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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-K

|(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 333-61386

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

|Deleware(State or other jurisdiction of
incorporation or organization)             |  | 94-3243499(I.R.S. Employer
Identification No.)
|---------------------------------------------------------------------------------- |  | ----------------------------------------------
|545 Boylston Street, Boston, Massachusetts(Address of principal executive offices) |  | 02116(Zip Code)                               

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

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 100 shares of common stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCENone.

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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,
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 income, cash flow
provided by operating activities and EBITDA for the year ended December 31, 2002, totaled $309.4 million, $9.6 million, $24.7 million and $81.8 million, respectively (see "Item 6Selected
Financial DataSelected Historical Consolidated Financial Data, Note 5" below for our reconciliation of EBITDA to cash flows provided by operating activities).

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 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

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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 by Tradeshow 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.

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

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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 52%, 53% and 51% 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; |  |  receive overview of market and emerging trends;
| position product and company in target industry;  |  |  network with industry executives;              
| communicate vision;                               |  |  identify and work with new vendors; and        
| service existing customers;                       |  |  source new products.                           
| 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 42% 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;                                                 |  |  relevant, industry specific information;                    
| highly targeted audience of qualified readers;                  |  |  promotion of industry stewardship;                          
| focused medium; attractive means to introduce new
    products; |  |  keep up with peers in the industry; and                     
| audited, controlled circulation; and                            |  |  interactive follow-up system in print and/or electronically.
| 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 6%, 6% and 7% of our total revenue
in 2000, 2001 and 2002, respectively.

Internet

Our subsidiary, 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

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Internet as a cost-effective method of developing qualifying magazine circulation and to register trade show and conference attendees. In 2001, we more tightly focused the activities of
Advanstar.com. As a result, many of the sales, marketing, technology and operating functions of Advanstar.com have been more closely integrated with our core activities in publishing, tradeshows, 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 operating expenses of Advanstar.com
in 2002

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.

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

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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:

Fashion & Apparel Events

|        |  | Events (1)
|------- |  | ----------
|
|Men's   |  | 4         
|Women's |  | 5         
|Kids'   |  | 2         
|Fabric  |  | 4         

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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:

Information Technology & Communications Events and Magazines

|                                |  | 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:

Specialty Retail Events and Magazines

Events(1)



MagazinesSector

Number

Net Square
Footage

Number

Ad Pages

Number of
Magazines Ranked
#1 or #2 (2)Art

3

169,304

2

956

1 of 1Beauty

2

172,203

2

1,754

1 of 2Entertainment / Marketing

6

241,847

4

1,551

2 of 3Motor Vehicle

15

1,122,037

8

3,533

4 of 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:

Healthcare, Science & Pharmaceuticals Events and Magazines

Events(1)



MagazinesSector

Number

Net Square
Footage

Number

Ad Pages

Number of Magazines
Ranked
#1 or #2 (2)Healthcare

7

125,700

11

3,498

7 of 10Science

1

15,279

6

2,035

4 of 5Pharmaceuticals



N/A

5

3,788

5 of 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:

Travel & Hospitality Events and Magazines

Events(1)



MagazinesSector

Number

Net Square
Footage

Number

Ad Pages

Number of Magazines Ranked
#1 or #2 (2)Travel

1

55,200

4

5,159

2 of 2Hospitality



NA

1

898

1 of 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,

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landscaping/pest control, mining, paper and roofing sectors. In 2002, we delivered our B-to-B marketing 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)



MagazinesSector

Number

Net Square
Footage

Number

Ad Pages

Number of Magazines Ranked
#1 or #2 (2)Energy



N/A

1

361

1 of 1Finance

1

5,121



N/A

N/AGeoSpatial



N/A

2

561

2 of 3Landscape / Pest Control



N/A

3

1,611

3 of 3Mining



N/A

1

618

1 of 2Paper



N/A

2

887

2 of 2Post Production



N/A

1

520

0 of 1Roofing



N/A

1

317

0 of 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

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industry magazine for a related event is often the biggest issue of the year, as the advertisers want to reinforce their show presence.

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



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 13 to our consolidated financial statements included in this annual
report on Form 10-K.

15

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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.

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, 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
predecessor 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.

We
were 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,

16

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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.

|                                                         |                      | Advanstar |         | Predecessor |  
|-------------------------------------------------------- | -------------------- | --------- | ------- | ----------- | -
|
|
|
|
|
|
|Income Statement Data:                                   |                      |           |         |             |  
|Net Revenue                                              |                      | $         | 309,404 |             | $
|Cost of production and selling                           |                      |           | 189,564 |             |  
|General and administrative expenses                      |                      |           | 37,245  |             |  
|Stock option compensation expense(benefit)(1)            |                      |           |        |             |  
|Restructuring charge (2)                                 |                      |           |        |             |  
|Depreciation and amortization (3)                        |                      |           | 72,980  |             |  
|                                                         |                      |           |         |             |  
|Operating income (loss)                                  |                      |           | 9,615   |             |  
|Other income (expense):                                  |                      |           |         |             |  
|Interest expense                                         |                      |           | (66,543 | )           |  
|Other income (expense), net                              |                      |           | 2,858   |             |  
|                                                         |                      |           |         |             |  
|Income (loss) before income taxes and minority interests |                      |           | (54,070 | )           |  
|Provision (benefit) for income taxes                     |                      |           | (3,282  | )           |  
|Minority interests                                       |                      |           | (474    | )           |  
|                                                         |                      |           |         |             |  
|Income (loss) from continuing operations                 |                      | $         | (51,262 | )           | $
|                                                         |                      |           |         |             |  
|Cash flows provided by (used in):                        |                      |           |         |             |  
|                                                         | Operating activities |           | $       | 24,701      |  
|                                                         | Investing activities |           |         | (31,388     | )
|                                                         | Financing activities |           |         | (15,650     | )
|Balance sheet data (at end of period):                   |                      |           |         |             |  
|Cash and cash equivalents                                |                      | $         | 19,022  |             | $
|Working capital (4)                                      |                      |           | (70,062 | )           |  
|Total assets                                             |                      |           | 870,562 |             |  
|Total debt                                               |                      |           | 657,804 |             |  
|Total stockholder's equity                               |                      |           | 88,171  |             |  
|Other Data:                                              |                      |           |         |             |  
|EBITDA (5)                                               |                      | $         | 81,818  |             | $
|Capital expenditures                                     |                      | $         | 7,449   |             | $
|Ratio of earnings to fixed charges (6)                   |                      |           |        |             |  

---

17

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|                                                  |  | Advanstar |         | Predecessor |  
|------------------------------------------------- |  | --------- | ------- | ----------- | -
|
|
|
|
|
|
|Reported income (loss) from continuing            |  |           |         |             |  
|operations                                        |  | $         | (51,262 | )           | $
|Add:goodwill amortization, net of tax             |  |           |        |             |  
|                                                  |  |           |         |             |  
|Adjusted income (loss) from continuing operations |  | $         | (51,262 | )           | $
|                                                  |  |           |         |             |  

