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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q/A

|ý | Quarterly Report Pursuant to Section 13 or 15(d) of The Securities Exchange
Act of 1934.
|- | ----------------------------------------------------------------------------------------
|  | For the quarterly period ended: June 30, 2002                                           

Commission File Number: 333-61386

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

Delaware
(State or other jurisdiction of
incorporation or organization)

94-3243499
(I.R.S. Employer
Identification No.)

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 August 14, 2002, 100 shares of the Registrant's common stock were outstanding.

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Explanatory Note

The principal purpose of this Amendment is to reflect the restatement of our unaudited financial statements for the fiscal quarter ended June 30, 2002 and
the restatement adjustments described under "Item 2.?Management's Discussion and Analysis of Financial Conditions and Results of Operations" and in the notes to our consolidated unaudited
financial statements below. We are amending and restating only those items in our Form 10-Q that are affected by the restatement adjustments. This Amendment No. 1 to
Quarterly Report on Form 10-Q/A does not reflect events occurring after the August 14, 2002 filing of our Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 2002 or modify or update the disclosures set forth in that Quarterly Report on Form 10-Q in any way, except as required to reflect the effects of the
re-audit of our financial statements for the fiscal year ended December 31, 2001 and restatements identified above. The remaining Items are not amended hereby, but are included for
the convenience of the reader.

|           |  |                                                                                                               |  | Page in this
Quarterly
Report
|---------- |  | ------------------------------------------------------------------------------------------------------------- |  | -----------------------------
|PART I     |  | Financial Information                                                                                         |  |                              
|Item 1.    |  | Financial Statements:                                                                                         |  |                              
|           |  | Condensed Consolidated Balance Sheets at June 30, 2002 (unaudited) and December 31, 2001                      |  | 3                            
|           |  | Condensed Consolidated Statements of Operations (unaudited) for the three months ended June 30, 2002 and 2001 |  | 3                            
|           |  | Condensed Consolidated Statements of Operations (unaudited) for the six months ended June 30, 2002 and 2001   |  | 4                            
|           |  | Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2002 and 2001   |  | 5                            
|           |  | Notes to Condensed Consolidated Financial Statements (unaudited)                                              |  | 6                            
|Item 2.    |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                         |  | 18                           
|Item 3.    |  | Qualitative and Quantitative Disclosure about Market Risk                                                     |  | 31                           
|PART II    |  | Other Information                                                                                             |  |                              
|Item 4.    |  | Submissions of Matters to a Vote of Security Holders                                                          |  | 33                           
|Item 6(a). |  | Exhibits                                                                                                      |  | 33                           
|Item 6(b). |  | Reports on Form 8-K                                                                                           |  | 33                           
|           |  | Signature                                                                                                     |  | 34                           

1

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ADVANSTAR, INC.    CONDENSED CONSOLIDATED BALANCE SHEETS  (In thousands, except share and per share data)

