---

---

SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

(Mark One)

|ý | Quarterly Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934.
|- | ----------------------------------------------------------------------------------------

For the quarterly period ended: March 31, 2002

Commission File Number: 333-57201

Advanstar Communications Inc.(Exact name of registrant as specified in its charter)

New York(State or other jurisdiction of
incorporation or organization)

59-2757389(I.R.S. Employer
Identification No.)

545 Boylston Street, Boston, Massachusetts(Address of principal executive offices)

02116(Zip Code)

Registrant's Telephone Number, Including Area Code: (617) 267-6500

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes ý No o

As
of May 20, 2002, 1,000,000 shares of the Registrant's common stock were outstanding.

---

---

---



PART I  Financial Information

Item 1.Financial Statements:

|           |                                                                                                                |    | Page in this
Quarterly Report
|---------- | -------------------------------------------------------------------------------------------------------------- | -- | -----------------------------
|           | Condensed Consolidated Balance Sheets at March 31, 2002 (unaudited) and December 31, 2001                      |    | 2                            
|           | Condensed Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2002 and 2001 |    | 3                            
|           | Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2002 and 2001 |    | 4                            
|           | Notes to Condensed Consolidated Financial Statements (unaudited)                                               |    | 5                            
|Item 2.    | Management's Discussion and Analysis of Financial Condition and Results of Operations                          |    | 19                           
|Item 3.    | Qualitative and Quantitative Disclosure about Market Risk                                                      |    | 30                           
|PART II    | Other Information                                                                                              |    | 31                           
|Item 4.    | Submissions of Matters to a Vote of Security Holders                                                           |    | 31                           
|Item 6(a). | Exhibits                                                                                                       |    | 31                           
|Item 6(b). | Reports on Form 8-K                                                                                            |    | 31                           
|Signature  |                                                                                                                | 32

1

---



ADVANSTAR COMMUNICATIONS INC.        CONDENSED CONSOLIDATED BALANCE SHEETS  (In thousands, except share and per share data)

|                                          |                                                                                                                                             | March 31,
2002                             |         | December 31,
2001 |        
|----------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ----------------- | -------
|
|ASSETS                                    |                                                                                                                                             |                                            |         |                   |        
|Current Assets                            |                                                                                                                                             |                                            |         |                   |        
|                                          | Cash and cash equivalents                                                                                                                   |                                            | $       | 16,182            |        
|                                          | Accounts receivable, net                                                                                                                    |                                            |         | 23,251            |        
|                                          | Prepaid expenses                                                                                                                            |                                            |         | 9,107             |        
|                                          | Other                                                                                                                                       |                                            |         | 1,426             |        
|                                          |                                                                                                                                             |                                            |         |                   |        
|                                          |                                                                                                                                             | Total current assets                       |         |                   | 49,966 
|Property, plant and equipment, net        |                                                                                                                                             |                                            | 24,523  |                   |        
|Intangible and other assets               |                                                                                                                                             |                                            |         |                   |        
|                                          | Goodwill, net                                                                                                                               |                                            |         | 655,929           |        
|                                          | Intangibles and other, net                                                                                                                  |                                            |         | 198,929           |        
|                                          |                                                                                                                                             |                                            |         |                   |        
|                                          |                                                                                                                                             | Total intangible and other assets          |         |                   | 854,858
|                                          |                                                                                                                                             |                                            |         |                   |        
|                                          |                                                                                                                                             | Total assets                               |         | $                 | 929,347
|                                          |                                                                                                                                             |                                            |         |                   |        
|LIABILITIES AND STOCKHOLDER'S EQUITY      |                                                                                                                                             |                                            |         |                   |        
|Current Liabilities                       |                                                                                                                                             |                                            |         |                   |        
|                                          | Current maturities of long-term debt                                                                                                        |                                            | $       | 17,000            |        
|                                          | Accounts payable                                                                                                                            |                                            |         | 26,953            |        
|                                          | Accrued liabilities                                                                                                                         |                                            |         | 24,237            |        
|                                          | Deferred revenue                                                                                                                            |                                            |         | 23,959            |        
|                                          |                                                                                                                                             |                                            |         |                   |        
|                                          |                                                                                                                                             | Total current liabilities                  |         |                   | 92,149 
|Long-term debt, net of current maturities |                                                                                                                                             |                                            | 549,550 |                   |        
|Deferred income taxes                     |                                                                                                                                             |                                            | 16,036  |                   |        
|Other long-term liabilities               |                                                                                                                                             |                                            | 3,246   |                   |        
|Due to Parent                             |                                                                                                                                             |                                            | 4,874   |                   |        
|Minority interests                        |                                                                                                                                             |                                            | 14,648  |                   |        
|Commitments and contingencies             |                                                                                                                                             |                                            |         |                   |        
|Stockholder's equity                      |                                                                                                                                             |                                            |         |                   |        
|                                          | Common stock, $.01 par value; 40,000,000 shares authorized; 1,000,000 shares issued and outstanding at March 31, 2002 and December 31, 2001 |                                            |         | 10                |        
|                                          | Capital in excess of par                                                                                                                    |                                            |         | 315,617           |        
|                                          | Accumulated deficit                                                                                                                         |                                            |         | (61,631           | )      
|                                          | Accumulated other comprehensive loss                                                                                                        |                                            |         | (5,152            | )      
|                                          |                                                                                                                                             |                                            |         |                   |        
|                                          |                                                                                                                                             | Total stockholder's equity                 |         |                   | 248,844
|                                          |                                                                                                                                             |                                            |         |                   |        
|                                          |                                                                                                                                             | Total liabilities and stockholder's equity |         | $                 | 929,347
|                                          |                                                                                                                                             |                                            |         |                   |        

See
notes to condensed consolidated financial statements.

2

---



ADVANSTAR COMMUNICATIONS INC.        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  (In thousandsUnaudited)

|                                                              |                                                               | Three Months Ended March 31, 2002 |         | Three Months Ended March 31, 2001 |        
|------------------------------------------------------------- | ------------------------------------------------------------- | --------------------------------- | ------- | --------------------------------- | -------
|Net revenue                                                   |                                                               | $                                 | 109,427 |                                   | $      
|                                                              |                                                               |                                   |         |                                   |        
|Operating expenses:                                           |                                                               |                                   |         |                                   |        
|                                                              | Costs of production                                           |                                   |         | 23,190                            |        
|                                                              | Selling, editorial and circulation                            |                                   |         | 34,688                            |        
|                                                              | Funding of affiliated dot.com company operations (see Note 7) |                                   |         | 38,079                            |        
|                                                              | General and administrative                                    |                                   |         | 11,346                            |        
|                                                              | Depreciation and amortization                                 |                                   |         | 17,435                            |        
|                                                              |                                                               |                                   |         |                                   |        
|                                                              |                                                               | Total operating expenses          |         |                                   | 124,738
|                                                              |                                                               |                                   |         |                                   |        
|Operating income (loss)                                       |                                                               |                                   | (15,311 | )                                 |        
|Other income (expense):                                       |                                                               |                                   |         |                                   |        
|                                                              | Interest expense, net                                         |                                   |         | (12,674                           | )      
|                                                              | Other income (expense), net                                   |                                   |         | 1,042                             |        
|                                                              |                                                               |                                   |         |                                   |        
|Income (loss) before income taxes and minority interests      |                                                               |                                   | (26,943 | )                                 |        
|Provision (benefit) for income taxes                          |                                                               |                                   | (10,594 | )                                 |        
|Minority interests                                            |                                                               |                                   | (88     | )                                 |        
|                                                              |                                                               |                                   |         |                                   |        
|Income (loss) before extraordinary item and accounting change |                                                               |                                   | (16,437 | )                                 |        
|Extraordinary item, net of tax                                |                                                               |                                   |        |                                   |        
|Cumulative effect of accounting change, net of tax            |                                                               |                                   |        |                                   |        
|                                                              |                                                               |                                   |         |                                   |        
|Net income (loss)                                             |                                                               | $                                 | (16,437 | )                                 | $      
|                                                              |                                                               |                                   |         |                                   |        

See
notes to condensed consolidated financial statements.

3

---



ADVANSTAR COMMUNICATIONS INC.        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (In thousandsUnaudited)

|                                                             |                                                                                                                             | Three Months
Ended
March 31,
2002                                             |                                                     | Three Months
Ended
March 31,
2001 |        
|------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------- | --------------------------------------------------- | --------------------------------- | -------
|Operating Activities                                         |                                                                                                                             |                                                                               |                                                     |                                   |        
|                                                             | Net income (loss)                                                                                                           |                                                                               | $                                                   | (16,437                           | )      
|                                                             | Adjustments to reconcile net income (loss) to net cash provided by operating activities, excluding effects of acquisitions: |                                                                               |                                                     |                                   |        
|                                                             |                                                                                                                             | Provision for notes and advances from affiliated dot.com company (see Note 7) |                                                     |                                   | 37,192 
|                                                             |                                                                                                                             | Deferred income taxes                                                         |                                                     |                                   | (14,505
|                                                             |                                                                                                                             | Extraordinary itemearly extinguishment of debt, net of taxes                 |                                                     |                                   |       
|                                                             |                                                                                                                             | Unrealized (gain) loss on derivative financial instruments                    |                                                     |                                   | (905   
|                                                             |                                                                                                                             | Depreciation and amortization                                                 |                                                     |                                   | 17,365 
|                                                             |                                                                                                                             | Non-cash interest                                                             |                                                     |                                   | 616    
|                                                             |                                                                                                                             | Loss on sales of assets and other                                             |                                                     |                                   | 158    
|                                                             |                                                                                                                             | Changes in operating assets and liabilities                                   |                                                     |                                   | (33,963
|                                                             |                                                                                                                             |                                                                               |                                                     |                                   |        
|                                                             |                                                                                                                             |                                                                               | Net cash provided by (used in) operating activities |                                   |        
|                                                             |                                                                                                                             |                                                                               |                                                     |                                   |        
|Investing Activities                                         |                                                                                                                             |                                                                               |                                                     |                                   |        
|                                                             | Additions to property, plant and equipment                                                                                  |                                                                               |                                                     | (1,289                            | )      
|                                                             | Acquisition of publications and trade shows, net of cash acquired                                                           |                                                                               |                                                     | (11,744                           | )      
|                                                             | Increase in advances and notes due from affiliate                                                                           |                                                                               |                                                     |                                  |        
|                                                             | Proceeds from sale of assets and other                                                                                      |                                                                               |                                                     | 8                                 |        
|                                                             |                                                                                                                             |                                                                               |                                                     |                                   |        
|                                                             |                                                                                                                             |                                                                               | Net cash used in investing activities               |                                   |        
|                                                             |                                                                                                                             |                                                                               |                                                     |                                   |        
|Financing Activities                                         |                                                                                                                             |                                                                               |                                                     |                                   |        
|                                                             | Net proceeds from revolving credit facility                                                                                 |                                                                               |                                                     |                                  |        
|                                                             | Borrowings of long-term debt                                                                                                |                                                                               |                                                     |                                  |        
|                                                             | Payments of long-term debt                                                                                                  |                                                                               |                                                     | (3,450                            | )      
|                                                             | Long-term debt financing costs                                                                                              |                                                                               |                                                     | (1,755                            | )      
|                                                             | Proceeds from capital contributions                                                                                         |                                                                               |                                                     |                                  |        
|                                                             |                                                                                                                             |                                                                               |                                                     |                                   |        
|                                                             |                                                                                                                             |                                                                               | Net cash provided by (used in) financing activities |                                   |        
|Effect of exchange rate changes on cash and cash equivalents |                                                                                                                             |                                                                               | 255                                                 |                                   |        
|Net (decrease) increase in cash and cash equivalents         |                                                                                                                             |                                                                               | (28,454                                             | )                                 |        
|Cash and cash equivalents, beginning of period               |                                                                                                                             |                                                                               | 44,636                                              |                                   |        
|                                                             |                                                                                                                             |                                                                               |                                                     |                                   |        
|Cash and cash equivalents, end of period                     |                                                                                                                             | $                                                                             | 16,182                                              |                                   | $      
|                                                             |                                                                                                                             |                                                                               |                                                     |                                   |        

See
notes to condensed consolidated financial statements.

