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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

|(Mark One)                                         |                                                                                         
|-------------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                                  | Quarterly Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934.
|For the quarterly period ended: September 30, 2003
|OR                                                
|o                                                  | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 333-57201

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.)

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

02116(Zip Code)

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

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

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

As
of November 14, 2003, 100 shares of the registrant's common stock were outstanding.

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Page in this
Quarterly
Report

|PART I FINANCIAL INFORMATION
|----------------------------
|Item 1.                     
|
|                            
|                            
|                            
|                            
|                            
|Item 2.                     
|Item 3.                     
|Item 4.                     
|PART II OTHER INFORMATION   
|Item 6.                     
|                            

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

|                                          |                                                                                                                                       | September 30,
2003                     |         | December 31,
2002 |        
|----------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | ------- | ----------------- | -------
|ASSETS                                    |                                                                                                                                       |                                        |         |                   |        
|Current assets:                           |                                                                                                                                       |                                        |         |                   |        
|                                          | Cash and cash equivalents                                                                                                             |                                        | $       | 143,674           |        
|                                          | Accounts receivable, net of allowance of $972 and $1,049 at September 30, 2003 and December 31, 2002                                  |                                        |         | 23,444            |        
|                                          | Prepaid expenses                                                                                                                      |                                        |         | 8,271             |        
|                                          | Other                                                                                                                                 |                                        |         | 1,533             |        
|                                          |                                                                                                                                       |                                        |         |                   |        
|                                          |                                                                                                                                       | Total current assets                   |         |                   | 176,922
|                                          |                                                                                                                                       |                                        |         |                   |        
|Due from parent                           |                                                                                                                                       |                                        | 145     |                   |        
|Property, plant and equipment, net        |                                                                                                                                       |                                        | 23,146  |                   |        
|Intangible and other assets:              |                                                                                                                                       |                                        |         |                   |        
|                                          | Goodwill, net                                                                                                                         |                                        |         | 665,825           |        
|                                          | Intangibles and other, net                                                                                                            |                                        |         | 99,020            |        
|                                          |                                                                                                                                       |                                        |         |                   |        
|                                          |                                                                                                                                       | Total intangible and other assets, net |         |                   | 764,845
|                                          |                                                                                                                                       |                                        |         |                   |        
|                                          |                                                                                                                                       | $                                      | 965,058 |                   | $      
|                                          |                                                                                                                                       |                                        |         |                   |        
|LIABILITIES AND STOCKHOLDER'S EQUITY      |                                                                                                                                       |                                        |         |                   |        
|Current liabilities:                      |                                                                                                                                       |                                        |         |                   |        
|                                          | Current maturities of long-term debt                                                                                                  |                                        | $       | 3,700             |        
|                                          | Accounts payable                                                                                                                      |                                        |         | 21,840            |        
|                                          | Accrued compensation                                                                                                                  |                                        |         | 4,654             |        
|                                          | Other accrued expenses                                                                                                                |                                        |         | 24,609            |        
|                                          | Deferred revenue                                                                                                                      |                                        |         | 33,156            |        
|                                          |                                                                                                                                       |                                        |         |                   |        
|                                          |                                                                                                                                       | Total current liabilities              |         |                   | 87,959 
|                                          |                                                                                                                                       |                                        |         |                   |        
|Long-term debt, net of current maturities |                                                                                                                                       |                                        | 741,414 |                   |        
|Other long-term liabilities               |                                                                                                                                       |                                        | 10,188  |                   |        
|Minority interests                        |                                                                                                                                       |                                        | 10,685  |                   |        
|Commitments and contingencies             |                                                                                                                                       |                                        |         |                   |        
|Stockholder's equity:                     |                                                                                                                                       |                                        |         |                   |        
|                                          | Common stock, $.01 par value, 10,000 shares authorized; 100 shares issued and outstanding at September 30, 2003 and December 31, 2002 |                                        |         |                  |        
|                                          | Capital in excess of par value                                                                                                        |                                        |         | 360,424           |        
|                                          | Accumulated deficit                                                                                                                   |                                        |         | (245,112          | )      
|                                          | Accumulated other comprehensive loss                                                                                                  |                                        |         | (500              | )      
|                                          |                                                                                                                                       |                                        |         |                   |        
|                                          |                                                                                                                                       | Total stockholder's equity             |         |                   | 114,812
|                                          |                                                                                                                                       |                                        |         |                   |        
|                                          |                                                                                                                                       | $                                      | 965,058 |                   | $      
|                                          |                                                                                                                                       |                                        |         |                   |        

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

2

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Advanstar, Inc.        Condensed Consolidated Statements of Operations        (In thousands)

|                                                |                                       | For the
Three Months Ended
September 30, |        
|----------------------------------------------- | ------------------------------------- | ---------------------------------------- | -------
|
|Net revenue                                     |                                       | $                                        | 76,649 
|Operating expenses:                             |                                       |                                          |        
|                                                | Cost of production                    |                                          |        
|                                                | Selling, editorial and circulation    |                                          |        
|                                                | General and administrative            |                                          |        
|                                                | Restructuring charge                  |                                          |        
|                                                | Amortization of intangibles           |                                          |        
|                                                | Depreciation                          |                                          |        
|                                                |                                       |                                          |        
|                                                |                                       | Total operating expenses                 |        
|                                                |                                       |                                          |        
|Operating income                                |                                       |                                          | 8,695  
|Other income (expense):                         |                                       |                                          |        
|                                                | Interest expense, net                 |                                          |        
|                                                | Write-off of deferred financing costs |                                          |        
|                                                | Other income (expense), net           |                                          |        
|                                                |                                       |                                          |        
|Loss before income taxes and minority interests |                                       |                                          | (23,629
|Provision (benefit) for income taxes            |                                       |                                          | (112   
|Minority interests                              |                                       |                                          | (18    
|                                                |                                       |                                          |        
|Net loss                                        |                                       | $                                        | (23,535
|                                                |                                       |                                          |        

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

3

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Advanstar, Inc.        Condensed Consolidated Statements of Operations        (In thousands)

|                                                                                        |                                       | For the
Nine Months Ended
September 30, |        
|--------------------------------------------------------------------------------------- | ------------------------------------- | --------------------------------------- | -------
|
|Net revenue                                                                             |                                       | $                                       | 250,617
|Operating expenses:                                                                     |                                       |                                         |        
|                                                                                        | Cost of production                    |                                         |        
|                                                                                        | Selling, editorial and circulation    |                                         |        
|                                                                                        | General and administrative            |                                         |        
|                                                                                        | Restructuring charge                  |                                         |        
|                                                                                        | Amortization of intangibles           |                                         |        
|                                                                                        | Depreciation                          |                                         |        
|                                                                                        |                                       |                                         |        
|                                                                                        |                                       | Total operating expenses                |        
|                                                                                        |                                       |                                         |        
|Operating income                                                                        |                                       |                                         | 34,591 
|Other income (expense):                                                                 |                                       |                                         |        
|                                                                                        | Interest expense, net                 |                                         |        
|                                                                                        | Write-off of deferred financing costs |                                         |        
|                                                                                        | Other income (expense), net           |                                         |        
|                                                                                        |                                       |                                         |        
|Loss before income taxes, minority interests and cumulative effect of accounting change |                                       |                                         | (30,764
|Provision (benefit) for income taxes                                                    |                                       |                                         | 613    
|Minority interests                                                                      |                                       |                                         | (560   
|                                                                                        |                                       |                                         |        
|Loss before cumulative effect of accounting change                                      |                                       |                                         | (31,937
|Cumulative effect of accounting change, net of tax and minority interest                |                                       |                                         |       
|                                                                                        |                                       |                                         |        
|Net loss                                                                                |                                       | $                                       | (31,937
|                                                                                        |                                       |                                         |        

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

4

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Advanstar, Inc.        Condensed Consolidated Statements of Cash Flows        (In thousands)

|                                                             |                                                                                           | For the
Nine Months Ended
September 30,             |        
|------------------------------------------------------------ | ----------------------------------------------------------------------------------------- | --------------------------------------------------- | -------
|
|Operating activities:                                        |                                                                                           |                                                     |        
|                                                             | Net income (loss)                                                                         |                                                     | $      
|                                                             | Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |                                                     |        
|                                                             |                                                                                           | Transition goodwill impairment                      |        
|                                                             |                                                                                           | Write-off of deferred financing costs               |        
|                                                             |                                                                                           | Depreciation and amortization                       |        
|                                                             |                                                                                           | (Gain) loss on derivative financial instruments     |        
|                                                             |                                                                                           | Undistributed earnings of minority interest holders |        
|                                                             |                                                                                           | Noncash interest                                    |        
|                                                             |                                                                                           | Loss (gain) on sales of assets and other            |        
|                                                             |                                                                                           | Deferred income taxes                               |        
|                                                             |                                                                                           | Provision for bad debts                             |        
|                                                             |                                                                                           | Changes in operating assets and liabilities         |        
|                                                             |                                                                                           |                                                     |        
|                                                             |                                                                                           | Net cash provided by (used in) operating activities |        
|                                                             |                                                                                           |                                                     |        
|Investing activities:                                        |                                                                                           |                                                     |        
|                                                             | Additions to property, plant and equipment                                                |                                                     |        
|                                                             | Acquisitions of publications, trade shows and other intangibles, net of cash acquired     |                                                     |        
|                                                             |                                                                                           |                                                     |        
|                                                             |                                                                                           | Net cash used in investing activities               |        
|                                                             |                                                                                           |                                                     |        
|Financing activities:                                        |                                                                                           |                                                     |        
|                                                             | Proceeds from revolving credit loan                                                       |                                                     |        
|                                                             | Payments on revolving credit loan                                                         |                                                     |        
|                                                             | Proceeds from issuance of long-term debt                                                  |                                                     |        
|                                                             | Payments of long-term debt                                                                |                                                     |        
|                                                             | Contribution of capital from parent                                                       |                                                     |        
|                                                             | Dividends paid to minority interest holders                                               |                                                     |        
|                                                             | Deferred financing costs                                                                  |                                                     |        
|                                                             |                                                                                           |                                                     |        
|                                                             |                                                                                           | Net cash used in financing activities               |        
|                                                             |                                                                                           |                                                     |        
|Effect of exchange rate changes on cash and cash equivalents |                                                                                           |                                                     | 453    
|                                                             |                                                                                           |                                                     |        
|Net decrease in cash and cash equivalents                    |                                                                                           |                                                     | 124,652
|Cash and cash equivalents, beginning of period               |                                                                                           |                                                     | 19,022 
|                                                             |                                                                                           |                                                     |        
|Cash and cash equivalents, end of period                     |                                                                                           | $                                                   | 143,674
|                                                             |                                                                                           |                                                     |        

