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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-K

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|(Mark One)                                   |                                                                                                            
|-------------------------------------------- | -----------------------------------------------------------------------------------------------------------
|ý                                            | FOR ANNUAL AND TRANSITIONAL REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002 
|or                                          
|o                                            | ANNUAL 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

59-2757389(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)545 Boylston Street, Boston, Massachusetts

02116(Address of principal executive offices)

(Zip Code)


Registrant's telephone number, including area code:(617) 267-6500

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

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

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, 2002, none of the registrant's common stock was held by non-affiliates of the registrant.

As
of March 28, 2003, 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.

NOTE ON 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 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, directories, guides and reference books.

We
are one of the largest U.S. trade show operators based upon total square footage and number of shows in 2002 and one of the largest U.S. B-to-B trade
publishers as measured by advertising pages in 2002. In 2002, 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, 2002, 74% of our 61 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
have approximately 1,200 employees as of December 31, 2002 in 18 U.S. offices and 6 international locations in Europe, Latin America and Asia. Our revenue, operating loss, cash
flow provided by operating activities and EBITDA for the year ended December 31, 2002, totaled $307.2 million, $(24.2) million, $24.3 million and $44.1 million,
respectively. Reflected in our EBITDA for the year ended December 31, 2002 is a non-cash charge of $37.2 million related to a provision for notes and advances to
Advanstar.com, Inc., our affiliated dot.com company (see "Item 6Selected Financial DataSelected Historical Consolidated Financial Data, Note 4" below for our
reconciliation of EBITDA to cash flows provided by operating activities). If we were to add back to EBITDA this non-cash provision, our EBITDA would have been $81.3 million.

Our
senior management team has an average of over 19 years of industry experience, and is led by Robert L. Krakoff, our Chairman and Chief Executive Officer, who joined Advanstar
in July 1996, and Joseph Loggia, our President and Chief Operating Officer, who joined Advanstar in April 1998. Our senior management team has significant industry experience and an
established track record in:



Industry Overview

B-to-B communications companies provide marketing solutions for specific industry sectors through trade shows and conferences, trade
publications, ancillary marketing services and through Internet applications. According to the July 2002 Veronis Suhler StevensonCommunications Industry
Forecast, the communications industry was the third fastest growing sector of the U.S. economy from

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1996 to 2001, expanding at a compound annual growth rate, or CAGR, of 6.5%. Total spending on B-to-B communications increased from $17.6 billion to $21.0 billion
from 1996 to 2001, which represents a CAGR of 3.6% during that period. According to the Veronis Suhler Stevenson report, total spending on U.S. trade shows and conferences amounted to
$8.1 billion in 2001, a decline of 3.2% from 2000 and a CAGR of 3.7% over the period from 1996 to 2001. The U.S. B-to-B publishing industry generated revenue of
$13.0 billion in 2001 according to Veronis Suhler Stevenson, and grew at a CAGR of 3.5% from 1996 to 2001.

In
2001, the B-to-B marketing and advertising market experienced its most significant downturn since 1990-1991 according to Veronis Suhler Stevenson.
This downturn continued into 2002. Media advertising spending declined significantly as companies reduced their marketing expenditures in response to the economic slowdown. Industry-wide
advertising pages, as measured by the Business Information Network, declined 20% in 2001 from 2000 levels and 15.0% in 2002 from 2001 levels. Trade show exhibition space and attendance were less
severely impacted by the downturn in the B-to-B marketing and advertising market in the first half of 2001. After the events of September, 11, however, trade show exhibition
space and attendance suffered dramatically. As measured byTradeshow Week, fourth quarter 2001 trade show attendance and number of exhibitors declined
approximately 20% and 7%, respectively, from the fourth quarter of 2000. The decline has continued in 2002, with 2002 net square footage dropping 5.3% from 2001 figures. Attendance was down 2.2% over
the same period.

The
persistence of the general economic slowdown in the U.S. may result in continued weakness in overall marketing and advertising expenditure by our customers throughout most of 2003.
As a result, we expect our operating results to reflect this overall weakness. However, we believe that our balanced portfolio between trade shows and publications and our diversification across many
industry sectors may mitigate the overall impact from continued weakness in general economic conditions and reduce our exposure to the potential volatility of any one sector.

Trade Shows

Trade shows have emerged as an important B-to-B sales, marketing and educational medium in the global economy, paralleling its rise in
profile 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
have had a significant short term impact on trade show attendance and exhibitor participation. Concern over travel and future economic uncertainty have impacted our customers' marketing and travel
decisions. We believe that trade show participation and attendance will be driven primarily by the economic recovery of that event's particular industry and our customers' view of general economic
developments in the months ahead.

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.

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According
to data from American Business Media, the current downturn in marketing and advertising spending has had the most significant impact on the telecommunications, horticulture and
farming, finance business and advertising, and manufacturing sectors. Advertising pages in these sectors declined 48%, 28%, 24% and 22%, respectively, in 2002 from 2001 levels. The events of
September 11, 2001 and the economic downturn in 2001 and 2002 have also severely impacted publications serving the travel sector resulting in an 8% decline in advertising pages for this sector
in 2002 from 2001 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

We are one of the largest trade show operators in the United States based on total square footage and number of shows in 2002. As of December 31, 2002, we
owned and managed 69 trade shows and 11 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, 2002 issue ofTradeshow Week 200'slist of the top 200 trade shows as
measured by total square footageMAGIC Spring, MAGIC Fall, Dealer News International Powersports Dealer Expo, AIIM Conference and Expo Licensing International and Artexpo New York.
Additionally, we own Telexpo, the largest telecommunications trade show in Latin America. Collectively, these seven trade shows represented 2.6 million of the 4.8 million total square
footage of all our trade shows for the year ended December 31, 2002.

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 53%, 54% and 52% of our revenue in 2000, 2001 and 2002.

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.                           |                       

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Trade Publications

We are the fourth largest B-to-B trade publisher in the United States as measured by advertising pages in 2002. As of December 31,
2002, we published 71 specialized business magazines and professional journals and 36 directories and other publications. Of our 61 magazines and journals for which competitive data is available, 74%
ranked either #1 or #2 in their respective markets, based on the number of advertising pages in the twelve months ended December 31, 2002.

Trade
publications revenue accounted for approximately 42%, 41% and 43% of our total revenue in 2000, 2001 and 2002. Our largest publications includeTravel
Agent, Pharmaceutical Technology, American Salon, Video Store, Premier, Dealernews and Pharmaceutical Executivewhich collectively represented 35% of total advertising pages of
all our publications for the year ended December 31, 2002.

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. Our publications are generally distributed free-of-charge to
qualified professional recipients and generate revenues predominantly from the sale of advertising. We seek to increase advertising 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

Within each industry cluster, we provide a comprehensive set of marketing communications products, services and support geared to the particular industry's
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, rather than being organized by cluster. Thus, our cluster executives are able to dedicate their activities to high value sales. In addition, our
central telesales and product management provides professional skills to these specialized product offerings. Marketing services revenue accounted for approximately 5% of our total revenue in 2000,
2001 and 2002.

Internet

We work with our affiliate, Advanstar.com, Inc., 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 also use the Internet as a cost-effective method of developing qualifying

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magazine circulation and to register trade show and conference attendees. See "Item 13.Certain Relationships and Related Party TransactionsRelationship with Advanstar.com."

Industry Clusters

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. 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, 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 maximizes our existing marketing and
customer service infrastructure and industry expertise. We believe that our total cluster participants, including readers, attendees, conferees, exhibitors, advertisers, and other customers, number
approximately three million.

We
previously had a sixth cluster; manufacturing and processing. In 2002 we reorganized our clusters to better match our operating strategy which resulted in the transfer of the trade
shows and publications in the manufacturing and processing cluster into our other existing clusters.

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 order to achieve this objective, we operate our business based on the following strategies:

Operate Leading Trade Shows and Publish Leading Magazines in Attractive Niche Markets

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 61
magazines and journals for which competitive data is available, 74% ranked either #1 or #2 in their respective niche markets in the twelve months ended December 31, 2002. Most of our trade
shows and conferences also were among the leading events in their respective markets based upon total square footage.

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Utilize Industry Cluster Strategy to Drive Growth

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:



Maximize Share of Customers' Total Marketing Expenditures

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.

Launch New Products and Services Within Existing Clusters

We have successfully developed new products within existing industry clusters and will continue to make strategic new product introductions. We launched 3
magazines and 3 trade shows in existing industry sectors to fill-in our product portfolio during the year ended December 31, 2002. Our launches are generally line extensions or
regional expansions of existing product concepts, and, as a result, such project launches generally require less capital investment and are less risky than major new product introductions.

Identify and Consummate Strategic Acquisitions

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. In addition, we also build on our existing international infrastructure to make strategic international acquisitions and enter into joint ventures with local
operating partners. 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, 2002, we completed 35 acquisitions and
joint ventures. In 2002 we completed four acquisitions in the automotive, imaging, healthcare, and beauty markets. Consistent with our strategy since 1996, we are engaged in ongoing evaluations of
potential acquisitions of complementary businesses.

Industry Clusters

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

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Our Fashion & Apparel cluster serves the men's, women's, children's, and fabrics industries. In 2002, we operated in these industry sectors through 15
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 & Apparel cluster in the twelve months ended December 31, 2002. We currently have no
publications in this cluster:



Sector

Number

Events(1)
Net Square FootageMen's

4

1,228,923Women's

5

664,065Kids'

2

101,290Fabric

4

76,030


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Our Information Technology & Communications cluster serves the information technology, telecommunications and call center industries. In 2002, we operated
in these industry sectors through 18 trade shows and 13 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 maintain a significant presence in the telecommunications sector which, while currently depressed, remains an important targeted market. 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. Finally, our Call Center
properties are the leading events serving operations managers for call centers in the U.S., Canada and Europe:

Key
trade shows, conferences and publications include:



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The
following table sets forth information relating to trade shows and magazines in our Information Technology & Communications cluster in the year ended December 31, 2002:



|                              |  | Events(1) |  |         |  | Magazines
|----------------------------- |  | --------- |  | ------- |  | ---------
|
|Information Technology        |  | 9         |  | 369,082 |  | 6        
|Telecommunications/e-learning |  | 4         |  | 343,130 |  | 7        
|CRM/Call Center               |  | 5         |  | 159,377 |  |          

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We served the Specialty Retail sector through 26 trade shows and 16 publications in 2002. This cluster 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, 2002:



|                          |  | Events(1) |  |           |  | Magazines
|------------------------- |  | --------- |  | --------- |  | ---------
|
|Art                       |  | 3         |  | 169,304   |  | 2        
|Beauty                    |  | 2         |  | 172,203   |  | 2        
|Entertainment / Marketing |  | 6         |  | 241,847   |  | 4        
|Motor Vehicle             |  | 15        |  | 1,122,037 |  | 8        

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Our Healthcare, Science & Pharmaceuticals cluster provided marketing products and services to these three related sectors with 8 trade shows and 22
publications in 2002. 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.

Key
trade shows, conferences and publications include:



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The
following table sets forth information relating to trade shows and magazines in our Healthcare, Science & Pharmaceuticals cluster in the year ended December 31, 2002:



|                |  | Events(1) |  |         |  | Magazines
|--------------- |  | --------- |  | ------- |  | ---------
|
|Healthcare      |  | 7         |  | 125,700 |  | 11       
|Science         |  | 1         |  | 15,279  |  | 6        
|Pharmaceuticals |  |          |  | N/A     |  | 5        

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We served the travel and hospitality sector through one trade show and five publications in 2002. 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, 2002:



|            |  | Events(1) |  |        |  | Magazines
|----------- |  | --------- |  | ------ |  | ---------
|
|Travel      |  | 1         |  | 55,200 |  | 4        
|Hospitality |  |          |  | NA     |  | 1        

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We group the balance of our products and services into a Portfolio cluster. 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, finance, landscaping/pest control, mining, paper and roofing
sectors. In 2002, we delivered our B-to-B marketing

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communications products and services to our customers in these industry sectors through 1 trade show and 11 publications.

The
following table sets forth information relating to trade shows and magazines in our Portfolio cluster in the year ended December 31, 2002:

Portfolio Events and Magazines

|                         |  | Events(1) |  |       |  | Magazines
|------------------------ |  | --------- |  | ----- |  | ---------
|
|Energy                   |  |          |  | N/A   |  | 1        
|Finance                  |  | 1         |  | 5,121 |  |         
|GeoSpatial               |  |          |  | N/A   |  | 2        
|Landscape / Pest Control |  |          |  | N/A   |  | 3        
|Mining                   |  |          |  | N/A   |  | 1        
|Paper                    |  |          |  | N/A   |  | 2        
|Post Production          |  |          |  | N/A   |  | 1        
|Roofing                  |  |          |  | N/A   |  | 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, a commitment 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 undertaken through direct mail, using both in-house, exhibitor-provided and rented lists of pre-qualified industry participants. 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.

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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 vendors for decorating, 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 requalified 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 primarily staff-written, with some editorial contribution by 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.

14

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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 some costs
to comply with these laws. 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 that
property, even if they did not know of and were not responsible for the contamination. Although we do not currently anticipate that the costs of complying with environmental laws will materially
adversely affect us, 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.

Employees

As of December 31, 2002, we had approximately 1,200 full-time equivalent employees. Of these, approximately 160 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, Illinois; Cleveland,
Ohio; Edison, New Jersey; Eugene, Oregon; Milford, Connecticut; New York City, New York; Santa Ana, California; and Woodland Hills, California. In addition, we have offices in Sao Paulo, Brazil; Hong
Kong, China; Paris, France; 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 these properties to the lenders under our
credit facility. 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, 2002.

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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 Communications Inc. and its predecessor for each of the periods indicated.
The selected historical financial data for Advanstar's predecessor for the years ended December 31, 1998 and 1999 have been derived from the audited consolidated financial statements and notes
thereto of the predecessors for those periods, which are not included nor incorporated herein. The selected historical financial data for Advanstar's predecessor for the period January 1, 2000
through October 11, 2000 have been derived from the audited consolidated financial statements and notes thereto of the predecessor for those periods included herein. The selected historical
financial data for Advanstar for the period October 12, 2000 through December 31, 2000 and for the years ended December 31, 2001 and 2002 have been derived from Advanstar's
audited financial statements, included herein. 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 Operations" and the consolidated financial statements and notes thereto included elsewhere in this annual report.

Our
parent company, Advanstar, Inc., was acquired (the "Acquisition") by Advanstar Holdings Corp. ("Holdings"), a newly created corporation formed by DLJ Merchant Banking Partners
III, L.P. and related funds (the "DLJ Merchant Banking Funds"), in October 2000. When we refer to "combined" financial results, we mean the consolidated financial data for the period
January 1, 2000 to October 11, 2000 (the "Predecesor") combined with the consolidated financial data for the period October 12, 2000 through December 31, 2000. The combined
consolidated financial data for the year ended December 31, 2000 has been derived from the audited consolidated financial statements of the Predecessor and Advanstar and has not been audited
and does not comply with generally accepted accounting principles. The Acquisition, and the resulting change in basis of accounting had no impact on revenues or
EBITDA, and therefore management believes that the presentation of combined information is important because it provides a comparable basis to analyze operating data, including operating income,
operating revenue and EBITDA for 2002, 2001, 2000, 1999 and 1998.

16

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|                                                         |                             | Advanstar |         | Predecessor |  
|-------------------------------------------------------- | --------------------------- | --------- | ------- | ----------- | -
|
|
|
|
|
|Income Statement Data:                                   |                             |           |         |             |  
|Net Revenue                                              |                             | $         | 307,183 |             | $
|Cost of production and selling                           |                             |           | 187,683 |             |  
|General and administrative expenses                      |                             |           | 35,027  |             |  
|Stock option compensation expense (benefit)(1)           |                             |           |        |             |  
|Funding of affiliated dot.com company operations         |                             |           | 39,587  |             |  
|Depreciation and amortization(2)                         |                             |           | 69,132  |             |  
|                                                         |                             |           |         |             |  
|Operating income (loss)                                  |                             |           | (24,246 | )           |  
|Other income (expense):                                  |                             |           |         |             |  
|                                                         | Interest expense            |           |         | (51,211     | )
|                                                         | Other income (expense), net |           |         | 2,931       |  
|                                                         |                             |           |         |             |  
|Income (loss) before income taxes and minority interests |                             |           | (72,526 | )           |  
|Provision (benefit) for income taxes                     |                             |           | (15,478 | )           |  
|Minority interests                                       |                             |           | (474    | )           |  
|                                                         |                             |           |         |             |  
|Loss from continuing operations                          |                             | $         | (57,522 | )           | $
|                                                         |                             |           |         |             |  
|Cash flows provided by (used in):                        |                             |           |         |             |  
|                                                         | Operating activities        |           | $       | 24,275      |  
|                                                         | Investing activities        |           |         | (31,155     | )
|                                                         | Financing activities        |           |         | (15,388     | )
|Balance sheet data (at end of period):                   |                             |           |         |             |  
|Cash and cash equivalents                                |                             | $         | 18,930  |             | $
|Working capital(3)                                       |                             |           | (69,536 | )           |  
|Total assets                                             |                             |           | 866,026 |             |  
|Total debt                                               |                             |           | 557,700 |             |  
|Total stockholder's equity                               |                             |           | 186,153 |             |  
|Other Data:                                              |                             |           |         |             |  
|EBITDA(4)                                                |                             | $         | 44,109  |             | $
|Capital expenditures                                     |                             | $         | 7,216   |             | $
|Ratio of earnings to fixed charges(5)                    |                             |           |        |             |  

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|                                                  |  | Advanstar |         | Predecessor |  
|------------------------------------------------- |  | --------- | ------- | ----------- | -
|
|
|
|
|
|Reported income (loss) from continuing operations |  | $         | (57,522 | )           | $
|Add: goodwill amortization, net of tax            |  |           |        |             |  
|                                                  |  |           |         |             |  
|Adjusted income (loss) from continuing operations |  | $         | (57,522 | )           | $
|                                                  |  |           |         |             |  

---

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The following table reconciles our EBITDA to cash flows provided by operating activities for each period presented (in thousands):

|                                                                         |  | Advanstar |          | Predecessor |  
|------------------------------------------------------------------------ |  | --------- | -------- | ----------- | -
|
|
|
|
|
|EBITDA                                                                   |  | $         | 44,109   |             | $
|Depreciation and amortization                                            |  |           | (69,132  | )           |  
|Minority interests (excluding depreciation and amortization)             |  |           | 777      |             |  
|                                                                         |  |           |          |             |  
|Operating income (loss)                                                  |  |           | (24,246  | )           |  
|Interest expense                                                         |  |           | (51,211  | )           |  
|Other income (expense), net                                              |  |           | 2,931    |             |  
|Benefit (provision) for income taxes                                     |  |           | 15,478   |             |  
|Minority interests                                                       |  |           | (474     | )           |  
|Extraordinary item, net of tax                                           |  |           |         |             |  
|Cumulative effect of accounting change, net of tax and monority interest |  |           | (66,817  | )           |  
|                                                                         |  |           |          |             |  
|Net Loss                                                                 |  |           | (124,339 | )           |  
|Extraordinary item-early extinguishment of debt                          |  |           |         |             |  
|Provision for notes and advances from affiliated dot.com company         |  |           | 37,192   |             |  
|Transition goodwill impairment                                           |  |           | 66,817   |             |  
|Depreciation and amortization                                            |  |           | 69,132   |             |  
|Deferred income taxes                                                    |  |           | (16,605  | )           |  
|Other non cash items                                                     |  |           | 3,597    |             |  
|Changes in operating assets and liabilities                              |  |           | (11,519  | )           |  
|                                                                         |  |           |          |             |  
|Net cash provided by (used in) operating Activities                      |  |           | 24,275   |             |  
|                                                                         |  |           |          |             |  

---

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Item 7MANAGEMENT'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 52%, 54% and 53% of total revenue in 2002, 2001 and 2000, respectively. Trade publications accounted for approximately 43%, 41%
and 42% of total revenue in 2002, 2001 and 2000, respectively, while marketing services accounted for approximately 5%, 5% and 5% of total revenue in 2002, 2001 and 2000, respectively. Our revenue
reaches its highest levels during the first and third quarters of the year due to the timing of the MAGIC trade shows and our other large trade shows and conferences. 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.

