January 15-31, 2004 Edition

Ripplewood and ZelnickMedia

Acquire Time Life Marketing Unit

NEW YORK, NY/1/05/04—Time Inc., Ripplewood Holdings L.L.C. and ZelnickMedia Corporation announced today the sale of Time Life Inc., the global music and video direct marketing subsidiary of Time Inc.

Time Life will be owned and operated by Direct Holdings Worldwide L.L.C., which also owns the Lillian Vernon Corporation. Direct Holdings was formed in connection with the acquisition of Lillian Vernon Corporation by Ripplewood and ZelnickMedia in July 2003 and, with the acquisition of Time Life, is expected to have revenues in excess of $500 million. The company will operate as a leader in the sale of music and video products under the Time Life brand, as well as a leader in gift, household, and children’s merchandise under the Lillian Vernon brand. ZelnickMedia will be responsible for the day-to-day management of the company. Strauss Zelnick will be the Chairman and CEO of the new entity.

Under the terms of the transaction, which is effective immediately, Direct Holdings has acquired an exclusive long-term license for the worldwide use of the Time Life brand in the direct marketing of music, video, books and educational software. Specific terms of the transaction were not disclosed.

“Ripplewood and ZelnickMedia are delighted to have concluded this agreement with Time Inc.,” said Strauss Zelnick. “We have enormous respect for Time Life and intend to continue to build upon its history of product excellence and consumer trust. Our strategy in acquiring Lillian Vernon Corporation this summer was to begin to build and operate a stable of leading direct marketing brands. Time Life is our second major acquisition of the year. We are very excited about the opportunity to build upon the foundation of these two terrific businesses.”

“Given our desire to concentrate on high-growth opportunities in Time Inc.’s core magazine businesses and brands, selling the Time Life direct marketing division to the right buyer made strategic sense,” said Ann Moore, Chairman and CEO of Time Inc. “We wanted to be certain, though, that the Time Life brand would go to an organization that is highly qualified to carry on its values and traditions. Under Ripplewood and ZelnickMedia, Time Life is well positioned to accomplish these objectives.”

Founded in 1961, Time Life is one of the world’s pre-eminent creators and direct marketers of unique book, music, video and multi-media products. The Time Life name is one of the most recognized and trusted brands in existence today. Its products are sold throughout North America, Europe, Australia and Asia through television, print, retail, the Internet, telemarketing and direct sales.

Lillian Vernon Corporation is a fifty-two year-old specialty catalog and online retailer that markets gift, household, kitchen, gardening, Christmas, and children’s products. The Company is one of the largest specialty catalog marketers in the United States. Since the Ripplewood-ZelnickMedia acquisition was completed in July, the company has increased its promotional presence beyond its core catalog, including online, on television, in print, and on the radio. Lillian Vernon and its subsidiaries publish six catalog titles: Lillian Vernon, Lilly’s Kids, Favorites, Personalized Gifts, Sales and Bargains, and Rue de France.

Ripplewood manages approximately $4 billion of committed capital through four institutional private equity funds, focusing primarily on investments in the U.S. and Japan. Ripplewood is a pioneer of the “Industrial Partner” investment philosophy, in which the firm forms partnerships with world-class operating executives to acquire businesses in targeted industries and pursue pre-defined strategies to enhance the value of these businesses. Time Life is Ripplewood’s second major acquisition in the direct marketing arena, both in partnership with ZelnickMedia.

ZelnickMedia is a partnership of experienced media executives that owns interests in, advises, and manages an array of media enterprises in direct marketing, recorded music, entertainment content, CD manufacturing, online games, and media-related software, both in the U.S. and Asia. ZelnickMedia has worked closely with Ripplewood on various investment opportunities since the firm was founded three years ago.

Time Inc. is the world’s leading magazine company, publishing about 130 regular-frequency titles with 300 million readers. Time Inc. is a wholly owned subsidiary of Time Warner Inc., the world’s leading media and entertainment company.