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

5

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Advanstar Inc.    Notes to Condensed Consolidated Financial Statements

1.    Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by Advanstar, Inc. ("Advanstar"), its wholly owned subsidiary,
Advanstar Communications Inc. ("Communications"), and Communications' majority owned subsidiaries (collectively, the "Company") in accordance with the instructions to
Form 10-Q and, therefore, do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. Management
believes that all adjustments, consisting solely of normal recurring items (except for the cumulative effect of an accounting change recorded in the first quarter of 2002 as discussed in
Note 3), considered necessary for a fair presentation have been included. These condensed consolidated financial statements, however, should be read in conjunction with the audited financial
statements and the related notes included in the Company's annual report on Form 10-K filed with the Securities and Exchange Commission on March 28, 2003. The results of
operations for the three and nine month periods ended September 30, 2003 are not necessarily indicative of the operating results that may be expected for the entire year ending
December 31, 2003.

2.    Summary of Significant Interim Accounting Policies

Stock-Based Compensation

As permitted by Statement of Financial Accounting Standards (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, results would have been adjusted to the pro
forma amounts indicated in the table below (in thousands):

|                                                  |  | Three Months Ended
September 30, |         | Nine Months Ended
September 30, |  
|------------------------------------------------- |  | -------------------------------- | ------- | ------------------------------- | -
|
|Net lossas reported                              |  | $                                | (23,535 | )                               | $
|Less: pro forma stock based employee compensation |  |                                  | (583    | )                               |  
|                                                  |  |                                  |         |                                 |  
|Net losspro forma                                |  | $                                | (24,118 | )                               | $
|                                                  |  |                                  |         |                                 |  

Interim Income Tax Expense

The Company determines its quarterly income tax provision based upon an estimated annual effective income tax rate. In determining the effective income tax rate
applicable to interim periods, the Company excludes tax jurisdictions where no tax expense or benefit is expected for the entire year.

Reclassifications

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

6

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Recently Issued Accounting Standards

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities" ("SFAS 149").
SFAS 149 amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities
under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." The changes are intended to improve financial reporting by requiring that contracts with comparable
characteristics be accounted for similarly. Additionally, those changes are expected to result in more consistent reporting of contracts as either derivatives or hybrid instruments. The requirements
of SFAS 149 became effective for the Company beginning in the third quarter of fiscal 2003 for contracts entered into or modified by it and for hedging relationships designated thereafter. The
adoption of SFAS 149 did not have a significant impact on the results of operations or financial position of the Company.

In
May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
establishes standards for issuer classification and measurement of certain financial instruments with characteristics of both liabilities and equity. Instruments that fall within the scope of SFAS
No. 150 must be classified as a liability. SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003. For financial instruments issued prior
to June 1, 2003, SFAS No. 150 becomes effective for the Company in the third quarter of fiscal 2003. The adoption of SFAS 150 did not have a significant impact on the results of
operations or financial position of the Company.

3.    Goodwill and Other Intangible Assets

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

Effective
with the adoption of this standard, the Company no longer amortizes goodwill. Instead, SFAS No. 142 requires acquired goodwill to be periodically evaluated for
impairment. Upon adoption of the standard, the Company completed 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 tradeshow operating segment which management believes resulted from a slow-down in the
economy and its associated impact on the tradeshow business. The net charge of $66.8 million was reported as a cumulative effect of a change in accounting principle. There was no income tax
effect associated with this impairment charge.

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

7

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The
changes in the carrying amount of goodwill for the nine months ended September 30, 2003, by operating segment, are as follows (in thousands):

|                                                 |  | Trade Shows
and
Conferences |         | Trade
Publications |   | Marketing
Services |  | Totals |       
|------------------------------------------------ |  | --------------------------- | ------- | ------------------ | - | ------------------ |  | ------ | ------
|Balance as of December 31, 2002                  |  | $                           | 492,554 |                    | $ | 137,414            |  | $      | 30,840
|Goodwill acquired or allocated during the period |  |                             | (197    | )                  |   | 28                 |  |        |      
|Foreign currency translation                     |  |                             | 4,468   |                    |   | 618                |  |        | 100   
|                                                 |  |                             |         |                    |   |                    |  |        |       
|Balance as of September 30, 2003                 |  | $                           | 496,825 |                    | $ | 138,060            |  | $      | 30,940
|                                                 |  |                             |         |                    |   |                    |  |        |       

Trade
exhibitor and advertiser lists are amortized on an accelerated basis over six and five years, respectively, while subscriber lists and other intangible assets are amortized on a
straight-line basis over three to ten years and consist of the following as of September 30, 2003 and December 31, 2002 (in thousands):

|                                       |  | September 30
2003 |          | December 31,
2002 |  
|-------------------------------------- |  | ----------------- | -------- | ----------------- | -
|Trade exhibitor lists                  |  | $                 | 162,340  |                   | $
|Advertiser lists                       |  |                   | 39,456   |                   |  
|Subscriber lists                       |  |                   | 23,886   |                   |  
|Other intangible assets                |  |                   | 7,805    |                   |  
|Deferred loan costs                    |  |                   | 22,308   |                   |  
|                                       |  |                   |          |                   |  
|                                       |  |                   | 255,795  |                   |  
|Accumulated amortization               |  |                   | (156,775 | )                 |  
|                                       |  |                   |          |                   |  
|Total intangible and other assets, net |  | $                 | 99,020   |                   | $
|                                       |  |                   |          |                   |  

Estimated
amortization expense of identified intangible assets and other for the remaining three months of 2003 and for the next five years is as follows: (in thousands):

2003

$
10,1662004


33,1632005


29,3342006


15,5762007


3,9652008


2,764


4.    Restructuring Charge and Other

In March 2001, the Company announced plans to more tightly focus the activities of its 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 marketing services. The restructuring activities were completed by the end of 2001, except for facility lease costs, which continue through June 2010. The balance of the accrual
at September 30, 2003 and December 31, 2002 was $6.2 million and $6.3 million, respectively, which principally represents remaining facility closure costs.

8

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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. These
charges included the present value of future facility rental payments, net of sublease income, of $1.7 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 March 2010. The accrual balance at September 30, 2003 is
$2.0 million which principally represents remaining facility lease costs, of which approximately $0.3 million is included in accrued liabilities, $0.3 million is included in
accounts payable and approximately $1.4 million is included in other long-term liabilities in the accompanying condensed consolidated balance sheet at September 30, 2003.

5.    Financial Derivative Instruments

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

Interest Rate Risk

Variable rate debt instruments are subject to interest rate risk. The Company has entered into an interest rate collar agreement expiring February 2004,
and an interest rate swap agreement expiring November 2005, to manage its exposure to interest rate movements on its variable rate debt obligations. The effective portion of the cumulative gain
or loss on these derivative instruments is reported as a component of accumulated other comprehensive income in stockholder's equity and is recognized in earnings as the underlying interest expense is
incurred. The ineffective portion of the interest rate collar and swap agreements is recognized in current earnings. The Company uses a portion of these agreements as hedges of the Company's second
priority senior secured floating rate notes described below. Gains and losses on the undesignated portion of these agreements at the end of each fiscal quarter (which are calculated as the net amount
payable upon termination at the date of determination), will be recognized in current earnings.

In
connection with Communications' private placement of $360,000,000 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 million of the outstanding term B loans under its credit facility (see Note 6), the Company reclassified
approximately $1.8 million of deferred losses previously reported as a component of accumulated other comprehensive income into other expense in the quarter ended September 30, 2003.

Foreign Currency Risk

Certain forecasted transactions are exposed to foreign currency risk. Foreign currencies hedged are the Euro, British Pound Sterling and the Brazilian Real. The
Company uses forward contracts to manage its exposure associated with forecasted international revenue transactions for up to three months in the future. These forward contracts are designated as cash
flow hedging instruments. 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.

9

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At
September 30, 2003, the Company had foreign exchange derivative contracts to sell with a notional amount totaling $3.3 million and to buy totaling $1.2 million.
The estimated fair value of the foreign exchange contracts based upon market quotes was a net asset of $0.1 million.

