173     (34,332)    (227,049)
                               ---------- ----------  ----------   ----------
Financial income (expense)
 (Note 3):
 Interest income..............    375,377    443,565     122,462      111,995
 Interest expense.............               (20,019)                     (11)
                               ---------- ----------  ----------   ----------
                                  375,377    423,546     122,462      111,984
                               ---------- ----------  ----------   ----------
    Net income (loss).........    694,324    556,719      88,130     (115,065)
 Pro forma taxes on income....    304,000    250,000      35,000      (33,000)
                               ---------- ----------  ----------   ----------
    Pro forma net income
     (loss)................... $  390,324  $ 306,719  $   53,130   $  (82,065)
                               ========== ==========  ==========   ==========
See Notes to Combined Financial Statements.
 
                                      F-21
PROFESSIONAL FARMERS OF AMERICA, INC. AND
                      PROFESSIONAL MARKET MANAGEMENT, INC.
 
                  COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY
PROFESSIONAL    PROFESSIONAL
                                     FARMERS OF        MARKET
                                    AMERICA, INC. MANAGEMENT, INC.  COMBINED
                                    ------------- ---------------- -----------
Common stock, no par value:
 Authorized 10,000 shares; issued
  December 31, 1995, 1996 and 1997
  and March 31, 1998 (unaudited)
  2,725 shares.....................  $    85,829     $      --     $    85,829
                                     ===========     ==========    ===========
Common stock, no par value:
 Authorized 1,000 shares;
  Issued December 31, 1995, none...  $       --      $      --     $       --
  Issuance of 500 shares...........          --           1,000          1,000
                                     -----------     ----------    -----------
  Issued December 31, 1996, 1997
   and March 31, 1998 (unaudited)
   500 shares......................  $       --      $    1,000    $     1,000
                                     ===========     ==========    ===========
Retained earnings (deficit):
 Balance, December 31, 1995........  $ 1,016,360     $      --      $1,016,360
  Net income (loss)................      760,469        (66,145)       694,324
  Dividends on common stock, $84.40
   per share.......................     (230,000)           --        (230,000)
                                     -----------     ----------    -----------
 Balance, December 31, 1996........    1,546,829        (66,145)     1,480,684
  Net income (loss)................      625,009        (68,290)       556,719
  Dividends on common stock,
   $366.97 per share...............   (1,000,000)           --      (1,000,000)
                                     -----------     ----------    -----------
 Balance, December 31, 1997........    1,171,838       (134,435)     1,037,403
  Net (loss) (unaudited)...........     (108,979)        (6,086)      (115,065)
                                     -----------     ----------    -----------
 Balance, March 31, 1998 (unau-
  dited)...........................  $ 1,062,859     $ (140,521)   $   922,338
                                     ===========     ==========    ===========
See Notes to Combined Financial Statements.
 
                                      F-22
PROFESSIONAL FARMERS OF AMERICA, INC. AND
                      PROFESSIONAL MARKET MANAGEMENT, INC.
 
                       COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED     FOR THE THREE MONTHS ENDED
                              DECEMBER 31,                 MARCH 31,
                          ----------------------  ------------------------------
                             1996        1997         1997            1998
                          ----------  ----------  -------------   --------------
                                                   (UNAUDITED)     (UNAUDITED)
CASH FLOWS FROM OPERAT-
 ING ACTIVITIES
 Net income (loss)......  $  694,324  $  556,719   $     88,130   $     (115,065)
 Adjustments to recon-
  cile net income (loss)
  to net cash
  provided by (used in)
  operating activities:
  Depreciation..........      39,906      30,525          7,940            8,273
  Amortization..........   1,884,519   1,789,278        469,969          550,942
  Provision for doubtful
   accounts.............      62,325      55,989         19,237           21,836
  Deferred compensa-
   tion.................      30,112      32,288          7,862         (125,001)
  Change in operating
   assets and liabili-
   ties:
   Accounts receivable..     (17,434)   (185,853)       (78,723)          69,204
   Prepaid expenses.....      16,818      14,468        (24,249)          30,257
   Deferred customer ac-
    quisition costs.....  (1,915,482) (1,960,214)      (664,864)        (405,543)
   Accounts payable and
    accrued expenses....     107,026    (304,190)       (13,013)          (7,825)
   Unearned subscription
    revenue.............     809,029     292,009        641,071         (232,893)
   Customer deposit.....      74,994      (7,107)        28,110          (35,624)
                          ----------  ----------   ------------   --------------
    Net cash provided by
     (used in) operating
     activities.........   1,786,137     313,912        481,470         (241,439)
                          ----------  ----------   ------------   --------------
CASH FLOWS FROM INVEST-
 ING ACTIVITIES
 Purchase of improve-
  ments and equipment...      (3,813)    (29,035)        (4,414)        (118,214)
 Redemption of certifi-
  cate of deposit.......     200,000   1,300,000         50,000              --
 (Increase) decrease in
  due from related par-
  ty....................  (1,752,324)   (533,138)      (516,448)         411,719
                          ----------  ----------   ------------   --------------
    Net cash provided by
     (used in) investing
     activities.........  (1,556,137)    737,827       (470,862)         293,505
                          ----------  ----------   ------------   --------------
CASH FLOWS FROM FINANC-
 ING ACTIVITIES
 Principal payments on
  long-term debt........         --      (51,739)           --           (51,966)
 Cash dividends paid....    (230,000) (1,000,000)           --               --
                          ----------  ----------   ------------   --------------
    Net cash (used in)
     financing activi-
     ties...............    (230,000) (1,051,739)           --           (51,966)
                          ----------  ----------   ------------   --------------
    Net increase in
     cash...............         --          --          10,608              100
CASH
 Beginning..............         350         350            350              350
                          ----------  ----------   ------------   --------------
 Ending.................  $      350  $      350   $     10,958   $          450
                          ==========  ==========   ============   ==============
SUPPLEMENTAL DISCLOSURES
 OF CASH FLOW
 INFORMATION, cash pay-
 ments for interest.....  $      --   $   20,019   $        --    $          --
SUPPLEMENTAL SCHEDULE OF
 NONCASH
 INVESTING AND FINANCING
 ACTIVITIES,
 Prepaid advertising ac-
 quired in exchange for
 long-term debt (Note
 3).....................  $      --   $  436,448   $        --    $          --
See Notes to Combined Financial Statements.
 
