SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-K

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|ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

FOR THE FISCAL YEAR ENDEDDECEMBER 31, 2003

or

|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

FOR THE TRANSITION PERIOD FROM  TO

Commission File Number 333-57201

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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.)One Park Avenue, New York, New York(Address of principal executive offices)
10016(Zip Code)


Registrant's telephone number, including area code: (212) 951-6600

Securities registered pursuant to Section 12(b) of the Act: None

Securities
registered pursuant to Section 12(g) of the Act: None

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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

.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.ý

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act
Rule 12b-2). Yes o    No ý

.

As of June 30, 2003, none of the registrant's common stock was held by non-affiliates of the registrant.

As
of March 29, 2004, the registrant had 1,000,000 shares of common stock issued and outstanding.

DOCUMENTS
INCORPORATED BY REFERENCE
None.



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PART I

Item IBUSINESS

Forward Looking Statements

THIS ANNUAL REPORT, OTHER REPORTS, AND COMMUNICATIONS TO SECURITYHOLDERS, AS WELL AS ORAL STATEMENTS MADE BY THE DIRECTORS, OFFICERS OR EMPLOYEES OF ADVANSTAR
COMMUNICATIONS INC. ("ADVANSTAR" OR THE "COMPANY") MAY CONTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, MADE PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THESE STATEMENTS MAY RELATE TO, AMONG OTHER THINGS,
ADVANSTAR'S FUTURE REVENUES, OPERATING INCOME, EBITDA AND THE PLANS AND OBJECTIVES OF MANAGEMENT. ALL FORWARD-LOOKING STATEMENTS INCLUDED HEREIN ARE MADE AS OF THE DATE HEREOF, BASED ON INFORMATION
AVAILABLE TO ADVANSTAR AS OF THE DATE THEREOF, AND ADVANSTAR ASSUMES NO OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENT OR TO CONFORM ANY FORWARD-LOOKING STATEMENT TO ACTUAL RESULTS. THESE
FORWARD-LOOKING STATEMENTS ARE NEITHER PROMISES NOR GUARANTEES AND INVOLVE RISKS AND UNCERTAINTIES, AND ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED IN THE FORWARD-LOOKING STATEMENTS.
FACTORS THAT MAY CAUSE SUCH VARIATION ARE DISCUSSED IN THIS ANNUAL REPORT AND IN ADVANSTAR'S OTHER REPORTS AND REGISTRATION STATEMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

INDUSTRY AND MARKET DATA

Industry and market data for the business-to-business ("B-to-B") media industry and our market share and relative
industry positions used throughout this annual report were obtained through company research, internal company surveys and studies conducted by third parties, independent industry publications and
other publicly available information. We have not independently verified market and industry data from third-party sources. In addition, while we believe internal company surveys are reliable and we
believe that we define markets appropriately, none of such surveys nor such market definitions have been verified by any independent sources.

In
particular:



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General

We are a leading worldwide provider of integrated, B-to-B, marketing communications products and services for specific 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, directories, guides and reference books. We are one of the largest U.S. trade show operators based on the number
of trade shows and total square footage in 2003 and the second largest B-to-B trade publishers in the United States as measured by advertising pages in 2003. In 2003, most of
our trade shows and stand-alone conferences were among the leading events in their respective markets based on square footage. For the year ended December 31, 2003, 68% of our 69 magazines and
journals for which competitive data is available ranked either #1 or #2 in their respective markets, based on number of advertising pages. We had approximately 1,400 employees as of
December 31, 2003 in 20 U.S. offices and 6 international locations in Europe, Latin America and Asia.

Industry Overview

B-to-B communications companies provide marketing solutions for our customers through trade shows and conferences, trade publications,
ancillary marketing services and through Internet applications. According to the July 2003 Veronis Suhler StevensonCommunications Industry
Forecast, total spending on B-to-B communications, including magazines and trade shows, declined for the second consecutive year in 2002 at a rate of
8.7% to $19.2 billion. Total B-to-B spending was virtually flat on a compound annual basis from 1997 to 2002, largely because of the two-year
B-to-B media recession that took place in 2001 and 2002.

According
to Veronis Suhler Stevenson, total spending on U.S. trade shows and conferences amounted to $8 billion in 2002, a decline of 1.2% from 2001 following a 3.2% contraction
from 2000 as a result of a sluggish economy, corporate profit declines and steep cutbacks in Company travel. As measured byTradeshow Week, 2003 saw an
increase in attendance and the number of exhibiting companies of 3.6% and 0.6%, respectively, though there was a slight decline of 0.4% in net square footage. Results improved in the fourth quarter
due to renewed confidence in air travel.

The
U.S. B-to-B publishing industry generated revenue of $11.2 billion in 2002 according to Veronis Suhler Stevenson, with a CAGR of 1.2% from 1997 to
2002. Spending in 4 of the 5 largest ad categories fell at double digit rates for 2002 led by a 27.8% plunge in tech advertising. A slow recovery appeared to be taking place in the
B-to-B media industry at the end of 2002 and the through the first quarter of 2003. Industry-wide advertising pages, as measured by the Business Information
Network, declined 3.2% in 2003 from 2002 levels following a 15.0% decline in 2002 from 2001 levels. Veronis

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Suhler
Stevenson is forecasting that total spending on business-to-business media will grow at a compound annual growth rate of 4.8% from 2002 to 2007.

Our
results during 2003 reflect the unevenness and sporadic nature of economic recovery in the United States across the multiple industry sectors in which our customers operate. However,
we believe that our balanced portfolio between trade shows and publications and our diversification across many industry sectors mitigates the overall impact of the tentative nature of the economic
recovery and reduces our exposure to the potential volatility of any one sector.

Trade Shows

Trade shows are an important B-to-B sales, marketing and educational medium in the global economy, seen among corporate marketers as a
highly cost-effective marketing tool. Trade shows provide an opportunity for industry participants to conduct face-to-face selling efforts, transact business and
receive product information from exhibits, conferences, workshops and other forums. Trade show attendees include executives, manufacturers and operating management, sales and marketing personnel,
industry analysts, middle-level managers and other industry professionals. The economic slowdown in 2001 and 2002 and the events of September 11, 2001 had a significant short term impact on
trade show attendance and exhibitor participation. Concern over travel and future economic uncertainty impacted our customers' marketing and travel decisions. However, we believe that trade show
participation and attendance will fundamentally be driven by the economic recovery of that event's particular industry and our customers' view of future general economic developments.

Trade Publications

Trade publications are generally published monthly and provide information about a specific industry or market segment within an industry. Advertisers are
attracted to B-to-B print media by the highly targeted and controlled circulation of publications. By focusing on targeted audiences, publishers aim to connect advertisers with
key purchasing decision-makers. Controlled distribution assists advertisers in reaching very specific target groups and provides for more efficient use of advertising dollars. The cost efficiency of
controlled circulation advertising versus general business advertising or consumer advertising enhances the stability of B-to-B advertising spending during difficult economic
conditions. The historical growth in B-to-B publishing has been driven primarily by rising levels of advertising spending as opposed to growth in subscription revenues.

As
reported by the December 2003 American Business Media report, the current downturn in marketing and advertising has had the most significant impact on the telecom, computers,
software, travel and manufacturing sectors. Advertising pages in these sectors decreased 22%, 17%, 15%, 12% and 10%, respectively, in 2003 from 2002 levels.

Product Segments

Our business is grouped in three broad segments reflecting products and services we provide to our customers to serve their marketing needs. We offer our
customers a comprehensive array of B-to-B communications products and services to reach their existing and prospective buyers on a cost-effective basis. Our product
and service offerings are trade shows and conferences, trade publications, and marketing services.

Trade Shows and Conferences

As of December 31, 2003, we owned and managed 60 trade shows and 12 standalone conferences for business, professional and consumer audiences worldwide,
most of which were among the leading events in their respective markets based on square footage. Six of our largest trade shows are listed in the April 2003 issue of Tradeshow Week 200'slist of
the top 200 trade shows as measured by total

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square
footage. These inclued MAGIC Fall, MAGIC Spring, International Powersports Dealer Expo, AIIM Conference and Expo, International Beauty Show New York and Licensing International. Additionally,
we own Telexpo, which we believe is the largest telecommunications trade show in Latin America. Collectively, these seven trade shows represented 2.5 million of the 4.7 million total
square footage of all our trade shows for the year ended December 31, 2003.

Our
trade show revenue is derived primarily from the sale of trade show floor space to exhibitors, show-specific advertising, sponsorships and conferences. Trade show revenue
accounted for approximately 54%, 52% and 48% of our revenue in 2001, 2002 and 2003, respectively.

Trade
shows are a long-established means of community building, bringing buyers and sellers in one particular industry or business face-to-face, in a
single forum. In addition, as new products and services proliferate, both suppliers and their customers need efficient forums to interact and transact business with one another. Events often include
an extensive conference program, which provides a forum for the exchange and dissemination of information relevant to the particular event's focus. A conference linked to a trade show plays a
strategic role in trade show development because it represents the unique editorial content for an event, and it can be used to build new segments, raise the profile of particular segments or
technologies and drive attendance at the underlying trade show. In addition, each event typically has one or more keynote speakers drawn from notable industry leaders.

The
advantages of trade shows to exhibitors and attendees are summarized below:

|Advantages to Exhibitor |  | Advantages to Attendee                           
|----------------------- |  | -------------------------------------------------
|                       |  | conduct sales more efficiently than in the field;
|                       |  | position product and company in target industry; 
|                       |  | communicate vision;                              
|                       |  | service existing customers;                      
|                       |  | open new accounts; and                           
|                       |  | introduce new products.                          

Trade Publications

We are the second largest B-to-B trade publisher in the United States as measured by advertising pages in 2003. As of December 31,
2003, we published 78 specialized business magazines and professional journals and 22 directories and other publications. Of our 69 magazines and journals for which competitive data is available, 68%
ranked either #1 or #2 in their respective markets, based on the number of advertising pages in the year ended December 31, 2003.

Our
publications are generally distributed free-of-charge to qualified professional recipients and generate revenues predominantly from advertising. Trade
publications
revenue accounted for approximately 41%, 43% and 47% of our total revenue in 2001, 2002 and 2003, respectively. Our largest publications includeTravel Agent, Medical
Economics, Pharmaceutical Technology, Drug Topics, American Salon, Dental Products Report, Video Store, Automotive Body Repair NewsandMotor
Agewhich collectively represented 27% of total advertising pages of all our publications for the year ended December 31, 2003.

By
offering our advertisers access to a targeted and industry-specific customer base, we believe that we are able to sell advertising space in our publications at a rate per customer
that is higher than the average rate charged by publications aimed at more general audiences. We believe that our targeted circulation lists for our U.S. and international publications provide our
advertising customers with a cost-effective method of reaching their target market's decision-makers. We seek to increase advertising

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revenues
by introducing existing advertisers to new titles, by attracting new advertisers who target our readership and by developing new reader and advertising categories.

The
advantages of trade publications to advertisers and readers are summarized below:

|Advantages to Advertiser |  | Advantages to Reader                             
|------------------------ |  | -------------------------------------------------
|                        |  | cost effective;                                  
|                        |  | highly targeted audience of qualified readers;   
|                        |  | focused medium; attractive means to introduce new
|                         |  | products;                                        
|                        |  | audited, controlled circulation; and             
|                        |  | editorial 100% focused on target market.         

Marketing Services

We provide a comprehensive set of marketing communications products, services and support geared to a variety of industries' marketing and customer needs. These
services include direct mail and database marketing programs, reprint services, reference books and other services to facilitate our clients' B-to-B marketing and
communications programs. These services are incremental to trade shows and publications and allow our customers to fill in their marketing plans.

Marketing
services are centrally managed, thus allowing our executives to dedicate their activities to high value sales. In addition, our central telesales and product management provide
professional skills to these specialized product offerings. Marketing services revenue accounted for approximately 5% of our revenue in each of 2001, 2002 and 2003.

Internet

In addition to our three product segments, we work with Advanstar.com, a subsidiary of our parent, to use Internet based products and services to complement our
delivery of trade show, publishing and marketing services products to our customers. We use the Internet as a cost-effective method of developing qualifying magazine circulation and to
register trade show and conference attendees. See Item 13. "Certain Relationships and Related Party Transactions-Relationship with Advanstar.com."

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Industry Sectors

We also operate our business by targeting a number of industry sectors in North America, Latin America, Europe and Asia through certain niche markets grouped
together in five core clusters. For financial information relating to Advanstar's operations by geographic area see Note 11 to our consolidated financial statements for the year ended
December 31, 2003. In addition to our five core clusters, we have grouped the industry sectors in which we provide products and services but do not have a significant industry presence into a
"Portfolio" cluster. We believe that by focusing on industries in addition to product segments, we better identify the broad array of our customers' B-to-B marketing
communications needs which our products and services can meet. In addition, we believe our industry focus allows us to cross-sell our products and services effectively and to capture a
larger share of our customers' marketing budgets. In each of our niche markets, many of the same customers advertise in our publications, exhibit at our trade shows and use our marketing services to
reach their buyers. We have expanded our trade show, conference and publication offerings within each cluster through new product introductions and strategic acquisitions, which we believe maximize
our existing marketing and customer service infrastructure and industry expertise.

The
following chart displays our cluster-based integrated revenue model:

GRAPHIC

Business Strategy

Our objective is to increase profitability by solidifying our position as a leading provider of comprehensive one stop B-to-B marketing
communications products and
services in selected industries. In order to achieve this objective, we operate our business based on the following strategies:



We focus on owning and managing businesses that are the leading sources of information for businesses and professionals in specific niches. We believe that our
trade shows and trade publications serve as unique forums for B-to-B communications and provide substantial value to industry participants. Niche markets are often attractive
publishing and trade show opportunities because of the difficulty in reaching industry leaders through general interest publications or broad based expositions. Of our 69 magazines and journals for
which competitive data is available, 68% ranked either #1 or #2 in their respective niche markets in the year ended December 31, 2003. Most of our trade shows and

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conferences
also were among the leading events in their respective markets based upon total square footage.



We organize our business based on the markets served which allows us to provide expertise across all media products within a market. It also allows us to respond
effectively to the market needs of buyers and sellers however they may choose to go to market to reach their customers. We are able to address evolving market needs through multiple means, including:



We seek to create cross-selling opportunities across existing products and services and, as a result of such efforts, seek to maximize our share of each
customer's total marketing budget. We offer customers a range of communications methods to attain their specific B-to-B marketing goals. For example, customers can choose to
benefit from face-to-face meetings at trade shows and conferences, achieve cost effective advertising through controlled circulation trade publications and diversify and expand
revenues through customized marketing services, including Internet advertising and education based programs through web sites owned and operated by our affiliate, Advanstar.com.



We have successfully developed new products within existing industry sectors and will continue to make strategic new product introductions. In 2003, we launched
eight magazines and 11 trade shows in existing industry sectors to fill in our product portfolio. Our launches are generally line extensions or regional expansions of existing product concepts, and,
as a result, such product launches generally require less capital investment and are less risky than major new product introductions.



As we expand further into our existing industry sectors, we explore strategic acquisitions and joint ventures designed to maintain and achieve market leading
positions in particular niche markets. We believe we enhance the value of acquired businesses by (1) integrating acquisitions and joint ventures into our efficient infrastructure,
(2) applying our industry experience and (3) cross-selling new products and services to increase our visibility in a given market. From May 31, 1996 to December 31, 2003,
we completed 37 acquisitions and joint ventures. In 2002, we completed four acquisitions in the automotive, imaging, healthcare, and beauty markets. On October 1, 2003, we acquired the
healthcare industry-specific magazines and related custom project business from The Thomson Corporation and its subsidiaries for $136 million in cash. See Item 5. "Management's Discussion and
Analysis of Financial Condition and Results of Operations-Presentation of Financial Information-Acquisitions and Joint Ventures." Consistent with our strategy since 1996, we are engaged in ongoing
evaluations of potential acquisitions of complementary businesses.

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Industry Sectors

The following is a summary of our products and services by industry sector.



Our Fashion group serves the men's, women's and children's industries. In 2003, we operated in these industry sectors through 14 trade shows. Four trade shows
held concurrently in Las Vegas twice annually constitute the foundation of our apparel market position:



The
following table sets forth information relating to trade shows in our Fashion group in the year ended December 31, 2003. We currently have no publications in this group.



Exhibitions (1)Sector

Number

2003
Net Square
FootageMens (includes Edge)

4

1,196,396Womens

5

600,400Kids

2

73,824Fabric

3

80,370


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We served the Specialty Retail sector through 26 trade shows and 12 publications for the year ended December 31, 2003. This group includes the art, beauty,
entertainment/marketing and motor vehicles sectors.

Key
trade shows and publications include:



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The
following table sets forth information relating to trade shows and magazines in our Specialty Retail cluster in the year ended December 31, 2003:



|                        |  | Exhibitions (1) |  | Magazines (2)
|----------------------- |  | --------------- |  | -------------
|
|Art                     |  | 3               |  | 186,216      
|Beauty                  |  | 2               |  | 173,810      
|Entertainment/Marketing |  | 5               |  | 276,904      
|Motor Vehicle           |  | 16              |  | 1,275,388    

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On
March 12, 2004, we sold our portfolio of art industry-specific trade shows and magazines for a total sales price of $19.5 million in cash, subject to a working capital
adjustment. In total, the portfolio includes three trade shows, with 186,216 aggregate square feet in 2003, and two publications, with 935 aggregate advertising pages in 2003. Total revenue and
contribution margin for the Art group in 2003 was $10.7 million and $2.8 million, respectively.



We serve the Healthcare, Science & Pharmaceutical sector by providing marketing products and services to these three related sectors with 6 trade shows and
38 publications for the year ended December 31, 2003. We serve the healthcare sector in both primary and specialized care areas, such as geriatrics, dermatology, ophthalmology and veterinary
medicine; the science sector in areas such as spectroscopy and liquid and gas chromatography; and the pharmaceutical sector in areas such as research and development, manufacturing, testing and
marketing.

On
October 1, 2003, we acquired a portfolio of healthcare industry-specific magazines and related custom project services from The Thomson Corporation and its subsidiaries for
$136 million in cash. These Thomson healthcare publications and custom project services are targeted at primary and specialty healthcare segments as well as nursing, pharmacy, dental and
veterinary professionals. Specifically, the portfolio is composed of three groups: Medical Economics Communications Group, Dental Products Report Group and Veterinary Healthcare Communications Group.
In total, the portfolio includes 15 magazines, one veterinary tradeshow and conference, and a significant special projects group, which includes custom projects, symposia, and continuing medical
education (CME) programs, which are produced in multiple media formats (print, audio, CD, live events, and on the Internet). Out of the 15 publications, 7 are ranked either #1 or #2 in their fields
based on the number of advertising pages in the year ended December 31, 2003.

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Key
trade shows, conferences and publications include:



Since
closing the acquisition we have integrated the Medical Economics Communications group of publications and projects with our existing portfolio of healthcare publications and
projects into an expanded healthcare portfolio.

The
following table sets forth information relating to trade shows and magazines in our Healthcare, Science & Pharmaceutical group in the year ended December 31, 2003,
including the portfolio of assets we acquired from The Thomson Corporation and its subsidiaries in October, 2003:



|               |  | Exhibitions (1) |  | Magazines (2)
|-------------- |  | --------------- |  | -------------
|
|Healthcare     |  | 6               |  | 137,100      
|Pharmaceutical |  |                |  | N/A          
|Science        |  |                |  | N/A          

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Our Information Technology & Communications group serves the information technology, telecommunications, manufacturing technology and call center
industries. For the year ended December 31, 2003, we operated in these industry sectors through 13 trade shows and 10 publications. We are a very specialized niche company in the information
technology market with focused events in data storage, digital printing and digital media. We have a strong worldwide presence in trade shows and magazines serving the telecommunications industry. We
also serve markets for teleconferencing, web-based collaboration and e-learning, and call centers.

Key
trade shows, conferences and publications include:



The
following table sets forth information relating to magazines in our Information Technology & Communications cluster in the year ended December 31, 2003:



|                       |  | Exhibitions (1) |  | Magazines (2)
|---------------------- |  | --------------- |  | -------------
|
|Call Center/CRM        |  | 5               |  | 106,005      
|Collaborate/e-learning |  | 1               |  | 22,500       
|Information Technology |  | 6               |  | 290,404      
|Telecommunications     |  | 1               |  | 211,552      

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We served the travel and hospitality sector through one trade show and six publications in the year ended December 31, 2003. Our publications for the
travel and hospitality sector provide a strong foundation to launch related trade shows and services as well as to develop custom-publishing products.

Selected
publications include:



The
following table sets forth information relating to trade shows and magazines in our Travel & Hospitality cluster in the year ended December 31, 2003:



|            |  | Exhibitions(1) |  | Magazines(2)
|----------- |  | -------------- |  | ------------
|
|Travel      |  | 1              |  | 62,300      
|Hospitality |  |               |  | N/A         

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We group the balance of our products and services into a Portfolio group charged with maximizing revenue and cash flow opportunities from these disparate
properties. The Portfolio cluster addresses large and attractive market sectors in which we provide selected products and services but do not have a significant presence. Markets currently served
include energy, geospatial, landscaping/pest control, mining, paper, post production and roofing sectors. We deliver our B-to-B marketing communications products and services
to our customers in these industry sectors through 12 publications.

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The
following table sets forth information relating to magazines in our Portfolio cluster in the year ended December 31, 2003:

Portfolio Events and Magazines

|                         |  | Magazines(2)
|------------------------ |  | ------------
|
|Energy                   |  | 1           
|GeoSpatial               |  | 3           
|Landscape / Pest Control |  | 3           
|Mining                   |  | 1           
|Paper                    |  | 2           
|Post production          |  | 1           
|Roofing                  |  | 1           

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Company Operations



The sales cycle for a future trade show typically begins shortly before the current show. Pricing information, preliminary floor plans and exhibitor promotion for
the future show are mailed in advance of the current show so that selling for the future show can begin at the current show. Typically, this "upfront" selling includes floor space reservations with
exhibitors executing a contract and making deposits for the future show. At many of our trade shows, reservations for a large portion of exhibit space for the next event is reserved by the end of the
current event. The sales cycle continues with selling to new exhibitors and collecting the balance of payments due. In general, we require exhibitor payments in full prior to a trade show as a
condition to participation.

In
addition to the sale of exhibit space, we market to exhibitors a wide range of promotional opportunities to raise their visibility at an event. These opportunities include directory
and preview advertising, banners, sponsorships of various functions and a wide variety of other products or services. We also produce related conferences and workshops, which represent the editorial
content for an event and play a crucial strategic role in trade show development. Conferences, workshops and other ancillary forums all stimulate interest in the industry and drive attendance at the
trade show. While show attendance is typically free for qualified attendees, participation in conferences at these shows can be a significant revenue source.

Event
promotion is primarily undertaken through direct mail, trade advertising and direct contact. In those industry sectors for which we also have complementary publications, our
publications play a key role in event promotion by providing lists from circulation files and editorial coverage for the upcoming show. Other industry magazines may also be involved, as the goal of
any event is to represent the entire industry or market. The "show issue" of an industry magazine for a related event is often the biggest issue of the year, as the advertisers want to reinforce their
show presence.

In
operating trade shows and conferences, we function in a capacity similar to a general contractor. Through our central trade show and conference operations, we select and manage
venues, hotels, and

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vendors
for set-up, registration, travel and housing, audio-visual services and other services. In many cases, venue and hotel reservations are made several years in advance, particularly
for primary markets such as New York, Chicago, Las Vegas, Los Angeles and San Francisco. While the production of a show may involve hundreds of workers, most workers are employees of our subcontractor
vendors. We employ very few of the workers on-site.



We operate an efficient publishing infrastructure in the United States and Europe. Our publications generally follow the controlled circulation model and are
distributed free-of-charge to qualified recipients. We build readership and maintain the quality and quantity of our circulation based on delivering high quality, professional
coverage of relevant industry information. Because we offer our advertisers access to a highly-targeted, industry-specific subscriber base with potential buying influence, our advertisers place their
ads in our publications to reach their customers. Most of our magazines are published monthly, although some titles are published weekly or semi-monthly.

We
attract readership and improve the effectiveness of our advertising by maintaining and continuously improving the quality of the editorial content of our publications. Recipients of
our publications are targeted through market research designed to determine the market coverage and purchasing authority desired by prospective advertisers. Based on existing and acquired mail lists,
the targeted recipient is then solicited through promotions offering free subscriptions to the relevant publications. High-quality circulation is achieved when a high percentage of the
circulation list is recently qualified, within one or two years, and the publication is delivered at the direct request of the recipient. Recipients are qualified and re-qualified on a
regular basis through qualification cards included in the publication, various direct mail methods and the Internet.

Our
advertising sales and editorial functions are dispersed throughout North America, Asia, Europe and Brazil. Advertising sales are predominantly conducted by our dedicated sales force.
Editorial content for our publications is either staff-written, contributed or purchased from freelance writers and industry or professional participants in selected markets.

Our
advertising materials and editorial content are integrated in our Duluth, Minnesota and Chester, England production facilities, where layout, ad insertion and output to film is
completed. All printing is
outsourced to vendors in various regions, but printing contracts are negotiated and managed centrally. We purchase paper centrally through a relationship with one of the industry's largest paper
brokers. Paper is shipped directly from the mills to the printers at our request. We maintain our own central U.S. fulfillment operation in Duluth to generate mailing labels and mailing instructions
for the printers. Our production workforce is highly experienced and is based in relatively low-cost locations in Duluth and Chester.

Internet

Our affiliate, Advanstar.com, uses Internet based products and services to complement our delivery of trade show, publishing and marketing services products to
our customers. We also use the Internet as a cost-effective method of developing qualifying magazine circulation and to register trade show and conference attendees.

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Diverse Customer Base

Our customer base has provided us with stable and diverse sources of revenue and cash flow as well as an established foundation from which to further penetrate
existing markets and to develop new markets. We benefit from:



Competition

The markets for our products and services are intensely competitive. The competition is highly fragmented by product and/or service offering and by geography. On
a global level, larger international firms operate in many geographic markets and have broad product offerings in trade shows, conferences, publications and marketing services. In several industries,
such as information technology and healthcare, we compete with large firms with a single-industry focus. Many of these large international and single-industry firms are better capitalized than we are
and have substantially greater financial and other resources than we have.

Within
each particular industry sector, we also compete with a large number of small to medium-sized firms. While most small to medium-sized firms operate in a single geographic market,
in some cases, our competitors operate in several geographic markets. In the trade show and conference segment, we compete with trade associations and, in several international markets, with
exposition hall owners and operators. Trade show and conference competition in each market and country occurs on many levels. The venues and dates of trade shows drive competition. Historically,
successful shows have been held at desirable locations and on desirable dates. Given the availability of alternative venues and the ability to define events for particular market segments, the range
of competition for exhibitor dollars, sponsorships, attendees and conferees is extensive. In the publications segment, we typically have between two and five direct competitors which target the same
industry sector and many indirect competitors which define industries differently than we do and thus may be alternatives for either readers or advertisers.

Intellectual Property

We have developed strong brand awareness for our principal products and services. Accordingly, we consider our trademarks, service marks, copyrights, trade
secrets and similar intellectual property important to our success, and we rely on trademark, service mark, copyright and trade secret laws, as well as licensing and confidentiality agreements, to
protect our intellectual property rights. We generally register our material trademarks and service marks in the United States and in certain other key countries in which these trademarks and service
marks are used. Trademarks and service marks registered in the United States typically require periodic renewals, and we typically obtain these renewals as a routine matter so long as the applicable
trademark and service marks are in use. Effective trademark, service mark and trade secret protection may not be available in every country in which our products and services are available.

15

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Environmental Matters

We are subject to various foreign, federal, state and local environmental protection and health and safety laws and regulations. Accordingly, we incur and will
continue to incur some costs to comply with these laws and regulations. We own or lease real property, and some environmental laws hold current or previous owners or operators of businesses and real
property liable for contamination on, under, or from that property, even if they did not know of and were not responsible for the contamination. In addition, some environmental laws hold companies
liable for the cleanup of landfills or other sites to which they may have sent waste. Based on available information, we do not believe we are responsible or liable for any such environmental
contamination and we do not currently anticipate that the costs of complying with environmental laws and regulations will materially adversely affect us. However, we cannot ensure that we will not
incur material costs or liabilities in the future, due to the discovery of new facts or conditions, releases of hazardous materials, or a change in environmental laws and regulations.