Accumulated Other Comprehensive Income (Loss)

The following table summarizes the effects of FAS 133 on the Company's accumulated other comprehensive income as of September 30, 2003 and 2002 (in
thousands):

|                                                                            |  | Interest Rate
Protection
Agreements |        | Foreign
Exchange
Contracts |   | Total |  
|--------------------------------------------------------------------------- |  | ----------------------------------- | ------ | -------------------------- | - | ----- | -
|Accumulated other comprehensive income (loss) balance at December 31, 2002  |  | $                                   | (4,350 | )                          | $ |      |  
|Unwound from accumulated other comprehensive income during the period       |  |                                     | 4,057  |                            |   |      |  
|Mark to market hedge contracts                                              |  |                                     | (1,017 | )                          |   | (22   | )
|                                                                            |  |                                     |        |                            |   |       |  
|Accumulated other comprehensive income (loss) balance at September 30, 2003 |  |                                     | (1,310 | )                          |   | (22   | )
|                                                                            |  |                                     |        |                            |   |       |  
|Accumulated other comprehensive income (loss) balance at December 31, 2001  |  | $                                   | (4,189 | )                          | $ | 5     |  
|Unwound from accumulated other comprehensive income during the period       |  |                                     | 5,574  |                            |   | (5    | )
|Mark to market hedge contracts                                              |  |                                     | (5,750 | )                          |   |      |  
|                                                                            |  |                                     |        |                            |   |       |  
|Accumulated other comprehensive income (loss) balance at September 30, 2002 |  | $                                   | (4,365 | )                          | $ |      |  
|                                                                            |  |                                     |        |                            |   |       |  

At
September 30, 2003, the Company estimates that it will reclassify out of accumulated other comprehensive income approximately $1.3 million of deferred losses into
earnings within the next 12 months.

The
fair value of the Company's derivatives was a net liability position of $3.7 million and $6.6 million at September 30, 2003 and December 31, 2002,
respectively, of which $3.7 million and $5.8 million is included in accrued liabilities at September 30, 2003 and December 31, 2002, respectively, and $0.8 million
is included in other long-term liabilities at December 31, 2002, in the accompanying condensed consolidated balance sheets.

10

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Statement of Operations

The
following tables summarize the effects of SFAS No. 133 on the Company's statement of operations related to the ineffective portion of the Company's interest rate protection
agreements and changes in the fair value of foreign exchange contracts not designated as hedging instruments for the three and nine months ended September 30, 2003 and 2002 (in thousands):

Interest Rate
Protection
Agreements

Foreign
Exchange
Contracts

TotalThree months ended September 30, 2003Other income (expense)

$
(774
)
$
(71
)
$
(845
)Total statement of operations impact before taxes

$
(774
)
$
(71
)
$
(845
)Three months ended September 30, 2002Other income (expense)

$
80

$
60

$
140Total statement of operations impact before taxes

$
80

$
60

$
140


|                                                  |  | Interest Rate
Protection
Agreements |      | Foreign
Exchange
Contracts |   | Total | 
|------------------------------------------------- |  | ----------------------------------- | ---- | -------------------------- | - | ----- | 
|Nine months ended September 30, 2003              |  |                                     |      |                            |   |       | 
|Other income (expense)                            |  | $                                   | (199 | )                          | $ | 63    | 
|                                                  |  |                                     |      |                            |   |       | 
|Total statement of operations impact before taxes |  | $                                   | (199 | )                          | $ | 63    | 
|                                                  |  |                                     |      |                            |   |       | 
|Nine months ended September 30, 2002              |  |                                     |      |                            |   |       | 
|Other income (expense)                            |  | $                                   | 368  |                            | $ | 599   | 
|                                                  |  |                                     |      |                            |   |       | 
|Total statement of operations impact before taxes |  | $                                   | 368  |                            | $ | 599   | 
|                                                  |  |                                     |      |                            |   |       | 

6.    Debt

Credit Facility

The credit facility (the "Credit Facility") consists of (i) $25 million of term loan B payable in quarterly installments through October 11,
2008 and (ii) $60.0 million of revolving loan availability through April 11, 2007. The Credit Facility contains restrictive covenants which require Communications to, among other
things, maintain a minimum fixed charge ratio (as defined). Borrowings under the Credit Facility are collateralized by substantially all of Communications' assets.

In
connection with its private placement in August 2003 described below, Communications amended its Credit Facility to permit the private placement and the proposed use of the
proceeds thereof, eliminated the leverage ratio covenant and amend certain other covenants contained in the Credit Facility and reduce the revolving loan commitments thereunder from $80 million
to $60 million.

Senior Secured Notes

On August 18, 2003, Communications issued $360 million of second priority senior secured notes (the "August senior secured notes"). On
September 25, 2003, Communications issued an additional $70 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 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) and $300 million of 10.75% Second Priority Senior Secured Notes due 2010.

11

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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 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 it agreed to either exchange the notes for registered notes or to file a shelf registration statement
for the notes.

Communications
used the net proceeds from the August senior secured notes offering to repay and terminate all outstanding term A loans under its credit facility and all but
$25 million of the outstanding term B loans and a portion of its revolving credit borrowings under its Credit Facility. Communications used the net proceeds of the September senior secured
notes offering to repay $12 million of revolving credit borrowings and invested the balance in short term securities. On October 1, 2003, Communications used the remaining net proceeds
from the September senior secured notes offering, along with $60 million of equity contributions from its parent company ($50 million of which occurred in September 2003),
$7 million of cash from operations and $13 million of revolving credit borrowings to fund the purchase of a portfolio of healthcare industry magazines and related custom service projects
from the Thomson Corporation and its subsidiaries ("Thomson Acquisition) and to pay related acquisition and financing fees and expenses.

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.

Senior Subordinated Debt and Discount Notes

Communications' $160.0 million unsecured, 12 percent 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.

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 percent,
payable semiannually beginning October 2005, and have an implied yield to maturity of approximately 17.2 percent. 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, it's 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 $4.5 million and $3.8 million during the three months ended September 30, 2003 and 2002,
respectively, and approximately $13.1 million and $11.1 million in the nine months ended September 30, 2003 and 2002,

12

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respectively.
These amounts are included in interest expense in the respective accompanying condensed consolidated statements of operations.

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

September 30,
2003

December 31,
2002Term loan A, interest at LIBOR plus 3.75%

$


$
75,000Term loan B, interest at LIBOR plus 4.50%; 5.64% at September 30, 2003, due quarterly through October 11, 2008


25,000


280,800Revolving credit loan, interest at LIBOR plus 3.75%; 4.87% at June 30, 2003, due April 11, 2007


13,000


37,100Second priority senior secured floating rate notes, interest at LIBOR plus 7.50%, due 2008


130,000


10.75% Second priority senior secured notes, due 2010, plus premium


301,031


Senior subordinated notes, interest at 12.00%, due 2011


160,000


160,000Senior discount notes at 15%, due 2011


113,183


100,104Acquisition note payable, interest at 5.50%, due monthly through 2004


2,500


4,000Acquisition note payable, interest at 6.00%, due April 1, 2004


400


800745,114


657,804Less current maturities


(3,700
)

(17,400
)$
741,414

$
640,404


In
addition, as of September 30, 2003, the Company has an interest rate collar for a notional amount of $150 million that effectively guarantees that the interest rate on
the Credit Facility will not exceed 10.17 percent, nor be less than 9.00 percent. This collar expires in February 2004. The Company entered into an interest rate swap agreement
with a notional amount of $200 million, that effectively guarantees
that beginning in November 2003 the interest rate on second priority senior secured floating rate notes will be 9.65 percent. The Company includes net amounts paid or received under the
interest rate protection agreements as a component of interest expense.

13

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7.    Comprehensive Income

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

|                                                    |  | Three Months Ended
September 30, |         | Nine Months Ended
September 30, |  
|--------------------------------------------------- |  | -------------------------------- | ------- | ------------------------------- | -
|
|Net loss                                            |  | $                                | (23,535 | )                               | $
|Change in cumulative translation adjustment         |  |                                  | 61      |                                 |  
|Change in unrealized losses on derivative financial |  |                                  |         |                                 |  
|instruments                                         |  |                                  | 2,516   |                                 |  
|                                                    |  |                                  |         |                                 |  
|Comprehensive loss                                  |  | $                                | (20,958 | )                               | $
|                                                    |  |                                  |         |                                 |  

8.    Segments

The Company follows the provisions of SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information," and has three reportable
segments: trade shows and conferences, trade publications and marketing services.