---

18

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

|                                                                         |  | Advanstar |          | Predecessor |  
|------------------------------------------------------------------------ |  | --------- | -------- | ----------- | -
|
|
|
|
|EBITDA                                                                   |  | $         | 81,818   |             | $
|Depreciation and amortization                                            |  |           | (72,980  | )           |  
|Minority interests (excluding depreciation and amortization)             |  |           | 777      |             |  
|                                                                         |  |           |          |             |  
|Operating income (loss)                                                  |  |           | 9,615    |             |  
|Interest expense                                                         |  |           | (66,543  | )           |  
|Other income (expense),net                                               |  |           | 2,858    |             |  
|Benefit (provision) for income taxes                                     |  |           | 3,282    |             |  
|Minority interests                                                       |  |           | (474     | )           |  
|Extraordinary item, net of tax                                           |  |           |         |             |  
|Cumulative effect of accounting change, net of tax and minority interest |  |           | (66,817  | )           |  
|                                                                         |  |           |          |             |  
|Net Loss                                                                 |  |           | (118,079 | )           |  
|Extraordinary item-early extinguishment of debt                          |  |           |         |             |  
|Transition goodwill impairment                                           |  |           | 66,817   |             |  
|Depreciation and amortization                                            |  |           | 72,980   |             |  
|Noncash interest                                                         |  |           | 18,001   |             |  
|Deferred income taxes                                                    |  |           | (4,292   | )           |  
|Other non cash items                                                     |  |           | 1,000    |             |  
|Changes in operating assets and liabilities                              |  |           | (11,726  | )           |  
|                                                                         |  |           |          |             |  
|Net cash provided by (used in) operating Activities                      |  | $         | 24,701   |             | $
|                                                                         |  |           |          |             |  

---

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."

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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:



In
addition to our trade shows, trade publications and marketing services, we deliver our integrated B-to-B marketing communications products and services to our customers using the
internet, which we conduct through our separate subsidiary, Advanstar.com. Our internet activities are immaterial to our consolidated operations. For discussion purposes, we have included our internet
activity in with our marketing services segment.

Trade
shows and conferences accounted for approximately 52%, 53% and 51% of total revenue in 2000, 2001 and 2002, respectively. Trade publications accounted for approximately 42%, 41%
and 42% of total revenue in 2000, 2001 and 2002, respectively, while marketing services accounted for approximately 6%, 6% and 7% of total revenue in 2000, 2001 and 2002. 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.

In
2001, we more tightly focused the activities of Advanstar.com. As a result, many of the sales, marketing, technology and operating functions of Advanstar.com have been more closely
integrated with our core activities in publishing, tradeshows, 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 operating expenses of Advanstar.com in 2002.

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

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to the overall business environment. Our travel publications remain sensitive to cutbacks in destination and vacation travel advertising in response to concern over terrorism and possible further
conflict in the Middle East and in other regions of 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 highly 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 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.



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.

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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.

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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 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.

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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.

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:

Revenue Recognition.We recognize revenue as discussed in the "Sources of Revenue" section above. The balance of
deferred revenue at December 31, 2002 was $49.8 million and $3.3 million for trade shows and trade publications, respectively. On a relative basis, our deferred revenue reaches its highest levels
during the second and fourth quarters of the year largely due to the timing of theMAGICtrade shows and our other large trade shows and conferences.

Allowance for Doubtful Accounts.We maintain an allowance for doubtful accounts for estimated losses resulting from the
inability of our customers to make required payments. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional
allowances may be required.

The
allowance for doubtful accounts is an estimate based on specifically identified accounts as well as general reserves. We evaluate specific accounts where we have information that the
customer may have an inability to meet its financial obligations. In these cases, management uses its judgment, based

24

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on the best available facts and circumstances, and records a specific reserve for that customer against amounts due to reduce the receivable to the amount that is expected to be collected. These
specific reserves are reevaluated and adjusted as additional information is received that impacts the amount reserved. We also establish a general reserve for all customers based on percentages
applied to the aging balance. This percentage is based on historical collection and write-off experience and varies by geographic region. If circumstances change, our estimates of the recoverability
of amounts due us could be reduced or increased by a material amount. Such a change in estimated recoverability would be accounted for in the period in which the facts that give rise to the change
become known.

Deferred Taxes.We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not
to be realized. At December 31, 2002 we have recorded a valuation allowance to offset the deferred tax benefit associated with net operating loss carryforwards in foreign tax jurisdictions and to
offset the net deferred tax assets of the Company because we believe realization of these benefits is not more likely than not. While we have considered future taxable income and ongoing prudent and
feasible tax planning strategies in assessing the need for the valuation allowance, in the event we were to subsequently determine that we would be able to realize our deferred tax assets in the
future in excess of our net recorded amount, a reduction in the net valuation allowance would result in an income tax benefit and would increase income in the period such determination was made.

Amortization of Intangible Assets.Trade exhibitor and advertiser lists are amortized on a double-declining balance method
over 6 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 8 years. Subscriber lists and other
intangible assets are being amortized on a straight-line method over 3 to 10 years. We amortize intangible assets on a basis which corresponds to our projections of future cash flows directly related
to these intangible assets. The estimates that are included in our projections of future cash flows are based upon the best available information at the time that the determination of useful life and
amortization method are made. A change in circumstances could result in a determination that the related assets are impaired and impairment charges to reduce the carrying value of intangible assets
may be necessary.

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

Under
SFAS No. 142, we evaluate goodwill for impairment using a two-step test based upon a fair value approach. The first step is used to identify a potential impairment through an
estimate of the fair value of certain of our reporting units (as defined by SFAS No. 142), 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, we
evaluated goodwill for impairment using the method described in the preceding paragraph. We determine the fair value of our reporting units by application of a discounted cash flow analysis. We make
estimates that are included in our discounted cash flow analyses based upon the best available information at the time that the determinations of fair value are made. If circumstances change, our
estimates of fair value will also change and could result in a determination that additional impairment charges to reduce the carrying value of goodwill are necessary.

25

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Results of Operations



Net Revenue

Total net revenue declined $40.8 million, or 11.7%, to $309.4 million in 2002 from $350.2 million in 2001.

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

Trade
publications and related marketing services revenue declined $13.6 million, or 8.3% to $150.3 million in 2002 from $164.0 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.

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Cost of production and selling

Cost of production and selling expenses declined $35.0 million, or 15.6%, to $189.6 million in 2002 from $224.6 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 $13.9 million, or 11.1%, to $111.4 million in 2002 from $125.3 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 of Healthcare Traveler,
acquiredin 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 $6.6 million, or 15.0% to $37.2 million in 2002 from $43.8 million in 2001. This decrease was primarily attributable
to our ongoing cost and headcount reduction programs. In response to the decline in revenue throughout 2001 and into 2002, we implemented early and aggressive cost management actions, including staff
reductions of approximately 18.8% since January 2001, reductions in travel and other operating costs, and reorganization of certain support functions and processes.

Restructuring Charge and Other

In 2001 we recorded a restructuring charge of $9.4 million related to our plans to more tightly focus our internet activities, including severance related
payments of $0.7 million, facility closure costs of approximately $6.6 million, asset impairments of approximately $1.3 million and approximately $0.8 million of other contractual commitments. These
restructuring activities were completed by the end of 2001, except for facility lease costs, which continue through June 2010.

Depreciation and amortization

Depreciation and amortization expense declined approximately $24.1 million to $73.0 million in 2002 from $97.1 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 $3.5 million.