Employees

As of December 31, 2003, we had approximately 1,400 full-time equivalent employees. Of these, approximately 140 employees were located in
Europe, Brazil and Asia with the balance based in the United States. None of our U.S. employees are represented by a labor union. We consider our relationships with our employees to be good.

Financial Information about Geographic Areas

Financial information relating to our operations by geographic area is set forth in Note 11 to our consolidated financial statements included in this
annual report on Form 10-K.

Item 2.PROPERTIES

Properties

We have executive, marketing, sales and editorial offices in several cities in the United States, including Boston, Massachusetts; Chicago and Northfield,
Illinois; Cleveland, Ohio; Iselin, New Jersey and Montvale, New Jersey; Peterborough, New Hampshire; Milford, Connecticut; New York City, New York; Santa Ana and Woodland Hills, California; and
Lenexa, Kansas. In addition, we have offices in São Paulo, Brazil; Hong Kong, China; Essen, Germany; and Chester and London, United Kingdom. Our finance, trade show registration, call
center, circulation, fulfillment, production and other necessary operational support facilities in the United States are located in Duluth, Minnesota.

We
generally lease our offices from third parties. However, we own our offices in Duluth and Cleveland although we have granted mortgages on the Cleveland property to the lenders under
our credit facility and, on a second priority basis, for the benefit of the holders of the second priority senior secured notes. We believe that our properties are in good operating condition and that
suitable additional or alternative space will be available on commercially reasonable terms for future expansion.

Item 3.LEGAL PROCEEDINGS

We are not a party to any legal proceedings other than ordinary course, routine litigation which is not material to our business, financial condition or results
of operations.

Item 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year ended December 31, 2003.

16

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PART II

Item 5.MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

There is no established public trading market for the registrant's common equity.

Item 6.SELECTED FINANCIAL DATA

The following table presents selected consolidated financial data for Advanstar and its predecessor for each of the periods indicated. The selected historical
consolidated financial data for Advanstar's predecessor for the year ended December 31, 1999 and for the period January 1, 2000 through October 11, 2000 has been derived from the
audited consolidated financial statements and notes thereto of the predecessor for those periods, which are not included herein. The consolidated balance sheet data as of December 31, 2000 and
December 31, 2001 and the selected historical consolidated financial data for Advanstar for the period October 12, 2000 through December 31, 2000 have been derived from the
audited consolidated financial statements and the notes thereto of Advanstar which are not included herein. The selected consolidated financial data for Advanstar for the years ended
December 31, 2001, 2002 and 2003 have been derived from Advanstar's audited financial statements and the notes thereto included herein. The combined financial data for the combined year ended
December 31, 2000 has been derived from the audited consolidated financial statements and notes thereto of the predecessor and Advanstar but has not been audited and does not comply with
generally accepted accounting principles. The selected historical consolidated financial data should be read in conjunction with Item 7. "Management's Discussion and Analysis of Financial Condition
and Results of

17

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Operations"
and the consolidated financial statements and notes thereto included elsewhere in this annual report.

|                                                                                                 |                                       | Advanstar |         | Predecessor |  
|------------------------------------------------------------------------------------------------ | ------------------------------------- | --------- | ------- | ----------- | -
|
|
|
|Income Statement Data:                                                                           |                                       |           |         |             |  
|Revenue                                                                                          |                                       | $         | 323,673 |             | $
|Cost of production and selling                                                                   |                                       |           | 201,857 |             |  
|General and administrative expenses                                                              |                                       |           | 34,555  |             |  
|Stock option compensation expense (benefit)(1)                                                   |                                       |           |        |             |  
|Restructuring charge(2)                                                                          |                                       |           | 2,692   |             |  
|Funding of affiliated dot.com company operations                                                 |                                       |           | 1,121   |             |  
|Depreciation and amortization(3)                                                                 |                                       |           | 56,603  |             |  
|                                                                                                 |                                       |           |         |             |  
|Operating income (loss)                                                                          |                                       |           | 26,845  |             |  
|Other income (expense):                                                                          |                                       |           |         |             |  
|                                                                                                 | Interest expense                      |           |         | (58,103     | )
|                                                                                                 | Write-off of deferred financing costs |           |         | (11,324     | )
|                                                                                                 | Other income (expense), net           |           |         | 486         |  
|                                                                                                 |                                       |           |         |             |  
|Income (loss) before income taxes, minority interests and cumulative effect of accounting change |                                       |           | (42,096 | )           |  
|Provision (benefit) for income taxes                                                             |                                       |           | 6,725   |             |  
|Minority interests                                                                               |                                       |           | (627    | )           |  
|                                                                                                 |                                       |           |         |             |  
|Income (loss) before cumulative effect of accounting change                                      |                                       |           | (49,448 | )           |  
|                                                                                                 |                                       |           |         |             |  
|Cumulative effect of accounting change, net of tax and minority interests                        |                                       |           |        |             |  
|                                                                                                 |                                       |           |         |             |  
|Net income (loss)                                                                                |                                       | $         | (49,448 | )           | $
|                                                                                                 |                                       |           |         |             |  
|Cash flows provided by (used in):                                                                |                                       |           |         |             |  
|                                                                                                 | Operating activities                  |           | $       | 45,848      |  
|                                                                                                 | Investing activities                  |           |         | (145,333    | )
|                                                                                                 | Financing activities                  |           |         | 110,236     |  
|Balance sheet data (at end of period):                                                           |                                       |           |         |             |  
|Cash and cash equivalents                                                                        |                                       | $         | 29,274  |             | $
|Working capital(4)                                                                               |                                       |           | (78,351 | )           |  
|Total assets                                                                                     |                                       |           | 985,085 |             |  
|Total debt                                                                                       |                                       |           | 626,069 |             |  
|Total stockholder's equity                                                                       |                                       |           | 209,296 |             |  
|Other Data:                                                                                      |                                       |           |         |             |  
|Capital expenditures                                                                             |                                       | $         | 7,608   |             | $
|Ratio of earnings to fixed charges (5)                                                           |                                       |           |        |             |  

---

18

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Advanstar

Predecessor2003

Year Ended
December 31,
2002

2001

Combined
2000

For the period
from October 12,
2000 through
December 31,
2000

For the period
from January 1,
2000 through
October 11,
2000

Year Ended
December 31,
1999(unaudited)(dollars in thousands)

(dollars in thousands)Reported income (loss) before cumulative effect of accounting change

$
(49,448
)
$
(57,522
)
$
(49,210
)
$
(18,535
)
$
(18,045
)
$
(490
)
$
(585
)Add: goodwill amortization, net of tax








22,738


22,758


7,308


15,450


22,140Adjusted income (loss) before cumulative effect of accounting change

$
(49,448
)
$
(57,522
)
$
(26,472
)
$
4,223

$
(10,737
)
$
14,960

$
21,555Reported net income (loss)

$
(49,448
)
$
(124,339
)
$
(49,762
)
$
(18,535
)
$
(18,045
)
$
(490
)
$
(585
)Add: goodwill amortization, net of tax








22,738


22,758


7,308


15,450


22,140Adjusted net income (loss)

$
(49,448
)
$
(124,339
)
$
(27,024
)
$
4,223

$
(10,737
)
$
14,960

$
21,555


---

19

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Item 7MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our consolidated financial statements, including the notes to those statements, included elsewhere in
this annual report.

This discussion contains forward-looking statements which are neither promises nor guarantees and involve risks and uncertainties. Our actual results may differ
significantly from the results discussed in the forward-looking statements. Factors that might cause those differences include, but are not limited to, those discussed in "Certain Factors Which May
Affect Future Results."

Overview

We are a worldwide provider of integrated B-to-B 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 48%, 52% and 54% of total revenue in 2003, 2002 and 2001, respectively. Trade publications accounted for approximately 47%, 43%
and 41% of total revenue in 2002, 2001 and 2000, respectively, while marketing services accounted for approximately 5% of total revenue in 2003, 2002 and 2001, respectively. As a result of our recent
acquisition of healthcare publications, we expect publication revenue to increase as a percentage of total revenue. Our revenue reaches its highest levels during the first and third quarters of each
year due to the timing of our MAGIC trade shows and our other large trade shows and conferences. Because trade shows and conferences revenue is recognized when a particular event is held, we may
experience fluctuations in quarterly revenue based on the movement of annual trade show dates from one quarter to another.

Trends and Developments

Our business and results of operations in the year ended December 31, 2003 reflect the tentative nature of the economic recovery in the U.S. economy. Our
publishing properties continue to experience encouraging year over year recovery from the media advertising recession across many industry sectors. However, trade advertising for our technology and
travel publications remains depressed. Media advertising from technology companies has not yet reached levels that would indicate a sustained technology recovery is underway. Travel advertising
expenditures remain sluggish in the face of continuing geopolitical uncertainty and difficult economic conditions in the travel industry. Our trade shows and conferences reflect a similar pattern as
publishing but are lagging in the strength and timing of their recovery from the media recession compared with publishing. Trade shows in non-technology sectors were essentially flat year
over year while revenue from technology events remained depressed similar to technology publishing.

20

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Advertising
in many of our markets shows good signs of recovery except for continuing downward pressure in our technology and travel markets. Advertising pages and revenue, across all
industry sectors other than technology, travel and excluding the effect of acquisitions, grew 10.3% and 8.3% respectively over 2002. Our acquisition of the Thomson assets in October 2003 and of Healthcare
Travelerlate in 2002 contributed to this increase. Revenue per page increased approximately 2.9% across our portfolio in 2003 compared with 2002. While we see this positive
trend continuing in 2004, forward visibility on our advertising revenue and pages is limited due to uncertainties related to the rate of recovery of B-to-B media spending. Our
travel publications remain highly sensitive to cutbacks in destination and vacation travel advertising in response to concern over terrorism, further unrest in the Middle East and in other regions of
the world. We do not anticipate significant near term recovery in our technology based publications due to continued uncertainty by our customers as to the pace of a technology spending recovery.

Our
trade show segment continues to lag behind the general economic recovery, which we believe is due to the advance commitments required by our exhibitors. However, our major trade
shows, including our MAGIC events, had increases in both revenue and attendance. Overall, revenue from trade shows and conferences held steady in 2003 across most industry groups with the exception of
our technology sector events. For events other than technology, total square footage was down 1% while revenue increased 5.8% over 2002, primarily on the strength of price increases. For all trade
shows our square footage was down 6.3% while revenue declined 2.2% compared to 2002.

On
October 1, 2003, we acquired a portfolio of healthcare industry magazines and related custom projects business from the Thomson Corporation. The integration of production and
support activities into our Duluth, MN operations center proceeded as planned and was substantially completed by the end of December. We are continuing our planned transition of the organizational
structure and are in the process of upgrading the available sales and marketing tools and procedures. The acquired Thomson properties contributed approximately $20.7 million and
$6.7 million to our fourth quarter publishing revenue and publishing contribution margin, respectively.

Funding of Advanstar.com

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 had 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 2001, there was a significant reduction in the levels of funding by us to Advanstar.com during 2002 and continuing into 2003. We funded approximately $1.1 million in
support of those operations in 2003 compared to approximately $2.4 million in 2002 and $16.6 million in 2001.

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 options between us and Advanstar.com to satisfy the outstanding advances and notes due to us from Advanstar.com. Accordingly, through December 31,
2001 we 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.

21

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In
the first quarter of 2002, management of Advanstar, Inc. began to consider the further consolidation of the activities of Advanstar.com with us, or a merger of Advanstar.com
into us. Consequently, we recorded a first quarter non-cash charge of $37.2 million related to a provision against the outstanding advances and notes due to us from Advanstar.com as
of December 31, 2001.

In
the first quarter of 2002, we began recording the current advances and notes issued for funds advanced to Advanstar.com as an operating expense in our consolidated statement of
operations, as a reflection of the ongoing nature of the operations of Advanstar.com in support of our operations. Net advances and notes included in operating expenses were approximately
$1.1 million in support of those operations in 2003 compared to approximately $2.4 million in 2002 and $16.6 million in 2001.



Acquisitions, Joint Ventures and Divestitures

Between May 31, 1996 and December 31, 2003, we completed 37 acquisitions and joint ventures, four of which were completed in 2001, four in 2002 and
one in 2003.



We
have accounted for our acquisitions under the purchase method of accounting. Accordingly, our results of operations include the effect of these acquisitions from the date of purchase.

On
December 31, 2003, we sold a portfolio of automotive and technology industry-specific trade shows and magazines operated by our U.K. subsidiary for a total sales price of
$2.2 million in cash, subject to a working capital adjustment. Total revenue and contribution margin for these properties in 2003 was $5.8 million and $0.2 million, respectively.

On
March 12, 2004, we sold our portfolio of art industry-specific trade shows and magazines for a total sales price of $19.5 million in cash, subject to a working capital
adjustment. In total, the portfolio included three trade shows, with 186,216 aggregate square feet in 2003, and two publications, with 935 aggregate advertising pages in 2003. Total revenue and
contribution margin for the Art group in 2003 was $10.7 million and $2.8 million, respectively.

22

---



As a result of the acquisition of Advanstar by DLJ Merchant Banking Partners III, L.P. ("DLJMB") and related funds in October 2000, we have, and will
continue to have, significantly higher indebtedness and interest expense than reflected in our historical results of operations prior to the acquisition. In addition, the DLJMB 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, 2002 and 2003 that were significantly higher than that reflected in our previous historical financial information.

During
the first quarter of 2001, we recorded a charge of approximately $4.0 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 the notes to our consolidated financial statements included within this annual report on Form 10-K for further details.



In connection with the adoption of FAS 142, we engaged an appraiser to determine the fair value of each of our reporting units as of January 1,
2002. Based on this valuation, which utilized a discounted cash flow valuation technique, we recorded a goodwill impairment charge of $66.8 million, net of minority interest effect of
$4.1 million, in the first quarter of 2002, attributable primarily to an impairment of the carrying value of goodwill in our trade show segment. The charge is reported as a cumulative effect of
a change in accounting principle in 2002. See Note 3 of the notes to our consolidated financial statements included within this annual report on Form 10-K for further
details.



In September 2003, we consolidated our midtown New York leased office space from two floors to one and sublet the excess space. These actions resulted in a
third quarter restructuring charge of approximately $2.1 million. In December 2003, we consolidated our Chester, U.K. leased office space and vacated two of our four floors, resulting in
a fourth quarter charge of approximately $0.6 million.
These activities included a charge for the present value of future rental payments, net of sublease income, of $2.3 million, and other relocation costs and expenses of $0.4 million. We
will continue to pay facility lease costs, net of sublease income, associated with the previously used facilities through August 2015.



In August 2003, in connection with the issuance of $360.0 million of second priority senior secured notes, we amended our credit facility to permit
the offering and the use of the proceeds thereof, eliminate the leverage ratio covenant and amend certain other covenants contained in the credit facility and reduce the revolving loan commitments
thereunder from $80 million to $60 million. We recorded an expense of $11.3 million in the third quarter of 2003 to reflect the write-off of deferred financing costs
related to the term loans which were repaid with the proceeds of the offering. Our interest expense and cash interest will be higher in future periods as a result of this refinancing. In addition, we
reclassified $1.8 million of deferred losses related to our interest rate collar and swap agreements previously reported as a component of accumulated other comprehensive income into other
expenses in the third quarter of 2003. Gains and losses on the portion of these agreements not designated as hedges of the second priority senior secured floating rate notes at the end of each fiscal
quarter (which

23

---

are
calculated as the net amount payable upon termination at the date of determination) are recognized in current earnings.

In
September 2003, we issued $70 million of second priority senior secured notes and used the net proceeds thereof to repay approximately $12 million of outstanding
borrowings under our revolving credit facility and purchase short-term investments pending completion of the Thomson acquisition. On October 1, 2003, we used $136.0 million
in cash, including $56 million of the net proceeds of the September offering to finance the Thomson acquisition.

Sources of Revenue



The trade shows and conferences segment derives revenue principally from the sale of exhibit space and conference attendance fees generated at its events. In
2003, approximately 82% of our trade shows and conferences revenue was from the sale of exhibit space. Events are generally held on an annual basis in major metropolitan or convention areas such as
New York City and Las Vegas. At many of our trade shows, a portion of exhibit space is reserved as much as a year in advance. The sale of exhibit space is generally impacted by the ongoing 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 consolidated balance sheet as deferred revenue.



The trade publications segment derives revenue principally from the sale of advertising in its B-to-B magazines. Additionally, certain
publications derive revenue from paid subscriptions and custom publishing and projects. 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 generally impacted 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.



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 generally impacted 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 or otherwise delivered.

Components of Expenses



Costs incurred by the trade shows and conferences segment include facility rent, attendee and exhibitor promotion and outsourced services such as registration,
security and set-up. Exhibitors generally contract directly with third parties for on-site services such as electrical and booth set-up.

24

---

Staff
salaries and related payroll expenses are treated as monthly period expenses. All other direct costs are expensed in the month the event occurs.



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 segment.
We outsource the actual printing of our publications. Printing, paper and postage costs are charged to operations at the time of publication issuance. All other direct costs are charged to operations
in the month incurred.



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. All direct costs are expensed in the month incurred.

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 of America. 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 ongoing 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:

Revenue Recognition.We recognize revenue as discussed in the "Sources of Revenue" section above. The balance of deferred
revenue at December 31, 2003 was $49.5 million and $11.4 million for trade shows and trade publications, respectively. On a relative basis, our deferred revenue reaches its
highest levels during the second and fourth quarters of the year largely due to the timing of theMAGICtrade shows and our other large trade shows and
conferences.

Allowance for Doubtful Accounts.We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our
customers to make required payments. The balance of the allowance for doubtful accounts at December 31, 2003 and December 31, 2002 was $1.0 million and $1.0 million,
respectively. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

The
allowance for doubtful accounts is an estimate based on specifically identified accounts as well as general reserves. We evaluate specific accounts where we have information that the
customer may have an inability to meet its financial obligations. In these cases, management uses its judgment, based on the best available facts and an evaluation of the circumstances, and records a
specific reserve for that customer against amounts due to reduce the receivable to the amount that is expected to be collected. These specific reserves are reevaluated and adjusted as additional
information is received that impacts the amount reserved. We also establish a general reserve for all customers based on percentages applied to customer balances depending on the age of the amount
due. This percentage is

25

---

based
on historical collection and write-off experience and varies by geographic region. If circumstances change, our estimates of the recoverability of amounts due us could be reduced or
increased by a material amount. Such a change in estimated recoverability would be accounted for in the period in which the facts that give rise to the change become known.

Deferred Taxes.Pursuant to the requirements of SFAS No. 109, we record a valuation allowance to reduce our deferred tax assets to
the amount that we determine is more likely than not to be realized. At December 31, 2003 we have recorded a valuation allowance to offset the deferred tax benefit associated with all of our
U.S. and foreign net operating loss carryforwards because the realization of these benefits is not considered likely. We have considered future taxable income and ongoing prudent and feasible tax
planning strategies in assessing the need for the valuation allowance. In the event we were to subsequently determine that we would be able to realize our deferred tax assets in the future in excess
of our net recorded amount, a reduction in the valuation allowance would result in an income tax benefit and would increase net income or reduce net loss in the period such determination was made.

Amortization of Intangible Assets.Intangible assets related to trade exhibitor and advertiser lists are amortized using a double-declining
balance method over 6 years and 5 years, respectively. Intangible assets related to tradenames and trade marks are amortized using a straight-line method over
20 years. Intangible assets related to subscriber lists and other intangible assets are amortized using a straight-line method over 3 to 10 years. We amortize intangible
assets on a basis which corresponds to our projections of future cash flows directly related to these intangible assets. The estimates that are included in our projections of future cash flow are
based upon the best available information at the time we determine useful life and amortization methods. A change in circumstances could result in a determination that asset lives should be changed or
that the related assets are impaired and impairment charges to reduce the carrying value of intangible assets may be necessary. The effect of any changes in useful lives or a determination that the
carrying value of an intangible asset is impaired would be accounted for in the period that such determination was made.

Impairment of Long-Lived Assets.We evaluate the carrying value of long-lived assets, including identifiable
intangibles, for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If impairment indicators are present and the estimated future
undiscounted cash flows are less than the carrying value of the assets, the carrying value is reduced to the estimated fair value as measured by the associated discounted cash flows.

In
accordance with the provisions of SFAS No. 142, we evaluate goodwill for impairment using a two-step test based upon a fair value approach. The first step is used
to identify a potential impairment by comparing the carrying value of the net assets of each reporting unit to an estimate of the fair value of each of our reporting units (as defined by SFAS
No. 142), while the second step calculates the amount of impairment, if any. Additionally, goodwill will be tested for impairment between annual tests if an event occurs or circumstances change
that would more likely than not reduce the fair value of an entity below its carrying value. We determine the fair value of our reporting units by application of a discounted cash flow analysis. We
make estimates that are included in our discounted cash flow analyses based upon the best available information at the time that the determinations of fair value are made. If circumstances change, our
estimates of fair value will also change and could result in a determination that additional impairment charges to reduce the carrying value of goodwill are necessary. We engaged an appraiser to
assist us in completing the first step of our annual goodwill impairment test for each of our three reporting units as of July 1, 2003. Based on this first step test, which utilized a
discounted cash flow method, there was no impairment of goodwill indicated.

26

---

Results of Operations



Revenue

Total revenue increased $16.5 million, or 5.4%, to $323.7 million in 2003 from $307.2 million in 2002.

Revenue
from trade shows and conferences declined $3.6 million, or 2.2%, to $155.5 million in 2003 from $159.1 million in 2002. Total trade shows square footage of
4.7 million square feet declined approximately 6.3% from 2002 while price per square foot increased 4.5%. The decline in revenue was
attributable primarily to the performance of our events in the technology sector. Revenue from our events serving the technology sector declined $10.5 million, or 26.5%, from 2002, including
the discontinuation of seven events held in 2002. Technology events made up approximately 13% of our total square footage and 19% of total trade show revenue in 2003. Total trade show square footage
for non-technology events was essentially flat, declining 1.0%, while revenue increased 5.8% in 2003 over 2002. Revenue for our MAGIC events increased approximately 4.2% over 2002. Strong
performances also came from our trade shows serving the art, beauty, home entertainment, licensing, travel and powersports markets.

Revenue
from publications increased $21.1 million, or 16.1%, to $152.2 million in 2003 from $131.1 million in 2002. The acquisitions of the Thomson healthcare
publications in October of 2003 andHealthcare Travelerin October of 2002 resulted in a revenue increase of approximately $23.8 million between
2002 and 2003. Publications in a wide cross section of our markets continued their solid recovery from the declines experienced in 2002, particularly those serving the beauty, healthcare, home
entertainment, licensing, pharmaceutical, science, golf/landscape, veterinary and automotive markets. Revenue from technology and travel publications declined $10.3 million, or 26%, from 2002
as advertising pages continued to decline in these markets.

Revenue
from marketing services and other declined $1.0 million, or 5.8%, to $16.0 million in 2003 from $17.0 million in 2002 primarily due to low demand for
classified and recruitment advertising, which we believe reflects low employment growth needs in response to the tentative nature of the economic recovery in their industries.

Cost of production and selling

Cost of production and selling expenses increased $14.2 million, or 7.6%, to $201.9 million in 2003 from $187.7 million in 2002.

Expenses
of trade shows and conferences increased $3.3 million, or 4.2%, to $81.5 million in 2003 from $78.2 million in 2002. This increase is primarily due to the
impact of a $2.8 million insurance recovery received in the last half of 2002 and reported as a reduction of our 2002 costs, and a $1.8 million fourth quarter charge in 2003 related to
our decision to cancel certain venue space arrangements. We also invested in additional development staff and show programs for our MAGIC events to expand our product categories and continue to build
the attendee base. These increases were partially offset by cost savings associated with canceling certain events in 2003.

Expenses
of trade publications increased $10.4 million, or 10.9%, to $105.1 million in 2003 from $94.7 million in 2002. This increase is attributable to additional
costs of $14.1 million associated with our acquisition of the Thomson healthcare properties in October 2003 and ofHealthcare Traveler,in
October 2002. The increased operating costs were partially offset by reductions in sales, editorial and circulation costs across our publications attributable to efforts to improve processes
and monitor cost structures and activity levels. Printing prices remained flat in 2003, however we have negotiated lower printing rates for 2004 due to the increased volume resulting from the acquired
Thomson publications.

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Postage
costs increased in 2003 due to a 15% average increase in postage rates implemented in June 2002. Postal rates remained unchanged throughout the balance of 2002 and 2003. Paper prices
increased on average 3% to 5% at the end of both the first and third quarters of 2003. Our overall paper costs decreased as we aggressively manage our inventories, folio sizes and paper stock in an
effort to minimize the impact of paper price fluctuations.

Expenses
of marketing services and other declined $0.1 million, or 1.7%, to $9.4 million in 2003 from $9.5 million in 2002.

Department
and support costs of $5.9 million increased $0.7 million from 2002 due to increased departmental production staff related to the Thomson acquisition.

General and administrative expenses

General and administrative expenses declined $0.4 million, or 1.3%, to $34.6 million in 2003 from $35.0 million in 2002. The decline is
principally due to cost savings as a result of lower bad debt expense and a reduction in credit card processing fees, partially offset by increases in staffing and occupancy costs related to the
Thomson acquisition.

Restructuring charge

In September 2003, we consolidated our midtown New York leased office space from two floors to one and sublet the excess space. These actions resulted in a
third quarter restructuring charge of approximately $2.1 million. In December 2003, we consolidated our Chester, U.K. leased office space and vacated two of our four floors, resulting in
a fourth quarter charge of approximately $0.6 million. These activities included a charge for the present value of future rental payments, net of sublease income, of $2.3 million, and
other relocation costs and expenses of $0.4 million. We will continue to pay
facility lease costs, net of sublease income, associated with the previously used facilities through August 2015.

Funding of affiliated dot.com company operations

Advanstar.com, Inc. ("Advanstar.com"), an affiliate of ours, operates our event and publication-related web sites and develops certain enhanced web
opportunities to serve our customers in selected industries. We provide Advanstar.com with certain administrative support services and charge for these services based on a general overhead charge. In
addition, we share selected sales, editorial, marketing and production staff with Advanstar.com. 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 us with support on its web sites for trade publications and trade shows.

In
2002 we began recording the advances and notes issued to Advanstar.com during the current year as an operating expense in our consolidated statement of operations, to reflect the
ongoing nature of the operations of Advanstar.com in support of our operations. Net advances and notes charged to our operations in 2003 were reduced $1.3 million from $2.4 million in
2002 to $1.1 million in 2003. As a result of the reorganization and redirection of the activities of Advanstar.com during 2001, there was a significant reduction in the levels of funding by us
to Advanstar.com during 2002 and continuing into 2003.

Depreciation and amortization

Depreciation and amortization expense declined approximately $12.5 million to $56.6 million in 2003 from $69.1 million in 2002 primarily due
to the effect of the double declining balance method of accelerated amortization on our exhibitor and advertiser lists partially offset by an additional

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$6.2 million
of amortization expense related to the assets acquired in our October 2003 acquisition of the Thomson publications.

Interest expense

Interest expense increased $6.9 million, or 13.5%, to $58.1 million in 2003 from $51.2 million in 2002 due to an increase in our
weighted-average debt outstanding of approximately $10.5 million and an increase in our weighted average interest rate of approximately 100 basis points as a result of our financings discussed
below.

In
August 2003, we issued $360 million of Senior Secured Notes and used the net proceeds to repay and terminate all outstanding term A loans under our credit facility and
all but $25 million of the outstanding term B loans and a portion of our revolving credit borrowings under our credit facility. In September 2003, we issued $70 million of the
Senior Secured Notes to finance, in part, the Thomson acquisition. Our interest expense will be higher in future periods as a result of these financings. See "Presentation of Financial
InformationPrivate Placement of Second Priority Senior Secured Notes and Refinancing of Credit Facility".