Recent Developments

Our business and results of operations in 2002 have been significantly impacted by the recession in the U.S. economy, particularly in our Information
Technology & Communications trade shows and publications and our Travel & Hospitality publications. The events of September 11, 2001 also impacted our results in 2002 particularly
our trade shows, including cancellations and reductions in attendance at certain of our events.

We
are seeing early indications of stabilization in advertising in many of our markets, except for continuing downward pressure in our technology and travel markets. Advertising pages
declined approximately 2.2% and revenue per page declined approximately 6.4% across our portfolio in 2002. The page decline was concentrated in our technology and travel sectors. Pages increased 4.4%
in 2002 across all sectors other than technology and travel, due in part to market share gains resulting in a 1.6% revenue increase in these other sectors. While we see this positive trend continuing
in the early stages of 2003, the economic outlook in the publishing sector continues to be challenging, and forward visibility on our advertising revenue and pages is limited, due to the concerns of
our customers related to the overall business environment. Our travel publications remain highly sensitive to cutbacks in

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destination and vacation travel advertising in response to concern over terrorism and possible further conflict in the Middle East and in other regions in the world.

Our
trade show segment continues to be negatively impacted by the economic recession. Our trade shows directed to the technology sector continues to suffer from the overall curtailment
of spending in technology markets, which impacts marketing spending by our customers. Our trade shows directed to the fashion sector were 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. We expect any improvement in the performance of our trade
show segment to lag behind any general economic recovery, just as it lagged the downturn in the economy going into
recession beginning in late 2000. Our trade shows remain sensitive to cutbacks in travel in response to concern over terrorism and possible further conflict in the Middle East and in other regions of
the world.

In
response to the decline in revenues throughout 2001 and 2002, we implemented cost management actions, including the layoff of staff, reductions in travel and other operating costs,
and reorganization of certain support functions and processes. Between January 2001 and December 2002 we reduced our overall headcount by 240 or 16.3% across all functions in our
company. Through these cost reduction initiatives, we were able to mitigate the effect of the decline in revenue on our operating results in 2002.

The
persistence of the general economic slowdown in the U.S. will likely result in continued weakness in overall marketing and advertising expenditures by our customers into 2003. As a
result, we expect our revenues, operating income and EBITDA to reflect this overall weakness. However, we believe that our balanced portfolio between trade shows and publications and our
diversification of these products across many industry sectors may mitigate the overall impact from continued weakness in general economic conditions and reduce the potential impact from the
volatility of any one sector.

Our
Term Loans (Term loan A and Term loan B) contain restrictive covenants which require us to, among other things, maintain a maximum quarterly leverage ratio (as defined) that declines
quarterly through the first quarter of 2004. In March 2002, we sought and obtained an amendment to the Credit Facility which provided eight quarters of covenant relief by increasing the existing
maximum quarterly leverage ratios in 2002 and 2003. In the fourth quarter of 2002, we met our maximum leverage ratio requirement of 6.75:1 with a ratio of 6.36:1. We believe that we will comply with
all covenants during 2003. In the event that we do not achieve our operating plan, we may need to adjust certain planned operating expenses and/or delay capital expenditures in order to meet the
leverage ratio requirement throughout 2003.

In
2004, the covenant relief provided in the amendment expires resulting in step-down in the maximum leverage ratio from 5.75:1 in the fourth quarter 2003 to 4.50:1 in the first quarter
of 2004 and then declines on a quarterly basis over the next two quarters to 4.00:1 in the third quarter of 2004, where it remains for the term of the loan agreement. We believe that the economic
slowdown will continue into 2003, and, as a result, we do not anticipate that we will meet the leverage ratio requirement as of the first quarter of 2004. Accordingly, we are evaluating several
alternatives for seeking a modification to the terms of our Credit Facility. However, there can be no assurance that we and our lenders will be able on agree to revised terms acceptable to both
parties.

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

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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 has been a significant reduction in the levels of funding by us to Advanstar.com during 2002. We funded approximately $2.4 million in support of those
operations in 2002 compared to approximately $16.6 million in 2001. This level of support represents a significant reduction in the operating costs of Advanstar.com from those 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 our sister subsidiary, 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.

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 as a result of the restructuring of the activities of Advanstar.com in 2001. Net
advances and notes included in operating expenses in 2002 were approximately $2.4 million.



Acquisitions and Joint Ventures

Since May 31, 1996, we have completed 35 acquisitions and joint ventures, three of which were completed in 2000, four in 2001 and four in 2002.



22

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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.
The pro forma operating results of the acquisitions are not material relative to our operating results.

The Acquisition

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

In
connection with the adoption of FAS 142, we engaged an appraiser to determine the fair value of the Company 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 related to the Acquisition. The charge is reported as a cumulative effect of a change in accounting principle.

During
the first quarter of 2001, we recorded an extraordinary charge of approximately $2.6 million, net of a deferred tax benefit of approximately $1.5 million, in
connection with the repayment of the 9.25% senior subordinated notes and the write-off of deferred financing fees related to the bridge facility. The 9.25% senior subordinated notes were
refinanced with the proceeds of the 12.00% senior subordinated notes and the concurrent offering of additional senior discount notes. See Notes to our Consolidated Financial Statements included within
this annual report for further details. Upon adoption of SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections.", in 2003 we will reclassify this extraordinary item into our 2001 operating loss.



We
account for stock-based compensation using the intrinsic value method. As a result, due to the variable features of option grants under our old option plan, we historically measured
compensation cost as the difference between the exercise price of the options and the fair value of the shares underlying the options at the end of the period. We then recognized a
non-cash compensation charge or benefit. We no longer have a variable-feature benefit plan after the Acquisition and we therefore do not anticipate that we will recognize stock option
compensation charges under the plan as currently in effect. Our results in 2000, including our EBITDA, were positively impacted by non-cash compensation benefits recognized due to a
decrease in the fair value of the shares underlying the options at the end of the period.



Trade Shows and Conferences

The trade shows and conferences segment derives revenue principally from the sale of exhibit space and conference attendance fees generated at its events. In
2002, approximately 82% of our trade shows and conferences revenue was from the sale of exhibit space. Events are generally held on an

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

Trade Publications

The trade publications segment derives revenue principally from the sale of advertising in its business-to-business magazines.
Additionally, certain publications derive revenue from paid subscriptions and custom publishing. Paid subscriptions comprise less than 5% of total publishing revenue. Most publications are produced
monthly with advertising sold both on an annual schedule and single insertion basis. The sale of advertising is 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.

Marketing Services

The marketing services segment derives its revenue from the sale of value-added marketing products such as classified advertising, both print and internet-based,
direct mail services, reprints, database marketing, directories, guides and reference books. These products complement and, in many cases, utilize the content or databases generated by our trade
shows, conferences and publications. The sale of these products is 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.



Trade Shows and Conferences

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

Trade Publications

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

24

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Marketing Services

Costs of the marketing services segment include printing and distribution costs, database administration fees and selling and product development salaries and
related payroll taxes and benefits. 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. The preparation of these financial statements requires management to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses. On an on-going basis, we evaluate these estimates, including those related to bad debts, intangible assets and income taxes.
We base these estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

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



25

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Results of Operations



Net Revenue

Total net 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

26

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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. 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 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
offset 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 $25.1 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 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.
Excluding goodwill amortization recorded in 2001, depreciation and amortization increased $2.5 million.

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Operating income (loss)

Operating loss increased $21.2 million to $24.2 million in 2002 from $3.0 million in 2001. This increase is primarily due to a
non-cash charge of $37.2 million related to a write-off of notes and advances due from our affiliated dot.com company, a $2.4 million charge related to current
funding of our affiliated dot.com company and the declines in revenue partially offset by a reduction in amortization expense and certain other operating expenses as more fully discussed above.

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. While we do not anticipate a significant change in interest rates in the near term, a 100 basis point increase in interest rates on variable rate debt would have
resulted in an increase in interest expense of $2.4 million.

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.

Provision (benefit) for income taxes

We recorded a tax benefit of approximately $15.5 million in 2002 compared to a tax benefit of approximately $11.2 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.

Net Loss

Net loss was approximately $124.3 million in 2002 compared to $49.8 million in 2001. This increase is primarily attributable to an increase in our
operating loss and our goodwill impairment charge, partially offset by a reduction in interest expense and an increase in our income tax benefit.

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The following discussion compares our results for 2001 to the two months and 20 days ended December 31, 2000 combined with our predecessor's results
for the period January 1, 2000 through October 11, 2000. The consolidated financial data for the combined year ended December 31, 2000 has been derived from the audited
consolidated financial statements of the Predecessor and Advanstar and has not been audited and does not comply with generally accepted accounting principles.

Net Revenue

Total net revenue decreased $30.5 million, or 8.1%, to $347.0 million in 2001 from $377.5 million in 2000.

Net
revenue from trade shows and conferences declined $12.1 million, or 6.1%, to $186.3 million in 2001 from $198.4 million in 2000. Strong performances in our
larger first and third quarter events, such as MAGIC and the New York art and beauty shows, our motorcycle shows and our Brazil telecom show, and the acquisition of an e-Learning
conference (TechLearn) were partially offset by the impact of the realignment of our East Coast fashion events and the cancellation of several events in Europe and the United States in our call center
and IT sectors. In the aftermath of September 11th, we held 18 events as scheduled, rescheduled two events later in 2001 and cancelled a small conference in Paris. Most of our events held after
September 11th performed below the prior year due to the lingering impact of the September 11th terrorist attacks and the persistence of the general economic slowdown in
the U.S., and will likely continue at least through the first half of 2002.

Trade
publications and related marketing services net revenue declined $18.4 million, or 10.3%, to $160.7 million in 2001 from $179.1 million in 2000. The continued
slowdown in the U.S. economy resulted in an 8.8% decrease in advertising pages combined with a 2.8% decrease in revenue per page. This decline in trade publication revenue worsened as the year
unfolded, particularly in the Technology, Communications, Travel and Hospitality sectors. Partially offsetting this decline was our acquisition at the end of the first quarter of Motor AgeandAutomotive Body Repair News.

Cost of production and selling

Cost of production and selling expenses decreased 21.0 million, or 8.7%, to $220.0 million in 2001 from $241.0 million in 2000.

Expenses
of trade shows and conferences decreased $12.9 million, or 11.5%, to $99.3 million in 2001 from $112.2 million in 2000. This decrease was primarily due to
cost savings associated with cancelled events and ongoing cost reduction programs, partially offset by costs related to our acquisition of TechLearn, discussed above and new product launches.

Expenses
of trade publications and marketing services decreased $8.1 million, or 6.3%, to $120.7 million in 2001 from $128.8 million in 2000. We have mitigated the
effects of the 15% postal rate increase in January 2001 and the costs related to our acquisitions described above through cost savings on our base portfolio related to our ongoing cost
reduction program and cost savings related to cancelled publications.

General and administrative expenses

General and administrative expenses declined $5.0 million, or 12.3% to $35.7 million in 2001 from $40.7 million in 2000. This decrease was
primarily due to staff and compensation reductions as part of our cost reduction efforts in response to the worsening economic situation in 2001. In addition, we incurred sale transaction bonuses in
the fourth quarter of 2000 for which there was no corresponding expense in 2001.

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Our
results in 2000, were positively impacted by non-cash compensation benefits of approximately $2.5 million recognized due to a decrease in the fair value of the
shares underlying the options at the end of the period. We no longer have a variable-feature benefit plan after the acquisition and no longer recognize stock option compensation charges under the plan
as currently in effect.

Depreciation and amortization

Depreciation and amortization expense increased $38.9 million to $94.3 million in 2001 from $55.4 million in 2000 primarily due to increased
amortization of goodwill and intangible assets related to the
Acquisition in October 2000 and the use of an accelerated amortization method for exhibitor and advertiser lists to reflect the pattern of usage of these assets.

Operating income (loss)

Operating income declined $45.9 million to a loss of $3.0 million in 2001 from income of $42.9 million in 2000. This decline is primarily due
to a decline in revenue and an increase in depreciation and amortization, partially offset by a decline in general and administrative expenses and cost of production and selling expenses.

Interest expense

Net interest expense increased $3.6 million, or 6.9%, to $55.5 million in 2001 from $51.9 million in 2000 due to the additional indebtedness
of $51.1 million necessary to fund the Acquisition, partially offset by a 170 basis point decrease in weighted average interest rates as a result of reduced LIBOR impact on our floating rate
debt. Also, in February 2001, we replaced our then outstanding $150.0 million 9.25% senior subordinated notes with $160.0 million of the Notes.

Other income (expense), net

Other income in 2001 was $0.8 million, compared to an expense of ($2.2) million in 2000. In 2001, the Company recognized foreign currency gains of
approximately $0.5 million and income of approximately $0.4 million related primarily to a non-compete agreement associated with the sale of our Plastics events in 2000. In
2000, the Company recorded a loss of $2.4 million related to the sale of the Plastics events.

Provision (benefit) for income taxes

We recorded an income tax benefit of $11.2 million in 2001 compared to a provision of $6.4 million in 2000. This change was primarily due to a
decrease in taxable earnings related to reduced operating income more fully described above and increased amortization of intangible assets, partially offset by an increase in nondeductible
amortization resulting from the Acquisition and an increase in the valuation allowance principally related to foreign tax jurisdiction net operating losses incurred in 2001.

Net Loss

Net loss was approximately $49.8 million in 2001 compared to $18.5 million in 2000. This increase is primarily attributable to our operating loss in
2001 as described above and an increase in interest expense, also described above, partially offset our income tax benefit recorded in 2001.

Liquidity and Capital Resources

Our
cash flow provided by operating activities and EBITDA for the year ended December 31, 2002 was approximately $24.3 million and $44.1 million, respectively.
EBITDA declined approximately

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$46.1 million from $90.2 million in 2001, due primarily to the reduction in operating income as discussed above. Reflected in our EBITDA for the year ended December 31, 2002 is a
non-cash charge of $37.2 million related to a provision for notes and advances to Advanstar.com, our affiliated dot.com company. If we were to add back this non-cash
provision, our EBITDA would have been $81.3 million. We believe that EBITDA is a useful supplement to cash flow from operations and operating income because we believe that investors use EBITDA
to help them understand our ability, and the ability of other companies in our industry, to service and/or incur indebtedness and to pay taxes. However, our method of computation may not be comparable
to other similarly titled measures of other companies. We use EBITDA to determine our compliance with key financial covenants under our existing credit facility, which impact the amount of
indebtedness we are permitted to incur. The definition of EBITDA in our existing credit facility is based, in part, on our EBITDA and includes adjustments described in our credit agreement (a copy of
our credit agreement, as amended, has been filed with the Securities and Exchange Commission). See "Item 6Selected Financial DataSelected Historical Consolidated Financial
Data, Note 4" above for our reconciliation of EBITDA to cash flows provided by operating activities.

Since
the DLJ Acquisition, our principal sources of liquidity have been cash flow from operations and borrowings under our credit facility and our principal uses of cash have been the
debt service requirements of our indebtedness described below, capital expenditures and strategic acquisitions. As of December 31, 2002, we had total indebtedness of $557.7 million and
approximately $40.3 million of borrowings available under our revolving credit facility.