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Operating income

Operating income increased $34.3 million to $9.6 million in 2002 from a loss of $24.7 million in 2001. This increase is primarily due to a reduction in
amortization, the restructuring charge taken in 2001 and a reduction in general and administrative expense, partially offset by a decline in revenue as more fully discussed above.

Interest expense

Net interest expense declined $1.5 million, or 2.2%, to $66.5 million in 2002 from $68.0 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 $20.0 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, and issued an additional $68.6 million of our 15.0% senior discount notes.

Approximately
$264.9 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 $3.0 million to $2.9 million in 2002 from an expense of $0.1 million in 2001. This increase is primarily the result of an increase in
non-cash gains related to our foreign currency and interest rate hedging activities, foreign exchange gains and a reduction in losses due to an impaired investment.

Provision (benefit) for income taxes

We recorded a tax benefit of approximately $3.3 million in 2002 compared to a tax benefit of approximately $23.2 million in 2001. The decrease in the tax benefit
is a result of reducing the 2002 effective tax rate and establishing a valuation allowance against our net deferred tax assets due to uncertainty about 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 $118.1 million in 2002 compared to $73.0 million in 2001. This increase is primarily attributable to our goodwill impairment charge and
a reduction in our income tax benefit, partially offset by our increase in operating income and a reduction in interest expense.



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

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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.

Revenue

Total revenue decreased $28.9 million, or 7.6%, to $350.2 million in 2001 from $379.1 million in 2000.

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 11,
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 11 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 revenue declined $16.7 million, or 9.3%, to $164.0 million in 2001 from $180.7 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 ofMotor
AgeandAutomotive Body Repair Newsand an increase in web-related activity related to the development and expansion of our
web-based products.

Cost of production and selling

Cost of production and selling expenses decreased $22.1 million, or 9.0%, to $224.6 million in 2001 from $246.7 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 discontinued events and ongoing cost reduction programs, partially offset by costs related to our acquisition of TechLearn, discussed above and new product launches.

Expenses
of publications and marketing services decreased $9.2 million, or 6.9%, to $125.3 million in 2001 from $134.5 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 discontinued publications.

General and administrative expenses

General and administrative expenses excluding stock option compensation benefit declined $5.8 million, or 11.7% to $43.8 million in 2001 from $49.6 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.

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.

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Restructuring Charge and Other

In 2001 we recorded a restructuring charge of $9.4 million related to our plans to more tightly focus our internet activities, including severance related
payments of $0.7 million, facility closure costs of approximately $6.6 million, asset impairments of approximately $1.3 million and approximately $0.8 million of other contractual commitments. These
restructuring activities were completed by the end of 2001, except for facility lease costs, which continue through June 2010.

Depreciation and amortization

Depreciation and amortization expense increased $40.3 million to $97.1 million in 2001 from $56.8 million in 2000 primarily due to increased amortization of
goodwill and intangible assets related to the Acquisition in October 2000, the use of an accelerated amortization method for trade show exhibitor and advertiser lists to reflect the pattern of usage
of these assets and the full period depreciation effect of the development and expansion of our information technology infrastructure and web-based e-commerce communities.

Operating income

Operating income declined $53.1 million to a loss of $24.7 million in 2001 from income of $28.4 million in 2000. This decline is primarily due to increased
amortization, the restructuring charge taken in 2001 and decline in revenue, partially offset by a reduction in general and administrative expense, as more fully discussed above.

Interest expense

Net interest expense increased $14.7 million, or 27.6%, to $68.0 million in 2001 from $53.3 million in 2000 due to the additional indebtedness of $94.3 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 12.00% senior subordinated notes, and issued our 15.0% senior discount notes with an aggregate
principal amount at maturity of $171.8 million.

Other income (expense), net

Other expense in 2001 was $0.1 million, compared to $10.2 million in 2000. In 2000, the Company expensed transaction costs related to the Acquisition. There were
no corresponding sale transaction costs in 2001.

Provision (benefit) for income taxes

We recorded an income tax benefit of $23.2 million in 2001 compared to a provision of $0.3 million in 2000. This 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 and interest expense 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 $73.0 million in 2001 compared to $36.3 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.

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Liquidity and Capital Resources

The following discussion presents our liquidity and capital resources on a consolidated basis, including our subsidiaries.

Our
cash flow provided by operating activities and EBITDA for the year ended December 31, 2002 was approximately $24.7 million and $81.8 million, respectively. EBITDA increased
approximately $10.3 million from $71.3 million in 2001, due primarily to the increase in operating income as described above and the decrease in depreciation and amortization in 2002, also as
described above. We believe that EBITDA is a useful supplement to 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 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 filed, has
been filed with the Securities and Exchange Commission). See "Item 6Selected Financial DataSelected Historical Consolidated Financial Data, Note 5" above for our
reconciliation of EBITDA to cash flows provided by operating activities.

We
are a holding company and have no direct material operations. Our principal assets are our ownership of Advanstar Communications Inc., and Advanstar.com, and our only material
liabilities are the senior discount notes and our guarantee of the Advanstar Communications Inc. credit facility. Our principal liquidity needs are for debt service on the senior discount notes and
investments in Advanstar.com, which currently does not generate positive cash flow.

Since
the Acquisition, our principal source of cash is dividends from Advanstar Communications Inc. The credit facility and senior subordinated notes described below are obligations of
Advanstar Communications Inc. and impose limitations on its ability to pay dividends to us. We believe that Advanstar Communications' debt instruments will permit it to supply us with sufficient cash
to meet the cash needs referred to above for the next several years. However, if that is not the case, we would not be able to satisfy those needs, because we have no other source of cash other than
dividends from Advanstar Communications. We would then be required to secure alternate financing, which may not be available on acceptable terms, or at all.

Advanstar
Communications principal cash needs are for debt service, capital expenditures and strategic acquisitions, as well as to provide us with cash to finance our cash needs. Its
principal sources of liquidity will be cash flow from operations and borrowings under its credit facility.

Debt service.

As of December 31, 2002, we had total indebtedness of $657.8 million and approximately $40.3 million of borrowings available under our credit facility, subject to
customary conditions.

Credit facility.The term loan facility under the credit facility consists of a $100.0 million amortizing term loan A
maturing April 11, 2006 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% senior subordinated notes. The balances outstanding on our term loans A and B at December 31, 2002 were $75.0 million and $280.8 million.

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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. As of December 31, 2002 we
were in compliance with these covenants.

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 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.

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

Senior Subordinated 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.

Senior discount notes.As part of the financing for the Acquisition, we issued senior discount notes due October 2011 with a
principal amount at maturity of $103.2 million. Concurrently with the closing of the offering of the 12.00% senior subordinated notes, we sold additional senior discount notes due October 2011 with an
additional aggregate principal amount at maturity of $68.6 million. These notes do not require cash interest payments until 2006 and contain restrictive covenants that,

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among other things, limit our ability and that of our subsidiaries to incur debt, pay dividends and make investments. As of December 31, 2002 we were in compliance with these covenants. However, we
are a holding company and our ability to pay interest on these notes will be dependent upon the receipt of dividends from our subsidiaries. The credit facility and the senior subordinated notes impose
substantial restrictions on our subsidiaries' ability to pay dividends.

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

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

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

Our
contingent obligations are 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".