At
December 31, 2003, approximately $462.4 million, or 73.9% of our total debt is at a fixed rate with the balance subject to interest rate fluctuations. A 100 basis point
increase in interest rates on our current variable rate debt would result in an increase in annual interest expense of $1.6 million. We previously entered into an interest rate collar agreement
to hedge our interest rate risk on these variable rate borrowings. The interest rate collar agreement had a notional amount of $150.0 million, and expired in February 2004. We currently
have no plans to renew this interest rate collar agreement or otherwise hedge our remaining floating rate debt.

Write-off of Deferred Financing Costs

We recorded an expense of $11.3 million in the third quarter of 2003 to reflect the write-off of deferred financing costs related to the term
loans which were repaid with the proceeds of the August senior secured notes offering and the reduction in the revolving loan commitment. See "Presentation of Financial InformationPrivate
Placement of Second Priority Senior Secured Notes and Refinancing of Credit Facility".

Other income (expense), net

Other income declined $2.4 million to $0.5 million in 2003 from $2.9 million in 2002. We recorded foreign exchange losses of
$0.3 million in 2003 resulting primarily from the strengthening of the Brazilian Real against the U.S. dollar compared to foreign exchange gains of $1.8 million recorded in 2002 as the
Brazilian Real weakened against the U.S. dollar. We also recorded a $0.6 million loss on the sale of
certain of our U.K. publishing and trade show assets. These declines were partially offset by a $0.5 million increase in non-cash gains related to our interest rate hedging
activities.

Provision (benefit) for income taxes

The provision for income taxes was $6.7 million in 2003 compared to an income tax benefit of $15.5 million in 2002. The 2003 provision is related to
a basis difference resulting from goodwill for tax purposes being less than the carrying value of goodwill for financial reporting purposes. We recorded no income tax benefit related to the net
operating losses we generated during 2003 because we have established a valuation allowance to offset any related tax benefits, due to uncertainty about realization of these benefits. Our tax benefit
in 2002 was recorded at a rate less than the applicable statutory rates primarily because we recorded a valuation allowance to offset the portion of the benefits associated with net operating losses
we generated in 2002, for which realization was not likely.

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Cumulative effect of accounting change

In the first quarter of 2002, in connection with the adoption of SFAS 142, "Goodwill and Other Intangible Assets", we recorded a goodwill impairment charge
of $66.8 million, net of minority interest effect of $4.1 million, attributable to an impairment of the carrying value of goodwill in our tradeshow operating segment which management
believes resulted from a slow-down in the economy and its associated impact on the tradeshow business in general, and on our technology events in particular. The net charge of
$66.8 million was reported as a cumulative effect of a change in accounting principle. There was no income tax effect associated with this impairment charge.



Revenue

Total revenue declined $39.8 million, or 11.5%, to $307.2 million in 2002 from $347.0 million in 2001.

Revenue
from trade shows and conferences declined $27.2 million, or 14.6% to $159.1 million in 2002 from $186.3 million in 2001. Our trade shows had
5.1 million square feet of exhibit space, a declined of approximately 13.6% from 2001. This decline occurred across most of the sectors in which we held events, however, it was concentrated in
the technology, fashion and art sectors. The technology sector continues to suffer from the overall curtailment of spending in technology markets, which impacts marketing spending by our customers.
Our fashion sector was impacted by a difficult apparel retail business environment and the impact of the terrorist attack of September 11, 2001 on exhibiting companies and attendance at our
February MAGIC events. Attendance at our August MAGIC events increased significantly over the spring events and MAGIC remains the major fashion and apparel event in the industry with over 850,000
square feet of exhibit space. The art sector is particularly subject to economic downturns due to the discretionary purchasing nature of its product. We also held fewer events in several of our
markets, including the IT markets in the U.S., Europe and Brazil and the art
market. These declines were partially offset by revenue from ourAIIMacquisition and several product launches.

Trade
publications and related marketing services revenue declined $12.6 million, or 7.9% to $148.1 million in 2002 from $160.7 million last year. Advertising pages
declined approximately 2.2% and revenue per page declined approximately 6.4% across our portfolio, both principally due to adverse economic conditions. The page decline was concentrated in our
technology and travel sectors. Advertising pages increased 4.4% across all sectors other than technology and travel, primarily due to market share gains, resulting in a 1.6% revenue increase in these
other sectors. The overall decline in revenue was partially offset by the acquisition late in the year ofHealthcare Travelerand several new
publication launches in our pharmaceutical market.

Cost of production and selling

Cost of production and selling expenses declined $32.3 million, or 14.7%, to $187.7 million in 2002 from $220.0 million in 2001.

Expenses
of trade shows and conferences declined $21.1 million, or 21.3%, to $78.2 million in 2002 from $99.3 million in 2001. The shortfall in revenue for the
period was substantially mitigated by cost savings associated with canceling certain events in 2002 and by our continuing actions to reduce our cost structure in response to lower revenues in this
current economic downturn. Notwithstanding our cost management actions, in 2002 we made strategic investments in our MAGIC events and other key trade shows which we believe will strengthen the events
and position them for long term growth as the economy recovers. In 2002, we also received an insurance recovery of $2.8 million in the third quarter

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related
to losses resulting from the terrorist attack of September 11, 2001 that are reported as a reduction of our 2002 costs.

Expenses
of trade publications and marketing services declined $11.2 million, or 9.3%, to $109.5 million in 2002 from $120.7 million in 2001. Revenue reductions were
addressed by cost reduction programs including cost reductions in circulation, sales promotion, staffing and a 14% reduction in paper costs. At the same time, we restructured our sales and editorial
teams using metrics-based productivity measures. We believe these measures have enabled our sales and editorial teams to increase efficiency and deepen our penetration of our customer base. Operating
costs ofHealthcare Traveler,acquired in October 2002, and an increase in sales staff resources dedicated to developing our small space
advertiser page opportunities also served to partially offset the overall decline in operating expenses of trade publications and marketing services.

General and administrative expenses

General and administrative expenses declined $0.7 million, or 1.9% to $35.0 million in 2002 from $35.7 million in 2001. This decrease was
primarily attributable to our ongoing cost reduction programs including reductions in travel and other operating costs, and reorganization of certain support functions and processes.

Depreciation and amortization

Depreciation and amortization expense declined approximately $25.2 million to $69.1 million in 2002 from $94.3 million in 2001 primarily due
to the adoption in January 2002 of SFAS No. 142, "Goodwill and Other Intangible Assets", and the effect of the double declining balance method of accelerated amortization on our
exhibitor and advertiser lists, partially offset by additional amortization related to acquisitions and fixed asset additions. Upon adoption of SFAS No. 142, we discontinued the amortization of
goodwill. Goodwill amortization expense in 2001 was $27.7 million.

Interest expense

Net interest expense declined $4.3 million, or 7.7%, to $51.2 million in 2002 from $55.5 million in 2001 due to a decrease in our weighted
average interest rate of approximately 1.8%, partially offset by an increase in our weighted-average debt outstanding of approximately $3.5 million. 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.

Approximately
$164.8 million of our total debt is at a fixed rate through coupon rates on our senior subordinated notes with an additional $150.0 million covered by our
interest rate protection agreements.

Write-off of Deferred Financing Costs

We recorded an expense of $4.0 million in the first quarter of 2001 in connection with the repayment of our then outstanding 9.25% senior subordinated
notes and the write-off of deferred financing fees related to our bridge facility.

Other income (expense), net

Other income increased $2.1 million to $2.9 million in 2002 from $0.8 million in 2001. This increase was primarily a result of an increase in
non-cash gains related to our foreign currency, interest rate hedging activities and foreign exchange gains.

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Provision (benefit) for income taxes

We recorded a tax benefit of approximately $15.5 million in 2002 compared to a tax benefit of approximately $12.6 million in 2001. We reduced our
effective tax rate in 2002 as a result of establishing a valuation allowance to offset our net deferred tax assets due to uncertainty about ultimate realization. At December 31, 2001 we had a
net deferred tax liability. At that time we had established a valuation allowance to offset the potential benefits related to our net operating loss carryforwards in foreign jurisdictions. At
December 31, 2002, due to the goodwill impairment charge recorded in 2002 and the accelerated amortization of intangible assets for financial reporting purposes, we had a net deferred tax asset
in the U.S tax jurisdiction. We established a valuation allowance to offset all of these net deferred tax assets due to uncertainty about their ultimate realization.

Cumulative effect of accounting change

In connection with the adoption of FAS 142, "Goodwill and Other Intangible Assets", we recorded a goodwill impairment charge of $66.8 million, net
of minority interest effect of $4.1 million, in the first quarter of 2002, attributable primarily to an impairment of the carrying value of goodwill related to the Acquisition. In 2001, in
connection with the adoption of SFAS 133, "Accounting for Derivative Instruments and Hedging Activities", we recorded a charge of $0.6 million.

Liquidity and Capital Resources

Our principal sources of liquidity have been, and are expected to be, cash flow from operations and borrowings under our credit facility. Our principal uses of
cash have been, and are expected to be, the
debt service requirements of our indebtedness described below, capital expenditures, investments in our publications and trade shows and strategic acquisitions.

Debt Service.

As of December 31, 2003, we had total indebtedness of $626.1 million and approximately $49.9 million of borrowings available under our
revolving credit facility. Our principal debt obligations are described below.

Credit Facility.Our credit facility consists of a $60.0 million revolving credit facility and $25.0 million
outstanding under the Term Loan B facility. The revolving credit facility will terminate in April 2007 and the Term Loan B matures in October 2008. Borrowings under the credit facility
generally bear interest based on a margin over, at our option, the base rate or LIBOR. The applicable margin for revolving credit loans varies based upon our ratio of consolidated debt to EBITDA, as
defined in the credit facility, and is currently 3.75% over LIBOR and 2.50% over the base rate. The applicable margin for the Term Loan B varies based upon the rating assigned by S&P and Moody's to
our credit facility and is currently 4.50% over LIBOR and 3.25% over the base rate. Our obligations under the credit facility are guaranteed by Advanstar Holdings Corp. ("Advanstar Holdings"), our
ultimate parent company, Advanstar, Inc., our direct parent company, and all our existing and future domestic subsidiaries and are collateralized 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 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. Our credit facility contains restrictive covenants which
require us to, among other things, maintain a minimum fixed charge coverage ratio (as defined in the credit facility documents) as of the end of each fiscal quarter. Although there can be no
assurance, we believe, based on our anticipated

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performance
and expected economic conditions, that we will be able to comply with the amended financial covenant contained in the credit facility in 2004.

Second Priority Senior Secured Notes.Our $130 million of floating rate notes mature in 2008 and our
$300 million of fixed rate notes mature in 2010. The notes of each series are guaranteed by each of our existing and future domestic restricted subsidiaries and collateralized by
second-priority liens on the assets collateralizing our credit facility (other than certain subsidiary stock and assets of our parent companies). The fixed rate notes bear interest at an annual rate
of 10.75% and the floating rate notes bear interest at an annual rate equal to the three-month LIBOR, which is reset quarterly, plus 7.50%. Interest on the fixed rate notes is payable
semi-annually in cash and interest on the floating rate notes, along with amortization of 0.25% of the principal of such floating rate notes, is
payable quarterly in cash. The notes contain restrictive covenants that, among other things, limit our ability to incur debt, pay dividends and make investments.

Senior Subordinated Notes.Our $160 million 12% senior subordinated 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 restrictive covenants that, among other things, limit
our ability to incur debt, pay dividends and make investments.

Parent Company Notes.Our parent, Advanstar, Inc., issued 15% senior discount notes due October 2011 with a
principal amount at maturity of $171.8 million. These discount notes do not require cash interest payments until 2006 and contain restrictive covenants that, among other things, limit the
ability of Advanstar, Inc. and its subsidiaries (including us) to incur debt, pay dividends and make investments. Neither we nor any of our subsidiaries have guaranteed the discount notes.
Advanstar, Inc., however, is a holding company and its ability to pay interest on these discount notes will be dependent upon the receipt of dividends from its subsidiaries, principally
Advanstar. However, the terms of our borrowing arrangements significantly restrict our ability to pay dividends to Advanstar, Inc. and Advanstar, Inc.'s failure to pay these notes would
be a default under our credit facility.

Contractual and contingent obligations.Our contractual obligations (excluding accounts payable and accrued expenses), as of
December 31, 2003 are as set forth below (in millions):

|                                   |  | Payments Due By Period
|---------------------------------- |  | ----------------------
|
|Indebtedness                       |  | $                     
|Interest on indebtedness           |  |                       
|Operating lease obligations        |  |                       
|                                   |  |                       
|Total Contractual Cash Obligations |  | $                     
|                                   |  |                       

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We have no material capital lease obligations or purchase obligations. Our contingent obligations are primarily composed of $2.1 million of
letters of credit and our interest rate and foreign currency derivatives discussed more fully below in Item 7A. "Qualitative and Quantitative Disclosure About Market Risk."

Off-Balance Sheet Arrangements.

We have no material off-balance sheet arrangements.

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Sources and Uses of Funds

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.

On
a relative basis, our revenue reaches its highest levels during the first and third quarters of the year largely due to the timing of the MAGICtrade shows and our other large trade shows and
conferences. This seasonality, when combined with the shift in the timing of when events take place
from year to year, may have a significant effect on our quarterly deferred revenue and working capital balances.

We
anticipate that our operating cash flow, together with borrowings under the credit facility (assuming continued compliance with the covenants contained therein or a modification
thereof) and other future financings and refinancings, 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.



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 increased $21.6 million to $45.8 million in 2003
compared to $24.3 million in 2002. Non-cash charges including a write-off of deferred financing costs of $11.3 million, depreciation and amortization expense of
$56.6 million, deferred income taxes of $7.0 million, other non-cash charges totaling $4.5 million and changes in operating assets and liabilities of
$15.9 million reduced the cash effect of the 2003 net loss of $49.4 million. The increase in cash generated from changes in our operating assets and liabilities is due largely to a delay
in payments on accounts payable to 2004, accelerated collections on accounts receivable and increased collections of customer advance deposits related to future trade shows. Net cash provided by
operations totaled $24.3 million in 2002 compared to $41.8 million in 2001. Non-cash charges including a provision for notes and advances
from our affiliated dot.com company of $37.2 million, transitional goodwill impairment charge of $66.8 million, depreciation and amortization expense of $69.1 million and other
non-cash charges of $3.6 million, offset by a deferred tax benefit of $16.6 million and changes in our operating assets and liabilities of $11.5 million reduced the
cash effect of the 2002 net loss of $124.3 million.

Cash flows used in investing activities.Net cash used in investing activities increased $114.1 million to $145.3 million in
2003, from $31.2 million in 2002. This increase was principally due to the acquisitions of the Thomson healthcare publications in October of 2003.

We
incurred capital expenses of $7.6 million, $7.2 million, and $7.9 million in 2003, 2002 and 2001, respectively. We anticipate that we will spend approximately
$7.5 million on capital expenditures in 2004. The majority of these expenditures are related to expansions and enhancements to our IT and communications infrastructure and management and
operating group information systems. We believe

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that
this amount of capital expenditure will be adequate to grow our business according to our business strategy and to maintain the key trade shows, publications and business of our continuing
operations.

Cash
used for acquisitions in 2003 increased $113.8 million relative to 2002 due to the acquisition of the Thomson healthcare publications. 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 covenants in our debt
instruments. Consistent with our longstanding strategy, we continue to pursue potential acquisitions of complementary businesses.

Cash flows from financing activities.Net cash flows provided by financing activities increased $125.6 million to
$110.2 million in 2003 from 2002. In August 2003, we issued $360 million of second priority senior secured notes used to repay and terminate all outstanding term A loans under our
credit facility and all but $25 million of the outstanding term B loans and a portion of our revolving credit borrowings under our credit facility. In September 2003 we issued an
additional $70 million of second priority senior secured notes and received $60.0 million in equity contributions from our parent company to finance the acquisition of the Thomson
healthcare publications in October 2003. Fees paid to our senior lenders for the amendment to our credit facility in April 2003 were $3.9 million, compared to fees paid for the
amendment in March 2002 of $1.8 million. We also paid fees of $13.1 million in connection with the second priority senior secured notes offerings in August and
September 2003.



In January 2003, the Financial Accounting Standards Board ("FASB") issued Interpretation No. 46,Consolidation of Variable
Interest Entities, which addressed accounting for special-purpose and variable interest entities. This interpretation was effective for financial statements issued after
December 31, 2002. In September 2003, the FASB issued a Staff Position to allow a deferment of the effective date to the end of the first interim or annual period ending after
December 15, 2003, if certain conditions were met. In December 2003, the FASB issued Interpretation No. 46R,Consolidation of Variable Interest
Entities, which addresses accounting for special-purpose and variable interest entities and which superseded Interpretation No. 46. The provisions of Interpretation
No. 46R are effective for the Company in the first quarter of 2005. Specifically, based upon the Company's preliminary analysis, the Company believes that it will be required to consolidate the
operations of Advanstar.com effective January 1, 2005. If the Company consolidates Advanstar.com, management believes the effect of adoption will be to reduce the amount of Advanstar.com losses
included in the Company's operating results. The Company does not expect this consolidation to have a material effect on its financial position, results of operations or cash flows.

In
May 2002, the FASB issued SFAS No. 145,Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections. SFAS No. 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. SFAS No. 145 also rescinds FASB Statement No. 44,Accounting for Intangible Assets of Motor
Carriers. SFAS No. 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. SFAS No. 145 also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their
applicability under changed conditions. The Company adopted SFAS No. 145 effective January 1, 2003. The adoption of SFAS No. 145 resulted in reclassification of the 2001
extraordinary item, net of income tax, into other income (expense). The effect of this reclassification was to increase the (loss) income before income taxes, minority interests, and

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cumulative
effect of accounting change by $4.0 million and to increase the income tax benefit of $1.5 million. This reclassification had no effect on the previously reported 2001 net
loss.

Certain Factors Which May Affect Future Results

Trade show exhibit space and ad pages declined significantly in 2001, 2002 and 2003 as a result of the economic slowdown in the United States and the September 11, 2001
terrorist attacks, and this trend may continue

Our customers typically reduce their marketing and advertising budgets during a general economic downturn or a recession in the United States or in any other
market where we conduct a significant amount of business. The longer a recession or economic downturn continues, the more likely it becomes that our customers may significantly reduce their marketing
and advertising budgets. Any material decrease in marketing budgets could reduce the demand for exhibition space and also reduce attendance at our trade shows and conferences. In addition, any
material decrease in advertising budgets could reduce the demand for advertising space in our publications. As a result, our revenue and our cash flow from operations could decrease significantly. In
addition, our integrated marketing strategy could be materially adversely affected if advertising revenue cannot support one or more of our important publications or if declines in our customers'
marketing and advertising budgets require us to discontinue one or more of our important trade shows or conferences.

Our
business and results of operations in 2001, 2002 and 2003 were significantly impacted by the downturn in the U.S. economy, particularly in our Information Technology &
Communications cluster and Travel & Hospitality cluster, which together accounted for approximately 18.9% of our revenue in 2003 and 12.3% of our contribution margin. Our future results will
continue to be affected if the economic slowdown continues. We expect any improvement in the performance of our trade shows and conferences to lag behind any general economic recovery, just as it
lagged behind the downturn in the economy going into the recession beginning in late 2000. The events of September 11, 2001 also significantly impacted our results in those periods, including
cancellations in ad pages, particularly in our travel industry publications, and cancellations of exhibitor participation in several of our events in the quarters following September 11, 2001.

Further
terrorist attacks and continued geopolitical concern (including conflict in the Middle East) may significantly affect our future results of operations or financial condition,
whether as a result of (1) reduced attendance at, or curtailment or cancellation of, trade shows due to travel fears, (2) further reduction in economic activity and a related reduction
in marketing expenditures on publications or trade shows, or (3) other circumstances that could result from these or subsequent attacks.

We depend on securing desirable dates and locations for our trade shows and conferences, which we may not be able to secure

The date and location of a trade show or a conference can impact its profitability and prospects. The market for desirable dates and locations is highly
competitive. If we cannot secure desirable dates and locations for our trade shows and conferences, their profitability and future prospects would suffer, and our financial condition and results of
operations would be materially adversely affected. In general, we maintain multi-year reservations for our trade shows and conferences. Consistent with industry practice, we do not pay for
these reservations, and these reservations are not binding on the facility owners until we execute a contract with the owner. We typically sign contracts that guarantee the right to venues or dates
for only one year. Therefore, our multi-year reservations may not lead to binding contracts with facility owners. In addition, because trade shows and conferences are held on
pre-scheduled dates at specific locations, the success of a particular trade show or conference depends upon events outside of our control, such as natural catastrophes, labor strikes and
transportation shutdowns.

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A significant portion of our revenue and contribution before general and administrative expenses is generated from our MAGIC trade shows, so any decline in the performance of
these shows would reduce our revenues and operating income

For the year ended December 31, 2003, our MAGIC trade shows represented approximately 19.7% of our total revenue and approximately 32.6% of contribution
margin (defined as revenue less cost of production and selling, editorial and circulation costs). We expect that the MAGIC trade shows will continue to represent a significant portion of our overall
revenue and contribution margin in the future. Therefore, a significant decline in the performance of one or both of the MAGIC trade shows, typically held in the first and third quarters, could have a
material adverse effect on our financial condition and results of operations. For example, MAGIC trade shows' performance in 2003 was adversely affected by a difficult apparel market (which has also
affected our other apparel and fashion shows).

As a result of the Thomson acquisition, we derive significant revenue from our healthcare cluster, which is dependent upon pharmaceutical marketing budgets

As a result of the Thomson acquisition we expect the percentage of revenues from our healthcare sector, which accounted for 18% of our revenues in 2003, to
increase significantly. A substantial portion of the advertising in the healthcare sector is by pharmaceutical companies. As a result, any material reduction in marketing activities by pharmaceutical
companies, which could occur due to general
economic conditions or factors specific to the industry, including a continued reduction in new drug introductions, a shift in marketing expenditures by pharmaceutical companies to sources other than
publications (which shift has occurred to some extent in the last several years) and any future governmental regulation such as price controls or types of advertising restrictions, could have a
material adverse effect on our results.

Any significant increase in paper or postage costs would cause our expenses to increase significantly

Because of our print products, direct mail solicitations and product distributions, we incur substantial costs for paper and postage. We do not use forward
contracts to purchase paper, and therefore are not protected against fluctuations in paper prices. In general, we use the U.S. Postal Service to distribute our print products and mailings. U.S. Postal
Service rates increase periodically. If we cannot pass increased paper and postage costs through to our customers, our financial condition and results of operations could be materially adversely
affected.

The market for our products and services is intensely competitive

The market for our products and services is intensely competitive. The competition is highly fragmented by product offering and by geography. On a global level,
larger international firms operate in many geographic markets and have broad product offerings in trade shows, conferences, publications and marketing services. In several industries, such as
information technology and healthcare, we compete with large firms with a single-industry focus. Many of these large international and single-industry firms are better capitalized than we are and have
substantially greater financial and other resources than we do.

Within
each particular industry sector, we also compete with a large number of small to medium-sized firms. While most small to medium-sized firms operate in a single geographic market,
in some cases, our competitors operate in several geographic markets. Our trade shows and conferences compete with trade associations and, in several international markets, with exposition hall owners
and operators. Our publications typically have between two and five direct competitors that target the same industry sector, and we also have many indirect competitors that define niche markets
differently than we do and thus may provide alternatives for readers and/or advertisers.

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We depend in part on new product introductions, and the process of researching, developing, launching and establishing profitability for a new event or publication is
inherently risky and costly

Our success depends in part upon our ability to monitor rapidly changing market trends and to adapt our events and publications to meet the evolving needs of
existing and emerging target audiences. Our future success will depend in part on our ability to continue to adapt our existing events and publications and to offer new events and publications by
addressing the needs of specific audience groups within our target markets. The process of researching, developing, launching and establishing profitability for a new event or publication is
inherently risky and costly. We generally incur initial operating losses when we introduce new events and publications. Our efforts to introduce new events or publications may not ultimately be
successful or profitable. In addition, costs related to the development of new events and publications are accounted for as expenses, so our year-to-year results may be
materially adversely affected by the number and timing of new product launches.

Our growth strategy of identifying and consummating acquisitions entails integration and financing risk

We intend to continue to grow in part through strategic acquisitions and joint ventures. This growth strategy entails risks inherent in identifying desirable
acquisition candidates, in integrating the operations of acquired businesses into our existing operations and risks relating to potential unknown liabilities associated with acquired businesses. In
addition, we may not be able to finance the acquisition of a desirable candidate or to pay as much as our competitors because of our leveraged financial condition or general economic conditions.
Difficulties that we may encounter in integrating the operations of acquired businesses, including the asset portfolio we purchased from Thomson, could have a material adverse effect on our results of
operations and financial condition. Moreover, we may not realize any of the anticipated benefits of an acquisition, and integration costs may exceed anticipated amounts. For example, we expect
synergies in connection with the Thomson acquisition but we may not be able to achieve them. In addition, while we believe that we will be able to stop the decline in operating results of the assets
acquired from Thomson, we may not be able to do so, which could substantially reduce the benefits of the Thomson acquisition and have a material adverse effect on our expected results of operations
and financial condition.

We depend on our senior management team, and we do not have employment contracts for many of our senior managers

We benefit substantially from the leadership and experience of members of our senior management team and depend on their continued services to successfully
implement our business strategy. The loss of any member of our senior management team or other key employee could materially adversely affect our financial condition and results of operations.
Although we have entered into employment agreements with Mr. Loggia, Mr. Krakoff and Mr. Alic, we do not have employment contracts with most
other members of our senior management team or other key employees. We cannot be certain that we will continue to retain the executives' services, or the services of other key personnel, in the
future. Moreover, we may not be able to attract and retain other qualified personnel in the future. We do not currently maintain key-man life insurance policies on any member of our senior
management team or other key employees.

Our international operations exposes us to various risks associated with international operations

We currently maintain offices in Brazil, the United Kingdom, Germany and Hong Kong and also hold an important show in France. International operations accounted
for approximately 7% of our total revenue in 2003. International operations and expansion involve numerous risks, such as:



38

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The
impact of any of these risks could materially adversely affect our future international operations and our financial condition and results of operations.

Current geopolitical conditions and the continuing threat of domestic and international terrorist attacks may adversely impact our results

International geopolitical conditions, exacerbated by the war in Iraq and the escalating tensions elsewhere have contributed to an uncertain political and
economic climate, both in the United States and globally, which may affect our ability to generate revenue on a predictable basis. In particular, our travel publications and trade shows remain
sensitive to cutbacks in trade advertising directed to destination and vacation travel in response to concerns over terrorism and possible further conflicts in the Middle East and in other regions of
the world. In addition, terrorist attacks internationally and the threat of future terrorist attacks both domestically and internationally have negatively impacted an already weakened worldwide
economy. Customers have deferred and may continue to defer or reconsider purchasing our products and services as a result of these factors. Accordingly, adverse impacts on our business due to these
factors could continue or worsen for an unknown period of time.

We have some exposure to fluctuations in the exchange rates of international currencies

Our consolidated financial statements are prepared in U.S. dollars. However, a portion of our revenues, expenses, assets and liabilities is denominated in
currencies other than the U.S. dollar, including the British Pound Sterling, the euro and the Brazilian Real. Consequently, fluctuations in exchange rates could result in exchange losses. In 2001,
2002 and 2003, there was no material effect on our net income due to currency fluctuations, but the impact of future exchange rate fluctuations on our results of operations cannot be accurately
predicted. Moreover, because we intend to continue our international expansion, the effect of exchange rate fluctuations could be greater in the future. We have previously undertaken, and in the
future may undertake, transactions to hedge the risks associated with fluctuations in exchange rates of other currencies to the dollar. We do not know if any hedging techniques that we may implement
will be successful or will mitigate the effect, if any, of exchange rate fluctuations on our financial condition and results of operations.

Our business is seasonal due largely to higher trade show revenue in the first and third quarters

Our business is seasonal, with revenue typically reaching its highest levels during the first and third quarters of each calendar year, largely due to the timing
of the MAGIC trade shows and our other large trade shows and conferences. In 2003, approximately 34% of our revenue was generated during the first quarter and approximately 24% during the third
quarter. The second quarter accounted for approximately 20% of revenue in 2003 and the fourth quarter accounted for approximately 22% of revenue in 2003. Because event revenue is recognized when a
particular event is held, we may also experience fluctuations in quarterly revenue based on the movement of annual trade show dates from one quarter to another.