4

---



ADVANSTAR COMMUNICATIONS, INC.        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.    Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by Advanstar Communications Inc. (Communications, or the Company)
in accordance with the instructions to Form 10-Q and, therefore, do not include all the information and footnotes required by generally accepted accounting principles for complete
financial statements. Management believes that all adjustments, consisting solely of normal recurring items, considered necessary for a fair presentation have been included, and that the disclosures
are adequate to make the information presented not misleading. These condensed consolidated financial statements, however, should be read in conjunction with the audited financial statements and the
related notes, included in the Company's annual report on Form 10-K filed with the Securities and Exchange Commission on March 29, 2001. The results of operations for the
three month period ended March 31, 2002 are not necessarily indicative of the operating results that may be expected for the entire year ending December 31, 2002.

2.    Goodwill and Intangible Assets

Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets."
Under SFAS No. 142, goodwill and intangible assets with indefinite lives are no longer amortized. However, the Company is required to perform an initial impairment review of goodwill in 2002
and an annual impairment review thereafter, or more frequently if impairment indicators arise. Separable intangible assets that are not deemed to have indefinite lives will continue to be amortized
over their useful lives, but with no maximum life. The Company expects to complete its initial impariment review of goodwill during the second quarter of 2002 and has not yet determined the impact of
adopting the impairment review provisions of SFAS No. 142.

Upon
adoption of SFAS No. 142, the Company discontinued the amortization of goodwill and accelerated amortization of trade exhibitor and advertiser lists to match the related
expected benefit of these assets. The Company recorded $6.3 million of additional amortization as a result of changing from straight line amortization to accelerated amortization on these
assets. The following table represents a reconciliation of income before extraordinary item and accounting change and net income adjusted for the exclusion of goodwill amortization, net of tax (in
thousands):

Three Months Ended
March 31, 2002

Three Months Ended
March 31, 2001Reported income (loss) before extraordinary item and accounting change

$
(16,437
)
$
5,382Add: goodwill amortization, net of tax





4,569Adjusted income (loss) before extraordinary item and accounting change

$
(16,437
)
$
9,951Reported net income (loss)

$
(16,437
)
$
2,274Add: goodwill amortization, net of tax





4,569Adjusted net income (loss)

$
(16,437
)
$
6,843


The
changes in the carrying amount of goodwill for the three months ended March 31, 2002, by operating segment, are as follows (in thousands):

Trade Shows
and
Conferences

Trade
Publications

Marketing
Services

TotalsBalance as of December 31, 2001

$
517,631

$
110,461

$
25,666

$
653,758Goodwill acquired during the period


4,494


(1,853
)

(470
)

2,171Balance as of March 31, 2002

$
522,125

$
108,608

$
25,196

$
655,929


5

---

During
the first quarter of 2002 we completed the acquisitions of the AIIM International Exposition and Conference and the First Global Media Group with a cumulative
purchase price totaling approximately $11.7 million in cash and assumed liabilities. We have accounted for our acquisitions under the purchase method of accounting and our results of operations
include the effect of these acquisitions from the date of purchase. Certain of the liabilities assumed and the identified intangible assets in connection with the 2001 and 2002 acquisitions have been
recorded based on preliminary estimates as of the dates of acquisition and are subject to adjustment upon completion of the allocation of the purchase price. The pro forma operating results of the
acquisitions are not material to our operating results.

Trade
exhibitor and advertiser lists are amortized on an accelerated basis over eight years while subscriber lists and other intangible assets are amortized on a
straight-line basis over three to 10 years and consist of the following as of March 31, 2002 and December 31, 2001 (in thousands):

March 31,
2002

December 31,
2001Trade exhibitor lists

$
166,722

$
160,318Advertiser lists


34,950


33,302Subscriber lists


23,190


22,339Other intangible assets


2,714


1,758Other assets


22,336


20,582249,912


238,299Accumulated amortization


(50,983
)

(35,306
)Total intangible and other assets, net

$
198,929

$
202,993


Estimated
amortization expense of identified intangible assets for the next five years are as follows (in thousands):

2002

$
54,1662003


41,9312004


28,1792005


21,5892006


16,681


3.    Derivative Financial Instruments

Effective January 1, 2001, the Company adopted Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" (FAS 133), which required derivative instruments be recorded on the balance sheet at fair value. Changes in the fair value of derivative financial instruments must be recognized
currently in earnings unless specific hedge accounting criteria are met. For those instruments which meet the hedging criteria, gains and losses will be recognized in other comprehensive income rather
than in earnings.

The
Company's adoption of FAS 133 on January 1, 2001 resulted in the cumulative effect of an accounting change of a reduction in income of approximately
$0.6 million, net of tax, and a reduction to other comprehensive income of approximately $0.2 million, net of tax.

The
Company uses derivative instruments to manage exposure to interest rate and foreign currency risks. The Company's objectives for holding derivatives are to minimize the risks using
the most effective methods to eliminate or reduce the impact of these exposures.

Interest Rate Risk

Variable rate debt instruments are subject to interest rate risk. The Company has entered into interest rate collar agreements with remaining maturities of up to
twenty three months to manage its exposure to interest rate movements on a portion of its variable rate debt obligations. The effective portion of the cumulative gain or loss on these derivative
instruments is reported as a component of accumulated other comprehensive income in stockholder's equity and is recognized in earnings as the underlying interest

6

---

expense is incurred. The ineffective portion of the interest rate collar and cap agreements is recognized in current earnings. For the periods ended March 31, 2002 and 2001, the Company
recorded a gain (loss) of $0.1 million and $(1.6) million related to ineffective portion of the of interest rate collar agreements. These amounts are included in other income on the Company's
consolidated statement of operations.

Foreign Currency Risk

Certain forecasted transactions are exposed to foreign currency risk. Foreign currencies hedged are the Euro, the British Pound Sterling, and the Brazilian Real.
Forward contracts are used to manage the exposure associated with forecasted international revenue transactions for up to twelve months in the future and are designated as cash flow hedging
instruments. Changes in fair value of these instruments are reported as a component of accumulated other comprehensive income in stockholder's equity and are recognized in earnings as the underlying
revenue is recognized. Forward contracts not designated as hedging instruments under SFAS No. 133 are also used to manage the impact of the variability in exchange rates. Changes in the fair
value of these foreign exchange contracts are recognized in current earnings.

At
March 31, 2002, the Company had foreign exchange derivative contracts to sell with a notional amount totalling $6.2 million and to buy totalling $1.1 million. The
estimated fair value of the foreign exchange contracts based upon market quotes was a net asset of $0.2 million at March 31, 2002. For the periods ended March 31, 2002 and 2001,
the Company recorded a gain (loss) of $0.8 million and $0.5 million related to the change in fair value of the foreign exchange contracts. These amounts are included in other income on the
Company's consolidated statement of operations.

Accumulated Other Comprehensive Income (Loss)

The following table summarizes the effects of FAS 133 on the Company's accumulated other comprehensive income as of March 31, 2002 (in thousands):

Interest Rate
Collar
Agreements

Foreign
Exchange
Contracts

TotalNet of taxes:Accumulated other comprehensive income (loss) balance at December 31, 2001

$
(4,189
)
$
5

$
(4,184
)Unwound from accumulated other comprehensive Income (loss) during the period


1,218


(5
)

1,213Mark to market of hedge contracts


176





176Accumulated other comprehensive income (loss) balance at March 31, 2002

$
(2,795
)
$


$
(2,795
)


7

---

The
fair value of the Company's derivatives was a net liability position of $4.5 million and $7.7 million at March 31, 2002 and December 31,
2001, respectively, of which $4.3 million and $6.6 million is included in other accrued liabilities at March 31, 2002 and December 31, 2001, respectively, and
$0.2 million and $1.1 million is included in other non-current liabilities at March 31, 2002 and December 31, 2001, respectively, in the accompanying
consolidated balance sheets.

Statement of Operations

The following table summarizes the effects of FAS 133 on the Company's statement of operations for the periods ended March 31, 2002 and
March 31, 2001 (in thousands):

Interest Rate
Collar
Agreements

Foreign
Exchange
Contracts

TotalThree months ended March 31, 2002Other income (expense)

$
126

$
776

$
902Total statement of operations impact before taxes

$
126

$
776

$
902Three months ended March 31, 2001Other income (expense)

$
(1,594
)
$
483

$
(1,111
)Total statement of operations impact before taxes

$
(1,594
)
$
483

$
(1,111
)


4.    Debt

Credit Facility

The senior credit facility (the Credit Facility) consists of (i) $415 million of term loans payable in quarterly installments beginning
March 31, 2001 and continuing through October 11, 2007 and (ii) $80 million of revolving loan availability. The Credit Facility contains a number of covenants that, among
other things, require the Company to maintain certain financial ratios, including leverage and fixed charge coverage ratios, as defined. Failure of the Company to comply with any of these covenants
may cause an event of default under the Credit Facility.

Borrowings
under the Credit Facility are secured by substantially all of the Company's assets. In addition, as of March 31, 2002, the Company has interest rate protection
agreements for a notional amount of $250 million that effectively guarantee that the Company's interest rate on $250 million of the Company's Credit Facility will not exceed
12.25 percent, nor be less than 8.25 percent. The net interest paid or received is included in interest expense. At March 31, 2002, the estimated fair value of the interest rate
protection agreements was a net liability position to the Company of approximately $4.6 million. As of March 31, 2002, the Company had approximately $42.9 million of borrowings
available under the Credit Facility, subject to customary conditions.

Senior Subordinated Notes

On January 9, 2001, in connection with the acquisition of the Company's parent, Advanstar, Inc., by a group of investors, including DLJMB, the
9.25 percent senior subordinated notes due in 2008 (the Notes) were tendered at an offer price in cash equal to 101 percent of the aggregate principal amount, plus accrued interest. The
Company financed the repurchase of the Notes with bridge financing. The premium paid on the tender of the Notes of approximately $1.0 million, net of related tax benefits, is reflected as an
extraordinary item in the accompanying 2001 condensed consolidated statement of operations.

On
February 21, 2001, the Company issued $160.0 million of unsecured, 12 percent senior subordinated notes due 2011 (the Replacement Notes). Interest on the
Replacement Notes is payable semiannually on February 15 and August 15 of each year commencing on August 15, 2001. The Replacement Notes are fully and unconditionally guaranteed
on a senior subordinated basis, jointly and severally, by the Company and its wholly owned domestic subsidiaries. As part of tendering of the Notes, the Company wrote-off the remaining

8

---

unamortized deferred financing costs of approximately $1.6 million, net of related tax benefits, which is reflected as an extraordinary item in the accompanying 2001 consolidated statement of
operations.