Credit facility.The term loan facility under the credit facility consists of a $100.0 million amortizing term loan A
maturing April 11, 2007 and a $315.0 million amortizing term loan B maturing October 11, 2008. The credit facility also includes an $80.0 million revolving credit facility.
The revolving credit facility will terminate in April 2007. The credit facility may be increased by up to $50.0 million at our request, with the formal prior consent of the lenders or
other financial institutions providing the increase. However,
there can be no assurance that this consent would be obtained if requested. In February 2001, we repaid $10.8 million of term loan A and $34.2 million of term loan B at the
closing of the issuance of our 12.00% Series B senior subordinated notes due 2011(the Replacement Notes). The balances outstanding on our term loans A and B at December 31, 2002 were
$75.0 million and $280.8 million.

Borrowings
under the credit facility generally bear interest based on a margin over, at our option, the base rate or the reserve-adjusted London-interbank offered rate (LIBOR). The
applicable margin for revolving credit loans and term loan A will vary based upon our ratio of consolidated debt to EBITDA, as defined in the credit facility and is currently 3.25% over LIBOR. The
applicable margin for term loan B is 4.00% over LIBOR and 2.75% over the base rate. Our obligations under the credit facility are guaranteed by Advanstar Holdings Corp., our ultimate parent company,
and all our existing and future domestic subsidiaries and are 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 Advanstar, Inc., our company and our domestic subsidiaries, a pledge of our company's and Advanstar IH, Inc.'s capital stock by our parent company,
and a pledge of our parent company's capital stock by Advanstar Holdings Corp. The credit facility contains restrictive covenants that, among other things, limit our ability to incur debt, pay
dividends and make investments.

Our
Term Loans (Term loan A and Term loan B) contain restrictive covenants which require us to, among other things, maintain a maximum quarterly leverage ratio (as defined) that
declines quarterly through the first quarter of 2004. In March 2002, we sought and obtained an amendment to the Credit Facility which provided eight quarters of covenant relief by increasing
the existing maximum quarterly leverage ratios in 2002 and 2003. In the fourth quarter of 2002, we met our maximum leverage ratio

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requirement of 6.75:1 with a ratio of 6.36:1. We believe that we will comply with all covenants during 2003. In the event that we do not achieve our operating plan, we may need to adjust certain
planned operating expenses and/or delay capital expenditures in order to meet the leverage ratio requirement throughout 2003.

In
2004, the covenant relief provided in the amendment expires resulting in a step-down in the maximum leverage ratio from 5.75:1 in the fourth quarter 2003 to 4.50:1 in the
first quarter of 2004 and then declines on a quarterly basis over the next two quarters to 4.00:1 in the third quarter of 2004, where it remains for the term of the loan agreement. We believe that the
economic slowdown will continue into 2003, and, as a result, we do not anticipate that we will meet the leverage ratio requirement as of the first quarter of 2004. Accordingly, we are evaluating
several alternatives for seeking a modification to the terms of our Credit Facility. However, there can be no assurance that we and our lenders will be able on agree to revised terms acceptable to
both parties.

Replacement Notes.The $160 million 12% Series B senior subordinated notes (Replacement Notes) mature in 2011
and are guaranteed by each of our existing and future domestic restricted subsidiaries. Interest on the Replacement Notes is payable semi-annually in cash. The Replacement Notes contain
restrictive covenants that, among other things, limit our ability to incur debt, pay dividends and make investments. As of December 31, 2002, we were in compliance with these covenants.

Parent company notes.As part of the financing for the Acquisition, our parent, Advanstar, Inc., issued senior
discount notes due October 2011 (the Discount Notes) with a principal amount at maturity of $103.2 million. Concurrently with the closing of the offering of the Replacement Notes,
Advanstar, Inc. sold additional senior discount notes due October 2011 with an additional aggregate principal amount at maturity of $68.6 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 the Company) to incur
debt, pay dividends and make investments. Neither we nor any of our subsidiaries 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 including the Company and Advanstar.com.

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

|                         |                                    |   |      |      |   | Payments Due By Period |      |   |      |     
|------------------------ | ---------------------------------- | - | ---- | ---- | - | ---------------------- | ---- | - | ---- | ----
|
|
|Indebtedness             |                                    | $ | 17.4 |      | $ | 19.5                   |      | $ | 17.1 |     
|Interest on indebtedness |                                    |   | 45.4 |      |   | 40.0                   |      |   | 38.2 |     
|Operating leases         |                                    |   | 6.1  |      |   | 5.7                    |      |   | 5.4  |     
|                         |                                    |   |      |      |   |                        |      |   |      |     
|                         | Total Contractual Cash Obligations |   | $    | 68.9 |   | $                      | 65.2 |   | $    | 60.7
|                         |                                    |   |      |      |   |                        |      |   |      |     

Interest
on indebtedness is estimated using interest rated as of December 31, 2002.

Our
contingent obligations are primarily composed of $2.6 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".

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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 working capital.

We
anticipate that our operating cash flow, together with borrowings under the credit facility (assuming continued compliance with the covenants contained thereon or a modification
thereof), 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 was $24.3 million in 2002, derived primarily
from our net loss of $124.3 million adjusted for a non-cash goodwill impairment charge of $66.8 million, amortization and depreciation of $69.1 million, a
$37.2 million non-cash charge in 2002 related to the provision for advances due from our affiliated dot.com company, a deferred income tax benefit of $16.1 million and a use
of cash caused by movements in our working capital of $8.4 million.

Net
cash provided by operations decreased $17.5 million from $41.8 million in 2001. Operating income declined $21.3 million in 2002 as discussed above. Certain
non-cash charges included in operating income, primarily the provision for advances from our affiliated dot.com company and depreciation and amortization, increased approximately
$12.0 million. Cash interest expense increased $1.1 million due to higher interest costs on the Replacement Notes issued in 2001offset by reduced interest rates on our senior term loans.
Cash paid for income taxes declined approximately $3.2 million due primarily to federal tax refunds we received in 2002 from a carryback of net operating losses to offset taxes we paid in 2000.
Additionally, cash generated from our working capital and minority interest declined $10.3 million in 2002 from 2001 levels due largely to payments on accounts payable.

Cash flows used in investing activities.Net cash used in investing activities declined $10.5 million to
$31.2 million in 2002, from $41.7 million in 2001. This decline was principally due to significantly decreased funding of Advanstar.com which declined from $16.6 million in 2001
to $2.4 million in 2002. We anticipate that we will provide approximately $1.3 million of additional funding in 2003. Our debt instruments limit the total amount we can invest in
Advanstar.com. Based on current estimates, we anticipate that we will be able to make these investments within those limitations.

Capital
expenditures declined $0.7 million in 2002 to $7.2 million compared to $7.9 million in 2001. We anticipate that we will spend approximately
$5.8 million on capital expenditures in 2003, primarily for expenditures related to our desktop computers and management information systems. We believe that this amount of capital expenditures
will be adequate to grow our business according to our business strategy and to maintain the properties and business of our continuing operations.

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Cash
used for acquisitions in 2002 increased $9.8 million over acquisitions completed in 2001. 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.Cash flows from financing activities decreased $40.2 million from a source of
cash of $24.8 million in 2001. We used approximately $15.4 million of net cash in financing activities in 2002, primarily in debt repayments and fees paid to our senior lenders for our
Credit Facility amendment in March 2002. We paid approximately $16.2 million on our long-term debt, paid financing costs related to the amendment to our senior credit
agreement of $1.8 million and drew down a net of $3.1 million on our revolving credit line to finance certain acquisitions. We also made $0.5 million in distributions to our
various joint venture partners.



In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 143, "Accounting for Asset Retirement Obligations." SFAS
No. 143 requires entities to record the fair value of the liability for legal obligations associated with an asset retirement in the period in which the obligation is incurred. When the
liability is initially recorded, the entity capitalizes the cost of the asset retirement obligation by increasing the carrying amount of the related long-lived asset. Over time, the
liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. The provisions of SFAS No. 143 are effective for us in
2003. We have not yet completed our analysis of the impact of adoption of SFAS No. 143. However, based upon a preliminary analysis, we do not expect adoption to have a material impact on our
financial position or results of operations.

In
August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." This statement addresses financial accounting
and reporting for the impairment or disposal of long-lived assets. SFAS No. 144 retains and expands upon the fundamental provisions of existing guidance related to the recognition
and measurement of the impairment of long-lived assets to be held and used and the measurement of long-lived assets to be disposed of by sale. Generally, the provisions of SFAS
No. 144 are effective for financial statements issued for fiscal years beginning after December 15, 2001. We adopted SFAS No. 144 on January 1, 2002. The adoption of SFAS
No. 144 had no impact on our results of operations or financial position.

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. SFAS No. 145 is generally effective for
fiscal years beginning after May 15, 2002. We will adopt SFAS No. 145 effective January 1, 2003. The adoption of SFAS No. 145 is not expected to have a significant impact
of our results of operations or financial position, but in accordance with the transition provisions, will result in reclassification of the 2001 extraordinary item into our operating loss.

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In
June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." This statement addresses financial accounting and reporting
for costs associated with exit or disposal activities and requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. The provisions
of SFAS No. 146 are effective for exit or disposal activities that are initiated after December 31, 2002. The adoption of SFAS No. 146 is not expected to have a significant impact
of our results of operations or financial position.

In
December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based CompensationTransition Disclosurean amendment of SFAS
No. 123."This Statement amends SFAS No. 123, "Accounting for Stock-Based Compensation,"to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this Statement amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and
the effect of the method used on reported results. The provisions of SFAS No. 148 are effective for financial statements for fiscal years ending after December 15, 2002, and disclosure
requirements shall be effective for interim periods beginning after December 15, 2002. We have no immediate plans to change to the fair value based method of accounting for stock-based
compensation. We have made certain disclosures required by SFAS No. 148 in the consolidated financial staements for the year ended December 31, 2002 and will make the additional
stock-based employee compensation disclosures required by SFAS No. 148 beginning in the quarter ended March 31, 2003.

In
November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness
of Others." This interpretation elaborates on the disclosures required in financial statements concerning obligations under certain guarantees. It also clarifies the requirements related to the
recognition of liabilities by a guarantor at the inception of certain guarantees. The disclosure requirements of this interpretation were effective for us on December 31, 2002 but did not
require any additional disclosures. The recognition provisions of the interpretation are effective for us in 2003 and are applicable only to guarantees issued or modified after December 31,
2002. We do not expect adoption of these recognition provisions to have a material impact on our financial position or results of operations.

Certain Factors Which May Affect Future Results

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

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 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. 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 would 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 and 2002 were significantly impacted by the downturn in the U.S. economy, particularly in our Information Technology &
Communications cluster and Travel & Hospitality cluster. The events of September 11th also significantly impacted our 2001

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and 2002 results, including cancellations in ad pages, particularly in our travel industry publications, and cancellations of exhibitor participation in several of our events in the third and fourth
quarter following September 11th.

It
is unclear what the continuing impact of the September 11, 2001 terrorist attacks in New York and Washington D.C. will have on our future results of operations and financial
condition, in relationship to the impact arising from the current economic slowdown. However, 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.

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, 2002, our MAGIC trade shows represented approximately 20% of our total revenue and approximately 34% of contribution before general and
administrative expenses. We expect that the MAGIC trade shows will continue to represent a significant portion of our overall revenue and contribution 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.
MAGIC's performance in 2002 was adversely affected by a difficult apparel market.

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 United States Postal Service to distribute our print products and mailings. United States 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.

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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 us.

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 be alternatives for either readers or advertisers.

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 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. This growth strategy entails risks inherent in identifying desirable acquisition candidates and in integrating the
operations of acquired businesses into our existing operations. 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 could have a material adverse impact 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.

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 implement
successfully 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. Krakoff, Mr. Alic and Mr. Loggia, 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 their 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

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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 and expansion strategy exposes us to various risks associated with international operations

Our growth strategy includes expanding our product and service offerings internationally. We currently maintain offices in Brazil, Germany, Hong Kong and the
United Kingdom. International operations accounted for approximately 10% of our total revenue in 2002. International operations and expansion involve numerous risks, such as:



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 remain sensitive to cutbacks
in destination and vacation travel trade advertising 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 are deferring 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 2000,
2001 and 2002, 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

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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 2002, approximately 36% of our revenue was generated during the first quarter and approximately 27% during the third
quarter. The second quarter accounted for approximately 20% of revenue in 2002 and the fourth quarter accounted for approximately 17% of revenue in 2002. 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.

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

We incurred a significant amount of indebtedness in connection with the Acquisition. The level of our indebtedness may have important consequences, including:



As
of December 31, 2002, we had (a) total indebtedness of approximately $557.7 million and (b) approximately $40.3 million of borrowings available
under our credit facility, subject to customary conditions. In addition, subject to the restrictions in our credit facility and the indenture, we may incur significant additional indebtedness, which
may be secured, from time to time.

We may not be able to service our debt without the need for additional financing, which we may not be able to obtain

Our ability to pay or to refinance our indebtedness, including the notes, 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 anticipate that our operating cash flow, together with money we can borrow under our credit
facility, will be sufficient to meet anticipated future operating expenses, to fund capital expenditures and to service our debt as it becomes due assuming we continue to be in compliance with our
credit facility covenants. However, 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 under our credit facility in amounts sufficient to enable us to pay our indebtedness, including the notes, or to fund our other liquidity
needs. If we cannot satisfy the covenants in the credit facility, borrowings thereunder will not be possible. 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.

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

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The indenture governing the notes contain various covenants that limit our ability to engage in a variety of transactions. In addition, the notes issued by our
parent company, which we refer to as "parent company notes," and our credit facility contain other and more restrictive covenants. Our credit facility prohibits us from prepaying our subordinated
indebtedness, including the notes, and also requires us to maintain specified financial ratios and satisfy other financial condition tests. Our ability to meet those financial ratios and tests can be
affected by events beyond our control, and we cannot assure you that we will meet those tests. As a result of the economic slowdown continuing into 2003, we do not anticipate that we will meet the
leverage ratio requirement in our credit facility as of the first quarter of 2004. Accordingly, we are evaluating several alternatives for seeking a modification to the terms of our credit facility.
However, there can be no assurance that we and our lenders will be able to agree to revised terms acceptable to both parties. A breach of any of these covenants or other provisions in the agreement
governing the credit facility, the parent company notes and/or the notes could result in a default under our credit facility, the parent company notes, and/or the 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. 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, including the notes.

We are controlled by principal stockholders who will be able to make important decisions about our business and capital structure; their interests may differ from
your interests as a debtholder

Circumstances
may occur in which the interests of our principal stockholders could be in conflict with your interests. 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 you as a holder of the notes.

Substantially
all of the outstanding shares of common stock of our ultimate parent company is 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 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
will 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 Corporation, which is also an affiliate of (1) Credit
Suisse First Boston, the arranger, syndication agent and a lender under our credit facility, and (2) the general partners of each of the DLJ Investment Partners funds, the purchasers of a
portion of the units issued by our parent company. Credit Suisse First Boston Corporation was also one of the initial purchasers of the notes and the initial purchaser of the additional parent company
units sold in February 2001.

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 number of factors
could cause our actual results, performance, achievements or industry results to be very different from the results, performance,

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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 in this annual report 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 rely on the forward-looking statements. 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. 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.QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK

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

Interest Rates.We rely significantly on variable rate and fixed rate debt in our capital structure. At December 31,
2002, we had fixed rate debt of $164.8 million and variable rate debt of $392.9 million. The pre-tax earnings and cash flows impact for the next year resulting from a 100
basis point increase in interest rates on variable rate debt would be a reduction of pre-tax earnings of $3.9 million for the year ended December 31, 2002, holding other
variables constant and excluding the impact of our interest rate protection agreements. Under the credit facility, we are required to enter into interest rate protection agreements that have the
effect of causing at least half of the outstanding term loan borrowings and Replacement Notes to be fixed-rate borrowings. We have entered into agreements to cap the interest rate on
$150.0 million of borrowings under our credit facility, which would have the effect of reducing the impact of interest rate increases on our earnings and cash flows.

Currencies.Outside of the United States, we maintain assets and operations in Europe, South America and Asia. The results of
operations and financial position of our foreign operations are principally measured in their respective currency and translated into U.S. dollars. As a result, exposure to foreign currency gains and
losses exists. The reported income of these subsidiaries will be higher or lower depending on a weakening or strengthening of the U.S. dollar against the respective foreign

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currency. Our subsidiaries and affiliates also purchase and sell products and services in various currencies. As a result, we may be exposed to cost increases relative to the local currencies in the
markets in which we sell.

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

Our
strategy for management of currency risk relies primarily upon conducting our operations in a country's respective currency and may, from time to time, involve currency derivatives,
primarily
forward exchange contracts, to reduce our exposure to currency fluctuations. As of December 31, 2002, there were open foreign exchange derivative contracts to sell with a notional amount
totaling $12.1 million and to buy with a notional amount totaling $6.4 million. The estimated fair value of the foreign exchange contracts based upon market quotes was a net asset 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 $0.4 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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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                                                     
|------------------- |  | --- |  | -------------------------------------------------------------
|Robert L. Krakoff   |  | 67  |  | Chairman of the Board and Chief Executive Officer            
|James M. Alic       |  | 60  |  | Vice Chairman, Vice President and Director                   
|Joseph Loggia       |  | 43  |  | President and Chief Operating Officer and Director           
|David W. Montgomery |  | 45  |  | 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  |  | 40  |  | Executive Vice President                                     
|Scott E. Pierce     |  | 44  |  | Executive Vice President                                     
|OhSang Kwon         |  | 34  |  | Director                                                     
|James A. Quella     |  | 53  |  | Director                                                     
|David M. Wittels    |  | 38  |  | Director                                                     
|Douglas B. Fox      |  | 55  |  | Director                                                     



Robert L. Krakoffhas served as our Chairman and Chief Executive Officer since he joined Advanstar in
July 1996. 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.

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.

Joseph Loggiawas named President and Chief Operating Officer in June 2001. 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.

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, 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.

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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.

Daniel M. Phillipscurrently serves as Executive Vice President of our InformationTechnology, 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.



Robert L. Krakoff.See "Executive Officers."

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

Joseph Loggia.See "Executive Officers."