                                      F-23
PROFESSIONAL FARMERS OF AMERICA, INC. AND
                     PROFESSIONAL MARKET MANAGEMENT, INC.
 
                    NOTES TO COMBINED FINANCIAL STATEMENTS
 
NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
 
NATURE OF BUSINESS: Professional Farmers of America, Inc. provides
agricultural market and management advisory news services through printed and
electronic media to agribusiness and futures industry clients located
primarily in the United States and Canada. Professional Market Management,
Inc. coordinates the marketing of producers' grain through local elevators
executing Professional Farmers of America, Inc.'s grain marketing advice for
the producers.
 
SIGNIFICANT ACCOUNTING POLICIES:
 
PRINCIPLES OF COMBINATION: The accompanying combined financial statements
include the accounts of Professional Farmers of America, Inc. ("PFA") and
Professional Market Management, Inc. ("PMM"), which are each owned by the same
individual stockholder. All material related party balances and transactions
have been eliminated in combination.
 
ACCOUNTING ESTIMATES AND ASSUMPTIONS: The preparation of financial statements
in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ from
those estimates.
 
DEPRECIATION: Depreciation is computed principally by accelerated methods over
estimated useful lives.
 
DEFERRED CUSTOMER ACQUISITION COSTS: Deferred customer acquisition costs
consist of direct response advertising costs and other direct costs associated
with the acquisition of a customer. Direct response advertising costs consist
primarily of the costs of direct mail promotional pieces incurred to acquire
new subscribers to PFA's printed products. Other customer acquisition costs
consist of hardware and software costs and sales commissionS incurred to
acquire new subscribers to PFA's electronic products. These costs are
capitalized and amortized using the straight-line method over the initial
subscription period of twelve months.
 
The capitalized costs are amortized using the revenue forecast method over the
estimated renewal lives. Lives are determined using PFA's historical
subscriber renewal data which indicates that approximately 20% (one-half year
convention), 35%, 25% and 20% of the revenues are generated in years one
through four, respectively, after a customer is acquired. Costs and related
accumulated amortization are eliminated as they become fully amortized.
 
PFA's policy is to evaluate the remaining life and recoverability of these
costs in light of current conditions and estimates of future cash flows. Based
on these evaluations, PFA has concluded that it is reasonably possible that
those estimates will change in the near term, particularly with respect to
more recently incurred customer acquisition costs which tend to have less
historical customer retention data and thus require more subjectivity in
estimating future activity.
 
PREPAID ADVERTISING: PFA has purchased advertising rights in an industry
magazine and recognizes expense as the magazine is published. The portion to
be expensed in the next twelve months is included in current assets.
 
SUBSCRIPTION REVENUE: Subscription revenue is recognized as publications and
services are delivered to subscribers. Unearned subscription revenue
represents paid subscriptions from publications and services to be delivered
in future periods.
 
                                     F-24
PROFESSIONAL FARMERS OF AMERICA, INC. AND
                     PROFESSIONAL MARKET MANAGEMENT, INC.
 
              NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
 
UNAUDITED INTERIM FINANCIAL STATEMENTS: The accompanying unaudited combined
financial statements have been prepared in accordance with the requirements
for presentation of interim financial statements and, therefore, do not
include all information and footnotes necessary for a fair presentation of
financial position, results of operations, and cash flows in conformity with
generally accepted accounting principles. In the opinion of management, all
adjustments, consisting only of normal recurring adjustments, that are
necessary for a fair presentation for interim periods presented have been
reflected. The results of operations for interim periods are not necessarily
indicative of the results of operations for the entire year.
 