Concurrent
with the issuance of the Replacement Notes, Advanstar, Inc. issued units comprised of 15 percent senior discount notes (the Discount Notes), with an aggregate
principal amount at maturity of approximately $68.6 million and warrants to purchase shares of common stock of its parent, Advanstar Holdings Corp. (Holdings), for consideration of
approximately $34.8 million. Advanstar, Inc. contributed the proceeds from the issuance of the Discount Notes to the Company. The Company used the proceeds from issuance of the
Replacement Notes and the Discount Notes to repay and terminate the bridge financing and to repay approximately $45.0 million of term loan borrowings under the Credit Facility. The contribution
of the proceeds from the Discount Notes by Advanstar, Inc. to the Company was treated as a capital contribution.

Long-term
debt consists of the following (in thousands):

March 31,
2002

December 31,
2001Term loan A, interest at LIBOR plus 3.25%; 4.89% at March 31, 2002, due quarterly through April 11, 2007

$
86,250

$
89,200Term loan B, interest at LIBOR plus 3.75%; 5.62% March 31, 2002, due quarterly through October 11, 2007


280,800


280,800Revolving credit loan, interest at LIBOR plus 4.87%; 5.10% at March 31, 2002, due April 11, 2007


34,000


34,000Senior subordinated notes at 12.00%, due 2011


160,000


160,000Acquisition note payable, interest at 5.50%, due monthly through 2004


5,500


6,000566,550


570,000Less-Current maturities


(17,000
)

(16,200
)$
549,550

$
553,800


The
Company's credit facility contains certain financial covenants, including a minimum fixed charge coverage ratio and a maximum leverage ratio. Additionally, certain
financial covenants under the Replacement Notes include a maximum leverage ratio, limitations on certain asset dispositions, payments, debt incurrence, dividends and other restricted payments. In
March 2002, the Company obtained an amendment to the Credit Facility providing for certain revisions to the quarterly financial covenants applicable in 2002 and 2003. The Company was in
compliance with all covenants as of March 31, 2002.

5.    Comprehensive Income

The tables below present comprehensive loss, defined as changes in the equity of the Company excluding changes resulting from investments by and distributions to
shareholders (in thousands):

Three Months
Ended
March 31, 2002

Three Months
Ended
March 31, 2001Net income (loss)

$
(16,437
)
$
2,274Change in cumulative translation adjustment


(585
)

(2,198
)Change in unrealized losses on derivative financial Instruments, net of taxes


1,389


(574
)Comprehensive loss

$
(15,633
)
$
(498
)


9

---

6.    Segment Information

Trade Shows
and
Conferences

Trade
Publications

Marketing
Services

Corporate
and
Other

Totals(In thousands)Three months ended March 31, 2002Revenues

$
76,465

$
28,674

$
3,576

$
712

$
109,427Operating income (loss)


42,745


5,741


1,589


(65,386
)

(15,311
)Segment assets


683,073


177,368


28,222


40,684


929,347Three months ended March 31, 2001Revenues

$
89,564

$
34,640

$
4,170

$
273

$
128,647Operating income (loss)


48,205


7,224


1,856


(27,990
)

29,295Segment assets


272,065


571,017


2,219


107,470


952,771


The
reconciliation of total segment gross profit to consolidated pre-tax income (loss) is as follows (in thousands):

Three Months Ended
March 31, 2002

Three Months Ended
March 31, 2001Total segment operating income (loss)

$
(15,311
)
$
29,295Interest expense


(12,674
)

(14,674
)Other income (expense), net


1,042


(938
)Consolidated income (loss) before taxes and minority interests

$
(26,943
)
$
13,683


7.    Related-Party Transactions

Relationship with Advanstar.com, Inc.

Advanstar.com, Inc. (Advanstar.com), an affiliate of the Company, operates the Company's event and publication-related web sites and develops certain
enhanced web opportunities to serve the Company's customers in selected industries. The Company provides Advanstar.com with certain administrative support services and charges for these services based
on a general overhead charge. In addition, selected sales, editorial, marketing and production staff of the Company are shared with Advanstar.com. The Company also provides Advanstar.com with
marketing and promotional support through advertising pages in its trade publications and exhibit space in its trade shows. In return, Advanstar.com provides support on its web sites for the Company's
trade publications and trade shows.

In
the third quarter of 2001, certain events, including the slowdown in the economy, the changing business environment and continuing operating losses of Advanstar.com, caused management
of Advanstar, Inc. to consider certain transactions between its two sister subsidiaries, the Company and Advanstar.com, to satisfy the outstanding advances and notes due to the Company from
Advanstar.com. Accordingly, through December 31, 2001 the Company accounted for these advances and notes to Advanstar.com as a charge to capital in excess of par value in the accompanying
consolidated balance sheet, pending final determination of the disposition of these advances and notes.

In
the first quarter of 2002, management of Advanstar, Inc. began to consider the further consolidation of the activities of Advanstar.com with Communications, or a merger of
Advanstar.com into Communications in response to the changing business environment and continuing operating losses of Advanstar.com. Consequently, the Company recorded a first quarter
non-cash charge of $37.2 million related to a provision against the outstanding advances and notes due to the Company from Advanstar.com as of December 31, 2001.

10

---

In
the first quarter of 2002 the Company began recording the advances and notes issued during the quarter as an operating expense on the Company's condensed consolidated statement of
operations, as a reflection of the ongoing nature of the operations of Advanstar.com in support of the Company's operations as a result of the restructuring of the activities of Advanstar.com in 2001.
Net advances and notes during the quarter were approximately $0.9 million.

Financial Advisory Fees and Agreements

Credit Suisse First Boston Corporation (CSFB), an affiliate of the DLJ Merchant Banking funds, acted as the Company's financial advisor in connection with the
issuance of, and was an initial purchaser of, the Replacement Notes and the Discount Notes. The Company paid customary fees to CSFB as compensation
for those services. DLJ Capital Funding, an affiliate of the DLJ Merchant Banking funds, received customary fees and reimbursement of expenses in connection with the bridge financing. The aggregate
amount of all fees paid to the CSFB entities in connection with these financings during 2001 was approximately $7.3 million, plus out-of-pocket expenses.

Advanstar
Holdings Corp. has agreed to pay CSFB an annual advisory fee of $0.5 million, until the earlier to occur of (1) an initial public offering of Holdings,
(2) the date when the DLJ Merchant Banking funds own less than 162/3% of the shares of Holdings' common stock held by them on the closing date of the acquisition and
(3) October 11, 2005. Payment of the advisory fee will be dependent upon the receipt of dividends from its subsidiaries, including the Company.

Parent Company Notes.

As part of the financing for the Acquisition, our parent, Advanstar, Inc., issued senior discount notes due October 2011 with a principal amount at
maturity of $103.2 million. Concurrently with the closing of the offering of the Notes, Advanstar, Inc. sold additional senior discount notes due October 2011 with an additional
aggregate principal amount at maturity of $68.6 million. These notes do not require cash interest payments until 2006. Neither we nor any of our subsidiaries guaranteed the senior discount
notes. Advanstar, Inc., however, is a holding company and its ability to pay interest on these senior discount notes will be dependent upon the receipt of dividends from its subsidiaries,
including the Company.

8.    New Accounting Pronouncements

In August 2001, the Financial Accounting Standards Board (FASB) issued Financial Accounting Standards No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets" (FAS 144). This statement addresses financial accounting and reporting for the impairment or disposal of long-lived assets. FAS 144
retains and expands upon the fundamental provisions of existing guidance related to the recognition and measurement of the impairment of long-lived assets to be held and used and the
measurement of long-lived assets to be disposed of by sale. Generally, the provisions of FAS 144 are effective for financial statements issued for fiscal years beginning after
December 15, 2001. The Company has adopted FAS 144 on January 1, 2002. The adoption of FAS 144 did not impact the results of operations or financial position of the Company
for the period ended March 31, 2002.

11

---



9.    Supplemental Guarantor Condensed Consolidating Financial Statements

Basis of Presentation

The Replacement Notes are fully and unconditionally guaranteed on a senior subordinated basis, jointly and severally, by the Company and its wholly-owned domestic
subsidiaries. The subsidiary guarantors are Mens Apparel Guild In California, Inc. (MAGIC) and Applied Business TeleCommunications, Inc. (ABC). The subsidiary guarantors and the
non-guarantor subsidiaries comprise all of the direct and indirect subsidiaries of the Company. The condensed consolidated financial statements of the guarantors are presented below and
should be read in connection with the consolidated financial statements of the Company. Separate financial statements of the guarantors are not presented because the guarantors are jointly, severally
and unconditionally liable under the guarantees and the Company believes the condensed consolidated financial statements presented are more meaningful in understanding the financial position of the
guarantors and management has determined that such information is not material to investors.

There
are no significant restrictions on the ability of the subsidiary guarantors to make distributions to the Company.

12

---

ADVANSTAR COMMUNICATIONS INC. AND SUBSIDIARIES        Condensed consolidating balance sheets  As of March 31, 2002  (in thousandsunaudited)

