SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-K

|(Mark One)                                                    |                                                                                         
|------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                                             | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004                  
|or                                                           
|o                                                             | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|FOR THE TRANSITION PERIOD
FROM                             TO

Commission File Number 333-61386

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

|Delaware(State or other jurisdiction of incorporation or organization)      |  | 94-3243499(I.R.S. Employer Identification No.)
|--------------------------------------------------------------------------- |  | ----------------------------------------------
|One Park Avenue, New York, New York(Address of principal executive offices) |  | 10016(Zip Code)                               
|Registrant's telephone number, including area code:(212) 951-6600          

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

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

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, 2004, none of the registrant's common stock was held by non-affiliates of the registrant.

As
of March 29, 2005, 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. 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. 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, PARTICULARLY UNDER THE HEADING "CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS," AND IN
ADVANSTAR'S OTHER REPORTS AND REGISTRATION STATEMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

INDUSTRY AND MARKET DATA

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

In
particular:



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General

We are a leading worldwide provider of integrated, B-to-B, marketing communications products and services for specific industry sectors,
principally through trade shows and conferences and through controlled circulation trade, business and professional magazines. We also provide a broad range of other direct marketing products,
including classified advertising, direct mail services, reprints, database marketing, directories, guides and reference books. Additionally, we produce a limited number of consumer expositions and
publications. We are the fourth largest U.S. trade show operator based on the number of trade shows and total square footage in 2004 and the second largest B-to-B trade
publisher in the United States as measured by advertising pages in 2004. In 2004, 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, 2004, 76% of our 67 magazines and journals for which competitive data is available ranked either #1 or #2 in their respective markets, based on
number of advertising pages. We had approximately 1,400 employees as of December 31, 2004 in 21 U.S. offices and 5 international locations in Europe, Latin America and Asia.

Industry Overview

B-to-B communications companies provide marketing solutions for their customers through trade shows and conferences, trade publications,
ancillary direct marketing products and through Internet applications. According to the July 2004 Veronis Suhler StevensonCommunications Industry
Forecast, total spending on B-to-B communications, including magazines and trade shows, was expected to increase 1.7% to $20.0 billion in 2004,
the industry's first notable gain in four years.

According
to Veronis Suhler Stevenson, spending was expected to increase in 2004 after remaining about level at $19.7 billion in 2003, when
business-to-business magazine spending dipped and trade shows grew slowly. In 2003 the market stabilized after declining 9.1% in 2002 and 12.4% in 2001.
Business-to-business media spending fell 2.0% on a compounded annual basis from 1998 to 2003, due to substantial declines in 2001 and 2002.

According
to Veronis Suhler Stevenson, total spending on U.S. trade shows and conferences amounted to $8.7 billion in 2003, bolstered by the success of healthcare events and
sporting goods and recreation shows. The marginal growth in 2003 represented an improvement over the 1.2% decline

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posted
in 2002 and the 3.2% decline in 2001. Trade show spending continues to grow faster than magazine spending in 2004. As measured byTradeshow Week,
the twelve months ended 9/30/04 saw an increase in all three primary trade show indicators: square footage grew by 2.8%, attendance by 1.6% and the number of exhibiting companies by 2.2%.

Total
spending on business-to-business magazines declined 0.7% to $11.0 billion in 2003, according to Veronis Suhler Stevenson, due to flat advertising
spending and a drop in paid circulation expenditures. The marginal fall-off in 2003 represented an improvement over the double-digit declines sustained in each of the previous two years.
Total business-to-business magazine spending was expected to rebound throughout 2004, posting a 1.3% gain to $11.1 billion. Industry-wide advertising pages,
as measured by American Business Media increased 1.4% in 2004 from 2003 levels following a 3.2% decline in 2003 from 2002 levels.

Veronis
Suhler Stevenson is forecasting that total spending on business-to-business media will grow at a compound annual growth rate of 3.8% from 2003 to 2008,
reaching $13.3 billion in 2008.

Trade Shows

Trade shows play a key role in B-to-B sales and marketing efforts and are utilized in the global economy as a highly
cost-effective sales and 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, manufacturing and operating management, sales and marketing personnel,
industry analysts, middle-level managers, buyers and other industry professionals.

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 historical growth in
B-to-B publishing has been driven primarily by rising levels of advertising spending as opposed to growth in subscription revenues.

As
reported by the December 2004 American Business Media report, the current upturn in marketing and advertising was driven by the telecommunications; drugs and toiletries; and
finance, business & advertising. Advertising pages in these sectors increased 9.2%, 6.4%, and 3.1%, respectively, in 2004 from 2003 levels.

Product Segments

Our business is grouped in three broad segments reflecting products and services we provide to our customers to serve their marketing and their customers' 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 direct marketing products and other. See footnote 12 to our Consolidated Financial Statements for
information regarding the breakdown of revenue, profit, and assets by segment.

Trade Shows and Conferences

As of December 31, 2004, we owned and managed 54 trade shows and 40 standalone conferences for business, professional and consumer audiences worldwide,
most of which were among the leading

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events
in their respective markets based on square footage. Six of our largest trade shows are listed in the April 2004 issue ofTradeshow Week
200'slist of the top 200 trade shows as measured by total square footage. These included MAGIC Fall, MAGIC Spring, International Powersports Dealer Expo, AIIM Conference and
Expo, International Beauty Show New York and Licensing International. Additionally, we own Telexpo, which we believe is the largest telecommunications trade show in Latin America. Collectively, these
seven trade shows represented 2.7 million of the 4.5 million total square footage of all our trade shows for the year ended December 31, 2004.

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 40%, 46% and 50% of our revenue in 2004, 2003 and 2002.

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

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

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

Trade Publications

We are the second largest B-to-B trade publisher in the United States as measured by advertising pages in 2004. As of December 31,
2004, we published 77 specialized business magazines and professional journals, five electronic magazines, one consumer publication, 22 directories and several other customized publications. Of our 67
magazines and journals for which competitive data is available, 76% ranked either #1 or #2 in their respective markets, based on the number of advertising pages in the year ended December 31,
2004.

Our
publications are generally distributed free-of-charge to qualified professional recipients and generate revenues predominantly from advertising. Trade
publications revenue accounted for approximately 44%, 48% and 54% of our total revenue in 2002, 2003 and 2004. Our largest publications based on revenue includeDental Product
Reports, Medical Economics, Travel Agent, Home Media Retailer(formerlyVideo Store Magazine),Drug
Topics, RN, Pharmaceutical
Technology, American Salon, DVM -The News Magazine of Veterinary MedicineandMotor Age.Collectively these 10
magazines represented 37% of trade publication revenue and 33% of total advertising pages of all our publications for the year ended December 31, 2004.

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

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average
rate charged by publications aimed at more general audiences. We believe that our targeted circulation lists for our U.S. and international publications provide our advertising customers with
a cost-effective method of reaching their target market's decision-makers. We seek to increase advertising revenues by introducing existing advertisers to new titles, by attracting new
advertisers who target our readership and by developing new reader and advertising categories.

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

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

Direct Marketing Products and Other

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

Direct
marketing products and other group is centrally managed, thus, allowing our trade show and publishing executives to dedicate their activities to high value sales. In addition, our
central telesales and product management provide professional skills to these specialized product offerings. Direct marketing products and other accounted for approximately 6% of our revenue in each
of 2002, 2003, and 2004.

Internet

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

Industry Sectors

We also operate our business by targeting a number of industry sectors in North America, Latin America, Europe and Asia through certain niche markets grouped
together in five core clusters: Fashion; Specialty Retail; Healthcare, Science & Pharmaceutical; Information Technology & Communication; and Travel & Hospitality. For financial
information relating to Advanstar's operations by geographic area see Note 12 to our consolidated financial statements for the year ended December 31, 2004. In addition to our five core
clusters, we have grouped the industry sectors in which we provide products and services but do not have a significant industry presence into a "Portfolio" cluster. We believe that by focusing on
industries in addition to product segments, we better identify the broad array of our customers' 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 direct marketing products to reach their buyers. We have expanded our trade show, conference and

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publication
offerings within each cluster through new product introductions and strategic acquisitions, which we believe maximize our existing marketing and customer service infrastructure and
industry expertise.

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

GRAPHIC

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Business Strategy

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

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 67 magazines and journals for
which competitive data is available, 76% ranked either #1 or #2 in their respective niche markets in the year ended December 31, 2004. 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 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 communication methods to attain their specific 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 Advanstar.com.

Launch New Products and Services Within Existing Industry Sectors

We have successfully developed new products within existing industry sectors and will continue to make strategic new product introductions. In 2004, we launched
four magazines and six trade shows in our existing industry sectors to fill in our product portfolio. Our launches are generally line extensions, regional expansions or entries into adjacent markets
of existing product concepts, and, as a result, such product launches generally require less capital investment and are less risky than major new product introductions.

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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. 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, 2004,
we completed 38 acquisitions and joint ventures. On March 8, 2004, we purchased a portfolio of pharmaceutical industry specific magazines and conferences from the Institute of Validation
Technology, Inc. ("IVT") for $7.9 million in cash. See Item 7. "Management's Discussion and Analysis of Financial Condition and Results of OperationsPresentation of
Financial InformationAcquisitions and Joint Ventures." Consistent with our strategy since 1996, we are engaged in ongoing evaluations of potential acquisitions of complementary
businesses.

Industry Sectors

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

Fashion

Our Fashion group serves the men's, women's and children's industries. In 2004, we operated in these industry sectors through 14 trade shows. Five trade shows
held concurrently in Las Vegas twice annually constitute the foundation of our apparel market position:



The
following table sets forth information relating to trade shows in our Fashion group in the year ended December 31, 2004. We currently have no publications in this group.

Fashion Events

ExhibitionsSector

Number

2004
Net Square
FootageMens (includes Edge)

4

1,289,929Womens

4

546,790Kids

2

52,288Fabric

4

68,550


Specialty Retail

We served the Specialty Retail sector through 23 trade shows, two conferences and 12 publications for the year ended December 31, 2004. This group includes
the beauty, entertainment/marketing and motor vehicles sectors.

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Key
trade shows and publications include:



In
2004, we launched our first consumer-based magazine,DIRTsports,the only consumer magazine covering the off-road motor
sports market.

The
following table sets forth information relating to trade shows, conferences and magazines in our Specialty Retail cluster in the year ended December 31, 2004:

Specialty Retail Events and Magazines

|                        |  | Exhibitions |  | Conferences |  | Magazines(1)
|----------------------- |  | ----------- |  | ----------- |  | ------------
|
|Beauty                  |  | 2           |  | 167,280     |  |            
|Entertainment/Marketing |  | 5           |  | 321,294     |  | 2           
|Motor Vehicle           |  | 16          |  | 1,270,388   |  |            

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Healthcare, Science & Pharmaceutical

We serve the Healthcare, Science & Pharmaceutical sector by providing marketing products and services to these three related sectors with six trade shows,
23 conferences and 42 publications for the year ended December 31, 2004. We serve the healthcare sector in both the 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, conferences and magazines in our Healthcare, Science & Pharmaceutical group in the year ended
December 31, 2004:

Healthcare, Science & Pharmaceutical Events and Magazines

|               |  | Exhibitions |  | Conferences |  | Magazines(1)
|-------------- |  | ----------- |  | ----------- |  | ------------
|
|Healthcare     |  | 6           |  | 172,450     |  | 2           
|Pharmaceutical |  |            |  | N/A         |  | 19          
|Science        |  |            |  | N/A         |  | 2           

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Information Technology & Communications

Our Information Technology & Communications group serves the information technology, telecommunications, engineering and manufacturing technology, and call
center industries. For the year ended December 31, 2004, we operated in these industry sectors through 9 trade shows, 14 conferences and 12 publications. Our focus in the information technology
market is data storage, digital printing and digital media. Additionally, we have a worldwide presence in trade shows and magazines serving the telecommunications industry, and also serve markets for
web-based collaboration and e-learning, and call centers.

Key
trade shows, conferences and publications include:



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The
following table sets forth information relating to trade shows, conferences and magazines in our Information Technology & Communications cluster in the year ended
December 31, 2004:

Information Technology & Communications Events and Magazines

|                       |  | Exhibitions |  | Conferences |  | Magazines(1)
|---------------------- |  | ----------- |  | ----------- |  | ------------
|
|Call Center/CRM        |  | 3           |  | 42,100      |  | 10          
|Information Technology |  | 5           |  | 211,600     |  | 2           
|Telecommunications     |  | 1           |  | 162,067     |  | 2           

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Travel & Hospitality

We served the travel and hospitality sector through two trade shows, one conference, five publications, one electronic magazine, and several custom published
products in the year ended December 31, 2004.

Selected
publications and tradeshows include:



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The following table sets forth information relating to trade shows, conferences and magazines in our Travel & Hospitality cluster in the year ended December 31, 2004:

Travel & Hospitality Events and Magazines

Exhibitions

Conferences

Magazines(1)Sector

Number

2004
Net Square
Footage

Number

Number

2004
Ad Pages

Number of
our magazines ranked
#1 or #2(2)Travel

2

103,500



5

3,772

2 of 3Hospitality



N/A

1

1

1,002

1 of 1


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Portfolio

We group the balance of our products and services into a Portfolio group charged with maximizing revenue and cash flow opportunities from these disparate
properties. The Portfolio cluster addresses market sectors in which we provide selected products and services but do not have a significant presence. Markets currently served include energy,
geospatial, landscaping/pest control, mining, paper and roofing sectors. We deliver our B-to-B marketing communications products and services to our customers in these industry
sectors through 11 publications.

The
following table sets forth information relating to magazines in our Portfolio cluster in the year ended December 31, 2004:

Portfolio Magazines

Magazines(1)Sector

Number

2004
Ad Pages

Number of
our magazines ranked
#1 or #2(2)Energy

1

410

1 of 1GeoSpatial

3

441

1 of 2Landscape/Pest Control

3

2,134

3 of 3Mining

1

520

1 of 1Paper

2

841

2 of 2Roofing

1

394

1 of 1


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Company Operations

Trade Shows and Conferences

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. Because event revenue is recognized when a particular event is held, we may also experience fluctuations in quarterly revenue
based on the movement of trade show dates from one quarter to another.

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The
sales cycle for a future trade show typically begins during the current show. Pricing information, preliminary floor plans and exhibitor promotion for the future show are made
available at 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 for the future show. At some of our trade shows, reservations for a large portion of exhibit space for the next event is reserved by the end of the current event. The sales cycle continues
with selling to new exhibitors and collecting the balance of payments due. In general, we require exhibitor payments in full prior to a trade show as a condition to participation.

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

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

In
operating trade shows and conferences, we function in a capacity similar to a general contractor. We select and manage venues, hotels, and vendors for set-up,
registration, travel and housing, audio-visual services and other services. In many cases, venue and hotel reservations are made several years in advance, particularly for primary markets such as New
York, Chicago, Las Vegas, Los Angeles and San Francisco. While the production of a show may involve hundreds of workers, most workers are employees of our subcontractor vendors.

Trade Publications

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

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

Our
advertising sales and editorial functions are dispersed throughout North America, Asia, Europe and Brazil. Advertising sales are predominantly conducted by our dedicated sales force.

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Editorial
content for our publications is either staff-written, contributed or purchased from freelance writers and industry or professional participants in selected markets.

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

Internet

We use Internet based products and services to complement our delivery of trade show, publishing and direct marketing products and other 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.

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 direct marketing products and other. 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
or industry sector, in some cases, our competitors operate in several geographic markets and/or sectors. 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 play an
important competitive role. 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

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extensive.
In the publications segment, we typically have between two and five direct competitors, which target the same industry sector, and there are also numerous indirect competitors, which define
industries differently than we do and thus provide 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.

Environmental Matters

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

Employees

As of December 31, 2004, we had approximately 1,400 full-time equivalent employees. Of these full-time employees, approximately 110
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 12 to our consolidated financial statements included in this
annual report on Form 10-K.

Item 2.PROPERTIES

Properties

We have executive, marketing, sales and editorial offices in several cities in the United States, including Newton and Concord, Massachusetts; Chicago and
Northfield, Illinois; Cleveland, Ohio; Iselin and Montvale, New Jersey; Peterborough, New Hampshire; Milford, Connecticut; New York City, New York; Santa Ana and Woodland Hills, California; and
Lenexa, Kansas. In addition, we have offices in São Paulo, Brazil; Hong Kong, China; and Chester and London, United Kingdom. Our finance, trade

16

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show
registration, call center, circulation, fulfillment, production and other necessary operational support facilities in the United States are located in Duluth, Minnesota.

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

Item 3.LEGAL PROCEEDINGS

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

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

No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year ended December 31, 2004.

17

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PART II

Item 5.MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND
                ISSUER PURCHASES OF EQUITY SECURITIES

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

Item 6.SELECTED FINANCIAL DATA

The following table presents selected consolidated financial data for Advanstar and its predecessor for each of the periods indicated. The selected historical
consolidated financial data for Advanstar's predecessor for the period January 1, 2000 through October 11, 2000 has been derived from the audited consolidated financial statements and
notes thereto of the predecessor for those periods, which are not included herein. The consolidated balance sheet data as of December 31, 2000, 2001 and 2002 and the selected historical
consolidated financial data for Advanstar for the period October 12, 2000 through December 31, 2000 and for the year ended December 31, 2001 have been derived from the audited
consolidated financial statements and the notes thereto of Advanstar which are not included herein. The selected consolidated financial data for Advanstar for the years ended December 31, 2002,
2003 and 2004 have been derived from Advanstar's audited financial statements and the notes thereto included herein. The combined financial data for the combined year ended December 31, 2000
has been derived from the audited consolidated financial statements and notes thereto of the predecessor and Advanstar but has not been audited and does not comply with generally accepted accounting
principles. The selected historical consolidated financial data should be read in conjunction with Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" and
the consolidated financial statements and notes thereto included elsewhere in this Annual Report.