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

|                                      |                            | Trade Shows
and
Conferences |   | Trade
Publications |  | Marketing
Services |         | Corporate
and Other |   | Total 
|------------------------------------- | -------------------------- | --------------------------- | - | ------------------ |  | ------------------ | ------- | ------------------- | - | ------
|Three months ended September 30, 2003 |                            |                             |   |                    |  |                    |         |                     |   |       
|                                      | Revenue                    |                             | $ | 41,595             |  | $                  | 30,656  |                     | $ | 3,652 
|                                      | Contribution margin (loss) |                             |   | 23,001             |  |                    | 9,130   |                     |   | 1,521 
|                                      | Segment assets             |                             |   | 568,818            |  |                    | 171,760 |                     |   | 32,766
|Three months ended September 30, 2002 |                            |                             |   |                    |  |                    |         |                     |   |       
|                                      | Revenue                    |                             |   | 46,988             |  |                    | 30,567  |                     |   | 3,651 
|                                      | Contribution margin (loss) |                             |   | 28,120             |  |                    | 8,304   |                     |   | 1,464 
|                                      | Segment assets             |                             |   | 595,894            |  |                    | 176,173 |                     |   | 31,837
|Nine months ended September 30, 2003  |                            |                             |   |                    |  |                    |         |                     |   |       
|                                      | Revenue                    |                             | $ | 139,371            |  | $                  | 97,751  |                     | $ | 11,051
|                                      | Contribution margin (loss) |                             |   | 72,743             |  |                    | 30,314  |                     |   | 4,166 
|                                      | Segment assets             |                             |   | 568,818            |  |                    | 171,760 |                     |   | 32,766
|Nine months ended September 30, 2002  |                            |                             |   |                    |  |                    |         |                     |   |       
|                                      | Revenue                    |                             |   | 145,387            |  |                    | 96,290  |                     |   | 11,322
|                                      | Contribution margin (loss) |                             |   | 78,907             |  |                    | 26,739  |                     |   | 5,032 
|                                      | Segment assets             |                             |   | 595,894            |  |                    | 176,173 |                     |   | 31,837

14

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

|                                   |                                                                                               | Three Months Ended
September 30, |         | Nine Months Ended
September 30, |  
|---------------------------------- | --------------------------------------------------------------------------------------------- | -------------------------------- | ------- | ------------------------------- | -
|
|Total segment contribution margin  |                                                                                               | $                                | 33,238  |                                 | $
|General and administrative expense |                                                                                               |                                  | (9,271  | )                               |  
|Depreciation and amortization      |                                                                                               |                                  | (13,221 | )                               |  
|Other expense (primarily interest) |                                                                                               |                                  | (21,000 | )                               |  
|                                   |                                                                                               |                                  |         |                                 |  
|                                   | Consolidated loss before taxes, minority interests and cumulative effect of accounting change |                                  | $       | (10,254                         | )
|                                   |                                                                                               |                                  |         |                                 |  

9.    Related-Party Transactions

Financial Advisory Fees

Credit Suisse First Boston Corporation ("CSFB"), an affiliate of the DLJ Merchant Banking funds, was an initial purchaser of the Senior Secured Notes. The Company
paid customary fees to CSFB as compensation for those services. The aggregate amount of all fees paid to CSFB entities in connection with the Senior Secured Note offerings during the third quarter of
2003 was approximately $9.6 million.

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 percent of the shares of Holdings' common stock held by them on the closing date of the DLJ Acquisition or (iii) October 11,
2005.

10.    Acquisition

On October 1, 2003, Communications purchased a portfolio of healthcare industry magazines and related custom service projects from the Thomson Corporation
and its subsidiaries ("Thomson") for $136 million in cash including related fees and expenses. Communications used a portion of the approximately $68 million in net proceeds of the
September 25, 2003 Senior Secured Notes offering, $7 million in cash generated by operations, revolver borrowings of $13 million, $50 million of equity contributions
received on September 25, 2003 and $10 million of equity contributions received on October 1, 2003 from the Company., which represent the proceeds from the Company's sale of
equity to the DLJ Merchant Banking funds, to fund the acquisition and related fees and expenses.

15

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

This quarterly report on Form 10-Q contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Investors are cautioned not to place undue reliance on these forward-looking statements, including statements about plans and objectives of management, potential
acquisitions, market growth and opportunity. These forward-looking statements are neither promises or guarantees and involve risks and uncertainties that could cause actual results to differ
materially from those indicated by such forward-looking statements. For example, statements about our expectations in connection with potential future acquisitions and possible financings are subject
to a variety of uncertainties and are subject to change as a result of changes in circumstances that could make it difficult for us to consummate such acquisitions and financings on the terms
described. You should not expect that these forward-looking statements will be updated or supplemented as a result of changing circumstances or otherwise, and we disavow and disclaim any obligation to
do so. Important cautionary statements and risk factors that would affect actual results are discussed in the Company's and Advanstar Communications Inc.'s ("Communications") periodic reports
and registration statements filed with the Securities and Exchange Commission, including those under the caption entitled "Certain Factors Which May Affect Future Results" in the Company's annual
report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2003, those under the caption entitled "Risk Factors-You May Not Be Able to
Rely on Forward-Looking Statements" in the Company's registration statement on Form S-1 (333-61386) filed on April 4, 2003 and those under the caption entitled
"Risk Factors-You May Not Be Able to Rely on Forward-Looking Statements" in Communications' registration statement on Form S-1 (333-109648) filed on
October 10, 2003.

Overview

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

We
report our business in three segments:



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

Trade
shows and conferences accounted for approximately 56% and 57% of total revenue in the nine months ended September 30, 2003 and 2002, respectively. Trade publications
accounted for approximately 39% and 38% of total revenue in the nine months ended September 30, 2003 and 2002, respectively, while marketing services accounted for approximately 5% and 5% of
total revenue in the nine months ended September 30, 2003 and 2002, respectively. Following completion of the Thomson acquisition, we expect that publications will constitute slightly more than
50% of our revenues. Our revenue reaches its highest levels during the first and third quarters of the year due to the timing of

16

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the
MAGIC trade shows and our other large trade shows and conferences. Because trade shows and conferences revenue is recognized when a particular event is held, we may experience fluctuations in
quarterly revenue based on the movement of annual trade show dates from one quarter to another.

Industry Trends and Developments

Our business and results of operations in the nine months ended September 30, 2003 reflect the tentative nature of the economic recovery in the U.S.
economy. Our publishing properties continue to experience encouraging year over year recovery from the media advertising recession across most industry sectors. However, trade advertising for our
technology and travel publications remains depressed. Media advertising from technology companies has not yet rebounded to levels that would indicate a sustained technology recovery is underway.
Travel advertising spending remains sluggish in
the face of continuing geopolitical uncertainty and difficult economic conditions in the travel industry. Trade shows and conferences are lagging in their recovery from the media recession compared
with publishing for which performance was essentially flat year over year through September across most of our industry sectors. Revenue from technology events remains depressed similar to technology
publishing.

Advertising
in many of our markets has stabilized and shows indications of recovery except for continuing downward pressure in our technology and travel markets. Advertising pages
stabilized in the third quarter of 2003 with ad pages increasing slightly over the same quarter last year. Revenue per page declined approximately 2.2% across our portfolio in the third quarter of
2003 compared with the third quarter of 2002 as we strived to capture increased market share. Excluding our technology and travel sectors, advertising pages increased 10.6% while revenue per page
declined only 0.4% resulting in a 10.1% revenue increase in the third quarter of 2003. Our acquisition late in 2002 ofHealthcare Travelercontributed
to this increase. While we see this positive trend continuing in 2003, the economic outlook in the publishing sector has improved, but forward visibility on our advertising revenue and pages is
limited due to uncertainties related to the rate of recovery of B-to-B media spending. Our travel publications remain highly sensitive to cutbacks in destination and vacation
travel advertising in response to concern over terrorism, further unrest in the Middle East and in other regions of the world and fears over health related outbreaks such as SARS. We do not anticipate
significant near term recovery in our technology based publications due to continued uncertainty by our customers as to the pace of a technology spending recovery.

Our
trade show segment continues to be negatively impacted by the slow pace of economic recovery as well as the lag effect for trade show recovery due to the advance commitments required
by our exhibitors. Our trade shows directed to the technology sector continue to suffer from the overall curtailment of spending in technology markets, which impacts marketing spending by our
customers. We expect any improvement in the performance of our trade show segment to lag behind any general economic recovery, just as it lagged the downturn in the economy going into recession
beginning in late 2000.

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

17

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Presentation of Financial Information

Acquisitions and Joint Ventures

Between May 31, 1996 and September 30, 2003, we completed 35 acquisitions and joint venture agreements, four of which were completed in 2002. There
were no acquisitions completed during the first nine months of 2003.

From
January 1, 2002 through December 31, 2002 we completed the acquisitions ofAIIM International Exposition and
Conference,HTthe Magazine for Healthcare Travel Professionalsand several smaller publications for a cumulative
purchase price totaling $24.0 million in cash and assumed liabilities.

On
October 1, 2003, Communications purchased a portfolio of healthcare industry magazines and related custom service projects from the Thomson Corporation and its subsidiaries
("Thomson") for $136 million in cash including related fees and expenses. Communications used a portion of the approximately $68 million in net proceeds of the September 25, 2003
Senior Secured Notes offering, $7 million in cash generated by operations, revolver borrowings of $13 million, $50 million of equity contributions received on September 25,
2003 and $10 million of equity contributions received on October 1, 2003 from the Company., which represent the proceeds from the Company's sale of equity to the DLJ Merchant Banking
funds, to fund the acquisition and related fees and expenses.

We
have accounted for our acquisitions under the purchase method of accounting. Accordingly, our results of operations include the effect of these acquisitions from the date of purchase.
The pro forma operating results of the acquisitions (other than the Thomson acquisition) are not significant relative to our operating results. Because the Thomson acquisition did not close until
October 1, 2003, our financial results for the three and nine months ended September 30, 2003 do not include any of the operating results of the acquired assets but we plan to file
financial statements for the business acquired and pro forma financial information on Form 8-K within the time period specified therein.

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

In August 2003, Communications issued $360 million of Second Priority Senior Secured Notes and used the net proceeds to repay and terminate all
outstanding term A loans under their credit facility and all but $25 million of the outstanding term B loans and a portion of their revolving credit borrowings under the credit facility. In
connection with the issuance, Communications amended their credit facility to
permit the private placement and the use of the proceeds thereof, eliminate the leverage ratio covenant and amend certain other covenants contained in the credit facility. Additionally, the revolving
loan commitments under the credit facility were reduced from $80 million to $60 million. We have 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 this offering and the reduction in the revolving loan commitment. Our interest
expense and cash interest will be higher in future periods as a result of this refinancing. In addition, we reclassified a portion of the deferred losses related to our interest rate collar and swap
agreements previously reported as a component of accumulated other comprehensive income into other expense in the third quarter of 2003.