|                                                      |                                       | Communications             |         | Guarantor
Subsidiaries |          | Non-Guarantor
Subsidiaries |         | Elimination |        | Consolidated
Total |       
|----------------------------------------------------- | ------------------------------------- | -------------------------- | ------- | ---------------------- | -------- | -------------------------- | ------- | ----------- | ------ | ------------------ | ------
|ASSETS                                                |                                       |                            |         |                        |          |                            |         |             |        |                    |       
|Current assets:                                       |                                       |                            |         |                        |          |                            |         |             |        |                    |       
|                                                      | Cash and cash equivalents             |                            | $       | 5,195                  |          | $                          |        |             | $      | 10,987             |       
|                                                      | Accounts receivable, net              |                            |         | 22,935                 |          |                            | (1,973  | )           |        | 2,289              |       
|                                                      | Prepaid expenses                      |                            |         | 4,721                  |          |                            | 1,979   |             |        | 2,407              |       
|                                                      | Intercompany receivable (payable)     |                            |         | (148,099               | )        |                            | 154,221 |             |        | (6,122             | )     
|                                                      | Other                                 |                            |         | 1,357                  |          |                            | 10      |             |        | 59                 |       
|                                                      |                                       |                            |         |                        |          |                            |         |             |        |                    |       
|                                                      |                                       | Total current assets       |         |                        | (113,891 | )                          |         | 154,237     |        |                    | 9,620 
|Noncurrent assets:                                    |                                       |                            |         |                        |          |                            |         |             |        |                    |       
|                                                      | Property, plant and equipment, net    |                            |         | 22,536                 |          |                            | 932     |             |        | 1,055              |       
|                                                      | Intangible and other assets, net      |                            |         | 424,961                |          |                            | 350,504 |             |        | 79,393             |       
|                                                      | Investments in subsidiaries           |                            |         | 540,308                |          |                            |        |             |        |                   |       
|                                                      |                                       |                            |         |                        |          |                            |         |             |        |                    |       
|                                                      |                                       | $                          | 873,914 |                        | $        | 505,673                    |         | $           | 90,068 |                    | $     
|                                                      |                                       |                            |         |                        |          |                            |         |             |        |                    |       
|LIABILITIES AND STOCKHOLDER'S EQUITY                  |                                       |                            |         |                        |          |                            |         |             |        |                    |       
|Current liabilities:                                  |                                       |                            |         |                        |          |                            |         |             |        |                    |       
|                                                      | Current maturities of long-term debt  |                            | $       | 17,000                 |          |                            |        |             |        |                   |       
|                                                      | Accounts payable                      |                            |         | 18,898                 |          |                            | 3,365   |             |        | 4,690              |       
|                                                      | Deferred revenue                      |                            |         | 19,230                 |          |                            | 2,352   |             |        | 2,377              |       
|                                                      | Accrued liabilities                   |                            |         | 17,705                 |          |                            | 3,145   |             |        | 3,387              |       
|                                                      |                                       |                            |         |                        |          |                            |         |             |        |                    |       
|                                                      |                                       | Total current liabilities  |         |                        | 72,833   |                            |         | 8,862       |        |                    | 10,454
|Long term debt, net of current maturities             |                                       |                            | 549,550 |                        |          |                           |         |             |       |                    |       
|Deferred income taxes and other long-term liabilities |                                       |                            | (18,877 | )                      |          | 37,802                     |         |             | 357    |                    |       
|Due to parent                                         |                                       |                            | 4,874   |                        |          |                           |         |             |       |                    |       
|Minority interests                                    |                                       |                            | 14,332  |                        |          |                           |         |             | 316    |                    |       
|Stockholder's equity:                                 |                                       |                            |         |                        |          |                            |         |             |        |                    |       
|                                                      | Common stock                          |                            |         | 10                     |          |                            | 3       |             |        | 474                |       
|                                                      | Capital in excess of par value        |                            |         | 315,617                |          |                            | 438,117 |             |        | 87,837             |       
|                                                      | Accumulated deficit                   |                            |         | (61,631                | )        |                            | 20,889  |             |        | (7,012             | )     
|                                                      | Accumulted other comprehensive income |                            |         | (2,794                 | )        |                            |        |             |        | (2,358             | )     
|                                                      |                                       |                            |         |                        |          |                            |         |             |        |                    |       
|                                                      |                                       | Total stockholder's equity |         |                        | 251,202  |                            |         | 459,009     |        |                    | 78,941
|                                                      |                                       |                            |         |                        |          |                            |         |             |        |                    |       
|                                                      |                                       | $                          | 873,914 |                        | $        | 505,673                    |         | $           | 90,068 |                    | $     
|                                                      |                                       |                            |         |                        |          |                            |         |             |        |                    |       

13

---



ADVANSTAR COMMUNICATIONS INC. AND SUBSIDIARIES        Condensed consolidating statements of operations  Three months ended March 31, 2002  (in thousandsunaudited)

|                                                         |                                                           | Communications           |         | Guarantor
Subsidiaries |         | Non-Guarantor
Subsidiaries |       | Elimination |        | Consolidated
total |       
|-------------------------------------------------------- | --------------------------------------------------------- | ------------------------ | ------- | ---------------------- | ------- | -------------------------- | ----- | ----------- | ------ | ------------------ | ------
|Net revenue                                              |                                                           | $                        | 66,744  |                        | $       | 30,048                     |       | $           | 12,635 |                    | $     
|Operating expenses:                                      |                                                           |                          |         |                        |         |                            |       |             |        |                    |       
|                                                         | Cost of production and selling, editorial and circulation |                          |         | 41,275                 |         |                            | 8,520 |             |        | 8,083              |       
|                                                         | General and administrative                                |                          |         | 9,431                  |         |                            | 450   |             |        | 1,465              |       
|Funding of affiliated dot.com company operations         |                                                           |                          | 38,079  |                        |         |                           |       |             |       |                    |       
|                                                         | Depreciation and amortization                             |                          |         | 8,892                  |         |                            | 7,755 |             |        | 788                |       
|                                                         |                                                           |                          |         |                        |         |                            |       |             |        |                    |       
|                                                         |                                                           | Total operating expenses |         |                        | 97,677  |                            |       | 16,725      |        |                    | 10,336
|                                                         |                                                           |                          |         |                        |         |                            |       |             |        |                    |       
|Operating income (loss)                                  |                                                           |                          | (30,933 | )                      |         | 13,323                     |       |             | 2,299  |                    |       
|Other income (expense):                                  |                                                           |                          |         |                        |         |                            |       |             |        |                    |       
|                                                         | Interest expense, net                                     |                          |         | (12,537                | )       |                            |      |             |        | (137               | )     
|                                                         | Other income (expense), net                               |                          |         | 1,351                  |         |                            |      |             |        | (309               | )     
|                                                         |                                                           |                          |         |                        |         |                            |       |             |        |                    |       
|Income (loss) before income taxes and minority interests |                                                           |                          | (42,119 | )                      |         | 13,323                     |       |             | 1,853  |                    |       
|Provision (benefit) for income taxes                     |                                                           |                          | (16,852 | )                      |         | 5,052                      |       |             | 1,206  |                    |       
|Minority interests                                       |                                                           |                          | (55     | )                      |         |                           |       |             | (33    | )                  |       
|Equity in earnings of subsidiaries                       |                                                           |                          | 8,885   |                        |         |                           |       |             |       |                    |       
|                                                         |                                                           |                          |         |                        |         |                            |       |             |        |                    |       
|                                                         |                                                           | Net income (loss)        |         | $                      | (16,437 | )                          | $     | 8,271       |        | $                  | 614   
|                                                         |                                                           |                          |         |                        |         |                            |       |             |        |                    |       

14

---



ADVANSTAR COMMUNICATIONS INC. AND SUBSIDIARIES        Condensed consolidating statements of cash flows  Three months ended March 31, 2002  (in thousandsunaudited)

|                                                     |                                                                                          | Communications                                                   |                                                     | Guarantor
Subsidiaries |         | Non-Guarantor
Subsidiaries |       | Elimination |        | Consolidated
Total |    
|---------------------------------------------------- | ---------------------------------------------------------------------------------------- | ---------------------------------------------------------------- | --------------------------------------------------- | ---------------------- | ------- | -------------------------- | ----- | ----------- | ------ | ------------------ | ---
|Operating activities:                                |                                                                                          |                                                                  |                                                     |                        |         |                            |       |             |        |                    |    
|                                                     | Net income (loss)                                                                        |                                                                  | $                                                   | (16,437                | )       | $                          | 8,271 |             | $      | 614                |    
|                                                     | Adjustments to reconcile net income (loss) to net cash provided by operating activities- |                                                                  |                                                     |                        |         |                            |       |             |        |                    |    
|                                                     |                                                                                          | Provision for notes and advances from affiliated dot.com company |                                                     |                        | 37,192  |                            |       |            |        |                    |   
|                                                     |                                                                                          | Deferred income taxes                                            |                                                     |                        | (14,505 | )                          |       |            |        |                    |   
|                                                     |                                                                                          | Equity in earnings of subsidiaries                               |                                                     |                        | (8,885  | )                          |       |            |        |                    |   
|                                                     |                                                                                          | Extraordinary item-early extinguishment of debt                  |                                                     |                        |        |                            |       |            |        |                    |   
|                                                     |                                                                                          | Unrealized (gain) loss on derivative financial instruments       |                                                     |                        | (905    | )                          |       |            |        |                    |   
|                                                     |                                                                                          | Depreciation and amortization                                    |                                                     |                        | 8,865   |                            |       | 7,755       |        |                    | 745
|                                                     |                                                                                          | Non-cash Items                                                   |                                                     |                        | 616     |                            |       |            |        |                    |   
|                                                     |                                                                                          | Loss on sales of assets and other                                |                                                     |                        | 125     |                            |       |            |        |                    | 33 
|                                                     |                                                                                          | Change in working capital items items                            |                                                     |                        | (18,659 | )                          |       | (16,012     | )      |                    | 708
|                                                     |                                                                                          |                                                                  |                                                     |                        |         |                            |       |             |        |                    |    
|                                                     |                                                                                          |                                                                  | Net cash provided by operating activities           |                        |         | (12,593                    | )     |             | 14     |                    |    
|                                                     |                                                                                          |                                                                  |                                                     |                        |         |                            |       |             |        |                    |    
|Investing activities:                                |                                                                                          |                                                                  |                                                     |                        |         |                            |       |             |        |                    |    
|                                                     | Additions to property, plant and equipment                                               |                                                                  |                                                     | (1,146                 | )       |                            | (14   | )           |        | (129               | )  
|                                                     | Acquisitions of publications and trade shows, net of proceeds                            |                                                                  |                                                     | (9,589                 | )       |                            |      |             |        | (2,155             | )  
|                                                     | Increase in advances and notes due from affiliate                                        |                                                                  |                                                     |                       |         |                            |      |             |        |                   |    
|                                                     | Proceeds from sale of assets and other                                                   |                                                                  |                                                     | 8                      |         |                            |      |             |        |                   |    
|                                                     |                                                                                          |                                                                  |                                                     |                        |         |                            |       |             |        |                    |    
|                                                     |                                                                                          |                                                                  | Net cash provided used in investing activities      |                        |         | (10,727                    | )     |             | (14    | )                  |    
|                                                     |                                                                                          |                                                                  |                                                     |                        |         |                            |       |             |        |                    |    
|Financing activities:                                |                                                                                          |                                                                  |                                                     |                        |         |                            |       |             |        |                    |    
|                                                     | Payments of long-term debt, net                                                          |                                                                  |                                                     | (3,450                 | )       |                            |      |             |        |                   |    
|Deferred financing costs                             |                                                                                          |                                                                  | (1,755                                              | )                      |         |                           |       |             |       |                    |    
|                                                     |                                                                                          |                                                                  |                                                     |                        |         |                            |       |             |        |                    |    
|                                                     |                                                                                          |                                                                  | Net cash provided by (used in) financing activities |                        |         | (5,205                     | )     |             |       |                    |    
|Effect of exchange rate changes on cash              |                                                                                          |                                                                  | (186                                                | )                      |         |                           |       |             | 441    |                    |    
|                                                     |                                                                                          |                                                                  |                                                     |                        |         |                            |       |             |        |                    |    
|Net increase (derease) in cash and cash equivalaents |                                                                                          |                                                                  | (28,711                                             | )                      |         |                           |       |             | 257    |                    |    
|Cash and cash equivalents, beginning of year         |                                                                                          |                                                                  | 33,906                                              |                        |         |                           |       |             | 10,730 |                    |    
|                                                     |                                                                                          |                                                                  |                                                     |                        |         |                            |       |             |        |                    |    
|Cash and cash equivalents, end of year               |                                                                                          | $                                                                | 5,195                                               |                        | $       |                           |       | $           | 10,987 |                    | $  
|                                                     |                                                                                          |                                                                  |                                                     |                        |         |                            |       |             |        |                    |    