|                                          |                                                                                                                                  | June 30,
2002                              |         | December 31,
2001 |        
|----------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ----------------- | -------
|
|ASSETS                                    |                                                                                                                                  |                                            |         |                  
|Current Assets                            |                                                                                                                                  |                                            |         |                   |        
|                                          | Cash and cash equivalents                                                                                                        |                                            | $       | 11,943            |        
|                                          | Accounts receivable, net                                                                                                         |                                            |         | 27,668            |        
|                                          | Prepaid expenses                                                                                                                 |                                            |         | 8,076             |        
|                                          | Other                                                                                                                            |                                            |         | 6,994             |        
|                                          |                                                                                                                                  |                                            |         |                   |        
|                                          |                                                                                                                                  | Total current assets                       |         |                   | 54,681 
|Due from Parent                           |                                                                                                                                  |                                            |        |                   |        
|Property, plant and equipment, net        |                                                                                                                                  |                                            | 30,084  |                   |        
|Intangible and other assets               |                                                                                                                                  |                                            |         |                   |        
|                                          | Goodwill, net                                                                                                                    |                                            |         | 728,133           |        
|                                          | Intangibles and other, net                                                                                                       |                                            |         | 154,587           |        
|                                          |                                                                                                                                  |                                            |         |                   |        
|                                          |                                                                                                                                  | Total intangible and other assets          |         |                   | 882,720
|                                          |                                                                                                                                  |                                            |         |                   |        
|                                          |                                                                                                                                  | Total assets                               |         | $                 | 967,485
|                                          |                                                                                                                                  |                                            |         |                   |        
|LIABILITIES AND STOCKHOLDER'S EQUITY      |                                                                                                                                  |                                            |         |                  
|Current Liabilities                       |                                                                                                                                  |                                            |         |                   |        
|                                          | Current maturities of long-term debt                                                                                             |                                            | $       | 17,000            |        
|                                          | Accounts payable                                                                                                                 |                                            |         | 22,856            |        
|                                          | Accrued liabilities                                                                                                              |                                            |         | 26,812            |        
|                                          | Deferred revenue                                                                                                                 |                                            |         | 40,031            |        
|                                          |                                                                                                                                  |                                            |         |                   |        
|                                          |                                                                                                                                  | Total current liabilities                  |         |                   | 106,699
|Long-term debt, net of current maturities |                                                                                                                                  |                                            | 632,501 |                   |        
|Deferred income taxes                     |                                                                                                                                  |                                            | 8,010   |                   |        
|Other long-term liabilities               |                                                                                                                                  |                                            | 9,919   |                   |        
|Minority interests                        |                                                                                                                                  |                                            | 15,660  |                   |        
|Commitments and contingencies             |                                                                                                                                  |                                            |         |                   |        
|Stockholder's equity                      |                                                                                                                                  |                                            |         |                   |        
|                                          | Common stock, $.01 par value; 10,000 shares authorized; 100 shares issued and outstanding at June 30, 2002 and December 31, 2001 |                                            |         |                  |        
|                                          | Capital in excess of par                                                                                                         |                                            |         | 310,424           |        
|                                          | Accumulated deficit                                                                                                              |                                            |         | (109,665          | )      
|                                          | Accumulated other comprehensive loss                                                                                             |                                            |         | (6,063            | )      
|                                          |                                                                                                                                  |                                            |         |                   |        
|                                          |                                                                                                                                  | Total stockholder's equity                 |         |                   | 194,696
|                                          |                                                                                                                                  |                                            |         |                   |        
|                                          |                                                                                                                                  | Total liabilities and stockholder's equity |         | $                 | 967,485
|                                          |                                                                                                                                  |                                            |         |                   |        

See
notes to condensed consolidated financial statements.

2

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ADVANSTAR, INC.    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  (In thousandsUnaudited)

|                                                |                                    | Three Months
Ended
June 30,
2002 |         | Three Months
Ended
June 30,
2001 |       
|----------------------------------------------- | ---------------------------------- | -------------------------------- | ------- | -------------------------------- | ------
|
|Net revenue                                     |                                    | $                                | 63,896  |                                  | $     
|                                                |                                    |                                  |         |                                  |       
|Operating expenses:                             |                                    |                                  |         |                                  |       
|                                                | Costs of production                |                                  |         | 12,783                           |       
|                                                | Selling, editorial and circulation |                                  |         | 28,305                           |       
|                                                | General and administrative         |                                  |         | 11,257                           |       
|                                                | Restructuring charge and other     |                                  |         |                                 |       
|                                                | Depreciation and amortization      |                                  |         | 17,314                           |       
|                                                |                                    |                                  |         |                                  |       
|                                                |                                    | Total operating expenses         |         |                                  | 69,659
|                                                |                                    |                                  |         |                                  |       
|Operating loss                                  |                                    |                                  | (5,763  | )                                |       
|Other income (expense):                         |                                    |                                  |         |                                  |       
|                                                | Interest expense, net              |                                  |         | (17,058                          | )     
|                                                | Other income (expense), net        |                                  |         | 1,193                            |       
|                                                |                                    |                                  |         |                                  |       
|Loss before income taxes and minority interests |                                    |                                  | (21,628 | )                                |       
|Provision (benefit) for income taxes            |                                    |                                  | (510    | )                                |       
|Minority interests                              |                                    |                                  | (590    | )                                |       
|                                                |                                    |                                  |         |                                  |       
|Net loss                                        |                                    | $                                | (21,708 | )                                | $     
|                                                |                                    |                                  |         |                                  |       

See
notes to condensed consolidated financial statements.