PRO FORMA INCOME TAXES: The Companies, with the consent of their stockholders,
have elected to be taxed as an S Corporation under Section 1372 of the
Internal Revenue Code and a similar section of the state income tax law, which
provide that, in lieu of corporate income taxes, the stockholders separately
account for their proportionate share of the Companies' items of income, gain,
losses, deductions and credits. The financial statements include pro forma
provisions for corporate income taxes as if the Companies were taxable C
Corporations.
 
NOTE 2. ADVERTISING COSTS
 
At December 31, 1996 and 1997, $688,842 and $1,087,159, respectively, of
advertising costs were reported as assets. Advertising expense for the years
ended December 31, 1996 and 1997, was approximately $631,000 and $774,000,
including amortization of direct response advertising of approximately
$401,000 and $449,000, respectively.
 
NOTE 3. RELATED PARTY TRANSACTIONS, LONG-TERM DEBT AND COMMON STOCK PLEDGED
 
The Companies are affiliated with Oster Communications, Inc., FutureSource
Information Systems, Inc. and several other entities through a common
stockholder group and common management. The companies in the group provide
certain services to one another and to stockholders at cost. Approximately 25%
and 27% of 1996 and 1997 operating expenses, respectively, represent cost
allocations from related parties for these services. Balances due from Oster
Communications, Inc. bear interest at 10%. Interest income on the amounts due
from Oster Communications, Inc. for the years ended December 31, 1996 and 1997
was $300,497 and $418,081, respectively.
 
PFA, Oster Communications, Inc., FutureSource Information Systems, Inc. and a
stockholder have jointly entered into a credit agreement with a bank for the
following revolving credit loans.
 
    Loan A: $1,000,000 line of credit facility. Interest is payable monthly
  through June 30, 1998 when all remaining principal and interest is due.
  This loan bears interest at the bank's prime rate (8.5% at December 31,
  1997). Oster Communications, Inc. had outstanding borrowings of $1,000,000
  at December 31, 1997.
 
    Loan B: $3,750,000 line of credit facility. Interest is payable monthly
  through June 30, 1998 when all remaining principal and interest are due.
  This loan bears interest at the bank's prime rate plus 1% (9.5% at December
  31, 1997). Oster Communications, Inc. had outstanding borrowings of
  $685,000 at December 31, 1997.
 
All of PFA's common stock has been pledged as collateral on these outstanding
borrowings and the Company has guaranteed repayment of all outstanding
borrowings.
 
                                     F-25
PROFESSIONAL FARMERS OF AMERICA, INC. AND
                     PROFESSIONAL MARKET MANAGEMENT, INC.
 
              NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
 
PFA entered into an agreement with its stockholder to purchase advertising
rights in an industry magazine. PFA recorded a $436,448 note payable to the
stockholder as well as prepaid advertising expense. The note is unsecured and
requires monthly payments of $10,500 including interest at 9% through July
2001.
 
Aggregate maturities by year as of December 31, 1997 are as follows:
1998................................................................ $ 95,242
   1999................................................................  104,176
   2000................................................................  113,948
   2001................................................................   71,343
                                                                        --------
                                                                        $384,709
                                                                        ========
NOTE 4. LEASE AGREEMENTS AND RENT EXPENSE
 
PFA leases certain communication services used to transmit information to its
customers under noncancelable operating lease agreements expiring from
December 31, 1999 to March 2001. PFA also leases equipment under noncancelable
operating lease agreements expiring in December 1999.
 
Following are approximate future minimum payments required under the
agreements as of December 31, 1997:
Year ending December 31:
    1998.............................................................. $246,000
    1999..............................................................  228,000
    2000..............................................................  143,000
    2001..............................................................   29,000
                                                                       --------
                                                                       $646,000
                                                                       ========
Total rental expense was $175,931 and $190,130 for the years ended December
31, 1996 and 1997, respectively.
 
NOTE 5. 401(K) PLAN
 
Substantially all employees of the Companies may participate in Oster
Communications, Inc.'s 401(k) plan. Contributions by the Companies are made at
the discretion of their Boards of Directors. Contributions by the Companies to
the plan for the years ended December 31, 1996 and 1997 were $3,569 and
$4,654, respectively.
 
NOTE 6. DEFERRED COMPENSATION AGREEMENT
 
PFA has entered into a deferred compensation agreement with an employee which
provides benefits payable at age 65 or if he becomes totally disabled. Under
certain circumstances, benefits are payable to his designated beneficiary. The
deferred compensation charged to expense totaled $30,112 and $32,288 for the
years ended December 31, 1996 and 1997, respectively.
 
NOTE 7. SUBSEQUENT EVENT
 
On April 2, 1998, the Companies' stockholder sold his shares of the Companies'
stock for $10,900,000 in cash plus approximately $1,000,000 of preferred stock
of the acquiring Company.
 
                                     F-26
--------------------------------------------------------------------------------
 
 NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UN-
LAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSE-
QUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE SUCH DATE.
 