OhSang Kwonhas served as a director since October 2000. Mr. Kwon has been a Principal of DLJ Merchant Banking, Inc.
since 2001 and a Vice President of DLJ Merchant Banking, Inc. 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.

James A. Quellahas served as a director since October 2000. Mr. Quella joined DLJ Merchant Banking, Inc. in 2000 as
a Managing Director and Operating Partner. Immediately prior to joining DLJ, he was a Managing Director at GH Venture Partners. From 1990 to 1999, Mr. Quella worked at Mercer Management
Consulting where he served as a senior consultant and became Vice Chairman in 1997. Mr. Quella was also a Director of Mercer Consulting Group and Executive Partner of Marsh McLennan Companies.
Mr. Quella currently serves on the board of directors of Merrill Corporation and Von Hoffman Press, Inc.

David M. Wittelshas served as a director since October 2000. Mr. Wittels has been a Managing Director of DLJ Merchant
Banking, Inc. 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. and Ziff Davis Holdings Inc.

Douglas B. Foxhas served as a director 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 Sr. V.P. of Marketing at International Paper Inc. from 1997 to
2000. He served as President of Landmark Communications Inc. in 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. as well as Bowne Global Services.

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Item 11.EXECUTIVE COMPENSATION

Summary Compensation Table

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

|Name and Principal Position |                                 | Year |      | Salary |         | Bonus(1) |   | Other Annual
Compensation(4) |         | Long-Term
Compensation
Awards
Securities
Underlying
Options/SARs |        | All Other
Compensation |        
|--------------------------- | ------------------------------- | ---- | ---- | ------ | ------- | -------- | - | ---------------------------- | ------- | ---------------------------------------------------------------- | ------ | ---------------------- | -------
|Robert L. Krakoff           |                                 | 2002 |      | $      | 600,000 |          | $ | 245,246                      |         | $                                                                | 13,680 |                        |       
|                            | Chairman of the Board and Chief |      | 2001 |        |         | 600,000  |   |                              |        | (5)                                                              |        | 19,721                 |        
|                            | Executive Officer               |      | 2000 |        |         | 522,308  |   |                              | 194,805 |                                                                  |        | 4,861                  |        
|James M. Alic               |                                 | 2002 |      |        | 209,230 |          |   |                             | (7)     |                                                                  |       |                        |       
|                            | Vice Chairman, Vice President   |      | 2001 |        |         | 500,000  |   |                              |        | (5)                                                              |        |                       |        
|                            | and Director                    |      | 2000 |        |         | 422,308  |   |                              | 157,700 |                                                                  |        | 5,392                  |        
|Joseph Loggia               |                                 | 2002 |      |        | 500,000 |          |   | 204,373                      |         |                                                                  |       |                        | 100,000
|                            | President and Chief Operating   |      | 2001 |        |         | 500,000  |   |                              |        | (5)                                                              |        | 3,375                  |        
|                            | Officer                         |      | 2000 |        |         | 565,385  |   |                              | 280,933 |                                                                  |        |                       |        
|David W. Montgomery         |                                 | 2002 |      |        | 250,000 |          |   | 58,000                       |         |                                                                  |       |                        | 50,000 
|                            | Vice President-Finance, Chief   |      | 2001 |        |         | 250,000  |   |                              | 17,000  |                                                                  |        | 1,500                  |        
|                            | Financial Officer and Secretary |      | 2000 |        |         | 210,000  |   |                              | 110,836 |                                                                  |        | 14,712                 |        
|Eric I. Lisman              |                                 | 2002 |      |        | 350,000 |          |   | 59,200                       |         |                                                                  |       |                        | 50,000 
|                            | Executive Vice President and    |      | 2001 |        |         | 280,000  |   |                              | 10,000  |                                                                  |        |                       |        
|                            | General Counsel                 |      | 2000 |        |         | 257,500  |   |                              | 110,156 |                                                                  |        |                       |        

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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, 2002 pursuant to the 2000 Management Incentive Plan described below to each of the named executive officers. We have not granted any stock appreciation rights.

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OPTION GRANTS IN LAST FISCAL YEAR

|                    |  |         |  | % of Total
Options
Granted
to
Employees
in Fiscal
Year |   |   |       |  |      | Potential Realizable Value at
Assumed Annual Rates
of Stock Price Appreciation
for Option Term
|------------------- |  | ------- |  | ------------------------------------------------------ | - | - | ----- |  | ---- | ----------------------------------------------------------------------------------------------
|
|
|
|Joseph Loggia       |  | 100,000 |  | 19.0                                                   | % | $ | 10.00 |  | 2012 |                                                                                               
|David W. Montgomery |  | 50,000  |  | 9.5                                                    | % |   | 10.00 |  | 2012 |                                                                                               
|Eric I. Lisman      |  | 50,000  |  | 9.5                                                    | % |   | 10.00 |  | 2012 |                                                                                               

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, 2002. None of the unexercised options were "in the money" at December 31, 2002.

Aggregated Option Exercises in 2002 and December 31, 2002 Option Values

|                    |  | Number of
Shares
Acquired
on
Exercise |  |   |   | Number of Securities Underlying Unexercised Options at Fiscal Year End |         | Value of Unexercised In-the-Money Options at Fiscal Year End
|------------------- |  | ------------------------------------- |  | - | - | ---------------------------------------------------------------------- | ------- | ------------------------------------------------------------
|
|
|Robert L. Krakoff   |  |                                      |  | $ |  |                                                                        | 337,500 |                                                             
|James M. Alic       |  |                                      |  |   |  |                                                                        | 86,168  |                                                             
|Joseph Loggia       |  |                                      |  |   |  |                                                                        | 150,000 |                                                             
|David W. Montgomery |  |                                      |  |   |  |                                                                        | 75,000  |                                                             
|Eric I. Lisman      |  |                                      |  |   |  |                                                                        | 50,000  |                                                             

Stock Option and Incentive Plans



Advanstar, Inc.'s Second Amended and Restated 1996 Stock Option Plan, as amended (the "1996 Plan"), provided for the issuance of a maximum of 2,051,124
shares of its common stock pursuant to the grant of non-qualified stock options to employees and other individuals who rendered services to Advanstar, Inc. As of December 31,
1999, options to purchase 2,031,100 shares of Advanstar, Inc.'s common stock at an average exercise price of $8.24 were outstanding under the 1996 Plan, and no options had been exercised. Under
the terms of the 1996 Plan and existing award agreements, upon the closing of the Acquisition all outstanding options became fully vested and exercisable. Under the acquisition agreement, the holder
of each option outstanding under the 1996 Plan whose exercise price was less than the value of the merger consideration received for each option, an amount equal to the per share merger consideration
minus the exercise price for such option. Outstanding options whose exercise price exceeded the value of the merger consideration were canceled as of the closing of the merger.

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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 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 3,447,789 shares of its common stock for participants under the plan during the term of the plan, of which 3,243,750 have
been granted and remain outstanding as of December 31, 2002. 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

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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.

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:



48

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Employment Agreements and Arrangements

Mr. Krakoff has entered into an employment agreement with Advanstar, Inc., dated as of August 14, 2000 which became effective on the closing
of the Acquisition. The agreement provides for a term through September 30, 2003. Pursuant to the agreement, Mr. Krakoff is entitled to annual base salary of $600,000. Mr. Krakoff
is also entitled to annual bonuses 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 of the executive to the
extent permissible under New York law. The agreement further provides for severance benefits equal to one year's base salary and benefits and a pro rated bonus upon termination of employment by
Advanstar without "cause" or by the executive for "good reason," which includes a change of control. 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, the executive 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. 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, the executive 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 June 20, 2001. Pursuant to the agreement, Mr. Loggia will act as our president and chief
operating officer for a term through December 31, 2003. Mr. Loggia is entitled to an annual base salary of $500,000 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. Mr. Loggia also has
entered into a 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.

Advanstar
Communications Inc. currently has a severance arrangement with David W. Montgomery, its Vice President-Finance, Chief Financial Officer and Secretary. In the event that
Mr. Montgomery's employment is involuntarily terminated for any reason other than 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 cause or if Mr. Lisman's principal office location is relocated outside the greater

49

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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-or-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

We do not have a compensation committee. During the fiscal year ended December 31, 2002, Messrs. Krakoff, Loggia and Montgomery participated in
deliberations of our board of directors concerning executive officer compensation.

50

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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 28, 2003 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 28, 2003. 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)                                   |  | 29,966,117                                          |     | 94.6                                   | %
|Robert L. Krakoff                                                                                  |  | 1,486,623                                           | (2) | 4.7                                    | %
|James M. Alic                                                                                      |  | 412,765                                             | (3) | 1.3                                    | %
|Joseph Loggia                                                                                      |  | 250,000                                             | (4) | *                                      |  
|David W. Montgomery                                                                                |  | 125,000                                             | (5) | *                                      |  
|Eric I. Lisman                                                                                     |  | 90,625                                              | (6) | *                                      |  
|Douglas B. Fox                                                                                     |  | 5,000                                               | (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            |  |                                                    |     |                                       |  
|James A. Quella(8)
DLJ Investment Partners II, Inc.
Eleven Madison Avenue
New York, New York 10010 |  |                                                    |     |                                       |  
|All directors and officers as a group (8 persons)(8)                                               |  | 2,370,013                                           |     | 7.2                                    | %

---

51

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Advanstar
has not 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

DLJ Capital Funding, 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 Corporation, an affiliate of the DLJ Merchant Banking funds, is acting as our financial
advisor.

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



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

52

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Advanstar and its subsidiaries may from time to time enter into other investment banking relationships with Credit Suisse First Boston Corporation or one of its affiliates pursuant to
which Credit Suisse First Boston Corporation 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 Corporation against a variety of liabilities, including liabilities under the
federal securities laws.

Stockholders' Agreement

Holdings, the DLJ Merchant Banking funds, the DLJ Investment Partners funds and the other stockholders of Holdings (collectively, including Messrs. Krakoff
and Alic, the "Holdings Stockholders") entered into a stockholders' agreement at the closing of the Acquisition. The stockholders' agreement provides that any person acquiring shares of common stock
of Holdings who is required by the stockholders' agreement or by any other agreement or plan of 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 Holdings Stockholders sold an aggregate of 200,000 shares of Holdings stock to 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 Holdings capital stock by the 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 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 equity ownership, 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 Holdings' board and select all of the additional directors. Messrs. Alic, Kwon and
Wittels are the directors selected by the DLJ Merchant Banking funds and Mr. Quella is the director selected by the DLJ Investment Partners funds.

Under
the stockholders' agreement, the Holdings Stockholders entered into a registration rights agreement with Holdings. Under that agreement, the DLJ Merchant Banking funds will have
the right to six demand registrations (or five if the DLJ Investment Partners funds have exercised a demand), and the DLJ Investment Partners funds 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 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

53

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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 is 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.

In
addition, we have provided funding to Advanstar.com to support its operations. We provided funding of approximately $2.4 million in 2002 and anticipate that we will provide an
aggregate of approximately $1.3 million of additional funding in 2003.

54

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PART IV

Item 14.CONTROLS AND PROCEDURES

The
Company's principal executive officer and principal financial officer have evaluated the Company's disclosure controls and procedures as of a date within 90 days before the
filing date of this annual report. Based on this evaluation, they concluded that, as of the evaluation date, the disclosure controls and procedures were adequate and effective and designed to ensure
that material information relating to the registrant, including its consolidated subsidiaries, is made known to them by others within those entities, particularly during the period in which this
annual report is being prepared.

There
have been no significant changes in our internal controls or, to our knowledge, in other factors that could significantly affect these controls subsequent to the evaluation of the
internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.

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

A. Documents Filed as Part of this Report:

1.    Financial Statements:

PageReport of PricewaterhouseCoopers LLP

F-1Report of Arthur Andersen LLP

F-2Consolidated Balance Sheets as of December 31, 2002 and 2001

F-4Consolidated Statements of Operations for the years ended December 31, 2002 and 2001, the period from October 12, 2000 through December 31, 2000 and the period from January 1, 2000 through October 11, 2000

F-5Consolidated Statements of Stockholder's Equity for the years ended December 31, 2002 and 2001, the period from October 12, 2000 through December 31, 2000 and the period from January 1, 2000 through October 11, 2000

F-6Consolidated Statements of Cash Flows for the years ended December 31, 2002 and 2001, the period from October 12, 2000 through December 31, 2000 and the period from January 1, 2000 through October 11, 2000

F-8Notes to Consolidated Financial Statements

F-9


2.  Financial Statement Schedules:

The following schedule is included in this Annual Report on the page indicatedSchedule IIValuation and Qualifying Accounts

II-1


55

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Report of Independent Accountants

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

In
our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, of stockholder's equity and of cash flows 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, 2002 and 2001, and
the results of their operations and their cash flows for the years then ended and for the period from October 12, 2000 (date of inception) through December 31, 2000 in conformity with
accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits 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. The predecessor financial statements of Advanstar Communications Inc. from January 1, 2000 through
October 11, 2000, prior to the revisions described in Note 3, were audited by other independent accountants who have ceased operations. Those independent accountants expressed an
unqualified opinion on those financial statements in their report dated February 15, 2002.

As
discussed in Note 6, the Company may not be able to meet one of its debt covenants in the first quarter of 2004. Management's plans with respect to this matter are also
discussed in Note 6.

As
discussed in Note 2, the Company adopted the provisions of Statement of Financial Accounting Standards 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.

As
discussed above, the predecessor financial statements of Advanstar Communications Inc. for the period from January 1, 2000 through October 11, 2000, were audited
by other independent accountants who have ceased operations. As described in Note 3, these financial statements have been revised to include the transitional disclosures required by Statement
of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets," which was adopted by the Company as of January 1, 2002. We audited the transitional disclosures
described in Note 3. In our opinion, the transitional disclosures for the period from January 1, 2000 through October 11, 2000 in Note 3 are appropriate and have been
properly applied. However, we were not engaged to audit, review, or apply any procedures to the financial statements of the Predecessor Company for the period from January 1, 2000 through
October 11, 2000 other than with respect to such disclosures and, accordingly, we do not express an opinion or any other form of assurance on the financial statements of the Predecessor Company
for the period from January 1, 2000 through October 11, 2000 taken as a whole.

PricewaterhouseCoopers
LLP
Minneapolis, Minnesota
February 14, 2003

F-1

---



THE FOLLOWING REPORT IS A COPY OF A REPORT PREVIOUSLY ISSUED BY ARTHUR ANDERSEN LLP. THIS REPORT HAS NOT BEEN REISSUED BY ARTHUR ANDERSEN LLP AND ARTHUR ANDERSEN
LLP DID NOT CONSENT TO THE USE OF THIS REPORT IN THIS FORM 10-K OR ANY PREVIOUSLY FILED REGISTRATION STATEMENTS. ADDITIONALLY, IN 2002, THE COMPANY ADOPTED THE PROVISIONS OF STATEMENT OF
FINANCIAL ACCOUNTING STANDARDS NO. 142, "GOODWILL AND OTHER INTANGIBLE ASSETS" (SFAS NO. 142). AS DISCUSSED IN NOTE 3, THE COMPANY HAS PRESENTED THE TRANSITIONAL DISCLOSURES AS REQUIRED BY
SFAS 142. THE ARTHUR ANDERSEN LLP REPORT DOES NOT EXTEND TO THESE DISCLOSURES.

Report of independent public accountants

To
Advanstar Communications Inc.:

We
have audited the accompanying consolidated balance sheets of Advanstar Communications Inc. (a Delaware corporation) and Subsidiaries as of December 31, 2001* and
2000***, and the related consolidated statements of operations, stockholder's equity and cash flows for the year ended December 31, 2001*, the period from October 12, 2000 through
December 31, 2000*, the period from January 1, 2000 through October 11, 2000 and the year ended December 31, 1999***. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We
conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Advanstar Communications Inc. and
Subsidiaries as of December 31, 2001* and 2000***, and the results of their operations and their cash flows for the year ended December 31, 2001*, the period from October 12, 2000
through December 31, 2000*, the period from January 1, 2000 through October 11, 2000 and the year ended December 31, 1999***, in conformity with accounting principles
generally accepted in the United States.

Our
audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedule listed in the index of financial statements is presented for
purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements
taken as a whole.**

F-2

---

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

Arthur
Andersen LLP

Minneapolis,
Minnesota,

February 15,
2002

---

*    Subsequent
to the date of this report, the consolidated balance sheet as of December 31, 2001 and the related consolidated statements of operations, of stockholder's equity and
of cash flows for the year ended December 31, 2001 and for the period from October 12, 2000 through December 31, 2000 were audited by PricewaterhouseCoopers LLP whose report
appears on page F-1 of this Form 10-K.

**  The
above copy of the Arthur Andersen LLP opinion on the financial statement schedule extended to information for the year ended December 31, 2001, the period from
October 12, 2000 through December 31, 2000, the period from January 1, 2000 through October 11, 2000 and the year ended December 31, 1999. Subsequent to the date of
that report, the information in the schedule of valuation and qualifying accounts for the year ended December 31, 2001 and for the period from October 12, 2000 through
December 31, 2000 was audited by PricewaterhouseCoopers LLP whose report appears on page F-1 of this Form 10-K. The information in the schedule of valuation and
qualifying accounts for the year ended December 31, 1999 is not included in this Form 10-K.

***The
consolidated balance sheet as of December 31, 2000 and the consolidated statements of operations, changes in stockholder's equity, and cash flows for the year ended December 31,
1999 are not included in this Form 10-K.