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We have a significant amount of debt, which could limit our ability to remain competitive or grow our business

As of December 31, 2003, we had (a) total indebtedness of approximately $626.1 million and (b) approximately $49.9 million of
borrowings available under our credit facility, subject to customary borrowing conditions. In addition, subject to the restrictions in our credit facility, the indenture and our other debt
instruments, we may incur significant additional indebtedness from time to time. The level of our indebtedness may have important consequences, including:



We may not be able to service our debt without the need for additional financing, which we may not be able to obtain on satisfactory terms, if at all

Our ability to pay or to refinance our indebtedness 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. We cannot assure you that our business will generate sufficient cash flow from operations, that currently
anticipated revenue growth and operating improvements will be realized or that future borrowings will be available to us in amounts sufficient to enable us to pay our indebtedness or to fund our other
liquidity needs. If we are unable to meet our debt service obligations or fund our other liquidity needs, we could attempt to restructure or refinance our indebtedness or seek additional equity
capital. We cannot assure you that we will be able to accomplish those actions on satisfactory terms, if at all.

Our parent company will likely need to rely upon distributions from us to service its debt and we may not be able to make distributions in amounts sufficient to satisfy such
debt service

In addition to our debt service needs, our parent company, Advanstar, Inc., will likely need to rely upon distributions from us to service its 15% Senior
Discount Notes due 2011, which we refer to as "parent company notes", including for the payment of interest which must be paid in cash beginning April 15, 2006. Our ability to generate
sufficient cash from operations to make distributions to Advanstar, Inc. 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. In addition, our ability to make distributions to Advanstar, Inc. is subject to restrictions in our various debt
instruments. For example, our second priority senior secured notes and our senior subordinated notes limit the amount of "restricted payments," including dividends, that we can make. Generally, we can
make dividends only if our leverage ratio (as defined) is 6.0 to 1 or better and only from the amount by which our cumulative EBITDA (as defined) since January 1, 2001 exceeds 150% of our
cumulative interest expense in that same period. As described above, our ability to generate EBITDA will depend upon various factors that may be beyond our control. Because a portion of our debt bears
variable rates of interest, our interest expense could increase in the future. We may not generate sufficient cash flow from operations or be permitted by the terms of our debt instruments to pay

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dividends
or distributions to Advanstar, Inc. in amounts sufficient to allow it to pay cash interest on the parent company notes. If Advanstar, Inc. is unable to meet its debt service
obligations, it could attempt to restructure or refinance its indebtedness or seek additional equity capital. We cannot assure you that Advanstar, Inc. will be able to accomplish these actions
on satisfactory terms or at all. A default under the parent company notes could result in an acceleration of all outstanding loans under our credit facility which, in turn, would trigger a
cross-default under both our second priority senior secured notes and our senior subordinated notes. See "Liquidity and Capital Resources."

Restrictive covenants in our debt instruments may limit our ability to engage in a variety of transactions and could trigger defaults that would accelerate all of our debt

Our second priority senior secured notes, senior subordinated notes, the parent company notes and our credit facility contain covenants that limit our ability to
engage in a variety of transactions and other more restrictive covenants. Our credit facility requires us to maintain a fixed charge coverage ratio (as defined). Our ability to meet such financial
covenant can be affected by events beyond our control, and we cannot assure you that we will meet those tests. We have required amendments in the past to relax financial covenants contained in our
credit facility. If not for the completion of the offering of our second priority senior secured notes in August 2003, management expects that Advanstar would have needed additional covenant or
other relief in the future. We are substantially leveraged and our business remains subject to the same risks that created our historical liquidity and covenant concerns. A breach of any of these
covenants or other provisions in the agreement governing the credit facility, our senior subordinated notes, the parent company notes and/or our second priority senior secured notes could result in a
default under our credit facility, our senior subordinated notes, the parent company
notes, and/or our second priority senior secured notes. Upon the occurrence of an event of default under our credit facility, the lenders could elect to declare all amounts outstanding under our
credit facility to be immediately due and payable and terminate all commitments to extend further credit. If we were unable to repay those amounts, the lenders could proceed against the collateral
granted to them to secure that indebtedness. We have pledged substantially all of our assets, other than assets of our foreign subsidiaries, as security under our credit facility on a first-priority
basis. If the lenders under our credit facility accelerate the repayment of borrowings, we cannot assure you that we will have sufficient assets to repay our credit facility and our other
indebtedness.

We are dependent upon dividends from our subsidiaries to meet our debt service obligations

We conduct a significant portion of our operations through our subsidiaries. Our ability to meet our debt service obligations will be dependent on receipt of
dividends from our direct and indirect subsidiaries. Subject to the restrictions contained in the indentures governing our debt instruments, future borrowings by our subsidiaries may contain
restrictions or prohibitions on the payment of dividends by our subsidiaries to us. In addition, under applicable state law, our subsidiaries may be limited in amounts that they are permitted to pay
as dividends to us on their capital stock.

We are controlled by principal stockholders whose interests may differ from the interests of the holders of our debt.

Circumstances may occur in which the interests of our principal stockholders could be in conflict with the interests of the holders of our debt. In addition,
these stockholders may have an interest in pursuing transactions that, in their judgment, enhance the value of their equity investment in our company, even though those transactions may involve risks
to the holders of our debt.

Substantially
all of the outstanding shares of common stock of our ultimate parent company are held by the DLJ Merchant Banking funds. As a result of their stock ownership, the DLJ
Merchant Banking funds control us and have the power to elect a majority of our directors, appoint new management and approve any action requiring the approval of the holders of common stock,
including

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adopting
amendments to our certificate of incorporation and approving acquisitions or sales of all or substantially all of our assets. The directors elected by the DLJ Merchant Banking funds have the
ability to control decisions affecting our capital structure, including the issuance of additional capital stock, the implementation of stock repurchase programs and the declaration of dividends.

The
general partners of each of the DLJ Merchant Banking funds are affiliates or employees of Credit Suisse First Boston LLC, which is also an affiliate of (1) Credit Suisse First
Boston, the arranger, syndication agent and a lender under our credit facility, to which we have obtained amendments in the past to avoid future potential covenant defaults, and (2) the general
partners of each of the DLJ Investment Partners funds, which own a substantial portion of the parent Company notes.

You may not be able to rely on forward-looking statements included in this annual report, as our actual results may be materially different

The information contained in this annual report includes some forward-looking statements that involve a number of risks and uncertainties. A forward-looking
statement is usually identified by our use of certain terminology including "believes," "expects," "may," "will," "should," "seeks," "pro forma," "anticipates" or "intends" or by discussions of
strategy or intentions. A number of factors could cause our actual results, performance, achievements or industry results to be very different from the results, performance, achievements or industry
results expressed or implied by those forward-looking statements. These factors include, but are not limited to:



In
addition, forward-looking statements depend upon assumptions, estimates and dates that may not be correct or precise and involve known and unknown risks, uncertainties and other
factors. Accordingly, a forward-looking statement is not a prediction of future events or circumstances and those future events or circumstances may not occur. Given these uncertainties, you are
warned not to place undue reliance on the forward-looking statements. We are not undertaking any obligation to update these factors or to publicly announce the results of any changes to our
forward-looking statements due to future events or developments.

Item 7A.    QUANTITATIVE AND QUALITATIVE 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

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instruments
to manage and reduce the impact of changes in interest rates and foreign currency exchange rates.

Interest Rates.At December 31, 2003, we had fixed rate debt of $462.4 million and variable rate debt of
$162.7 million. The annual pre-tax earnings and cash flows impact resulting from a 100 basis point increase in interest rates on variable rate debt, holding other variables constant
and excluding the impact of the hedging agreements described below, would be approximately $1.6 million per year.

The
term loan B under our credit facility bears interest at a variable rate. We have previously entered into an interest rate collar agreement to hedge our interest rate risk on these
borrowings. The interest rate collar agreement has a notional amount of $150.0 million, and expires in February 2004. Under this agreement, based on current LIBOR, we will be required to
make payments of $0.9 million in the first quarter of 2004, which we will account for as interest expense. A decrease in LIBOR of 100 basis points would increase our interest expense on these
agreements by $0.2 million per year. Approximately $125 million of the interest rate collar agreement is considered undesignated for hedging purposes. Changes in fair value of the
undesignated portion of these instruments are recognized in current earnings.

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 on 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 December 31, 2003, we had open foreign exchange derivative contracts to sell with a notional amount
totaling $7.5 million, and to buy with a notional amount totaling $2.4 million. The estimated fair value of the foreign exchange contracts based upon market quotes was a net liability of
approximately $0.1 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.

Item 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Please refer to Item 15.Exhibits, Financial Statements and Reports on Form 8-K

Item 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

No events have occurred which would require disclosure under this Item.

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Item 9A.CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures.Advanstar's Chief Executive Officer and Chief Financial Officer, after
evaluating the effectiveness of the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period
covered by this report (the "Evaluation Date"), have concluded that as of the Evaluation Date, our disclosure controls and procedures were adequate and designed to ensure that material information
relating to the Company would be made known to them by others within the Company.

Changes in Internal Controls.There were no significant changes during the Company's fourth fiscal quarter in our internal
controls over financial reporting that have materially affected or are reasonably likely to materially affect the Company's internal controls over financial reporting.

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PART III

Item 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth the name, age and position of each of our executive officers, directors and other key employees.

|Name                |  | Age |  | Position                                                     
|------------------- |  | --- |  | -------------------------------------------------------------
|Joseph Loggia       |  | 44  |  | Chief Executive Officer and Director                         
|James M. Alic       |  | 61  |  | Vice President, Vice Chairman and Director                   
|David W. Montgomery |  | 46  |  | Vice President-Finance, Chief Financial Officer and Secretary
|Eric I. Lisman      |  | 46  |  | Executive Vice President and General Counsel                 
|Alexander S. DeBarr |  | 43  |  | Executive Vice President                                     
|Daniel M. Phillips  |  | 41  |  | Executive Vice President                                     
|Scott E. Pierce     |  | 45  |  | Executive Vice President                                     
|Robert L. Krakoff   |  | 68  |  | Chairman of the Board                                        
|OhSang Kwon         |  | 35  |  | Director                                                     
|David M. Wittels    |  | 39  |  | Director                                                     
|Douglas B. Fox      |  | 56  |  | Director                                                     



Joseph Loggiahas served as our Chief Executive Officer since January 1, 2004. Prior to that he served as
President and Chief Operating Officer since July 2001. Since May 1998, when Advanstar acquired MAGIC, Mr. Loggia has also served as President of MAGIC. Prior to that, he had
served as MAGIC's President and Chief Executive Officer since May 1997, President from August 1996 and Chief Operating Officer beginning in 1995. From August 1993 to
August 1996, he was Chief Financial Officer of MAGIC. Prior to joining MAGIC, Mr. Loggia was a manager at the accounting firm of Coopers & Lybrand responsible for Fraud &
Financial Investigations.

James M. Alichas served as our Vice Chairman and Vice President since he joined Advanstar in July 1996. From June 1995 to
June 1996, he was Vice President and Controller of IBM Corporation, a computer hardware and software manufacturer. From September 1994 to May 1995, he was Chairman of Reed
Exhibition Companies. From August 1991 to August 1994, he was President of Reed Exhibitions North America.

David W. Montgomeryhas served as our Vice President-Finance and Chief Financial Officer since January 1994. From July 1989
to December 1993, he was our Director of Corporate Finance. In July 1992, he became our Secretary. From January 1981 to June 1989, he was a practicing CPA with
McGladrey & Pullen in Minneapolis and St. Paul, Minnesota.

Eric I. Lismanhas served as our Executive Vice President and General Counsel since September 1998. From November 1997 to
August 1998, he engaged in a private legal practice. From August 1996 to July 1997, he was a Senior Vice President and General Counsel of Cahners Publishing Company. From
July 1993 to July 1996, he was a Vice President and General Counsel of Reed Publishing USA.



Alexander S. DeBarrhas served as our Executive Vice President since June 1997 and is responsible for the
Healthcare, Portfolio and Marketing Services markets. From February 1995 to May 1997, he was a Group Vice President of Advanstar. Mr. DeBarr also served as a Group Publisher of
Advanstar from February 1993 until January 1995.

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Daniel M. Phillipscurrently serves as Executive Vice President of our Information Technology, Call Center, Telecom and Powersports
markets. He was previously Vice President and General Manager of Advanstar's Technology groups. Mr. Phillips joined Advanstar in 1996 as a group publisher of America's Network, Telecom Asia and
Communicationes magazines, and in 1998 was promoted to Vice President and General Manager. Prior to joining Advanstar, Mr. Phillips was responsible for publications for EMAP (U.K.) in the area
of telecommunications.

Scott E. Piercecurrently serves as Executive Vice President responsible for the Travel & Hospitality group,
Pharmaceutical & Science group, Licensing group and the Art and Beauty groups. Mr. Pierce joined Advanstar in 1997 as a group publisher of the Travel & Hospitality group.



Joseph Loggia.See "Executive Officers."

James M. Alic.See "Executive Officers."

Robert L. Krakoffhas served as our Chairman since he joined Advanstar in July 1996 and served as our Chief Executive Officer from
July 1996 until December 31, 2003. From January 1993 to June 1996, he was the Chairman and Chief Executive Officer of Reed Publishing USA, a division of Reed
Elsevier Inc. which included Cahners Publishing Company, a trade publications business, and Reed Exhibition Companies, an exposition and conference business. From January 1993 to
June 1996, he was also a member of the board of directors of Reed Elsevier PLC. Mr. Krakoff currently serves on the board of directors of Freedom Communications, Inc.

OhSang Kwonhas served as a director since October 2000. Mr. Kwon has been a Principal of DLJ Merchant Banking since 2001
and a Vice President of DLJ Merchant Banking prior to that. From May 1997 to February 2000, he was an Associate with DLJ Securities Corporation, and he became a Vice President of DLJ
Securities Corporation in February 2000. From October 1996 to May 1997, he was an Associate at Davis Polk & Wardwell. Prior to that, he was a law clerk for the Hon. William
C. Conner in the United States District Court for the Southern District of New York. Mr. Kwon currently serves on the board of directors of UAE Holdings Corp., MSW Energy Holdings II LLC
and American Ref-Fuel Company LLC.

David M. Wittelshas served as a director since October 2000. Mr. Wittels has been a Managing Director of DLJ Merchant
Banking since 2001 and has served in various capacities with DLJ Merchant Banking for the past five years. Mr. Wittels serves as a director of AKI Holding Corp., AKI Inc., Mueller
Holdings (N.A.) Inc., Ziff Davis Holdings Inc. and Jostens, Inc.

Douglas B. Foxhas served as a director and chairman of the audit committee since September 2002. Mr. Fox is a private
investor and consultant. Prior to his current activities, he served as Senior Vice President of Marketing and Strategy at Compaq Computer Company from 2000 to 2001 and Senior Vice President of
Marketing at International Paper Inc. from 1997 to 2000. He served as President of Landmark Communications Inc. from 1994 to 1996 and prior to that while at Newsday in New York from 1987
to 1994 he served as President and Chief Operating Officer. Mr. Fox currently serves on the Board of Directors of Bowne Inc., Bowne Global Services, Arcade Marketing Inc., The Oreck
Company and Ziff-Davis Media Inc.

On
March 23, 2004, Mr. James Quella, who has served as a director since October 2000, submitted his resignation as a director effective on that date.

All
of our directors also serve on the board of directors of Advanstar, Inc.

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Our Audit Committee is comprised of three non-management directors who are appointed by the Board of Directors: Mr. Douglas B. Fox,
Mr. David M. Wittels and Mr. OhSang Kwon. Our Board of Directors has carefully considered the definition of "audit committee financial expert" adopted by the United States Securities and
Exchange Commission and has determined that Mr. Fox is an audit committee financial expert. Our Board of Directors has determined that Mr. Fox is not independent under
Rule 10A-3 of the Exchange Act.



We have adopted a Code of Ethics applicable to our Chief Executive Officer and Chief Financial Officer, which is compliant with Item 406 of
Regulation S-K. Our Code of Ethics is posted on our website at http://www.advanstar.com. Any waivers or amendments to our Code of Ethics that apply to our Chief Executive Officer or
our Chief Financial Officer that are required to be disclosed by SEC rules will be disclosed on our website within five business days following such waiver.

Item 11.EXECUTIVE COMPENSATION

Summary Compensation Table

The following table presents compensation paid to our chief executive officer and the four other most highly paid officers in the last three fiscal years.

|Name and Principal Position                                                       |  | Year           |  | Salary |                         | Bonus (1) |    | Other Annual
Compensation(3) |        | Long-Term
Compensation
Awards
Securities
Underlying
Options/SARs |                      | All Other
Compensation(2)
|--------------------------------------------------------------------------------- |  | -------------- |  | ------ | ----------------------- | --------- | -- | ---------------------------- | ------ | ---------------------------------------------------------------- | -------------------- | -------------------------
|Robert L. Krakoff
Chairman of the Board(4)                                        |  | 2003
2002
2001 |  | $$     | 600,000
600,000
600,000 |           | $$ | 175,256
245,246
            | (5)    | $                                                                | 13,680
13,680
19,721 |                          
|Joseph Loggia
Chief Executive Officer and Director(4)                             |  | 2003
2002
2001 |  |        | 500,000
500,000
500,000 |           |    | 146,046
204,373
            | (5)    |                                                                  | 

3,375            |                          
|James M. Alic
Vice Chairman, Vice President and Director                          |  | 2003
2002
2001 |  |        | 150,000
209,230
500,000 |           |    | 50,000

                   | (6)(5) |                                                                  | 

                |                          
|David W. Montgomery
Vice President-Finance, Chief Financial Officer and Secretary |  | 2003
2002
2001 |  |        | 259,615
250,000
250,000 |           |    | 75,000
58,000
17,000         |        |                                                                  | 

1,500            |                          
|Eric I. Lisman
Executive Vice President and General Counsel                       |  | 2003
2002
2001 |  |        | 361,539
350,000
280,000 |           |    | 65,639
59,200
10,000         |        |                                                                  | 

                |                          

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Option Grants in Last Fiscal Year

The following table sets forth each grant of stock options made by Advanstar (consisting of options to purchase stock of Holdings) during the year ended
December 31, 2003 pursuant to the 2000 Management Incentive Plan described below to each of the named executive officers. We have not granted any stock appreciation rights.

OPTION GRANTS IN LAST FISCAL YEAR

|              |  |         |  |       |   |   |       |  |      | Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation
for Option Term
|------------- |  | ------- |  | ----- | - | - | ----- |  | ---- | ----------------------------------------------------------------------------------------------
|
|
|
|
|Joseph Loggia |  | 600,000 |  | 100.0 | % | $ | 10.00 |  | 2013 |                                                                                               

Option Exercises and Holdings

The following table sets forth, for each of the officers named in the Summary Compensation Table, certain information concerning the number of shares subject to
both exercisable and unexercisable stock options as of December 31, 2003. None of the unexercised options were "in the money" at December 31, 2003.

Aggregated Option Exercises in 2003 and December 31, 2003 Option Values

|                    |  |   |  |   |   | Number of Securities
Underlying
Unexercised Options
at Fiscal
Year End |         |  |         | 
|------------------- |  | - |  | - | - | ---------------------------------------------------------------------- | ------- |  | ------- | 
|
|
|
|Robert L. Krakoff   |  |  |  | $ |  |                                                                        | 600,000 |  | 300,000 | 
|James M. Alic       |  |  |  |   |  |                                                                        | 102,084 |  | 66,666  | 
|Joseph Loggia       |  |  |  |   |  |                                                                        | 218,750 |  | 881,250 | 
|David W. Montgomery |  |  |  |   |  |                                                                        | 109,375 |  | 140,625 | 
|Eric I. Lisman      |  |  |  |   |  |                                                                        | 78,125  |  | 121,875 | 

Stock Option and Incentive Plans



The 2000 Management Incentive Plan was adopted by the board of Advanstar Holdings ("Holdings") on October 11, 2000 and amended by the board of Holdings as
of September 17, 2002 and December 10, 2002. The following description of the plan is intended to be a summary and does not describe all provisions of the plan.

Purpose of the Plan

The purpose of the plan is to attract and retain the best available key employees, non-employee directors and consultants for Holdings and its
subsidiaries and affiliates and to encourage the highest level of performance by those individuals, thereby enhancing Holdings' value for the benefit of its stockholders. The plan is also intended to
motivate such individuals by means of performance-related

48

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incentives
to achieve longer-range performance goals and enable such individuals to participate in the long-term growth and financial success of Holdings.

Administration of the Plan

The plan will be administered by the compensation committee or the board as a whole, if no committee is constituted. The compensation committee has the power, in
its discretion, to select the participants who will participate in the plan, to grant awards under the plan, to determine the terms of these awards, to interpret the provisions of the plan and to take
any action that it deems necessary or advisable for the administration of the plan.

Eligibility and Participation

Eligibility to participate in the plan is limited to key employees of Holdings, its subsidiaries and affiliates. Participation in the plan is at the discretion of
the compensation committee and will be based upon the individual's present and potential contributions to Holdings' success and such other factors as the compensation committee deems relevant. No
individual may be granted in any calendar year awards covering more than 900,000 shares of Holdings common stock.

Type of Awards Under the Plan

The plan provides that the compensation committee may grant non-statutory stock options to eligible participants subject to such terms, conditions and
provisions as the compensation committee may determine to be necessary or desirable.

Number of Authorized Shares

Holdings has authorized a maximum of 4,047,789 shares of its common stock for participants under the plan during the term of the plan, of which 3,843,750 have
been granted and remain outstanding as of December 31, 2003. In addition, the number of shares available will be increased to the extent that shares are not purchased on a leveraged basis under
Holdings' Direct Investment Program. The compensation committee may adjust the number and class of shares available under the plan to prevent dilution or enlargement of rights in the event of various
changes in Holdings' capitalization.

Put and Call Rights

Holdings has certain rights to repurchase, or "call," shares purchased pursuant to the plan if a plan participant is terminated by Holdings or one of its
subsidiaries for cause or without cause, or if the participant terminates employment for good reason, without good reason, or due to death, disability or "qualified retirement." A plan participant has
the right to sell, or "put," shares purchased pursuant to the plan to Holdings if a participant's employment is terminated due to disability, "qualified retirement" or death. "Qualified retirement"
means retirement at age 62 or with board approval.

Change in Control

If there is a change in control of Holdings, all unvested time-vesting options granted pursuant to the plan will vest and become immediately
exercisable and, if the change in control constitutes a liquidity event (as defined in the award agreements), all performance vesting options will vest. A change in control generally means the
acquisition by any person or group of persons, other than an affiliate or affiliates of the DLJ Merchant Banking funds, of more than 51% of the outstanding voting securities of Holdings or a sale of
all or substantially all of Holdings' assets.

49

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Amendment and Termination

Holdings' board may amend, alter, suspend, discontinue or terminate the plan at any time, provided that no such amendment, alteration, suspension, discontinuation
or termination will be made without stockholder approval if such approval is necessary to qualify for or comply with any tax or regulatory status or requirement with which the board deems it necessary
or desirable to qualify or comply.

Direct Investment Plan

The Direct Investment Plan was adopted by the board of Holdings on October 11, 2000 to promote the interests of Holdings and its stockholders by retaining
exceptional executive personnel and aligning the interests of such employees with those of Holdings' equity investors. Upon the closing of the DLJ Acquisition, 1,100,000 million shares of
common stock of Holdings were purchased by executives of the Company pursuant to the plan, and participation in the plan was closed at that level as of December 31, 2000. Pursuant to the plan,
one-half of the shares were purchased through non-recourse loans granted by Holdings.

Holdings
has certain rights to repurchase, or "call," shares purchased pursuant to the plan if a plan participant is terminated by Holdings or one of its subsidiaries for cause or
without cause, or if the participant terminates employment for good reason, without good reason, or due to death, disability or "qualified retirement." A plan participant has the right to sell, or
"put," shares purchased pursuant to the plan to Holdings if a participant's employment is terminated due to disability, "qualified retirement" or death. "Qualified retirement" means retirement at age
62 or with board approval.



Advanstar, Inc. has an Employees' 401(k) Plan and Trust. All current and future employees who have completed one year of service with
Advanstar, Inc. or any other domestic subsidiary of Advanstar, Inc. and are at least 21 years-of-age are eligible to participate in the 401(k) Plan.
Participants in the 401(k) Plan may not contribute more than the lesser of a specified statutory amount or 15% of his or her pre-tax total compensation. Advanstar, Inc. is required
to make a matching contribution to the 401(k) Plan, which vests in equal installments over five years, in accordance with the following schedule:



Employment Agreements and Arrangements

Mr. Krakoff entered into an employment agreement with Advanstar, Inc., dated as of October 1, 2003. The agreement provides for a term through
December 31, 2005. Pursuant to the agreement, Mr. Krakoff continued as Chairman and Chief Executive Officer until December 31, 2003, following which time, he will continue as
Chairman of the Board until December 31, 2005. The agreement provides that Mr. Krakoff is entitled to an annual base salary of $600,000. Mr. Krakoff is also entitled to an annual
bonus for fiscal year 2003 based on our EBITDA for fiscal year 2003, up to a maximum of 100% of base salary. For fiscal years 2004 and 2005, Mr. Krakoff is entitled to annual bonuses equal

50

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to
0.5% of the transaction value of certain acquisitions of business operations or assets by Advanstar (as more fully described in the agreement). The agreement provides for indemnification of the
executive to the extent permissible under applicable law. The agreement further provides for severance benefits equal to a maximum of one year's base salary and a pro rated bonus upon termination of
employment by Advanstar without "cause" or by the executive for "good reason", which includes a change in control. The agreement requires Advanstar Holdings to repurchase, upon Mr. Krakoff's
election, at $10.00 per share, stock of Advanstar Holdings owned by Mr. Krakoff and formerly pledged by him as security for a loan from Advanstar Holdings, in an amount sufficient for
Mr. Krakoff to repay $3,000,000 of the then outstanding principal balance of the loan plus accrued interest on the outstanding principal of the loan to the date of such repurchase such that, on
a cash basis, no amounts will be distributed by Advanstar Holdings to Mr. Krakoff. Mr. Krakoff exercised this election and the shares were repurchased, and the loan repaid, as of
October 1, 2003. Mr. Krakoff also entered into a non-competition and confidentiality agreement with us. The non-compete period is one year after termination of
employment unless employment is terminated by us without cause or by the executive for good reason, in which case the non-competition period is six months. During the
non-compete period, Mr. Krakoff may not hire any employee or solicit any trade show or publishing business from a third party that has a relationship or contract with us.

Mr. Loggia
has also entered into an employment agreement with us dated as of November 21, 2003. Pursuant to the agreement, Mr. Loggia continued to act as our
president and chief operating officer through December 31, 2003, following which time he succeeded to the position of Chief Executive Officer for an initial employment term of three years,
followed by successive three year employment terms unless terminated by either party in accordance with this agreement. Mr. Loggia will continue to receive his current annual base salary of
$500,000 and annual bonus until December 31, 2003, following which time he is entitled to an annual base salary of $625,000 and an annual bonus based on our EBITDA for any year, up to a maximum
bonus in any one year of 100% of base salary. The agreement provides for indemnification to the maximum extent permitted by law. If Mr. Loggia is terminated by us without "cause" or terminates
his employment for "good reason", each as defined in the employment agreement, he will be entitled to his bonus for that portion of the fiscal year before he was terminated and the continuation of his
base salary for a period of two years following his termination. Mr. Loggia also has entered into a new non-compete and confidentiality agreement with us. The
non-compete period is one year, during which time Mr. Loggia will continue to receive his base salary unless he was terminated for cause or as a result of his death or disability.
Any base
salary paid to Mr. Loggia under his non-compete and confidentiality agreement will offset any severance payments to which Mr. Loggia may become entitled under his new
employment agreement.