18

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|                                                                                                                            |                                       | Advanstar            |         | Predecessor |        
|--------------------------------------------------------------------------------------------------------------------------- | ------------------------------------- | -------------------- | ------- | ----------- | -------
|
|
|
|Income Statement Data:                                                                                                      |                                       |                      |         |             |        
|Revenue                                                                                                                     |                                       | $                    | 380,471 |             | $      
|Cost of production and selling                                                                                              |                                       |                      | 240,389 |             |        
|General and administrative expenses                                                                                         |                                       |                      | 45,817  |             |        
|Stock option compensation benefit(1)                                                                                        |                                       |                      |        |             |        
|Restructuring charge(2)                                                                                                     |                                       |                      | (4,015  | )           |        
|Depreciation and amortization(3)                                                                                            |                                       |                      | 50,170  |             |        
|                                                                                                                            |                                       |                      |         |             |        
|Operating income (loss)                                                                                                     |                                       |                      | 48,110  |             |        
|Other income (expense):                                                                                                     |                                       |                      |         |             |        
|                                                                                                                            | Interest expense                      |                      |         | (91,353     | )      
|                                                                                                                            | Write-off of deferred financing costs |                      |         |            |        
|                                                                                                                            | Other income (expense), net           |                      |         | 375         |        
|                                                                                                                            |                                       |                      |         |             |        
|(Loss) income from continuing operations before income taxes, minority interests and cumulative effect of accounting change |                                       |                      | (42,868 | )           |        
|Provision (benefit) for income taxes                                                                                        |                                       |                      | 13,954  |             |        
|Minority interests                                                                                                          |                                       |                      | (562    | )           |        
|                                                                                                                            |                                       |                      |         |             |        
|Loss from continuing operations before cumulative effect of accounting change                                               |                                       |                      | (57,384 | )           |        
|                                                                                                                            |                                       |                      |         |             |        
|(Loss) income from operations of discontinued business                                                                      |                                       |                      | (9,743  | )           |        
|                                                                                                                            |                                       |                      |         |             |        
|Loss before cumulative effect of accounting change                                                                          |                                       |                      | (67,127 | )           |        
|Cumulative effect of accounting change, net of tax and minority interests                                                   |                                       |                      |        |             |        
|                                                                                                                            |                                       |                      |         |             |        
|Net loss                                                                                                                    |                                       | $                    | (67,127 | )           | $      
|                                                                                                                            |                                       |                      |         |             |        
|Cash flows provided by (used in):                                                                                           |                                       |                      |         |             |        
|                                                                                                                            |                                       | Operating activities |         | $           | 18,550 
|                                                                                                                            |                                       | Investing activities |         |             | 4,996  
|                                                                                                                            |                                       | Financing activities |         |             | (12,515
|Balance sheet data (at end of period):                                                                                      |                                       |                      |         |             |        
|Cash and cash equivalents                                                                                                   |                                       | $                    | 41,328  |             | $      
|Working capital(4)                                                                                                          |                                       |                      | (70,658 | )           |        
|Total assets                                                                                                                |                                       |                      | 914,910 |             |        
|Total debt                                                                                                                  |                                       |                      | 753,319 |             |        
|Total stockholder's equity                                                                                                  |                                       |                      | 26,223  |             |        
|Other Data:                                                                                                                 |                                       |                      |         |             |        
|Capital expenditures                                                                                                        |                                       | $                    | 9,576   |             | $      
|Ratio of earnings to fixed charges (5)                                                                                      |                                       |                      |        |             |        

---

19

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Advanstar

Predecessor2004

2003

Year Ended
December 31,
2002

2001

Combined
2000

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

For the period
from January 1,
2000 through
October 11,
2000(unaudited)(dollars in thousands)





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

$
(67,127
)
$
(70,144
)
$
(51,262
)
$
(72,408
)
$
(36,294
)
$
(22,136
)
$
(14,158
)Add: goodwill amortization, net of tax











22,738


22,758


7,308


15,450Adjusted income (loss) before cumulative effect of accounting change

$
(67,127
)
$
(70,144
)
$
(51,262
)
$
(49,670
)
$
(13,536
)
$
(14,828
)
$
1,292Reported net income (loss)

$
(67,127
)
$
(70,144
)
$
(118,079
)
$
(72,960
)
$
(36,294
)
$
(22,136
)
$
(14,158
)Add: goodwill amortization, net of tax











22,738


22,758


7,308


15,450Adjusted net income (loss)

$
(67,127
)
$
(70,144
)
$
(118,079
)
$
(50,222
)
$
(13,536
)
$
(14,828
)
$
1,292


20

---



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

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

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

Overview

We are a worldwide provider of integrated B-to-B marketing communications products and services for targeted industry sectors, principally
through trade shows and conferences and through controlled circulation trade, business and professional magazines. We also provide a broad range of other direct marketing 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 direct marketing products and other, 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 direct marketing products and other segment.

Trade
shows and conferences accounted for approximately 40%, 46% and 50% of total revenue in 2004, 2003 and 2002, respectively. Trade publications accounted for approximately 54%, 48%
and 44% of total revenue in 2004, 2003 and 2002, respectively, while direct marketing products and other accounted for approximately 6% of total revenue in 2004, 2003 and 2002. Publication revenue has
increased as a percentage of total revenue in 2004 primarily as a result of our acquisition of a group of certain healthcare publications in October 2003. Our revenue reaches its highest levels
during the first and third quarters of the year due to the timing of our MAGIC trade shows and our other large trade shows and conferences. Because trade show and conference revenues are recognized
when a particular event is held, we may experience fluctuations in quarterly revenue based on the movement of trade show dates from one quarter to another.

Trends and Developments

The level of marketing and advertising spending remains variable across the eighteen industry sectors served by our trade shows and publications.

Our
trade shows and conferences continued to perform well in 2004. Our MAGIC, License and Home Entertainment events posted gains in square footage and revenue over 2003. Our Powersports
motorcycle events also increased revenue significantly over last year. Our trade shows serving technology markets continue to struggle but our revenues from Sensorsevent in the system design and
engineering markets began to stabilize after three years of declines. We were encouraged by the attendee activity
and exhibitor interest in our AIIM and On Demand expos serving the digital information and document management markets. Our recently acquired IVT conferences, which

21

---



address
FDA validation and compliance issues for the pharmaceutical industry, have performed better than our expectations.

The
primary driver of the growth of our publishing segment in 2004 came from the acquisition of the healthcare properties from Thomson. Our legacy healthcare and pharmaceutical
publications continued to do well in 2004. Our healthcare publications we recently acquired from Thomson are now part of a fully integrated healthcare group organized by primary care, specialty care,
promotional special projects
and CME special projects. Trade advertising across our other market sectors grew in 2004 over 2003 with the exception of our technology and travel sectors, which continue to struggle.

We
have identified new opportunities and initiatives that we will be pursuing in 2005, including opportunities to expand customer relationships and our market position in our MAGIC
events and the development of a stand alone Continuing Media Education business and other diversified customer offerings in our healthcare sector. We are also investing in a significant new product
development initiative in our Powersports group with the launch of two new publications and tradeshows in the dirt sports and off-road truck markets.

Presentation of Financial Information

Acquisitions, Joint Ventures and Divestitures

Between May 31, 1996 and December 31, 2004, we completed 38 acquisitions and joint ventures, four of which were completed in 2002, one in 2003 and
one in 2004.



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

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

In
the first quarter of 2004, we sold our portfolio of art industry trade shows and magazines for a total sales price of $19.6 million in cash ("Art Group"). In total, the
portfolio included three trade shows, with 186,216 aggregate square feet in 2003, and two publications, with 944 aggregate advertising pages in 2003. Total revenue and contribution margin for the Art
group in 2003 was $10.9 million and $3.1 million, respectively.

In
the second quarter of 2004, we sold our 65% ownership in our French joint venture ("SeCA"), which consisted of one trade show for $3.1 million in cash. In conjunction with our
sale of SeCA we recorded a goodwill impairment charge of $9.4 million, net of minority interest. Total revenue and contribution margin for SeCA, net of minority interest, in 2003 were
$2.6 million and $1.1 million, respectively.

22

---



In
the third quarter of 2004, we sold our German trade show business ("DMS") for $1.7 million in cash. As a result of the sale of DMS we recorded a goodwill impairment of
$6.2 million. Total revenue and contribution margin for 2003 were $2.0 million, and $0.5 million.

We
will continue to explore the divestiture of certain assets as we focus our portfolio on areas we believe offer the best potential for growth.

Private Placement of Second Priority Senior Secured Notes and Refinancing of Credit Facility

In August 2003 our wholly owned subsidiary, Advanstar Communications Inc., amended its Credit Facility to permit the issuance of
$360.0 million of second priority senior secured notes and the use of the proceeds thereof, eliminate the leverage ratio covenant, amend certain other covenants contained in the Credit Facility
and reduce the revolving loan commitments thereunder from $80 million to $60 million. We recorded an expense of $11.3 million in the third quarter of 2003 to reflect the
write-off of deferred financing costs related to the term loans, which were repaid with the proceeds of the offering. Our interest expense and cash interest is higher as a result of this
refinancing. In addition, we reclassified $1.8 million of deferred losses related to our interest rate collar and swap agreements previously reported as a component of accumulated other
comprehensive income into other expenses in the third quarter of 2003.

In
September 2003, Advanstar Communications, Inc. issued $70 million of second priority senior secured notes and used the net proceeds to repay approximately
$12 million of outstanding borrowings under its revolving Credit Facility and to purchase short-term investments pending completion of the Thomson acquisition. On October 1,
2003, Advanstar Communications, Inc. used $136.5 million in cash, including $56 million of the net proceeds of the second priority senior secured notes to finance the Thomson
acquisition.

23

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Sources of Revenue

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 our events. In
2004, approximately 77.1% of our trade shows and conferences revenue was from the sale of exhibit space. Events are generally held in major metropolitan or convention areas such as New York City and
Las Vegas. At many of our trade shows, a portion of exhibit space is reserved as much as a year in advance. The sale of exhibit space is generally impacted by the ongoing quality and quantity of
attendance, venue selection and availability, industry cycle and general market conditions. Revenue and related direct event expenses are recognized in the month in which the event is held. An event
is billed and cash is collected in advance and is recorded on our consolidated balance sheet as deferred revenue until the event has been held.

Trade Publications

The trade publications segment derives revenue principally from the sale of advertising in our B-to-B magazines. Additionally, certain
publications derive revenue from paid subscriptions and custom publishing and projects. Paid subscriptions comprise less than 3% of total publishing revenue. Most publications are produced monthly
with advertising sold on either a scheduled or 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. Custom project contract revenue with both
conference and print elements are deferred and not recognized until all elements are delivered. Customer advances are recorded when cash is received in anticipation of future advertising unrelated to
a specific publication issue.

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.

Direct Marketing Products and Other

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

Components of Expenses

Trade Shows and Conferences

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

24

---



and
sales staff costs, and production, editorial and circulation staff costs, with related payroll taxes and benefits, are charged to the publications segment. We outsource the actual printing of our
publications. Printing, paper and postage costs are charged to operations at the time of publication issuance. All other direct costs are charged to operations in the month incurred.

Direct Marketing Products and Other

Costs of the direct marketing products and other segment include printing and distribution costs, database administration fees and selling and product development
staff costs. All direct costs are expensed when incurred.

Significant Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and judgments that affect
the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate these estimates, including those related to bad debts, recoverability of intangible assets and
realizability of deferred income tax assets. 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

Revenue is recognized as discussed in the "Sources of Revenue" section above. The balance of deferred revenue at December 31, 2004 was
$42.1 million, $10.3 million and $0.1 million for trade shows and trade publications, and internet activities, 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 the MAGIC trade shows and our other large trade shows and conferences.

Allowance for Doubtful Accounts

We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The balance of the
allowance for doubtful accounts at December 31, 2004 and 2003 was $0.8 million each. 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 non-specific identification 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 judgment, based on the best available facts and circumstances, to
determine if a specific reserve for that customer's receivable is warranted. These specific reserves are reevaluated and adjusted as additional information is received that impacts the amount
reserved. We also establish a non-specific identification reserve for all customers based on historical percentages applied to customer balances depending on the age of the amount due.
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

25

---



recoverability
would be accounted for in the period in which the facts that give rise to the change become known.

Deferred Taxes

Pursuant to the requirements of SFAS No. 109, we record a valuation allowance to reduce our deferred tax assets to the amount that we determine is more
likely than not to be realized. At December 31, 2004, we have recorded a valuation allowance to offset the deferred tax benefit associated with all of our U.S. and foreign net operating loss
carryforwards because the realization of these benefits is not considered likely based upon our history of not generating taxable income to utilize these tax benefits. 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 excess of our net recorded amount, a reduction in the valuation allowance would result in an income tax benefit and would increase net income or reduce net loss in
the period such determination was made. In addition to the deferred tax assets, which are fully reserved, we have established a deferred tax liability based upon the excess of the carrying value of
our goodwill for financial reporting purposes over the tax basis of this goodwill. We establish this liability because we do not amortize goodwill for financial reporting purposes but we do amortize
goodwill for tax reporting purposes.

Amortization of Intangible Assets

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

Impairment of Long-Lived Assets

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

In
accordance with the provisions of SFAS No. 142, we evaluate goodwill for impairment using a two-step test based upon a fair value approach. The first step is used
to identify a potential impairment by comparing the carrying value of the net assets of each reporting unit to an estimate of the fair value of each of our reporting units (as defined by SFAS
No. 142), while the second step calculates the amount of impairment, if any. Additionally, goodwill will be tested for impairment between annual tests if an event occurs or circumstances change
that would more likely than not reduce the fair value of an entity below its carrying value. We determine the fair value of our reporting units by application of a discounted cash flow analysis. If
circumstances change, our estimates of fair value will also change and could result in a determination that additional impairment charges to reduce the carrying value of goodwill are necessary. We
engaged an appraiser to assist us in completing the first step of our annual goodwill impairment test for each of our three reporting units as of July 1, 2004. Based on this first

26

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step
test there was no impairment of goodwill indicated. Goodwill is allocated by segment based on fair market value.

Results of Operations

2004
COMPARED TO 2003

Revenue

Total revenue increased $71.5 million, or 23.1%, to $380.4 million in 2004 from $309.0 million in 2003.

Revenue
from trade shows and conferences increased $9.4 million, or 6.6%, to $151.5 million in 2004 from $142.1 million in 2003. Our MAGIC event grew by more than
138,000 square feet or 8.4% over 2003 and revenue increased approximately 8.2% over last year. The MAGIC events were successfully combined into a single venue, the Las Vegas Convention Center,
beginning with the August 2004 event. The concentration and proximity of the various fashion sectors contributed to increased attendance and exhibitor interest and participation in MAGIC.
Powersports events' revenue increased approximately 14.7% over 2003 with the 15th year of growth in our Dealer Expo, solid performance from the IMS Tour series of consumer events and the
launch of a west coast event for the v-twin market segment. Revenue also increased approximately $7.3 million due to acquisitions of the Central Veterinary Conference in
October 2003, and the IVT pharmaceutical conferences in March 2004. Strong performances also came from our trade shows serving the home entertainment, licensing, and travel markets.
Additionally, we launched six new events in the fashion, pharmaceutical, licensing, luxury travel, and technology sectors. The increase in revenues was partially offset by holding five fewer events in
the beauty and technology markets in 2003, the sale of certain UK events in December 2003 and much weaker results from our east-coast fashion and technology events in 2003.

Revenue
from publications increased $58.3 million, or 39.4%, to $206.1 million in 2004 from $147.9 million in 2003. Approximately $55.0 million, or 94%, of
the increase is due to the acquisitions of healthcare properties from Thomson and pharmaceutical publications from IVT. Revenue growth also reflects strong results from Advanstar's specialty
healthcare and pharmaceutical publications,DVM,Motor Age,Home Media
Retailing(formerlyVideo Store Magazine),CADalyst, and American Spa, as well as
the introduction of several new products. Revenue increases for the year were partially offset by weaker results from our
travel publications and the sale of select UK publications. Advanstar's advertising pages increased 20.8% for the year, primarily due to the properties acquired from Thomson. Advertising pages
increased 4.6% over 2003 for all publications other than those acquired or sold during 2003 or 2004.

Revenue
from direct marketing products and other increased $3.8 million, or 20.0%, to $22.8 million in 2004 from $19.0 million in 2003 primarily due to higher levels
of classified and recruitment advertising and strong list sales and reprints, primarily from the acquisition of properties from Thomson.

Cost of production and selling

Cost of production and selling expenses increased $48.7 million, or 25.4%, to $240.4 million in 2004 from $191.7 million in 2003.

Expenses
of trade shows and conferences increased $2.9 million, or 3.9%, to $75.7 million in 2004 from $72.8 million in 2003. Expenses increased $6.5 million
due to the acquired healthcare conferences, the IVT acquisition, and product launches. These increases were partially offset by holding fewer events in the beauty and technology markets and the sale
of certain UK events in December 2003, as discussed above. There were no significant increases in venue pricing during the year.

27

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Expenses
of trade publications increased $44.1 million, or 43.0%, to $146.8 million in 2004 from $102.7 million in 2003. This increase is primarily attributable to
additional costs of $41.6 million associated with our acquisition of the Thomson healthcare properties. The increase in expenses was partially offset by the cost savings from the sale of
certain UK properties in December 2003. Printing prices increased slightly from 2003. We have indications that printing prices will increase 2% in 2005 and paper prices will increase
approximately 14% in 2005 primarily in the first and third quarters. Postal rates are expected to be unchanged for 2005 but we anticipate cost increases will occur sometime in 2006.

Expenses
of direct marketing products and other increased $0.5 million, or 4.6%, to $11.3 million in 2004 from $10.7 million in 2003 due to related growth in
revenues.

Department
and support costs of $6.6 million increased $1.2 million from 2003 to higher departmental production staff costs related to support of the publications acquired
from Thomson and additional staff related to the launches of publications serving the powersports market.

General and administrative expenses

General and administrative expenses increased $10.5 million, or 29.8%, to $45.8 million in 2004 from $35.3 million in 2003. The increase
reflects higher administrative costs relating to the acquisition of properties from Thomson and related investments in the management team in the healthcare group, as well as a $1.5 million
employee compensation payment related to the IVT acquisition, increased employee healthcare costs, expenses relating to Sarbanes-Oxley compliance and implementation and consulting costs related to
strategic management and marketing initiatives.