Sources and Uses of Funds

We generally operate with negative working capital, excluding cash and current maturities of long-term debt, due to the impact of deferred revenue from trade
shows, which is billed and collected as deposits up to one year in advance of the respective trade show. Consequently, our existing operations are expected to maintain very low or negative working
capital balances, excluding cash and current maturities of long-term debt.

On
a relative basis, our revenue reaches its highest levels during the first and third quarters of the year largely due to the timing of the MAGICtrade shows and our other large trade shows and
conferences. This seasonality, when combined with the shift in the timing of when events take
place from year to year, may have a significant effect on our quarterly 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 $24.7 million in 2002, derived primarily from our
net loss of $118.1 million adjusted for a non-cash goodwill impairment charge of $66.8 million, amortization and depreciation of $73.0 million, non-cash interest expense of $18.0 million, deferred
income tax benefit of $4.3 million and a use of cash caused by movements in our working capital of $9.5 million.

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Net
cash provided by operations decreased $1.2 million from $25.9 million in 2001. Operating income increased $34.3 million in 2002 as discussed above. This increase was partially offset
by a reduction in depreciation and amortization in 2002. 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 $11.6 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 increased $5.5 million to $31.4 million in
2002, from $25.9 million in 2001.

Capital
expenditures declined $4.7 million in 2002 to $7.4 million compared to $12.1 million in 2001 principally due to the restructuring of our internet activities as more fully
discussed above. We anticipate that we will spend approximately $6.1 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.

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 $40.9 million from a source of cash of
$25.2 million in 2001. We used approximately $15.7 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 $2.0 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.

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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.

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.

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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 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.

36

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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.



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.



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.

37

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

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

We may continue to experience continued operating losses at Advanstar.com, our internet subsidiary, which historically we have funded from our other
business

During
the year ended December 31, 2002 we have provided funding to Advanstar.com of approximately $2.4 million to support its operations. We expect to provide additional funding of
approximately $1.3 million in 2003. Historically, Advanstar.com has had operating losses, which were funded by distributions from Advanstar Communications. While we expect Advanstar.com to achieve
operating income, we may continue to incur additional operating losses, which operating losses we may fund with additional distributions from Advanstar Communications.

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 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

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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.



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, 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

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experience fluctuations in quarterly revenue based on the movement of annual trade show dates from one quarter to another.



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 $657.8 million and (b) approximately $40.3 million of borrowings available under the 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 are a holding company and therefore dependent on dividends from our subsidiaries to meet our debt obligations.

We
are a holding company, and our ability to pay interest on the senior discount notes when they become cash payable in 2005 is dependent upon the receipt of dividends from our direct
and indirect subsidiaries. We do not have, and may not in the future have, any assets other than ownership interests in Advanstar Communications Inc. and Advanstar IH, Inc. Advanstar Communications
Inc. and Advanstar IH, Inc. and their subsidiaries are parties to the credit facility and Advanstar Communications Inc. and its subsidiaries are party to the senior subordinated note indenture, each
of which imposes substantial restrictions on Advanstar Communications Inc. and Advanstar IH, Inc.'s ability to pay dividends. Any payment of dividends will be subject to the satisfaction of certain
financial conditions set forth in the senior subordinated notes indenture and the credit facility. The ability of Advanstar Communications Inc. and Advanstar IH, Inc. and their subsidiaries to comply
with such conditions may be affected by events that are beyond our or their control. 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. The breach of any such conditions could result in a default under the senior
subordinated notes indenture and/or the credit facility, and in the event of any such default, the holders of the senior subordinated notes or the lenders under the credit facility could elect to
accelerate the maturity of all the senior subordinated notes or the loans under such facility. If the maturity of the senior subordinated notes or the loans under the credit facility were to be
accelerated, all such outstanding debt would be required to be paid in full before Advanstar Communications Inc. or Advanstar IH, Inc. or their subsidiaries would be permitted to distribute any assets
or cash to us. Future borrowings by Advanstar Communications Inc. and Advanstar IH, Inc. can also be expected to contain restrictions or prohibitions on the payment of dividends by such subsidiaries
to us. We cannot predict what the value of our subsidiaries, assets or the

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amount of their liabilities will be in the future and whether such values or amounts will permit the payment of distributions to us. Accordingly, there can be no assurance that we will be able to pay
our debt service obligations on the senior discount notes.

As
a result of our holding company structure, the holders of the senior discount notes are structurally junior to all creditors of our subsidiaries, except to the extent that we are
recognized as a creditor of any such subsidiary, in which case our claims would still be subordinate to any security in the assets of such subsidiary and any indebtedness of such subsidiary senior to
that held by us. In the event of insolvency, liquidation, reorganization, dissolution or other winding-up of our subsidiaries, we will not receive any funds available to pay to creditors of the
subsidiaries until they are paid in full.

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 Holdings 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, which own a substantial portion of the
notes.

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

The
information contained in this annual report includes some forward-looking statements that involve a number of risks and uncertainties. A number of factors could cause our actual
results, performance, achievements or industry results to be very different from the results, performance, achievements or industry results expressed or implied by those forward-looking statements.
These factors include, but are not limited to:



41

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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.

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

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

Our
strategy for management of currency risk relies primarily upon conducting our operations in a country's respective currency and may, from time to time, involve currency derivatives,
primarily forward exchange contracts, to reduce our exposure to currency fluctuations. As of 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
    Chairman of the Board and
    Chief Executive Officer               |  | 2002
2001
2000 |  | $      | 600,000
600,000
522,308 |           | $ | 245,246

194,805             | (5)    | $                                                                | 13,680
19,721
4,861 |                        | 

900,000          
|James M. Alic
    Vice Chairman, Vice President
    and Director                          |  | 2002
2001
2000 |  |        | 209,230
500,000
422,308 |           |   | 

157,700                   | (7)(5) |                                                                  | 

5,392           |                        | 

275,000          
|Joseph Loggia
    President and Chief Operating
    Officer                               |  | 2002
2001
2000 |  |        | 500,000
500,000
565,385 |           |   | 204,373

280,933             | (5)    |                                                                  | 
3,375
           |                        | 100,000

400,000    
|David W. Montgomery
    Vice President-Finance, Chief
    Financial Officer and Secretary |  | 2002
2001
2000 |  |        | 250,000
250,000
210,000 |           |   | 58,000
17,000
110,836         |        |                                                                  | 
1,500
14,712      |                        | 50,000

200,000     
|Eric I. Lisman
    Executive Vice President and
    General Counsel                       |  | 2002
2001
2000 |  |        | 350,000
280,000
257,500 |           |   | 59,200
10,000
110,156         |        |                                                                  | 

               |                        | 50,000
50,000
100,000

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Option Grants in Last Fiscal Year

The following table sets forth each grant of stock options made by Advanstar (consisting of options to purchase stock of Advanstar's parent) 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

|                    |  |         |  |      |   |   |       |  |      | 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 Securities
Underlying
Unexercised Options
at Fiscal
Year End |         |  |         | 
|------------------- |  | - |  | - | - | ---------------------------------------------------------------------- | ------- |  | ------- | 
|
|
|
|Robert L. Krakoff   |  |  |  | $ |  |                                                                        | 337,500 |  | 562,500 | 
|James M. Alic       |  |  |  |   |  |                                                                        | 86,168  |  | 82,582  | 
|Joseph Loggia       |  |  |  |   |  |                                                                        | 150,000 |  | 350,000 | 
|David W. Montgomery |  |  |  |   |  |                                                                        | 75,000  |  | 175,000 | 
|Eric I. Lisman      |  |  |  |   |  |                                                                        | 50,000  |  | 150,000 | 

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 nonstatutory 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.