                                  -----------
 
                               TABLE OF CONTENTS
PAGE
                                                                            ----
Prospectus Summary........................................................    3
Risk Factors..............................................................   11
Use of Proceeds...........................................................   17
Management Purchase.......................................................   17
Capitalization............................................................   18
Dividend Policy...........................................................   19
Dilution..................................................................   19
Unaudited Pro Forma Combined Financial Data...............................   20
Selected Consolidated Financial Data......................................   28
Management's Discussion and Analysis of Financial Condition and Results of
 Operations...............................................................   31
Business..................................................................   39
Management................................................................   52
Certain Relationships and Related Transactions............................   57
Principal Stockholders....................................................   58
Description of Capital Stock..............................................   60
Shares Eligible for Future Sale...........................................   63
Underwriting..............................................................   65
Notice to Canadian Residents..............................................   66
Legal Matters.............................................................   67
Experts...................................................................   67
Additional Information....................................................   68
Index to Financial Statements.............................................  F-1
-----------
 
 UNTIL     , 1998 (25 DAYS AFTER THE COMMENCEMENT OF THIS OFFERING), ALL DEAL-
ERS EFFECTING TRANSACTIONS IN THE CLASS A COMMON STOCK OFFERED HEREBY, WHETHER
OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PRO-
SPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPEC-
TUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
 
--------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------
 
                                        Shares
 
                          THE FARM JOURNAL CORPORATION
 
                              Class A Common Stock
                          (par value $0.01 per share)
 
 
                                   PROSPECTUS
 
 
 
                           CREDIT SUISSE FIRST BOSTON
 
                                  FURMAN SELZ
 
                           MORGAN SCHIFF & CO., INC.
 
 
 
--------------------------------------------------------------------------------
PART II
 
                    INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
 
  The following is an itemization of all estimated expenses incurred or
expected to be incurred by the Registrant in connection with the issuance and
distribution of the securities being registered hereby, other than
underwriting discounts and commissions.
ITEM                                                           AMOUNT
        ----                                                          ---------
SEC Registration Fee.............................................. $  10,325
   NASD Filing Fee...................................................     4,000
   Nasdaq Listing Fee................................................     *
   Blue Sky Fees and Expenses........................................     5,000
   Printing and Engraving Costs......................................   250,000
   Transfer Agent Fees...............................................     *
   Legal Fees and Expenses...........................................     *
   Accounting Fees and Expenses......................................     *
   Miscellaneous.....................................................     *
                                                                      ---------
     Total........................................................... $   *
                                                                      =========
--------
*To be filed by amendment.
 
  All amounts are estimated except for the SEC Registration Fee and the NASD
filing fee.
 
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
 
  The Company is incorporated under the laws of the State of Delaware. Section
145 of the General Corporation Law of the State of Delaware ("Section 145")
provides that a Delaware corporation may indemnify any person who is, or is
threatened to be made, a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of such corporation), by reason of
the fact that such person was an officer, director, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding, provided such person acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the corporation's best interests and, with respect to any criminal action
or proceeding, had no reasonable cause to believe that his conduct was
illegal. A Delaware corporation may indemnify any person who is, or is
threatened to be made, a party to any threatened, pending or completed action
or suit by or in the right of the corporation by reason of the fact that such
person was a director, officer, employee or agent of such corporation, or is
or was serving at the request of such corporation as a director, officer,
employee or agent of another corporation or enterprise. The indemnity may
include expenses (including attorneys' fees) actually and reasonably incurred
by such person in connection with the defense or settlement of such action or
suit, provided such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the corporation's best interests except
that no indemnification is permitted without judicial approval if the officer
or director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against the expenses
which such officer or director has actually and reasonably incurred.
 
  The Company's Amended and Restated Certificate of Incorporation provides for
the indemnification of directors and officers of the Company to the fullest
extent permitted by Section 145. In that regard, the Amended and Restated
Certificate of Incorporation provides that the Company shall indemnify any
person who was or is a
 
                                     II-1
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director or officer of such
corporation, or is or was serving at the request of such corporation as a
director, officer or member of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorney's
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of such corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. Indemnification in connection with an action or suit by or in the
right of such corporation to procure a judgment in its favor is limited to
payment of settlement of such an action or suit except that no such
indemnification may be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the indemnifying corporation
unless and only to the extent that the Court of Chancery of Delaware or the
court in which such action or suit was brought shall determine that, despite
the adjudication of liability but in consideration of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper.
 
  In addition, the By-laws of the Company provide that the Company shall
indemnify to the full extent authorized by law any person made or threatened
to be made a party to an action, suit or proceeding, whether criminal, civil,
administrative or investigative, by reason of the fact that he, his testator
or intestate is or was a director, officer, employee or agent of the Company
or is or was serving, at the request of the Company, as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise.
 
  The Company has purchased an insurance policy effective upon consummation of
the Offering covering indemnification of directors and officers of the
Registrant against certain liabilities arising under the Securities Act that
might be incurred by them in such capacities.
 