Restructuring charge

In March 2001, we announced plans to more tightly focus the activities of our wholly owned subsidiary Advanstar.com, Inc. (Advanstar.com). These
plans had the effect of more closely integrating many of the sales, marketing, technology and operating functions of Advanstar.com with Communications and its core activities in publishing, tradeshows
and direct marketing products and other. The restructuring activities were completed by the end of 2001, except for facility lease costs which were to continue through June 2010. In
April 2004, we settled the remaining facility lease commitment for a total of $1.9 million, resulting in an offset to operating expense of $4.0 million as we released the
remaining accrual. The buyout saved approximately $5.0 million in future lease payments through June 2010.

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

Depreciation and amortization

Depreciation and amortization expense declined approximately $7.6 million to $50.2 million in 2004 from $57.7 million in 2003 primarily due
to the effect of the double declining balance method of accelerated amortization on our exhibitor and advertiser lists partially offset by additional amortization expense related to the assets
acquired in the acquisitions of the healthcare properties from Thomson and the pharmaceutical publications from IVT.

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Interest expense

Interest expense increased $15.4 million, or 20.3%, to $91.4 million in 2004 from $75.9 million in 2003 due to an increase in our
weighted-average debt outstanding of approximately $65.7 million, as a result of Communications' issuance of $360 million of Senior Secured Notes in August 2003 and
$70 million Senior Secured Notes in September 2003. The increase was offset by a decrease in our debt outstanding under the Credit Facility due to the repayment, in August 2003 of
all but $25 million of the outstanding term B loans and a portion of our revolving credit borrowings under our Credit Facility. See "Presentation of Financial Information-Private Placement of
Second Priority Senior Secured Notes and Refinancing of Credit Facility."

At
December 31, 2004, approximately $599.9 million, or 79.5% of our total debt is at a fixed rate with the balance of our debt subject to interest rate fluctuations. A 100
basis point increase in interest rates on our current variable rate debt would result in an increase in annual interest expense of $1.5 million. We previously entered into an interest rate
collar agreement to hedge our interest rate risk on these variable rate borrowings. The agreement expired in February 2004 and we currently have no plans to renew this interest rate collar
agreement or otherwise hedge our interest expense related to our remaining floating rate debt.

Write-off of deferred financing costs

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

Other income (expense), net

Other income increased $0.2 million to $0.4 million in 2004 from $0.1 million in 2003. This increase is attributable to gains associated with
our interest rate protection agreement, which expired in February 2004, and foreign currency translation gains.

Provision (benefit) for income taxes

The provision for income taxes was $14.0 million in 2004 compared to $4.3 million in 2003. The 2004 and 2003 provision is related to a basis
difference resulting from goodwill for tax purposes being less than the carrying value of goodwill for financial reporting purposes and income taxes in certain foreign jurisdictions. We recorded no
income tax benefit related to the net operating losses we generated during 2004 and 2003 because we have established a valuation allowance to offset any related tax benefits, due to uncertainty about
realization of these benefits.

Discontinued operations

In conjunction with the sale of the Art Group in the first quarter of 2004, we recorded a gain on the sale of $1.0 million plus a tax benefit of
$2.4 million. The Art Group generated $4.4 million of income before income taxes for the period from January 1, 2004 to March 12, 2004 and $2.1 million in 2003.

In
the second quarter of 2004, in conjunction with our sale of SeCA we recorded a goodwill impairment charge of $9.4 million. SeCA generated an $8.7 million loss before
income taxes, net of minority interest, in 2004 and income of $0.4 million in 2003.

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In
the third quarter of 2004, as a result of the sale of DMS we recorded goodwill impairment as a component of discontinued operations of $6.2 million. DMS generated a loss before
income taxes of $7.6 million in 2004, and income of $0.1 million in 2003.

See
further information regarding discontinued operations of the Art Group, SeCA and DMS in "Presentation of Financial InformationAcquisitions, Joint Ventures
and Divestitures."

2003
COMPARED TO 2002

Revenue

Total revenue increased $17.1 million, or 5.9%, to $309.0 million in 2003 from $291.8 million in 2002.

Revenue
from trade shows and conferences declined $3.9 million, or 2.7%, to $142.1 million in 2003 from $146.0 million in 2002. Total trade shows square footage of
4.5 million square feet declined approximately 6.2% from 2002 while price per square foot increased 1.9%. The decline in revenue was attributable primarily to the performance of our events in
the technology sector. Revenue from our events serving the technology sector declined $10.5 million, or 26.5%, from 2002, including the discontinuation of seven events held in 2002. Technology
events made up approximately 14% of our total square footage and 14% of total trade show revenue in 2003. Total trade show square footage for non-technology events was essentially flat,
declining 1.1%, while revenue increased 5.4% in 2003 over 2002. Revenue for our MAGIC events increased approximately 4.2% over 2002. Strong performances also came from our trade shows serving the
beauty, home entertainment, licensing, travel and powersports markets.

Revenue
from publications increased $20.5 million, or 16.1%, to $147.9 million in 2003 from $127.4 million in 2002. The acquisitions of the Thomson healthcare
publications in October of 2003 andHealthcare Travelerin October of 2002 resulted in a revenue increase of approximately $23.8 million between
2002 and 2003. Publications in a wide cross section of our markets continued their solid recovery from the declines experienced in 2002, particularly those serving the beauty, healthcare, home
entertainment, licensing, pharmaceutical, science, golf/landscape, veterinary and automotive markets. Revenue from technology and travel publications declined $10.3 million, or 26%, from 2002
as advertising pages continued to decline in these markets.

Revenue
from direct marketing products and other increased $0.5 million, or 2.9%, to $19.0 million in 2003 from $18.5 million in 2002 primarily due to strong list
sales.

Cost of production and selling

Cost of production and selling expenses increased $14.5 million, or 8.2%, to $191.7 million in 2003 from $177.2 million in 2002.

Expenses
of trade shows and conferences increased $3.3 million, or 4.7%, to $72.8 million in 2003 from $69.6 million in 2002. This increase is primarily due to the
impact of a $2.8 million insurance recovery received in the last half of 2002 and reported as a reduction of our 2002 costs, and a $1.8 million fourth quarter charge in 2003 related to
our decision to cancel certain venue space arrangements. We also invested in additional development staff and show programs for our MAGIC events to expand our product categories and continue to build
the attendee base. These increases were partially offset by cost savings associated with canceling certain events in 2003.

Expenses
of trade publications increased $10.8 million, or 11.8%, to $102.7 million in 2003 from $91.8 million in 2002. This increase is attributable to additional
costs of $14.1 million associated with our acquisition of the Thomson healthcare properties in October 2003 and ofHealthcare Traveler,in
October 2002. The increased operating costs were partially offset by reductions in sales, editorial and

30

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

Expenses
of direct marketing products and other declined $0.2 million, or 1.9%, to $10.8 million in 2003 from $11.0 million in 2002, primarily due to reduction in
internet sales and marketing costs.

Department
and support costs of $5.4 million increased $0.6 million from 2002 due to increased departmental production staff related to the Thomson acquisition.

General and administrative expenses

General and administrative expenses remained stable at $35.3 million in 2003 and 2002 The increase in staffing and occupancy costs related to the
acquisition of properties from Thomson and was offset by cost savings as a result of lower bad debt expense and a reduction in credit card processing fees.

Depreciation and amortization

Depreciation and amortization expense declined approximately $13.2 million to $57.7 million in 2003 from $70.9 million in 2002 primarily due
to the effect of the double declining balance method of accelerated amortization on our exhibitor and advertiser lists partially offset by an additional $6.2 million of amortization expense
related to the assets acquired in our October 2003 acquisition of the Thomson publications.

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Interest expense

Interest expense increased $9.5 million, or 14.4%, to $75.9 million in 2003 from $66.4 million in 2002 due to an increase in our
weighted-average debt outstanding of approximately $27.1 million and an increase in our weighted average interest rate of approximately 100 basis points as a result of our financings discussed
at "Presentation of Financial Information-Private Placement of Second Priority Senior Secured Notes and Refinancing of Credit Facility."

Other income (expense), net

Other income declined $2.7 million to $0.1 million in 2003 from $2.9 million in 2002. We recorded foreign exchange losses of
$0.3 million in 2003 resulting primarily from the strengthening of the Brazilian Real against the U.S. dollar compared to foreign exchange gains of $1.8 million recorded in 2002 as the
Brazilian Real weakened against the U.S. dollar. We also recorded a $0.6 million loss on the sale of certain of our U.K. publishing and trade show assets in 2003. These declines were partially
offset by a $0.5 million increase in non-cash gains related to our interest rate hedging activities.

Provision (benefit) for income taxes

The provision for income taxes was $4.3 million in 2003 compared to an income tax benefit of $4.1 million in 2002. The 2003 provision is related to
a basis difference resulting from goodwill for tax purposes being less than the carrying value of goodwill for financial reporting purposes. We recorded no income tax benefit related to the net
operating losses we generated during 2003 because we have established a valuation allowance to offset any related tax benefits, due to uncertainty about realization of these benefits. Our tax benefit
in 2002 was recorded at a rate less than the applicable statutory rates primarily because we recorded a valuation allowance to offset the portion of the benefits associated with net operating losses
we generated in 2002, for which realization was not likely.

Cumulative effect of accounting change

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

Liquidity and Capital Resources

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

We
are a holding company and have no direct material operations. Our principal assets are our ownership of Communications, and Advanstar.com, and our only material liabilities are the
senior discounts notes and our guarantee of the Communications 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 of Advanstar by DLJ Merchant Banking Partners III, L.P., our principal source of cash is dividends from Communications. The credit facility, senior secured notes
and senior subordinated notes described below are obligations of Communications and impose limitations on its ability to pay dividends to us. We believe that 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.

32

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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.

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 are expected to be cash flow from operations and borrowings under its credit facility.

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 MAGIC trade shows and our other large trade
shows and conferences. This seasonality, when combined with the shift in the timing of when events take place from year to year, may have a significant effect on our quarterly deferred revenue and
working capital balances.

We
anticipate that our operating cash flow, together with borrowings under the credit facility (assuming continued compliance with the covenants contained therein or a modification
thereof) and other future financings and refinancings, will be sufficient to meet our anticipated future operating expenses, capital expenditures and debt service and other obligations as they become
due. However, our ability to make scheduled payments of principal, to pay interest on or to refinance our indebtedness and to satisfy our other debt obligations will depend upon our future operating
performance, which will be affected by general economic, financial, competitive, legislative, regulatory, business and other factors beyond our control. We expect to be in compliance with our debt
covenants during 2005.

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.

Operating
cash flows may be significantly affected by the working capital characteristics of our business, in particular the trade shows and conferences business. Deferred revenue
increases on the balance sheet in the quarters immediately preceding our busy first quarter trade show season as we collect deposits for booth space several months in advance of the trade shows.
Revenue and contribution margin are recognized in the quarter as the events are held, releasing the deferred revenue from the balance sheet, which results in a reduction to our operating cash flow.

Cash flows from operating activities

Net cash provided by operations decreased $28.0 million to $18.6 million in 2004 compared to $46.5 million in 2003. This decline was
principally due to an increase in interest expense of $16.1 million and a reduction in our negative working capital due to the sale of our art industry trade show and publications in the first
quarter of 2004. In addition, we collected less cash in the fourth quarter of 2004, which was collected subsequently in 2005, related to trade shows held in the first five months of 2005. The decline
was also attributable to changes in the timing of our payments of accounts payable in 2004. These declines were partially offset by an increase in operating income of $26.5 million in 2004
compared to 2003.

33

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Net
cash provided by operations increased $21.8 million to $46.5 million in 2003 compared to $24.7 million in 2002. Non-cash charges including a
write-off of deferred financing costs of $11.3 million, depreciation and amortization expense of $59.2 million, non-cash interest expense of $21.4 million,
deferred income taxes of $7.0 million, other non-cash charges totaling $1.1 million and changes in operating assets and liabilities of $16.7 million reduced the cash
effect of the 2003 net loss of $70.1 million. The increase in cash generated from changes in our operating assets and liabilities is largely due to a delay in payments on accounts payable to
2004, accelerated collections on accounts receivable and increased collections of customer advance deposits related to future trade shows.

Cash flows provided by (used in) investing activities

Net cash used in investing activities decreased $150.7 million to $5.0 million provided by investing activities in 2004, from $145.7 million
used in 2003. This decrease was principally due to the acquisitions of the healthcare properties from Thomson for $136.5 million in 2003, the sale in 2004 of our art shows and magazines and our
European call center and document management shows for a total sales price of $24.4 million in cash proceeds, partially offset by $7.9 million in cash used for the acquisition of IVT in
2004.

Net
cash used in investing activities for 2003 compared to 2002 increased $114.3 million to $145.7 million in 2003. This increase was principally due to the acquisition
from Thomson in 2003 as described above.

We
incurred capital expenses of $9.6 million, $7.9 million, and $7.4 million in 2004, 2003 and 2002, respectively. We anticipate that we will spend approximately
$11.1 million on capital expenditures in
2005, which will be funded by cash flows from operations. The majority of these expenditures are related to expansions and enhancements to our IT and communications infrastructure and management and
operating group information systems. We believe that this amount of capital expenditure will be adequate to grow our business according to our business strategy and to maintain the key trade shows,
publications and business of our continuing operations.

Cash
used for acquisitions in 2004 decreased $129.8 million relative to 2003 primarily due to the 2003 acquisition from Thomson, compared to the acquisition of IVT in 2004 for
$7.9 million. 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 (used in) provided by financing activities

Net cash flows used in financing activities were $12.5 million in 2004 compared to cash provided by financing activities in 2003 of $110.2 million.
We repaid $11.7 million of debt in 2004, including $8.0 million on our revolving credit facility. In 2003, we issued $430.0 million principal amount of the Senior Secured Notes
and received $60.0 million in equity contributions from our parent company. We used the proceeds from these issuances to repay and terminate all outstanding term A loans and
$12.0 million of outstanding borrowings under our revolving credit facility, and paid fees of $12.3 million in connection with the offering. We also paid fees of $3.9 million to
our senior lenders for an amendment to our credit facility in April 2003.

Net
cash used in financing activities for 2003 compared to 2002 increased $125.9 million to $110.2 million in 2003. This increase was principally due to financing
transactions in 2003 described above.

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Debt service

As of December 31, 2004, we had total indebtedness of $753.3 million and approximately $59.1 million of borrowings available under our credit
facility, subject to customary conditions.

Credit facility

The credit facility consists of a $60.0 million revolving credit facility and $25.0 million outstanding under the Term Loan B facility. The
revolving credit facility will terminate in April 2007 and the Term Loan B matures in October 2008. Borrowings under the credit facility generally bear interest based on a margin over,
at our option, the base rate or LIBOR. The applicable margin for revolving credit loans varies based upon Advanstar Communications ratio of consolidated debt to EBITDA, as defined in the credit
facility, and is currently 3.75% over LIBOR and 2.50% over the base rate. The applicable margin for the Term Loan B varies based upon the rating assigned by S&P and Moody's to our credit facility and
is currently 4.50% over LIBOR and 3.25% over the base rate. Advanstar Communications obligations under the credit facility are guaranteed by Advanstar Holdings Corp. ("Advanstar Holdings"), our parent
company, and all Advanstar Communications existing and future domestic subsidiaries. Advanstar Communications obligations under the credit facility are collateralized by substantially all of the
assets of Advanstar Communications company and the subsidiary guarantors, including a pledge of the capital stock of all Advanstar Communications existing and future domestic subsidiaries, a pledge of
no more than 65% of the voting stock of any foreign subsidiary directly owned by Advanstar Communications company or any domestic subsidiary, a pledge of all intercompany indebtedness in favor of
Advanstar Communications company and Advanstar Communications domestic subsidiaries, a pledge of our company's capital stock held by Advanstar Holdings. Our credit facility contains restrictive
covenants, which require Advanstar Communications to, among other things, maintain a minimum fixed charge coverage ratio (as defined in the credit facility documents) as of the end of each fiscal
quarter. Although there can be no assurance, we believe, based on our anticipated performance and expected economic conditions, that we will be able to comply with the amended financial covenant
contained in the credit facility in 2005.

Second priority senior secured notes

The $128.3 million of floating rate notes mature in 2008 and the $300 million of fixed rate notes mature in 2010. The notes of each series are
guaranteed by each of Advanstar Communications' existing and future domestic restricted subsidiaries and collateralized by second-priority liens on the assets collateralizing our credit facility
(other than certain subsidiary stock and assets of our parent companies). The fixed rate notes bear interest at an annual rate of 10.75% and the floating rate notes bear interest at an annual rate
equal to the three-month LIBOR, which is reset quarterly, plus 7.50%. Interest on the fixed rate notes is payable semi-annually in cash and interest on the floating rate notes, along with
amortization of 0.25% of the principal of such floating rate notes, is payable quarterly in cash. The notes contain restrictive covenants that, among other things, limit Advanstar Communications
ability to incur debt, pay dividends and make investments.

Senior subordinated notes

The $160 million 12% 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 restrictive covenants that, among other things, limit Advanstar Communications ability to
incur debt, pay dividends and make investments.

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Senior discount notes

As part of the financing for the acquisition of Advanstar by DLJ Merchant Banking Partners III, L.P. and related funds in 2000 ("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% 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, among other things, limit our ability and that of our subsidiaries to incur debt, pay dividends and make investments. As of December 31, 2004, 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 (excluding accounts payable and accrued expenses), as of December 31, 2004 are as set forth below (in millions):

Payments Due By Period2005

2006

2007

2008

2009

After
2009

TotalIndebtedness

$
1.3

$
1.3

$
1.3

$
149.5

$


$
631.8

$
785.2Interest on indebtedness (1)


66.6


92.3


92.1


88.0


77.2


99.2


515.4Operating leases


7.1


6.4


5.1


4.6


3.0


1.7


27.9Total Contractual Cash Obligations

$
75.0

$
100.0

$
98.5

$
242.1

$
80.2

$
732.7

$
1,328.5


---

We
have no material capital lease obligations or purchase obligations. Our contingent obligations are primarily composed of $0.9 million of letters of credit and our interest rate
and foreign currency derivatives discussed more fully below in Item 7A. "Qualitative and Quantitative Disclosure About Market Risk."