Mr. Alic
has entered into an employment agreement with us which was amended effective March 1, 2002. The amended agreement provides for a fixed term through
September 30, 2002, and continuation thereafter until terminated upon not less than sixty days notice by either party. Pursuant to the amended agreement, Mr. Alic will continue to serve
on a part-time basis as our Vice Chairman and will be entitled to an annual base salary of $150,000. The amended agreement does not provide for a bonus payment or severance upon
termination. The agreement provides for indemnification of the executive to the extent permissible under New York law. Mr. Alic also entered into a non-competition and
confidentiality agreement with us. The non-compete period is one year after termination of employment unless employment is terminated by us without cause or by the executive for good
reason, in which case the non-competition period is six months. During the non-compete period, Mr. Alic may not hire any employee or solicit any trade show or publishing
business from a third party that has a relationship or contract with us.

We
currently have a severance arrangement with David W. Montgomery, our Vice President-Finance, Chief Financial Officer and Secretary. In the event that Mr. Montgomery's
employment is

51

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involuntarily
terminated for any reason other than for cause, the arrangement provides that Mr. Montgomery will receive a termination payment equal to six months salary.

Advanstar, Inc.
currently has a severance arrangement with Eric I. Lisman, its Executive Vice President and General Counsel. In the event that Mr. Lisman's employment is
terminated for any reason other than for cause or if Mr. Lisman's principal office location is relocated outside the greater Boston area, the arrangement provides that Mr. Lisman will
receive twelve months of severance based on his then current salary, his target bonus and health benefits.

We
do not have employment agreements with our other named executive officers.

Director Compensation

Standard Arrangements

We currently have no standard arrangements pursuant to which our directors would be compensated for their services as a director.

Other Arrangements

On September 17, 2002, Mr. Douglas B. Fox was appointed to the Board of Directors of the Company as a director. Mr. Fox receives an annual
retention fee of $20,000 and, through Renaissance Brands, LLC, a company wholly owned by Mr. Fox, a separate annual advisory fee of $30,000, both payable in equal quarterly installments.
Mr. Fox is also reimbursed for all reasonable out-of-pocket expenses incurred in connection with his service as a director of the Company.

As
of the date of his appointment, Mr. Fox was granted options to purchase 25,000 shares of the common stock of Holdings at an exercise price of $10.00 per share, pursuant to
Holdings' 2000 Management Incentive Plan. These options will vest over a four-year period, with 20% vesting immediately and an additional 20% vesting on each anniversary of the grant.
Mr. Fox was also granted the right, expiring December 31, 2002, to purchase up to 50,000 shares of the common stock of Holdings at a price of $10.00 per share, which he did not exercise.

Compensation Committee Interlocks and Insider Participation

During the periods up to and including 2003, we did not have a compensation committee. During the fiscal year ended December 31, 2003,
Messrs. Krakoff, Loggia and Montgomery participated in deliberations of our board of directors concerning executive officer compensation. The Board of Directors, at the December 2003
board meeting for Advanstar Communications and Advanstar, Inc., established a compensation committee to oversee certain compensation related matters of the company.

52

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Item 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

All of our common stock is owned by our parent company, Advanstar, Inc., which is wholly-owned by Advanstar Holdings. The following table sets forth
information with respect to the beneficial ownership of Holdings' common stock as of March 29, 2004 by (a) any person or group who beneficially owns more than five percent of Holdings
common stock, (b) each of our directors and executive officers and (c) all directors and officers as a group.

In
accordance with the rules of the SEC, beneficial ownership includes voting or investment power with respect to securities and includes shares issuable pursuant to warrants that are
exercisable within 60 days of March 29, 2004. Shares issuable pursuant to warrants are deemed outstanding in computing the percentage held by the person holding the warrants but are not
deemed outstanding in computing the percentage held by any other person.

|Name of Beneficial Owner:                                                                    |  | Number of
shares of
Common Stock
beneficially
owned |     | Percentage of
Outstanding
Common Stock |  
|-------------------------------------------------------------------------------------------- |  | --------------------------------------------------- | --- | -------------------------------------- | -
|DLJ Merchant Banking Partners III, L.P. and related investors(1)                             |  | 35,966,117                                          |     | 96.4                                   | %
|Robert L. Krakoff                                                                            |  | 1,257,732                                           | (2) | 3.4                                    | %
|James M. Alic                                                                                |  | 412,011                                             | (3) | 1.1                                    | %
|Joseph Loggia                                                                                |  | 250,000                                             | (4) | *                                      |  
|David W. Montgomery                                                                          |  | 125,000                                             | (5) | *                                      |  
|Eric I. Lisman                                                                               |  | 90,625                                              | (6) | *                                      |  
|Douglas B. Fox                                                                               |  | 10,000                                              | (7) | *                                      |  
|David M. Wittels(8)
DLJ Merchant Banking Inc.
Eleven Madison Avenue
New York, New York 10010 |  |                                                    |     |                                       |  
|OhSang Kwon(8)
DLJ Merchant Banking Inc.
Eleven Madison Avenue
New York, New York 10010      |  |                                                    |     |                                       |  
|All directors and officers as a group (8 persons)(8)                                         |  | 2,145,368                                           |     | 5.5                                    | %

---

53

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Advanstar
has no securities authorized for issuance under equity compensation plans; all equity issued as compensation consists of equity of Holdings.

Item 13.CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Financial Advisory Fees and Agreements

Credit Suisse First Boston, an affiliate of the DLJ Merchant Banking funds, has and will receive customary fees and reimbursement of expenses in connection with
the arrangement and syndication of the credit facility and as a lender thereunder. Credit Suisse First Boston LLC, an affiliate of the DLJ Merchant Banking funds, acts as our financial advisor and
acted as our financial advisor in connection with the Thomson acquisition, was one of the initial purchasers of the second priority senior secured notes issued in August and September of 2003 and was
an initial purchaser of our senior subordinated notes and the parent company discount notes. We paid fees for these services of $7.3 million in 2001, $0.2 million in 2002 and
$10.4 million in 2003, plus out-of-pocket expenses.

Advanstar
Holdings has agreed to pay Credit Suisse First Boston LLC an annual advisory fee of $0.5 million beginning October 11, 2000 until the earlier to occur of:



Advanstar
Holdings is a holding company and has no direct material operations or source of cash to pay other than from Advanstar Communications Inc.

Advanstar
and its subsidiaries may from time to time enter into other investment banking relationships with Credit Suisse First Boston LLC or one of its affiliates pursuant to which
Credit Suisse First Boston LLC or its affiliates will receive customary fees and will be entitled to reimbursement for all related disbursements and out-of-pocket expenses. We
expect that any arrangement will include provisions for the indemnification of Credit Suisse First Boston LLC against a variety of liabilities, including liabilities under the federal securities laws.

Stockholders Agreement

Advanstar Holdings, the DLJ Merchant Banking funds, the DLJ Investment Partners funds and the other stockholders of Advanstar Holdings (collectively, including
Messrs. Krakoff and Alic, the "Advanstar Holdings Stockholders") entered into a stockholders' agreement at the closing of the DLJMB acquisition. The stockholders' agreement provides that any
person acquiring shares of common stock of Advanstar Holdings who is required by the stockholders' agreement or by any other agreement or plan of Advanstar Holdings to become a party to the
stockholders' agreement will execute an agreement to be bound by the stockholders' agreement. In April 2001, certain non-management Advanstar Holdings Stockholders sold an aggregate
of 200,000 shares of Advanstar Holdings stock to

54

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an
institutional investor. The new investor became a party to the stockholders' agreement in connection with the sale.

The
terms of the stockholders' agreement restrict transfers of shares of Advanstar Holdings capital stock by the Advanstar Holdings Stockholders, except to permitted transferees and
subject to various exceptions. The agreement will permit:



The
stockholders' agreement also provides that the DLJ Merchant Banking funds have the right to select three of the five members of the board of directors of Advanstar Holdings, the DLJ
Investment Partners funds will have the right to select one member so long as they maintain ownership of at least 50% of their initial ownership of senior discount notes of Advanstar, Inc. (and
thereafter will have rights to an observer), and Mr. Krakoff will be the other director pursuant to the terms of his employment agreement. In addition, the DLJ Merchant Banking funds are
permitted to expand Advanstar Holdings' board and select all of the additional directors. Messrs. Alic, Kwon and Wittels are the directors selected by the DLJ Merchant Banking funds.

Under
the stockholders' agreement, the Advanstar Holdings Stockholders entered into a registration rights agreement with Advanstar Holdings. Under that agreement, the DLJ Merchant
Banking funds will have the right to six demand registrations (or five if the holders of the warrants issued with the parent company notes have exercised a demand), and the holders of the warrants
issued with the parent company notes will have the right to one demand registration of common stock after an initial public offering. In addition, all of the holders will be entitled to piggyback
registration rights, subject to customary cutback and deferral provisions. The agreement also provides that Advanstar Holdings will indemnify the parties against specified liabilities, including
liabilities under the Securities Act.

Relationship with Advanstar.com

Our affiliate, Advanstar.com, has developed vertical community web sites to serve industry sectors that we target and operates our event and publication-related
web sites. We provide Advanstar.com with limited administrative support services in accounting, finance, legal, human resource management, information technology and business development. These
services are charged to Advanstar.com based on level of activity. In addition, selected staff in editorial and other functions at Advanstar will be shared with Advanstar.com. To the extent the
percentage of time devoted by our employees to Advanstar.com activities is significant, appropriate allocations of staff cost are made to Advanstar.com.

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. Advanstar.com operates specific web sites in support of our trade publications and trade shows. Among other
functions, these sites provide services, such as trade show and conference registration and publication subscription and reader services, in support of our products. Advanstar.com has the right to use
the content from our publications and events, our brands and our customer lists for the purpose of building and operating the web sites.

55

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In
addition, we have provided funding to Advanstar.com to support its operations. We provided funding of approximately $16.6 million in 2001, $2.4 million in 2002 and $1.1
in 2003. We anticipate that we will provide an aggregate of approximately $2.6 million of additional funding in 2004.

Item 14.PRINCIPAL ACCOUNTING FEES AND SERVICES.



The Audit Committee engaged Pricewaterhouse Coopers LLP ("PwC") to perform an annual audit of Advanstar's financial statements in 2002 and 2003. The following
table presents information concerning fees paid to PwC in each of those years.

2002

2003Audit fees(1)

$
353,000

$
642,300Audit-related fees(2)


28,500


19,000Tax fees(3)


229,000


299,000All other fees








---



The Audit Committee has adopted policies and procedures for pre-approving all non-audit work performed by PricewaterhouseCoopers LLP after
January 1, 2003. Specifically, the policies and procedures prohibit PricewaterhouseCoopers LLP from performing any services for Advanstar or its subsidiaries without the prior specific approval
of the audit committee, except that the audit committee pre-approved the use of PricewaterhouseCoopers LLC for the following service categories of non-audit service: audit
related services in aggregate not to exceed $120,000; U.S. tax planning and compliance in aggregate not to exceed $285,000; other tax services in aggregate not to exceed $140,000; other
non-audit services in aggregate not to exceed $50,000. Services in excess of these limits must have prior specific approval by the audit committee.

All
services provided by PricewaterhouseCoopers LLC in 2003 were pre-approved by the audit committee pursuant to the approval policies described above. None of such services
were approved pursuant to the procedures described in Rule 2-01(c)(7)(i)(C) of Regulation S-X, which waives the general requirement for pre-approval
in certain circumstances.

56

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PART IV

Item 15.EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

a. Documents Filed as Part of this Report:



PageReport of PricewaterhouseCoopers LLP

F-1Consolidated Balance Sheets as of December 31, 2003 and 2002

F-2Consolidated Statements of Operations for the years ended December 31, 2003, 2002 and 2001

F-3Consolidated Statements of Stockholder's Equity for the years ended December 31, 2003, 2002 and 2001

F-4Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001

F-5Notes to Consolidated Financial Statements

F-6




Schedule IIValuation and Qualifying Accounts

II-1


57

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Report of Independent Auditors

To
the Stockholder and Board of Directors
of Advanstar Communications Inc.

In
our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in all material respects, the financial position of
Advanstar Communications Inc., a wholly owned subsidiary of Advanstar, Inc., and its Subsidiaries at December 31, 2003 and 2002, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America. In addition, in our
opinion, the financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with
the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As
discussed in Note 2, the Company adopted the provisions of Statement of Financial Accounting Standards ("SFAS") No. 133,Accounting for
Derivative Instruments and Hedging Activities, effective January 1, 2001.

As
discussed in Note 3, the Company adopted the provisions of SFAS No. 142,Goodwill and Other Intangible Assets, effective
January 1, 2002.

/s/PricewaterhouseCoopers
LLP
Minneapolis, Minnesota
February 20, 2004

F-1

---

Advanstar Communications Inc.
Consolidated Balance Sheets
December 31, 2003 and 2002

|                                          |                                                                                                                                   | 2003 |         | 2002                                   |  
|----------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------- | ---- | ------- | -------------------------------------- | -
|
|Assets                                    |                                                                                                                                   |      |         |                                        |  
|Current assets                            |                                                                                                                                   |      |         |                                        |  
|                                          | Cash and cash equivalents                                                                                                         |      | $       | 29,274                                 |  
|                                          | Accounts receivable, net of allowance of $1,006 and $1,049 at December 31, 2003 and 2002                                          |      |         | 34,560                                 |  
|                                          | Prepaid expenses                                                                                                                  |      |         | 8,987                                  |  
|                                          | Other                                                                                                                             |      |         | 1,771                                  |  
|                                          |                                                                                                                                   |      |         |                                        |  
|                                          |                                                                                                                                   |      |         | Total current assets                   |  
|Property, plant and equipment, net        |                                                                                                                                   |      | 23,886  |                                        |  
|Intangible and other assets               |                                                                                                                                   |      |         |                                        |  
|                                          | Goodwill                                                                                                                          |      |         | 742,496                                |  
|                                          | Intangibles and other, net                                                                                                        |      |         | 144,111                                |  
|                                          |                                                                                                                                   |      |         |                                        |  
|                                          |                                                                                                                                   |      |         | Total intangible and other assets, net |  
|                                          |                                                                                                                                   |      |         |                                        |  
|                                          |                                                                                                                                   | $    | 985,085 |                                        | $
|                                          |                                                                                                                                   |      |         |                                        |  
|Liabilities and Stockholder's Equity      |                                                                                                                                   |      |         |                                        |  
|Current liabilities                       |                                                                                                                                   |      |         |                                        |  
|                                          | Current maturities of long-term debt                                                                                              |      | $       | 3,700                                  |  
|                                          | Accounts payable                                                                                                                  |      |         | 29,460                                 |  
|                                          | Accrued compensation                                                                                                              |      |         | 6,940                                  |  
|                                          | Other accrued expenses                                                                                                            |      |         | 26,371                                 |  
|                                          | Deferred revenue                                                                                                                  |      |         | 60,898                                 |  
|                                          |                                                                                                                                   |      |         |                                        |  
|                                          |                                                                                                                                   |      |         | Total current liabilities              |  
|Long-term debt, net of current maturities |                                                                                                                                   |      | 622,369 |                                        |  
|Deferred income taxes                     |                                                                                                                                   |      | 6,990   |                                        |  
|Other long-term liabilities               |                                                                                                                                   |      | 5,322   |                                        |  
|Due to parent                             |                                                                                                                                   |      | 3,650   |                                        |  
|Minority interests                        |                                                                                                                                   |      | 10,089  |                                        |  
|Commitments and contingencies (Note 10)   |                                                                                                                                   |      |         |                                        |  
|Stockholder's equity                      |                                                                                                                                   |      |         |                                        |  
|                                          | Common stock, $.01 par value, 40,000,000 shares authorized; 1,000,000 shares issued and outstanding at December 31, 2003 and 2002 |      |         | 10                                     |  
|                                          | Capital in excess of par value                                                                                                    |      |         | 447,367                                |  
|                                          | Accumulated deficit                                                                                                               |      |         | (241,594                               | )
|                                          | Accumulated other comprehensive income (loss)                                                                                     |      |         | 3,513                                  |  
|                                          |                                                                                                                                   |      |         |                                        |  
|                                          |                                                                                                                                   |      |         | Total stockholder's equity             |  
|                                          |                                                                                                                                   |      |         |                                        |  
|                                          |                                                                                                                                   | $    | 985,085 |                                        | $
|                                          |                                                                                                                                   |      |         |                                        |  

The
accompanying notes are an integral part of these consolidated financial statements.

F-2

---

Advanstar Communications Inc.
Consolidated Statements of Operations
Years Ended December 31, 2003, 2002 and 2001

|                                                                         |                                                             | 2003 |         | 2002                                                                                     |   | 2001    |        
|------------------------------------------------------------------------ | ----------------------------------------------------------- | ---- | ------- | ---------------------------------------------------------------------------------------- | - | ------- | -------
|
|Revenue                                                                  |                                                             | $    | 323,673 |                                                                                          | $ | 307,183 |        
|Operating expenses                                                       |                                                             |      |         |                                                                                          |   |         |        
|                                                                         | Cost of production (excluding depreciation)                 |      |         | 68,524                                                                                   |   |         | 62,838 
|                                                                         | Selling, editorial and circulation (excluding depreciation) |      |         | 133,333                                                                                  |   |         | 124,845
|                                                                         | General and administrative (excluding depreciation)         |      |         | 34,555                                                                                   |   |         | 35,027 
|                                                                         | Restructuring charge                                        |      |         | 2,692                                                                                    |   |         |       
|                                                                         | Funding of affiliated dot.com company operations (Note 13)  |      |         | 1,121                                                                                    |   |         | 39,587 
|                                                                         | Amortization of goodwill and other intangibles              |      |         | 48,291                                                                                   |   |         | 59,899 
|                                                                         | Depreciation                                                |      |         | 8,312                                                                                    |   |         | 9,233  
|                                                                         |                                                             |      |         |                                                                                          |   |         |        
|                                                                         |                                                             |      |         | Total operating expenses                                                                 |   |         | 296,828
|                                                                         |                                                             |      |         |                                                                                          |   |         |        
|                                                                         |                                                             |      |         | Operating income (loss)                                                                  |   |         | 26,845 
|Other income (expense)                                                   |                                                             |      |         |                                                                                          |   |         |        
|                                                                         | Interest expense, net                                       |      |         | (58,103                                                                                  | ) |         | (51,211
|                                                                         | Write-off of deferred financing costs                       |      |         | (11,324                                                                                  | ) |         |       
|                                                                         | Other income (expense), net                                 |      |         | 486                                                                                      |   |         | 2,931  
|                                                                         |                                                             |      |         |                                                                                          |   |         |        
|                                                                         |                                                             |      |         | Loss before income taxes, minority interests, and cumulative effect of accounting change |   |         | (42,096
|Income tax provision (benefit)                                           |                                                             |      | 6,725   |                                                                                          |   | (15,478 | )      
|Minority interests                                                       |                                                             |      | (627    | )                                                                                        |   | (474    | )      
|                                                                         |                                                             |      |         |                                                                                          |   |         |        
|                                                                         |                                                             |      |         | Loss before cumulative effect of accounting change                                       |   |         | (49,448
|Cumulative effect of accounting change, net of tax and minority interest |                                                             |      |        |                                                                                          |   | (66,817 | )      
|                                                                         |                                                             |      |         |                                                                                          |   |         |        
|                                                                         |                                                             |      |         | Net loss                                                                                 |   | $       | (49,448
|                                                                         |                                                             |      |         |                                                                                          |   |         |        

The
accompanying notes are an integral part of these consolidated financial statements.

F-3

---

Advanstar Communications Inc.
Consolidated Statements of Stockholder's Equity
Years Ended December 31, 2003, 2002 and 2001

|                                                              |                                                                           | Common Stock             |   |   |    |   |   | Accumulated
Other
Comprehensive
Income (Loss) |   |   |         
|------------------------------------------------------------- | ------------------------------------------------------------------------- | ------------------------ | - | - | -- | - | - | --------------------------------------------- | - | - | --------
|
|
|
|Balances at December 31, 2000                                 |                                                                           | 1,000,000                |   | $ | 10 |   | $ | 352,592                                       |   | $ | (18,045 
|Comprehensive loss                                            |                                                                           |                          |   |   |    |   |   |                                               |   |   |         
|                                                              | Net loss                                                                  |                          |  |   |    |  |   |                                               |  |   |         
|                                                              | Translation adjustment                                                    |                          |  |   |    |  |   |                                               |  |   |         
|                                                              | Change in unrealized loss on derivative financial instruments, net of tax |                          |  |   |    |  |   |                                               |  |   |         
|                                                              |                                                                           | Total comprehensive loss |   |   |    |   |   |                                               |   |   |         
|Capital contribution                                          |                                                                           |                         |   |   |   |   |   | 34,775                                        |   |   |        
|Advances and notes due from affiliate (Note 12)               |                                                                           |                         |   |   |   |   |   | (37,192                                       | ) |   |        
|                                                              |                                                                           |                          |   |   |    |   |   |                                               |   |   |         
|Balances at December 31, 2001                                 |                                                                           | 1,000,000                |   |   | 10 |   |   | 350,175                                       |   |   | (67,807 
|Comprehensive loss                                            |                                                                           |                          |   |   |    |   |   |                                               |   |   |         
|                                                              | Net loss                                                                  |                          |  |   |    |  |   |                                               |  |   |         
|                                                              | Translation adjustment                                                    |                          |  |   |    |  |   |                                               |  |   |         
|                                                              | Change in unrealized loss on derivative financial instruments             |                          |  |   |    |  |   |                                               |  |   |         
|                                                              |                                                                           | Total comprehensive loss |   |   |    |   |   |                                               |   |   |         
|Provision for advances and notes due from affiliate (Note 12) |                                                                           |                         |   |   |   |   |   | 37,192                                        |   |   |        
|                                                              |                                                                           |                          |   |   |    |   |   |                                               |   |   |         
|Balances at December 31, 2002                                 |                                                                           | 1,000,000                |   |   | 10 |   |   | 387,367                                       |   |   | (192,146
|Comprehensive loss                                            |                                                                           |                          |   |   |    |   |   |                                               |   |   |         
|                                                              | Net loss                                                                  |                          |  |   |    |  |   |                                               |  |   |         
|                                                              | Translation adjustment                                                    |                          |  |   |    |  |   |                                               |  |   |         
|                                                              | Change in unrealized loss on derivative financial instruments             |                          |  |   |    |  |   |                                               |  |   |         
|                                                              |                                                                           | Total comprehensive loss |   |   |    |   |   |                                               |   |   |         
|Contribution of capital from parent                           |                                                                           |                         |   |   |   |   |   | 60,000                                        |   |   |        
|                                                              |                                                                           |                          |   |   |    |   |   |                                               |   |   |         
|Balances at December 31, 2003                                 |                                                                           | 1,000,000                |   | $ | 10 |   | $ | 447,367                                       |   | $ | (241,594
|                                                              |                                                                           |                          |   |   |    |   |   |                                               |   |   |         

The
accompanying notes are an integral part of these consolidated financial statements.

F-4

---

Advanstar Communications Inc.
Consolidated Statements of Cash Flows
Years Ended December 31, 2003, 2002 and 2001

|                                                                               |                                                                            | 2003                                  |                                                      | 2002   |        | 2001     |        
|------------------------------------------------------------------------------ | -------------------------------------------------------------------------- | ------------------------------------- | ---------------------------------------------------- | ------ | ------ | -------- | -------
|
|Cash flows from operating activities                                           |                                                                            |                                       |                                                      |        |        |          |        
|Net loss                                                                       |                                                                            | $                                     | (49,448                                              | )      | $      | (124,339 | )      
|Adjustments to reconcile net loss to net cash provided by operating activities |                                                                            |                                       |                                                      |        |        |          |        
|                                                                               | Provision for notes and advances from affiliated dot.com company (Note 13) |                                       |                                                      |       |        |          | 37,192 
|                                                                               | Cumulative effect of accounting changetransitional goodwill impairment    |                                       |                                                      |       |        |          | 66,817 
|                                                                               | Write-off of deferred financing costs                                      |                                       |                                                      | 11,324 |        |          |       
|                                                                               | Depreciation and amortization                                              |                                       |                                                      | 56,603 |        |          | 69,132 
|                                                                               | (Gain) loss on derivative financial instruments                            |                                       |                                                      | (772   | )      |          | (1,236 
|                                                                               | Undistributed earnings of minority interest holders                        |                                       |                                                      | 627    |        |          | 474    
|                                                                               | Noncash interest                                                           |                                       |                                                      | 3,363  |        |          | 2,698  
|                                                                               | Loss (gain) on disposition of business and other                           |                                       |                                                      | 661    |        |          | 22     
|                                                                               | Provision for bad debts                                                    |                                       |                                                      | 578    |        |          | 1,639  
|                                                                               | Deferred income taxes                                                      |                                       |                                                      | 6,990  |        |          | (16,605
|                                                                               | Changes in operating assets and liabilities                                |                                       |                                                      |        |        |          |        
|                                                                               |                                                                            | Accounts receivable                   |                                                      |        | (365   | )        |        
|                                                                               |                                                                            | Inventories                           |                                                      |        | 188    |          |        
|                                                                               |                                                                            | Prepaid expenses                      |                                                      |        | 844    |          |        
|                                                                               |                                                                            | Accounts payable and accrued expenses |                                                      |        | 16,167 |          |        
|                                                                               |                                                                            | Deferred revenue                      |                                                      |        | 1,525  |          |        
|                                                                               |                                                                            | Other                                 |                                                      |        | (2,437 | )        |        
|                                                                               |                                                                            |                                       |                                                      |        |        |          |        
|                                                                               |                                                                            |                                       | Net cash provided by operating activities            |        |        | 45,848   |        
|                                                                               |                                                                            |                                       |                                                      |        |        |          |        
|Cash flows from investing activities                                           |                                                                            |                                       |                                                      |        |        |          |        
|Additions to property, plant and equipment                                     |                                                                            |                                       | (7,608                                               | )      |        | (7,216   | )      
|Acquisitions of publications and trade shows, net of cash acquired             |                                                                            |                                       | (137,728                                             | )      |        | (23,972  | )      
|Increase in advances and notes due from affiliate                              |                                                                            |                                       |                                                     |        |        |         |        
|Proceeds from sale of assets and other                                         |                                                                            |                                       | 3                                                    |        |        | 33       |        
|                                                                               |                                                                            |                                       |                                                      |        |        |          |        
|                                                                               |                                                                            |                                       | Net cash used in investing activities                |        |        | (145,333 | )      
|                                                                               |                                                                            |                                       |                                                      |        |        |          |        
|Cash flows from financing activities                                           |                                                                            |                                       |                                                      |        |        |          |        
|Proceeds from revolving credit loan                                            |                                                                            |                                       | 21,000                                               |        |        | 11,100   |        
|Payments on revolving credit loan                                              |                                                                            |                                       | (50,100                                              | )      |        | (8,000   | )      
|Proceeds from long-term debt                                                   |                                                                            |                                       | 431,050                                              |        |        |         |        
|Payments of long-term debt                                                     |                                                                            |                                       | (333,525                                             | )      |        | (16,200  | )      
|Capital contribution from parent                                               |                                                                            |                                       | 60,000                                               |        |        |         |        
|Deferred financing costs                                                       |                                                                            |                                       | (16,962                                              | )      |        | (1,785   | )      
|Dividends paid to minority interest holders                                    |                                                                            |                                       | (1,227                                               | )      |        | (503     | )      
|                                                                               |                                                                            |                                       |                                                      |        |        |          |        
|                                                                               |                                                                            |                                       | Net cash provided by (used in) financing activities  |        |        | 110,236  |        
|                                                                               |                                                                            |                                       |                                                      |        |        |          |        
|Effect of exchange rate changes on cash                                        |                                                                            |                                       | (407                                                 | )      |        | (3,438   | )      
|                                                                               |                                                                            |                                       |                                                      |        |        |          |        
|                                                                               |                                                                            |                                       | Net increase (decrease) in cash and cash equivalents |        |        | 10,344   |        
|Cash and cash equivalents                                                      |                                                                            |                                       |                                                      |        |        |          |        
|Beginning of year                                                              |                                                                            |                                       | 18,930                                               |        |        | 44,636   |        
|                                                                               |                                                                            |                                       |                                                      |        |        |          |        
|End of year                                                                    |                                                                            | $                                     | 29,274                                               |        | $      | 18,930   |        
|                                                                               |                                                                            |                                       |                                                      |        |        |          |        

The
accompanying notes are an integral part of these consolidated financial statements.