3

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ADVANSTAR, INC.    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  (In thousandsUnaudited)

|                                                     |                                    | Six Months
Ended
June 30,
2002 |         | Six Months
Ended
June 30,
2001 |        
|---------------------------------------------------- | ---------------------------------- | ------------------------------ | ------- | ------------------------------ | -------
|
|Net revenue                                          |                                    | $                              | 173,806 |                                | $      
|                                                     |                                    |                                |         |                                |        
|Operating expenses:                                  |                                    |                                |         |                                |        
|                                                     | Costs of production                |                                |         | 36,014                         |        
|                                                     | Selling, editorial and circulation |                                |         | 63,500                         |        
|                                                     | General and administrative         |                                |         | 23,257                         |        
|                                                     | Restructuring charge and other     |                                |         |                               |        
|                                                     | Depreciation and amortization      |                                |         | 34,221                         |        
|                                                     |                                    |                                |         |                                |        
|                                                     |                                    | Total operating expenses       |         |                                | 156,992
|                                                     |                                    |                                |         |                                |        
|Operating income                                     |                                    |                                | 16,814  |                                |        
|Other income (expense):                              |                                    |                                |         |                                |        
|                                                     | Interest expense, net              |                                |         | (33,280                        | )      
|                                                     | Other income (expense), net        |                                |         | 2,235                          |        
|                                                     |                                    |                                |         |                                |        
|Loss before income taxes and minority interests      |                                    |                                | (14,231 | )                              |        
|Provision (benefit) for income taxes                 |                                    |                                | (342    | )                              |        
|Minority interests                                   |                                    |                                | (680    | )                              |        
|                                                     |                                    |                                |         |                                |        
|Loss before extraordinary item and accounting change |                                    |                                | (14,569 | )                              |        
|Extraordinary item, net of tax                       |                                    |                                |        |                                |        
|Cumulative effect of accounting change, net of tax   |                                    |                                |        |                                |        
|                                                     |                                    |                                |         |                                |        
|Net loss                                             |                                    | $                              | (14,569 | )                              | $      
|                                                     |                                    |                                |         |                                |        

See
notes to condensed consolidated financial statements.

4

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ADVANSTAR, INC.    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (In thousandsUnaudited)