Off-balance sheet arrangements.

We have no material off-balance sheet arrangements.

Recently Issued Accounting Standards

In December 2003, the FASB issued Interpretation No. 46R,Consolidation of Variable Interest
Entities, which addresses accounting for special-purpose and variable interest entities and which supersedes Interpretation No. 46. The provisions of Interpretation
No. 46R are effective for us in the first quarter of 2005. We do not expect the adoption of this standard to have a material effect on our financial position, results of operations or cash
flows.

In
December 2004, the Financial Accounting Standards Board issued SFAS No. 123R, "Share-Based Payment" which revises SFAS 123 and supersedes APB 25. This statement
establishes standards relating to accounting for transactions in which equity instruments are exchanged for goods or services.

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Under
this statement, the Company must measure the cost of employee services received in exchange for an award of equity instruments based upon the fair value of the award on the date of grant. This
cost must be recognized over the period during which an employee is required to provide the service (usually the vesting period). We are required to adopt the provisions of this standard effective
January 1, 2006. We are currently evaluating the impact of this standard. The adoption of this standard may result in an increase in compensation expense and a reduction to net income as new
options are granted under our 2000 Management Incentive Plan.

CERTAIN FACTORS WHICH MAY AFFECT FUTURE RESULTS

Trade show exhibit space and ad pages could decline as a result of an economic slowdown in the United States, future terrorist attacks, or geopolitical
concern.

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

Our
business and results of operations in 2004 were not significantly impacted by the U.S. economy, although our technology and travel sectors continue to be impacted by the poor
conditions in these markets. Our future results may be affected by an economic slowdown.

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.

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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, 2004, our MAGIC trade shows represented approximately 18.2% of our total revenue and approximately 31.0% of our
contribution margin (defined as revenue less cost of production and selling, editorial and circulation costs). We expect that the MAGIC trade shows will continue to represent a significant portion of
our overall revenue and contribution margin in the future. Therefore, a significant decline in the performance of one or both of the MAGIC trade shows, typically held in the first and third quarters,
could have a material adverse effect on our financial condition and results of operations.

We derive significant revenue and contribution margin before general and administrative expenses from our healthcare, science, and pharmaceutical cluster, which is dependent
upon pharmaceutical marketing budgets.

The healthcare sector contributed 36.6% of our revenues in 2004 and 31.8% of our contribution margin (defined as revenue less cost of production and selling,
editorial and circulation). A substantial portion of the advertising in the healthcare sector is by pharmaceutical companies. As a result, any material reduction in marketing activities by
pharmaceutical companies, which could occur due to general economic conditions or factors specific to the industry, including a continued reduction in new drug introductions, a shift in marketing
expenditures by pharmaceutical companies to sources other than publications (which shift has occurred to some extent in the last several years) and any future governmental regulation such as price
controls or types of advertising restrictions, could have a material adverse effect on our results.

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

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

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The market for our products and services is intensely competitive.

The intense competition for our products and services 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 direct marketing products and other. In several industries, such as information
technology and healthcare, we compete with large firms with a single-industry focus. Many of these large international and single-industry firms are better capitalized than we are and have
substantially greater financial and other resources than we do.

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

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

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

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

During the year ended December 31, 2004, Advanstar.com's operations were funded by cash distributions from Advanstar Communications. We expect the
operations of Advanstar.com to merge with Advanstar Communications operations in 2005. The result of this merger will not have a material impact on our financial position.

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

We intend to continue to grow in part through strategic acquisitions and joint ventures. This growth strategy entails risks inherent in identifying desirable
acquisition candidates, in integrating the operations of acquired businesses into our existing operations and risks relating to potential unknown liabilities associated with acquired businesses. In
addition, we may not be able to finance the acquisition of a desirable candidate or to pay as much as our competitors because of our leveraged financial condition or general economic conditions.
Difficulties that we may encounter in integrating the operations of acquired businesses, could have a material adverse effect on our results of operations and financial condition. Moreover, we may not
realize any of the anticipated benefits of an acquisition, and integration costs may exceed anticipated amounts.

39

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

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

Our international operations expose us to various risks associated with international operations.

We currently maintain offices in Brazil, the United Kingdom and Hong Kong. International operations accounted for approximately 3.6% of our total revenue in 2004.
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 and trade shows remain
sensitive to cutbacks in trade advertising directed to destination and vacation travel in response to concerns over terrorism and possible further conflicts in the Middle East and in other regions of
the world. In addition, terrorist attacks internationally and the threat of future terrorist attacks both domestically and internationally have negatively impacted an already weakened worldwide
economy. Customers have deferred and may continue to defer or reconsider purchasing our products and services as a result of these factors. Accordingly, adverse impacts on our business due to these
factors could continue or worsen for an unknown period of time.

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

Our consolidated financial statements are prepared in U.S. dollars. However, a portion of our revenues, expenses, assets and liabilities is denominated in
currencies other than the U.S. dollar, including the British Pound Sterling and the Brazilian Real. Consequently, fluctuations in exchange rates could result in exchange losses. In 2002, 2003 and
2004, there was no material effect on our net

40

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income
due to currency fluctuations, but the impact of future exchange rate fluctuations on our results of operations cannot be accurately predicted. Moreover, because we intend to continue our
international expansion, the effect of exchange rate fluctuations could be greater in the future. We have previously undertaken, and in the future may undertake, transactions to hedge the risks
associated with fluctuations in exchange rates of other currencies to the dollar. We do not know if any hedging techniques that we may implement will be successful or will mitigate the effect, if any,
of exchange rate fluctuations on our financial condition and results of operations.

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

Our business is seasonal, with revenue typically reaching its highest levels during the first and third quarters of each calendar year, largely due to the timing
of the MAGIC trade shows and our other large trade shows and conferences. In 2004, approximately 32% of our revenue was generated during the first quarter and approximately 26% during the third
quarter. The second quarter accounted for approximately 22% of revenue in 2004 and the fourth quarter accounted for approximately 20% of revenue in 2004. Because event revenue is recognized when a
particular event is held, we may also experience fluctuations in quarterly revenue based on the movement of annual trade show dates from one quarter to another.

We may be required to recognize additional impairment charges.

Pursuant to GAAP, we are required to periodically assess our goodwill, intangibles and other long-lived assets to determine if they are impaired. Disruptions to
our business, end market conditions and protracted economic weakness, unexpected significant declines in operating results of reporting units and divestitures may result in additional charges to
goodwill and other asset impairments. Future impairment charges could substantially affect our reported earnings in the period of such charge.

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

As of December 31, 2004, we had (a) total indebtedness of approximately $753.3 million and (b) approximately $59.1 million of
borrowings available under our credit facility, subject to customary borrowing conditions. In addition, subject to the restrictions in our credit facility, the indentures and our other debt
instruments, we may incur significant additional indebtedness from time to time. The level of our indebtedness may have important consequences, including:



We 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 2006 is dependent upon the receipt of
dividends from our direct and indirect

41

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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, and senior secured notes 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, the senior secured 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. 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 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 forward-looking
statement is usually identified by our use of certain terminology including "believes," "expects," "may," "will," "should," "seeks," "pro forma," "anticipates" or "intends" or by discussions of
strategy or intentions. A number of factors could cause our actual results, performance, achievements or industry results to be very different from

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the
results, performance, achievements or industry results expressed or implied by those forward-looking statements. These factors include, but are not limited to:



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

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Item 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

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

Interest Rates

At December 31, 2004, we had fixed rate debt of $599.9 million and variable rate debt of $153.4 million. The annual pre-tax
earnings and cash flows impact resulting from a 100 basis point increase in interest rates on variable rate debt, holding other variables constant, would be approximately $1.5 million per year.

Currencies

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

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

Our
strategy for management of currency risk relies primarily on conducting our operations in a country's respective currency and may, from time to time, involve currency derivatives,
primarily forward exchange contracts, to reduce our exposure to currency fluctuations. As of December 31, 2004, we had no open foreign exchange derivative contracts.

Item 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Please
refer to Item 15.Exhibits and Financial Statement Schedules.

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

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

Item 9A.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Advanstar's Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of the Company's disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report (the "Evaluation Date"), have concluded that as of the
Evaluation Date, our disclosure controls and procedures were adequate and designed to

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ensure
that material information relating to the Company would be made known to them by others within the Company.

Changes in Internal Controls

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

Item 9B.OTHER INFORMATION

On September 15, 2004, the employment agreement between Advanstar, Inc. and James M. Alic, our Vice President, Chairman of the Board and Director was
amended. Pursuant to the amendment, Mr. Alic shall receive annual bonus compensation for calendar years 2004 and 2005, subject to discretionary approval of the Board of Directors of Advanstar, Inc.
The amount of such bonus shall be based on the recommendation of the CEO of the Company and shall be in a gross amount not to exceed 100% of Mr. Alic's base salary. The terms of Mr. Alic's employment
agreement shall expire on December 31, 2005.

On
October 1, 2004 we entered into an agreement with Mr. James A. Finkelstein pursuant to which Mr. Finkelstein will receive compensation for his service as a director of
Advanstar, Advanstar, Inc. and Advanstar Holdings. Pursuant to the agreement, Mr. Finkelstein will receive an annual retention fee of $50,000 will be reimbursed for reasonable out of pocket expenses
and will be granted options to purchase 25,000 shares of Holdings common stock as an exercise price equal to $10.00 per share. The options will vest over a four year period with 20% vesting on the
agreement date and 20% vesting on each anniversary of Mr. Fenkelstein's service on the boards.

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PART III

Item 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

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

|Name                |  | Age |  | Position                                                     
|------------------- |  | --- |  | -------------------------------------------------------------
|Joseph Loggia       |  | 45  |  | Chief Executive Officer and Director                         
|James M. Alic       |  | 62  |  | Vice President, Chairman of the Board and Director           
|David W. Montgomery |  | 47  |  | Vice PresidentFinance, Chief Financial Officer and Secretary
|Eric I. Lisman      |  | 47  |  | Executive Vice President Corporate Development               
|Rick Treese         |  | 34  |  | Vice PresidentChief Technical Officer                       
|Alexander S. DeBarr |  | 44  |  | Executive Vice President                                     
|Daniel M. Phillips  |  | 42  |  | Executive Vice President                                     
|Scott E. Pierce     |  | 46  |  | Executive Vice President                                     
|R. Steven Morris    |  | 53  |  | Vice President                                               
|Annie Callanan      |  | 41  |  | Executive Vice President                                     
|OhSang Kwon         |  | 36  |  | Director                                                     
|Douglas B. Fox      |  | 57  |  | Director                                                     
|Charles Pieper      |  | 58  |  | Director                                                     
|James Finkelstein   |  | 56  |  | Director                                                     

Executive Officers

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

James M. Alichas served as Chairman of the Board since August 2004. He previously served as our Vice Chairman and Vice President
since he joined Advanstar in July 1996 to July 2004. From June 1995 to June 1996, he was Vice President and Controller of IBM Corporation, a computer hardware and software
manufacturer. From September 1994 to May 1995, he was Chairman of Reed Exhibition Companies. From August 1991 to August 1994, he was President of Reed Exhibitions North
America.

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

Eric I. Lismanhas served as our Executive Vice President Corporate Development since 1998. He previously served as our General Counsel
from September 1998 to February 2005. 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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Rick Treesehas served as our Vice President and Chief Technology Officer since March of 2002, a role he moved to after two years as the
CTO of Advanstar.com. Prior to Advanstar, Mr. Treese was Vice President of Technology at Goldman, Sachs & Company where he led the software development effort for the Equity Research
Division.

Key Employees

Alexander S. DeBarrhas served as our Executive Vice President since June 1997 and is responsible for the
Portfolio, Dental, Veterinary, and Beauty 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 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. Mr. Pierce
joined Advanstar in 1997 as a group publisher of the Travel & Hospitality group.

R. Steven Morriscurrently serves as Vice President responsible for the Direct Marketing Products group. Mr. Morris joined
Advanstar in 2004. Prior to joining Advanstar, Mr. Morris was Chief Operating Officer for Metro International Newspapers for the Americas and Asia.

Annie Callanancurrently serves as Executive Vice President responsible for the Healthcare, Science and Pharmaceutical markets.
Mrs. Callanan joined Advanstar in 2004. Prior to joining Advanstar, Ms. Callanan was a Senior Vice President at CMP Media and a Vice President at Miller Freeman.

Directors

Joseph Loggia.See "Executive Officers."

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

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

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

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Charles Pieperhas served as a Director since August 2004. Mr. Pieper joined DLJMB and CSFB's Alternative Capital Division
in 2004 as an Operating Partner. Prior to joining DLJMB, he served as President and Chief Executive Officer of GE Japan, Korea, Taiwan; GE Medical Systems Asia; Yokogawa Medical Systems; GE Lighting
Europe and GE Trading Co; and an Operating Partner with Clayton, Dubilier & Rice. Mr. Pieper previously served as Chairman and Acting CEO of Alliant
Foodservice, Inc. and U.S. Office Products, Chairman of the Board of Fairchild Dornier Corporation, Italtel Holding S.p.A., North American Van Lines, and Vice Chairman of Dynatech.

James Finkelsteinhas served as a Director since October 2004. Mr. Finkelstein has been Executive Chairman of Thompson
Publishing Group since May 2004 and Chairman of Global Media Partners at Credit Suisse First Boston since January 2004. Previously, he served as media partner to DB Capital Partners and
Veronis Suhler Stevenson. He is presently President of the Marquis Who's Who, LLC, and CEO of News Communication, Inc. publishers of The Hill, the publication for Congress, and Dan's Publications.
From 1979 to 1998 he served as CEO of the National Law Publishing Company. Mr. Finkelstein has served on the Board of Directors of the Legal Aid Society, and New York University's Faculty of
Arts and Sciences Board of Overseers, and was awarded an Honorary Doctor of Laws degree from Hofstra University.

Audit Committee Financial Expert

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

Code of Ethics

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

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Item 11.EXECUTIVE COMPENSATION

Summary Compensation Table

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

|Name and Principal Position                                                       |  | Year           |  | Salary |                         | Bonus(1) |   | Other Annual
Compensation(2) |  | Long-Term
Compensation
Awards
Securities
Underlying
Options/SARs |         | All Other
Compensation(3)
|--------------------------------------------------------------------------------- |  | -------------- |  | ------ | ----------------------- | -------- | - | ---------------------------- |  | ---------------------------------------------------------------- | ------- | -------------------------
|Joseph Loggia
Chief Executive Officer and
Director                                |  | 2004
2003
2002 |  | $      | 625,000
500,000
500,000 |          | $ | 339,016
146,046
204,373      |  | $                                                                | 990

 |                          
|James M. Alic
Chairman of the Board(4)                                            |  | 2004
2003
2002 |  |        | 150,000
150,000
209,230 |          |   | 75,000
50,000
              |  |                                                                  | 

   |                          
|David W. Montgomery
Vice PresidentFinance, Chief
Financial Officer and Secretary |  | 2004
2003
2002 |  |        | 298,462
259,615
250,000 |          |   | 120,000
75,000
58,000        |  |                                                                  | 

   |                          
|Eric I. Lisman
Executive Vice President
Corporate Development                    |  | 2004
2003
2002 |  |        | 362,000
361,539
350,000 |          |   | 144,800
65,639
59,200        |  |                                                                  | 

   |                          
|Rick Treese
Vice PresidentChief Techical
Officer                                 |  | 2004
2003
2002 |  |        | 239,731
232,692
221,923 |          |   | 84,000
38,165
46,000         |  |                                                                  | 

   |                          

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Option Grants in Last Fiscal Year

The following table sets forth each grant of stock options made by Advanstar (consisting of options to purchase stock of Holdings) during the year ended
December 31, 2004 pursuant to the 2000 Management Incentive Plan described below to each of the named executive officers. We have not granted any stock appreciation rights.

Option Grants in Last Fiscal Year

|              |  |         |  |      |   |   |       |  |      | Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation
for Option Term
|------------- |  | ------- |  | ---- | - | - | ----- |  | ---- | ----------------------------------------------------------------------------------------------
|
|
|
|
|James M. Alic |  | 106,250 |  | 41.5 | % | $ | 10.00 |  | 2014 |                                                                                               

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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, 2004. None of the unexercised options were "in the money" at December 31, 2004 based on a good faith estimate of the
fair market value of the stock price.

Aggregated Option Exercises in 2004 and December 31, 2004 Option Values

|                    |  |   |  |   |  | Number of Securities
Underlying
Unexercised Options
at Fiscal
Year End |  |         |  |  
|------------------- |  | - |  | - |  | ---------------------------------------------------------------------- |  | ------- |  | -
|
|
|
|James M. Alic       |  |  |  |  |  | 138,610                                                                |  | 136,390 |  | 
|Joseph Loggia       |  |  |  |  |  | 461,250                                                                |  | 638,750 |  | 
|David W. Montgomery |  |  |  |  |  | 140,625                                                                |  | 109,375 |  | 
|Eric I. Lisman      |  |  |  |  |  | 96,875                                                                 |  | 103,125 |  | 
|Rick Treese         |  |  |  |  |  | 9,844                                                                  |  | 25,156  |  | 

The
following table sets forth, the shares issued and issuable and exercise price for our equity compensation plan as of December 31, 2004.

Equity Compensation Plan Information

|                                                      |  | Number of Shares
To Be Issued Upon
Exercise of Outstanding
Options, Warrants and Rights |  | Weighted Average
Exercise Price of
Outstanding Options,
Warrants and Rights |       | Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(Excluding Outstanding Securities)
|----------------------------------------------------- |  | --------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------- | ----- | -------------------------------------------------------------------------------------------------------------------------------
|Equity compensation plan approved by security holders |  | 3,825,000                                                                               |  | $                                                                           | 10.00 |                                                                                                                                

We
do not have any equity compensation plans that were not approved by shareholders.

Stock Option and Incentive Plans

2000 Management Incentive Plan

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.

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

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

Number of Authorized Shares.Holdings has authorized a maximum of 4,047,789 shares of its common stock for participants under
the plan during the term of the plan, of which 3,825,000 have been granted and remain outstanding as of December 31, 2004. In addition, the number of shares available will be increased to the
extent that shares are not purchased on a leveraged basis under Holdings' Direct Investment Program. The compensation committee may adjust the number and class of shares available under the plan to
prevent dilution or enlargement of rights in the event of various changes in Holdings' capitalization.