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
 
  The Company issued the following securities (not adjusted for the
Recapitalization):
NO. OF
         PURCHASER          SHARES     DATE           CLASS/TYPE      PAR VALUE
         ---------          ------     ----           ----------      ---------
MS Farm International
    Limited Partnership.... 92,800 April 1, 1997 Class A Common Stock   $0.01
   MS Farm International
    Limited Partnership....  9,079 July 15, 1997 Class B Common Stock   $0.01
   MS Farm International
    Limited Partnership....  8,008 April 1, 1997 Class A Common Stock   $0.01
   MS Farm International
    Limited Partnership....    791 July 15, 1997 Class B Common Stock   $0.01
   Professional Farmers of
    America, Inc. .........  2,725 April 2, 1998 Preferred Stock        $0.01
The issuances cited above were exempt from registration under the Securities
Act pursuant to Section 4(2) of the Securities Act.
 
                                     II-2
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 
  (a) Exhibits.
NUMBER                               DESCRIPTION
 ------                               -----------
*1   Form of Underwriting Agreement
   2.1  Stock Purchase Agreement dated as of January 23, 1997 between MS Farm
        Journal Corporation and Tribune Company
   2.2  Assignment and Assumption Agreement dated as of April 1, 1997 between
        MS Farm Journal Corporation and Farm Journal Holdings Inc.
   2.3  Note Purchase Agreement dated as of April 1, 1997 among Farm Journal,
        Inc., Farm Journal Holdings Inc. and Teachers Insurance and Annuity
        Association of America
   2.4  Stock Purchase Agreement dated as of March 17, 1998 among Farm Journal
        Holdings Inc. and the Stockholders of Professional Farmers of America,
        Inc
   2.5  Stock Purchase Agreement dated as of March 17, 1998 among Farm Journal
        Holdings Inc. and Professional Market Management, Inc.
  *3.1  Articles of Incorporation of Registrant
  *3.2  By-Laws of Registrant
   *4   Form of Common Stock Certificate
   *5   Opinion of Milbank, Tweed, Hadley & McCloy
  10.1  Employment Agreement dated as of March 28, 1997 between MS Farm Journal
        Corporation and Stanford Erickson
  10.2  Assignment and Assumption Agreement dated as of April 1, 1997 between
        MS Farm Journal Corporation and Farm Journal, Inc. relating to Stanford
        Erickson Employment Agreement
  10.3  Employment Agreement dated as of March 27, 1997 between MS Farm Journal
        Corporation and Roger Randall
  10.4  Assignment and Assumption Agreement dated as of April 1, 1997 between
        MS Farm Journal Corporation and Farm Journal, Inc. relating to Roger
        Randall Employment Agreement
  10.5  $15,000,000 Credit Facility Agreement dated as of April 2, 1998 among
        Farm Journal, Inc., Farm Journal Holdings Inc. and First Union National
        Bank
  10.6  Lease dated July 17, 1995 for property located in Centre Square
        Complex, Philadelphia, PA
  10.7  Farm Journal Holdings Inc. Incentive Stock Option Plan
 *11    Statement re computation of per share earnings
  21    Subsidiaries of Registrant
  23.1  Consent of Deloitte & Touche LLP
  23.2  Consent of McGladrey & Pullen, LLP
 *23.3  Consent of Milbank, Tweed, Hadley & McCloy (included in its opinion
        filed as Exhibit 5 hereto)
  24    Power of Attorney (included on signature pages hereto)
  27    Financial Data Schedule
--------
*To be filed by amendment.
 
                                      II-3
(b) Financial Statement Schedules.
 
    Schedule I--Condensed Financial Information of Registrant
 
    Schedule II--Valuation and Qualifying Accounts
 
  All other schedules have been omitted as they are inapplicable, or the other
information is included in the financial statements.
 
ITEM 17. UNDERTAKINGS
 
  (a) The undersigned registrant hereby undertakes to provide the Underwriters
at the Closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
 
  (b) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission, such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel that matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
 
  (c) The undersigned Registrant hereby undertakes that:
 
    (1) For purposes of determining any liability under the Act, the
  information omitted from the form of prospectus filed as part of this
  Registration Statement in reliance upon Rule 430A and contained in a form
  of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
  497(h) under the Act shall be deemed to be part of this Registration
  Statement as of the time it was declared effective.
 
    (2) For the purpose of determining any liability under the Act, each
  post-effective amendment that contains a form of prospectus shall be deemed
  to be a new registration statement relating to the securities offered
  therein, and the offering of such securities at that time shall be deemed
  to be the initial bona fide offering thereof.
 
                                     II-4
SIGNATURES
 
  Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Philadelphia,
Pennsylvania on this 10th day of June, 1998.
 