15

---



ADVANSTAR COMMUNICATIONS INC. AND SUBSIDIARIES        Condensed consolidating balance sheets  As of December 31, 2001  (in thousandsunaudited)

|                                                      |                                      | Communications             |         | Guarantor
Subsidiaries |         | Non-Guarantor
Subsidiaries |         | Elimination |        | Consolidated
Total |       
|----------------------------------------------------- | ------------------------------------ | -------------------------- | ------- | ---------------------- | ------- | -------------------------- | ------- | ----------- | ------ | ------------------ | ------
|ASSETS                                                |                                      |                            |         |                        |         |                            |         |             |        |                    |       
|Current assets:                                       |                                      |                            |         |                        |         |                            |         |             |        |                    |       
|                                                      | Cash and cash equivalents            |                            | $       | 33,906                 |         | $                          |        |             | $      | 10,730             |       
|                                                      | Accounts receivable, net             |                            |         | 20,049                 |         |                            | 63      |             |        | 2,779              |       
|                                                      | Prepaid expenses                     |                            |         | 6,202                  |         |                            | 2,511   |             |        | 2,689              |       
|                                                      | Intercompany receivable (payable)    |                            |         | (148,162               | )       |                            | 153,827 |             |        | (5,665             | )     
|                                                      | Other                                |                            |         | (2,483                 | )       |                            |        |             |        | 3,960              |       
|                                                      |                                      |                            |         |                        |         |                            |         |             |        |                    |       
|                                                      |                                      | Total current assets       |         |                        | (90,488 | )                          |         | 156,401     |        |                    | 14,493
|Noncurent assets:                                     |                                      |                            |         |                        |         |                            |         |             |        |                    |       
|                                                      | Property, plant and equipment, net   |                            |         | 23,299                 |         |                            | 1,042   |             |        | 1,115              |       
|                                                      | Intangible and other assets, net     |                            |         | 420,041                |         |                            | 358,135 |             |        | 78,575             |       
|                                                      | Investments in subsidiaries          |                            |         | 531,816                |         |                            |        |             |        |                   |       
|                                                      |                                      |                            |         |                        |         |                            |         |             |        |                    |       
|                                                      |                                      | $                          | 884,668 |                        | $       | 515,578                    |         | $           | 94,183 |                    | $     
|                                                      |                                      |                            |         |                        |         |                            |         |             |        |                    |       
|LIABILITIES AND STOCKHOLDER'S EQUITY                  |                                      |                            |         |                        |         |                            |         |             |        |                    |       
|Current liabilities                                   |                                      |                            |         |                        |         |                            |         |             |        |                    |       
|                                                      | Current maturities of long-term debt |                            | $       | 16,200                 |         |                            |        |             |        |                   |       
|                                                      | Accounts payable                     |                            |         | 20,883                 |         |                            | 2,609   |             |        | 6,302              |       
|                                                      | Deferred revenue                     |                            |         | 25,750                 |         |                            | 21,657  |             |        | 6,642              |       
|                                                      | Accrued liabilities                  |                            |         | 24,147                 |         |                            | 2,772   |             |        | 1,288              |       
|                                                      |                                      |                            |         |                        |         |                            |         |             |        |                    |       
|                                                      |                                      | Total current liabilities  |         |                        | 86,980  |                            |         | 27,038      |        |                    | 14,232
|Long term debt, net of current maturities             |                                      |                            | 553,800 |                        |         |                           |         |             |       |                    |       
|Deferred income taxes and other Long-term liabilities |                                      |                            | (3,184  | )                      |         | 37,802                     |         |             | 358    |                    |       
|Due to parent                                         |                                      |                            | 3,662   |                        |         |                           |         |             |       |                    |       
|Minority interest                                     |                                      |                            | 14,352  |                        |         |                           |         |             | 288    |                    |       
|Shareholder's equity:                                 |                                      |                            |         |                        |         |                            |         |             |        |                    |       
|                                                      | Common stock                         |                            |         | 10                     |         |                            | 3       |             |        | 475                |       
|                                                      | Capital in excess of par value       |                            |         | 278,425                |         |                            | 438,117 |             |        | 88,226             |       
|                                                      | Acclumulated deficit                 |                            |         | (45,194                | )       |                            | 12,618  |             |        | (7,623             | )     
|                                                      | Accum other comprehensive income     |                            |         | (4,183                 | )       |                            |        |             |        | (1,773             | )     
|                                                      |                                      |                            |         |                        |         |                            |         |             |        |                    |       
|                                                      |                                      | Total shareholder's equity |         |                        | 229,058 |                            |         | 450,738     |        |                    | 79,305
|                                                      |                                      |                            |         |                        |         |                            |         |             |        |                    |       
|                                                      |                                      | $                          | 884,668 |                        | $       | 515,578                    |         | $           | 94,183 |                    | $     
|                                                      |                                      |                            |         |                        |         |                            |         |             |        |                    |       

16

---



ADVANSTAR COMMUNICATIONS INC. AND SUBSIDIARIES        Condensed consolidating statements of operations  Three months ended March 31, 2001  (in thousandsunaudited)

|                                                              |                                                           | Communications           |         | Guarantor
Subsidiaries |        | Non-Guarantor
Subsidiaries |       | Elimination |        | Consolidated
Total |       
|------------------------------------------------------------- | --------------------------------------------------------- | ------------------------ | ------- | ---------------------- | ------ | -------------------------- | ----- | ----------- | ------ | ------------------ | ------
|Net revenue                                                   |                                                           | $                        | 77,242  |                        | $      | 34,005                     |       | $           | 17,400 |                    | $     
|Operating expenses:                                           |                                                           |                          |         |                        |        |                            |       |             |        |                    |       
|                                                              | Cost of production and selling, editorial and circulation |                          |         | 48,324                 |        |                            | 9,249 |             |        | 12,794             |       
|                                                              | General and administrative                                |                          |         | 11,193                 |        |                            | 274   |             |        | 1,730              |       
|                                                              | Depreciation and amortization                             |                          |         | 13,540                 |        |                            | 936   |             |        | 1,312              |       
|                                                              |                                                           |                          |         |                        |        |                            |       |             |        |                    |       
|                                                              |                                                           | Total operating expenses |         |                        | 73,057 |                            |       | 10,459      |        |                    | 15,836
|Operating income (loss)                                       |                                                           |                          | 4,185   |                        |        | 23,546                     |       |             | 1,564  |                    |       
|Other income (expense):                                       |                                                           |                          |         |                        |        |                            |       |             |        |                    |       
|                                                              | Interest expense, net                                     |                          |         | (14,388                | )      |                            |      |             |        | (286               | )     
|                                                              | Other income (expense), net                               |                          |         | (985                   | )      |                            |      |             |        | 47                 |       
|                                                              |                                                           |                          |         |                        |        |                            |       |             |        |                    |       
|Income (loss) before income taxes and minority interests      |                                                           |                          | (11,188 | )                      |        | 23,546                     |       |             | 1,325  |                    |       
|Provision (benefit) for income taxes                          |                                                           |                          | (2,284  | )                      |        | 8,918                      |       |             | 1,533  |                    |       
|Minority interests                                            |                                                           |                          | (134    | )                      |        |                           |       |             |       |                    |       
|Equity in (loss) of subsidiaries                              |                                                           |                          | 14,420  |                        |        |                           |       |             |       |                    |       
|                                                              |                                                           |                          |         |                        |        |                            |       |             |        |                    |       
|Income (loss) before extraordinary item and accounting change |                                                           |                          | 5,382   |                        |        | 14,628                     |       |             | (208   | )                  |       
|Extraordinary item                                            |                                                           |                          | (2,556  | )                      |        |                           |       |             |       |                    |       
|Cumulative effect of accounting change                        |                                                           |                          | (552    | )                      |        |                           |       |             |       |                    |       
|                                                              |                                                           |                          |         |                        |        |                            |       |             |        |                    |       
|                                                              |                                                           | Net income (loss)        |         | $                      | 2,274  |                            | $     | 14,628      |        | $                  | (208  
|                                                              |                                                           |                          |         |                        |        |                            |       |             |        |                    |       

17

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ADVANSTAR COMMUNICATIONS INC. AND SUBSIDIARIES        Condensed consolidating statements of cash flows  Three months ended March 31, 2001  (in thousandsunaudited)

|                                                     |                                                                                          | Communications                                             |                                                     | Guarantor
Subsidiaries |         | Non-Guarantor
Subsidiaries |        | Elimination |       | Consolidated
Total |      
|---------------------------------------------------- | ---------------------------------------------------------------------------------------- | ---------------------------------------------------------- | --------------------------------------------------- | ---------------------- | ------- | -------------------------- | ------ | ----------- | ----- | ------------------ | -----
|Operating activities::                               |                                                                                          |                                                            |                                                     |                        |         |                            |        |             |       |                    |      
|                                                     | Net income (loss)                                                                        |                                                            | $                                                   | 2,274                  |         | $                          | 14,628 |             | $     | (208               | )    
|                                                     | Adjustments to reconcile net income (loss) to net cash provided by operating activities- |                                                            |                                                     |                        |         |                            |        |             |       |                    |      
|                                                     |                                                                                          | Equity in earnings of subsidiaries                         |                                                     |                        | (14,420 | )                          |        |            |       |                    |     
|                                                     |                                                                                          | Extraordinary item-early extinguishment of debt            |                                                     |                        | 2,538   |                            |        |            |       |                    |     
|                                                     |                                                                                          | Unrealized (gain) loss on derivative financial instruments |                                                     |                        | 1,984   |                            |        |            |       |                    |     
|                                                     |                                                                                          | Depreciation and amortization                              |                                                     |                        | 13,540  |                            |        | 936         |       |                    | 1,312
|                                                     |                                                                                          | Non-cash Items                                             |                                                     |                        | 536     |                            |        |            |       |                    |     
|                                                     |                                                                                          | Loss on sales of assets and other                          |                                                     |                        | 159     |                            |        |            |       |                    |     
|                                                     |                                                                                          | Change in working capital items                            |                                                     |                        | (911    | )                          |        | (15,474     | )     |                    | 185  
|                                                     |                                                                                          |                                                            |                                                     |                        |         |                            |        |             |       |                    |      
|                                                     |                                                                                          |                                                            | Net cash provided by operating activities           |                        |         | 5,700                      |        |             | 90    |                    |      
|                                                     |                                                                                          |                                                            |                                                     |                        |         |                            |        |             |       |                    |      
|Investing activities:                                |                                                                                          |                                                            |                                                     |                        |         |                            |        |             |       |                    |      
|                                                     | Additions to property, plant and equipment                                               |                                                            |                                                     | (1,437                 | )       |                            | (90    | )           |       | (111               | )    
|                                                     | Acquisitions of publications and trade shows, net of proceeds                            |                                                            |                                                     | (4,298                 | )       |                            |       |             |       | 514                |      
|                                                     | Increase in advances and notes due from affiliate                                        |                                                            |                                                     | (7,524                 | )       |                            |       |             |       |                   |      
|                                                     | Proceeds from sale of assets and other                                                   |                                                            |                                                     | 17                     |         |                            |       |             |       |                   |      
|                                                     |                                                                                          |                                                            |                                                     |                        |         |                            |        |             |       |                    |      
|                                                     |                                                                                          |                                                            | Net cash used in investing activities               |                        |         | (13,242                    | )      |             | (90   | )                  |      
|                                                     |                                                                                          |                                                            |                                                     |                        |         |                            |        |             |       |                    |      
|Financing activities:                                |                                                                                          |                                                            |                                                     |                        |         |                            |        |             |       |                    |      
|                                                     | Net proceeds from revolving credit facility                                              |                                                            |                                                     | 15,000                 |         |                            |       |             |       |                   |      
|                                                     | Borrowings of long-term debt                                                             |                                                            |                                                     | 160,000                |         |                            |       |             |       |                   |      
|                                                     | Payments of long-term debt                                                               |                                                            |                                                     | (195,000               | )       |                            |       |             |       |                   |      
|                                                     | Long-term debt financing costs                                                           |                                                            |                                                     | (7,606                 | )       |                            |       |             |       |                   |      
|                                                     | Proceeds from capital contributions                                                      |                                                            |                                                     | 34,775                 |         |                            |       |             |       |                   |      
|                                                     |                                                                                          |                                                            |                                                     |                        |         |                            |        |             |       |                    |      
|                                                     |                                                                                          |                                                            | Net cash provided by (used in) financing activities |                        |         | 7,169                      |        |             |      |                    |      
|Effect of exchange rate changes on cash              |                                                                                          |                                                            |                                                    |                        |         |                           |        |             | 276   |                    |      
|                                                     |                                                                                          |                                                            |                                                     |                        |         |                            |        |             |       |                    |      
|Net increase (decrease) in cash and cash equivalents |                                                                                          |                                                            | (373                                                | )                      |         |                           |        |             | 1,968 |                    |      
|Cash and cash equivalents, beginning of year         |                                                                                          |                                                            | 10,736                                              |                        |         | 1                          |        |             | 6,938 |                    |      
|                                                     |                                                                                          |                                                            |                                                     |                        |         |                            |        |             |       |                    |      
|Cash and cash equivalents, end of year               |                                                                                          | $                                                          | 10,363                                              |                        | $       | 1                          |        | $           | 8,906 |                    | $    
|                                                     |                                                                                          |                                                            |                                                     |                        |         |                            |        |             |       |                    |      