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

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

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. The principal and accrued interest on the non-recourse loans were settled in full in 2004.

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

51

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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.

401(k) Plan

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 100% of his or her pre-tax total compensation. Advanstar, Inc. is required
to
make a matching contribution to the 401(k) Plan, which vests in equal installments over five years, in accordance with the following schedule:



Employment Agreements and Arrangements

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

Mr. Alic
entered into an employment agreement with us, which was amended effective March 1, 2002 and September 15, 2004. The amended agreement provides for a fixed
term through December 31, 2005, and continuation thereafter until terminated by either party. Pursuant to the amended agreement, Mr. Alic will serve as our Vice Chairman and will be
entitled to an annual base salary of $150,000 and
up to a maximum bonus in 2004 and 2005 of 100% of his base salary. The amended agreement does not provide for a bonus payment or severance upon termination. The agreement provides for indemnification
of the executive to the extent permissible under New York law. Mr. Alic also entered into a non-competition and confidentiality agreement with us. The non-compete period
is one year after termination of employment unless employment is terminated by us without cause or by the executive for good reason, in which case the non-competition period is six months.
During the non-compete period, Mr. Alic may not hire any employee or solicit any trade show or publishing business from a third party that has a relationship or contract with us.

52

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We currently have a severance arrangement with David W. Montgomery, our Vice President-Finance, Chief Financial Officer and Secretary. In the event that Mr. Montgomery's
employment is involuntarily terminated for any reason other than for cause, the arrangement provides that Mr. Montgomery will receive a termination payment equal to six months of salary.

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

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

Director Compensation

Standard Arrangements

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

Other Arrangements

On October 1, 2004, Mr. James Finkelstein was appointed as a member of the board of directors. Mr. Finkelstein receives an annual retention
fee of $50,000. He also 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 upon the grant date and an additional 20% vesting on each anniversary of the grant.

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

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

Compensation Committee Interlocks and Insider Participation

During the periods up to and including 2004, we did not have a compensation committee. During the fiscal year ended December 31, 2004,
Messrs. 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 Holdings. The following table sets forth information with respect to the beneficial ownership of
Holdings' common stock as of March 29, 2005 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.

53

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In
accordance with the rules of the SEC, beneficial ownership includes voting or investment power with respect to securities and includes shares issuable pursuant to warrants that are
exercisable within 60 days
of March 29, 2005. Shares issuable pursuant to warrants are deemed outstanding in computing the percentage held by the person holding the warrants but are not deemed outstanding in computing
the percentage held by any other person.

|Name of Beneficial Owner:                                                                  |  | Number of
shares of
Common Stock
beneficially owned |   | Percentage of
Outstanding
Common Stock |  
|------------------------------------------------------------------------------------------ |  | --------------------------------------------------- | - | -------------------------------------- | -
|DLJ Merchant Banking Partners III, L.P. and related investors                              |  | 35,966,117(1                                        | ) | 97.2                                   | %
|Joseph Loggia                                                                              |  | 467,500(2                                           | ) | 1.3                                    | %
|James M. Alic                                                                              |  | 316,288(3                                           | ) | *                                      |  
|David W. Montgomery                                                                        |  | 143,750(4                                           | ) | *                                      |  
|Eric I. Lisman                                                                             |  | 103,125(5                                           | ) | *                                      |  
|Douglas B. Fox                                                                             |  | 15,000(6                                            | ) | *                                      |  
|Rick Treese                                                                                |  | 13,125(7                                            | ) | *                                      |  
|James Finkelstein                                                                          |  | 5,000(8                                             | ) | *                                      |  
|OhSang Kwon(9)
DLJ Merchant Banking Inc.
Eleven Madison Avenue
New York, New York 10010    |  |                                                    |   |                                       |  
|Charles Pieper(9)
DLJ Merchant Banking Inc.
Eleven Madison Avenue
New York, New York 10010 |  |                                                    |   |                                       |  
|All directors and officers as a group (9 persons)                                          |  | 1,063,788                                           |   | 2.7                                    | %

---

54

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

Item 13.CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Financial Advisory Fees and Agreements

Our parent company, Advanstar Holdings, was acquired by the DLJ Merchant Banking Partners III L.P. and related funds in October 2000 ("the
Acquisition").

Credit
Suisse First Boston, an affiliate of the DLJ Merchant Banking funds, has and will receive customary fees and reimbursement of expenses in connection with the arrangement and
syndication of the credit facility and as a lender thereunder. Credit Suisse First Boston LLC, an affiliate of the DLJ Merchant Banking funds, acts as our financial advisor and acted as our financial
advisor in connection with the Thomson acquisition, was one of the initial purchasers of the second priority senior secured notes issued in August and September of 2003 and was an initial purchaser of
our senior subordinated notes and the parent company discount notes. We paid fees for these services of $0.2 million in 2002 and $10.4 million in 2003, plus
out-of-pocket expenses. No fees were paid in 2004 related to financings.

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.

In
connection with the Acquisition, Advanstar Hodlings agreed to pay Credit Suisse First Boston Corporation an annual advisory fee of $0.5 million, beginning October 11,
2000 when the acquisition of Advanstar by DLJ Merchant Banking Partners III, L.P. and related funds occurred ("The Acquisition") until the earlier to occur of:



Subsequently,
Credit Suisse First Boston, LLC has assigned its rights under this agreement to DLJ Merchant Banking Funds.

Holdings
is a holding company and has no direct material operations or source of cash to pay this obligation other than by distributions from its subsidiaries, including 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.

55

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Stockholders' Agreement

Holdings, the DLJ Merchant Banking funds, the DLJ Investment Partners funds and the other stockholders of Holdings (collectively, including Mr. 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.

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 six 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. In addition, the DLJ Merchant Banking funds are permitted
to expand Holdings' board and select all of the additional directors. Messrs. Alic, Kwon and Pieper are the directors selected by the DLJ Merchant Banking funds. As of December 31, 2004,
DLJ Investment Partners no longer owns Advanstar's senior discount notes, so they can no longer select a member of the board.

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.

Loan Agreemment with Chairman of the Board

See "Item 11Exectuive CompensationDirect Investment Plan."

56

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PART IV

Item 14.PRINCIPAL ACCOUNTING FEES AND SERVICES.

Principal Accounting Fees and Services

The Audit Committee engaged PricewaterhouseCoopers LLP ("PwC") to perform an annual audit of Advanstar's financial statements in 2003 and 2004. The following
table presents information concerning fees paid to PwC in each of those years.

2003

2004Audit fees(1)

$
642,300

$
532,404Audit-related fees(2)


19,000


19,856Tax fees(3)


299,000


452,980All other fees








---

Pre-approval Policies and Procedures

The Audit Committee has adopted policies and procedures for pre-approving all work performed by PricewaterhouseCoopers LLP. Specifically, the policies
and procedures prohibit PricewaterhouseCoopers LLP from performing any services for Advanstar or its subsidiaries without the prior specific approval of the audit committee, except that the audit
committee pre-approved the use of PricewaterhouseCoopers LLC for the following service categories of non-audit service for 2004: audit related services in aggregate not to
exceed $120,000; U.S. tax planning and compliance in aggregate not to exceed $285,000; other tax services in aggregate not to exceed $140,000; other non-audit services in aggregate not to
exceed $50,000. Services in excess of these limits must have prior specific approval by the audit committee.

All
services provided by PricewaterhouseCoopers LLC in 2004 were pre-approved by the audit committee pursuant to the approval policies described above. None of such services
were approved pursuant to the procedures described in Rule 2-01(c)(7)(i)(C) of Regulation S-X, which waives the general requirement for pre-approval
in certain circumstances.

57

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PART IV

Item 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

A.    Documents Filed as Part of this Report:

1.     Financial Statements:

PageReport of Independent Registered Public Accounting Firm

F-2Consolidated Balance Sheets as of December 31, 2004 and 2003

F-3Consolidated Statements of Operations for the years ended December 31, 2004, 2003 and 2002

F-4Consolidated Statements of Stockholder's Equity for the years ended December 31, 2004, 2003 and 2002

F-5Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002

F-6Notes to Consolidated Financial Statements

F-7


2.     Financial Statement Schedules:

The following schedules are included in this Annual Report on the page indicated:

PageSchedule ICondensed Financial Information of Advanstar, Inc. (Parent Company)

II-1Schedule IIValuation and Qualifying Accounts

II-2


All
other schedules have been omitted because they are not applicable.

F-1

---





Report of Independent Registered Public Accounting Firm

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

In
our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in all material respects, the financial position of
Advanstar, Inc., a wholly owned subsidiary of Advanstar Holdings Corporation, and its Subsidiaries at December 31, 2004 and 2003, and the results of their operations and their cash flows
for each of the three years in the period ended December 31, 2004, in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the
financial statement schedules listed in the index appearing under Item 15(a)(2) present fairly, in all material respects, the information set forth therein when read in conjunction with the related
consolidated financial statements. These financial statements and financial statement schedules are the responsibility of the Company's management; our responsibility is to express an opinion on these
financial statements and financial statement schedules based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As
discussed in Note 3 to the consolidated financial statements, the Company adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible
Assets", on January 1, 2002.

/s/
PricewaterhouseCoopers LLP
Minneapolis, Minnesota
February 11, 2005

F-2

---





Advanstar, Inc.  Consolidated Balance Sheets  December 31, 2004 and 2003

|                                                 |                                                                                                                         | 2004                                   |         | 2003     |        
|------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | ------- | -------- | -------
|
|Assets                                           |                                                                                                                         |                                        |         |          |        
|Current assets                                   |                                                                                                                         |                                        |         |          |        
|                                                 | Cash and cash equivalents                                                                                               |                                        | $       | 41,328   |        
|                                                 | Accounts receivable, net of allowance of $798 and $842 at December 31, 2004 and 2003                                    |                                        |         | 27,289   |        
|                                                 | Prepaid expenses                                                                                                        |                                        |         | 8,839    |        
|                                                 | Other                                                                                                                   |                                        |         | 2,476    |        
|                                                 | Current assets of discontinued operations                                                                               |                                        |         |         |        
|                                                 |                                                                                                                         |                                        |         |          |        
|                                                 |                                                                                                                         | Total current assets                   |         |          | 79,932 
|                                                 |                                                                                                                         |                                        |         |          |        
|Due from parent                                  |                                                                                                                         |                                        | 256     |          |        
|Property, plant and equipment, net               |                                                                                                                         |                                        | 25,153  |          |        
|Intangible and other assets                      |                                                                                                                         |                                        |         |          |        
|                                                 | Goodwill                                                                                                                |                                        |         | 707,756  |        
|                                                 | Intangibles and other, net                                                                                              |                                        |         | 101,813  |        
|                                                 |                                                                                                                         |                                        |         |          |        
|                                                 |                                                                                                                         | Total intangible and other assets, net |         |          | 809,569
|Non-current assets of discontinued operations    |                                                                                                                         |                                        |        |          |        
|                                                 |                                                                                                                         |                                        |         |          |        
|                                                 |                                                                                                                         | $                                      | 914,910 |          | $      
|                                                 |                                                                                                                         |                                        |         |          |        
|Liabilities and Stockholder's Equity             |                                                                                                                         |                                        |         |          |        
|Current liabilities                              |                                                                                                                         |                                        |         |          |        
|                                                 | Current maturities of long-term debt                                                                                    |                                        | $       | 1,300    |        
|                                                 | Accounts payable                                                                                                        |                                        |         | 14,067   |        
|                                                 | Accrued compensation                                                                                                    |                                        |         | 8,695    |        
|                                                 | Other accrued expenses                                                                                                  |                                        |         | 34,103   |        
|                                                 | Deferred revenue                                                                                                        |                                        |         | 52,397   |        
|                                                 | Current liabilities of discontinued operations                                                                          |                                        |         |         |        
|                                                 |                                                                                                                         |                                        |         |          |        
|                                                 |                                                                                                                         | Total current liabilities              |         |          | 110,562
|                                                 |                                                                                                                         |                                        |         |          |        
|Long-term debt, net of current maturities        |                                                                                                                         |                                        | 752,019 |          |        
|Deferred income taxes                            |                                                                                                                         |                                        | 18,250  |          |        
|Other long-term liabilities                      |                                                                                                                         |                                        | 4,277   |          |        
|Minority interests                               |                                                                                                                         |                                        | 3,579   |          |        
|Long term liabilities of discontinued operations |                                                                                                                         |                                        |        |          |        
|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, 2004 and 2003 |                                        |         |         |        
|                                                 | Capital in excess of par value                                                                                          |                                        |         | 370,424  |        
|                                                 | Accumulated deficit                                                                                                     |                                        |         | (350,446 | )      
|                                                 | Accumulated other comprehensive income                                                                                  |                                        |         | 6,245    |        
|                                                 |                                                                                                                         |                                        |         |          |        
|                                                 |                                                                                                                         | Total stockholder's equity             |         |          | 26,223 
|                                                 |                                                                                                                         |                                        |         |          |        
|                                                 |                                                                                                                         | $                                      | 914,910 |          | $      
|                                                 |                                                                                                                         |                                        |         |          |        

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

F-3

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Advanstar, Inc.  Consolidated Statements of Operations  Years Ended December 31, 2004, 2003 and 2002

|                                                                                                                                                                                            |                                                             | 2004                                                                                                               |         | 2003    |         | 2002    |        
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------ | ------- | ------- | ------- | ------- | -------
|
|Revenue                                                                                                                                                                                     |                                                             | $                                                                                                                  | 380,471 |         | $       | 308,962 |        
|Operating expenses                                                                                                                                                                          |                                                             |                                                                                                                    |         |         |         |         |        
|                                                                                                                                                                                            | Cost of production (excluding depreciation)                 |                                                                                                                    |         | 76,791  |         |         | 62,895 
|                                                                                                                                                                                            | Selling, editorial and circulation (excluding depreciation) |                                                                                                                    |         | 163,598 |         |         | 128,783
|                                                                                                                                                                                            | General and administrative (excluding depreciation)         |                                                                                                                    |         | 45,817  |         |         | 35,310 
|                                                                                                                                                                                            | Restructuring charge                                        |                                                                                                                    |         | (4,015  | )       |         | 2,692  
|                                                                                                                                                                                            | Amortization of intangibles                                 |                                                                                                                    |         | 41,575  |         |         | 47,120 
|                                                                                                                                                                                            | Depreciation                                                |                                                                                                                    |         | 8,595   |         |         | 10,601 
|                                                                                                                                                                                            |                                                             |                                                                                                                    |         |         |         |         |        
|                                                                                                                                                                                            |                                                             | Total operating expenses                                                                                           |         |         | 332,361 |         |        
|                                                                                                                                                                                            |                                                             |                                                                                                                    |         |         |         |         |        
|                                                                                                                                                                                            |                                                             | Operating income                                                                                                   |         |         | 48,110  |         |        
|Other income (expense)                                                                                                                                                                      |                                                             |                                                                                                                    |         |         |         |         |        
|                                                                                                                                                                                            | Interest expense, net                                       |                                                                                                                    |         | (91,353 | )       |         | (75,924
|                                                                                                                                                                                            | Write-off of deferred financing costs                       |                                                                                                                    |         |        |         |         | (11,324
|                                                                                                                                                                                            | Other income (expense), net                                 |                                                                                                                    |         | 375     |         |         | 140    
|                                                                                                                                                                                            |                                                             |                                                                                                                    |         |         |         |         |        
|                                                                                                                                                                                            |                                                             | Loss from continuing operations before income taxes, minority interests and cumulative effect of accounting change |         |         | (42,868 | )       |        
|Income tax provision (benefit)                                                                                                                                                              |                                                             |                                                                                                                    | 13,954  |         |         | 4,283   |        
|Minority interests                                                                                                                                                                          |                                                             |                                                                                                                    | (562    | )       |         | (403    | )      
|                                                                                                                                                                                            |                                                             |                                                                                                                    |         |         |         |         |        
|                                                                                                                                                                                            |                                                             | Loss from continuing operations before cumulative effect of accounting change                                      |         |         | (57,384 | )       |        
|(Loss) income from operations of discontinued business (including a goodwill impairment charge of $15,570 net of minority interest of $5,072 for the year ended December 31, 2004) (Note 5) |                                                             |                                                                                                                    | (9,743  | )       |         | 89      |        
|                                                                                                                                                                                            |                                                             |                                                                                                                    |         |         |         |         |        
|                                                                                                                                                                                            |                                                             | Loss before cumulative effect of accounting change                                                                 |         |         | (67,127 | )       |        
|Cumulative effect of accounting change, net of tax and minority interest                                                                                                                    |                                                             |                                                                                                                    |        |         |         |        |        
|                                                                                                                                                                                            |                                                             |                                                                                                                    |         |         |         |         |        
|                                                                                                                                                                                            |                                                             | Net loss                                                                                                           |         | $       | (67,127 | )       | $      
|                                                                                                                                                                                            |                                                             |                                                                                                                    |         |         |         |         |        