F-5

---

Advanstar Communications Inc.
Notes to Consolidated Financial Statements
December 31, 2003, 2002 and 2001

1.     Nature of Business

The accompanying consolidated financial statements include the accounts of Advanstar Communications Inc., a wholly owned subsidiary of
Advanstar, Inc. ("Parent"), and its majority owned subsidiaries (collectively, "Advanstar" or the "Company"). All intercompany accounts and transactions between consolidated entities have been
eliminated.

The
Company operates and manages trade shows and conferences; publishes controlled circulation trade and professional periodicals; and markets a broad range of marketing, direct mail and
database products and services.

2.     Summary of Significant Accounting Policies

Cash and Cash Equivalents

Cash and cash equivalents include cash on deposit and highly liquid investments with original maturities of three months or less. Cash equivalents are stated at
cost, which approximates fair market value.

Prepaid Expenses and Other Current Assets

Prepaid expenses consist primarily of prepaid trade show and conference expenses, prepaid publication production costs and miscellaneous deposits. Event and
publication expenses are charged to operations at the time of the related event and at the time of publication issuance. Other current assets consist primarily of paper inventories.

Property, Plant and Equipment

Property, plant and equipment consisted of the following at December 31:

|                                   |                                    | 2003 |         | 2002   |  
|---------------------------------- | ---------------------------------- | ---- | ------- | ------ | -
|
|Land and improvements              |                                    | $    | 2,495   |        | $
|Buildings                          |                                    |      | 5,327   |        |  
|Furniture, machinery and equipment |                                    |      | 36,818  |        |  
|Leasehold improvements             |                                    |      | 5,390   |        |  
|                                   |                                    |      |         |        |  
|                                   |                                    |      | 50,030  |        |  
|Accumulated depreciation           |                                    |      | (26,144 | )      |  
|                                   |                                    |      |         |        |  
|                                   | Property, plant and equipment, net |      | $       | 23,886 |  
|                                   |                                    |      |         |        |  

Property,
plant and equipment is stated at its original cost and is depreciated on the straight-line basis over the following estimated useful lives:

Land improvements

10-15 yearsBuildings

20-40 yearsFurniture, machinery and equipment

3-10 yearsLeasehold improvements

Shorter of useful life or lease term


F-6

---

Maintenance
and repairs are charged to expense as incurred. Major betterments and improvements which extend the useful life of the item are capitalized and depreciated. The cost and
accumulated depreciation of property, plant and equipment retired or otherwise disposed of are removed from the related accounts, and any residual values are charged or credited to operations.

Intangible and Other Assets

Trade exhibitor and advertiser lists are amortized on a double-declining balance method over six years and five years, respectively. For periods prior to
April 1, 2001, trade exhibitor and advertiser lists were amortized using the straight-line method over eight years. Subscriber lists and other intangible assets are being amortized
on a straight-line basis over three to ten years. Trademarks and trade names are being amortized on a straight-line basis over 20 years.

Effective
January 1, 2002, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 142,Goodwill and Other Intangible
Assets. Effective with the adoption of this standard, the Company
no longer amortizes goodwill. For periods prior to January 1, 2002, goodwill was amortized on a straight-line basis over an average of 23 years. Goodwill is recorded in the
accompanying consolidated balance sheets net of accumulated amortization of $39.3 million at December 31, 2003 and 2002, respectively.

Impairment of Long-Lived Assets and Goodwill

The Company evaluates the carrying value of long-lived assets, including identifiable intangibles, for impairment when events or changes in
circumstances indicate that the carrying amount of an asset may not be recoverable. If impairment indicators are present and the estimated future undiscounted cash flows are less than the carrying
value of the assets, the carrying value is reduced to the estimated fair value as measured by the associated discounted cash flows.

Under
SFAS No. 142, the Company evaluates goodwill for impairment annually using a two-step test based upon a fair value approach. The first step is used to identify a
potential impairment, while the second step calculates the amount of impairment, if any. Additionally, goodwill shall be tested for impairment between annual tests if an event occurs or circumstances
change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Prior to January 1, 2002, the Company evaluated goodwill for impairment using the
method described in the preceding paragraph.

Accrued Expenses

Accrued expenses consisted of the following at December 31:

2003

2002(in thousands of dollars)Derivative instruments

$
1,535

$
5,849Interest


12,958


8,958Security deposits


3,661


3,125Benefits and severance


1,206


1,755Taxes


4,660


4,166Other


2,351


941$
26,371

$
24,794


F-7

---

Revenue Recognition

Trade show and conference revenue is recognized in the accounting period in which the event is conducted. Subscription revenue is recognized on a pro rata basis
as publications are issued to fulfill the subscription obligations. Advertising revenue is recognized when the publication with the respective advertisement is issued. Deferred revenue is recorded
when cash is received in advance of when the event is held or the publication is issued.

Deferred
revenue consisted of the following at December 31:

2003

2002(in thousands of dollars)Deferred trade show and conference revenue

$
49,480

$
49,752Deferred advertising and subscription revenue


11,418


3,287Total deferred revenue

$
60,898

$
53,039


Foreign Currency Translation

The Company accounts for translation adjustments related to its investments in foreign entities in accordance with SFAS No. 52, Foreign Currency
Translation. Local currencies are considered the functional currencies outside of the U.S. Generally, income and expense items are
translated at average rates of exchange prevailing during the year. For operations in local currency environments, assets and liabilities are translated at year end exchange rates with cumulative
translation adjustments included as a component of stockholder's equity.

Financial Derivative Instruments

Effective January 1, 2001, the Company adopted SFAS No. 133,Accounting for Derivative Instruments and Hedging
Activities, which required derivative instruments to 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 SFAS No. 133 on January 1, 2001, resulted in a reduction in income of approximately $0.6 million, net of tax, reported as a cumulative
effect of accounting change and a reduction to other comprehensive income of approximately $0.2 million, net of tax.

Stock-Based Compensation

As permitted by SFAS No. 123,Accounting for Stock-Based Compensation, the Company has elected to account
for stock options and awards to employees under the provisions of Accounting Principles Board ("APB") Opinion No. 25,Accounting for Stock Issued to
Employees, and related interpretations.

F-8

---

If
the Company had elected to recognize compensation cost based on the fair value of the options granted as prescribed by SFAS No. 123, net loss would have been increased to the
pro forma amounts indicated in the table below for the years ended December 31:

|                                                       |  | 2003 |         | 2002 |   | 2001     |  
|------------------------------------------------------ |  | ---- | ------- | ---- | - | -------- | -
|
|Net lossas reported                                   |  | $    | (49,448 | )    | $ | (124,339 | )
|Less: Pro forma stock-based employee compensation cost |  |      | (2,400  | )    |   | (2,133   | )
|                                                       |  |      |         |      |   |          |  
|Net losspro forma                                     |  | $    | (51,848 | )    | $ | (126,472 | )
|                                                       |  |      |         |      |   |          |  

See
Note 7 for further discussion of the Company's stock compensation plans.

Comprehensive Income (Loss)

The Company follows the provisions of SFAS No. 130,Reporting Comprehensive Income. This statement
established rules for the reporting of comprehensive income (loss) and its components. Comprehensive income (loss) reflects the change in equity of a business enterprise during a period from
transactions and other events and circumstances from nonowner sources. Comprehensive income (loss) consists of net income (loss), foreign currency translation adjustments and changes in unrealized
loss on derivative financial instruments, and is presented in the accompanying consolidated statements of stockholder's equity.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting periods. Ultimate results could differ from these estimates. On an ongoing basis, management reviews its estimates, including those affecting
doubtful accounts, valuation of goodwill and intangible assets, and income taxes. Changes in facts and circumstances may result in revised estimates.

New Accounting Pronouncements

In January 2003, the Financial Accounting Standards Board ("FASB") issued Interpretation No. 46,Consolidation of Variable
Interest Entities, which addressed accounting for special-purpose and variable interest entities. This interpretation was effective for financial statements issued after
December 31, 2002. In September 2003, the FASB issued a Staff Position to allow a deferment of the effective date to the end of the first interim or annual period ending after
December 15, 2003, if certain conditions were met. In December 2003, the FASB issued Interpretation No. 46R,Consolidation of Variable Interest
Entities, which addresses accounting for special-purpose and variable interest entities and which superseded Interpretation No. 46. The provisions of Interpretation
No. 46R are effective for the Company in the first quarter of 2005. Specifically, based upon the Company's preliminary analysis, the Company believes that it will be required to consolidate the
operations of Advanstar.com effective January 1, 2005. If the Company consolidates Advanstar.com, management believes the effect of adoption will be to reduce the amount of Advanstar.com losses
included in the Company's operating results. The Company does not expect this consolidation to have a material effect on its financial position, results of operations or cash flows.

F-9

---

In
May 2002, the FASB issued SFAS No. 145,Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections. SFAS No. 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. SFAS No. 145 also rescinds FASB Statement No. 44,Accounting for Intangible Assets of Motor
Carriers. SFAS No. 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. SFAS No. 145 also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their
applicability under changed conditions. The Company adopted SFAS No. 145 effective January 1, 2003. The adoption of SFAS No. 145 resulted in reclassification of the 2001
extraordinary item, net of income tax, into other income (expense). The effect of this reclassification was to increase the (loss) income before income taxes, minority interests, and cumulative effect
of accounting change by $4.0 million and to increase the income tax benefit of $1.5 million. This reclassification had no effect on the previously reported 2001 net loss.

3.     Goodwill and Other Intangible Assets

Effective January 1, 2002, the Company adopted SFAS No. 142, which established new standards related to how acquired goodwill and indefinite-lived
intangible assets are to be recorded upon their
acquisition as well as how they are to be accounted for after they have been initially recognized in the financial statements.

Effective
with the adoption of this standard, the Company no longer amortizes goodwill. Instead, SFAS No. 142 requires acquired goodwill to be periodically evaluated for
impairment. Upon adoption of the standard, the Company engaged an appraiser to assist in completing a transitional impairment test for its acquired goodwill using a discounted cash flow model. As a
result of the impairment analysis, the Company recorded a goodwill impairment charge of $70.9 million in the first quarter of 2002. After minority interest effect of $4.1 million, the
net charge was $66.8 million. This charge was attributable to an impairment of the carrying value of goodwill in the Company's trade show operating segment which management believes resulted
from a slow-down in the economy and its associated impact on the trade show business. The net charge of $66.8 million was reported as a cumulative effect of a change in accounting
principle. There was no income tax effect associated with this impairment charge.

On
a prospective basis, the Company is required to test acquired goodwill on an annual basis based upon a fair value approach. Additionally, goodwill shall be tested for impairment
between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.

On
July 1, 2003 the Company engaged an appraiser to assist in completing its annual goodwill impairment test of each of its three reporting units. Based on this valuation, which
utilized a discounted cash flow method, there was no impairment of goodwill indicated.

F-10

---

The following table represents a reconciliation of loss before cumulative effect of accounting change and net (loss) income adjusted for the exclusion of goodwill amortization, net of
tax, for the year ended December 31, 2001:

(in thousands of dollars)Reported loss before cumulative effect of accounting change

$
(49,210
)Add: Goodwill amortization, net of tax


22,738Pro forma loss before cumulative effect of accounting change

$
(26,472
)Reported net loss

$
(49,762
)Add: Goodwill amortization, net of tax


22,738Pro forma net loss

$
(27,024
)


The
changes in the carrying amount of goodwill for the year ended December 31, 2003, by operating segment, are as follows:

Trade Shows
and
Conferences

Trade
Publications

Marketing
Services

Totals(in thousands of dollars)Balances at December 31, 2001

$
557,109

$
131,932

$
30,345

$
719,386Goodwill acquired or finally allocated during the period


6,350


5,482


495


12,327Transition impairment loss


(70,905
)







(70,905
)Balances at December 31, 2002


492,554


137,414


30,840


660,808Goodwill acquired or finally allocated during the period


(1,351
)

75,685





74,334Goodwill allocated to business disposition


(787
)

(639
)




(1,426
)Foreign currency translation


6,679


1,863


238


8,780Balances at December 31, 2003

$
497,095

$
214,323

$
31,078

$
742,496


Intangible
and other assets consist of the following at December 31:

2003

2002(in thousands of dollars)Trade exhibitor lists

$
161,558

$
161,492Advertiser lists


62,501


39,673Subscriber lists


28,749


23,978Trade names and trademarks


18,016


Other intangible assets


21,593


8,097Deferred financing costs


21,942


22,367314,359


255,607Accumulated amortization


(170,248
)

(126,807
)Total intangible and other assets, net

$
144,111

$
128,800


F-11

---

The
allocated fair value of intangible assets acquired during 2003 and 2002 was as follows:

2003

2002(in thousands of dollars)Trade exhibitor lists

$


$
1,636Advertiser lists


24,419


6,728Subscriber lists


5,091


1,796Trade names and trademarks


17,948


Other intangible assets


14,752


3,298$
62,210

$
13,458


Amortization
expense related to intangible assets for 2003, 2002 and 2001 was $48.3 million, $59.9 million and $61.1 million, respectively.

Estimated
amortization expense of intangible assets for the next five years is as follows:

(in thousands of dollars)2004

$
45,7882005


38,6162006


28,9332007


7,2922008


2,025


4.     Acquisitions

All acquisitions have been accounted for using the purchase method of accounting and, accordingly, the assets acquired and liabilities assumed have been recorded
at their fair values as of the dates of the acquisitions. The excess of the purchase price over the fair value of the assets acquired and liabilities assumed has been recorded as goodwill. Results of
operations for these acquisitions have been included in the accompanying consolidated financial statements since their respective dates of acquisition.

In
May 2001, the Company contributed SeCA, the Company's French call center event, to a joint venture, MMStars. The transaction required certain approvals by French governmental
authorities. Final approval was obtained in September 2001. Upon approval of the French governmental authorities and completion of the purchase price allocation, the Company consolidated
MMStars and recorded a minority interest of $6.3 million representing the minority stockholder's proportional share of MMStars' equity at the joint venture's formation date. In the formation of
the joint venture, the minority investor
made an asset contribution equal to its ownership interest. Thus, no gain or loss was recognized upon formation of the joint venture.

On
August 22, 2001, the Company acquired theTechLearnconference for approximately $6.0 million in cash and assumed
liabilities and a $6.0 million note payable, due in 36 equal monthly installments through 2004. The excess of purchase price over the fair value of the assets acquired has been recorded as
goodwill of $11.5 million.

From
January 1, 2001 through December 31, 2001, the Company completed two other acquisitions of trade shows, conferences, and publishing properties, including the
outstanding minority interest in Advanstar Wideband, with a cumulative purchase price of $8.3 million.

F-12

---

On
January 9, 2002, the Company acquiredAIIM International Exposition and Conferencefor approximately $11.9 million in
cash and assumed liabilities.

On
October 3, 2002, the Company acquiredHTthe Magazine for Healthcare Travel Professionalsfor approximately
$11.1 million in cash and assumed liabilities.

From
January 1, 2002 through December 31, 2002, the Company completed two other acquisitions of publishing properties with a cumulative purchase price of
$1.0 million in cash.

From
January 1, 2003 through December 31, 2003, the Company acquired intangible assets, primarily customer relationships, of approximately $0.7 million in cash and
paid an additional $0.5 million contingent purchase price related to its 2002 acquisition ofHTthe Magazine for Healthcare Travel
Professionals.

On
October 1, 2003, the Company purchased a portfolio of healthcare industry magazines and related custom service projects from the Thomson Corporation and its subsidiaries
("Thomson") for $150.7 million, including $136.5 million in cash (including related fees and expenses) and $14.1 million of liabilities assumed.

The
following table summarizes the estimated fair value of the assets acquired and liabilities assumed in the Thomson acquisition at October 1, 2003.

(in thousands of dollars)Current assets

$
12,878Property, plant and equipment


1,233Intangible assetsAdvertiser lists


23,842Subscriber lists


5,091Trade names and trademarks


17,948Noncompetition agreement


13,591Other intangible assets


957Goodwill


75,110Total assets acquired


150,650Current liabilities


14,111Total liabilities assumed


14,111Net assets acquired

$
136,539


The
$61.4 of intangible assets have a weighted average useful life of approximately nine years.

Current
liabilities of $14.1 million assumed, include approximately $1.0 million of severance costs pursuant to the Company's plan to sever certain employees of Thomson.
All effected employees were severed as of December 31, 2003. The balance of accrued severance at December 31, 2003, was $1.0 million. The following are unaudited pro forma
operating results as if the Thomson acquisition had taken place at January 1, 2002. The pro forma operating results related to all other 2002 and 2001 acquisitions discussed above were
immaterial.

2003

2002(in thousands of dollars)Revenue

$
387,072

$
394,685Loss before cumulative effect of accounting change


(59,561
)

(66,269
)Net loss


(59,561
)

(133,086
)


F-13

---

5.     Financial Derivative Instruments

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. In 2001 the Company entered into an interest rate collar agreement expiring
February 2004, 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 interest rate collar
agreement is reported as a component of accumulated other comprehensive income in stockholder's equity and is recognized in earnings as the underlying interest expense is incurred. The ineffective
portion of the interest rate collar and swap agreements is recognized in current earnings. The Company uses a portion of these agreements as hedges of the Company's second priority senior secured
floating rate notes described below. Gains and losses on the undesignated portion of these agreements at the end of each fiscal quarter (which are calculated as the
net amount payable upon termination at the date of determination), will be recognized in current earnings.

In
May 2003 the Company entered into an interest rate swap agreement expiring November 2005, and subsequently terminated the agreement in December 2003. The net gain
at termination of approximately $0.2 million will continue to be reported in accumulated other comprehensive income and amortized into earnings over the original contract term.

In
connection with the Company's private placement of $360 million of second priority senior secured notes in August 2003 and the use of proceeds therefrom to repay and
terminate all outstanding term A loans under its credit facility and all but $25.0 million of the outstanding term B loans under its credit facility (Note 6), the Company reclassified
approximately $1.8 million of deferred losses previously reported as a component of accumulated other comprehensive income into other expense in the quarter ended September 30, 2003.

Foreign Currency Risk

Certain forecasted transactions are exposed to foreign currency risk. Foreign currencies hedged are the Euro, British Pound Sterling and the Brazilian Real. These
forward contracts are not designated as hedging instruments under SFAS No. 133 but are 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.

F-14

---

At December 31, 2003, the Company had foreign exchange derivative contracts to sell with a notional amount totaling $7.5 million and to buy totaling $2.4 million.
The estimated fair value of the foreign exchange contracts based upon market quotes was a net liability of $0.1 million at December 31, 2003.



The following table summarizes the effects of SFAS No. 133 on the Company's accumulated other comprehensive income at December 31, 2003 and 2002:

Interest Rate
Collar
Agreements

Foreign
Exchange
Contracts

Total(in thousands of dollars)Accumulated other comprehensive (loss) income balance at December 31, 2001

$
(4,189
)
$
5

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


6,856


(5
)

6,851Mark to market hedge contracts


(7,017
)




(7,017
)Accumulated other comprehensive loss balance at December 31, 2002


(4,350
)




(4,350
)Unwound from accumulated other comprehensive income during the period


5,739





5,739Mark to market hedge contracts


(1,431
)




(1,431
)Accumulated other comprehensive loss balance at December 31, 2003

$
(42
)
$


$
(42
)


At
December 31, 2003, the Company estimates that it will reclassify out of accumulated other comprehensive income approximately $0.2 million of deferred losses into
earnings within the next 12 months.

The
fair value of the Company's derivatives was a net liability position of $1.5 million and $6.6 million at December 31, 2003 and 2002, respectively, of which
$1.5 million and $5.8 million is included in accrued liabilities at December 31, 2003 and 2002, respectively, and $0.8 million is included in other long-term
liabilities at December 31, 2002, in the accompanying consolidated balance sheets.

Statement of Operations

The following tables summarize the effects of SFAS No. 133 on the Company's statement of operations related to the ineffective portion of the Company's
interest rate collar agreements and changes in the fair value of foreign exchange contracts not designated as hedging instruments for the years ended December 31, 2003 and 2002:

Interest Rate
Collar
Agreements

Foreign
Exchange
Contracts

Total(in thousands of dollars)Year ended December 31, 2003Other income (expense)

$
1,178

$
(96
)
$
1,082Total statement of operations impact before taxes

$
1,178

$
(96
)
$
1,082Year ended December 31, 2002Other (expense) income

$
(105
)
$
649

$
544Total statement of operations impact before taxes

$
(105
)
$
649

$
544


F-15

---

6.     Debt

Credit Facility

The credit facility (the "Credit Facility") consisted of (i) $415.0 million of term loans A and B payable in quarterly installments through
October 11, 2007, and (ii) $80.0 million of revolving loans availability through April 11, 2007. The Credit Facility contained restrictive covenants which required the
Company to, among other things, maintain a maximum quarterly leverage ratio (as defined) that declined quarterly through the fourth quarter of 2004, and maintain a minimum fixed charge ratio (as
defined).

In
connection with its private placement in August 2003 described below, the Company and the lenders amended its Credit Facility to permit the private placement and the proposed
use of the proceeds thereof, to eliminate the leverage ratio covenant and amended certain other covenants contained in the Credit Facility and reduce the revolving loan commitments thereunder from
$80.0 million to $60.0 million. Failure of the Company to comply with the current covenants may cause an event of default under the Credit Facility. Borrowings under the Credit Facility
are collateralized by substantially all of the Company's assets.

Senior Secured Notes

On August 18, 2003, the Company issued $360.0 million of second priority senior secured notes (the "August senior secured notes"). On
September 25, 2003, the Company issued an additional $70.0 million of second priority senior secured notes (the "September senior secured notes") which were issued at a premium (together
with the August senior secured notes, the "Senior Secured Notes"). The Senior Secured Notes were issued in two tranches: $130.0 million of Second Priority Senior Secured Floating Rate Notes due
2008, which require quarterly amortization equal to 0.25% of the principal amount thereof (the "floating rate notes"), and $300.0 million of 10.75% Second Priority Senior Secured Notes due
2010. Interest on the floating rate notes is payable at a rate equal to three-month LIBOR, which is reset quarterly, plus 7.5%. Each tranche of the notes is collateralized by second priority liens on
substantially all the collateral pledged against borrowings under the Company's Credit Facility (other than the capital stock of certain of its subsidiaries and assets of its parent companies). The
notes contain restrictive covenants that, among other things, limit the Company's ability to incur debt, pay dividends and make investments. The Company entered into a registration rights agreement in
connection with the private placement pursuant to which the Company has registered substantially all of the notes.

The
Company used the net proceeds from the August senior secured notes offering to repay and terminate all outstanding term A loans under its credit facility and all but
$25.0 million of the outstanding term B loans and a portion of its revolving credit borrowings under its Credit Facility. The Company used the net proceeds of the September senior secured notes
offering to acquire a portfolio of healthcare industry magazines and related custom service projects from the Thomson Corporation (Note 4).

The
Senior Secured Notes are fully and unconditionally guaranteed on a senior basis, jointly and severally, by the Company's wholly owned domestic subsidiaries. The financial covenants
under the Senior Secured Notes include limitations on certain asset dispositions, payments, debt incurrence, dividends and other restricted payments.

Senior Subordinated Notes

The Company's $160.0 million unsecured, 12% senior subordinated notes due 2011 (the "Senior Subordinated Notes") require semiannual
interest-only payments on February 15 and August 15 of each year. The Senior Subordinated Notes are fully and unconditionally guaranteed on a senior subordinated

F-16

---

basis,
jointly and severally, by the Company's wholly owned domestic subsidiaries. The financial covenants under the Senior Subordinated Notes include limitations on certain asset dispositions,
payments, debt incurrence, dividends and other restricted payments.

Long-term
debt consists of the following at December 31 (in thousands):

2003

2002(in thousands of dollars)Term loan A, interest at LIBOR plus 3.75%

$


$
75,000Term loan B, interest at LIBOR plus 4.50%; 5.64% at December 31, 2003, due quarterly through October 11, 2008


25,000


280,800Revolving credit loan, interest at LIBOR plus 3.75%; 4.87% and 4.66% at December 31, 2003 and 2002, respectively, due April 11, 2007


8,000


37,100Second priority senior secured floating rate notes, interest at LIBOR plus 7.5%, due 2008


129,675


10.75% Second priority senior secured notes, due 2010, plus unamortized premium of $994 at December 31, 2003


300,994


12% Senior subordinated notes, due 2011


160,000


160,000Acquisition note payable, interest at 5.5%, due monthly through 2004


2,000


4,000Acquisition note payable, interest at 6%, due April 1, 2004


400


800626,069


557,700Less: Current maturities


(3,700
)

(17,400
)$
622,369

$
540,300


Based
on the borrowing rates currently available to the Company for debt instruments with similar terms and average maturities, the fair value of long-term debt exceeded its
carrying value by approximately $33.2 million at December 31, 2003, and the fair value of long-term debt was below its carrying value by approximately $35.2 million at
December 31, 2002.

Cash
paid for interest for the years ended December 31, 2003, 2002 and 2001, was approximately $51.1 million, $49.1 million and $45.7 million, respectively.

Annual
maturities of long-term debt for the next five years (excluding amortization of premium) are as follows:

(in thousands of dollars)2004

$
3,7002005


1,3002006


1,3002007


9,3002008


149,475Thereafter


460,000$
625,075


7.     Stockholder's Equity

2000 Management Incentive Plan

On October 12, 2000, Advanstar Holdings Inc. ("Holdings"), the Parent company of Advanstar, Inc., adopted the 2000 Management Incentive Plan.
A maximum of 4,047,789 shares of Holdings are authorized for grant to participants under the 2000 Management Incentive Plan. Options are granted by Holdings' board of directors at an exercise price of
not less than the fair value of

F-17

---

Holdings
common stock at the date of grant and vest over a maximum of nine years. Shares available for grant under the 2000 Management Incentive Plan totaled 204,039 at December 31, 2003.

For
purposes of computing compensation cost of stock options granted, as summarized in Note 2, the fair value of each stock option grant was estimated on the date of grant using
the Black-Scholes option pricing model with the following weighted average assumptions for the years ended December 31:

2003

2002

2001Expected dividend yield





Expected stock price volatility

36.0%

37.6%

76.8%Risk-free interest rate

3.8%

5.0%

4.9%Expected life of options

7.0 years

7.0 years

7.5 years


The
Company uses comparable public companies in its industry for estimating its expected stock price volatility. The Company has not declared or paid any cash dividends in the past.
Under terms of the Company's Credit Facility, the Company is prohibited from paying cash dividends without prior approval of the lenders, as defined in the Credit Facility.

A
summary of stock option activity under the Plan and the 2000 Management Incentive Plan is as follows:

Options
Outstanding

Weighted
Average
Exercise
PriceOutstanding at December 31, 2000

3,255,000

$
10.00Granted

115,000


10.00Cancelled

(445,000
)

10.00Outstanding at December 31, 2001

2,925,000


10.00Granted

575,000


10.00Cancelled

(256,250
)

10.00Outstanding at December 31, 2002

3,243,750


10.00Granted

600,000


10.00Cancelled




Outstanding at December 31, 2003

3,843,750

$
10.00


At
December 31, 2003 and 2002, the outstanding stock options had a weighted average remaining contractual life of 7.6 and 8.1 years, respectively, and an exercise price of
$10.00 per option. Of the options outstanding at December 31, 2003 and 2002, 1,596,600 and 1,013,500, respectively, were exercisable. The weighted average fair value of grants, as estimated
using the Black-Scholes option
pricing model, for the years ended December 31, 2003, 2002 and 2001, was $5.34, $5.42 and $5.62 per option, respectively.

8.     401(k) Plan

The Company has a 401(k) savings plan and trust (the "401(k) Plan") available to employees of the Company and its domestic subsidiaries. All domestic employees
who have completed one year of service and are at least 21 years of age are eligible to participate in the 401(k) Plan. The Company is required to make a matching contribution to the 401(k)
Plan and may also make discretionary contributions to the 401(k) Plan. Eligible employees are vested 100% in their own contributions. Contributions made by the Company vest in equal installments over
five years. Total contribution expense was $1.2 million for the year ended December 31, 2003, $1.2 million for the year ended December 31, 2002, and $1.3 million for
the year ended December 31, 2001.