In
September 2003, Communications issued $70 million of the Senior Secured Notes, and used the net proceeds thereof to repay approximately $12 million of outstanding
borrowings under their revolving credit facility and purchase short term investments pending completion of the Thomson acquisition. On October 1, 2003 Communications used $136 million in
cash, to purchase Thomson's portfolio of healthcare industry magazines and related custom service projects and pay related fees and expenses. Our depreciation and amortization, interest expense and
cash interest will be higher in future periods as a result of this acquisition and related financing.

18

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New York Office Consolidation

In September 2003, we consolidated our midtown New York leased office space from two floors to one and sublet the excess space. These actions resulted in a
third quarter restructuring charge of approximately $2.1 million. These charges included the present value of future rental payments, net of sublease income, of $1.7 million, and other
relocation costs and expenses of $0.4 million. All of the costs associated with the consolidation were incurred in September 2003. We anticipate annual savings of approximately
$1.2 million for the balance of the lease term but we will continue to pay facility lease costs, net of sublease income, associated with the previously used facilities through
March 2010.

Goodwill Impairment

In connection with the adoption of SFAS 142, we engaged an appraiser to determine the fair value of the Company as of January 1, 2002. Based on this
valuation, which utilized a discounted cash flow valuation technique, we recorded a goodwill impairment charge of $66.8 million in the first quarter of 2002. This charge was attributable
primarily to an impairment of the carrying value of goodwill related to the DLJMB acquisition. The charge is reported as a cumulative effect of a change in accounting principle (see Note 4 of
the notes to our condensed consolidated financial statements).

We
engaged an appraiser to assist us in determining the fair value of each of our three reporting units as of July 1, 2003. Based on this appraisal, there was no impairment of
goodwill indicated.



Trade Shows and Conferences

The trade shows and conferences segment derives revenue principally from the sale of exhibit space and conference attendance fees generated at its events. In
2002, approximately 82% of our trade shows and conferences revenue was from the sale of exhibit space. Events are generally held on an annual basis in major metropolitan areas such as New York City or
Las Vegas. At many of our trade shows, a portion of exhibit space is reserved and partial payment is received as much as a year in advance. The sale of exhibit space is generally impacted by the
on-going quality and quantity of attendance, venue selection and availability, industry life cycle and general market conditions. Revenue and related direct event expenses are recognized
in the month in which the event is held. Cash is collected in advance of an event and is recorded on our consolidated balance sheet as deferred revenue.

Trade Publications

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

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

19

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Marketing Services

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



Trade Shows and Conferences

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

Trade Publications

Costs incurred by the trade publications segment include printing, paper and postage; selling and promotion; editorial and prepress; and circulation acquisition
and fulfillment. Additionally, publisher and sales staff costs, and production, editorial and circulation staff costs, with related payroll taxes and benefits, are charged to the publications. We
outsource the actual printing of our publications. Printing, paper and postage costs are charged to operations at the time of publication issuance. All other direct costs are charged to operations in
the month incurred.

Marketing Services

Costs of the marketing services segment include printing and distribution costs, database administration fees and selling and product development salaries and
related payroll taxes and benefits. All direct costs are expensed in the month incurred.

Significant Accounting Policies and Estimates

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

20

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



21

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Selected Financial Data

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

|                                                                            |                                       | Three Months Ended
September 30,     |         | Nine Months Ended
September 30, |       
|--------------------------------------------------------------------------- | ------------------------------------- | ------------------------------------ | ------- | ------------------------------- | ------
|
|
|Income Statement Data:                                                      |                                       |                                      |         |                                 |       
|Net Revenue                                                                 |                                       |                                      |         |                                 |       
|                                                                            | Trade Shows and conferences           |                                      | $       | 41,595                          |       
|                                                                            | Publications                          |                                      |         | 30,656                          |       
|                                                                            | Marketing services and other          |                                      |         | 4,398                           |       
|                                                                            |                                       |                                      |         |                                 |       
|                                                                            |                                       | Total net revenue                    |         |                                 | 76,649
|Cost of production and selling                                              |                                       |                                      |         |                                 |       
|                                                                            | Trade Shows and conferences           |                                      |         | 18,594                          |       
|                                                                            | Publications                          |                                      |         | 21,526                          |       
|                                                                            | Marketing services and other          |                                      |         | 3,291                           |       
|                                                                            |                                       |                                      |         |                                 |       
|                                                                            |                                       | Total cost of production and selling |         |                                 | 43,411
|General and administrative expenses                                         |                                       |                                      | 9,271   |                                 |       
|Restructuring charge                                                        |                                       |                                      | 2,051   |                                 |       
|Depreciation and amortization                                               |                                       |                                      | 13,221  |                                 |       
|                                                                            |                                       |                                      |         |                                 |       
|Operating income                                                            |                                       |                                      | 8,695   |                                 |       
|Other income (expense):                                                     |                                       |                                      |         |                                 |       
|                                                                            | Interest expense                      |                                      |         | (20,283                         | )     
|                                                                            | Write-off of deferred financing costs |                                      |         | (11,324                         | )     
|                                                                            | Other income (expense), net           |                                      |         | (717                            | )     
|                                                                            |                                       |                                      |         |                                 |       
|Loss before income taxes and minority interests                             |                                       |                                      | (23,629 | )                               |       
|Provision (benefit) for income taxes                                        |                                       |                                      | (112    | )                               |       
|Minority interests                                                          |                                       |                                      | (18     | )                               |       
|                                                                            |                                       |                                      |         |                                 |       
|Loss before cumulative effect of accounting change                          |                                       |                                      | (23,535 | )                               |       
|Cumulative effect of accounting change, net of taxes and minority interests |                                       |                                      |        |                                 |       
|                                                                            |                                       |                                      |         |                                 |       
|Net loss                                                                    |                                       | $                                    | (23,535 | )                               | $     
|                                                                            |                                       |                                      |         |                                 |       

22

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Results of Operations

THREE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2002

Net revenue

Net revenue was $76.6 million and $81.9 million in the quarters ended September 30, 2003 and 2002, respectively.

Revenue
from trade shows and conferences declined $5.4 million, or 11.5%, to $41.6 million in the third quarter of 2003 from $47.0 million in the third quarter of
2002. Total tradeshow square feet declined approximately 16.7% and price per square foot increased 8.0% in the third quarter of 2003 over the third quarter of 2002. The decline in trade show and
conference revenue was attributable to a shift in the timing of three events into the fourth quarter of 2003, declines in events that serve the technology market, and the effect of holding four fewer
events serving the abilities, license and technology markets. Revenue for our fall MAGIC events increased approximately $0.9 million, or 2.9%, compared to the 2002 events. Total square feet for
our fall MAGIC event declined 5.6% compared to the 2002 events, but was offset by increased pricing per square foot, the launch of a new fabric event at our MAGIC show and an increase in ancillary
product sales. Adjusted for timing of events, total tradeshow revenue declined $1.9 million, due primarily to declines in events serving the technology markets which continue to suffer from the
overall curtailment of marketing spending by technology companies.

Revenue
from publications increased $0.1 million, or 0.3% to $30.7 million in the third quarter of 2003 from $30.6 million in the third quarter of 2002. The increase
is due to the strong performance of our publications serving our home entertainment, automotive and beauty markets, our acquisition late in 2002 ofHealthcare
Travelerand an increase in healthcare custom projects, offset by a decline in advertising revenue for publications serving the technology and travel markets. Advertising pages
remained stable while revenue per page declined approximately 2.2% in the third quarter of 2003 compared to the third quarter of 2002. The decline in ad revenue was most heavily concentrated in our
magazines serving the technology and travel markets, as they continue to suffer from the overall economic environment. Advertising pages in the third quarter of 2003 increased 10.6% across all markets
other than technology and travel, resulting in a 10.1% increase in revenue in these other markets compared to the third quarter of 2002.

Revenue
from marketing services and other increased $0.1 million to $4.4 million in the third quarter of 2003 from $4.3 million in the third quarter of 2002 due
primarily to the acquisition of additional circulation fulfillment contracts.

Cost of production and selling

Cost of production and selling expenses decreased $1.0 million, or 2.2%, to $43.4 million in the third quarter of 2003 from $44.4 million in
the third quarter of 2002.

Expenses
of trade shows and conferences declined $0.3 million, or 1.5%, to $18.6 million in the third quarter of 2003 from $18.9 million in the third quarter of
2002. This decrease was primarily due to a shift in the timing of three events discussed above and the effect of holding four fewer events serving the abilities, license and technology markets. These
declines were partially offset by increased costs associated with new product launches and the impact of an insurance recovery of approximately $2.4 million related to losses resulting from the
9/11 terrorist attacks reducing expenses in the third quarter 2002.

Expenses
of trade publications decreased $0.8 million, or 3.3%, to $21.5 million in the third quarter of 2003 from $22.3 million in the third quarter of 2002.
Operating costs were impacted by

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savings
attributable to our ongoing metrics driven cost reduction programs, gains in printing efficiencies and reductions in bad debt expenses. These savings were partially offset by additional costs
associated with our acquisition ofHealthcare Traveler,in October 2002.

Expenses
of marketing services and other was $3.3 million in the third quarter of 2003 and $3.3 million in the third quarter of 2002.

General and administrative expenses

General and administrative expenses increased $1.2 million, or 14.0%, to $9.3 million in the third quarter of 2003 from $8.1 million in the
third quarter of 2002. The increase is principally due to the timing of certain compensation accruals between the third quarter of 2002 compared with the third quarter of 2003 and charges in the third
quarter of 2003 for various third party m&a expenses related to the pursuit of acquisitions which were not subsequently completed.