                                          THE FARM JOURNAL CORPORATION
 
                                                /s/ Stanford A. Erickson
                                          By: _________________________________
                                            Name: Stanford A. Erickson
                                            Title: Chairman of the Board,
                                                 Chief Executive Officer
 
                               POWER OF ATTORNEY
 
  KNOW ALL MEN AND WOMEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Stanford A. Erickson and Richard K.
Stanislaw and each or any of them, as his true and lawful attorney-in-fact and
agent, with full power of substitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments or post-
effective amendments to this Registration Statement, and to file the same,
with all exhibits thereto, which amendments may make such changes in this
Registration Statement as such agent deems appropriate, and to file any new
registration statement (and any post-effective amendment thereto) which
registers additional securities of the same class and for the same offering as
this Registration Statement in accordance with Rule 462(b) under the
Securities Act (each, a "462(b) Registration Statement"), and the Registrant
and each such person hereby appoints each such Agent as attorney-in-fact to
execute in the name and on behalf of the Registrant and each such person,
individually and in each capacity stated below, any such amendments to this
registration statement and any such 462(b) Registration Statements, and other
documents in connection therewith, with the Commission.
 
  Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE                         TITLE                 DATE
              ---------                         -----                 ----
/s/ Stanford A. Erickson       Chairman of the Board and   June 10, 1998
 ____________________________________  Chief Executive Officer
         Stanford A. Erickson          (Principal
                                       Executive Officer)
 
         /s/ Roger D. Randall         President and Chief         June 10, 1998
 ____________________________________  Operating Officer and
           Roger D. Randall            Director
 
       /s/ Richard K. Stanislaw       Chief Financial Officer     June 10, 1998
 ____________________________________  (Principal Financial and
         Richard K. Stanislaw          Accounting Officer)
 
       /s/ J. Carr Gamble, III        Secretary and Director      June 10, 1998
 ____________________________________
         J. Carr Gamble, III
II-5
SIGNATURE                 TITLE        DATE
              ---------                 -----        ----
/s/ Sterling B. Brinkley, Jr.     Director   June 10, 1998
 ____________________________________
      Sterling B. Brinkley, Jr.
 
                                      Director         , 1998
 ____________________________________
            Mark C. Pickup
 
                                      Director         , 1998
 ____________________________________
            David J. Bates
 
                                      Director         , 1998
 ____________________________________
         Richard S. Werdiger
II-6
THE ACCOMPANYING FINANCIAL STATEMENTS REFLECT CHANGES TO THE TYPE AND NUMBER
OF COMMON SHARES AUTHORIZED AND A CONVERSION OF PREVIOUSLY OUTSTANDING COMMON
STOCK INTO NEWLY CREATED CLASSES OF COMMON STOCK, ALL OF WHICH IS TO BE
EFFECTED PRIOR TO THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT. THE
FOLLOWING OPINION IS IN THE FORM WHICH WILL BE SIGNED BY DELOITTE & TOUCHE LLP
UPON CONSUMMATION OF THE ABOVE EVENTS, WHICH ARE DESCRIBED IN NOTE 19 OF NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AND ASSUMING THAT FROM JANUARY 23, 1998
TO THE DATE OF SUCH EVENTS, NO OTHER EVENTS HAVE OCCURRED WHICH WOULD AFFECT
THE ACCOMPANYING FINANCIAL STATEMENTS AND NOTES THERETO.
 
Deloitte & Touche LLP
 
Philadelphia, Pennsylvania
June 10, 1998
 
                         INDEPENDENT AUDITORS' REPORT
 
The Farm Journal Corporation
 
  We have audited the consolidated financial statements of the Farm Journal
Corporation and Subsidiaries as of December 29, 1996 and December 31, 1997 and
for each of the three years in the period ended December 31, 1997 and have
issued our report thereon dated January 23, 1998, except for Note 19 as to
which the date is     , 1998, (included elsewhere in this Registration
Statement). Our audits also included the financial statement schedules listed
in Item 21 of this Registration Statement. These financial statement schedules
are the responsibility of the Company's management. Our responsibility is to
express an opinion based on our audits. In our opinion, the financial
statement schedules, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.
 
 
Philadelphia, Pennsylvania
January 23, 1998
(     as to Note 19)
 
                                      S-1
THE FARM JOURNAL CORPORATION
 
                 CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                            CONDENSED BALANCE SHEETS
                             (PARENT COMPANY ONLY)
 
                                                                      SCHEDULE I
DECEMBER 31,   MARCH 31,
                                                           1997         1998
                                                       ------------  -----------
                                                                     (UNAUDITED)
ASSETS--Investment in equity of subsidiaries.......... $ 8,448,756   $10,464,252
                                                       ===========   ===========
TOTAL................................................. $ 8,448,756   $10,464,252
                                                       ===========   ===========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Preferred Stock $.01 par value, 2,725 shares
 authorized     issued and outstanding at March 31,
 1998.................................................
Shareholders' equity:
Common Stock:
  Class A, $.01 par value,     shares authorized,
   issued and outstanding.............................
  Class B, $.01 par value,     shares authorized,
   102,786 issued and outstanding.....................               $     1,028
  Class A, $.01 par value, 111,000 shares authorized;
   issued and outstanding 100,808 shares in 1997, none
   at March 31 1998................................... $     1,008
  Class B, convertible into Class A common stock, $.01
   par value, 99,000 shares authorized, 9,870 shares
   issued and outstanding 1997, none at March 31,
   1998...............................................          99
Additional paid-in capital............................   9,928,533    10,291,722
Retained earnings.....................................  (1,480,884)      171,502
                                                       -----------   -----------
    Total shareholders' equity........................   8,448,756    10,464,252
                                                       -----------   -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY............ $ 8,448,756   $10,464,252
                                                       ===========   ===========
See notes to financial statements.
 