F-18

---

9.     Income Taxes

The Company's taxable income or loss is included in the consolidated federal income tax return of the Parent. Federal income taxes are paid to or refunded by the
Parent pursuant to the terms of a tax-sharing agreement under which taxes approximate the amount that would have been computed on a separate company basis. Taxes payable to the Parent of
approximately $6.6 million at December 31, 2003, are included in due to Parent in the accompanying consolidated balance sheet.

Cash
paid for income taxes during the years ended December 31, 2003, 2002 and 2001, was approximately $0.3 million, $0.8 million and $1.2 million,
respectively.

The
summary of income (loss) before provision (benefit) for income taxes, minority interests and accounting change were as follows for the years ended December 31:

2003

2002

2001(in thousands of dollars)Domestic

$
(37,586
)
$
(72,369
)
$
(57,455
)Foreign


(4,510
)

(157
)

(4,247
)$
(42,096
)
$
(72,526
)
$
(61,702
)


The
(benefit) provision for income taxes is comprised of the following for the years ended December 31:

2003

2002

2001(in thousands of dollars)CurrentFederal

$


$
(820
)
$
State





59


Foreign


(265
)

1,888


2,277Deferred


6,990


(16,605
)

(14,925
)Total provision (benefit)

$
6,725

$
(15,478
)
$
(12,648
)


The
Company accounts for income taxes following the provisions of SFAS No. 109,Accounting for Income Taxes, which requires
recognition of deferred tax assets and liabilities for the expected future tax consequences of differing amounts that have been included in the financial statements or tax returns. Under this method,
deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using currently enacted tax rates.

F-19

---

Significant
components of the Company's deferred income taxes were as follows at December 31:

2003

2002(in thousands of dollars)Net current deferred tax assetAccounts receivable

$
15,287

$
14,845Accrued expenses and other


4,789


2,474Prepaid and other


(3,196
)

(3,186
)Total net current deferred tax asset


16,880


14,133Net noncurrent deferred tax assetProperty, plant and equipment


575


1,128Identifiable intangible assets


5,230


(9,214
)Goodwill


(6,990
)

3,955U.S. net operating loss carryforwards


21,132


12,008Foreign jurisdiction net operating loss carryforwards


7,616


5,664Financial derivatives


1,075


1,933AMT credit carryforwards


453


453Total net noncurrent deferred tax asset


29,091


15,927Valuation allowance


(52,961
)

(30,060
)Net deferred income tax assets (liabilities)

$
(6,990
)
$



Prior
to December 31, 2002, the Company had a net deferred tax liability in the U.S. tax jurisdiction and management expected the Company's deferred tax assets to be realized
through offset against reversals of the Company's deferred tax liabilities. However at December 31, 2002, the Company had a net deferred tax asset of approximately $30.1 million. The
increase in net deferred tax assets resulted primarily from the accelerated amortization of intangible assets and the write down of the carrying value of goodwill for financial reporting purposes. The
Company has established a valuation allowance to offset all of these net deferred tax assets due to uncertainty about ultimate realization. During 2003, the continuing amortization of goodwill for
income tax purposes resulted in the reduction in tax basis of goodwill to a tax effected amount $7.0 million less than the carrying value of goodwill for financial reporting purposes at
December 31, 2003. Because goodwill is not amortized for financial reporting purposes, the Company has established a deferred tax liability equal to this basis difference and has increased the
valuation allowance by the same amount.

At
December 31, 2003 and 2002, the Company had net operating loss carryforwards of approximately $73.7 million and $48.7 million, respectfully. Of these losses,
approximately $19.0 million and $14.2 million are related to losses generated by the Company's operations in foreign tax jurisdictions whose use are subject to the tax laws of such
foreign jurisdictions and will be limited by the ability of such foreign entities to generate taxable income. Of the total operating loss carryforwards, approximately $19.0 million have no
expiration date and approximately $54.7 million expire at various dates beginning in 2021.

F-20

---

A
reconciliation of the Company's provision (benefit) for income taxes at the federal statutory rate to the reported income tax provision (benefit) is as follows:

|                                          |  |   |         | 2002 |   |         |  
|----------------------------------------- |  | - | ------- | ---- | - | ------- | -
|
|
|Income tax benefit at statutory rates     |  | $ | (14,734 | )    | $ | (25,384 | )
|Nondeductible amortization                |  |   |        |      |   |        |  
|Nondeductible goodwill impairment         |  |   |        |      |   |        |  
|Change in valuation allowance             |  |   | 22,901  |      |   | 10,817  |  
|State taxes, net of federal benefit       |  |   | (1,052  | )    |   | (1,813  | )
|Foreign provision in excess of U.S. rates |  |   | (530    | )    |   | 260     |  
|Other, net                                |  |   | 140     |      |   | 642     |  
|                                          |  |   |         |      |   |         |  
|Provision (benefit) for income taxes      |  | $ | 6,725   |      | $ | (15,478 | )
|                                          |  |   |         |      |   |         |  

10.   Commitments and Contingencies

Leases

The Company has long-term operating leases for office space and office equipment. The leases generally require the Company to pay maintenance,
insurance, taxes and other expenses in addition to minimum annual rentals. Building and equipment rent expense, including an allocation of certain facility operating expenses, was $7.8 million,
$7.4 million and $7.1 million for the years ended December 31, 2003, 2002 and 2001, respectively. Future minimum rent commitments under operating leases with initial terms of one
year or more are as follows:

(in thousands of dollars)2004

$
6,4582005


6,1512006


5,1902007


4,0682008


3,855Thereafter


3,196


Litigation

The Company is a defendant in legal proceedings arising in the ordinary course of business. Although the outcome of these proceedings cannot presently be
determined, in the opinion of management, disposition of these proceedings will not have a material effect on the results of operations or financial position of the Company.

F-21

---

11.   Segments

The Company follows the provisions of SFAS No. 131,Disclosures about Segments of an Enterprise and Related
Information, and has three reportable segments: trade shows and conferences, trade publications and marketing services. The trade show and conference segment allows exhibitors
a cost-effective means to showcase and sell products and services while developing business relationships with potential customers. The Company's trade publications segment provides
new product and educational information to readers and allows advertisers to reach highly targeted and select business audiences. The marketing services segment offers customers mailing lists from the
Company's subscriber and attendee databases; editorial and advertising reprints; direct mail postcards; and classified, recruitment and industry directory advertising.

The
Company evaluates the performance of, and allocates resources to, its segments based on contribution margindefined as net revenue less cost of production and selling,
editorial, and circulation costs. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. There are no intersegment sales
or transfers. Segment assets are primarily intangible assets, prepaid expenses and accounts receivable. Revenues, contribution margins and segment assets of the Company's reportable segments are as
follows:

Trade Shows
and
Conferences

Trade
Publications

Marketing
Services

Corporate
and Other

Total(in thousands of dollars)Year ended December 31, 2003Net revenue

$
155,507

$
152,157

$
14,975

$
1,034

$
323,673Contribution margin (loss)


73,981


47,061


5,732


(4,958
)

121,816Segment assets


561,550


279,792


33,349


110,394


985,085Year ended December 31, 2002Net revenue


159,075


131,106


15,678


1,324


307,183Contribution margin (loss)


80,865


36,364


6,579


(4,308
)

119,500Segment assets


586,406


183,954


32,599


63,067


866,026Year ended December 31, 2001Net revenue


186,250


142,607


17,168


972


346,997Contribution margin (loss)


86,911


35,464


8,788


(4,158
)

127,005Segment assets


688,223


188,842


32,750


90,964


1,000,779


F-22

---

The
reconciliation of total segment contribution margin to consolidated (loss) income before taxes, minority interests and cumulative effect of accounting change is as follows for the
years ended December 31:

|                                                 |                                                                                              | 2003 |         | 2002    |   | 2001    |        
|------------------------------------------------ | -------------------------------------------------------------------------------------------- | ---- | ------- | ------- | - | ------- | -------
|
|Total segment contribution margin                |                                                                                              | $    | 121,816 |         | $ | 119,500 |        
|General and administrative expense               |                                                                                              |      | (34,555 | )       |   | (35,027 | )      
|Restructuring charge                             |                                                                                              |      | (2,692  | )       |   |        |        
|Funding of affiliated dot.com company operations |                                                                                              |      | (1,121  | )       |   | (39,587 | )      
|Depreciation and amortization                    |                                                                                              |      | (56,603 | )       |   | (69,132 | )      
|Other expense (primarily interest)               |                                                                                              |      | (68,941 | )       |   | (48,280 | )      
|                                                 |                                                                                              |      |         |         |   |         |        
|                                                 | Consolidated loss before taxes, minority interest and cumulative effect of accounting change |      | $       | (42,096 | ) | $       | (72,526
|                                                 |                                                                                              |      |         |         |   |         |        

Financial
information relating to the Company's operations by geographic area is as follows for the years ended December 31:

|              |  | 2003 |         | 2002 |   | 2001   
|------------- |  | ---- | ------- | ---- | - | -------
|
|Net Revenue   |  |      |         |      |   |        
|United States |  | $    | 299,767 |      | $ | 276,784
|International |  |      | 23,906  |      |   | 30,399 
|              |  |      |         |      |   |        
|              |  | $    | 323,673 |      | $ | 307,183
|              |  |      |         |      |   |        

Revenues
are primarily attributed to countries based on the location of customers.

|                  |  | 2003 |         | 2002
|----------------- |  | ---- | ------- | ----
|
|Long-Lived Assets |  |      |         |     
|United States     |  | $    | 845,309 |     
|International     |  |      | 65,184  |     
|                  |  |      |         |     
|                  |  | $    | 910,493 |     
|                  |  |      |         |     

12.   Restructuring Activities

In September 2003, the Company consolidated its midtown New York leased office space from two floors to one. These actions resulted in a third quarter
charge of approximately $2.1 million. In December 2003, the Company consolidated its Chester, U.K. leased office space, resulting in a fourth quarter charge of approximately
$0.6 million. These activities included a charge for the present value of future facility rental payments, net of sublease income, of $2.3 million and incurred other relocation costs and
expenses of $0.4 million. The Company will continue to pay facility lease costs, net of sublease income, associated with the previously used facilities through August 2015. The accrual
balance at December 31, 2003 is $2.4 million which principally represents remaining facility lease costs, of which approximately $0.5 million is included in accrued liabilities
and approximately $1.9 million is

F-23

---

included
in other long-term liabilities in the accompanying consolidated balance sheet at December 31, 2003.

13.   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, the Company has accounted for the approximately $37.2 million in accumulated advances and notes to Advanstar.com as a charge to capital in excess of par value in the
December 31, 2001 consolidated balance sheet, pending final determination of the disposition of these advances and notes. The accumulated advances and notes to Advanstar.com were
$20.5 million at December 31, 2000. Net advances and notes of approximately $16.7 million were made during 2001. In the first quarter of 2002, management of Advanstar, Inc.
began to consider the further consolidation of the activities of
Advanstar.com with the Company, or a merger of Advanstar.com into the Company. Consequently, in response to the changing business environment and continuing operating losses of Advanstar.com, the
Company recorded a first quarter 2002 noncash charge to operations of $37.2 million related to a provision against the outstanding advances and notes due to the Company from Advanstar.com at
December 31, 2001.

In
2002 the Company began recording the advances and notes issued as an operating expense on the Company's 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 new advances and notes charged to the Company's
operations during the year ended December 31, 2003 and 2002, were approximately $1.1 million and $2.4 million, respectively.

F-24

---



14.    Related-Party Transactions

Financial Advisory Fees and Agreements

In
2001, 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 Senior Subordinated 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, including out-of-pocket expenses.

In
2003, CSFB, acted as the Company's financial advisor in connection with the issuance of, and was an initial purchaser of, the Senior Secured Notes. The Company paid customary fees to
CSFB as compensation for those services. The aggregate amount of all fees paid to the CSFB entities in connection with these financings during 2003 was approximately $10.4 million, including
out-of-pocket expenses.

Parent Company Notes

The
Company's Parent, Advanstar, Inc., issued the Discount Notes in October 2000 with a principal amount at maturity of $103.2 million. In February 2001,
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 the Company nor any of its 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. The credit facility and the Senior Subordinated Notes impose substantial restrictions on the Company's and its subsidiaries' ability to pay dividends.

15.    Supplemental Guarantor Condensed Consolidating Financial Statements

Basis of Presentation

The
Senior Subordinated 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 Art Expositions International, Inc., MAGIC and Applied Business TeleCommunications. The condensed consolidating 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, fully, and unconditionally liable under the guarantees and the Company believes the condensed consolidating financial statements presented are sufficiently meaningful in
understanding the financial position and results of the guarantors.

F-25

---

Condensed Consolidating Balance Sheets  December 31, 2003

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

|                                                      |                                         | Communications             |           | Guarantor
Subsidiaries |         | Nonguarantor
Subsidiaries |         | Eliminations |         | Consolidated
Total |       
|----------------------------------------------------- | --------------------------------------- | -------------------------- | --------- | ---------------------- | ------- | ------------------------- | ------- | ------------ | ------- | ------------------ | ------
|
|Assets                                                |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|Current assets                                        |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|                                                      | Cash and cash equivalents               |                            | $         | 21,568                 |         | $                         |        |              | $       | 7,706              |       
|                                                      | Accounts receivable, net                |                            |           | 30,256                 |         |                           |        |              |         | 4,304              |       
|                                                      | Prepaid expenses                        |                            |           | 5,673                  |         |                           | 1,547   |              |         | 1,767              |       
|                                                      | Other                                   |                            |           | 1,718                  |         |                           |        |              |         | 53                 |       
|                                                      |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|                                                      |                                         | Total current assets       |           |                        | 59,215  |                           |         | 1,547        |         |                    | 13,830
|Noncurrent assets                                     |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|                                                      | Property, plant and equipment, net      |                            |           | 22,506                 |         |                           | 850     |              |         | 530                |       
|                                                      | Deferred tax asset                      |                            |           | 13,524                 |         |                           | 35      |              |         |                   |       
|                                                      | Intangible and other assets, net        |                            |           | 533,950                |         |                           | 281,321 |              |         | 71,336             |       
|                                                      | Investments in subsidiaries             |                            |           | 518,214                |         |                           |         |              |         | 27,792             |       
|                                                      | Intercompany receivable                 |                            |           | 3                      |         |                           | 208,188 |              |         | (8,952             | )     
|                                                      |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|                                                      |                                         | $                          | 1,147,412 |                        | $       | 491,941                   |         | $            | 104,536 |                    | $     
|                                                      |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|Liabilities and Stockholder's Equity                  |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|Current liabilities                                   |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|                                                      | Current maturities of long-term debt    |                            | $         | 3,700                  |         | $                         |        |              | $       |                   |       
|                                                      | Accounts payable                        |                            |           | 23,289                 |         |                           | 2,738   |              |         | 3,433              |       
|                                                      | Accrued liabilities                     |                            |           | 23,513                 |         |                           | 6,554   |              |         | 3,244              |       
|                                                      | Deferred revenue                        |                            |           | 41,322                 |         |                           | 16,954  |              |         | 2,622              |       
|                                                      |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|                                                      |                                         | Total current liabilities  |           |                        | 91,824  |                           |         | 26,246       |         |                    | 9,299 
|Long-term debt, net of current maturities             |                                         |                            | 622,369   |                        |         |                          |         |              |        |                    |       
|Deferred income taxes and other long-term liabilities |                                         |                            | 12,017    |                        |         | 13,559                    |         |              | 295     |                    |       
|Intercompany payable                                  |                                         |                            | 199,239   |                        |         |                          |         |              |        |                    |       
|Due to parent                                         |                                         |                            | 3,650     |                        |         |                          |         |              |        |                    |       
|Minority interests                                    |                                         |                            | 9,017     |                        |         |                          |         |              | 1,072   |                    |       
|Stockholder's equity                                  |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|                                                      | Common stock                            |                            |           | 10                     |         |                           | 3       |              |         | 950                |       
|                                                      | Capital in excess of par value          |                            |           | 447,367                |         |                           | 438,117 |              |         | 112,204            |       
|                                                      | (Accumulated deficit) retained earnings |                            |           | (241,594               | )       |                           | 14,016  |              |         | (22,839            | )     
|                                                      | Accumulated other comprehensive loss    |                            |           | 3,513                  |         |                           |         |              |         | 3,555              |       
|                                                      |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|                                                      |                                         | Total stockholder's equity |           |                        | 209,296 |                           |         | 452,136      |         |                    | 93,870
|                                                      |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|                                                      |                                         | $                          | 1,147,412 |                        | $       | 491,941                   |         | $            | 104,536 |                    | $     
|                                                      |                                         |                            |           |                        |         |                           |         |              |         |                    |       

F-26

---

Condensed Consolidating Statements of Operations  Year Ended December 31, 2003

|                                       |                                                           | Communications                                                |         | Guarantor
Subsidiaries |         | Nonguarantor
Subsidiaries |        | Eliminations |        | Consolidated
Total |       
|-------------------------------------- | --------------------------------------------------------- | ------------------------------------------------------------- | ------- | ---------------------- | ------- | ------------------------- | ------ | ------------ | ------ | ------------------ | ------
|
|Net revenue                            |                                                           | $                                                             | 230,755 |                        | $       | 64,725                    |        | $            | 28,193 |                    | $     
|Operating expenses                     |                                                           |                                                               |         |                        |         |                           |        |              |        |                    |       
|                                       | Cost of production and selling, editorial and circulation |                                                               |         | 153,084                |         |                           | 25,343 |              |        | 23,430             |       
|                                       | General and administrative, including restructuring       |                                                               |         | 31,271                 |         |                           | 1,313  |              |        | 4,663              |       
|                                       | Funding of affiliated company operations                  |                                                               |         | 1,121                  |         |                           |       |              |        |                   |       
|                                       | Depreciation and amortization                             |                                                               |         | 33,788                 |         |                           | 20,492 |              |        | 2,323              |       
|                                       |                                                           |                                                               |         |                        |         |                           |        |              |        |                    |       
|                                       |                                                           | Total operating expenses                                      |         |                        | 219,264 |                           |        | 47,148       |        |                    | 30,416
|                                       |                                                           |                                                               |         |                        |         |                           |        |              |        |                    |       
|                                       |                                                           | Operating income (loss)                                       |         |                        | 11,491  |                           |        | 17,577       |        |                    | (2,223
|Other income (expense)                 |                                                           |                                                               |         |                        |         |                           |        |              |        |                    |       
|                                       | Interest expense, net                                     |                                                               |         | (58,590                | )       |                           |       |              |        | 487                |       
|                                       | Other income, net                                         |                                                               |         | (8,871                 | )       |                           |       |              |        | (1,967             | )     
|                                       |                                                           |                                                               |         |                        |         |                           |        |              |        |                    |       
|                                       |                                                           | (Loss) income before income taxes and minority interests      |         |                        | (55,970 | )                         |        | 17,577       |        |                    | (3,703
|Provision (benefit) for income taxes   |                                                           |                                                               | 567     |                        |         | 6,427                     |        |              | (269   | )                  |       
|Minority interests                     |                                                           |                                                               | (403    | )                      |         |                          |        |              | (224   | )                  |       
|Equity in earnings of subsidiaries     |                                                           |                                                               | 7,492   |                        |         |                          |        |              |       |                    |       
|                                       |                                                           |                                                               |         |                        |         |                           |        |              |        |                    |       
|                                       |                                                           | (Loss) income before extraordinary item and accounting change |         |                        | (49,448 | )                         |        | 11,150       |        |                    | (3,658
|Cumulative effect of accounting change |                                                           |                                                               |        |                        |         |                          |        |              |       |                    |       
|                                       |                                                           |                                                               |         |                        |         |                           |        |              |        |                    |       
|Net (loss) income                      |                                                           | $                                                             | (49,448 | )                      | $       | 11,150                    |        | $            | (3,658 | )                  | $     
|                                       |                                                           |                                                               |         |                        |         |                           |        |              |        |                    |       

F-27

---

Advanstar Communications Inc.
Condensed Consolidating Statements of Cash Flows
Year Ended December 31, 2003

|                                                                                        |                                                                  | Communications                            |                                                     | Guarantor
Subsidiaries |        | Nonguarantor
Subsidiaries |         | Eliminations |        | Consolidated
Total |      
|--------------------------------------------------------------------------------------- | ---------------------------------------------------------------- | ----------------------------------------- | --------------------------------------------------- | ---------------------- | ------ | ------------------------- | ------- | ------------ | ------ | ------------------ | -----
|
|Cash flows from operating activities                                                    |                                                                  |                                           |                                                     |                        |        |                           |         |              |        |                    |      
|Net (loss) income                                                                       |                                                                  | $                                         | (49,448                                             | )                      | $      | 11,150                    |         | $            | (3,658 | )                  | $    
|Adjustments to reconcile net (loss) income to net cash provided by operating activities |                                                                  |                                           |                                                     |                        |        |                           |         |              |        |                    |      
|Equity in earnings of subsidiaries                                                      |                                                                  |                                           | (7,492                                              | )                      |        |                          |         |              |       |                    |      
|                                                                                        | Gain on derivative financial instruments                         |                                           |                                                     | (772                   | )      |                           |        |              |        |                   |      
|                                                                                        | Provision for notes and advances from affiliated dot.com company |                                           |                                                     |                       |        |                           |        |              |        |                   |      
|                                                                                        | Transition goodwill impairment                                   |                                           |                                                     |                       |        |                           |        |              |        |                   |      
|                                                                                        | Deferred income taxes                                            |                                           |                                                     | 14,779                 |        |                           | (7,554  | )            |        | (235               | )    
|                                                                                        | Depreciation and amortization                                    |                                           |                                                     | 33,788                 |        |                           | 20,492  |              |        | 2,323              |      
|                                                                                        | Other noncash items                                              |                                           |                                                     | 15,701                 |        |                           | 72      |              |        | 541                |      
|                                                                                        | Change in working capital items                                  |                                           |                                                     | 37,036                 |        |                           | (23,772 | )            |        | 2,897              |      
|                                                                                        |                                                                  |                                           |                                                     |                        |        |                           |         |              |        |                    |      
|                                                                                        |                                                                  | Net cash provided by operating activities |                                                     |                        | 43,592 |                           |         | 388          |        |                    | 1,868
|                                                                                        |                                                                  |                                           |                                                     |                        |        |                           |         |              |        |                    |      
|Cash flows from investing activities                                                    |                                                                  |                                           |                                                     |                        |        |                           |         |              |        |                    |      
|Additions to property, plant and equipment                                              |                                                                  |                                           | (7,054                                              | )                      |        | (388                      | )       |              | (166   | )                  |      
|Acquisitions of publications and trade shows, net of proceeds                           |                                                                  |                                           | (137,712                                            | )                      |        |                          |         |              | (13    | )                  |      
|                                                                                        |                                                                  |                                           |                                                     |                        |        |                           |         |              |        |                    |      
|                                                                                        |                                                                  |                                           | Net cash used in investing activities               |                        |        | (144,766                  | )       |              | (388   | )                  |      
|                                                                                        |                                                                  |                                           |                                                     |                        |        |                           |         |              |        |                    |      
|Cash flows from financing activities                                                    |                                                                  |                                           |                                                     |                        |        |                           |         |              |        |                    |      
|Payments of long-term debt, net                                                         |                                                                  |                                           | 68,425                                              |                        |        |                          |         |              |       |                    |      
|Dividends paid to minority interest holders                                             |                                                                  |                                           | (1,000                                              | )                      |        |                          |         |              | (227   | )                  |      
|Contribution of capital from parent                                                     |                                                                  |                                           | 60,000                                              |                        |        |                          |         |              |       |                    |      
|Deferred financing costs                                                                |                                                                  |                                           | (16,962                                             | )                      |        |                          |         |              |       |                    |      
|                                                                                        |                                                                  |                                           |                                                     |                        |        |                           |         |              |        |                    |      
|                                                                                        |                                                                  |                                           | Net cash provided by (used in) financing activities |                        |        | 110,463                   |         |              |       |                    |      
|                                                                                        |                                                                  |                                           |                                                     |                        |        |                           |         |              |        |                    |      
|Effect of exchange rate changes on cash                                                 |                                                                  |                                           | (3                                                  | )                      |        |                          |         |              | (404   | )                  |      
|                                                                                        |                                                                  |                                           |                                                     |                        |        |                           |         |              |        |                    |      
|                                                                                        |                                                                  |                                           | Net increase in cash and cash equivalents           |                        |        | 9,286                     |         |              |       |                    |      
|Cash and cash equivalents                                                               |                                                                  |                                           |                                                     |                        |        |                           |         |              |        |                    |      
|Beginning of year                                                                       |                                                                  |                                           | 12,282                                              |                        |        |                          |         |              | 6,648  |                    |      
|                                                                                        |                                                                  |                                           |                                                     |                        |        |                           |         |              |        |                    |      
|End of year                                                                             |                                                                  | $                                         | 21,568                                              |                        | $      |                          |         | $            | 7,706  |                    | $    
|                                                                                        |                                                                  |                                           |                                                     |                        |        |                           |         |              |        |                    |      

F-28

---

Advanstar Communications Inc.
Condensed Consolidating Balance Sheets
December 31, 2002

|                                                      |                                         | Communications             |           | Guarantor
Subsidiaries |         | Nonguarantor
Subsidiaries |         | Eliminations |         | Consolidated
Total |       
|----------------------------------------------------- | --------------------------------------- | -------------------------- | --------- | ---------------------- | ------- | ------------------------- | ------- | ------------ | ------- | ------------------ | ------
|
|Assets                                                |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|Current assets                                        |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|                                                      | Cash and cash equivalents               |                            | $         | 12,282                 |         | $                         |        |              | $       | 6,648              |       
|                                                      | Accounts receivable, net                |                            |           | 20,167                 |         |                           | 29      |              |         | 2,828              |       
|                                                      | Prepaid expenses                        |                            |           | 6,163                  |         |                           | 1,673   |              |         | 1,921              |       
|                                                      | Other                                   |                            |           | 1,159                  |         |                           |        |              |         | 49                 |       
|                                                      |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|                                                      |                                         | Total current assets       |           |                        | 39,771  |                           |         | 1,702        |         |                    | 11,446
|Noncurrent assets                                     |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|                                                      | Property, plant and equipment, net      |                            |           | 21,707                 |         |                           | 898     |              |         | 894                |       
|                                                      | Deferred tax asset                      |                            |           | 21,113                 |         |                           |        |              |         |                   |       
|                                                      | Intangible and other assets, net        |                            |           | 422,073                |         |                           | 301,366 |              |         | 66,169             |       
|                                                      | Investments in subsidiaries             |                            |           | 543,029                |         |                           |        |              |         |                   |       
|                                                      | Intercompany receivable                 |                            |           |                       |         |                           | 185,023 |              |         | 29,120             |       
|                                                      |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|                                                      |                                         | $                          | 1,047,693 |                        | $       | 488,989                   |         | $            | 107,629 |                    | $     
|                                                      |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|Liabilities and Stockholder's Equity                  |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|Current liabilities                                   |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|                                                      | Current maturities of long-term debt    |                            | $         | 17,400                 |         | $                         |        |              | $       |                   |       
|                                                      | Accounts payable                        |                            |           | 14,556                 |         |                           | 1,162   |              |         | 3,654              |       
|                                                      | Accrued liabilities                     |                            |           | 23,385                 |         |                           | 6,516   |              |         | 1,213              |       
|                                                      | Deferred revenue                        |                            |           | 29,327                 |         |                           | 19,213  |              |         | 4,499              |       
|                                                      |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|                                                      |                                         | Total current liabilities  |           |                        | 84,668  |                           |         | 26,891       |         |                    | 9,366 
|                                                      |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|Long-term debt, net of current maturities             |                                         |                            | 540,300   |                        |         |                          |         |              |        |                    |       
|Deferred income taxes and other long-term liabilities |                                         |                            | 4,139     |                        |         | 21,113                    |         |              | 235     |                    |       
|Intercompany payable                                  |                                         |                            | 214,143   |                        |         |                          |         |              |        |                    |       
|Due to parent                                         |                                         |                            | 4,492     |                        |         |                          |         |              |        |                    |       
|Minority interests                                    |                                         |                            | 9,068     |                        |         |                          |         |              | 714     |                    |       
|Stockholder's equity                                  |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|                                                      | Common stock                            |                            |           | 10                     |         |                           | 3       |              |         | 488                |       
|                                                      | Capital in excess of par value          |                            |           | 387,367                |         |                           | 438,117 |              |         | 120,738            |       
|                                                      | (Accumulated deficit) retained earnings |                            |           | (192,146               | )       |                           | 2,865   |              |         | (19,182            | )     
|                                                      | Accumulated other comprehensive loss    |                            |           | (4,348                 | )       |                           |        |              |         | (4,730             | )     
|                                                      |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|                                                      |                                         | Total stockholder's equity |           |                        | 190,883 |                           |         | 440,985      |         |                    | 97,314
|                                                      |                                         |                            |           |                        |         |                           |         |              |         |                    |       
|                                                      |                                         |                            | $         | 1,047,693              |         | $                         | 488,989 |              | $       | 107,629            |       
|                                                      |                                         |                            |           |                        |         |                           |         |              |         |                    |       