Restructuring charge

In September 2003, we consolidated our midtown New York leased office space from two floors to one and sublet the excess space. These actions resulted in a
third quarter restructuring charge of approximately $2.1 million. These charges included the present value of future rental payments, net of sublease income, of $1.7 million, and other
relocation costs and expenses of $0.4 million. All of the costs associated with the consolidation were incurred in September 2003. We anticipate annual savings of approximately
$1.2 million for the balance the lease term but we will continue to pay facility lease costs, net of sublease income, associated with the previously used facilities through March 2010.

Depreciation and amortization

Depreciation and amortization expense declined approximately $5.1 million to $13.2 million in the third quarter of 2003 from $18.3 million in
the third quarter of 2002 primarily due to the effect of the declining balance method of accelerated amortization on our exhibitor and advertiser lists, partially offset by additional amortization
related to acquisitions.

Interest expense

Interest expense increased $3.6 million, or 21.3%, to $20.3 million in the third quarter of 2003 from $16.7 million in the third quarter of
2002 due to an increase in our weighted-average interest rate of approximately 200 basis points as a result of our financings discussed below, and an increase in our weighted-average debt outstanding
due to accretion on our Discount Notes.

In
August 2003, Communications issued $360 million of Senior Secured Notes and used the net proceeds to repay and terminate all outstanding term A loans under their credit
facility and all but $25 million of the outstanding term B loans and a portion of their revolving credit borrowings under their credit facility. In September 2003, Communications issued
$70 million of the Senior Secured Notes and used the net proceeds to repay approximately $12 million of outstanding borrowings under their revolving credit facility and purchase short
term investments pending completion of the Thomson acquisition.
Our interest expense and cash interest will be higher in future periods as a result of these financings. See "Presentation of Financial InformationPrivate Placement of Second Priority
Senior Secured Notes and Refinancing of Credit Facility".

Approximately
$576.1 million of our total debt is at a fixed rate with the balance subject to fixed or limited interest rate fluctuations by virtue of our interest rate protection
agreements (see Note 5 of the notes to our condensed consolidated financial statements). A 100 basis point increase in interest rates on our current variable rate debt would result in an
increase in annual interest expense of $1.7 million.

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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 expense increased $2.4 million to $0.7 million in the third quarter of 2003 from other income of $1.7 million in the third quarter of
2002. We reclassified a portion of the deferred losses related to our interest rate collar and swap agreements, currently reported as a component of accumulated other comprehensive income into
earnings in the third quarter of 2003 as a result of a portion of our hedge instruments becoming ineffective during the quarter. We also experienced a reduction in foreign exchange gains recognized
during the period resulting primarily from the strengthening of the Brazilian Real against the U.S. dollar.

Provision (benefit) for income taxes

Our tax benefit in the third quarter of 2003 relates to income taxes in certain foreign jurisdictions. We recorded no income tax benefit related to the net
operating loss we expect to generate during 2003 because we will establish a valuation allowance to offset any related tax benefits, due to uncertainty about realization of these benefits. Our tax
benefit in the third quarter of 2002 was recorded at a rate less than the applicable statutory rates primarily because we recorded a valuation allowance to offset
the portion of the benefits associated with net operating losses we generated in 2002, for which realization was not likely.

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NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2002

Net Revenue

Net revenue was $250.6 million and $255.7 million in the nine months ended September 30, 2003 and 2002, respectively.

Revenue
from trade shows and conferences declined $6.0 million, or 4.1%, to $139.4 million in the first nine months of 2003 from $145.4 million in the first nine
months of 2002. Total tradeshow square footage of 4.0 million square feet decreased 6.3% while price per square foot increased 2.8% from the first nine months of 2002. The decline in trade show
and conference revenue was partially attributable to a shift in the timing of four events into the fourth quarter of 2003. In 2003 we also held fewer events serving the beauty, e-learning,
abilities, licensing and technology markets. These declines were partially offset by strong performances of our trade shows serving the fashion, art, beauty, home entertainment and powersports
markets, and the launch of new events in the art, beauty, fashion and technology markets. Revenue for our spring and fall MAGIC events increased approximately $2.3 million, or 3.8%, compared to
the 2002 events. Square feet for our MAGIC events declined 4.7% compared to the 2002 events but was offset by increased pricing per square foot and an increase in ancillary product sales. Our trade
shows serving the technology market continue to suffer from the overall curtailment of marketing spending by technology companies. Revenue from our events serving the technology market declined
$8.1 million, or 23.1%, in the first nine months of 2003 compared to the first nine months of 2002. For all of our markets except technology, total tradeshow square feet declined 1.3% and
revenue increased 1.5% over the first nine months of 2002.

Revenue
from publications increased $1.5 million, or 1.5% to $97.8 million in the first nine months of 2003 from $96.3 million in the first nine months of 2002.
Advertising pages increased approximately 0.6% and revenue per page increased approximately 0.1% across our portfolio. The revenue increase was most heavily concentrated in publications serving the
beauty, healthcare, science, license, home entertainment and automotive markets. Our acquisition in October 2002 ofHealthcare Traveleralso
contributed to this increase. Our magazines serving the technology and travel markets continue to suffer from the overall economic environment as advertising pages continued to decline in these
markets. Advertising pages increased 13.0% across all markets other than technology and travel, resulting in a 13.9% revenue increase in these other markets.

Revenue
from marketing services and other declined $0.5 million, or 3.8%, to $13.5 million in the first nine months of 2003 from $14.0 million in the first nine
months of 2002 due largely to a reduction in internet sales and softness in classified and recruitment advertising.

Cost of production and selling

Cost of production and selling expenses declined $1.9 million, or 1.3%, to $144.9 million in the first nine months of 2003 from
$146.8 million in the first nine months of 2002.

Expenses
of trade shows and conferences increased $0.1 million, or 0.2%, to $66.6 million in the first nine months of 2003 from $66.5 million in the first nine
months of 2002. This increase was primarily due to an insurance recovery of approximately $2.4 million received in the third quarter of 2002 related to losses resulting from the 9/11 terrorist
attacks which had the effect of reducing trade show expenses last year. We also incurred costs in the first nine months of 2003 to launch several new events in the fashion, art, beauty and technology
markets, made investments in our MAGIC events and increased costs associated with ancillary product sales at our MAGIC events. These costs were partially offset by cost savings resulting from holding
fewer events serving the beauty, e-learning, abilities, licensing and technology markets.

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Expenses
of trade publications declined $2.2 million, or 3.0%, to $67.4 million in the first nine months of 2003 from $69.6 million in the first nine months of 2002.
Operating costs were impacted by lower paper prices, reductions in circulation acquisition and maintenance costs and our ongoing cost reduction programs partially offset by additional costs associated
with our acquisition ofHealthcare Traveler,in October 2002.

Expenses
of marketing services and other increased $0.1 million, or 1.0%, to $10.8 million in the first nine of 2003 from $10.7 million in the first nine months of
2002, due primarily to increases in sales staff resources dedicated to developing our small space advertiser page opportunities, partially offset by cost savings associated with a reduction in
internet sales activity.

General and administrative expenses

General and administrative expenses declined $0.5 million, or 1.7%, to $28.1 million in the first nine months of 2003 from $28.5 million in
the first nine months of 2002. The decline is principally due to cost savings as a result of reductions in personnel costs, lower bad debt expense and a reduction in credit card processing fees. Our
office occupancy costs remained essentially flat in the first nine months of 2003 compared with the same period last year.

Restructuring charge

In September 2003, we consolidated our midtown New York leased office space from two floors to one and sublet the excess space. These actions resulted in a
third quarter restructuring charge of approximately $2.1 million. These charges included the present value of future rental payments, net of sublease income, of $1.7 million, and other
relocation costs and expenses of $0.4 million. All of the costs associated with the consolidation were incurred in September 2003. We anticipate annual savings of approximately
$1.2 million for the balance of the lease term but we will continue to pay facility lease costs, net of sublease income, associated with the previously used facilities through
March 2010.

Depreciation and amortization

Depreciation and amortization expense declined approximately $11.5 million to $41.0 million in the first nine months of 2003 from
$52.5 million in the first nine months of 2002 primarily due to the effect of the declining balance method of accelerated amortization on our exhibitor and advertiser lists, partially offset by
additional amortization related to acquisitions.

Interest expense

Interest expense increased $3.6 million, or 7.2%, to $53.6 million in the first nine months of 2003 from $50.0 million in the comparable
period of 2002 due to an increase in our weighted average interest rate of approximately 60 basis points as a result of our financings discussed below and an increase in our weighted-average debt
outstanding due to accretion on our Discount Notes.

In
August 2003, Communications issued $360 million of Senior Secured Notes and used the net proceeds to repay and terminate all outstanding term A loans under their credit
facility and all but $25 million of the outstanding term B loans and a portion of their revolving credit borrowings under their credit facility. In September 2003, Communications issued
$70 million of the Senior Secured Notes and used the net proceeds to repay approximately $12 million of outstanding borrowings under their revolving credit facility and purchase short
term investments pending completion of the Thomson acquisition. Our interest expense and cash interest will be higher in future periods as a result of these financings. See "Presentation of Financial
Information-Private Placement of Second Priority Senior Secured Notes and Refinancing of Credit Facility".

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Approximately
$576.1 million of our total debt is at a fixed rate with the balance subject to fixed or limited interest rate fluctuations by virtue of our interest rate protection
agreements (see Note 5 of the notes to our condensed consolidated financial statements). A 100 basis point increase in interest rates on our current variable rate debt would result in an
increase in annual interest expense of $1.7 million.