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

F-4

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Advanstar, Inc.  Consolidated Statements of Stockholder's Equity  Years Ended December 31, 2004, 2003 and 2002

|                                    |                                                               | Common Stock             |   |   |   |   |   | Accumulated
Other
Comprehensive
Income (Loss) |   |   |         
|----------------------------------- | ------------------------------------------------------------- | ------------------------ | - | - | - | - | - | --------------------------------------------- | - | - | --------
|
|
|
|Balances at December 31, 2001       |                                                               | 100                      |   | $ |  |   | $ | 310,424                                       |   | $ | (95,096 
|Comprehensive loss                  |                                                               |                          |   |   |   |   |   |                                               |   |   |         
|                                    | Net loss                                                      |                          |  |   |   |  |   |                                               |  |   |         
|                                    | Translation adjustment                                        |                          |  |   |   |  |   |                                               |  |   |         
|                                    | Change in unrealized loss on derivative financial instruments |                          |  |   |   |  |   |                                               |  |   |         
|                                    |                                                               | Total comprehensive loss |   |  |   |   |  |                                               |   |  |         
|                                    |                                                               |                          |   |   |   |   |   |                                               |   |   |         
|Balances at December 31, 2002       |                                                               | 100                      |   |   |  |   |   | 310,424                                       |   |   | (213,175
|Comprehensive loss                  |                                                               |                          |   |   |   |   |   |                                               |   |   |         
|                                    | Net loss                                                      |                          |  |   |   |  |   |                                               |  |   |         
|                                    | Translation adjustment                                        |                          |  |   |   |  |   |                                               |  |   |         
|                                    | Change in unrealized loss on derivative financial instruments |                          |  |   |   |  |   |                                               |  |   |         
|                                    |                                                               | Total comprehensive loss |   |  |   |   |  |                                               |   |  |         
|Contribution of capital from parent |                                                               |                         |   |   |  |   |   | 60,000                                        |   |   |        
|                                    |                                                               |                          |   |   |   |   |   |                                               |   |   |         
|Balances at December 31, 2003       |                                                               | 100                      |   |   |  |   |   | 370,424                                       |   |   | (283,319
|Comprehensive loss                  |                                                               |                          |   |   |   |   |   |                                               |   |   |         
|                                    | Net loss                                                      |                          |  |   |   |  |   |                                               |  |   |         
|                                    | Translation adjustment                                        |                          |  |   |   |  |   |                                               |  |   |         
|                                    | Change in unrealized loss on derivative financial instruments |                          |  |   |   |  |   |                                               |  |   |         
|                                    |                                                               | Total comprehensive loss |   |  |   |   |  |                                               |   |  |         
|                                    |                                                               |                          |   |   |   |   |   |                                               |   |   |         
|Balances at December 31, 2004       |                                                               | 100                      |   | $ |  |   | $ | 370,424                                       |   | $ | (350,446
|                                    |                                                               |                          |   |   |   |   |   |                                               |   |   |         

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

F-5

---





Advanstar, Inc.  Consolidated Statements of Cash Flows  Years Ended December 31, 2004, 2003 and 2002

|                                                                               |                                                     | 2004                                  |                                                      | 2003   |         | 2002     |       
|------------------------------------------------------------------------------ | --------------------------------------------------- | ------------------------------------- | ---------------------------------------------------- | ------ | ------- | -------- | ------
|
|Cash flows from operating activities                                           |                                                     |                                       |                                                      |        |         |          |       
|Net loss                                                                       |                                                     | $                                     | (67,127                                              | )      | $       | (70,144  | )     
|Adjustments to reconcile net loss to net cash provided by operating activities |                                                     |                                       |                                                      |        |         |          |       
|                                                                               | Cumulative effect of accounting changetransitional |                                       |                                                      |        |         |          |       
|                                                                               | goodwill impairment                                 |                                       |                                                      |       |         |          |      
|                                                                               | Write-off of deferred financing costs               |                                       |                                                      |       |         |          | 11,324
|                                                                               | Restructuring charge                                |                                       |                                                      | (4,015 | )       |          |      
|                                                                               | Impairment of goodwill                              |                                       |                                                      | 15,570 |         |          |      
|                                                                               | Depreciation and amortization                       |                                       |                                                      | 50,433 |         |          | 59,180
|                                                                               | (Gain) on derivative financial instruments          |                                       |                                                      | (1,391 | )       |          | (772  
|                                                                               | Undistributed earnings of minority interest holders |                                       |                                                      | 562    |         |          | 627   
|                                                                               | Noncash interest expense                            |                                       |                                                      | 24,489 |         |          | 21,386
|                                                                               | (Gain) loss on disposition of business and other    |                                       |                                                      | (1,006 | )       |          | 661   
|                                                                               | Provision for bad debts                             |                                       |                                                      | 874    |         |          | 589   
|                                                                               | Deferred income taxes                               |                                       |                                                      | 11,260 |         |          | 6,990 
|                                                                               | Changes in operating assets and liabilities         |                                       |                                                      |        |         |          |       
|                                                                               |                                                     | Accounts receivable                   |                                                      |        | 6,060   |          |       
|                                                                               |                                                     | Inventories                           |                                                      |        | (708    | )        |       
|                                                                               |                                                     | Prepaid expenses                      |                                                      |        | (506    | )        |       
|                                                                               |                                                     | Accounts payable and accrued expenses |                                                      |        | (10,776 | )        |       
|                                                                               |                                                     | Deferred revenue                      |                                                      |        | (6,902  | )        |       
|                                                                               |                                                     | Other                                 |                                                      |        | 1,733   |          |       
|                                                                               |                                                     |                                       |                                                      |        |         |          |       
|                                                                               |                                                     |                                       | Net cash provided by operating activities            |        |         | 18,550   |       
|                                                                               |                                                     |                                       |                                                      |        |         |          |       
|Cash flows from investing activities                                           |                                                     |                                       |                                                      |        |         |          |       
|Additions to property, plant and equipment                                     |                                                     |                                       | (9,576                                               | )      |         | (7,930   | )     
|Acquisition of publications and trade shows, net of cash acquired              |                                                     |                                       | (7,915                                               | )      |         | (137,728 | )     
|Proceeds from sale of assets                                                   |                                                     |                                       | 24,418                                               |        |         |         |       
|Acquisitions of intangibles, contingent payments, and other                    |                                                     |                                       | (1,931                                               | )      |         | 3        |       
|                                                                               |                                                     |                                       |                                                      |        |         |          |       
|                                                                               |                                                     |                                       | Net cash provided by (used in) investing activities  |        |         | 4,996    |       
|                                                                               |                                                     |                                       |                                                      |        |         |          |       
|Cash flows from financing activities                                           |                                                     |                                       |                                                      |        |         |          |       
|Proceeds from revolving credit loan                                            |                                                     |                                       | (14,000                                              | )      |         | (50,100  | )     
|Payments on revolving credit loan                                              |                                                     |                                       | 6,000                                                |        |         | 21,000   |       
|Proceeds from long-term debt                                                   |                                                     |                                       |                                                     |        |         | 431,050  |       
|Payments of long-term debt                                                     |                                                     |                                       | (3,700                                               | )      |         | (333,525 | )     
|Capital contributions from parent and other                                    |                                                     |                                       |                                                     |        |         | 60,000   |       
|Deferred financing costs                                                       |                                                     |                                       | (315                                                 | )      |         | (16,962  | )     
|Dividends paid to minority interest holders                                    |                                                     |                                       | (500                                                 | )      |         | (1,227   | )     
|                                                                               |                                                     |                                       |                                                      |        |         |          |       
|                                                                               |                                                     |                                       | Net cash (used in) provided by financing activities  |        |         | (12,515  | )     
|                                                                               |                                                     |                                       |                                                      |        |         |          |       
|Effect of exchange rate changes on cash                                        |                                                     |                                       | 576                                                  |        |         | (407     | )     
|                                                                               |                                                     |                                       |                                                      |        |         |          |       
|                                                                               |                                                     |                                       | Net increase (decrease) in cash and cash equivalents |        |         | 11,607   |       
|Cash and cash equivalents                                                      |                                                     |                                       |                                                      |        |         |          |       
|Beginning of year                                                              |                                                     |                                       | 29,721                                               |        |         | 19,022   |       
|                                                                               |                                                     |                                       |                                                      |        |         |          |       
|End of year                                                                    |                                                     | $                                     | 41,328                                               |        | $       | 29,721   |       
|                                                                               |                                                     |                                       |                                                      |        |         |          |       

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

F-6

---



Advanstar, Inc.
Notes to Consolidated Financial Statements
December 31, 2004, 2003 and 2002

1.    Nature of Business and Basis of Presentation

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

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

2.    Summary of Significant Accounting Policies



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



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



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

2004

2003(in thousands of dollars)Land and improvements

$
2,514

$
2,495Buildings


6,310


5,327Furniture, machinery and equipment


45,749


41,113Leasehold improvements


6,502


5,39061,075


54,325Accumulated depreciation


(35,922
)

(29,919
)Property, plant and equipment, net

$
25,153

$
24,406


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

Land improvements

10-15 yearsBuildings

20-40 yearsFurniture, machinery and equipment

3-10 yearsLeasehold improvements

Shorter of useful life or original lease term


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

F-7

---





Trade exhibitor and advertiser lists are amortized on a double-declining balance method over six years and five years, respectively. Subscriber lists and other
intangible assets are amortized on a straight-line basis over three to ten years. Trademarks and trade names are amortized on a straight-line basis over twenty years.



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

The
Company evaluates goodwill for impairment annually using a two-step test based upon a fair value approach. The first step is used to identify a potential impairment,
while the second step calculates the amount of impairment, if any. Additionally, goodwill is tested for impairment between annual tests if an event occurs or circumstances change that would more
likely than not reduce the fair value of a reporting unit below its carrying value.



Accrued expenses consisted of the following at December 31:

2004

2003(in thousands of dollars)Interest

$
13,084

$
12,958Deposits and customer advances


12,627


11,261Benefits and severance


2,326


2,882Taxes


4,403


4,543Derivative instruments





1,535Other


1,663


2,687$
34,103

$
35,866




Trade show and conference revenue is recognized in the accounting period in which the event is conducted. Subscription revenue is recognized on a pro rata basis
as publications are issued to fulfill the subscription obligations. Advertising revenue is recognized when the publication with the respective advertisement is issued. Custom project contract revenue
with both conference and print elements are deferred and not recognized until all elements are delivered. Deferred revenue is recorded when cash is received in advance of when a trade show event is
held or the publication is issued. Customer advances are recorded when cash is received in anticipation of future advertising unrelated to a specific publication issue.

Deferred
revenue consisted of the following at December 31:

2004

2003(in thousands of dollars)Deferred trade show and conference revenue

$
42,088

$
45,301Deferred advertising and subscription revenue


10,268


11,169Deferred Internet advertising and other revenue


41


83Total deferred revenue

$
52,397

$
56,553


F-8

---





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



The Company accounts for derivative instruments on the balance sheet at fair value in accordance with SFAS No. 133,Accounting for
Derivative Instruments and Hedging Activities. Changes in the fair value of derivative financial instruments must be recognized currently in earnings unless specific hedge
accounting criteria are met. For those instruments which meet the hedging criteria, gains and losses will be recognized in other comprehensive income rather than in earnings.



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

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

2004

2003

2002(in thousands of dollarsunaudited)Net lossas reported

$
(67,127
)
$
(70,144
)
$
(118,079
)Less: Pro forma stock-based employee compensation cost


(2,550
)

(2,400
)

(2,133
)Net losspro forma

$
(69,677
)
$
(72,544
)
$
(120,212
)


See
Note 8 for further discussion of the Company's stock compensation plans.



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



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

F-9

---





In December 2003, the FASB issued Interpretation No. 46R,Consolidation of Variable Interest
Entities, which addresses accounting for special-purpose and variable interest entities and which superseded Interpretation No. 46. The provisions of Interpretation
No. 46R are effective for the Company in the first quarter of 2005. The Company does not expect the adoption of this standard to have a material effect on its financial position, results of
operations or cash flows.

In
December 2004, the Financial Accounting Standards Board issued SFAS No. 123 R, "Share-Based Payment" which revises SFAS 123 and supersedes APB 25. This statement
establishes standards relating to accounting for transactions in which equity instruments are exchanged for goods or services. Under this statement, the Company must measure the cost of employee
services received in exchange for an award of equity instruments based upon the fair value of the award on the date of grant. This cost must be recognized over the period during which an employee is
required to provide the service (usually the vesting period). The Company is required to adopt the provisions of this standard effective January 1, 2006. The Company is currently evaluating the
impact of this standard. The adoption of this standard will result in an increase in compensation expense and an increase to net loss.

3.    Goodwill and Other Intangible Assets

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

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

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

On
July 1, 2003 and 2004, the Company engaged an appraiser to assist in completing its annual goodwill impairment test of each of its three reporting units. Based on this
valuation, which utilized a discounted cash flow method, there was no impairment of goodwill indicated.

F-10

---



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

|                                                         |  | Trade Shows
and
Conferences |         | Trade
Publications |   | Direct
Marketing
Products
and Other |   | Totals |       
|-------------------------------------------------------- |  | --------------------------- | ------- | ------------------ | - | ----------------------------------- | - | ------ | ------
|
|Balances at December 31, 2002                            |  | $                           | 456,940 |                    | $ | 133,725                             |   | $      | 30,840
|Goodwill acquired or finally allocated during the period |  |                             | (1,017  | )                  |   | 75,685                              |   |        |      
|Goodwill allocated to business disposition               |  |                             | (787    | )                  |   | (639                                | ) |        |      
|Foreign currency translation                             |  |                             | 2,773   |                    |   | 1,672                               |   |        | 29    
|                                                         |  |                             |         |                    |   |                                     |   |        |       
|Balances at December 31, 2003                            |  |                             | 457,909 |                    |   | 210,443                             |   |        | 30,869
|Goodwill acquired or finally allocated during the period |  |                             | 247     |                    |   | 6,272                               |   |        |      
|Goodwill allocated to business disposition               |  |                             |        |                    |   | (900                                | ) |        |      
|Foreign currency translation                             |  |                             | 2,274   |                    |   | 640                                 |   |        | 2     
|                                                         |  |                             |         |                    |   |                                     |   |        |       
|Balances at December 31, 2004                            |  | $                           | 460,430 |                    | $ | 216,455                             |   | $      | 30,871
|                                                         |  |                             |         |                    |   |                                     |   |        |       

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

2004

2003Trade exhibitor lists

$
155,721

$
155,043Advertiser lists


60,943


62,303Subscriber lists


29,145


28,577Trade names and trademarks


17,996


18,008Other intangible assets


24,405


21,323Deferred financing costs


23,379


23,063311,589


308,317Accumulated amortization


(209,776
)

(165,926
)Total intangible and other assets, net

$
101,813

$
142,391


The
allocated fair value of intangible assets acquired during 2004 and 2003 was as follows:

2004

2003(in thousands of dollars)Trade exhibitor lists

$


$
Advertiser lists





24,419Subscriber lists


789


5,091Trade names and trademarks


97


17,948Other intangible assets


1,566


14,752$
2,452

$
62,210


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

(in thousands of dollars)2005

$
37,7532006


27,2952007


11,5332008


8,0372009


3,912


F-11

---



4.     Restructuring Activity

The Company integrated many of the sales, marketing, technology and operating functions of its wholly owned subsidiary Advanstar.com, Inc.
("Advanstar.com") with Communications and its core activities in publishing, trade shows and direct marketing products. These restructuring activities were completed by the end of 2001, except for
facility lease costs, which continue through June 2010, including leasehold improvements from the facility Advanstar.com vacated. At December 31 2003, there was a $6.2 million
accrual for remaining facility closure costs, of which $0.6 million is included in accrued liabilities and approximately $5.6 million is included in other long-term
liabilities in the accompanying consolidated balance sheet. The facility lease obligation was settled in May 2004 for less than amounts owed under the lease. An $4.0 million favorable
settlement (net of fees and related expenses) of the lease obligation was recognized as an offset to operating expenses in 2004. No liability existed as of December 31, 2004 relating to this
restructuring.

In
September 2003, the Company consolidated its midtown New York leased office space from two floors to one. These actions resulted in a third quarter charge of approximately
$2.1 million. In December 2003, the Company consolidated its Chester, U.K. leased office space, resulting in a fourth quarter charge of approximately $0.6 million. These charges
included the present value of future facility rental payments, net of sublease income, of $2.3 million and other relocation costs and expenses of $0.4 million. The Company will continue
to pay facility lease costs, net of sublease income, associated with the previously used facilities through August 2015. The balance of the accrual for these costs at December 31, 2004,
and 2003 is $1.8 million and $2.4 million which principally represents remaining facility lease costs, of which $0.5 million is included in accrued liabilities at
December 31, 2004 and 2003,
and $1.3 million and $1.9 million is included in other long-term liabilities at December 31, 2004 and 2003 in the accompanying consolidated balance sheet.

5.     Acquisitions and Divestitures



All acquisitions have been accounted for using the purchase method of accounting and, accordingly, the assets acquired and liabilities assumed have been recorded
at their fair values as of the dates of the acquisitions. The excess of the purchase price over the fair value of the assets acquired and liabilities assumed has been recorded as goodwill. Results of
operations for these acquisitions have been included in the accompanying consolidated financial statements since their respective dates of acquisition. Any divestiture where the Company has
significant continuing involvement are included in continuing operations in accordance with Emerging Issues Task Force (EITF) Issue No. 03-13.

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

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

During
2002, the Company completed two other acquisitions of publishing properties with a cumulative purchase price of $1.0 million in cash.

During
2003, the Company acquired intangible assets, primarily customer relationships, for $0.7 million in cash. The Company also paid an additional $0.5 million contingent
purchase price related to its 2002 acquisition ofHTthe Magazine for Healthcare Travel Professionals.

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

F-12

---



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

(in thousands of dollars)Current assets

$
12,878Property, plant and equipment


1,233Intangible assetsAdvertiser lists


23,842Subscriber lists


5,091Trade names and trademarks


17,948Noncompetition agreement


13,591Other intangible assets


957Goodwill


75,110Total assets acquired


150,650Current liabilities


14,111Total liabilities assumed


14,111Net assets acquired

$
136,539


The
$61.4 million of intangible assets related to Thomson have a weighted average useful life of approximately nine years. All goodwill acquired is expected to be
deductible for tax purposes.

Current
liabilities of $14.1 million were assumed, including approximately $1.0 million of severance costs pursuant to the Company's plan to sever certain employees of
Thomson. All affected employees were severed as of December 31, 2003. The remaining balance of accrued severance at December 31, 2004 and 2003, was $0.1 million and
$1.0 million, respectively. All remaining severance liability, as of December 31, 2004, will be paid in 2005.

On
March 8, 2004, the Company purchased a portfolio of pharmaceutical industry conferences and magazines from the Institute of Validation Technology, Inc. ("IVT") for
$7.9 million in cash. In addition, the Company will pay additional contingent cash consideration to the former shareholders based on 2004 and 2005 operating results of the acquired assets and
their continued employment with the Company. As of December 31, 2004, the Company has accrued $1.5 million based upon 2004 operating results, of which $1.0 million is included in
other accrued liabilities and $0.5 million is included in other long-term liabilities in the accompanying consolidated balance sheet at December 31, 2004.