F-3

---



Advanstar Communications Inc. and Subsidiaries        Consolidated Balance Sheets        (In thousands, except share and per share data)

|                                          |                                                                                                                                   | Successor                              |        
|----------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | -------
|
|ASSETS                                    |                                                                                                                                  
|Current assets:                           |                                                                                                                                   |                                        |        
|                                          | Cash and cash equivalents                                                                                                         |                                        | $      
|                                          | Accounts receivable, net of allowance of $1,049 and $970 at December 31, 2002 and 2001                                            |                                        |        
|                                          | Prepaid expenses                                                                                                                  |                                        |        
|                                          | Other                                                                                                                             |                                        |        
|                                          |                                                                                                                                   |                                        |        
|                                          |                                                                                                                                   | Total current assets                   |        
|Property, plant and equipment, net        |                                                                                                                                   |                                        | 23,499 
|Intangible and other assets:              |                                                                                                                                   |                                        |        
|                                          | Goodwill, net                                                                                                                     |                                        |        
|                                          | Intangibles and other, net                                                                                                        |                                        |        
|                                          |                                                                                                                                   |                                        |        
|                                          |                                                                                                                                   | Total intangible and other assets, net |        
|                                          |                                                                                                                                   |                                        |        
|                                          |                                                                                                                                   | $                                      | 866,026
|                                          |                                                                                                                                   |                                        |        
|LIABILITIES AND STOCKHOLDER'S EQUITY      |                                                                                                                                  
|Current liabilities:                      |                                                                                                                                   |                                        |        
|                                          | Current maturities of long-term debt                                                                                              |                                        | $      
|                                          | Accounts payable                                                                                                                  |                                        |        
|                                          | Accrued compensation                                                                                                              |                                        |        
|                                          | Other accrued expenses                                                                                                            |                                        |        
|                                          | Deferred revenue                                                                                                                  |                                        |        
|                                          |                                                                                                                                   |                                        |        
|                                          |                                                                                                                                   | Total current liabilities              |        
|Long-term debt, net of current maturities |                                                                                                                                   |                                        | 540,300
|Deferred income taxes                     |                                                                                                                                   |                                        |       
|Other long-term liabilities               |                                                                                                                                   |                                        | 4,374  
|Due to parent                             |                                                                                                                                   |                                        | 4,492  
|Minority interests                        |                                                                                                                                   |                                        | 9,782  
|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, 2002 and 2001 |                                        |        
|                                          | Capital in excess of par value                                                                                                    |                                        |        
|                                          | Accumulated deficit                                                                                                               |                                        |        
|                                          | Accumulated other comprehensive loss                                                                                              |                                        |        
|                                          |                                                                                                                                   |                                        |        
|                                          |                                                                                                                                   | Total stockholder's equity             |        
|                                          |                                                                                                                                   |                                        |        
|                                          |                                                                                                                                   | $                                      | 866,026
|                                          |                                                                                                                                   |                                        |        

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

F-4

---



Advanstar Communications Inc. and Subsidiaries        Consolidated Statements of Operations        (In thousands)

|                                                                                                                     |                                                                | Successor                |          | Predecessor |        
|-------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------- | ------------------------ | -------- | ----------- | -------
|
|
|
|Net revenue                                                                                                          |                                                                | $                        | 307,183  |             | $      
|Operating expenses:                                                                                                  |                                                                |                          |          |             |        
|                                                                                                                     | Cost of production                                             |                          |          | 62,838      |        
|                                                                                                                     | Selling, editorial and circulation                             |                          |          | 124,845     |        
|                                                                                                                     | General and administrative                                     |                          |          | 35,027      |        
|                                                                                                                     | Funding of affiliated dot.com company operations (see Note 12) |                          |          | 39,587      |        
|                                                                                                                     | Amortization of goodwill and other intangibles                 |                          |          | 59,899      |        
|                                                                                                                     | Depreciation                                                   |                          |          | 9,233       |        
|                                                                                                                     |                                                                |                          |          |             |        
|                                                                                                                     |                                                                | Total operating expenses |          |             | 331,429
|                                                                                                                     |                                                                |                          |          |             |        
|Operating (loss) income                                                                                              |                                                                |                          | (24,246  | )           |        
|Other income (expense):                                                                                              |                                                                |                          |          |             |        
|                                                                                                                     | Interest expense, net                                          |                          |          | (51,211     | )      
|                                                                                                                     | Other income (expense), net                                    |                          |          | 2,931       |        
|                                                                                                                     |                                                                |                          |          |             |        
|(Loss) income before income taxes, minority interests, extraordinary item and cumulative effect of accounting change |                                                                |                          | (72,526  | )           |        
|(Benefit) provision for income taxes                                                                                 |                                                                |                          | (15,478  | )           |        
|Minority interests                                                                                                   |                                                                |                          | (474     | )           |        
|                                                                                                                     |                                                                |                          |          |             |        
|Loss before extraordinary item and cumulative effect of accounting change                                            |                                                                |                          | (57,522  | )           |        
|Extraordinary item, net of tax                                                                                       |                                                                |                          |         |             |        
|Cumulative effect of accounting change, net of tax and minority interest                                             |                                                                |                          | (66,817  | )           |        
|                                                                                                                     |                                                                |                          |          |             |        
|Net loss                                                                                                             |                                                                | $                        | (124,339 | )           | $      
|                                                                                                                     |                                                                |                          |          |             |        

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

F-5

---



Advanstar Communications Inc. and Subsidiaries        Consolidated Statements of Stockholder's Equity        (Dollars in thousands)

|                                                                        |                                            | Common Stock             |   |   |    |   |   | Accumulated
Other
Comprehensive
Income (Loss) |        |   |        
|----------------------------------------------------------------------- | ------------------------------------------ | ------------------------ | - | - | -- | - | - | --------------------------------------------- | ------ | - | -------
|
|
|Balance, December 31, 1999 (predecessor)                                |                                            | 1,000,000                |   | $ | 10 |   | $ | 186,904                                       |        | $ | (48,330
|Comprehensive loss:                                                     |                                            |                          |   |   |    |   |   |                                               |        |   |        
|                                                                        | Net loss                                   |                          |  |   |    |  |   |                                               |       |   |        
|                                                                        | Translation adjustment                     |                          |  |   |    |  |   |                                               |       |   |        
|                                                                        |                                            | Total comprehensive loss |   |  |    |   |  |                                               |        |  |        
|                                                                        | Stock option compensation income and other |                          |  |   |    |  |   |                                               | (6,933 | ) |        
|                                                                        |                                            |                          |   |   |    |   |   |                                               |        |   |        
|Balance, October 11, 2000 (predecessor)                                 |                                            | 1,000,000                |   | $ | 10 |   | $ | 179,971                                       |        | $ | (48,820
|                                                                        |                                            |                          |   |   |    |   |   |                                               |        |   |        
|Balance, October 12, 2000 (successor)                                   |                                            |                         |   | $ |   |   | $ |                                              |        | $ |       
|Issuance of stock in connection with the acquisition of Advanstar, Inc. |                                            | 1,000,000                |   |   | 10 |   |   | 352,592                                       |        |   |       
|Comprehensive income (loss):                                            |                                            |                          |   |   |    |   |   |                                               |        |   |        
|                                                                        | Net loss                                   |                          |  |   |    |  |   |                                               |       |   |        
|                                                                        | Translation adjustment                     |                          |  |   |    |  |   |                                               |       |   |        
|                                                                        |                                            | Total comprehensive loss |   |  |    |   |  |                                               |        |  |        
|                                                                        |                                            |                          |   |   |    |   |   |                                               |        |   |        
|Balance, December 31, 2000                                              |                                            | 1,000,000                |   |   | 10 |   |   | 352,592                                       |        |   | (18,045

F-6

---

Advanstar Communications Inc. and Subsidiaries        Consolidated Statements of Stockholder's Equity        (Dollars in thousands)

|                                       |                                                                           | Common Stock             |   |   |    |   |   | Accumulated
Other
Comprehensive
Income (Loss) |         |   |         
|-------------------------------------- | ------------------------------------------------------------------------- | ------------------------ | - | - | -- | - | - | --------------------------------------------- | ------- | - | --------
|
|
|Balance, 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 | ) |         
|                                       |                                                                           |                          |   |   |    |   |   |                                               |         |   |         
|Balance, December 31, 2001 (successor) |                                                                           | 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  |   |         
|                                       |                                                                           |                          |   |   |    |   |   |                                               |         |   |         
|Balance, December 31, 2002 (successor) |                                                                           | 1,000,000                |   | $ | 10 |   | $ | 387,367                                       |         | $ | (192,146
|                                       |                                                                           |                          |   |   |    |   |   |                                               |         |   |         

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

F-7

---



Advanstar Communications Inc. and Subsidiaries        Consolidated Statements of Cash Flows        (In thousands)

|                                                     |                                                                                           | Successor                                                                      |                                       | Predecessor |        
|---------------------------------------------------- | ----------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------ | ------------------------------------- | ----------- | -------
|
|
|
|Operating activities:                                |                                                                                           |                                                                                |                                       |             |        
|                                                     | Net loss                                                                                  |                                                                                | $                                     | (124,339    | )      
|                                                     | Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |                                                                                |                                       |             |        
|                                                     |                                                                                           | Extraordinary itemearly extinguishment of debt                                |                                       |             |       
|                                                     |                                                                                           | Provision for notes and advances from affiliated dot.com company (see Note 12) |                                       |             | 37,192 
|                                                     |                                                                                           | Transition goodwill impairment                                                 |                                       |             | 66,817 
|                                                     |                                                                                           | Depreciation and amortization                                                  |                                       |             | 69,132 
|                                                     |                                                                                           | (Gain) loss on derivative financial instruments                                |                                       |             | (1,236 
|                                                     |                                                                                           | Undistributed earnings of minority interest holders                            |                                       |             | 474    
|                                                     |                                                                                           | Noncash interest                                                               |                                       |             | 2,698  
|                                                     |                                                                                           | Debt discount accretion                                                        |                                       |             |       
|                                                     |                                                                                           | Provision for bad debts                                                        |                                       |             | 1,639  
|                                                     |                                                                                           | Loss (gain) on sales of assets and other                                       |                                       |             | 22     
|                                                     |                                                                                           | Deferred income taxes                                                          |                                       |             | (16,605
|                                                     |                                                                                           | Changes in operating assets and liabilities:                                   |                                       |             |        
|                                                     |                                                                                           |                                                                                | Accounts receivable                   |             |        
|                                                     |                                                                                           |                                                                                | Inventories                           |             |        
|                                                     |                                                                                           |                                                                                | Prepaid expenses                      |             |        
|                                                     |                                                                                           |                                                                                | Accounts payable and accrued expenses |             |        
|                                                     |                                                                                           |                                                                                | Deferred revenue                      |             |        
|                                                     |                                                                                           |                                                                                | Other                                 |             |        
|                                                     |                                                                                           |                                                                                |                                       |             |        
|                                                     |                                                                                           | Net cash provided by (used in) operating activities                            |                                       |             | 24,275 
|                                                     |                                                                                           |                                                                                |                                       |             |        
|Investing activities:                                |                                                                                           |                                                                                |                                       |             |        
|                                                     | Additions to property, plant and equipment                                                |                                                                                |                                       | (7,216      | )      
|                                                     | Acquisitions of publications and trade shows, net of cash acquired                        |                                                                                |                                       | (23,972     | )      
|                                                     | Increase in advances and notes due from affiliate                                         |                                                                                |                                       |            |        
|                                                     | Proceeds from sale of assets and other                                                    |                                                                                |                                       | 33          |        
|                                                     |                                                                                           |                                                                                |                                       |             |        
|                                                     |                                                                                           | Net cash used in investing activities                                          |                                       |             | (31,155
|                                                     |                                                                                           |                                                                                |                                       |             |        
|Financing activities:                                |                                                                                           |                                                                                |                                       |             |        
|                                                     | Proceeds from revolving credit loan                                                       |                                                                                |                                       | 11,100      |        
|                                                     | Payments on revolving credit loan                                                         |                                                                                |                                       | (8,000      | )      
|                                                     | Proceeds from long-term debt                                                              |                                                                                |                                       |            |        
|                                                     | Payments of long-term debt                                                                |                                                                                |                                       | (16,200     | )      
|                                                     | Proceeds from capital contributions and other                                             |                                                                                |                                       |            |        
|                                                     | Deferred financing costs                                                                  |                                                                                |                                       | (1,785      | )      
|                                                     | Dividends paid to minority interest holders                                               |                                                                                |                                       | (503        | )      
|                                                     |                                                                                           |                                                                                |                                       |             |        
|                                                     |                                                                                           | Net cash (used in) provided by financing activities                            |                                       |             | (15,388
|                                                     |                                                                                           |                                                                                |                                       |             |        
|Effect of exchange rate changes on cash              |                                                                                           |                                                                                | (3,438                                | )           |        
|                                                     |                                                                                           |                                                                                |                                       |             |        
|Net (decrease) increase in cash and cash equivalents |                                                                                           |                                                                                | (25,706                               | )           |        
|Cash and cash equivalents, beginning of period       |                                                                                           |                                                                                | 44,636                                |             |        
|                                                     |                                                                                           |                                                                                |                                       |             |        
|Cash and cash equivalents, end of period             |                                                                                           | $                                                                              | 18,930                                |             | $      
|                                                     |                                                                                           |                                                                                |                                       |             |        

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

F-8

---



ADVANSTAR COMMUNICATIONS INC. AND SUBSIDIARIES        Notes to Consolidated Financial Statements

1.    Nature of Business

The accompanying consolidated financial statements include the accounts of Advanstar Communications Inc., a wholly owned subsidiary of Advanstar, Inc., 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.

On
October 11, 2000, a group of investors, including DLJ Merchant Banking Partners III L.P. (DLJMB), certain of its affiliated funds and certain members of management, formed
Advanstar Holdings Corp. (Holdings or the Parent) to acquire substantially all of the outstanding shares of Advanstar's direct parent, Advanstar, Inc., for an aggregate purchase price of
approximately $917.6 million (the DLJ Acquisition) including the assumption of outstanding indebtedness and debt repaid on the date of sale, and related transaction costs. The DLJ Acquisition
has been accounted for using the purchase method of accounting and, accordingly, all assets and liabilities of the Company have been recorded at their fair values as of the date of acquisition. The
excess of the purchase price over the fair value of the assets and liabilities of the Company has been recorded as goodwill. The table below sets forth the initial purchase price allocation (in
millions):

|Cash                                                 |                      | $ | 302.6
|---------------------------------------------------- | -------------------- | - | -----
|Debt assumed                                         |                      |   | 606.6
|Direct acquisition costs                             |                      |   | 8.4  
|                                                     |                      |  
|                                                     | Total purchase price |   |      
|Estimated fair value of net tangible assets acquired |                      |   | 2.9  
|Identifiable intangible assets                       |                      |   | 94.1 
|Goodwill                                             |                      |   | 820.6
|                                                     |                      |  
|                                                     |                      | $ | 917.6
|                                                     |                      |  

The
Company completed and finalized its purchase price allocation related to the DLJ Acquisition during 2001, which resulted in the recognition of approximately $139.2 million of
additional intangible assets and $45.7 million of deferred tax liabilities and a corresponding reduction to goodwill.

Due
to the effects of the DLJ Acquisition on the recorded bases of goodwill, intangibles, property and stockholder's equity, the financial statements prior to and subsequent to the DLJ
Acquisition are not comparable. Periods prior to October 12, 2000 represent the accounts of the Predecessor, and from that date, the Successor. The effects of the DLJ Acquisition have not been
included in the accompanying consolidated statements of cash flows as the acquisition was deemed to have occurred at a date that is not part of either the Predecessor or Successor company operations.

2.    Summary of Significant Accounting Policies



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.

F-9

---



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 consisted of the following at December 31 (in thousands):

|                                   |                                    | Successor |        
|---------------------------------- | ---------------------------------- | --------- | -------
|
|Land and improvements              |                                    | $         | 2,416  
|Buildings                          |                                    |           | 5,097  
|Furniture, machinery and equipment |                                    |           | 30,830 
|Leasehold improvements             |                                    |           | 4,325  
|                                   |                                    |           |        
|                                   |                                    |           | 42,668 
|Accumulated depreciation           |                                    |           | (19,169
|                                   |                                    |           |        
|                                   | Property, plant and equipment, net |           | $      
|                                   |                                    |           |        

Property,
plant and equipment is depreciated on the straight-line basis over the following estimated useful lives:

|Land improvements                  |  | 10-15 years                         
|---------------------------------- |  | ------------------------------------
|Buildings                          |  | 20-40 years                         
|Furniture, machinery and equipment |  | 3-10 years                          
|Leasehold improvements             |  | Shorter of useful life or lease term

For
tax reporting purposes, certain assets have different estimated useful lives and depreciation methods.

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 other expenses.



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 on a 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.

Effective
January 1, 2002, the Company adopted Statement of Financial Condition (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, 2002 and 2001, respectively.

F-10

---



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 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 an entity 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 consisted of the following at December 31 (in thousands):

|                       |  | Successor
|---------------------- |  | ---------
|
|Derivative instruments |  | $        
|Interest               |  |          
|Security deposits      |  |          
|Benefits and severance |  |          
|Other                  |  |          
|                       |  |          
|                       |  | $        
|                       |  |          



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 published. 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 (in thousands):

|                                              |  | Successor
|--------------------------------------------- |  | ---------
|
|Deferred trade show and conference revenue    |  | $        
|Deferred advertising and subscription revenue |  |          
|                                              |  |          
|Total deferred revenue                        |  | $        
|                                              |  |          



The Company accounts for translation adjustments related to its investments in foreign entities in accordance with SFAS No. 52, "Foreign Currency
Translation." Such adjustments are included in other comprehensive income (loss).

F-11

---



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 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.



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.

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 (in thousands):

|                                                                                           |  | Successor |          | Predecessor |  
|------------------------------------------------------------------------------------------ |  | --------- | -------- | ----------- | -
|
|
|
|Net lossas reported                                                                       |  | $         | (124,339 | )           | $
|Less: stock based employee compensation benefit included in operating results, as reported |  |           |         |             |  
|Less: pro forma stock based employee compensation (cost) benefit                           |  |           | (2,133   | )           |  
|                                                                                           |  |           |          |             |  
|Net losspro forma                                                                         |  | $         | (126,472 | )           | $
|                                                                                           |  |           |          |             |  



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.