F-29

---

Advanstar Communications Inc.
Condensed Consolidating Statements of Operations
Year Ended December 31, 2002

|                                       |                                                           | Communications                                                |          | Guarantor
Subsidiaries |         | Nonguarantor
Subsidiaries |        | Eliminations |        | Consolidated
Total |       
|-------------------------------------- | --------------------------------------------------------- | ------------------------------------------------------------- | -------- | ---------------------- | ------- | ------------------------- | ------ | ------------ | ------ | ------------------ | ------
|
|Net revenue                            |                                                           | $                                                             | 208,668  |                        | $       | 64,364                    |        | $            | 34,151 |                    | $     
|Operating expenses                     |                                                           |                                                               |          |                        |         |                           |        |              |        |                    |       
|                                       | Cost of production and selling, editorial and circulation |                                                               |          | 138,753                |         |                           | 22,411 |              |        | 26,519             |       
|                                       | General and administrative                                |                                                               |          | 28,228                 |         |                           | 1,224  |              |        | 5,575              |       
|                                       | Funding of affiliated company operations                  |                                                               |          | 39,587                 |         |                           |       |              |        |                   |       
|                                       | Depreciation and amortization                             |                                                               |          | 36,703                 |         |                           | 28,770 |              |        | 3,659              |       
|                                       |                                                           |                                                               |          |                        |         |                           |        |              |        |                    |       
|                                       |                                                           | Total operating expenses                                      |          |                        | 243,271 |                           |        | 52,405       |        |                    | 35,753
|                                       |                                                           |                                                               |          |                        |         |                           |        |              |        |                    |       
|                                       |                                                           | Operating (loss) income                                       |          |                        | (34,603 | )                         |        | 11,959       |        |                    | (1,602
|Other income (expense)                 |                                                           |                                                               |          |                        |         |                           |        |              |        |                    |       
|                                       | Interest expense, net                                     |                                                               |          | (50,849                | )       |                           |       |              |        | (362               | )     
|                                       | Other income, net                                         |                                                               |          | 953                    |         |                           |       |              |        | 1,978              |       
|                                       |                                                           |                                                               |          |                        |         |                           |        |              |        |                    |       
|                                       |                                                           | (Loss) income before income taxes and minority interests      |          |                        | (84,499 | )                         |        | 11,959       |        |                    | 14    
|(Benefit) provision for income taxes   |                                                           |                                                               | (21,848  | )                      |         | 4,487                     |        |              | 1,883  |                    |       
|Minority interests                     |                                                           |                                                               | (176     | )                      |         |                          |        |              | (298   | )                  |       
|Equity in earnings of subsidiaries     |                                                           |                                                               | (9,284   | )                      |         |                          |        |              |       |                    |       
|                                       |                                                           |                                                               |          |                        |         |                           |        |              |        |                    |       
|                                       |                                                           | (Loss) income before extraordinary item and accounting change |          |                        | (72,111 | )                         |        | 7,472        |        |                    | (2,167
|Cumulative effect of accounting change |                                                           |                                                               | (52,228  | )                      |         | (10,501                   | )      |              | (4,088 | )                  |       
|                                       |                                                           |                                                               |          |                        |         |                           |        |              |        |                    |       
|Net loss                               |                                                           | $                                                             | (124,339 | )                      | $       | (3,029                    | )      | $            | (6,255 | )                  | $     
|                                       |                                                           |                                                               |          |                        |         |                           |        |              |        |                    |       

F-30

---



Advanstar Communications Inc.
Condensed Consolidating Statements of Cash Flows
Year Ended December 31, 2002

|                                                                               |                                                                  | Communications |                                           | Guarantor
Subsidiaries |   | Nonguarantor
Subsidiaries |         | Eliminations |        | Consolidated
Total |  
|------------------------------------------------------------------------------ | ---------------------------------------------------------------- | -------------- | ----------------------------------------- | ---------------------- | - | ------------------------- | ------- | ------------ | ------ | ------------------ | -
|
|Cash flows from operating activities                                           |                                                                  |                |                                           |                        |   |                           |         |              |        |                    |  
|Net loss                                                                       |                                                                  | $              | (124,339                                  | )                      | $ | (3,029                    | )       | $            | (6,255 | )                  | $
|Adjustments to reconcile net loss to net cash provided by operating activities |                                                                  |                |                                           |                        |   |                           |         |              |        |                    |  
|                                                                               | Equity in earnings of subsidiaries                               |                |                                           | 9,284                  |   |                           |        |              |        |                   |  
|                                                                               | Gain on derivative financial instruments                         |                |                                           | (1,236                 | ) |                           |        |              |        |                   |  
|                                                                               | Provision for notes and advances from affiliated dot.com company |                |                                           | 37,192                 |   |                           |        |              |        |                   |  
|                                                                               | Transition goodwill impairment                                   |                |                                           | 52,228                 |   |                           | 10,501  |              |        | 4,088              |  
|                                                                               | Deferred income taxes                                            |                |                                           | (20,788                | ) |                           | 4,306   |              |        | (123               | )
|                                                                               | Depreciation and amortization                                    |                |                                           | 36,703                 |   |                           | 28,770  |              |        | 3,659              |  
|                                                                               | Other noncash items                                              |                |                                           | 4,527                  |   |                           |        |              |        | 306                |  
|                                                                               | Change in working capital items                                  |                |                                           | 29,713                 |   |                           | (40,304 | )            |        | (928               | )
|                                                                               |                                                                  |                |                                           |                        |   |                           |         |              |        |                    |  
|                                                                               |                                                                  |                | Net cash provided by operating activities |                        |   | 23,284                    |         |              | 244    |                    |  
|                                                                               |                                                                  |                |                                           |                        |   |                           |         |              |        |                    |  
|Cash flows from investing activities                                           |                                                                  |                |                                           |                        |   |                           |         |              |        |                    |  
|Additions to property, plant and equipment                                     |                                                                  |                | (6,602                                    | )                      |   | (244                      | )       |              | (370   | )                  |  
|Acquisitions of publications and trade shows, net of proceeds                  |                                                                  |                | (23,424                                   | )                      |   |                          |         |              | (515   | )                  |  
|                                                                               |                                                                  |                |                                           |                        |   |                           |         |              |        |                    |  
|                                                                               |                                                                  |                | Net cash used in investing activities     |                        |   | (30,026                   | )       |              | (244   | )                  |  
|                                                                               |                                                                  |                |                                           |                        |   |                           |         |              |        |                    |  
|Cash flows from financing activities                                           |                                                                  |                |                                           |                        |   |                           |         |              |        |                    |  
|Payments of long-term debt, net                                                |                                                                  |                | (13,100                                   | )                      |   |                          |         |              |       |                    |  
|Dividends paid to minority interest holders                                    |                                                                  |                |                                          |                        |   |                          |         |              | (503   | )                  |  
|Deferred financing costs                                                       |                                                                  |                | (1,785                                    | )                      |   |                          |         |              |       |                    |  
|                                                                               |                                                                  |                |                                           |                        |   |                           |         |              |        |                    |  
|                                                                               |                                                                  |                | Net cash used in financing activities     |                        |   | (14,885                   | )       |              |       |                    |  
|                                                                               |                                                                  |                |                                           |                        |   |                           |         |              |        |                    |  
|Effect of exchange rate changes on cash                                        |                                                                  |                | 3                                         |                        |   |                          |         |              | (3,441 | )                  |  
|                                                                               |                                                                  |                |                                           |                        |   |                           |         |              |        |                    |  
|                                                                               |                                                                  |                | Net decrease in cash and cash equivalents |                        |   | (21,624                   | )       |              |       |                    |  
|Cash and cash equivalents                                                      |                                                                  |                |                                           |                        |   |                           |         |              |        |                    |  
|Beginning of year                                                              |                                                                  |                | 33,906                                    |                        |   |                          |         |              | 10,730 |                    |  
|                                                                               |                                                                  |                |                                           |                        |   |                           |         |              |        |                    |  
|End of year                                                                    |                                                                  | $              | 12,282                                    |                        | $ |                          |         | $            | 6,648  |                    | $
|                                                                               |                                                                  |                |                                           |                        |   |                           |         |              |        |                    |  

F-31

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Advanstar Communications Inc.  Condensed Consolidating Statements of Operations  Year Ended December 31, 2001

|                                       |                                                           | Communications |                                                                                                  | Guarantor
Subsidiaries |   | Nonguarantor
Subsidiaries |        | Eliminations |        | Consolidated
Total |  
|-------------------------------------- | --------------------------------------------------------- | -------------- | ------------------------------------------------------------------------------------------------ | ---------------------- | - | ------------------------- | ------ | ------------ | ------ | ------------------ | -
|
|Net revenue                            |                                                           | $              | 234,428                                                                                          |                        | $ | 71,777                    |        | $            | 40,792 |                    | $
|Operating expenses                     |                                                           |                |                                                                                                  |                        |   |                           |        |              |        |                    |  
|                                       | Cost of production and selling, editorial and circulation |                |                                                                                                  | 164,355                |   |                           | 22,054 |              |        | 33,583             |  
|                                       | General and administrative                                |                |                                                                                                  | 29,077                 |   |                           | 1,087  |              |        | 5,533              |  
|                                       | Depreciation and amortization                             |                |                                                                                                  | 47,698                 |   |                           | 40,184 |              |        | 6,379              |  
|                                       |                                                           |                |                                                                                                  |                        |   |                           |        |              |        |                    |  
|                                       |                                                           |                | Total operating expenses                                                                         |                        |   | 241,130                   |        |              | 63,325 |                    |  
|                                       |                                                           |                |                                                                                                  |                        |   |                           |        |              |        |                    |  
|                                       |                                                           |                | Operating (loss) income                                                                          |                        |   | (6,702                    | )      |              | 8,452  |                    |  
|Other income (expense)                 |                                                           |                |                                                                                                  |                        |   |                           |        |              |        |                    |  
|                                       | Interest expense, net                                     |                |                                                                                                  | (54,171                | ) |                           |       |              |        | (1,328             | )
|                                       | Write off of deferred financing costs                     |                |                                                                                                  | (4,038                 | ) |                           |       |              |        |                   |  
|                                       | Other income, net                                         |                |                                                                                                  | 381                    |   |                           |       |              |        | 407                |  
|                                       |                                                           |                |                                                                                                  |                        |   |                           |        |              |        |                    |  
|                                       |                                                           |                | (Loss) income before income taxes, minority interests and cumulative effect of accounting change |                        |   | (64,530                   | )      |              | 8,452  |                    |  
|(Benefit) provision for income taxes   |                                                           |                | (17,432                                                                                          | )                      |   | 2,507                     |        |              | 2,277  |                    |  
|Minority interests                     |                                                           |                | 136                                                                                              |                        |   |                          |        |              | (292   | )                  |  
|Equity in earnings of subsidiaries     |                                                           |                | (2,248                                                                                           | )                      |   |                          |        |              |       |                    |  
|                                       |                                                           |                |                                                                                                  |                        |   |                           |        |              |        |                    |  
|                                       |                                                           |                | (Loss) income cumulative effect of accounting change                                             |                        |   | (49,210                   | )      |              | 5,945  |                    |  
|Cumulative effect of accounting change |                                                           |                | (552                                                                                             | )                      |   |                          |        |              |       |                    |  
|                                       |                                                           |                |                                                                                                  |                        |   |                           |        |              |        |                    |  
|Net (loss) income                      |                                                           | $              | (49,762                                                                                          | )                      | $ | 5,945                     |        | $            | (8,193 | )                  | $
|                                       |                                                           |                |                                                                                                  |                        |   |                           |        |              |        |                    |  

F-32

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Advanstar Communications Inc.  Condensed Consolidating Statements of Cash Flows  Year Ended December 31, 2001

|                                                                                        |                                                 | Communications                            |                                                      | Guarantor
Subsidiaries |        | Nonguarantor
Subsidiaries |         | Eliminations |        | Consolidated
Total |       
|--------------------------------------------------------------------------------------- | ----------------------------------------------- | ----------------------------------------- | ---------------------------------------------------- | ---------------------- | ------ | ------------------------- | ------- | ------------ | ------ | ------------------ | ------
|
|Cash flows from operating activities                                                    |                                                 |                                           |                                                      |                        |        |                           |         |              |        |                    |       
|Net (loss) income                                                                       |                                                 | $                                         | (49,762                                              | )                      | $      | 5,945                     |         | $            | (8,193 | )                  | $     
|Adjustments to reconcile net (loss) income to net cash provided by operating activities |                                                 |                                           |                                                      |                        |        |                           |         |              |        |                    |       
|                                                                                        | Equity in earnings of subsidiaries              |                                           |                                                      | 2,248                  |        |                           |        |              |        |                   |       
|                                                                                        | Extraordinary itemearly extinguishment of debt |                                           |                                                      | 2,556                  |        |                           |        |              |        |                   |       
|                                                                                        | Loss on derivative financial instruments        |                                           |                                                      | 1,075                  |        |                           |        |              |        |                   |       
|                                                                                        | Depreciation and amortization                   |                                           |                                                      | 47,698                 |        |                           | 40,184  |              |        | 6,379              |       
|                                                                                        | Other noncash items                             |                                           |                                                      | (6,876                 | )      |                           | (11,166 | )            |        | 9,912              |       
|                                                                                        | Change in working capital items                 |                                           |                                                      | 29,202                 |        |                           | (34,211 | )            |        | 6,822              |       
|                                                                                        |                                                 |                                           |                                                      |                        |        |                           |         |              |        |                    |       
|                                                                                        |                                                 | Net cash provided by operating activities |                                                      |                        | 26,141 |                           |         | 752          |        |                    | 14,920
|                                                                                        |                                                 |                                           |                                                      |                        |        |                           |         |              |        |                    |       
|Cash flows from investing activities                                                    |                                                 |                                           |                                                      |                        |        |                           |         |              |        |                    |       
|Additions to property, plant and equipment                                              |                                                 |                                           | (6,701                                               | )                      |        | (753                      | )       |              | (481   | )                  |       
|Acquisitions of publications and trade shows, net of proceeds                           |                                                 |                                           | (7,346                                               | )                      |        |                          |         |              | (6,428 | )                  |       
|Increase in advances and notes due from affiliate                                       |                                                 |                                           | (20,024                                              | )                      |        |                          |         |              |       |                    |       
|                                                                                        |                                                 |                                           |                                                      |                        |        |                           |         |              |        |                    |       
|                                                                                        |                                                 |                                           | Net cash used in investing activities                |                        |        | (34,071                   | )       |              | (753   | )                  |       
|                                                                                        |                                                 |                                           |                                                      |                        |        |                           |         |              |        |                    |       
|Cash flows from financing activities                                                    |                                                 |                                           |                                                      |                        |        |                           |         |              |        |                    |       
|Proceeds from sale of common stock and capital contributions                            |                                                 |                                           | 34,775                                               |                        |        |                          |         |              |       |                    |       
|Payments of long-term debt, net                                                         |                                                 |                                           | (1,000                                               | )                      |        |                          |         |              |       |                    |       
|Deferred financing costs                                                                |                                                 |                                           | (9,000                                               | )                      |        |                          |         |              | (1     | )                  |       
|                                                                                        |                                                 |                                           |                                                      |                        |        |                           |         |              |        |                    |       
|                                                                                        |                                                 |                                           | Net cash provided by (used in) financing activities  |                        |        | 24,775                    |         |              |       |                    |       
|                                                                                        |                                                 |                                           |                                                      |                        |        |                           |         |              |        |                    |       
|Effect of exchange rate changes on cash                                                 |                                                 |                                           | 6,325                                                |                        |        |                          |         |              | (4,218 | )                  |       
|                                                                                        |                                                 |                                           |                                                      |                        |        |                           |         |              |        |                    |       
|                                                                                        |                                                 |                                           | Net increase (decrease) in cash and cash equivalents |                        |        | 23,170                    |         |              | (1     | )                  |       
|Cash and cash equivalents                                                               |                                                 |                                           |                                                      |                        |        |                           |         |              |        |                    |       
|Beginning of year                                                                       |                                                 |                                           | 10,736                                               |                        |        | 1                         |         |              | 6,938  |                    |       
|                                                                                        |                                                 |                                           |                                                      |                        |        |                           |         |              |        |                    |       
|End of year                                                                             |                                                 | $                                         | 33,906                                               |                        | $      |                          |         | $            | 10,730 |                    | $     
|                                                                                        |                                                 |                                           |                                                      |                        |        |                           |         |              |        |                    |       

F-33

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2.     Financial Statement Schedules

Schedule IIValuation and Qualifying Accounts.
Advanstar Communications Inc.
Valuation and Qualifying Accounts

|     |  | Balance at
Beginning of
Period |            | Charged to
Costs and
Expenses |   | Charged to
Other
Accounts |  | Deductions (1) |   | Balance at
End of
Period
|---- |  | ------------------------------ | ---------- | ----------------------------- | - | ------------------------- |  | -------------- | - | ------------------------
|
|
|
|2003 |  | $                              | 1,049,000  |                               | $ | 578,000                   |  | $              |  |                         
|2002 |  |                                | 970,000    |                               |   | 1,639,000                 |  |                |  |                         
|2001 |  |                                | 725,000    |                               |   | 2,768,000                 |  |                |  |                         
|     |  |                                |            |                               |   |                           |  |                |   |                         
|
|
|2003 |  | $                              | 30,060,000 |                               | $ | 22,901,000                |  | $              |  |                         
|2002 |  |                                | 3,977,000  |                               |   | 26,083,000                |  |                |  |                         
|2001 |  |                                | 1,223,000  |                               |   | 2,754,000                 |  |                |  |                         

---

All
other financial schedule are omitted because they are not applicable or the information is included in the financial statements or related notes.

b.     Reports on Form 8-K

We filed a Current Report on Form 8-K on October 16, 2003 under Items 2 and 7 in order to report certain information related to
our acquisition of a portfolio of assets from The Thomson Corporation and its subsidiaries.

We
filed a Current Report on Form 8-K on October 30, 2003 under Items 7 and 12 in order to report our financial results for the third quarter of 2003.

II-1

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C. Exhibits

|Exhibit
No. |  | Document                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1         |  | Asset Purchase Agreement among Thomson Healthcare Inc., Global Information Licensing Corporation and Advanstar Communications Inc. dated as of August 22, 2003 (Previously filed as an exhibit to the Company's Registration Statement on
Form S-1 (333-109648) and incorporated by reference herein)                                                                                                                                                                                                                                                                                                      
|2.1.1       |  | Amendment No. 1 dated October 1, 2003 to the Asset Purchase Agreement dated as of August 22, 2003 among Thomson Healthcare Inc., Global Information Licensing Corporation and Advanstar Communications Inc. (Previously
filed as an exhibit to the Company's Registration Statement on Form S-1 (333-109648) and incorporated by reference herein)                                                                                                                                                                                                                                                         
|3.1         |  | Certificate of Incorporation of Advanstar Communications Inc. (Previously filed as an exhibit to the Company's Registration Statement on Form S-4 (333-57201) and incorporated by reference herein)                                                                                                                                                                                                                                                                                                                                                                                                        
|3.1.1       |  | Certificate of Amendment of the Certificates of Incorporation of Advanstar Communications Inc. (Previously filed as an exhibit to the Company's Annual Report on Form 10-K for 2000 and incorporated by reference
herein)                                                                                                                                                                                                                                                                                                                                                                                  
|3.2         |  | Amended and Restated By-Laws of Advanstar Communications Inc. (Previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2003 and incorporated by reference
herein)                                                                                                                                                                                                                                                                                                                                                                                     
|4.1         |  | Indenture, dated as of February 21, 2001 among Advanstar Communications Inc., the Guarantors party thereto and the Trustee (Previously filed as an exhibit to the Company's Annual Report on Form 10-K for 2000 and
incorporated by reference herein)                                                                                                                                                                                                                                                                                                                                                      
|4.2         |  | Indenture, dated as of August 18, 2003 among Advanstar Communications Inc., the Guarantors party thereto and the Trustee (Previously filed as an exhibit to the Company's Registration Statement on Form S-1
(333-59284) and incorporated by reference herein)                                                                                                                                                                                                                                                                                                                                             
|4.3         |  | Intercreditor Agreement dated as of August 18, 2003 among Advanstar Communications Inc., Fleet National Bank, Credit Suisse First Boston and Wells Fargo Bank Minnesota N.A. (Previously filed as an exhibit to the
Company's Registration Statement (333-109648) and incorporated by reference herein) The Company has not filed certain debt instruments with respect to long-term debt that does not exceed ten percent of the total assets of the Company and its
subsidiaries on a consolidated basis. The Company hereby agrees to furnish a copy of such instruments to the Commission upon request.
|10.1        |  | Advanstar Holdings Corp. 2000 Management Plan Incentive dated as of October 11, 2000 (as amended September 17, 2002 and December 10, 2002) (Previously filed as an exhibit to the Company's Annual Report on
Form 10-K for 2002 and incorporated by reference herein)                                                                                                                                                                                                                                                                                                                                      
|10.2        |  | Advanstar Holdings Corp. Shareholders Agreement dated as of October 11, 2000 (Previously filed as an exhibit to the Company's Annual Report on Form 10-K for 2000 and incorporated by reference herein)                                                                                                                                                                                                                                                                                                                                                                                                    
|10.2.1      |  | First Amendment and Waiver to Shareholders' Agreement dated as of February 21, 2001 (Previously filed as an Exhibit to Advanstar Communications' Registration Statement on Form S-1 (333-59284) and incorporated by
reference herein)                                                                                                                                                                                                                                                                                                                                                                      
|10.2.2      |  | Second Amendment and Waiver to Stockholders' Agreement dated as of April 4, 2001 (Previously filed as an Exhibit to Advanstar Communications' Registration Statement on Form S-1 (333-59284) and incorporated by
reference herein)                                                                                                                                                                                                                                                                                                                                                                         
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

II-2

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|10.3   |  | Credit Agreement, dated as of October 11, 2000, as amended and restated November 7, 2000, among, Advanstar Communications Inc., the guarantors party thereto and the lenders party thereto (Previously filed as an
exhibit to the Company's Annual Report on Form 10-K for 2000 and incorporated by reference herein)
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.3.1 |  | First amendment to Credit Agreement, dated as of March 22, 2002 (Previously filed as an exhibit to the Company's Annual Report on Form 10-K for 2001 and incorporated by reference herein)                                                                                                                           
|10.3.2 |  | Second Amendment to Credit Agreement dated as of March 28, 2003 (Previously filed as an exhibit to Advanstar Communications Inc.'s Current Report on Form 8-K filed on April 15, 2003 and incorporated by
reference herein)                                                                                          
|10.3.3 |  | Third Amendment to Credit Agreement, dated as of August 18, 2003 (Previously filed as an exhibit to Advanstar Communications Inc.'s Registration Statement on Form S-1 (333-59284) and incorporated by reference
herein)                                                                                             
|10.4   |  | Employment Agreement, dated October 3, 2003, between Advanstar, Inc. and Robert Krakoff (Previously filed as an exhibit to Advanstar Communications Inc.'s registration statement (333-109648) and incorporated by
reference herein)                                                                                 
|10.5   |  | Employment Agreement, dated August 14, 2000, between Advanstar, Inc. and James M. Alic. (Previously filed as Exhibit 10.2 to Form 10-Q of Advanstar, Inc. filed with the Securities and Exchange Commission on
November 14, 2000, and incorporated by reference herein)                                              
|10.5.1 |  | Amendment to Employment Agreement, effective March 1, 2002, between Advanstar, Inc. and James M. Alic (Previously filed as an exhibit to the Company's Annual Report on Form 10-K for 2001 and incorporated by reference
herein)                                                                                     
|10.6   |  | Employees' 401(k) Plan and Trust, as amended. (Previously filed as an exhibit to the Company's Registration Statement on Form S-4 (333-57201) and incorporated by reference herein)                                                                                                                                  
|10.7   |  | Agreement, dated July 31, 1997, between Advanstar Communications Inc. and Banta Publications. (Previously filed as an exhibit to the Company's Registration Statement on Form S-4 (File No. 333-57201) and incorporated
by reference herein)                                                                         
|10.8   |  | Employment Agreement dated November 21, 2003 between Advanstar, Inc. and Joseph Loggia (Previously filed as an exhibit to Advanstar Communications Inc.'s Registration Statement (333-109648) and incorporated by reference
herein)                                                                                  
|10.9   |  | Direct Investment Plan dated as of October 11, 2000 (Previously filed as an exhibit to the Company's Annual Report on Form 10-K for 2001 and incorporated by reference herein)                                                                                                                                       
|10.10  |  | Advisory Agreement, effective December 10, 2002, between Advanstar, Inc. and Douglas B. Fox (Previously filed as an exhibit to the Company's Annual Report on Form 10-K for 2002 and incorporated by reference
herein)                                                                                               
|10.11  |  | Letter, dated February 7, 1994, between the Company and David W. Montgomery (Previously filed as an exhibit to the Company's Annual Report on Form 10-K/A for 2002 and incorporated by reference herein)                                                                                                             
|10.12  |  | Agreement, dated February 19, 1999, by and among Advanstar, Inc., Advanstar Communications Inc. and Eric I. Lisman (Previously filed as an exhibit to the Company's Annual Report on Form 10-K/A for 2002 and
incorporated by reference herein)                                                                      
|12.1   |  | Computation of Ratio of Earnings to Fixed Charges *                                                                                                                                                                                                                                                                  
|       |  |                                                                                                                                                                                                                                                                                                                      

II-3

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|21.1 |  | Subsidiaries of Advanstar Communications, Inc. (Previously filed as an exhibit to the Company's Annual Report on Form 10-K for 2000 and incorporated by reference herein)
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1 |  | Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*                                                                      
|31.2 |  | Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*                                                                      
|32.1 |  | Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act if 2002*                       
|32.2 |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*                       

---

II-4

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the 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.
| |  | -----------------------------
| |  | By:                          

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant, in the capacities indicated,
on the dates indicated below.

|Signature                                 |  | Title                                                                                      |  | Date          
|----------------------------------------- |  | ------------------------------------------------------------------------------------------ |  | --------------
|                                          |  |                                                                                            |  |               
|/s/ROBERT L. KRAKOFFRobert L. Krakoff     |  | Chairman of the Board                                                                      |  | March 29, 2004
|/s/JOSEPH LOGGIAJoseph Loggia             |  | Chief Executive Officer and Director                                                       |  | March 29, 2004
|/s/DAVID W. MONTGOMERYDavid W. Montgomery |  | Vice President-Finance, Chief Financial Officer Secretary and Principal Accounting Officer |  | March 29, 2004
|/s/JAMES M. ALICJames M. Alic             |  | Director                                                                                   |  | March 29, 2004
|/s/OHSANG KWONOhSang Kwon                 |  | Director                                                                                   |  | March 29, 2004
|/s/DAVID M. WITTELSDavid M. Wittels       |  | Director                                                                                   |  | March 29, 2004
|/s/DOUGLAS B. FOXDouglas B. Fox           |  | Director                                                                                   |  | March 25, 2004

II-5

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