                                      S-2
THE FARM JOURNAL CORPORATION
 
                 CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                       CONDENSED STATEMENTS OF OPERATIONS
                             (PARENT COMPANY ONLY)
 
                                                                      SCHEDULE I
NINE MONTHS   THREE MONTHS
                                                         ENDED         ENDED
                                                      DECEMBER 31,   MARCH 31,
                                                          1997          1998
                                                      ------------  ------------
                                                                    (UNAUDITED)
Equity in net income (loss) of subsidiaries.......... $(1,480,884)   $1,652,386
                                                      -----------    ----------
NET INCOME (LOSS).................................... $(1,480,884)   $1,652,386
                                                      ===========    ==========
See notes to financial statements.
 
                                      S-3
THE FARM JOURNAL CORPORATION
 
                 CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                       CONDENSED STATEMENTS OF CASH FLOWS
                             (PARENT COMPANY ONLY)
 
                                                                      SCHEDULE I
NINE MONTHS   THREE MONTHS
                                                         ENDED         ENDED
                                                      DECEMBER 31,   MARCH 31,
                                                          1997          1998
                                                      ------------  ------------
                                                                    (UNAUDITED)
OPERATING ACTIVITIES:
  Net income (loss).................................. $(1,480,884)   $1,652,386
  Adjustment to reconcile net income to net cash pro-
   vided by operating activities.....................   1,480,884    (1,652,386)
                                                      -----------    ----------
    Net cash provided by operating activities........         --            --
                                                      -----------    ----------
INVESTING ACTIVITIES:
  Contribution of capital to subsidiaries............  (4,445,808)
  Acquisition of stock of Farm Journal, Inc. net of
   acquisition costs.................................  (5,483,832)
                                                      -----------
    Net cash used in investing activities............  (9,929,640)
                                                      -----------
FINANCIAL ACTIVITIES:
  Proceeds from issuance of Class A stock............   9,929,541
  Proceeds from issuance of Class B stock............          99
                                                      -----------
    Net cash provided by financing activities........   9,929,640
                                                      -----------    ----------
NET CHANGE IN CASH................................... $       --     $      --
                                                      ===========    ==========
See notes to financial statements.
 
                                      S-4
SCHEDULE I
                         THE FARM JOURNAL CORPORATION
 
            NOTES TO CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                             (PARENT COMPANY ONLY)
1. BASIS OF PRESENTATION
 
  The accompanying condensed financial statements include the accounts of The
  Farm Journal Corporation (the Parent) and on an equity basis its
  subsidiaries and should be read in conjunction with the consolidated
  financial statements of The Farm Journal Corporation and Subsidiaries (the
  "Company") and the notes thereto.
 
2. SUBSEQUENT EVENT
 
  DEBT WAIVER--On March 27, 1998 the Company obtained a waiver of the debt
  covenant violation described in Note 8.
 
  ACQUISITION AND RELATED FINANCING--On April 1, 1998, the Company entered
  into a $15,000,000 Reducing Revolving Credit Facility (the "Bank
  Facility"). The interest rate on the Bank Facility is 8.5% annually,
  subject to adjustment from time to time with a term that expires in 2005.
  The Bank Facility includes requirements as to the maintenance of financial
  ratios and minimum tangible net worth amounts and restrictions of certain
  asset sales, other significant transactions, as well as certain reporting
  requirements. On April 2, 1998, the Company consummated an acquisition of
  the assets of Professional Farmers of America, Inc. and Professional Market
  Management, Inc. (collectively, the "PFA Acquisition"). The total
  consideration paid for the PFA Acquisition included $11,000,000 in cash and
  $1,000,000 in liquidation value of an issue of preferred stock of the
  Company that was approved by the Board of Directors on March 17, 1998. The
  preferred stock is cumulative, non-voting, convertible automatically into
  shares of common stock issued by the Company through an initial public
  offering, and if outstanding at the time, putable to the Company during a
  30-day period beginning on the third anniversary of issuance for
  $1,100,000. The conversion feature provides that the preferred stock will
  be converted at the closing of an initial public offering into $1,000,000
  of common stock at the price sold to the public. The acquisition was
  completed with a cash payment of $3,000,000 and an $8,000,000 drawdown of
  the Bank Facility.
 
  LETTER OF INTENT--On June 2, 1998 the Company entered into a letter of
  intent to purchase the assets of another media company for $4,750,000,
  including $1,000,000 of shares of the class of common stock issued to the
  public at the price sold to the public.
 