F-12

---



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.



Certain reclassifications have been made to amounts reported in prior periods in order to conform to the current period presentation. These reclassifications did
not change previously reported operating (loss) income, net loss, cash flows or stockholder's equity.

F-13

---





In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 143, "Accounting for Asset Retirement Obligations." SFAS
No. 143 requires entities to record the fair value of the liability for legal obligations associated with an asset retirement in the period in which the obligation is incurred. When the
liability is initially recorded, the entity capitalizes the cost of the asset retirement obligation by increasing the carrying amount of the related long-lived asset. Over time, the
liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. The provisions of SFAS No. 143 are effective for the
Company in 2003. The Company has not yet completed its analysis of the impact of adoption of SFAS No. 143. However, based upon a preliminary analysis, management does not expect adoption to
have a material impact on the Company's financial position or results of operations.

In
August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." This statement addresses financial accounting
and reporting for the impairment or disposal of long-lived assets. SFAS No. 144 retains and expands upon the fundamental provisions of existing guidance related to the recognition
and measurement of the impairment of long-lived assets to be held and used and the measurement of long-lived assets to be disposed of by sale. Generally, the provisions of SFAS
No. 144 are effective for financial statements issued for fiscal years beginning after December 15, 2001. The Company adopted SFAS No. 144 on January 1, 2002. The adoption
of SFAS No. 144 had no impact on the results of operations or financial position of the Company.

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. SFAS No. 145 is generally effective for fiscal years beginning
after May 15, 2002. The Company will adopt SFAS No. 145 effective January 1, 2003. The adoption of SFAS No. 145 is not expected to have a significant impact of the results
of operations or financial position of the Company, but in accordance with the transition provisions, will result in reclassification of the 2001 extraordinary item into the Company's operating loss.

In
June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." This statement addresses financial accounting and reporting
for costs associated with exit or disposal activities and requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. The provisions
of SFAS No. 146 are effective for exit or disposal activities that are initiated after December 31, 2002. The adoption of SFAS No. 146 is not expected to have a significant impact
of the results of operations or financial position of the Company.

In
December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based CompensationTransition Disclosurean amendment of SFAS
No. 123."This Statement amends SFAS No. 123, "Accounting for Stock-Based Compensation,"to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this Statement amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and
the effect of the method used on reported results. The provisions of

F-14

---

SFAS No. 148 are effective for financial statements for fiscal years ending after December 15, 2002, and disclosure requirements shall be effective for interim periods beginning after
December 15, 2002. The Company has no immediate plans to change to the fair value based method of accounting for stock-based compensation. The Company has made certain disclosures required by
SFAS No. 148 in the consolidated financial staements for the year ended December 31, 2002 and will make the additional stock-based employee compensation disclosures required by SFAS
No. 148 beginning in the quarter ended March 31, 2003.

In
November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness
of Others." This interpretation elaborates on the disclosures required in financial statements concerning obligations under certain guarantees. It also clarifies the requirements related to the
recognition of liabilities by a guarantor at the inception of certain guarantees. The disclosure requirements of this interpretation were effective for the Company on December 31, 2002 but did
not require any additional disclosures. The recognition provisions of the interpretation are effective for the Company in 2003 and are applicable only to guarantees issued or modified after
December 31, 2002. The Company does not expect adoption of these recognition provisions to have a material impact on its financial position or results of operations.

3.    Goodwill and Other Intangible Assets

Effective January 1, 2002, the Company adopted SFAS No. 142, "Goodwill and Other Intangible Assets," 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 evaluated for impairment 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. Upon adoption
of the standard, the Company completed a transitional impairment test for its acquired goodwill, determining the fair value of the Company's three reporting units (Tradeshows and Conferences, Trade
Publications, and Marketing Services) using a discounted cash flow model. As a result of the impairment analysis, the Company recorded, in the first quarter of 2002, in the Tradeshows and Conferences
segment, a goodwill impairment charge of $70.9 million. After minority interest effect of $4.1 million, the net charge was $66.8 million. This charge was attributable primarily to
an impairment of the carrying value of goodwill related to the DLJ Acquisition which management believes resulted from a slow-down in the economy and the tradeshow 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 an entity below its carrying value.

At
July 1, 2002, the Company completed its annual impairment tests for acquired goodwill using methodologies consistent with those applied for its transitional impairment tests
performed as of January 1, 2002. Such testing resulted in no impairment charge.

F-15

---

The
following table represents a reconciliation of loss before extraordinary item and cumulative effect of accounting change and net (loss) income adjusted for the exclusion of goodwill
amortization, net of tax (in thousands):

|                                                                           |  | Successor |          | Predecessor |  
|-------------------------------------------------------------------------- |  | --------- | -------- | ----------- | -
|
|Reported loss before extraordinary item and accounting change              |  | $         | (57,522  | )           | $
|Add: Goodwill amortization, net of tax                                     |  |           |         |             |  
|                                                                           |  |           |          |             |  
|Adjusted (loss) income before extraordinary item and and accounting change |  | $         | (57,522  | )           | $
|                                                                           |  |           |          |             |  
|Reported net loss                                                          |  | $         | (124,339 | )           | $
|Add: Goodwill amortization, net of tax                                     |  |           |         |             |  
|                                                                           |  |           |          |             |  
|Adjusted net (loss) income                                                 |  | $         | (124,339 | )           | $
|                                                                           |  |           |          |             |  

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

|Successor:                                               |  | Trade Shows
and
Conferences |         | Trade
Publications |   | Marketing
Services |  | Totals |       
|-------------------------------------------------------- |  | --------------------------- | ------- | ------------------ | - | ------------------ |  | ------ | ------
|Balance as of December 31, 2001                          |  | $                           | 557,109 |                    | $ | 131,932            |  | $      | 30,345
|Goodwill acquired or finally allocated during the period |  |                             | 6,350   |                    |   | 5,482              |  |        | 495   
|Transition impairment loss                               |  |                             | (70,905 | )                  |   |                   |  |        |      
|                                                         |  |                             |         |                    |   |                    |  |        |       
|Balance as of December 31, 2002                          |  | $                           | 492,554 |                    | $ | 137,414            |  | $      | 30,840
|                                                         |  |                             |         |                    |   |                    |  |        |       

Intangible
and other assets consist of the following at December 31 (in thousands):

|                                       |  | Successor |         
|-------------------------------------- |  | --------- | --------
|
|Trade exhibitor lists                  |  | $         | 161,492 
|Advertiser lists                       |  |           | 39,673  
|Subscriber lists                       |  |           | 23,978  
|Other intangible assets                |  |           | 8,097   
|Deferred loan costs                    |  |           | 22,367  
|                                       |  |           |         
|                                       |  |           | 255,607 
|Accumulated amortization               |  |           | (126,807
|                                       |  |           |         
|Total intangible and other assets, net |  | $         | 128,800 
|                                       |  |           |         

F-16

---

The
fair value of intangible assets allocated to acquisitions in the 2002 and 2001 periods was (in thousands):

|                        |  | Successor
|----------------------- |  | ---------
|
|Trade exhibitor lists   |  | $        
|Advertiser lists        |  |          
|Subscriber lists        |  |          
|Other intangible assets |  |          
|                        |  |          
|Total                   |  | $        
|                        |  |          

F-17

---

Amortization expense related to definite lived intangible assets for 2002, 2001 and the period from October 12 through December 31, 2000, and the period from
January 1 through October 11, 2000, were $59.9 million, $61.1 million, $4.4 million and $12.7 million, respectively.

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

2003

$
45,1752004


32,8042005


28,4962006


14,7872007


3,397


4.    Acquisitions

From January 1, 2000 through December 31, 2000, the Company completed three acquisitions of trade shows, conferences and publishing properties, with
a cumulative purchase price totaling approximately $21.4 million in cash and assumed liabilities.

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.

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

The
acquisitions discussed above 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. Certain of the
assets and liabilities acquired in connection with 2002 acquisitions have been recorded based upon preliminary estimates as of the dates of acquisition. The Company does not believe the final
allocation of purchase

F-18

---

price will be materially different from preliminary allocations. Any changes to the preliminary estimates during the allocation period will be reflected as an adjustment to goodwill. Results of
operations for these acquisitions have been included in the accompanying consolidated financial statements since their respective dates of acquisition. The pro forma operating results related to the
acquisitions are immaterial.

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.



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



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

At
December 31, 2002, the Company had foreign exchange derivative contracts to sell with a notional amount totaling $12.1 million and to buy totaling $6.4 million.
The estimated fair value of the foreign exchange contracts based upon market quotes was a net asset of $0.1 million at December 31, 2002.

F-19

---



The following table summarizes the effects of FAS 133 on the Company's accumulated other comprehensive income as of December 31, 2002 and 2001 (in
thousands):

|                                                                             |  | Interest Rate
Collar
Agreements |        | Foreign
Exchange
Contracts |   | Total |  
|---------------------------------------------------------------------------- |  | ------------------------------- | ------ | -------------------------- | - | ----- | -
|Accumulated other comprehensive income (loss) balance at December 31, 2000   |  | $                               |       |                            | $ |      |  
|Unwound from accumulated other comprehensive income (loss) during the period |  |                                 | 2,856  |                            |   | 191   |  
|Mark to market hedge contracts                                               |  |                                 | (7,045 | )                          |   | (186  | )
|                                                                             |  |                                 |        |                            |   |       |  
|Accumulated other comprehensive income (loss) balance at December 31, 2001   |  |                                 | (4,189 | )                          |   | 5     |  
|Unwound from accumulated other comprehensive income (loss) during the period |  |                                 | 6,856  |                            |   | (5    | )
|Mark to market hedge contracts                                               |  |                                 | (7,017 | )                          |   |      |  
|                                                                             |  |                                 |        |                            |   |       |  
|Accumulated other comprehensive income (loss) balance at December 31, 2002   |  | $                               | (4,350 | )                          | $ |      |  
|                                                                             |  |                                 |        |                            |   |       |  

At
December 31, 2002, the Company estimates that it will reclassify out of accumulated other comprehensive income approximately $3.8 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 $6.6 million and $7.7 million at December 31, 2002 and 2001, respectively, of which
$5.8 million and $6.6 million is included in accrued liabilities at December 31, 2002 and 2001, respectively, and $0.8 million and $1.1 million is included in other
long-term liabilities at December 31, 2002 and 2001, respectively, in the accompanying consolidated balance sheets.



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, 2002 and 2001 (in thousands):

|                                                  |  | Interest Rate
Collar
Agreements |      | Foreign
Exchange
Contracts |   | Total | 
|------------------------------------------------- |  | ------------------------------- | ---- | -------------------------- | - | ----- | 
|Year ended December 31, 2002                      |  |                                 |      |                            |   |       | 
|Other income (expense)                            |  | $                               | (105 | )                          | $ | 649   | 
|                                                  |  |                                 |      |                            |   |       | 
|Total statement of operations impact before taxes |  | $                               | (105 | )                          | $ | 649   | 
|                                                  |  |                                 |      |                            |   |       | 
|Year ended December 31, 2001                      |  |                                 |      |                            |   |       | 
|Other income (expense)                            |  | $                               | (210 | )                          | $ | 5     | 
|                                                  |  |                                 |      |                            |   |       | 
|Total statement of operations impact before taxes |  | $                               | (210 | )                          | $ | 5     | 
|                                                  |  |                                 |      |                            |   |       | 

F-20

---

6.    Debt



The credit facility (the Credit Facility) consists of (i) $415 million of term loans A and B payable in quarterly installments beginning
March 31, 2001 and continuing through October 11, 2007 and (ii) $80.0 million of revolving loan availability through April 11, 2007. The Credit Facility contains
restrictive covenants which require the Company to, among other things, maintain a maximum quarterly leverage ratio (as defined) that declines quarterly through the fourth quarter of 2004. Failure of
the Company to comply with the covenants may cause an event of default under the Credit Facility. In March 2002, the Company sought and obtained an amendment to the Credit Facility which
provided eight quarters of covenant relief by increasing the existing maximum quarterly leverage ratios in 2002 and 2003. In the fourth quarter of 2002, the Company met its maximum leverage ratio
requirement of 6.75:1 with a ratio of 6.36:1. Management believes that it will comply with all covenants during 2003. In the event that the Company does not achieve its operating plan, management may
need to adjust certain planned operating expenses and/or delay capital expenditures in order to meet the leverage ratio requirement throughout 2003.

In
2004, the covenant relief provided in the amendment expires resulting in a step-down in the maximum leverage ratio from 5.75:1 in the fourth quarter 2003 to 4.50:1 in the
first quarter of 2004 and then declines on a quarterly basis over the next two quarters to 4.00:1 for the third quarter of 2004, where it remains for the term of the loan agreement. As a result of the
economic slowdown continuing into 2003, management does not anticipate that the Company will meet the leverage ratio requirement as of the first quarter of 2004. Accordingly, management is evaluating
several alternatives for seeking a modification to the terms of its Credit Facility. However, there can be no assurance that the Company and the lenders will be able to agree to revised terms
acceptable to both parties.

Borrowings
under the Credit Facility are collateralized by substantially all of the Company's assets. In addition, as of December 31, 2002, the Company has interest rate
protection agreements for a notional amount of $150 million that effectively guarantee that the Company's interest rate on $150 million of the Company's Credit Facility will not exceed
10.17 percent, nor be less than 9.00 percent. The Company includes net interest paid or received in interest expense. At December 31, 2002, the estimated fair value of the
interest rate protection agreements was a net liability position to the Company of
approximately $6.6 million. At December 31, 2002, the Company had approximately $40.3 million of borrowings available under the Credit Facility, subject to terms and conditions
specified therein.



On January 9, 2001, the Company's 9.25 percent senior subordinated notes due in 2008 (the Notes) were tendered at an offer price in cash equal to
101 percent of the aggregate principal amount, plus accrued interest. The Company financed the repurchase of the Notes with bridge financing. This bridge financing was repaid on
February 21, 2001, with proceeds from the issuance of the Replacement Notes described below. The premium paid on the tender of the Notes of approximately $1.0 million, net of related tax
benefits, is reflected as an extraordinary item in the 2001 consolidated statement of operations.

On
February 21, 2001, the Company issued $160.0 million of unsecured, 12 percent senior subordinated notes due 2011 (the Replacement Notes). Interest on the
Replacement Notes is payable semiannually on February 15 and August 15 of each year commencing on August 15, 2001. The Replacement Notes are fully and unconditionally guaranteed
on a senior subordinated basis, jointly and severally, by the Company and its wholly owned domestic subsidiaries. Additionally, certain financial covenants under the Replacement Notes include a
maximum leverage ratio, limitations on certain asset dispositions, payments, debt incurrence, dividends and other restricted payments. As part of tendering

F-21

---

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

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

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

|                                                                                                              |  | Successor |        
|------------------------------------------------------------------------------------------------------------- |  | --------- | -------
|
|Term loan A, interest at LIBOR plus 3.25%; 4.67% at December 31, 2002, due quarterly through April 11, 2007   |  | $         | 75,000 
|Term loan B, interest at LIBOR plus 4.00%; 5.43% at December 31, 2002, due quarterly through October 11, 2008 |  |           | 280,800
|Revolving credit loan, interest at LIBOR plus 3.25%; 4.66% at December 31, 2002, due April 11, 2007           |  |           | 37,100 
|Senior subordinated notes, interest at 12.00%, due 2011                                                       |  |           | 160,000
|Acquisition note payable, interest at 5.50%, due monthly through 2004                                         |  |           | 4,000  
|Acquisition note payable, interest at 6.00%, due April 1, 2004                                                |  |           | 800    
|                                                                                                              |  |           |        
|                                                                                                              |  |           | 557,700
|Less current maturities                                                                                       |  |           | (17,400
|                                                                                                              |  |           |        
|                                                                                                              |  | $         | 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 would have
been below its carrying value by approximately $35.2 million at December 31, 2002 and $43.2 million at December 31, 2001.

Cash
paid for interest for the years ended December 31, 2002 and 2001, for the period from October 12, 2000 through December 31, 2000, and the period from
January 1, 2000 through October 11, 2000 was approximately $49.1 million, $45.7 million, $15.3 million and $34.0 million, respectively.

Annual
maturities of long-term debt for the next five years are as follows (in thousands):

2003

$
17,4002004


19,5442005


17,1442006


17,1442007


45,668Thereafter


440,800


F-22

---

7.    Stockholder's Equity



The Company accounted for stock options issued to employees and directors under the 1996 stock option plan using the intrinsic value method outlined in APB
Opinion No. 25. Accordingly, and because of certain variable features of the 1996 Stock Option Plan (the Plan), the Company measures compensation cost as the difference between the exercise
price of the options and the fair value of the shares under option at the end of each period, and recognizes compensation expense to provide for such difference. In connection with the DLJ
Acquisition, all of the outstanding options under the Plan became fully vested and were purchased and cancelled by the Company at fair market value and the Plan was terminated. For the period from
January 1, 2000 through October 11, 2000, the Company recognized compensation benefit of $2.5 million resulting from the re-measurement of previously-recognized
compensation expense under the Plan. The compensation expense is presented in the accompanying consolidated statements of stockholder's equity net of the amounts paid by the Company to repurchase the
options.



On October 12, 2000, Holdings adopted the 2000 Management Incentive Plan. A maximum of 3,447,789 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 market value of 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 204,250 at December 31, 2002.

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:

|                                |  | Successor |  
|------------------------------- |  | --------- | -
|
|
|Expected dividend yield         |  |          |  
|Expected stock price volatility |  | 37.6      | %
|Risk-free interest rate         |  | 5.0       | %
|Expected life of options        |  | 7.0 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.