48

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Put and Call Rights

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

Change in Control

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

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

49

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401(k) Plan, which vests in equal installments over five years, in accordance with the following schedule:



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.

50

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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 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.

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 Holdings. The following table sets forth information with
respect to the beneficial ownership of Advanstar 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

51

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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                                    | %

---

52

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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.

The
DLJ Investment Partners funds purchased units consisting of $103.2 million principal amount at maturity of senior discount notes and warrants to purchase Holdings stock in October
2000 for a purchase price of $50.0 million. In February 2001, they exchanged these notes for old notes. We have granted them registration rights in connection with these securities. The registration
rights agreement includes customary indemnification provisions.

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.

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.

53

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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.

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 quarterly 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 quarterly
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:

|                                                                                                                                                                                                                        |  | Page
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|Report of PricewaterhouseCoopers LLP                                                                                                                                                                                    |  | F-1 
|Report of Arthur Andersen LLP                                                                                                                                                                                           |  | F-2 
|Consolidated Balance Sheets as of December 31, 2002 and 2001                                                                                                                                                            |  | F-4 
|Consolidated 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-5 
|Consolidated 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-6 
|Consolidated 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-8 
|Notes to Consolidated Financial Statements                                                                                                                                                                              |  | F-9 

2.    Financial Statement Schedules:

The following schedule is included in this Annual Report on the page indicated

Schedule 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, 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, Inc., a wholly owned subsidiary of Advanstar Holdings Corporation, 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, 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 8, 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 8.

As
discussed in Note 2, "Financial Derivative Instruments," 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, 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 AUTHUR ANDERSEN LLP. THIS REPORT HAS NOT BEEN REISSUED BY AUTHUR ANDERSEN LLP AND AUTHUR 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 STATEMENTS 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 AUTHUR ANDERSEN LLP
REPORT DOES NOT EXTEND TO THESE DISCLOSURES.

Report of Independent Public Accountants

To
Advanstar, Inc.:

We
have audited the accompanying consolidated balance sheets of Advanstar, 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 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 eccepted 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 principals 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, 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 conformitory with accounting principals generally accepted in the United States.

Our
audit was made for the purpose of forming an opinion in 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. **

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 Derivitive Instruments and Hedging Activities."

Authur
Andersen LLP
Minneapolis, Minnesota
February 15, 2003

F-2

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F-3

---



ADVANSTAR, 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                   |        
|                                                |                                                                                                                         |                                        |        
|Due from parent                                 |                                                                                                                         |                                        | 53     
|Property, plant and equipment, net              |                                                                                                                         |                                        | 26,402 
|Intangible and other assets:                    |                                                                                                                         |                                        |        
|                                                | Goodwill, net                                                                                                           |                                        |        
|                                                | Intangibles and other, net                                                                                              |                                        |        
|                                                |                                                                                                                         |                                        |        
|                                                |                                                                                                                         | Total intangible and other assets, net |        
|                                                |                                                                                                                         |                                        |        
|                                                |                                                                                                                         | $                                      | 870,562
|                                                |                                                                                                                         |                                        |        
|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       |                                                                                                                         |                                        | 640,404
|Deferred income taxes                           |                                                                                                                         |                                        |       
|Other long-term liabilities                     |                                                                                                                         |                                        | 10,155 
|Minority interests                              |                                                                                                                         |                                        | 9,782  
|Commitments and contingencies (Notes 11 and 13) |                                                                                                                         |                                        |        
|Stockholder's equity:                           |                                                                                                                         |                                        |        
|                                                | Common stock, $.01 par value, 10,000 shares authorized; 100 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             |        
|                                                |                                                                                                                         |                                        |        
|                                                |                                                                                                                         | $                                      | 870,562
|                                                |                                                                                                                         |                                        |        

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

F-4

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ADVANSTAR, INC. AND SUBSIDIARIES        Consolidated Statements of Operations        (In thousands, except share and per share data)

|                                                                                                            |                                                | Successor                |          | Predecessor |        
|----------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | ------------------------ | -------- | ----------- | -------
|
|
|
|Net revenue                                                                                                 |                                                | $                        | 309,404  |             | $      
|Operating expenses:                                                                                         |                                                |                          |          |             |        
|                                                                                                            | Cost of production                             |                          |          | 63,048      |        
|                                                                                                            | Selling, editorial and circulation             |                          |          | 126,516     |        
|                                                                                                            | General and administrative                     |                          |          | 37,245      |        
|                                                                                                            | Restructuring charge                           |                          |          |            |        
|                                                                                                            | Amortization of goodwill and other intangibles |                          |          | 59,899      |        
|                                                                                                            | Depreciation                                   |                          |          | 13,081      |        
|                                                                                                            |                                                |                          |          |             |        
|                                                                                                            |                                                | Total operating expenses |          |             | 299,789
|                                                                                                            |                                                |                          |          |             |        
|Operating (loss) income                                                                                     |                                                |                          | 9,615    |             |        
|Other income (expense):                                                                                     |                                                |                          |          |             |        
|                                                                                                            | Interest expense, net                          |                          |          | (66,543     | )      
|                                                                                                            | Other income (expense), net                    |                          |          | 2,858       |        
|                                                                                                            |                                                |                          |          |             |        
|Loss before income taxes, minority interests, extraordinary item and cumulative effect of accounting change |                                                |                          | (54,070  | )           |        
|(Benefit) provision for income taxes                                                                        |                                                |                          | (3,282   | )           |        
|Minority interests                                                                                          |                                                |                          | (474     | )           |        
|                                                                                                            |                                                |                          |          |             |        
|Loss before extraordinary item and cumulative effect of accounting change                                   |                                                |                          | (51,262  | )           |        
|Extraordinary item, net of tax                                                                              |                                                |                          |         |             |        
|Cumulative effect of accounting change, net of tax and minority interest                                    |                                                |                          | (66,817  | )           |        
|                                                                                                            |                                                |                          |          |             |        
|Net loss                                                                                                    |                                                | $                        | (118,079 | )           | $      
|                                                                                                            |                                                |                          |          |             |        