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 expense increased $4.3 million to $0.4 million in the first nine months of 2003 from other income of $3.9 million in the first nine
months of 2002. We reclassified a portion of the deferred losses related to our interest rate collar and swap agreements currently reported as a component of accumulated other comprehensive income
into earnings in the third quarter of 2003 as a result of a portion of our hedge instruments becoming ineffective during the quarter. Finally, we recorded foreign exchange losses recognized during the
period resulting primarily from the strengthening of the Brazilian Real against the U.S. dollar compared to foreign exchange gains recorded in the nine months ended September 30, 2002 as the
Brazilian Real weakened against the U.S. dollar.

Provision (benefit) for income taxes

Provision for income taxes increased to $0.6 million in the first nine months of 2003 from an income tax benefit of $0.4 million in the first nine
months of 2002. Our tax provision in the first nine months of 2003 relates to income taxes in certain foreign jurisdictions. We recorded no income tax benefit related to the net operating loss we
expect to generate during 2003 because we will establish a valuation allowance to offset any related tax benefits, due to uncertainty about realization of these benefits. Our tax benefit in the first
nine months of 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 connection with the adoption of FAS 142, "Goodwill and Other Intangible Assets", we recorded a goodwill impairment charge of $66.8 million, net
of minority interest effect of $4.1 million, in the first quarter of 2002, attributable to an impairment of the carrying value of goodwill in our tradeshow operating segment which management
believes resulted from a slow-down in the economy and its associated impact on the tradeshow business. 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

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 discount notes and our guarantee of Communications' Credit Facility. Our principal liquidity needs are

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for
debt service on the senior discount notes and investments in Advanstar.com, which currently does not generate positive cash flow.

Our
principal source of cash is dividends from Communications. The Credit Facility and Senior Subordinated Notes described below are obligations of Communications and impose limitations
on its ability to pay dividends to us. For example, the Senior Secured Notes that Communications issued on August 18, 2003 and September 25, 2003, and its Senior Subordinated Notes limit
the amount of "restricted payments," including dividends, that Communications can make. Generally, Communications can make dividends only if its leverage ratio (as defined) is 6.0 to 1 or better and
only from the amount by which its cumulative EBITDA since January 1, 2001 exceeds 150% of its cumulative interest
expense in that same period. Communications' ability to generate EBITDA will depend upon various factors that may be beyond our control. Communications' interest expense will increase as a result of
its recent notes offering and, because a portion of its debt bears variable rates of interest, its interest expense could increase further in the future. Accordingly, Communications may not generate
sufficient cash flow from operations or be permitted by the terms of its debt instruments to pay dividends or distributions to us in amounts sufficient to allow it to pay cash interest on the parent
company notes. We currently 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. 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 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, investments in its publications and trade shows and strategic acquisitions, as well as to provide us with
cash to finance our cash needs. Its principal sources of liquidity will be cash flow from operations and borrowings under its Credit Facility.

Debt Service.As of September 30, 2003, we had total indebtedness of $744.1 million and approximately
$44.9 million of borrowings available under our revolving credit facility. Our principal debt obligations are described below.

Credit Facility.Communications' Credit Facility consists of a $60.0 million revolving credit facility and a
$25.0 million Term Loan B facility. The revolving credit facility will terminate in April 2007 and the Term Loan B matures October 11, 2008. Borrowings under the Credit Facility
generally bear interest based on a margin over, at Communications' option, the base rate or the reserve-adjusted London-interbank offered rate (LIBOR). The applicable margin for revolving credit loans
vary based upon our ratio of consolidated debt to EBITDA, as defined in the Credit Facility and, is currently 3.75% over LIBOR and 2.50% over the base rate. The applicable margin for Term Loan B
varies based upon the rating by S&P and Moody's of our credit facility and is currently 4.50% over LIBOR and 3.25% over the base rate. Communications' obligations under the Credit Facility are
guaranteed by us and our parent company, Advanstar Holdings Corp. ("Advanstar Holdings") and all Communications' existing and future domestic subsidiaries and are collateralized by substantially all
of the assets of Communications and the subsidiary guarantors, including a pledge of the capital stock of all Communications' existing and future domestic subsidiaries, a pledge of 65% of the voting
stock of any foreign subsidiary directly owned by Communications or any domestic subsidiary, a pledge of Communications' and Advanstar IH, Inc.'s capital stock by us, and a pledge of our
capital stock by Advanstar Holdings Corp. The Credit Facility contains restrictive covenants which require Communications to, among other things, maintain a level of 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 Communications' anticipated performance and expected economic
conditions, that Communications will be able to comply with the amended financial covenant contained in the credit facility throughout the remainder of 2003 and 2004.

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Senior Secured Notes.Communications' $130 million of second priority senior secured floating rate notes mature in
2008 and its $300 million of second priority senior secured fixed rate notes mature in 2010. The notes of each series are guaranteed by each of Communications' existing and future domestic
restricted subsidiaries and collateralized by second-priority liens on the assets collateralizing Communications' credit facility (other than certain of Communications' subsidiary stock and our
assets). 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 Communications' ability to incur debt, pay dividends and make investments.

Senior Subordinated Notes.The $160 million 12% Series B senior subordinated notes (the "Senior Subordinated
Notes") mature in 2011 and are guaranteed by each of Communications' existing and future domestic restricted subsidiaries. Interest on the Senior Subordinated Notes is payable
semi-annually in cash. The Notes contain restrictive covenants that, among other things, limit Communications' ability to incur debt, pay dividends and make investments.

Senior discount notes.We issued senior discount notes ("Discount Notes") due October 2011 with a principal amount at
maturity of $171.8 million. These Discount Notes do not require cash interest payments until 2006 and contain restrictive covenants that, among other things, limit our ability and that of our
subsidiaries to incur debt, pay dividends and make investments. However, we are a holding company and our ability to pay interest on these Discount Notes will be dependent upon the receipt of
dividends from our subsidiaries. The Credit Facility and the senior subordinated notes impose substantial restrictions on our subsidiaries' ability to pay dividends.

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

|                                   |  | Payments Due By Period
|---------------------------------- |  | ----------------------
|
|Indebtedness                       |  | $                     
|Interest on indebtedness(2)        |  |                       
|Operating leases                   |  |                       
|                                   |  |                       
|Total Contractual Cash Obligations |  | $                     
|                                   |  |                       

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Our contingent obligations are primarily composed of $2.6 million of letters of credit and our interest rate and foreign currency
derivatives discussed more fully below in "Qualitative and Quantitative Disclosure About Market Risk."

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

On
a relative basis, our revenue reaches its highest levels during the first and third quarters of the year largely due to the timing of the MAGICtrade shows and our other large trade shows and
conferences. This seasonality, when combined with the shift in the timing of when events take
place from year to year, may have a significant effect on our quarterly 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 financings and refinancings, will be sufficient to meet our anticipated future operating expenses, capital expenditures and debt service and other obligations as they become due.
However, our ability to make scheduled payments of principal, to pay interest on or to refinance our indebtedness and to satisfy our other debt obligations will depend upon our future operating
performance, which will be affected by general economic, financial, competitive, legislative, regulatory, business and other factors beyond our control.

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

Cash flows from operating activities.Net cash provided by operations was $21.1 million in the first nine months of
2003, derived primarily from our net loss of $31.9 million adjusted for amortization and depreciation of $41.0 million, the write-off of deferred finance costs of
$11.3 million, noncash interest of $15.5 million, other non-cash items totaling approximately $1.8 million, partially offset by a use of cash caused by movements in
our operating assets and liabilities of $16.6 million, principally from the release of deferred revenue upon completion of our trade shows.

Net
cash provided by operations increased $10.0 million to $21.1 million in the first nine months of 2003 compared to $11.1 million in the first nine months of 2002.
This increase was principally due to a decline in our net loss of $53.3 million, adjusted by the write-off of deferred finance costs of $11.3 million, a period over period
change in other non-cash items of $3.0 million. This increase was partially offset by certain non-cash charges included in net income in the first nine months of 2002,
primarily the goodwill impairment charge and a period over period reduction in depreciation and amortization, of approximately $78.4 million. Cash generated from changes in our operating assets
and liabilities increased $20.8 million in the first nine months of 2003 from the first nine months of 2002 due largely to the timing of payments on accounts payable and collections on accounts
receivable and collections of customer deposits related to future events.

Cash flows used in investing activities.Net cash used in investing activities declined $15.4 million to
$4.7 million in the first nine months of 2003, from $20.1 million in the first nine months of 2002. This decline was principally due to significantly decreased acquisition activity and
capital expenditures.

Capital
expenditures declined $1.4 million in the first nine months of 2003 to $4.5 million compared to $5.8 million in the first nine months of 2002. We anticipate
that we will spend approximately $6.8 million on capital expenditures in 2003, primarily for expenditures related to our desktop computers and management information systems. We believe that
this amount of capital

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expenditures
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 for the first nine months of 2003 declined $14.1 million relative to the first nine months of 2002 because of reduced acquisition activity during the
period. 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.

On
October 1, 2003, Communications purchased a portfolio of healthcare industry magazines and related custom service projects from Thomson, for $136 million in cash
including related fees and expenses. See "Presentation of Financial InformationAcquisitions and Joint Ventures". Communications is in the process of integrating the Thomson acquisition
into our operations and we will incur costs related to these efforts over the next several months. These costs will be reflected in our results of operations beginning in the fourth quarter of 2003.