18

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

This quarterly report on Form 10-Q contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Investors are cautioned not to place undue reliance on these forward-looking statements, including statements about plans and objectives of management and market growth
and opportunity. These forward-looking statements are neither promises or guarantees and involve risks and uncertainties that could cause actual results to differ materially from those indicated by
such forward-looking statements. You should not expect that these forward-looking statements will be updated or supplemented as a result of changing circumstances or otherwise, and we disavow and
disclaim any obligation to do so. Important cautionary statements and risk factors that would affect actual results are discussed in the Company's periodic reports and registration statements filed
with the Securities and Exchange Commission, including those under the caption entitled "Certain Factors Which May Affect Future Results" in the Company's annual report on Form 10-K
filed with the Securities and Exchange Commission on March 29, 2002.

General

We are is a worldwide provider of integrated, business-to-business marketing communications products and services for targeted industry
sectors, principally through trade shows and conferences and through controlled circulation trade, business and professional magazines. We also provide a broad range of other marketing services
products, including classified advertising, direct mail services, reprints, database marketing, guides and reference books.

We
report our business in three segments:



Trade
shows and conferences accounted for approximately 70% of total revenue in each of the three month periods ended March 31, 2002 and 2001. Trade publications accounted for
approximately 26% of total revenue in each of the three month periods ended March 31, 2002 and 2001, while marketing services accounted for approximately 4% of total revenue in each of the
three month periods ended March 31, 2002 and 2001. Our revenue reaches its highest levels during the first and third quarters of the year due to the timing of the MAGIC trade shows and our
other large trade shows and conferences. In comparing results between years, we may experience fluctuations in quarterly revenue based on the movement of trade show dates from one quarter to another
because trade show and conference revenue is recognized when a particular event is held.

We
provide our affiliate Advanstar.com with administrative support services in accounting, finance, legal, human resource management, information technology and business development. We
also provide Advanstar.com with marketing and promotional support through advertising pages in our trade publications and exhibit space in our trade shows. In return, Advanstar.com provides
promotional support on its web sites for our trade publications and trade shows.

In
2001, our parent, Advanstar, Inc., more tightly focused the activities of Advanstar.com. These plans will have the effect of more closely integrating many of the sales,
marketing, technology and operating functions of Advanstar.com with our core activities in publishing, trade shows, and marketing services. As a result of the reorganization and redirection of the
activities of Advanstar.com during

19

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2001, management anticipates that there will be a significant reduction in the levels of funding by the Company to Advanstar.com during 2002 and subsequent periods.

In
the third quarter of 2001, certain events, including the slowdown in the economy, the changing business environment and continuing operating losses of Advanstar.com, caused management
of Advanstar, Inc. to consider certain transactions between its two sister subsidiaries, the Company and Advanstar.com, to satisfy the outstanding advances and notes due to the Company from
Advanstar.com. Accordingly, through December 31, 2001 the Company accounted for these advances and notes to Advanstar.com as a charge to capital in excess of par value in the accompanying
consolidated balance sheet, pending final determination of the disposition of these advances and notes.

In
the first quarter of 2002, management of Advanstar, Inc. began to consider the further consolidation of the activities of Advanstar.com with Communications, or a merger of
Advanstar.com into Communications in response to the changing business environment and continuing operating losses of Advanstar.com. Consequently, the Company recorded a first quarter
non-cash charge of $37.2 million related to a provision against the outstanding advances and notes due to the Company from Advanstar.com as of December 31, 2001.

In
the first quarter of 2002 the Company began recording the advances and notes issued during the quarter as an operating expense on the Company's condensed consolidated statement of
operations, as a reflection of the ongoing nature of the operations of Advanstar.com in support of the Company's operations as a result of the restructuring of the activities of Advanstar.com in 2001.
Net advances and notes during the quarter were approximately $0.9 million.



Our business and results of operations for the quarter ended March 31, 2002 were significantly impacted by the downturn in the U.S. economy, particularly
in our Information Technology & Communications cluster and Travel & Hospitality cluster. The events of September 11th also impacted our results, including cancellations and
reductions in ad pages, particularly in our travel industry publications.

In
response to the decline in revenues throughout 2001 and into 2002, we implemented early and aggressive cost management actions, including the layoff of approximately 236 staff,
reductions in travel and other operating costs, and reorganization of certain support functions and processes. Through these cost initiatives, we were able to limit the decline in our 2002 EBITDA to
12.5% from the first quarter of 2001 and increase our EBITDA operating margins to 35.8% for the first quarter of 2002, up from 34.8% for the first quarter of 2001.

The
persistence of the general economic slowdown in the U.S. and the uncertainties relating to the ongoing impact from the events of September 11 will likely result in continued
weakness in overall marketing and advertising expenditures by our customers throughout most of 2002. As a result, we expect our revenues and EBITDA to reflect this overall weakness. However, we
believe that our balanced portfolio between trade shows and publications and our diversification across many industry sectors may mitigate the overall impact from continued weakness in general
economic conditions and reduce potential volatility of any one sector.

As
a result of the decline in our operating results in 2001 and the anticipated decline in our operating results through the first half of 2002, we believe that we would have failed to
satisfy certain of the financial covenants contained in our Credit Facility as of March 31, 2002. Accordingly, we sought and obtained an amendment to the Credit Facility in March 2002
which provided for certain revisions to our quarterly financial covenants in 2002 and 2003. Although there can be no assurance, we believe that we will be able to comply with the amended financial
covenants contained in the Credit Facility.

20

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Acquisitions and Joint Ventures



We
have accounted for our acquisitions under the purchase method of accounting and our results of operations include the effect of these acquisitions from the date of purchase. Certain
of the liabilities assumed and the identified intangible assets in connection with the 2001 and 2002 acquisitions have been recorded based on preliminary estimates as of the dates of acquisition and
are subject to adjustment upon completion of the allocation of the purchase price. The pro forma operating results of the acquisitions are not material to our operating results.

The Acquisition

As a result of the acquisition of our Company by the DLJ Merchant Banking funds (the Acquisition) in October, 2000, we have, and will continue to have,
significantly higher indebtedness and interest
expense than reflected in our previous historical results of operations. In addition, the Acquisition was accounted for under the purchase method of accounting. Under the purchase method, the purchase
price is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values, with the remainder being allocated to goodwill.
Accordingly, the increase in basis of our assets resulted in non-cash depreciation and amortization charges in 2001 that were significantly higher than that reflected in our previous
historical financial information.

During
the first quarter of 2001, we recorded an extraordinary charge of approximately $2.6 million, net of a deferred tax benefit of approximately $1.5 million, in
connection with the repayment of the 9.25% senior subordinated notes and the write-off of deferred financing fees related to the bridge facility. The 9.25% senior subordinated notes were
refinanced with the proceeds of the 12.00% senior subordinated notes and the concurrent offering of additional senior discount notes. See Notes to our Consolidated Financial Statements included within
this annual report for further details.



Trade Shows and Conferences

The trade shows and conferences segment derives revenue principally from the sale of exhibit space and conference attendance fees generated at its events. In
2001, approximately 83% of our trade shows and conferences revenue was from the sale of exhibit space. Events are generally held on an

21

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annual basis in major metropolitan or convention areas such as New York City or Las Vegas. At many of our trade shows, a portion of exhibit space is reserved and partial payment is received as much
as a year in advance. The sale of exhibit space is affected by the on-going quality and quantity of attendance, venue selection and availability, industry life cycle and general market
conditions. Revenue and related direct event expenses are recognized in the month in which the event is held. Cash is collected in advance of an event and is recorded on our balance sheet as deferred
revenue.

Trade Publications

The trade publications segment derives revenue principally from the sale of advertising in its business-to-business magazines.
Additionally, certain publications derive revenue from paid subscriptions and custom publishing. Paid subscriptions comprise less than 5% of total publishing revenue. Most publications are produced
monthly with advertising sold both on an annual schedule and single insertion basis. The sale of advertising is affected by new product releases, circulation quality,
readership and general market conditions. Advertising revenue is recognized on the publication issue date, and subscription revenue, if any, is recognized over the subscription period, typically one
year.

Our
publishing properties operate in many different markets and industries which are subject to economic conditions prevalent in those industries. Accordingly, publishing revenues may
fluctuate in connection with the markets in which we operate.

Marketing Services

The marketing services segment derives its revenue from the sale of value-added marketing products such as classified advertising, both print and internet-based,
direct mail services, reprints, database marketing, directories, guides and reference books. These products complement and, in many cases, utilize the content or databases generated by our trade
shows, conferences and publications. The sale of these products is affected by the success of the event or publication from which these products are derived, the quality of the sales team and general
market conditions. Revenue is generally recognized when the applicable product is shipped.



Trade Shows and Conferences

Costs incurred by the trade shows and conferences segment include facility rent, outsourced services such as registration, security, decorator, and attendee and
exhibitor promotion. Exhibitors generally contract directly with third parties for on-site services such as electrical, booth set-up and drayage. Staff salaries and related
payroll expenses are treated as monthly period expenses. All other direct costs are expensed in the month the event occurs.

Trade Publications

Costs incurred by the trade publications segment include printing, paper and postage; selling and promotion; editorial and prepress; and circulation acquisition
and fulfillment. Additionally, publisher and sales staff costs, and production, editorial and circulation staff costs, with related payroll taxes and benefits, are charged to the publications. We
outsource the actual printing of our publications.

Marketing Services

Costs of the marketing services segment include printing and distribution costs, database administration fees and selling and product development salaries and
related payroll taxes and benefits.

22

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Significant Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses. On an on-going basis, we evaluate these estimates, including those related to bad debts, intangible assets and income taxes.
We base these estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We
apply the following critical accounting policies in the preparation of our consolidated financial statements:



Selected Financial Data

The following table sets forth selected statements of operations and other financial data.