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

F-5

---



ADVANSTAR, INC. AND SUBSIDIARIES        Consolidated Statements of Stockholder's Equity        (In thousands)

|                                         |                                                      | Common Stock             |   |   |     |   |   | Accumulated
Other
Comprehensive
Income (Loss) |        |   |        
|---------------------------------------- | ---------------------------------------------------- | ------------------------ | - | - | --- | - | - | --------------------------------------------- | ------ | - | -------
|
|
|Balance, December 31, 1999 (predecessor) |                                                      | 33,630,000               |   | $ | 336 |   | $ | 186,578                                       |        | $ | (49,772
|Comprehensive loss:                      |                                                      |                          |   |   |     |   |   |                                               |        |   |        
|                                         | Net loss                                             |                          |  |   |     |  |   |                                               |       |   |        
|                                         | Translation adjustment                               |                          |  |   |     |  |   |                                               |       |   |        
|                                         | Change in unrealized gain on investments, net of tax |                          |  |   |     |  |   |                                               |       |   |        
|                                         |                                                      | Total comprehensive loss |   |  |     |   |  |                                               |        |  |        
|                                         | Stock option compensation expense and other          |                          |  |   |     |  |   |                                               | (6,933 | ) |        
|                                         |                                                      |                          |   |   |     |   |   |                                               |        |   |        
|Balance, October 11, 2000 (predecessor)  |                                                      | 33,630,000               |   | $ | 336 |   | $ | 179,645                                       |        | $ | (63,930
|                                         |                                                      |                          |   |   |     |   |   |                                               |        |   |        
|Balance, October 12, 2000 (successor)    |                                                      | 100                      |   | $ |    |   | $ | 304,808                                       |        | $ |       
|Comprehensive loss:                      |                                                      |                          |   |   |     |   |   |                                               |        |   |        
|                                         | Net loss                                             |                          |  |   |     |  |   |                                               |       |   |        
|                                         | Translation adjustment                               |                          |  |   |     |  |   |                                               |       |   |        
|                                         |                                                      | Total comprehensive loss |   |  |     |   |  |                                               |        |  |        
|                                         |                                                      |                          |   |   |     |   |   |                                               |        |   |        
|Balance, December 31, 2000 (successor)   |                                                      | 100                      |   |   |    |   |   | 304,808                                       |        |   | (22,136

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

F-6

---



ADVANSTAR, INC. AND SUBSIDIARIES        Consolidated Statements of Stockholder's Equity        (In thousands)

|                                       |                                                                           | Common Stock             |   |   |   |   |   | Accumulated
Other
Comprehensive
Income (Loss) |   |   |         
|-------------------------------------- | ------------------------------------------------------------------------- | ------------------------ | - | - | - | - | - | --------------------------------------------- | - | - | --------
|
|
|Balance, December 31, 2000 (successor) |                                                                           | 100                      |   | $ |  |   | $ | 304,808                                       |   | $ | (22,136 
|Comprehensive loss:                    |                                                                           |                          |   |   |   |   |   |                                               |   |   |         
|                                       | Net loss                                                                  |                          |  |   |   |  |   |                                               |  |   |         
|                                       | Translation adjustment                                                    |                          |  |   |   |  |   |                                               |  |   |         
|                                       | Change in unrealized loss on derivative financial instruments, net of tax |                          |  |   |   |  |   |                                               |  |   |         
|                                       |                                                                           | Total comprehensive loss |   |  |   |   |  |                                               |   |  |         
|Capital contribution                   |                                                                           |                         |   |   |  |   |   | 5,616                                         |   |   |        
|                                       |                                                                           |                          |   |   |   |   |   |                                               |   |   |         
|Balance, December 31, 2001 (successor) |                                                                           | 100                      |   |   |  |   |   | 310,424                                       |   |   | (95,096 
|Comprehensive loss:                    |                                                                           |                          |   |   |   |   |   |                                               |   |   |         
|                                       | Net loss                                                                  |                          |  |   |   |  |   |                                               |   |   |         
|                                       | Translation adjustment                                                    |                          |  |   |   |  |   |                                               |  |   |         
|                                       | Change in unrealized loss on derivative financial instruments             |                          |  |   |   |  |   |                                               |  |   |         
|                                       | Total comprehensive loss                                                  |                          |  |   |   |  |   |                                               |  |   |         
|                                       |                                                                           |                          |   |   |   |   |   |                                               |   |   |         
|Balance, December 31, 2002 (successor) |                                                                           | 100                      |   | $ |  |   | $ | 310,424                                       |   | $ | (213,175
|                                       |                                                                           |                          |   |   |   |   |   |                                               |   |   |         

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

F-7

---



ADVANSTAR, INC. AND SUBSIDIARIES        Consolidated Statements of Cash Flows        (In thousands)

|                                                     |                                                                                           | Successor                                           |                                                     | Predecessor |       
|---------------------------------------------------- | ----------------------------------------------------------------------------------------- | --------------------------------------------------- | --------------------------------------------------- | ----------- | ------
|
|
|
|Cash flows from operating activities:                |                                                                                           |                                                     |                                                     |             |       
|                                                     | Net loss                                                                                  |                                                     | $                                                   | (118,079    | )     
|                                                     | Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |                                                     |                                                     |             |       
|                                                     |                                                                                           | Extraordinary item-early extinguishment of debt     |                                                     |             |      
|                                                     |                                                                                           | Transition goodwill impairment                      |                                                     |             | 66,817
|                                                     |                                                                                           | Restructuring charge                                |                                                     |             |      
|                                                     |                                                                                           | Depreciation and amortization                       |                                                     |             | 72,980
|                                                     |                                                                                           | (Gain) loss on derivative financial instruments     |                                                     |             | (1,236
|                                                     |                                                                                           | Undistributed earnings of minority interest holders |                                                     |             | 474   
|                                                     |                                                                                           | Noncash interest                                    |                                                     |             | 18,001
|                                                     |                                                                                           | Noncash stock compensation                          |                                                     |             |      
|                                                     |                                                                                           | (Gain) loss on sales of assets and other            |                                                     |             | 95    
|                                                     |                                                                                           | Provision for bad debts                             |                                                     |             | 1,667 
|                                                     |                                                                                           | Deferred income taxes                               |                                                     |             | (4,292
|                                                     |                                                                                           | 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 |                                                     |             | 24,701
|                                                     |                                                                                           |                                                     |                                                     |             |       
|Cash flows from investing activities:                |                                                                                           |                                                     |                                                     |             |       
|                                                     | Additions to property, plant and equipment                                                |                                                     |                                                     | (7,449      | )     
|                                                     | Acquisition of publications and trade shows, net of cash acquired                         |                                                     |                                                     | (23,972     | )     
|                                                     | Proceeds from sale of assets and other                                                    |                                                     |                                                     | 33          |       
|                                                     |                                                                                           |                                                     |                                                     |             |       
|                                                     | Net cash (used in) provided by investing activities                                       |                                                     |                                                     | (31,388     | )     
|                                                     |                                                                                           |                                                     |                                                     |             |       
|Cash flows from 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                                                                  |                                                     |                                                     | (2,047      | )     
|                                                     | Dividends paid to minority interest holders                                               |                                                     |                                                     | (503        | )     
|                                                     |                                                                                           |                                                     |                                                     |             |       
|                                                     |                                                                                           |                                                     | Net cash (used in) provided by financing activities |             |       
|                                                     |                                                                                           |                                                     |                                                     |             |       
|Effect of exchange rate changes on cash              |                                                                                           |                                                     | (3,438                                              | )           |       
|                                                     |                                                                                           |                                                     |                                                     |             |       
|Net (decrease) increase in cash and cash equivalents |                                                                                           |                                                     | (25,775                                             | )           |       
|Cash and cash equivalents, beginning of period       |                                                                                           |                                                     | 44,797                                              |             |       
|                                                     |                                                                                           |                                                     |                                                     |             |       
|Cash and cash equivalents, end of period             |                                                                                           | $                                                   | 19,022                                              |             | $     
|                                                     |                                                                                           |                                                     |                                                     |             |       