Cash flows from financing activities.Cash flows used in financing activities increased $127.3 million to
$107.8 million in the first nine months of 2003 from the first nine months of 2002. This increase is due to the issuance of $360 million of the Senior Secured Notes used to repay and
terminate all outstanding term A loans under our credit facility and all but $25 million of the outstanding term B loans and a portion of our revolving credit borrowings under the Credit
Facility; the issuance of an additional $70 million of Senior Secured Notes used to repay $12 million of outstanding borrowings under our revolving credit facility and purchase short
term investments pending completion of the Thomson acquisition and the receipt of $50.0 million in equity contributions from our parent company. Fees paid to our senior lenders for the
amendment to our Credit Facility in April 2003 were $3.9 million, compared to fees paid for the amendment in March 2002 of $2.0 million. We also paid fees of
$12.3 million in connection with the Senior Secured Notes offerings in August and September 2003.



In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities" ("SFAS 149").
SFAS 149 amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities
under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." The changes are intended to improve financial reporting by requiring that contracts with comparable
characteristics be accounted for similarly. Additionally, those changes are expected to result in more consistent reporting of contracts as either derivatives or hybrid instruments. The requirements
of SFAS 149 became effective for the Company beginning in the third quarter of fiscal 2003 for contracts entered into or modified by it and for hedging relationships designated thereafter. The
adoption of SFAS 149 did not have a significant impact on the results of operations or financial position of the Company.

In
May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
establishes standards for issuer classification and measurement of certain financial instruments with characteristics of both liabilities and equity. Instruments that fall within the scope of SFAS
No. 150 must be classified as a liability. SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003. For financial instruments issued prior
to June 1, 2003, SFAS No. 150 becomes effective for the Company in

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the
third quarter of fiscal 2003. The adoption of SFAS 150 did not have a significant impact on the results of operations or financial position of the Company.

Item 3.    Qualitative and Quantitative Disclosure about Market Risk

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

Interest Rates.At September 30, 2003, we had fixed rate debt of $576.1 million and variable rate debt of
$168.0 million. The annual pre-tax earnings and cash flows impact resulting from a 100 basis point increase in interest rates on variable rate debt, holding other variables constant
and excluding the impact of the hedging agreements described below, would be approximately $1.7 million per year.

The
term loans under our Credit Facility and $130.0 million of the Senior Secured Notes bear interest at a variable rate. We have previously entered into two interest rate hedge
agreements to hedge our interest rate risk on these borrowings. One, with a notional amount of $150.0 million, is an interest rate collar agreement that expires in February 2004, and the
other, with a notional amount of $200.0 million, is an interest rate swap agreement that expires in November 2005. Under these agreements, based on current LIBOR, the Company will be
required to make payments of $1.5 million per quarter beginning in October 2003, and an additional $0.5 million per quarter beginning in December 2003, until the agreements
expire, which it will account for as interest expense. A decrease in LIBOR of 100 basis points would increase the Company's interest expense on these agreements by $3.5 million per year.
Approximately $125 million of the interest rate collar agreement and $70 million of our interest rate swap agreement is considered undesignated for hedging purposes. Changes in fair
value of the undesignated portion of these instruments are recognized in current earnings.

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

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

Our
strategy for management of currency risk relies primarily on conducting our operations in a country's respective currency and may, from time to time, involve currency derivatives,
primarily forward exchange contracts, to reduce our exposure to currency fluctuations. As of September 30, 2003, we had open foreign exchange derivative contracts to sell with a notional amount
totaling $3.3 million, and to buy with a notional amount totaling $1.2 million. The estimated fair value of the foreign exchange contracts based upon market quotes was a net asset of
approximately $0.1 million. The potential loss in fair value resulting from a hypothetical 10% adverse change in quoted foreign currency exchange rates amounts to an additional loss of
approximately $0.3 million. Actual results may differ.

33

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Item 4.    Controls and Procedures



The
Company's principal executive officer and principal financial officer have evaluated the Company's disclosure controls and procedures (as defined in the Securities Exchange Act of
1934, as amended (the "Exchange Act") Rules 13a-15(e) or 15d-15(e)) as of the end of the quarter ended September 30, 2003. Based on this evaluation, they
concluded that the disclosure controls and procedures were adequate and effective and designed to ensure that material information relating to the registrant, including its consolidated subsidiaries,
is made known to them by others within those entities, particularly during the period in which this quarterly report is being prepared.



There
were no changes in our internal control over financial reporting identified in connection with such evaluation that occurred during our last fiscal quarter that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.

34

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PART II  OTHER INFORMATION

Item 6.    Exhibits and Reports on Form 8-K

Item 6(a).    Exhibits

| |  | 4.1  |  | Indenture, dated as of August 18, 2003 among Advanstar Communications Inc., the Guarantors party thereto and the Trustee. (Previously filed as an exhibit to the Company's Registration Statement on Form S-1 (333-59284) and
incorporated by reference herein)                                                    
| |  | ---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 4.2  |  | Intercreditor Agreement dated as of August 18, 2003 among Advanstar Communications Inc., Fleet National Bank, Credit Suisse First Boston and Wells Fargo Bank Minnesota N.A. (Previously filed as an exhibit to the Company's Registration Statement on
Form S-1 (333-109648) and incorporated by reference herein)
| |  |      |  | The Company has not filed certain debt instruments with respect to long-term debt that does not exceed ten percent of the total assets of the Company and its subsidiaries on a consolidated basis. The Company hereby agrees to furnish a copy of such
instruments to the Commission upon request.                
| |  | 10.1 |  | Third Amendment to Credit Agreement, dated as of August 18, 2003 (Previously filed as an exhibit to the Company's Registration Statement on Form S-1 (333-59284) and incorporated by reference herein)                                                                                                             
| |  | 31.1 |  | Certification of principal executive officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act                                                                                                                                                                                                      
| |  | 31.2 |  | Certification of principal financial officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.                                                                                                                                                                                                     
| |  | 32.1 |  | Certification of principal executive officer required by Rule 13a-14(b) or 15d-14(b) of the Exchange Act.                                                                                                                                                                                                          
| |  | 32.2 |  | Certification of principal financial officer required by Rule 13a-14(b) or 15d-14(b) of the Exchange Act.                                                                                                                                                                                                          

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

The Company filed a report on Form 8-K under Items 5 and 7 on September 11, 2003 to announce the commencement of a private placement of its second priority senior
secured notes and the pricing of the private placement.

The
Company filed a report on Form 8-K under Items 7 and 9 on August 26, 2003 to announce its agreement to acquire a portfolio of healthcare industry-specific magazines and related
custom project services from The Thomson Corporation and its subsidiaries.

The
Company filed a report on Form 8-K under Item 9 on August 11, 2003 under Item 9 to provide information regarding the its participation in an auction to acquire a complementary
business.

The
Company filed a report on Form 8-K under Items 5 and 7 on August 5, 2003 to announce the pricing of a private placement of its second priority senior secured notes.

The
Company filed a report on Form 8-K under Item 9 on August 1, 2003 under Item 9 to provide information regarding the its participation in an auction to acquire a complementary
business.

The
Company filed a report on Form 8-K under Items 5 and 7 on July 22, 2003 to announce its commencement of a private placement of second priority senior secured notes.

The
Company filed a report on Form 8-K under Items 7, 9 and 12 on July 22, 2003 to disclose certain information related to its employment contract with its chief executive officer,
certain information relating to the performance of trade shows in the first half of 2003, certain information with respect to
initiatives undertaken during the recession and to furnish its earnings release for the second fiscal quarter ended June 30, 2003.

35

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SIGNATURES

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

|                  |  | ADVANSTAR, INC.                                                                                                                                                                      
|----------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|November 14, 2003 |  | /s/DAVID W. MONTGOMERYDavid W. Montgomery
Vice President-Finance, Secretary and Chief Financial Officer
(Principal Financial Officer and Authorized
Representative of the Registrant)

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Exhibit Index

|Exhibit No. |  | Document                                                                                                                                                                                                                                                                                                          
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.1         |  | Indenture, dated as of August 18, 2003 among Advanstar Communications Inc., the Guarantors party thereto and the Trustee. (Previously filed as an exhibit to the Company's Registration Statement on Form S-1 (333-59284) and
incorporated by reference herein)                                                   
|4.2         |  | Intercreditor Agreement dated as of August 18, 2003 among Advanstar Communications Inc., Fleet National Bank, Credit Suisse First Boston and Wells Fargo Bank Minnesota N.A.(Previously filed as an exhibit to the Company's Registration Statement on
Form S-1 (333-109648) and incorporated by reference herein)
|            |  | The Company has not filed certain debt instruments with respect to long-term debt that does not exceed ten percent of the total assets of the Company and its subsidiaries on a consolidated basis. The Company hereby agrees to furnish a copy of such
instruments to the Commission upon request.               
|10.1        |  | Third Amendment to Credit Agreement, dated as of August 18, 2003 (Previously filed as an exhibit to the Company's Registration Statement on Form S-1 (333-59284) and incorporated by reference herein)                                                                                                            
|31.1        |  | Certification of principal executive officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act                                                                                                                                                                                                     
|31.2        |  | Certification of principal financial officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.                                                                                                                                                                                                    
|32.1        |  | Certification of principal executive officer required by Rule 13a-14(b) or 15d-14(b) of the Exchange Act.                                                                                                                                                                                                         
|32.2        |  | Certification of principal financial officer required by Rule 13a-14(b) or 15d-14(b) of the Exchange Act.                                                                                                                                                                                                         

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