The
following are the Company's unaudited pro forma operating results as if the Thomson acquisition had taken place at January 1, 2002. The unaudited pro forma operating results
related to all other acquisitions discussed above were immaterial.

2003

2002(in thousands of dollarsunaudited)Revenue

$
372,361

$
379,338Loss from continuing operations before cumulative effect of accounting change


(85,990
)

(59,916
)Net loss


(83,497
)

(126,826
)


The
unaudited pro forma operating results do not purport to represent what the Company's results of operations actually would have been if the acquisition had occurred as
of the date indicated or what such results will be for any future periods.

F-13

---





The results of the following divestitures have been reported in discontinued operations in the consolidated statements of operations for the years ended
December 31, 2004, 2003 and 2002. In addition, the assets and liabilities related to these divestitures are reported in discontinued operations in the consolidated balance sheet at
December 31, 2003. Any divestiture where the Company has continued involvement are included in continuing operations in accordance with Emerging Issues Task Force (EITF) regarding Issue
No. 03-13.



On March 12, 2004, the Company completed the sale of its art industry trade shows and magazines (the "Art Group") for a total selling price of
$19.6 million in cash. The portfolio included three trade shows and two publications. The Company recorded a gain on the sale of $1.0 million plus a tax benefit of $2.4 million.

Revenues
of the Art Group, included in discontinued operations in the consolidated statements of operations, for the period from January 1, 2004 to March 12, 2004, and for
the years ended December 31, 2003 and 2002, were $8.5 million, $10.9 million and $9.6 million, respectively.



On August 5, 2004, the Company completed the sale, for a total selling price of $3.1 million in cash, of its 65% ownership in its French joint
venture ("SeCA"), which consisted of one trade show. In
connection with the sale, the Company recorded a goodwill impairment charge of $9.4 million, net of minority interest, in the second quarter of 2004. The amount of the impairment charge was
determined based upon the excess of the carrying value of the Company's interest in SeCA over the selling price, less the costs incurred by the Company to sell SeCA. This charge is reported separately
as a component of discontinued operations for the year ended December 31, 2004.

Revenues
of SeCA, included in discontinued operations in the consolidated statements of operations, for the period from January 1, 2004 to August 5, 2004 and for the years
ended December 31, 2003 and 2002 were $2.9 million, $4.1 million and $5.7 million, respectively.



On September 8, 2004, the Company sold its German trade show business ("DMS") for $1.7 million in cash. In connection with the sale, the Company
recorded a goodwill impairment charge of $6.2 million in the third quarter of 2004. The amount of the impairment charge was determined based upon the excess of the carrying value of DMS over
the selling price, less the costs incurred by the Company to sell DMS. This charge is reported as a component of discontinued operations for the year ended December 31, 2004.

Revenues
of DMS, included in discontinued operations in the consolidated statements of operations, were for the period from January 1, 2004 to September 8, 2004, and for
the years ended December 31, 2003 and 2002 were, $0.1 million, $2.0 million and $2.3 million, respectively.

F-14

---



The
financial results of the Art Group, SeCA and DMS included in the discontinued operations in the accompanying consolidated statements of operations for the years ended
December 31, 2004, 2003 and 2003 are as follows:

2004

2003

2002(in thousands of dollars)(Loss) income before income taxes (including goodwill impairment charge and gain on sale)

$
(16,559
)
$
2,755

$
987Income tax (benefit) provision


(1,990
)

2,442


782Minority interests


4,826


(224
)

(298
)Net (loss) income


(9,743
)

89


(93
)


The
amount of goodwill associated with the businesses to be disposed of was determined based on the relative fair values of the businesses to be disposed of and the
portion of the reporting units that will be retained. For businesses to be disposed of that were never integrated into the reporting units, the carrying amount of that acquired goodwill is included in
the carrying amount of the businesses to be disposed of.

The
Art Group, SeCA and DMS goodwill included in gain/loss on discontinued operations and the goodwill impairment charge included in discontinued operations in the Company's reportable
segments for the year ended December 31, 2004 (in thousands) are as follows:

|                                                             |  | Trade Shows
and
Conferences |        | Trade
Publications |   | Direct
Marketing
Products
and Other |  | Corporate |   | Total
|------------------------------------------------------------ |  | --------------------------- | ------ | ------------------ | - | ----------------------------------- |  | --------- | - | -----
|Goodwill included in gain on sale of discontinued operations |  | $                           | 19,287 |                    | $ | 3,346                               |  | $         |  |      
|Goodwill impairment included in discontinued operations      |  |                             | 20,108 |                    |   | 534                                 |  |           |  |      

The
goodwill impairment charge of $20.6 million above does not include the effect of minority interest. After minority interest effect of $5.1 million, the net
charge was $15.6 million.

The
discontinued operations of the Art Group, SeCA and DMS included in the consolidated balance sheets as of December 31, 2003 are as follows:

|            |                                             | (in thousands of dollars)                             
|----------- | ------------------------------------------- | ------------------------------------------------------
|Assets      |                                             |                                                       
|            | Accounts receivable                         |                                                       
|            | Prepaid expenses                            |                                                       
|            |                                             |                                                       
|            |                                             | Total current assets of discontinued operations       
|            | Property, plant and equipment, net          |                                                       
|            | Goodwill                                    |                                                       
|            | Intangibles and other, net                  |                                                       
|            |                                             |                                                       
|            |                                             | Total non current assets of discontinued operations   
|Liabilities |                                             |                                                       
|            | Accounts payable and other accrued expenses |                                                       
|            | Deferred revenue                            |                                                       
|            |                                             |                                                       
|            |                                             | Total current liabilities of discontinued operations  
|            | Deferred income taxes                       |                                                       
|            | Minority interests                          |                                                       
|            |                                             |                                                       
|            |                                             | Total long term liabilities of discontinued operations
|            |                                             |                                                       
|            |                                             |                                                       
|            |                                             |                                                       

F-15

---



The Art Group, SeCA and DMS assets included in discontinued operations in the Company's reportable segments at December 31, 2003 (in thousands) are as follows:

|               |  | Trade Shows
and
Conferences |        | Trade
Publications |   | Direct
Marketing
Products
and Other |  | Corporate |   | Total
|-------------- |  | --------------------------- | ------ | ------------------ | - | ----------------------------------- |  | --------- | - | -----
|Segment assets |  | $                           | 45,167 |                    | $ | 3,908                               |  | $         |  |      

6.     Financial Derivative Instruments

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



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

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

In
connection with Communications' private placement of $360 million of second priority senior secured notes in August 2003 and the use of proceeds therefrom to repay and
terminate all outstanding term A loans under its credit facility and all but $25.0 million of the outstanding term B loans under its credit facility (Note 7), the Company reclassified
approximately $1.8 million of deferred losses previously reported as a component of accumulated other comprehensive income into other expense in the quarter ended September 30, 2003.



The Company periodically uses forward contracts to manage its exposure associated with forecasted international revenue and expense transactions denominated in
euro, British Pound Sterling and the Brazilian Real for up to 15 months in the future. Changes in the fair value of these instruments are reported as a component of accumulated other
comprehensive income in stockholder's equity and are recognized in earnings as the underlying revenue is recognized. Forward contracts not designated as hedging instruments under SFAS No. 133
are also used to manage the impact of the variability in exchange rates. Changes in the fair value of these foreign exchange contracts are recognized in current earnings.

At
December 31, 2004, the Company had no foreign exchange derivative contracts.

F-16

---





The following table summarizes the effects of SFAS No. 133 on the Company's accumulated other comprehensive income at December 31, 2004 and 2003:

Interest Rate
Collar
Agreements

Foreign
Exchange
Contracts

Total(in thousands of dollars)Accumulated other comprehensive loss balance at December 31, 2002

$
(4,350
)
$


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


5,739





5,739Mark to market hedge contracts


(1,431
)




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


(42
)




(42
)Unwound from accumulated other comprehensive income during the period


(99
)




(99
)Mark to market hedge contracts


244





244Accumulated other comprehensive income balance at December 31, 2004

$
103

$


$
103


At
December 31, 2004, the Company will reclassify out of accumulated other comprehensive income approximately $0.1 million of deferred gains into earnings within the next
12 months.

The
Company had no derivatives in the consolidated balance sheet as of December 31, 2004. As of December 31, 2003, the fair value of the Company's derivatives was a net
liability position of $1.5 million included in accrued liabilities, in the accompanying consolidated balance sheet.



The following tables summarize the effects of SFAS No. 133 on the Company's statement of operations related to the ineffective portion of the Company's
interest rate collar agreements and changes in the fair value of foreign exchange contracts not designated as hedging instruments for the years ended December 31, 2004 and 2003:

|                                                  |  | Interest Rate
Collar
Agreements |       | Foreign
Exchange
Contracts |   | Total
|------------------------------------------------- |  | ------------------------------- | ----- | -------------------------- | - | -----
|
|Year ended December 31, 2004                      |  |                                 |       |                            |   |      
|Other income (expense)                            |  | $                               | 1,319 |                            | $ | 71   
|                                                  |  |                                 |       |                            |   |      
|Total statement of operations impact before taxes |  | $                               | 1,319 |                            | $ | 71   
|                                                  |  |                                 |       |                            |   |      
|Year ended December 31, 2003                      |  |                                 |       |                            |   |      
|Other income (expense)                            |  | $                               | 1,178 |                            | $ | (96  
|                                                  |  |                                 |       |                            |   |      
|Total statement of operations impact before taxes |  | $                               | 1,178 |                            | $ | (96  
|                                                  |  |                                 |       |                            |   |      

7.     Debt



Prior to the August 2003 transactions described below, the credit facility (the "Credit Facility") consisted of (i) $415.0 million of term
loans A and B payable in quarterly installments through October 11, 2008, and (ii) $80.0 million of revolving loan availability through April 11, 2007. The Credit

F-17

---



Facility
contained restrictive covenants, which required the Company to, among other things, maintain a minimum fixed charge coverage ratio and maximum quarterly leverage ratio (as defined).

In
connection with the Company's private placement in August 2003, described below, the Company repaid all term A loans, all but $25.0 million term B loans, and a portion
of the revolving credit borrowings under the Credit Facility. The Company also amended its Credit Facility to reduce the
revolving loan availability from $80.0 million to $60.0 million, eliminate the leverage ratio covenant and amend certain other covenants.

Failure
to comply with current covenants may cause an event of default under the credit facility. Borrowings under the Credit Facility are collateralized by substantially all of the
Company's assets. At December 31, 2004, the Company had $59.1 million of borrowings available under the Credit Facility.



On August 18, 2003, Communications issued $360.0 million of second priority senior secured notes (the "August senior secured notes"). On
September 25, 2003, Communications issued an additional $70.0 million of second priority senior secured notes (the "September senior secured notes"), which were issued at a premium
(together with the August senior secured notes, the "Senior Secured Notes"). The Senior Secured Notes were issued in two tranches: $130.0 million of Second Priority Senior Secured Floating Rate
Notes due 2008, which will require quarterly amortization equal to 0.25% of the principal amount thereof (the "floating rate notes"), and $300.0 million of 10.75% Second Priority Senior Secured
Notes due 2010. Interest on the floating rate notes is payable at a rate equal to three-month LIBOR, which is reset quarterly, plus 7.5%. Each tranche of the notes is collateralized by second priority
liens on substantially all the collateral pledged against borrowings under Communications' Credit Facility (other than the capital stock of certain of its subsidiaries and assets of its parent
companies, including Advanstar). The notes contain restrictive covenants that, among other things, limit Communications' ability to incur debt, pay dividends and make investments. Communications
entered into a registration rights agreement in connection with the private placement pursuant to which the Company has registered substantially all of the notes under the Securities Act of 1933, as
amended.

Communications
used the net proceeds from the August senior secured notes offering to repay and terminate all outstanding term A loans under the Credit Facility and all but
$25.0 million of the outstanding term B loans and a portion of its revolving credit borrowings under the Credit Facility. Communications used the net proceeds of the September senior secured
notes offering to acquire a portfolio of healthcare industry magazines and related custom service projects from the Thomson Corporation (Note 5).

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



Communications' $160.0 million unsecured, 12% senior subordinated notes due 2011 (the "Senior Subordinated Notes") bear interest payable semiannually on
February 15 and August 15 of each year. The Senior Subordinated Notes are fully and unconditionally guaranteed on a senior subordinated basis, jointly and severally, by Communications'
wholly owned domestic subsidiaries. The financial covenants under the Senior Subordinated Notes include limitations on certain asset dispositions, payments, debt incurrence, dividends and other
restricted payments.

F-18

---



The
Company's senior discount notes due October 2011 (the "Discount Notes") with a principal amount at maturity of $171.8 million bear interest at 15%, payable semiannually
beginning October 2005, and have an implied yield to maturity of approximately 17.2%. The notes are redeemable at the Company's option at specified premiums through 2007 and at par thereafter.
The notes may also be redeemed at a premium upon a qualifying change of control of the Company.

The
Discount Notes do not require cash interest payments until 2006 and contain restrictive covenants that, among other things, limit Advanstar's ability and that of its subsidiaries to
incur debt, pay dividends and make investments. Since Advanstar is a holding company and its subsidiaries serve as its only source of cash flow, its ability to pay interest on these notes will be
dependent upon the receipt of dividends from its subsidiaries. The Credit Facility, the Senior Secured Notes and the Senior Subordinated Notes impose substantial restrictions on
Advanstar, Inc.'s subsidiaries' ability to pay dividends to Advanstar, Inc. Additionally, the Discount Notes are not guaranteed by Advanstar's subsidiaries.

Accretion
of the debt discount on the Discount Notes was approximately $21.1 million, $17.9 million and $15.2 million during the years ended December 31,
2004, 2003 and 2002, respectively. These amounts are included in interest expense in the respective accompanying consolidated statements of operations.

Long-term
debt consists of the following at December 31:

|                                                                                                                                                             |  | 2004 |         | 2003 |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---- | ------- | ---- | -
|
|Term loan B, interest at LIBOR plus 4.50%; 6.92% at December 31, 2004, due quarterly through October 11, 2008                                                |  | $    | 25,000  |      | $
|Revolving credit loan, interest at LIBOR plus 3.75%; due April 11, 2007                                                                                      |  |      |        |      |  
|Second priority senior secured floating rate notes, interest at LIBOR plus 7.50%, 9.79% at December 31, 2004, due 2008                                       |  |      | 128,375 |      |  
|10.75% Second priority senior secured notes, due 2010, plus unamortized premium of $844 and $994 at December 31, 2004 and 2003, respectively                 |  |      | 300,844 |      |  
|12% Senior subordinated notes, due 2011                                                                                                                      |  |      | 160,000 |      |  
|Senior discount notes, interest at 15%, due October 11, 2011, net of unamortized discount of $33,692 and $53,790 at December 31, 2004 and 2003, respectively |  |      | 139,100 |      |  
|Acquisition note payable, interest at 5.5%, due monthly through 2004                                                                                         |  |      |        |      |  
|Acquisition note payable, interest at 6.0%, due April 1, 2004                                                                                                |  |      |        |      |  
|                                                                                                                                                             |  |      |         |      |  
|                                                                                                                                                             |  |      | 753,319 |      |  
|Less: Current maturities                                                                                                                                     |  |      | (1,300  | )    |  
|                                                                                                                                                             |  |      |         |      |  
|                                                                                                                                                             |  | $    | 752,019 |      | $
|                                                                                                                                                             |  |      |         |      |  

Based
on the borrowing rates currently available to the Company for debt instruments with similar terms and average maturities, the fair value of long-term debt exceeded its
carrying value by $55.6 million and $49.1 million at December 31, 2004 and 2003.

Cash
paid for interest for the years ended December 31, 2004, 2003 and 2002, was approximately $67.2 million, $51.1 million and $49.1 million, respectively.

F-19

---



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

(in thousands of dollars)2005

$
1,3002006


1,3002007


1,3002008


149,4752009


Thereafter


632,792$
786,167


8.    Stockholder's Equity



On October 12, 2000, Holdings adopted the 2000 Management Incentive Plan. A maximum of 4,047,789 shares of Holdings are authorized for grant to
participants under the 2000 Management Incentive Plan. Options are granted by Holdings' board of directors at an exercise price of not less than the fair value of Holdings common stock at the date of
grant and vest over a maximum of nine years. Shares available for grant under the 2000 Management Incentive Plan totaled 222,789 at December 31, 2004.

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

2004

2003

2002Expected dividend yield





Expected stock price volatility

42.3
%
36.0
%
37.6
%Risk-free interest rate

3.6
%
3.8
%
5.0
%Expected life of options

5.0 years

7.0 years

7.0 years


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

F-20

---



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

Options
Outstanding

Weighted
Average
Exercise
PriceOutstanding at December 31, 2001

2,925,000

$
10.00Granted

575,000


10.00Cancelled

(256,250
)

10.00Outstanding at December 31, 2002

3,243,750


10.00Granted

600,000


10.00Outstanding at December 31, 2003

3,843,750


10.00Granted

256,250


10.00Cancelled

(275,000
)

10.00Outstanding at December 31, 2004

3,825,000


10.00


At
December 31, 2004 and 2003, the outstanding stock options had a weighted average remaining contractual life of 6.83 years and 7.6 years, respectively, and an
exercise price of $10.00 per option. Of the options outstanding at December 31, 2004 and 2003, 2,230,798 and 1,596,600 respectively, were exercisable. The weighted average fair value of grants,
as estimated using the Black-Scholes option pricing model, for the years ended December 31, 2004, 2003 and 2002, was $5.24, $5.34 and $5.42 per option, respectively.

9.    401(k) Plan

The Company has a 401(k) savings plan and trust (the "401(k) Plan") available to employees of Advanstar, Inc. and its domestic subsidiaries. All domestic
employees who have completed one year of service and are at least 21 years of age are eligible to participate in the 401(k) Plan. The Company is required to make a matching contribution to the
401(k) Plan and may also make discretionary contributions to the 401(k) Plan. Eligible employees are vested 100% in their own contributions. Contributions made by the Company vest in equal
installments over five years. Total contribution expense was $1.6 million for the year ended December 31, 2004, $1.2 million for each of the years ended December 31, 2003
and 2002.