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

F-8

---



ADVANSTAR, INC. AND SUBSIDIARIES        Notes to Consolidated Financial Statements

1.    Nature of Business and Basis of Presentation



Cash

$
302.6Debt assumed


606.6Direct acquisition costs


8.4Total purchase price


917.6Estimated fair value of net tangible assets acquired


2.9Identifiable intangible assets


94.1Goodwill


820.6$
917.6




F-9

---



2.    Summary of Significant Accounting Policies



Successor2002

2001Land and improvements

$
2,416

$
2,409Buildings


5,097


4,995Furniture, machinery and equipment


40,878


33,672Leasehold improvements


4,325


4,34352,716


45,419Accumulated depreciation


(26,314
)

(13,377
)Property, plant and equipment, net

$
26,402

$
32,042




Land improvements

10-15 yearsBuildings

20-40 yearsFurniture, machinery and equipment

3-10 yearsLeasehold improvements

Shorter of useful life or lease term




F-10

---



Successor2002

2001Derivative instruments

$
5,849

$
6,553Interest


8,958


9,468Security deposits


3,125


2,770Benefits and severance


1,755


3,459Other


5,666


5,707$
25,353

$
27,957




F-11

---



Successor2002

2001Deferred trade show and conference revenue

$
49,752

$
50,309Deferred advertising and subscription revenue


3,287


3,740Deferred internet advertising and other revenue


214


604Total deferred revenue

$
53,253

$
54,653




F-12

---



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

2001Net lossas reported

$
(118,079
)
$
(72,960
)
$
(22,136
)
$
(14,158
)Less: stock based employee compensation benefit included in operating results, as reported











(2,485
)Less: pro forma stock based employee compensation (cost) benefit


(2,133
)

(2,090
)

(320
)

541Net losspro forma

$
(120,212
)
$
(75,050
)
$
(22,456
)
$
(16,102
)




F-13

---



F-14

---



3.    Goodwill and Other Intangible Assets



F-15

---





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

2001Reported loss before extraordinary item and accounting change

$
(51,262
)
$
(69,852
)
$
(22,136
)
$
(14,158
)Add: Goodwill amortization, net of tax





22,738


7,308


15,450Adjusted (loss) income before extraordinary item and and accounting change

$
(51,262
)
$
(47,114
)
$
(14,828
)
$
1,292Reported net loss

$
(118,079
)
$
(72,960
)
$
(22,136
)
$
(14,158
)Add: Goodwill amortization, net of tax





22,738


7,308


15,450Adjusted net (loss) income

$
(118,079
)
$
(50,222
)
$
(14,828
)
$
1,292




Successor:

Trade Shows
and
Conferences

Trade
Publications

Marketing
Services

TotalsBalance as of December 31, 2001

$
557,109

$
131,932

$
30,345

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


6,350


5,482


495


12,327Transition impairment loss


(70,905
)







(70,905
)Balance as of December 31, 2002

$
492,554

$
137,414

$
30,840

$
660,808


F-16

---



Successor2002

2001Trade exhibitor lists

$
161,492

$
160,318Advertiser lists


39,673


33,302Subscriber lists


23,978


22,339Other intangible assets


8,097


3,529Deferred loan costs


23,488


21,440256,728


240,928Accumulated amortization


(127,039
)

(64,819
)Total intangible and other assets, net

$
129,689

$
176,109




Successor2002

2001Trade exhibitor lists

$
1,636

$
Advertiser lists


6,728


Subscriber lists


1,796


Other intangible assets


3,298


804Total

$
13,458

$
804




2003

$
45,1752004


32,8042005


28,4962006


14,7872007


3,397


4.    Restructuring Charge and Other



F-17

---



5.    Acquisitions



6.    Investments



F-18

---



7.    Financial Derivative Instruments



F-19

---



Interest Rate
Collar
Agreements

Foreign
Exchange
Contracts

TotalAccumulated other comprehensive income(loss) balance at December 31, 2000

$


$


$
Unwound from accumulated other comprehensive income (loss) during the period


2,856


191


3,047Mark to market hedge contracts


(7,045
)

(186
)

(7,231
)Accumulated other comprehensive income (loss) balance at December 31, 2001


(4,189
)

5


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


6,856


(5
)

6,851Mark to market hedge contracts


(7,017
)




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

$
(4,350
)
$


$
(4,350
)




F-20

---



Interest Rate
Collar
Agreements

Foreign
Exchange
Contracts

TotalYear ended December 31, 2002Other income (expense)

$
(105
)
$
649

$
544Total statement of operations impact before taxes

$
(105
)
$
649

$
544Year ended December 31, 2001Other income (expense)

$
(210
)
$
5

$
(205
)Total statement of operations impact before taxes

$
(210
)
$
5

$
(205
)


8.    Debt



F-21

---





F-22

---



Successor2002

2001Term loan A, interest at LIBOR plus 3.25%; 4.67% at December 31, 2002, due quarterly through April 11, 2007

$
75,000

$
89,200Term loan B, interest at LIBOR plus 4.00%; 5.43% at December 31, 2002, due quarterly through October 11, 2008


280,800


280,800Revolving credit loan, interest at LIBOR plus 3.25%; 4.66% at December 31, 2002, due April 11, 2007


37,100


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


160,000


160,000Senior discount notes, interest at 15.00%, due October 11, 2011, net of unamortized discount of $71,688 and $86,869 at December 31, 2002 and 2001, respectively


100,104


84,923Acquisition note payable, interest at 5.50%, due monthly through 2004


4,000


6,000Acquisition note payable, interest at 6.00%, due April 1, 2004


800


657,804


654,923Less current maturities


(17,400
)

(16,200
)$
640,404

$
638,723




F-23

---



2003

$
17,4002004


19,5442005


17,1442006


17,1442007


45,668Thereafter


612,592


9.    Stockholder's Equity



SuccessorFor the
Years Ended
December 31,For the Period from
October 12,
2000 through
December 31, 20002002

2001Expected dividend yield





Expected stock price volatility

37.6
%
76.8
%
41.6
%Risk-free interest rate

5.0
%
4.9
%
6.0
%Expected life of options

7.0 years

7.5 years

7.5 years




F-24

---



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




10.    401(k) Plan



11.    Income Taxes



F-25

---



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

$
(53,913
)
$
(88,602
)
$
(28,558
)
$
(1,626
)Foreign


(157
)

(4,247
)

(1,497
)

(3,453
)Total

$
(54,070
)
$
(92,849
)
$
(30,055
)
$
(5,079
)




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

$
(937
)
$


$
(7,815
)
$
2,903State


59





(471
)

568Foreign


1,888


2,277


156


1,355Deferred


(4,292
)

(25,430
)

336


3,250Total (benefit) provision

$
(3,282
)
$
(23,153
)
$
(7,794
)
$
8,076




F-26

---





Successor2002

2001Deferred tax liabilities:Identifiable intangible assets

$
(9,214
)
$
(27,544
)Prepaid and other


(3,186
)

(2,075
)Total deferred tax liabilities


(12,400
)

(29,619
)Deferred tax assets:Property, plant and equipment


1,355


(197
)Goodwill


3,955


(779
)U.S. net operating loss carryforwards


19,669


14,313Accrued expenses and other


5,620


5,544Foreign jurisdiction net operating loss carryforwards


5,664


3,977Financial derivatives


1,933


2,502Debt discount


7,301


3,491AMT credit carryforwards


453


453Total deferred tax assets


45,950


29,304Valuation allowance


(33,550
)