F-23

---

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, 1999 (predecessor)

2,031,100

$
8.24Granted

50,000

$
12.68Repurchased in connection with DLJ Acquisition

(2,081,100
)
$
9.00Outstanding at October 11, 2000 (predecessor)




Outstanding at October 12, 2000 (successor)




Granted

3,255,000

$
10.00Outstanding at December 31, 2000 (successor)

3,255,000

$
10.00Granted

115,000

$
10.00Cancelled

(445,000
)
$
10.00Outstanding at December 31, 2001 (successor)

2,925,000

$
10.00Granted

575,000

$
10.00Cancelled

(256,250
)
$
10.00Outstanding at December 31, 2002 (successor)

3,243,750

$
10.00


At
December 31, 2002 and 2001, the outstanding stock options had a weighted average remaining contractual life of 8.1 and 8.8 years, respectively, and an exercise price of
$10.00 per option. Of the options outstanding at December 31, 2002 and 2001, 1,013,500 and 702,500, 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, 2002 and 2001, and the period from October 12, 2000 through December 31, 2000 was $5.42, $5.62 and $5.54
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 percent 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, 2002, $1.3 million for the year ended December 31, 2001,
$0.2 million for the period from October 12, 2000 through December 31, 2000 and $1.1 million for the period from January 1, 2000 through October 11, 2000.

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, 2002 are included in due to parent in the accompanying consolidated balance sheet.

Cash
paid for income taxes during the years ended December 31, 2002 and 2001, the period from October 12, 2000 through December 31, 2000, and the period from
January 1, 2000 through October 11, 2000 was approximately $0.8 million, $1.2 million, $0.1 million and $4.0 million, respectively.

F-24

---

The
summary of income (loss) before provision (benefit) for income taxes, minority interests, extraordinary item and accounting change were as follows (in thousands):

Successor

PredecessorFor the
Period from
October 12,
2000 through
December 31,
2000

For the
Period from
January 1,
2000 through
October 11,
2000For the
Years Ended
December 31,2002

2001Domestic

$
(72,369
)
$
(53,417
)
$
(21,438
)
$
15,163Foreign


(157
)

(4,247
)

(1,504
)

(3,460
)Total

$
(72,526
)
$
(57,664
)
$
(22,942
)
$
11,703


The
(benefit) provision for income taxes is comprised of the following (in thousands):

Successor

PredecessorFor the
Period from
October 12,
2000 through
December 31,
2000

For the
Period from
January 1,
2000 through
October 11,
2000For the
Years Ended
December 31,2002

2001Current:Federal

$
(820
)
$


$
(6,595
)
$
5,792State


59





(44
)

811Foreign


1,888


2,277


156


1,355Deferred


(16,605
)

(13,443
)

1,711


3,232Total (benefit) provision

$
(15,478
)
$
(11,166
)
$
(4,772
)
$
11,190


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 events 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-25

---

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

Successor2002

2001Deferred tax liabilities:Identifiable intangible assets

$
(9,214
)
$
(27,443
)Prepaid and other


(3,186
)

(2,856
)Total deferred tax liabilities


(12,400
)

(30,299
)Deferred tax assets:Property, plant and equipment


1,128


(230
)Goodwill


3,955


(779
)U.S. net operating loss carryforwards


12,008


8,750Accounts receivable


14,845


Accrued expenses and other


2,474


2,998Foreign jurisdiction net operating loss carryforwards


5,664


3,977Financial derivatives


1,933


2,502AMT credit carryforwards


453


453Total deferred tax assets


42,460


17,671Valuation allowance


(30,060
)

(3,977
)Net deferred income taxes

$


$
(16,605
)


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 has 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. At December 31, 2001, the Company had established a
valuation allowance of approximately $4 million to offset the potential tax benefit related to all of its net operating loss carryforwards generated in foreign jurisdictions due to uncertainty
of their ultimate realization. Accordingly, the net increase in the valuation allowance during 2002 was approximately $26.1 million.

The
Company's net deferred tax liability of $16.6 million at December 31, 2001, includes $0.4 million that is included in other current assets in the balance sheet.

At
December 31, 2002 and 2001, the Company had net operating loss carryforwards of approximately $48.7 million and $18.9 million. Of these losses, approximately
$14.2 million and $12.2 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 $14.2 million have no expiration
date and approximately $34.5 million expire at various dates beginning in 2021.

F-26

---

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 (in thousands):

|                                                |       | Successor |         | Predecessor
|----------------------------------------------- | ----- | --------- | ------- | -----------
|
|
|
|
|Income tax (benefit) expense at statutory rates |       | $         | (25,384 | )          
|Nondeductible amortization                      |       |           |        |            
|Nondeductible goodwill impairment               |       |           |        |            
|Change in valuation allowance                   |       |           | 10,817  |            
|State taxes, net of federal benefit             |       |           | (1,813  | )          
|Foreign provision in excess of U.S. rates       |       |           | 260     |            
|Other, net                                      |       |           | 642     |            
|                                                |       |           |         |            
|                                                | Total |           | $       | (15,478    
|                                                |       |           |         |            

10.  Commitments and Contingencies



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 $7.4 million,
$7.1 million, $1.3 million, and $5.0 million for the years ended December 31, 2002 and 2001, the period from October 12, 2000 through December 31, 2000, and
the period from January 1, 2000 through October 11, 2000, respectively. Future minimum rent commitments under operating leases with initial terms of one year or more are as follows (in
thousands):

2003

$
6,0732004


5,7302005


5,3632006


4,8962007


4,730Thereafter


9,053


F-27

---



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.



Three senior executives of the Company have employment agreements which terminate at various times during 2003. Pursuant to the agreements, the executives are
entitled to annual base salaries and annual bonuses based on the Company's EBITDA for any year. Certain of these agreements also provide for severance benefits equal to one year's base salary and
benefits (and a prorated bonus) upon termination of employment by the Company without cause or by the executive for good reason. The executives also entered into noncompetition and confidentiality
agreements with the Company.

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

F-28

---

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 (in thousands):

Trade Shows
and
Conferences

Trade
Publications

Marketing
Services

Corporate
and Other

TotalPeriod from January 1, 2000 through October 11, 2000 (predecessor):Revenues

$
178,606

$
120,706

$
13,794

$
939

$
314,045Contribution margin (loss)


83,766


34,434


7,057


(2,850
)

122,407Segment assets


453,299


224,829


2,291


67,565


747,984Period from October 12, 2000 through December 31, 2000 (successor):Revenues


19,752


38,281


5,206


195


63,434Contribution margin (loss)


2,372


10,639


2,932


(1,848
)

14,095Segment assets


313,914


524,215


97,454


92,794


1,028,377Year ended December 31, 2001 (successor):Revenues


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


1,000,779Year ended December 31, 2002 (successor):Revenues


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


866,026


F-29

---

The reconciliation of total segment contribution margin to consolidated (loss) income before taxes, minority interests, extraordinary item and cumulative effect of accounting change is
as follows (in thousands):

|                                                                                                                          |  | Successor |         | Predecessor |  
|------------------------------------------------------------------------------------------------------------------------- |  | --------- | ------- | ----------- | -
|
|
|
|Total segment contribution margin                                                                                         |  | $         | 119,500 |             | $
|General and administrative expense                                                                                        |  |           | (35,027 | )           |  
|Funding of affiliated dot.com company operations                                                                          |  |           | (39,587 | )           |  
|Depreciation and amortization                                                                                             |  |           | (69,132 | )           |  
|Other expense (primarily interest)                                                                                        |  |           | (48,280 | )           |  
|                                                                                                                          |  |           |         |             |  
|Consolidated (loss) income before taxes, minority interest, extraordinary item and cumulative effect of accounting change |  | $         | (72,526 | )           | $
|                                                                                                                          |  |           |         |             |  

Financial
information relating to the Company's operations by geographic area is as follows (in thousands):

|              |  | Successor |         | Predecessor
|------------- |  | --------- | ------- | -----------
|
|
|
|Revenues      |  |           |         |            
|United States |  | $         | 276,784 |            
|International |  |           | 30,399  |            
|              |  |           |         |            
|Total         |  | $         | 307,183 |            
|              |  |           |         |            

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

SuccessorDecember 31,2002

2001Long-Lived AssetsUnited States

$
752,766

$
857,715International


60,341


62,487Total

$
813,107

$
920,202


No
individual customer accounted for more than 10 percent of consolidated revenues during any period presented.

F-30

---

12. 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 non-cash charge to operations of $37.2 million related to a provision against
the outstanding advances and notes due to the Company from Advanstar.com as of December 31, 2001.

In
2002 the Company began recording the advances and notes issued during the current year 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 advances and notes
charged to the Company's operations during the year ended December 31, 2002 were approximately $2.4 million.

13. Related-Party Transactions



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



As part of the financing for the Acquisition, our parent, Advanstar, Inc., issued the Discount Notes with a principal amount at maturity of
$103.2 million. Concurrently with the closing of the offering of the Replacement Notes, Advanstar, Inc. sold additional senior discount notes due October 2011 with an additional
aggregate principal amount at maturity of $68.6 million. These notes do not require cash interest payments until 2006. Neither 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

F-31

---

senior discount notes will be dependent upon the receipt of dividends from its subsidiaries, including the Company. The credit facility and the Replacement Notes impose substantial restrictions on
the Company's and its subsidiaries' ability to pay dividends.

14. Supplemental Guarantor Condensed Consolidating Financial Statements



The Replacement Notes are fully and unconditionally guaranteed on a senior subordinated basis, jointly and severally, by the Company and its wholly owned domestic
subsidiaries. The subsidiary guarantors are 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.

Due
to the effects of the DLJ Acquisition on the recorded basis of goodwill, intangibles, property and shareholder's equity, the financial statements prior to and subsequent to the DLJ
Acquisition are not comparable. Periods prior to October 12, 2000 represent the accounts of the Predecessor, and from that date, the Successor. The DLJ Acquisition effects have not been
included in the accompanying consolidated statements of cash flows as it was deemed to have occurred at a date that is not part of either the Predecessor or Successor company operations.

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

F-32

---



Advanstar Communications Inc. and Subsidiaries  Condensed Consolidating Balance Sheets  At December 31, 2002  (In thousands)

|                                                      |                                         | Successor                  |          
|----------------------------------------------------- | --------------------------------------- | -------------------------- | ---------
|
|ASSETS                                                |                                        
|Current assets:                                       |                                         |                            |          
|                                                      | Cash and cash equivalents               |                            | $        
|                                                      | Accounts receivable, net                |                            |          
|                                                      | Prepaid expenses                        |                            |          
|                                                      | Other                                   |                            |          
|                                                      |                                         |                            |          
|                                                      |                                         | Total current assets       |          
|Noncurrent assets:                                    |                                         |                            |          
|                                                      | Property, plant and equipment, net      |                            |          
|                                                      | Deferred tax asset                      |                            |          
|                                                      | Intangible and other assets, net        |                            |          
|                                                      | Investments in subsidiaries             |                            |          
|                                                      | Intercompany receivable                 |                            |          
|                                                      |                                         |                            |          
|                                                      |                                         | $                          | 1,075,417
|                                                      |                                         |                            |          
|LIABILITIES AND STOCKHOLDER'S EQUITY                  |                                        
|Current liabilities:                                  |                                         |                            |          
|                                                      | Current maturities of long-term debt    |                            | $        
|                                                      | Accounts payable                        |                            |          
|                                                      | Accrued liabilities                     |                            |          
|                                                      | Deferred revenue                        |                            |          
|                                                      |                                         |                            |          
|                                                      |                                         | Total current liabilities  |          
|Long-term debt, net of current maturities             |                                         |                            | 540,300  
|Deferred income taxes and other long-term liabilities |                                         |                            | 4,139    
|Intercompany payable                                  |                                         |                            | 214,143  
|Due to parent                                         |                                         |                            | 4,492    
|Minority interests                                    |                                         |                            | 9,068    
|Stockholder's equity:                                 |                                         |                            |          
|                                                      | Common stock                            |                            |          
|                                                      | Capital in excess of par value          |                            |          
|                                                      | (Accumulated deficit) retained earnings |                            |          
|                                                      | Accumulated other comprehensive loss    |                            |          
|                                                      |                                         |                            |          
|                                                      |                                         | Total stockholder's equity |          
|                                                      |                                         |                            |          
|                                                      |                                         | $                          | 1,075,417
|                                                      |                                         |                            |          

F-33

---



Advanstar Communications Inc. and Subsidiaries  Condensed Consolidating Statements of Operations  For the year ended December 31, 2002  (In thousands)

|                                                              |                                                           | Successor                |        
|------------------------------------------------------------- | --------------------------------------------------------- | ------------------------ | -------
|
|Net revenue                                                   |                                                           | $                        | 208,668
|Operating expenses:                                           |                                                           |                          |        
|                                                              | Cost of production and selling, editorial and circulation |                          |        
|                                                              | General and administrative                                |                          |        
|                                                              | Funding of affiliated company operations                  |                          |        
|                                                              | Depreciation and amortization                             |                          |        
|                                                              |                                                           |                          |        
|                                                              |                                                           | Total operating expenses |        
|                                                              |                                                           |                          |        
|Operating (loss) income                                       |                                                           |                          | (34,603
|Other income (expense):                                       |                                                           |                          |        
|                                                              | Interest expense, net                                     |                          |        
|                                                              | Other income, net                                         |                          |        
|                                                              |                                                           |                          |        
|(Loss) income before income taxes and minority interests      |                                                           |                          | (84,499
|(Benefit) provision for income taxes                          |                                                           |                          | (21,848
|Minority interests                                            |                                                           |                          | (176   
|Equity in earnings of subsidiaries                            |                                                           |                          | 18,440 
|                                                              |                                                           |                          |        
|(Loss) income before extraordinary item and accounting change |                                                           |                          | (44,387
|Cumulative effect of accounting change                        |                                                           |                          | (52,228
|                                                              |                                                           |                          |        
|Net loss                                                      |                                                           | $                        | (96,615
|                                                              |                                                           |                          |        

F-34

---



Advanstar Communications Inc. and Subsidiaries  Condensed Consolidating Statements of Cash Flows  For the year ended December 31, 2002  (In thousands)

|                                             |                                                                                 | Successor                             |        
|-------------------------------------------- | ------------------------------------------------------------------------------- | ------------------------------------- | -------
|
|Operating activities:                        |                                                                                 |                                       |        
|                                             | Net loss                                                                        |                                       | $      
|                                             | Adjustments to reconcile net loss to net cash provided by operating activities: |                                       |        
|                                             | Equity in earnings of subsidiaries                                              |                                       |        
|                                             | Gain on derivative financial instruments                                        |                                       |        
|                                             | Provision for notes and advances from affiliated dot.com company                |                                       |        
|                                             | Transition goodwill impairment                                                  |                                       |        
|                                             | Deferred income taxes                                                           |                                       |        
|                                             | Depreciation and amortization                                                   |                                       |        
|                                             | Other noncash items                                                             |                                       |        
|                                             | Change in working capital items                                                 |                                       |        
|                                             |                                                                                 |                                       |        
|                                             | Net cash provided by operating activities                                       |                                       |        
|                                             |                                                                                 |                                       |        
|Investing activities:                        |                                                                                 |                                       |        
|                                             | Additions to property, plant and equipment                                      |                                       |        
|                                             | Acquisitions of publications and trade shows, net of proceeds                   |                                       |        
|                                             |                                                                                 |                                       |        
|                                             |                                                                                 | Net cash used in investing activities |        
|                                             |                                                                                 |                                       |        
|Financing activities:                        |                                                                                 |                                       |        
|                                             | Payments of long-term debt, net                                                 |                                       |        
|                                             | Dividends paid to minority interest holders                                     |                                       |        
|                                             | Deferred financing costs                                                        |                                       |        
|                                             |                                                                                 |                                       |        
|                                             |                                                                                 | Net cash used in financing activities |        
|                                             |                                                                                 |                                       |        
|Effect of exchange rate changes on cash      |                                                                                 |                                       | 3      
|                                             |                                                                                 |                                       |        
|Net decrease in cash and cash equivalents    |                                                                                 |                                       | (21,624
|Cash and cash equivalents, beginning of year |                                                                                 |                                       | 33,906 
|                                             |                                                                                 |                                       |        
|Cash and cash equivalents, end of year       |                                                                                 | $                                     | 12,282 
|                                             |                                                                                 |                                       |        

F-35

---



Advanstar Communications Inc. and Subsidiaries  Condensed Consolidating Balance Sheets  At December 31, 2001  (In thousands)

|                                                      |                                         | Successor                  |        
|----------------------------------------------------- | --------------------------------------- | -------------------------- | -------
|
|ASSETS                                                |                                         |                            |        
|Current assets:                                       |                                         |                            |        
|                                                      | Cash and cash equivalents               |                            | $      
|                                                      | Accounts receivable, net                |                            |        
|                                                      | Prepaid expenses                        |                            |        
|                                                      | Intercompany (payable) receivable       |                            |        
|                                                      | Other                                   |                            |        
|                                                      |                                         |                            |        
|                                                      |                                         | Total current assets       |        
|Noncurrent assets:                                    |                                         |                            |        
|                                                      | Property, plant and equipment, net      |                            |        
|                                                      | Intangible and other assets, net        |                            |        
|                                                      | Investments in subsidiaries             |                            |        
|                                                      |                                         |                            |        
|                                                      |                                         | $                          | 933,864
|                                                      |                                         |                            |        
|LIABILITIES AND
STOCKHOLDER'S EQUITY                  |                                         |                            |        
|Current liabilities:                                  |                                         |                            |        
|                                                      | Current maturities of long-term debt    |                            | $      
|                                                      | Accounts payable                        |                            |        
|                                                      | Accrued liabilities                     |                            |        
|                                                      | Deferred revenue                        |                            |        
|                                                      |                                         |                            |        
|                                                      |                                         | Total current liabilities  |        
|Long-term debt, net of current maturities             |                                         |                            | 553,800
|Deferred income taxes and other long-term liabilities |                                         |                            | (3,184 
|Due to parent                                         |                                         |                            | 3,662  
|Minority interests                                    |                                         |                            | 14,412 
|Stockholder's equity:                                 |                                         |                            |        
|                                                      | Common stock                            |                            |        
|                                                      | Capital in excess of par value          |                            |        
|                                                      | (Accumulated deficit) retained earnings |                            |        
|                                                      | Accumulated other comprehensive loss    |                            |        
|                                                      |                                         |                            |        
|                                                      |                                         | Total stockholder's equity |        
|                                                      |                                         |                            |        
|                                                      |                                         | $                          | 933,864
|                                                      |                                         |                            |        