23

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We
define "EBITDA" as operating income plus amortization and depreciation less amounts attributable to minority interests. EBITDA does not represent, and should not be considered to be,
an alternative to net income or cash flow from operations as determined in accordance with GAAP, and our calculation thereof may not be comparable to that reported by other companies. We believe that
EBITDA provides useful information regarding our ability to service and/or incur indebtedness and is used by many other companies. Our key financial covenants under our existing credit facility, which
impact the amount of indebtedness we are permitted to incur, are based, in part, on our EBITDA. EBITDA does not take into account our working capital requirements, debt service requirements and other
commitments. Accordingly, EBITDA is not necessarily indicative of amounts that may be available to us for discretionary uses.

"Adjusted
EBITDA" is defined as EBITDA plus the provision for notes and advances due from Advanstar.com. We believe that "Adjusted EBITDA" is a useful supplement to net income in
understanding cash flows generated from operations that are available for taxes, debt service and capital expenditures, as it excludes the one-time non-cash provision for notes
and advances due from Advanstar.com.

To
calculate EBITDA for the three months ended March 31, 2002 and 2001, we reduced operating income by $(0.1) million and $(0.3) million, respectively, to reflect minority
interest.

|                                                                 |                              | Three Months
Ended
March 31, 2002    |         | Three Months
Ended
March 31, 2001 |        
|---------------------------------------------------------------- | ---------------------------- | ------------------------------------ | ------- | --------------------------------- | -------
|
|Net revenue:                                                     |                              |                                      |         |                                   |        
|                                                                 | Trade shows and conferences  |                                      | $       | 76,465                            |        
|                                                                 | Publications                 |                                      |         | 28,674                            |        
|                                                                 | Marketing services and other |                                      |         | 4,288                             |        
|                                                                 |                              |                                      |         |                                   |        
|                                                                 |                              | Total net revenues                   |         |                                   | 109,427
|Cost or production and selling:                                  |                              |                                      |         |                                   |        
|                                                                 | Trade shows and conferences  |                                      |         | 33,720                            |        
|                                                                 | Publications                 |                                      |         | 22,933                            |        
|                                                                 | Marketing services and other |                                      |         | 1,225                             |        
|                                                                 |                              |                                      |         |                                   |        
|                                                                 |                              | Total cost of production and selling |         |                                   | 57,878 
|Funding of affiliated dot.com company operations                 |                              |                                      | 38,079  |                                   |        
|General and administrative expenses                              |                              |                                      | 11,346  |                                   |        
|Depreciation and amortization                                    |                              |                                      | 17,435  |                                   |        
|                                                                 |                              |                                      |         |                                   |        
|                                                                 |                              | Operating income (loss)              |         |                                   | (15,311
|Other income (expense):                                          |                              |                                      |         |                                   |        
|                                                                 | Interest expense, net        |                                      |         | (12,674                           | )      
|                                                                 | Other income (expense)       |                                      |         | 1,042                             |        
|Provision (benefit) for income taxes                             |                              |                                      | (10,594 | )                                 |        
|Minority interests                                               |                              |                                      | (88     | )                                 |        
|                                                                 |                              |                                      |         |                                   |        
|Income (loss) before extraordinary item and accounting change    |                              | $                                    | (16,437 | )                                 | $      
|                                                                 |                              |                                      |         |                                   |        
|EBITDA                                                           |                              | $                                    | 2,023   |                                   | $      
|Provision for notes and advances from affiliated dot.com company |                              |                                      | 37,192  |                                   |        
|                                                                 |                              |                                      |         |                                   |        
|Adjusted EBITDA                                                  |                              | $                                    | 39,215  |                                   | $      
|                                                                 |                              |                                      |         |                                   |        

24

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Results of Operations

Three Months Ended March 31, 2002 Compared to the Three Months Ended March 31, 2001

Revenue

Total revenue decreased $19.2 million, or 14.9%, to $109.4 million in the first quarter of 2002 from $128.6 million for the first quarter of
2001.

Revenue
from trade shows and conferences decreased $13.1 million, or 14.6%, to $76.5 million for the first quarter of 2002 from $89.6 million in the first quarter of
2001. This decrease was primarily attributable to a decline in certain of our trade shows, a shift in the timing of when events take place and the discontinuation of an event in our technology market,
partially offset by the acquisition of AIIM International Exposition and Conference. The downturn in the U.S. economy continued to impact revenue in our trade shows as did the residual effect from the
events of September 11th by adding to our customers' concern over its ongoing impact on their marketing efforts. Revenue for the quarter was also impacted by a net shift in the
timing of five trade shows, three of which were held in the first quarter of 2001, but moved to the second quarter of 2002, another event was held in the first quarter of 2001 but the 2002 event was
held in December 2001, while the remaining trade show was held in the second quarter of 2002, but moved to the first quarter of 2002. Adjusting first quarter 2001 results for all such
movements, first quarter 2002 trade show revenue decreased by $6.2 million, or 7.5%.

Revenue
from publications and marketing services decreased $6.1million, or 15.7%, to $33.0 million for the first quarter of 2002 from $39.1 million in 2001. This decrease
was attributable to the overall slowdown in the economy and the resulting reduction in marketing spending by our customers as they adjust to slowing growth in their respective industry sectors. The
decline was heavily weighted to our travel and technology markets, which together decreased approximately 37.1% while the balance of our portfolio declined approximately 6.8%. Advertising pages
decreased approximately 11.5% across our portfolio while advertising revenue per page decreased approximately 6.7% in the first quarter of 2002. The economic outlook in the publishing sector continues
to be challenging, and forward visibility on our advertising revenue and pages is limited, due to the concerns of our customers related to the overall business environment. We also discontinued
publication of certain magazines published in 2001. These declines were offset by revenue from our acquisitions ofMotor Age, Auto Body Repair Newsand Centre
d'Appelsmagazines in 2001.

Cost of Production and Selling

Cost of production and selling expenses decreased $12.5 million, or 17.8%, to $57.9 million for the first quarter of 2002 from $70.4 million
for the comparable period of 2001.

Expenses
of trade shows and conferences decreased $7.7 million, or 18.5%, to $33.7 million for the first quarter of 2002 from $41.4 million in 2001. This decrease
was primarily due to cost savings associated with continuing and discontinued events and costs associated with the movement of events between quarters, partially offset by new costs related to our
acquisition of the AIIM International Exposition and Conference. Adjusting first quarter 2001 results for movements of events between quarters, trade show and conference expenses in 2002 decreased by
$4.6 million, or 11.9%.

Expenses
of publication and marketing services decreased $4.8 million, or 16.7%, to $24.2 million in the first quarter of 2002 from $29.0 million in the first
quarter of 2001. This decrease was due primarily to savings attributable to our ongoing cost reduction programs and discontinued publications, partially offset by additional cost attributable to our
acquisitions ofMotor Age, Auto Body Repair NewsandCentre d'Appelsmagazines in 2001.

25

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Funding of Affiliated Company Operations

In the first quarter of 2002, management of Advanstar, Inc. began to consider the further consolidation of the activities of Advanstar.com with
Communications, or a merger of Advanstar.com into Communications in response to the changing business environment and continuing operating losses of Advanstar.com. Consequently, the Company recorded a
first quarter non-cash charge of $37.2 million related to a provision against the outstanding advances and notes due to the Company from Advanstar.com as of December 31,
2001.

The
Company also began recording the advances and notes issued during the period as an operating expense on the Company's condensed consolidated statement of operations, as a reflection
of the ongoing nature of the operations of Advanstar.com in support of the Company's operations resulting from the restructuring of the activities of Advanstar.com in 2001. The Company funded
approximately $0.9 million in support of those operations in the first quarter of 2002 compared to $7.5 million in the first quarter of 2001. This level of support represents a
significant reduction in the operating costs of Advanstar.com.

General and Administrative Expenses

General and administrative expenses decreased $1.9 million, or 14.0%, to $11.3 million in the first quarter of 2002 from $13.2 million in the
first quarter of 2001. This decrease is primarily attributable to our ongoing cost and headcount reduction programs. In response to the decline in revenues throughout 2001 and into 2002, we
implemented early and aggressive cost management actions, including the layoff of approximately 236 staff, reductions in travel and other operating costs, and reorganization of certain support
functions and processes.

Depreciation and Amortization

Depreciation and amortization expense increased $1.6 million to $17.4 million in the first quarter of 2002 from $15.8 million in the first
quarter of 2001 primarily due to the adoption in January 2002 of SFAS No. 142, "Goodwill and Other Intangible Assets." Upon adoption we discontinued the amortization of goodwill and
accelerated amortization of certain of our identified intangible assets. Excluding goodwill amortization recorded in the first quarter of 2001, depreciation and amortization expense increased
$7.9 million due to the accelerated amortization of certain identified intangible assets and the amortization of approximately $139.2 million of identified intangible assets that were
reclassified from goodwill subsequent to the first quarter of 2001 as we completed our purchase price allocation related to the Acquisition.

Interest Expense

Net interest expense decreased $2.0 million, or 13.6%, to $12.7 million in the first quarter of 2002 from $14.7 million in the first quarter
of 2001 due to a decrease in our weighted average interest rate, partially offset by the additional indebtedness necessary to fund the Acquisition. In February 2001, we replaced our then
outstanding $150.0 million 9.25% senior subordinated notes with $160.0 million 12.00% senior subordinated notes.

Other Income (Expense)

Other income (expense) increased $1.9 million to $1.0 million in the first quarter of 2002 from $(0.9) million in the first quarter of 2001. We
reported a non-cash gain of approximately $0.9 million in the first quarter of 2002 related to our foreign currency and interest rate hedging activities, compared to a
non-cash loss of approximately $1.1 million in the comparable period of 2001.

26

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Provision (Benefit) for Income Taxes

The provision for income taxes decreased $18.8 million to $(10.6) million in the first quarter of 2002 from $8.2 million in the first quarter of
2001. This decrease was primarily due to the provision we recorded on our notes and advances due to us from our affiliate, Advanstar.com. In addition, our expected annual effective rate for 2002
decreased to 38.5% primarily as a result of the adoption in January of SFAS No. 142, "Goodwill and Other Intangible Assets." The expected annual effective rate of 38.5% is exclusive of the tax
benefit related to the provision recorded on notes and advances dues from our affiliate.

Adjusted EBITDA

Adjusted EBITDA decreased $5.6 million, or 12.5%, to $39.2 million in the first quarter of 2002 from $44.8 million in the first quarter of
2001. The decrease was primarily due to a general economic downturn in our trade show and publishing segments, the charge related to our first quarter 2002 funding of Advanstar.com and the effect of a
net shift in the timing of five trade shows, offset by reductions in general and administrative expense. Adjusting first quarter 2001 for the movement of trade shows from one quarter to another,
Adjusted EBITDA in the first quarter of 2002 decreased by $1.7 million, or 4.2%, from the first quarter of 2001.

Liquidity and Capital Resources

Since the Acquisition, our principal sources of liquidity have been cash flow from operations and borrowings under our credit facility and our principal uses of
cash have been the debt service requirements of our indebtedness described below, capital expenditures and strategic acquisitions. As of March 31, 2002, we had total indebtedness of
$566.6 million and approximately $42.9 million of borrowings available under our credit facility.

Credit facility.The term loan facility under the credit facility consists of a $100.0 million amortizing term loan A
maturing April 11, 2007 and a $315.0 million amortizing term loan B maturing October 11, 2008. The credit facility also includes an $80.0 million revolving credit facility.
The revolving credit facility will terminate in April 2007. The credit facility may be increased by up to $50.0 million at our request, with the formal prior consent of the lenders or
other financial institutions providing the increase. However, there can be no assurance that this consent will be obtained. In February 2001, we repaid $10.8 million of term loan A and
$34.2 million of term loan B at the closing of the issuance of our 12.00% senior subordinated notes.