(3,977
)Net deferred income taxes

$


$
(4,292
)




F-27

---



Successor

PredecessorFor the Years Ended December 31,2002Income (Loss)
Before Tax
Provision,
Minority
Interests,
Extraordinary
Items, and
Accounting
Change

Cumulative
Effect of
Accounting
Change, Net
of Tax and
Minority
Interest

Total

2001

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

For the
Period from
January 1,
2000 through
October 11,
2000Income tax benefit at statutory rates

$
(18,925
)
$
(23,386
)
$
(42,311
)
$
(32,497
)
$
(10,219
)
$
(1,727
)Nondeductible amortization











7,270


2,220


3,339Nondeductible goodwill impairment





9,790


9,790








Change in valuation allowance


14,307


15,266


29,573


2,754





(1,080
)State taxes, net of federal benefit


(1,352
)

(1,670
)

(3,022
)

(2,284
)

(547
)

595Nondeductible interest


1,883





1,883


1,437





Foreign provision in excess of U.S. rates


260





260


684


1,506


2,215Capitalized sale expenses











2,946





Other, net


545





545


(517
)

(754
)

1,788Total

$
(3,282
)
$


$
(3,282
)
$
(23,153
)
$
(7,794
)
$
8,076


12.    Commitments and Contingencies



2003

$
6,2232004


5,8812005


6,1862006


5,7602007


5,620Thereafter


11,152




F-28

---



13.    Segments



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

$
2,074

$
315,180Contribution margin (loss)


83,766


34,434


7,057


(4,501
)

120,756Segment assets


453,299


224,829


2,291


84,330


764,749Period from October 12, 2000 through December 31, 2000 (successor):Revenues


19,752


38,281


5,206


633


63,872Contribution margin (loss)


2,372


10,639


2,932


(4,375
)

11,568Segment assets


313,914


524,215


97,454


85,852


1,021,435Year ended December 31, 2001 (successor):Revenues


186,250


142,607


17,168


4,179


350,204Contribution margin (loss)


86,911


35,464


8,788


(5,588
)

125,575Segment assets


688,223


188,842


32,750


106,693


1,016,508Year ended December 31, 2002 (successor):Revenues


159,075


131,106


15,678


3,545


309,404Contribution margin (loss)


80,865


36,364


6,579


(3,968
)

119,840Segment assets


586,406


183,954


32,599


67,603


870,562


F-29

---



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

2001Total segment contribution margin

$
119,840

$
125,575

$
11,568

$
120,756General and administrative expense


(37,245
)

(43,809
)

(10,239
)

(36,879
)Restructuring charge





(9,406
)




Depreciation and amortization


(72,980
)

(97,052
)

(16,359
)

(40,475
)Other expense (primarily interest)


(63,685
)

(68,157
)

(15,025
)

(48,481
)Consolidated loss before taxes, minority interest, extraordinary item and cumulative effect of accounting change

$
(54,070
)
$
(92,849
)
$
(30,055
)
$
(5,079
)




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,Revenues2002

2001United States

$
279,005

$
312,943

$
53,757

$
281,971International


30,399


37,261


10,115


33,209Total

$
309,404

$
350,204

$
63,872

$
315,180




SuccessorDecember 31,Long-Lived Assets2002

2001United States

$
756,611

$
867,140International


60,341


62,487$
816,952

$
929,627




F-30

---

14.    Related-Party Transactions



F-31

---



2.    Financial Statement Schedules

Report of Independent Accountants on Financial Statement Schedule

To
the Stockholder and Board of Directors of
Advanstar, 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

|                                |                                                   |  |   | Additions |  |   |           | 
|------------------------------- | ------------------------------------------------- |  | - | --------- |  | - | --------- | 
|
|Advanstar                       |                                                   |  |   |           |  |   |           | 
|Allowance for doubtful accounts |                                                   |  |   |           |  |   |           | 
|                                | Year ended December 31, 2002                      |  | $ | 970,000   |  | $ | 1,667,000 | 
|                                | 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.

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                                                                                                                                                                                                                                                                                                                                                     
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.1         |  | Registration Rights Agreement dated as of February 21, 2001 between Advanstar, Inc. and Credit Suisse First Boston Corporation, as Initial Purchaser (previously filed)                                                                                                                                                                                      
|2.1         |  | Agreement and Plan of Merger dated August 14, 2000, among Advanstar, Inc., Advanstar Holdings Corp. (formerly known as Jetman Acquisition Corp.), Junior Jetman Corp. and AHI Advanstar LLC (filed as Exhibit 2.1 to Form 8-K of Advanstar, Inc. filed
with the Securities and Exchange Commission on October 26, 2000, and incorporated by reference herein)
|3.1         |  | Certificate of Incorporation of Advanstar, 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, Inc. (Previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for June 30, 1999 and incorporated by reference herein)                                                                                                                                      
|3.2         |  | By-Laws of Advanstar, 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)                                                                                                       
|4.1         |  | Indenture dated as of February 21, 2001 between Advanstar, Inc. and the Trustee (previously filed).                                                                                                                                                                                                                                                          
|5.1         |  | Opinion of Davis Polk & Wardwell with respect to the notes (previously filed).                                                                                                                                                                                                                                                                               
|10.1        |  | Advanstar Holdings Corp. 2000 Management Plan Incentive 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        |  | 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 Advanstar Communications Inc. 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)                                                                                      
|            |  |                                                                                                                                                                                                                                                                                                                                                              

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|10.5.1 |  | Amendment to Employment Agreement, effective March 1, 2002, between Advanstar, Inc. and James M. Alic. (Previously filed as an exhibit to Advanstar Communications Inc. 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 Advanstar Communications Inc. annual report on Form 10-K for 2001 and incorporated by reference herein)                                                        
|10.10  |  | Advisory Agreement, effective December 10, 2002, between Advanstar, Inc. and Douglas B. Fox.(filed as an exhibit to the Advanstar Communications Inc. Annual Report on Form 10-K for 2002 and incorporated by reference herein)                        
|10.11  |  | Letter, dated February 7, 1994, between Advanstar Communications Inc. and David W. Montgomery (filed as an exhibit to the Advanstar Communications Inc. Annual Report on Form 10-K for 2002 and incorporated by reference herein)                      
|10.12  |  | Agreement, dated February 19, 1999, by and amoung Advanstar, Inc., Advanstar Communications Inc. and Eric I. Lisman (filed as an exhibit to the Advanstar Communications Inc. Annual Report on Form 10-K for 2002 and incorporated by reference
herein)
|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)                                                                              
|23.1   |  | Consent of Davis Polk & Wardwell (contained in their opinion filed as Exhibit 5.1)                                                                                                                                                                     
|25.1   |  | Statement of Eligibility of Wells Fargo Bank Minnesota, N.A. on Form T-1 (previously filed)                                                                                                                                                            
|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. *                                                                                                                                                                              

---

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.

| |  | ADVANSTAR, 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

---



CERTIFICATION

I,
Robert L. Krakoff, certify that:

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

March
28, 2003

---

CERTIFICATION

I,
David W. Montgomery, certify that:

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

March
28, 2003

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