10.    Income Taxes

The Company's taxable income or loss is included in the consolidated federal income tax return of Holdings. Federal income taxes are paid to or refunded by the
Parent pursuant to the terms of a tax sharing agreement under which taxes approximate the amount that would have been computed on a separate company basis. Taxes payable to the Parent of approximately
$0.1 million at December 31, 2004 and 2003 are included in due from Parent in the accompanying consolidated balance sheets.

Cash
paid for income taxes for the years ended December 31, 2004, 2003 and 2002, was approximately $0.2 million, $0.3 million and $0.8 million, respectively.

F-21

---



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

2004

2003

2002(in thousands of dollars)Domestic

$
(43,070
)
$
(60,424
)
$
(54,378
)Foreign


202


(5,123
)

(679
)$
(42,868
)
$
(65,547
)
$
(55,057
)


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

2004

2003

2002(in thousands of dollars)CurrentFederal

$


$


$
(937
)State


7





59Foreign


283


(303
)

1,106Deferred


13,664


4,586


(4,292
)Total provision (benefit)

$
13,954

$
4,283

$
(4,064
)


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

F-22

---



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

2004

2003(in thousands of dollars)Net current deferred tax assetAccrued expenses and other

$
7,927

$
7,882Prepaid and other


(372
)

(3,196
)Total net current deferred tax asset


7,555


4,686Net noncurrent deferred tax assetProperty, plant and equipment


777


1,587Identifiable intangible assets


16,012


5,238Goodwill


(18,250
)

(4,586
)U.S. net operating loss carryforwards


41,878


29,933Foreign jurisdiction net operating loss carryforwards


10,744


7,616Financial derivatives


(419
)

1,075Debt discount


17,089


11,793AMT credit carryforwards


453


453Total net noncurrent deferred tax asset


68,284


53,109Valuation allowance


(94,089
)

(62,381
)Net deferred income tax liabilities

$
(18,250
)
$
(4,586
)


The
Company has established a valuation allowance to offset all of these net deferred tax assets. The amortization of goodwill for income tax purposes resulted in the reduction in tax
basis of goodwill to a tax effected amount of $18.3 million and $4.6 million less than the carrying value of goodwill for financial reporting purposes at December 31, 2004 and
2003. Because goodwill is not amortized for financial reporting purposes, the Company has established a deferred tax liability equal to this basis difference and has increased the valuation allowance
by the same amount.

At
December 31, 2004 and 2003, the Company had net operating loss carryforwards of approximately $134.5 million and $97.5 million, respectively. Of these losses,
approximately $26.9 million and $19.0 million are related to losses generated by the Company's operations in foreign tax jurisdictions whose use are subject to the tax laws of such
foreign jurisdictions and will be limited by the ability of such foreign entities to generate taxable income. Of the total operating loss carryforwards, approximately $26.9 million have no
expiration date and approximately $107.6 million expire at various dates beginning in 2021.

F-23

---



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

|                                      |  |   |         |   |   | 2002    |  
|------------------------------------- |  | - | ------- | - | - | ------- | -
|
|
|Income tax benefit at statutory rates |  | $ | (15,004 | ) | $ | (21,977 | )
|Nondeductible goodwill impairment     |  |   |        |   |   |        |  
|Change in valuation allowance         |  |   | 27,580  |   |   | 28,831  |  
|State taxes, net of federal benefit   |  |   | (1,072  | ) |   | (1,570  | )
|Nondeductible interest                |  |   | 2,616   |   |   | 2,220   |  
|Foreign rate differential             |  |   | 213     |   |   | (568    | )
|Other, net                            |  |   | (379    | ) |   | (2,653  | )
|                                      |  |   |         |   |   |         |  
|Provision (benefit) for income taxes  |  | $ | 13,954  |   | $ | 4,283   |  
|                                      |  |   |         |   |   |         |  

The
change in valuation allowance for the year ended December 31, 2004 excludes a $4.1 million valuation allowance established to offset foreign jurisdiction net operating
loss carryforwards that were also recorded in the year ended December 31, 2004.

11.   Commitments and Contingencies



The Company has long-term operating leases for office space and office equipment. The leases generally require the Company to pay maintenance,
insurance, taxes and other expenses in addition to minimum annual rentals. Building and equipment rent expense, including an allocation of certain facility operating expenses, was $9.7 million,
$7.8 million and $7.4 million for the years ended December 31, 2004, 2003 and 2002, respectively. Future minimum rent commitments under operating leases with initial terms of one
year or more are as follows:

(in thousands of dollars)2005

$
7,0742006


6,3712007


5,1302008


4,5592009


3,046Thereafter


1,729




The Company is a defendant in legal proceedings arising in the ordinary course of business. Based on information presently available, management has determined
that the accruals for these routine actions and claims are adequate. Although recorded accruals include management's best estimates, the resolution of these matters and can not be predicted with
certainty. Management believes, however, that it is unlikely that any identified matters, either individually or in the aggregate, will have a material adverse effect on the Company's results of
operations or financial position.

F-24

---



12.   Segments

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

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

|                             |                            | Trade Shows
and
Conferences |   | Trade
Publications |  | Direct
Marketing
Products
and Other |         | Corporate |   | Total 
|---------------------------- | -------------------------- | --------------------------- | - | ------------------ |  | ----------------------------------- | ------- | --------- | - | ------
|
|Year ended December 31, 2004 |                            |                             |   |                    |  |                                     |         |           |   |       
|                             | Revenues                   |                             | $ | 151,483            |  | $                                   | 206,147 |           | $ | 22,841
|                             | Contribution margin (loss) |                             |   | 75,775             |  |                                     | 59,368  |           |   | 11,572
|                             | Segment assets             |                             |   | 502,663            |  |                                     | 293,399 |           |   | 33,848
|Year ended December 31, 2003 |                            |                             |   |                    |  |                                     |         |           |   |       
|                             | Revenues                   |                             |   | 142,063            |  |                                     | 147,864 |           |   | 19,035
|                             | Contribution margin (loss) |                             |   | 69,215             |  |                                     | 45,213  |           |   | 8,265 
|                             | Segment assets             |                             |   | 563,055            |  |                                     | 279,792 |           |   | 33,349
|Year ended December 31, 2002 |                            |                             |   |                    |  |                                     |         |           |   |       
|                             | Revenues                   |                             |   | 145,961            |  |                                     | 127,385 |           |   | 18,490
|                             | Contribution margin (loss) |                             |   | 76,384             |  |                                     | 35,538  |           |   | 7,512 
|                             | Segment assets             |                             |   | 586,406            |  |                                     | 183,954 |           |   | 32,599

The
reconciliation of total segment contribution margin to consolidated loss from continuing operations before taxes, minority interest and cumulative effect of accounting change is as
follows for the years ended December 31:

|                                   |                                                                                                      | 2004 |         | 2003    |   | 2002    |        
|---------------------------------- | ---------------------------------------------------------------------------------------------------- | ---- | ------- | ------- | - | ------- | -------
|
|Total segment contribution margin  |                                                                                                      | $    | 140,082 |         | $ | 117,284 |        
|General and administrative expense |                                                                                                      |      | (45,817 | )       |   | (35,310 | )      
|Restructuring charge               |                                                                                                      |      | 4,015   |         |   | (2,692  | )      
|Depreciation and amortization      |                                                                                                      |      | (50,170 | )       |   | (57,721 | )      
|Other expense (primarily interest) |                                                                                                      |      | (90,978 | )       |   | (87,108 | )      
|                                   |                                                                                                      |      |         |         |   |         |        
|                                   | Consolidated loss before income taxes, minority interests and cumulative effect of accounting change |      | $       | (42,868 | ) | $       | (65,547
|                                   |                                                                                                      |      |         |         |   |         |        

F-25

---



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

2004

2003

2002(in thousands of dollars)RevenueUnited States

$
366,674

$
297,897

$
273,344International


13,797


11,065


18,492$
380,471

$
308,962

$
291,836


2004

2003(in thousands of dollars)Long-Lived AssetsUnited States

$
794,973

$
828,270International


39,749


37,748$
834,722

$
866,018


13.   Related-Party Transactions



In 2003, Credit Suisse First Boston Corporation ("CSFB"), an affiliate of the DLJ Merchant Banking funds, provided services to the Company in connection with the
arrangement and syndication of the Credit Facility and as a lender thereunder. CSFB was an initial purchaser of, the Senior Secured Notes. The Company paid customary financing fees to CSFB for those
services. The aggregate amount of all fees paid to the CSFB entities in connection with these financings during 2003 was approximately $10.4 million, including
out-of-pocket expenses. This amount has been capitalized as deferred financing costs and is being amortized over the remaining term of the Senior Secured Notes.

The
Company has agreed to pay CSFB an annual advisory fee of $0.5 million until the earlier of (i) an initial public offering of Holdings, (ii) the date when the DLJ
Merchant Banking funds own less than 162/3% of the shares of Holdings' common stock held by them on the closing date of the DLJ Acquisition or (iii) October 11, 2005. This
amount is expensed as incurred.

F-26

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2.    Financial Statement Schedules

Schedule ICondensed Financial Information of Advanstar, Inc. (Parent Company)

|Condensed Balance SheetDecenber 31 |                                            | 2004 |         | 2003   
|----------------------------------- | ------------------------------------------ | ---- | ------- | -------
|
|Cash and cash equivalents           |                                            | $    | 32      |        
|                                    |                                            |      |         |        
|                                    | Total current assets                       |      |         | 32     
|Investment in subsidiaries          |                                            |      | 181,676 |        
|Debt issuance costs                 |                                            |      | 638     |        
|                                    |                                            |      |         |        
|                                    | Total assets                               |      | $       | 182,346
|                                    |                                            |      |         |        
|Total current liabilities           |                                            |      | 55      |        
|Long-term debt                      |                                            |      | 139,100 |        
|Due to affiliate, net               |                                            |      | 16,968  |        
|Stockholder's equity                |                                            |      | 26,223  |        
|                                    |                                            |      |         |        
|                                    | Total liabilities and stockholder's equity |      | $       | 182,346
|                                    |                                            |      |         |        

|                                     |          | Year Ended |        
|------------------------------------ | -------- | ---------- | -------
|
|
|
|Revenue                              |          | $          |       
|Operating loss                       |          |            | (706   
|Interest expense                     |          |            | (21,233
|Other expense                        |          |            |       
|Provision (benefit) for income taxes |          |            |       
|Equity in losses of subsidiaries     |          |            | (45,188
|                                     |          |            |        
|                                     | Net loss |            | $      
|                                     |          |            |        

|                                                |  | Year Ended
|----------------------------------------------- |  | ----------
|
|
|
|Cash provided by (used in) operation activities |  | $         
|Cash used by investing activities               |  |           
|Cash used by financing activities               |  |           
|Cash at beginning of year                       |  |           
|Cash at end of year                             |  |           

Notes
to Condensed Financial Statements





II-1

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

|                                |      | Balance at
Beginning of
Period |   | Charged to
Costs and
Expenses
Additions |  | Charged to
Other
Accounts |           | Deductions(1) |   | Balance at
End of
Period
|------------------------------- | ---- | ------------------------------ | - | --------------------------------------- |  | ------------------------- | --------- | ------------- | - | ------------------------
|
|Allowance for doubtful accounts |      |                                |   |                                         |  |                           |           |               |   |                         
|Year Ended December 31,         |      |                                |   |                                         |  |                           |           |               |   |                         
|                                | 2004 |                                | $ | 842,000                                 |  | $                         | 790,000   |               | $ |                        
|                                | 2003 |                                |   | 865,000                                 |  |                           | 582,000   |               |   |                        
|                                | 2002 |                                |   | 942,000                                 |  |                           | 1,335,000 |               |   |                        

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

II-2

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3. Exhibits

|Exhibit
No. |  | Document                                                                                                                                                                                                                                                                                                                                                    
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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)
|2.2         |  | Asset Purchase Agreement among Thomson Healthcare Inc., Global Information Licensing Corporation and Advanstar Communications Inc. dated as of August 22, 2003 (Previously filed as an exhibit to the Company's current report on Form 8-K filed on
October 16, 2003 and incorporated by reference herein)                                                  
|2.2.1       |  | Amendment No. 1 dated October 1, 2003 to the Asset Purchase Agreement dated as of August 22, 2003 among Thomson Healthcare Inc., Global Information Licensing Corporation and Advanstar Communications Inc. (Previously filed as an exhibit to the
Company's current report on Form 8-K filed on October 16, 2003 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 (333-57201) and incorporated by reference herein)                                                                                                                                                                       
|3.1.1       |  | Certificate of Amendment of the Certificate 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 (333-57201) and incorporated by reference herein)                                                                                                                                                                                            
|3.2.1       |  | Amended and Restated By-Laws of Advanstar, Inc. (Previously filed as an exhibit to the Company's Registration Statement on Form S-4 (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 Advanstar Communications Inc.'s Annual Report on Form 10-K for 2000 and incorporated by
reference herein)                                                                                     
|4.2         |  | Indenture, dated as of August 18, 2003 among Advanstar Communications Inc., the Guarantors party thereto and the Trustee (Previously filed as an exhibit to Advanstar Communications Inc.'s Registration Statement on Form S-1 (333-59284) and
incorporated by reference herein)                                                                            
|4.3         |  | Intercreditor Agreement dated as of August 18, 2003 among Advanstar Communications Inc., Fleet National Bank, Credit Suisse First Boston and Wells Fargo Bank Minnesota N.A. (Previously filed as an exhibit to Advanstar Communications Inc.'s
Registration Statement (333-109648) and incorporated by reference herein)                                   
|4.4         |  | Indenture dated as of February 21, 2001 between Advanstar, Inc. and the Trustee (Previously filed).                                                                                                                                                                                                                                                         
|4.4.1       |  | Registration Rights Agreement dated as of February 21, 2001 between Advanstar, Inc. and Credit Suisse First Boston Corporation, as Initial Purchaser (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) +                                                                                                                                          
|            |  |                                                                                                                                                                                                                                                                                                                                                             

II-3

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|10.1.1 |  | Form of Award Agreement under Advanstar Holdings Corp. 2000 Management Incentive Plan * +                                                                                                                                                                                                                            
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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)                                                                                                           
|10.3.2 |  | Second Amendment to Credit Agreement dated as of March 28, 2003 (Previously filed as an exhibit to Advanstar Communications Inc.'s Current Report on Form 8-K filed on April 15, 2003 and incorporated by reference herein)                                                                                          
|10.3.3 |  | Third Amendment to Credit Agreement, dated as of August 18, 2003 (Previously filed as an exhibit to Advanstar Communications Inc.'s Registration Statement on Form S-1 (333-59284) and incorporated by reference herein)                                                                                             
|10.4   |  | Compensation Agreement, effective October 1, 2004, between Advanstar Holdings Corp. and James A. Finkelstein. * +                                                                                                                                                                                                    
|10.5   |  | Employment Agreement, dated August 14, 2000, between Advanstar, Inc. and James M. Alic. (Previously filed as Exhibit 10.2 to Form 10-Q of Advanstar, Inc. filed with the Securities and Exchange Commission on November 14, 2000, and incorporated by
reference herein) +                                            
|10.5.1 |  | Amendment to Employment Agreement, effective March 1, 2002, between Advanstar, Inc. and James M. Alic (Previously filed as an exhibit to Advanstar Communications Inc. annual report on Form 10-K for 2001 and incorporated by reference herein)
+                                                                   
|10.5.2 |  | Amendment to Employment Agreement, effective September 15, 2005, between Advanstar, Inc. and James M. Alic * +                                                                                                                                                                                                       
|10.6   |  | Employees' 401(k) Plan and Trust, as amended (Previously filed as an exhibit to the Company's Registration Statement on Form S-4 (333-57201) and incorporated by reference herein) +                                                                                                                                 
|10.7   |  | Agreement, dated July 31, 1997, between Advanstar Communications Inc. and Banta Publications. (Previously filed as an exhibit to the Company's Registration Statement on Form S-4 (File No. 333-57201) and incorporated by reference herein)                                                                         
|10.8   |  | Employment Agreement dated November 21, 2003 between Advanstar, Inc. and Joseph Loggia (Previously filed as an exhibit to Advanstar Communications Inc.'s Registration Statement (333-109648) and incorporated by reference herein) +                                                                                
|       |  |                                                                                                                                                                                                                                                                                                                      

II-4

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|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 (Previously 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 among 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)
+
|10.13 |  | Award Agreement, effective October 1, 2004 between Advanstar Holdings Corp. and James A. Finkelstein * +                                                                                                                                                
|12.1  |  | Computation of Ratio of Earnings to Fixed Charges *                                                                                                                                                                                                     
|21.1  |  | Subsidiaries of Advanstar, Inc. (Previously filed as an exhibit to Advanstar, Inc.'s Annual Report on Form 10-K for 2000 and incorporated by reference herein)                                                                                          
|31.1  |  | Certification by Chief Executive Officer required by Rule 13a-14(a)/15d-14(a)*                                                                                                                                                                          
|31.2  |  | Certification by Chief Financial Officer required by Rule 13a-14(a)/15d-14(a)*                                                                                                                                                                          
|32.1  |  | Certification of Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of the United States Code*                                                                                                         
|32.2  |  | Certification of Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of the United States Code*                                                                                                         

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II-5

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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/JAMES M. ALICJames M. Alic             |  | Chairman of the Board and Director                                                         |  | March 29, 2005
|/s/JOSEPH LOGGIAJoseph Loggia             |  | Chief Executive Officer and Director                                                       |  | March 29, 2005
|/s/DAVID W. MONTGOMERYDavid W. Montgomery |  | Vice PresidentFinance, Chief Financial Officer Secretary and Principal Accounting Officer |  | March 29, 2005
|/s/OHSANG KWONOhSang Kwon                 |  | Director                                                                                   |  | March 28, 2005
|/s/DOUGLAS B. FOXDouglas B. Fox           |  | Director                                                                                   |  | March 24, 2005
|/s/CHARLES PIEPERCharles Pieper           |  | Director                                                                                   |  | March 29, 2005
|/s/JAMES FINKELSTEINJames Finkelstein     |  | Director                                                                                   |  | March 29, 2005

II-6

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