  NAME CHANGE--On June 5, 1998, FJC amended its Certificate of Incorporation
  to change its name to The Farm Journal Corporation.
 
  INITIAL PUBLIC OFFERING--The Company has entered into a letter of intent
  with representatives of underwriters to sell in an Offering shares of its
  common stock. The proceeds of the Offering will be used to repay
  $13,800,000 of debt and to find the Company's business expansion plans,
  including acquisitions, and for working capital and other general corporate
  purposes.
 
  RECAPITALIZATION--On      1998, FJC amended and restated its Certificate of
  Incorporation to (i) change the authorized capital stock of FJC to
  shares of Class A Common Stock, par value $0.01 per share,     shares of
  Class B Common Stock, par value $0.01 per share and 2,725 shares of
  Convertible Redeemable Preferred Stock, par value $0.01 per share; (ii)
  reclassify each outstanding share of original Class A Common Stock into
  shares of its newly created Class B Common Stock; (iii) reclassify each
  outstanding share of original Class B Common Stock into     shares of its
  newly created Class A Common Stock; and (iv) change the rights and
  privileges of the Class A Common Stock and Class B Common Stock. This stock
  conversion has been given retroactive recognition in the accompanying
  financial statements as of March 31, 1998.
 
                                     *****
 
                                      S-5
THE FARM JOURNAL CORPORATION
 
                       VALUATION AND QUALIFYING ACCOUNTS
 
                                                                     SCHEDULE II
BALANCE
                                BALANCE AT  CHARGED TO                   AT
                               BEGINNING OF  COST AND                  END OF
                                  PERIOD     EXPENSES  DEDUCTIONS (A)  PERIOD
                               ------------ ---------- -------------- ---------
For the year ended December
 31, 1995
  Accounts receivable allow-
   ances......................   $163,653    $121,541    $(125,289)   $ 159,905
For the year ended December
 29, 1996
  Accounts receivable allow-
   ances......................    159,905      55,001      (98,551)     116,355
For the year ended December
 31, 1997
  Accounts receivable allow-
   ances......................    116,355      74,206      (42,731)     147,830
For the three months ended
 March 31, 1998
  Accounts receivable allow-
   ances (Unaudited)..........    147,830      79,032                   226,862
--------
(a) Amounts written off against related assets
 
                                      S-6
EXHIBIT INDEX
NUMBER                               DESCRIPTION
 ------                               -----------
*1    Form of Underwriting Agreement
   2.1  Stock Purchase Agreement dated as of January 23, 1997 between MS Farm
        Journal Corporation and Tribune Company
   2.2  Assignment and Assumption Agreement dated as of April 1, 1997 between
        MS Farm Journal Corporation and Farm Journal Holdings Inc.
   2.3  Note Purchase Agreement dated as of April 1, 1997 among Farm Journal,
        Inc., Farm Journal Holdings Inc. and Teachers Insurance and Annuity
        Association of America
   2.4  Stock Purchase Agreement dated as of March 17, 1998 among Farm Journal
        Holdings Inc. and the Stockholders of Professional Farmers of America,
        Inc.
   2.5  Stock Purchase Agreement dated as of March 17, 1998 among Farm Journal
        Holdings Inc. and Professional Market Management, Inc.
  *3.1  Articles of Incorporation of Registrant
  *3.2  By-Laws of Registrant
  *4    Form of Common Stock Certificate
  *5    Opinion of Milbank, Tweed, Hadley & McCloy
  10.1  Employment Agreement dated as of March 28, 1997 between MS Farm Journal
        Corporation and Stanford Erickson
  10.2  Assignment and Assumption Agreement dated as of April 1, 1997 between
        MS Farm Journal Corporation and Farm Journal, Inc. relating to Stanford
        Erickson Employment Agreement
  10.3  Employment Agreement dated as of March 27, 1997 between MS Farm Journal
        Corporation and Roger Randall
  10.4  Assignment and Assumption Agreement dated as of April 1, 1997 between
        MS Farm Journal Corporation and Farm Journal, Inc. relating to Roger
        Randall Employment Agreement
  10.5  $15,000,000 Credit Facility Agreement dated as of April 2, 1998 among
        Farm Journal, Inc., Farm Journal Holdings Inc. and First Union National
        Bank
  10.6  Lease dated July 17, 1995 for property located in Centre Square
        Complex, Philadelphia, PA
  10.7  Farm Journal Holdings Inc. Incentive Stock Option Plan
  *11   Statement re computation of per share earnings
  21    Subsidiaries of Registrant
  23.1  Consent of Deloitte & Touche LLP
  23.2  Consent of McGladrey & Pullen, LLP
 *23.3  Consent of Milbank, Tweed, Hadley & McCloy (included in its opinion
        filed as Exhibit 5 hereto)
  24    Power of Attorney (included on signature pages hereto)
  27    Financial Data Schedule
--------
*To be filed by amendment.