F-36

---



ADVANSTAR COMMUNICATIONS INC. AND SUBSIDIARIES    Condensed Consolidating Statements of Operations    For the year ended December 31, 2001  (In thousands)

|                                                             |                                                          | Successor                |        
|------------------------------------------------------------ | -------------------------------------------------------- | ------------------------ | -------
|
|Net revenue                                                  |                                                          | $                        | 234,428
|Operating expenses:                                          |                                                          |                          |        
|                                                             | Cost of production and selling, editorial nd circulation |                          |        
|                                                             | General and administrative                               |                          |        
|                                                             | Depreciation and amortization                            |                          |        
|                                                             |                                                          |                          |        
|                                                             |                                                          | Total operating expenses |        
|                                                             |                                                          |                          |        
|Operating (loss) income                                      |                                                          |                          | (6,702 
|Other income (expense):                                      |                                                          |                          |        
|                                                             | Interest expense, net                                    |                          |        
|                                                             | Other income, net                                        |                          |        
|                                                             |                                                          |                          |        
|(Loss) income before income taxes and minority interests     |                                                          |                          | (60,492
|(Benefit) provision for income taxes                         |                                                          |                          | (15,950
|Minority interests                                           |                                                          |                          | 136    
|Equity in earnings of subsidiaries                           |                                                          |                          | (2,248 
|                                                             |                                                          |                          |        
|(Loss) income before extraordinary item and ccounting change |                                                          |                          | (46,654
|Extraordinary item                                           |                                                          |                          | (2,556 
|Cumulative effect of accounting change                       |                                                          |                          | (552   
|                                                             |                                                          |                          |        
|Net (loss) income                                            |                                                          | $                        | (49,762
|                                                             |                                                          |                          |        

F-37

---



Advanstar Communications Inc. and Subsidiaries        Condensed Consolidating Statements of Cash Flows        For the year ended December 31, 2001        (In thousands)

|                                                     |                                                                                         | Successor                                           |       
|---------------------------------------------------- | --------------------------------------------------------------------------------------- | --------------------------------------------------- | ------
|
|Operating activities:                                |                                                                                         |                                                     |       
|                                                     | Net (loss) income                                                                       |                                                     | $     
|                                                     | Adjustments to reconcile net income (loss) to et cash provided by operating activities: |                                                     |       
|                                                     |                                                                                         | Equity in earnings of subsidiaries                  |       
|                                                     |                                                                                         | Extraordinary item  early extinguishment of debt   |       
|                                                     |                                                                                         | Loss on derivative financial instruments            |       
|                                                     |                                                                                         | Depreciation and amortization                       |       
|                                                     |                                                                                         | Other noncash items                                 |       
|                                                     |                                                                                         | Change in working capital items                     |       
|                                                     |                                                                                         |                                                     |       
|                                                     |                                                                                         | Net cash provided by operating activities           |       
|                                                     |                                                                                         |                                                     |       
|Investing activities:                                |                                                                                         |                                                     |       
|                                                     | Additions to property, plant and equipment                                              |                                                     |       
|                                                     | Acquisitions of publications and trade shows, net of proceeds                           |                                                     |       
|                                                     | Increase in advances and notes due from affiliate                                       |                                                     |       
|                                                     |                                                                                         |                                                     |       
|                                                     |                                                                                         | Net cash used in investing activities               |       
|                                                     |                                                                                         |                                                     |       
|Financing activities:                                |                                                                                         |                                                     |       
|                                                     | Proceeds from sale of common stock and capital contributions                            |                                                     |       
|                                                     | Payments of long-term debt, net                                                         |                                                     |       
|                                                     | Deferred financing costs                                                                |                                                     |       
|                                                     |                                                                                         |                                                     |       
|                                                     |                                                                                         | Net cash provided by (used in) financing activities |       
|                                                     |                                                                                         |                                                     |       
|Effect of exchange rate changes on cash              |                                                                                         |                                                     | 6,325 
|                                                     |                                                                                         |                                                     |       
|Net increase (decrease) in cash and cash equivalents |                                                                                         |                                                     | 23,170
|Cash and cash equivalents, beginning of year         |                                                                                         |                                                     | 10,736
|                                                     |                                                                                         |                                                     |       
|Cash and cash equivalents, end of year               |                                                                                         | $                                                   | 33,906
|                                                     |                                                                                         |                                                     |       

F-38

---



Advanstar Communications Inc. and Subsidiaries  Condensed Consolidating Statements of Operations  For the period from October 12, 2000 through December 31, 2000  (In thousands)

|                                                |                                                           | Successor                |        
|----------------------------------------------- | --------------------------------------------------------- | ------------------------ | -------
|
|Net revenue                                     |                                                           | $                        | 48,638 
|Operating expenses:                             |                                                           |                          |        
|                                                | Cost of production and selling, editorial and circulation |                          |        
|                                                | General and administrative                                |                          |        
|                                                | Depreciation and amortization                             |                          |        
|                                                |                                                           |                          |        
|                                                |                                                           | Total operating expenses |        
|                                                |                                                           |                          |        
|Operating loss                                  |                                                           |                          | (7,838 
|Other income (expense):                         |                                                           |                          |        
|                                                | Interest (expense) income, net                            |                          |        
|                                                | Other income (expense), net                               |                          |        
|                                                |                                                           |                          |        
|Loss before income taxes and minority interests |                                                           |                          | (21,037
|(Benefit) provision for income taxes            |                                                           |                          | (4,976 
|Minority interests                              |                                                           |                          | 125    
|Equity in losses of subsidiaries                |                                                           |                          | (2,109 
|                                                |                                                           |                          |        
|Net (loss) income                               |                                                           | $                        | (18,045
|                                                |                                                           |                          |        

F-39

---



ADVANSTAR COMMUNICATIONS INC. AND SUBSIDIARIES    Condensed Consolidating Statements of Cash Flows    For the period from October 12, 2000 through December 31, 2000  (In thousands)

|                                                     |                                                                                                    | Successor                                           |        
|---------------------------------------------------- | -------------------------------------------------------------------------------------------------- | --------------------------------------------------- | -------
|
|Operating activities:                                |                                                                                                    |                                                     |        
|                                                     | Net (loss) income                                                                                  |                                                     | $      
|                                                     | Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: |                                                     |        
|                                                     |                                                                                                    | Equity in losses of subsidiaries                    |        
|                                                     |                                                                                                    | Depreciation and amortization                       |        
|                                                     |                                                                                                    | Noncash items                                       |        
|                                                     |                                                                                                    | Change in working capital items                     |        
|                                                     |                                                                                                    |                                                     |        
|                                                     |                                                                                                    | Net cash provided by (used in) operating activities |        
|                                                     |                                                                                                    |                                                     |        
|Investing activities:                                |                                                                                                    |                                                     |        
|                                                     | Investment in subsidiaries                                                                         |                                                     |        
|                                                     | Additions to property, plant and equipment                                                         |                                                     |        
|                                                     | Acquisitions of publications and trade shows, net of cash acquired                                 |                                                     |        
|                                                     | Increase in advances and notes due from affiliate                                                  |                                                     |        
|                                                     |                                                                                                    |                                                     |        
|                                                     |                                                                                                    | Net cash (used in) provided by investing activities |        
|                                                     |                                                                                                    |                                                     |        
|Financing activities:                                |                                                                                                    |                                                     |        
|                                                     | Proceeds from sale of common stock and capital contributions and other                             |                                                     |        
|Effect of exchange rate changes on cash              |                                                                                                    |                                                     | 904    
|                                                     |                                                                                                    |                                                     |        
|Net (decrease) increase in cash and cash equivalents |                                                                                                    |                                                     | (28,370
|Cash and cash equivalents, beginning of period       |                                                                                                    |                                                     | 39,106 
|                                                     |                                                                                                    |                                                     |        
|Cash and cash equivalents, end of period             |                                                                                                    | $                                                   | 10,736 
|                                                     |                                                                                                    |                                                     |        

F-40

---



Advanstar Communications Inc. and Subsidiaries  Condensed Consolidating Statements of Operations  For the period from January 1, 2000 through October 11, 2000  (In thousands)

|                                                         |                                                           | Predecessor              |        
|-------------------------------------------------------- | --------------------------------------------------------- | ------------------------ | -------
|
|Net revenue                                              |                                                           | $                        | 210,239
|Operating expenses:                                      |                                                           |                          |        
|                                                         | Cost of production and selling, editorial and circulation |                          |        
|                                                         | General and administrative                                |                          |        
|                                                         | Depreciation and amortization                             |                          |        
|                                                         |                                                           |                          |        
|                                                         |                                                           | Total operating expenses |        
|                                                         |                                                           |                          |        
|Operating income                                         |                                                           |                          | 18,426 
|Other income (expense):                                  |                                                           |                          |        
|                                                         | Interest expense, net                                     |                          |        
|                                                         | Other expense, net                                        |                          |        
|                                                         |                                                           |                          |        
|(Loss) income before income taxes and minority interests |                                                           |                          | (19,097
|(Benefit) provision for income taxes                     |                                                           |                          | (6,213 
|Minority interests                                       |                                                           |                          | (1,003 
|Equity in earnings of subsidiaries                       |                                                           |                          | 13,397 
|                                                         |                                                           |                          |        
|Net (loss) income                                        |                                                           | $                        | (490   
|                                                         |                                                           |                          |        

F-41

---



Advanstar Communications Inc. and Subsidiaries  Condensed Consolidating Statements of Cash Flows  For the period from January 1, 2000 through October 11, 2000  (In thousands)

|                                               |                                                                                                    | Predecessor                                         |       
|---------------------------------------------- | -------------------------------------------------------------------------------------------------- | --------------------------------------------------- | ------
|
|Operating activities:                          |                                                                                                    |                                                     |       
|                                               | Net (loss) income                                                                                  |                                                     | $     
|                                               | Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: |                                                     |       
|                                               |                                                                                                    | Equity in earnings of subsidiaries                  |       
|                                               |                                                                                                    | Depreciation and amortization                       |       
|                                               |                                                                                                    | Noncash items                                       |       
|                                               |                                                                                                    | Change in working capital items                     |       
|                                               |                                                                                                    |                                                     |       
|                                               |                                                                                                    | Net cash (used in) provided by operating activities |       
|                                               |                                                                                                    |                                                     |       
|Investing activities:                          |                                                                                                    |                                                     |       
|                                               | Investment in subsidiaries                                                                         |                                                     |       
|                                               | Additions to property, plant and equipment                                                         |                                                     |       
|                                               | Acquisitions of publications and trade shows, net of cash acquired                                 |                                                     |       
|                                               | Increase in long-term receivable from affiliate                                                    |                                                     |       
|                                               |                                                                                                    |                                                     |       
|                                               |                                                                                                    | Net cash provided by (used in) investing activities |       
|                                               |                                                                                                    |                                                     |       
|Financing activities:                          |                                                                                                    |                                                     |       
|                                               | Proceeds from sale of common stock and capital contributions and other                             |                                                     |       
|                                               | Payments of long-term debt, net                                                                    |                                                     |       
|                                               | Dividends paid to minority interest holders                                                        |                                                     |       
|                                               |                                                                                                    |                                                     |       
|                                               |                                                                                                    | Net cash (used in) provided by financing activities |       
|                                               |                                                                                                    |                                                     |       
|Effect of exchange rate changes on cash        |                                                                                                    |                                                     | (3,230
|                                               |                                                                                                    |                                                     |       
|Net decrease in cash and cash equivalents      |                                                                                                    |                                                     | (5,726
|Cash and cash equivalents, beginning of period |                                                                                                    |                                                     | 5,612 
|                                               |                                                                                                    |                                                     |       
|Cash and cash equivalents, end of period       |                                                                                                    | $                                                   | (114  
|                                               |                                                                                                    |                                                     |       

F-42

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2. Financial Statement Schedules

Report of Independent Accountants on Financial Statement Schedules

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

Our
audits of the consolidated financial statements referred to in our report dated February 14, 2003 also included an audit of the financial statement schedule listed in Item 15(a)(2) of this
Form 10-K. In our opinion, this financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related
consolidated financial statements.

PricewaterhouseCoopers
LLP
Minneapolis, Minnesota
February 14, 2003

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
|------------------------------- | ------------------------------------------------- | ------------------------------ | - | ----------------------------- |  | ------------------------- | --------- | -------------- | - | ------------------------
|
|Allowance for doubtful accounts |                                                   |                                |   |                               |  |                           |           |                |   |                         
|Advanstar                       |                                                   |                                |   |                               |  |                           |           |                |   |                         
|                                | Year ended December 31, 2002                      |                                | $ | 970,000                       |  | $                         | 1,639,000 |                | $ |                        
|                                | Year ended December 31, 2001                      |                                |   | 725,000                       |  |                           | 2,768,000 |                |   |                        
|                                | Period from October 12, 2000 to December 31, 2000 |                                |   |                              |  |                           | 956,500   |                |   |                        
|Predecessor                     |                                                   |                                |   |                               |  |                           |           |                |   |                         
|                                | Period from January 1, 2000 to October 11, 2000   |                                |   | 709,000                       |  |                           | 1,406,500 |                |   |                        

---

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

F-43

---

B. Reports on Form 8-K

There were no Current Reports on Form 8-K filed during the fourth quarter of the year ended December 31, 2001.

C. Exhibits

|Exhibit
No. |  | Document                                                                                                                                                                                                                                                                                                              
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1         |  | Certificate of Incorporation of Advanstar Communications Inc. (Previously filed as an exhibit to the Company's Registration Statement on Form S-4 (File No. 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         |  | By-Laws of Advanstar Communications Inc. (Previously filed as an exhibit to the Company's Registration Statement on Form S-4 (File No. 333-57201) 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)                                                                
|10.1        |  | Advanstar Holdings Corp. 2000 Management Plan Incentive dated as of October 11, 2000. (As amended September 17, 2002 and December 10, 2002)*                                                                                                                                                                          
|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)                                                                                   
|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)                                                                                                                           
|10.4        |  | Employment Agreement, dated August 14, 2000, between Advanstar, Inc. and Robert Krakoff. (Previously filed as Exhibit 10.1 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        |  | 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 (File No. 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 June 20, 2001 between Advanstar, Inc. and Joseph Loggia. (Previously filed as an exhibit to Advanstar Communications' Quarterly Report on Form 10-Q for the second quarter of 2001
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)                                                                                                                                       

F-44

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|10.10 |  | Registration Rights Agreement dated as of February 21, 2001 between Advanstar Communications Inc. and Credit Suisse First Boston Corporation, Fleet Securities, Inc., Barclays Capital Inc., BMO Nesbitt
Burns Inc. and Dresdner Kleinwort Benson North America LLC, as Initial Purchasers. (Previously filed as an exhibit to the Company's Registration Statement on Form S-4 (File No. 333-57201) and incorporated by reference
herein)
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.11 |  | Advisory Agreement, effective December 10, 2002, between Advanstar, Inc. and Douglas B. Fox.*                                                                                                                                                                                                                                                                                                                                             
|10.12 |  | Letter, dated February 7, 1994, between Advanstar Communications Inc. and David W. Montgomery*                                                                                                                                                                                                                                                                                                                                            
|10.13 |  | Agreement, dated February 19, 1999, by and among Advanstar, Inc., Advanstar Communications Inc. and Eric I. Lisman*                                                                                                                                                                                                                                                                                                                       
|12.1  |  | Computation of Ratio of Earnings to Fixed Charges.*                                                                                                                                                                                                                                                                                                                                                                                       
|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)                                                                                                                                                                                                                                                                 
|99.1  |  | CEO's Certification pursuant to §906 of the Sarbanes-Oxley Act of 2002.*                                                                                                                                                                                                                                                                                                                                                                  
|99.2  |  | CFO's Certification pursuant to §906 of the Sarbanes-Oxley Act of 2002.*                                                                                                                                                                                                                                                                                                                                                                  

---

*
Filed herewith

F-45

---



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 and Chief Executive Officer                                          |  | March 28, 2002
|/s/DAVID W. MONTGOMERYDavid W. Montgomery |  | Vice PresidentFinance, Chief Financial Officer Secretary and Principal Accounting Officer |  | March 28, 2002
|/s/JAMES M. ALICJames M. Alic             |  | Director                                                                                   |  | March 28, 2002
|/s/JOSEPH LOGGIAJoseph Loggia             |  | Director                                                                                   |  | March 28, 2002
|/s/OHSANG KWONOhSang Kwon                 |  | Director                                                                                   |  | March 27, 2002
|/s/JAMES A. QUELLAJames A. Quella         |  | Director                                                                                   |  | March 27, 2002
|/s/DAVID M. WITTELSDavid M. Wittels       |  | Director                                                                                   |  | March 27, 2002
|/s/DOUGLAS B. FOXDouglas B. Fox           |  | Director                                                                                   |  | March 27, 2002

F-46

---



CERTIFICATION

I,
Robert L. Krakoff, certify that:



|By: |  | /s/ROBERT L. KRAKOFFRobert L. Krakoff Chief Executive Officer |  | 
|--- |  | ------------------------------------------------------------- |  | 

March
28, 2003

F-47

---



CERTIFICATION

I,
David W. Montgomery, certify that:



|By: |  | /s/DAVID W. MONTGOMERYDavid W. Montgomery Chief Financial Officer |  | 
|--- |  | ----------------------------------------------------------------- |  | 

March
28, 2003

F-48

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