Borrowings
under the credit facility generally bear interest based on a margin over, at our option, the base rate or the reserve-adjusted London-interbank offered rate (LIBOR). The
applicable margin for revolving credit loans and term loan A will vary based upon our ratio of consolidated debt to EBITDA, as defined in the credit facility, and the applicable margin for term loan B
is 3.75% over LIBOR and 2.50% over the base rate. Our obligations under the credit facility are guaranteed by Advanstar Holdings Corp., our ultimate parent company, and all our existing and future
domestic subsidiaries and are secured by substantially all of the assets of our company and the subsidiary guarantors, including a pledge of the capital stock of all our existing and future domestic
subsidiaries, a pledge of no more than 65% of the voting stock of any foreign subsidiary directly owned by our company or any domestic subsidiary, a pledge of all intercompany indebtedness in favor of
Advanstar, Inc., our company and our domestic subsidiaries, a pledge of our company's and Advanstar IH, Inc.'s capital stock by our parent company, and a pledge of our parent company's
capital stock by Advanstar Holdings Corp. The credit facility contains covenants and events of default that, among other things, limit our ability to incur debt, pay dividends and make investments.

As
a result of the decline in our operating results through 2001 and the anticipated decline in our operating results through the first half of 2002, we believe that we would have failed
to satisfy certain

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of the financial covenants contained in our Credit Facility as of March 31, 2002. Accordingly, we sought and obtained an amendment to the Credit Facility in March 2002 which provided
for certain revisions to our quarterly financial covenants in 2002 and 2003. As of March 31, 2002 we were in compliance with these covenants.

Notes.The 12.00% Series B senior subordinated notes (the "Notes") mature in 2011 and are guaranteed by each of our
existing and future domestic restricted subsidiaries. Interest on the Notes is payable semi-annually in cash. The Notes contain covenants and events of default that, among other things,
limit our ability to incur debt, pay dividends and make investments. As of March 31, 2002, we were in compliance with these covenants.

Parent company notes.As part of the financing for the Acquisition, our parent, Advanstar, Inc., issued senior
discount notes due October 2011 with a principal amount at maturity of $103.2 million. Concurrently with the closing of the offering of the Notes, Advanstar, Inc. sold additional
senior discount notes due October 2011 with an additional aggregate principal amount at maturity of $68.6 million. These notes do not require cash interest payments until 2006 and
contain covenants and events of default that, among other things, limit the ability of Advanstar, Inc. and its subsidiaries (including the Company) to incur debt, pay dividends and make
investments. Neither we nor any of our subsidiaries guaranteed the senior discount notes. Advanstar, Inc., however, is a holding company and its ability to pay interest on these senior discount
notes will be dependent upon the receipt of dividends from its subsidiaries, including the Company.

Contractual and contingent obligations.Our contractual obligations are set forth below (in millions):

|                                  |       | Payment due by Period
|--------------------------------- | ----- | ---------------------
|
|Indebtedness (excluding interest) |       | $                    
|Operating leases                  |       |                      
|                                  |       |                      
|                                  | Total |                      
|                                  |       |                      

Our
contingent obligations are primarily composed of $3.1 million of letters of credit and our interest rate and foreign currency derivatives discussed more fully below in Item
3Qualitative and Quantitative Disclosure About Market Risk

Capital expenditures.Capital expenditures in the first quarter of 2002 were approximately $1.3 million. We anticipate
that we will spend between $7.0 and $8.0 million on capital expenditures in 2002, primarily for expenditures related to our desktop computers and management information systems. Based on
current estimates, management believes that the amount of capital expenditures permitted to be made under the credit facility will be adequate to grow our business according to our business strategy
and to maintain the properties and business of our continuing operations.

Acquisitions and investments.We have provided funding to Advanstar.com, our affiliate and a subsidiary of
Advanstar, Inc., to support its operations. We provided funding of approximately $0.9 million in the first quarter of 2002 and anticipate that we will provide approximately
$1.5 million of additional funding in 2002. Our debt instruments limit the total amount we can invest in Advanstar.com. Based on current estimates, we anticipate that we will be able to make
these investments within those limitations.

Our
business strategy includes the consummation of strategic acquisitions. In connection with any future acquisitions, we may require additional funding, which may be provided in the
form of additional debt or equity financing or a combination thereof. There can be no assurance that any additional financing will be available to us on acceptable terms or in a manner that complies
with the restrictive

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covenants in our debt instruments. Consistent with our longstanding strategy, we continue to pursue potential acquisitions of complementary businesses.



We generally operate with negative working capital, excluding cash and current maturities of long-term debt, due to the impact of deferred revenue
from trade shows, which is billed and collected as deposits up to one year in advance of the respective trade show. Consequently, our existing operations are
expected to maintain very low or negative working capital balances, excluding cash and current maturities of long-term debt. We anticipate that our operating cash flow, together with
borrowings under the credit facility, will be sufficient to meet our anticipated future operating expenses, capital expenditures and debt service and other obligations as they become due. However, our
ability to make scheduled payments of principal, to pay interest on or to refinance our indebtedness and to satisfy our other debt obligations will depend upon our future operating performance, which
will be affected by general economic, financial, competitive, legislative, regulatory, business and other factors beyond our control.

From
time to time, we will continue to explore additional financing methods and other means to lower our cost of capital, which could include stock issuance or debt financing and the
application of the proceeds therefrom to the repayment of bank debt or other indebtedness.

Historically,
our financing requirements have been funded primarily through cash generated by operating activities and borrowings under our revolving credit facility. From time to time,
we have also raised additional funds through sales of common stock, high yield offerings and term borrowings under our credit facility for purposes of completing strategic acquisitions.

Cash flows from operating activities.Net cash provided by operations decreased $17.6 million to a use of cash of
$10.5 million in 2002 from a source of cash of $7.1 million in 2001. The decrease was primarily due to an increase in working capital items and cash interest expense due to the timing of
interest payments on our 12% senior subordinated notes.

Cash flows used in investing activities.Net cash used in investing activities increased $0.1 million to
$13.0 million in 2002, from $12.9 million in 2001. This increase was principally due to decreased funding of Advanstar.com, partially offset by increased investments in acquisitions
during the period.

Cash flows from financing activities.Net cash used by financing activities increased $12.4 million to
$5.2 million in 2002, from a source of cash of $7.2 million in 2001. This increase was principally due to payments on long-term debt and financing costs related to the
amendment to our senior credit agreement during the quarter. In 2001 we refinanced the Notes (as more fully discussed above) and made additional borrowings under our operating line of credit.

New Accounting Pronouncements

In August 2001, the Financial Accounting Standards Board (FASB) issued Financial Accounting Standards No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets" (FAS 144). This statement addresses financial accounting and reporting for the impairment or disposal of long-lived assets. FAS 144
retains and expands upon the fundamental provisions of existing guidance related to the recognition and measurement of the impairment of long-lived assets to be held and used and the
measurement of long-lived assets to be disposed of by sale. Generally, the provisions of FAS 144 are effective for financial statements issued for fiscal years beginning after
December 15, 2001. The Company has adopted FAS 144 on January 1, 2002. The adoption of FAS 144 did not impact the results of operations or financial position of the Company
for the period ended March 31, 2002.

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In
May 2002, the FASB issued Financial Accounting Standards No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections" (FAS 145). FAS 145 rescinds FASB Statement No. 4, "Reporting Gains and Losses from Extinguishment of Debt",and an amendment of that Statement, FASB Statement No. 64, "Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements". FAS 145 also rescinds FASB Statement
No. 44, "Accounting for Intangible Assets of Motor Carriers". FAS 145 amends FASB Statement No. 13, "Accounting for Leases", to eliminate an inconsistency between the required
accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback
transactions. FAS 145 also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions.
FAS 145 is generally effective for fiscal years beginning after May 15, 2002. The Company has not adopted FAS 145. The adoption of FAS 145 is not expected to have a
significant impact of the results of operations or financial position of the Company.

Item 3.Qualitative and Quantitative Disclosure about Market Risk

We are exposed to various market risks, which is the potential loss arising from adverse changes in market rates and prices, such as foreign currency exchange and
interest rates. We do not enter into derivatives or other financial instruments for trading or speculative purposes. We enter into financial instruments to manage and reduce the impact of changes in
interest rates and foreign currency exchange rates.

Interest Rates.We rely significantly on variable rate and fixed rate debt in our capital structure. At March 31,
2002, we had fixed rate debt of $165.5 million and variable rate debt of $401.1 million. The pre-tax earnings and cash flows impact for the next year resulting from a 100
basis point increase in interest rates on variable rate debt would be a reduction of pre-tax earnings of $4.0 million, holding other variables constant and excluding the impact of
our interest rate protection agreements. Under the credit facility, we are required to enter into interest rate protection agreements that have the effect of causing at least half of the outstanding
term loan borrowings and senior subordinated notes to be fixed-rate borrowings. We have entered into agreements to cap the interest rate on $250.0 million of borrowings under our
credit facility, which would have the effect of reducing the impact of interest rate increases on our earnings and cash flows.

Currencies.Outside of the United States, we maintain assets and operations in Europe, South America and Asia. The results of
operations and financial position of our foreign operations are principally
measured in their respective currency and translated into U.S. dollars. As a result, exposure to foreign currency gains and losses exists. The reported income of these subsidiaries will be higher or
lower depending on a weakening or strengthening of the U.S. dollar against the respective foreign currency. Our subsidiaries and affiliates also purchase and sell products and services in various
currencies. As a result, we may be exposed to cost increases relative to the local currencies in the markets in which we sell.

A
portion of our assets are based in our foreign locations and are translated into U.S. dollars at foreign currency exchange rates in effect as of the end of each period, with the effect
of such translation reflected in other comprehensive income (loss). Accordingly, our consolidated stockholder's equity will fluctuate depending upon the weakening or strengthening of the U.S. dollar
against the respective foreign currency.

Our
strategy for management of currency risk relies primarily upon conducting our operations in a country's respective currency and may, from time to time, involve currency derivatives,
primarily forward exchange contracts, to reduce our exposure to currency fluctuations. As of March 31, 2002, there were open foreign exchange derivative contracts to sell with a notional amount
totaling $6.2 million and to buy with a notional amount totaling $1.1 million. The estimated fair value of the foreign exchange contracts based upon market quotes was a net asset of
approximately $0.2 million. The potential loss in fair value resulting from a hypothetical 10% adverse change in quoted foreign currency exchange rates amounts to an additional loss of
approximately $0.5 million. Actual results may differ.

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PART II  Other Information

Item 4.Submissions of Matters to a Vote of Security Holders.

None

Item 6.Exhibits and Reports on Form 8-K

Item 6(a).Exhibits

None

Item 6(b).Reports on Form 8-K

A
report on Form 8-K was filed by the Company on April 18, 2002 to report an event under Item 4Changes in Registrant's Certifying Accountant. No financial statements were
filed with such report.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.

|             |  | ADVANSTAR COMMUNICATIONS INC.                                                                           
|------------ |  | --------------------------------------------------------------------------------------------------------
|             |  |                                                                                                         
|May 20, 2002 |  | /s/ DAVID W. MONTGOMERYDavid W. Montgomery
Vice President-Finance, Secretary and Chief Financial Officer

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