|                                                             |                                                                                                                             | Six Months
Ended
June 30,
2002                                  |                                                     | Six Months
Ended
June 30,
2001 |        
|------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------- | --------------------------------------------------- | ------------------------------ | -------
|
|Operating Activities                                         |                                                                                                                             |                                                                 |                                                     |                                |        
|                                                             | Net loss                                                                                                                    |                                                                 | $                                                   | (14,569                        | )      
|                                                             | Adjustments to reconcile net income (loss) to net cash provided by operating activities, excluding effects of acquisitions: |                                                                 |                                                     |                                |        
|                                                             |                                                                                                                             | Deferred taxes                                                  |                                                     |                                | (2,105 
|                                                             |                                                                                                                             | Extraordinary item  early extinguishment of debt, net of taxes |                                                     |                                |       
|                                                             |                                                                                                                             | Restructuring charge and other                                  |                                                     |                                |       
|                                                             |                                                                                                                             | Unrealized (gain) loss on derivative financial instruments      |                                                     |                                | (827   
|                                                             |                                                                                                                             | Depreciation and amortization                                   |                                                     |                                | 34,221 
|                                                             |                                                                                                                             | Non-cash interest                                               |                                                     |                                | 8,664  
|                                                             |                                                                                                                             | Loss on sales of assets and other                               |                                                     |                                | 675    
|                                                             |                                                                                                                             | Changes in operating assets and liabilities                     |                                                     |                                | (25,916
|                                                             |                                                                                                                             |                                                                 |                                                     |                                |        
|                                                             |                                                                                                                             |                                                                 | Net cash provided by (used in) operating activities |                                |        
|                                                             |                                                                                                                             |                                                                 |                                                     |                                |        
|Investing Activities                                         |                                                                                                                             |                                                                 |                                                     |                                |        
|                                                             | Additions to property, plant and equipment                                                                                  |                                                                 |                                                     | (3,296                         | )      
|                                                             | Acquisition of publications and trade shows, net of cash acquired                                                           |                                                                 |                                                     | (13,279                        | )      
|                                                             | Proceeds from sale of assets and other                                                                                      |                                                                 |                                                     | 11                             |        
|                                                             |                                                                                                                             |                                                                 |                                                     |                                |        
|                                                             |                                                                                                                             |                                                                 | Net cash used in investing activities               |                                |        
|                                                             |                                                                                                                             |                                                                 |                                                     |                                |        
|Financing Activities                                         |                                                                                                                             |                                                                 |                                                     |                                |        
|                                                             | Net proceeds from revolving credit facility                                                                                 |                                                                 |                                                     | (5,000                         | )      
|                                                             | Borrowings of long-term debt                                                                                                |                                                                 |                                                     | (7,700                         | )      
|                                                             | Payments of long-term debt                                                                                                  |                                                                 |                                                     |                               |        
|                                                             | Long-term debt financing costs                                                                                              |                                                                 |                                                     | (2,047                         | )      
|                                                             | Dividends paid to minority interest holders                                                                                 |                                                                 |                                                     | (503                           | )      
|                                                             | Capital contributions                                                                                                       |                                                                 |                                                     |                               |        
|                                                             |                                                                                                                             |                                                                 |                                                     |                                |        
|                                                             |                                                                                                                             |                                                                 | Net cash provided by (used in) financing activities |                                |        
|Effect of exchange rate changes on cash and cash equivalents |                                                                                                                             |                                                                 | (1,183                                              | )                              |        
|Net (decrease) increase in cash and cash equivalents         |                                                                                                                             |                                                                 | (32,854                                             | )                              |        
|Cash and cash equivalents, beginning of period               |                                                                                                                             |                                                                 | 44,797                                              |                                |        
|                                                             |                                                                                                                             |                                                                 |                                                     |                                |        
|Cash and cash equivalents, end of period                     |                                                                                                                             | $                                                               | 11,943                                              |                                | $      
|                                                             |                                                                                                                             |                                                                 |                                                     |                                |        

See
notes to condensed consolidated financial statements.

5

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1.    Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by Advanstar, Inc. (Advanstar, or 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, considered necessary for a fair presentation have been included, and that the disclosures are
adequate to make the information presented not misleading. 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 amended annual report on Form 10-K/A filed with the Securities and Exchange Commission on November 25, 2002. The results of
operations for the three and six month periods ended June 30, 2002 are not necessarily indicative of the operating results that may be expected for the entire year ending December 31,
2002.

Reclassifications

Certain reclassifications have been made to amounts reported in prior periods in order to conform to the current period presentation.

2.    Restatement of Financial Information Relating to Intangible Assets

The Company has determined that the method of amortization of certain intangible assets acquired in the acquisition of the Company consisting of intangible assets
related to trade exhibitor lists and advertiser lists, should reflect the pattern in which the economic benefit would be realized. Accordingly, at the completion of the allocation period and as a
result of the finalization of a valuation of intangible assets, amortization of the affected intangible assets which was recognized on a straight-line basis in 2001 and an accelerated
basis in 2002 was adjusted to reflect accelerated methods which correspond to the Company's projections of future cash flows directly related to these intangible assets.

6

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A
summary of the restatement of previously issued financial information is as follows:

|(in thousands)                                               |  | As Previously
Reported |         | As
Restated |  
|------------------------------------------------------------ |  | ---------------------- | ------- | ----------- | -
|Balance sheet at June 30, 2002                               |  |                        |         |             |  
|Intangible and other assets, net of accumulated amortization |  | $                      | 181,166 |             | $
|Deferred income tax liability                                |  |                        | 21,486  |             |  
|Minority interests                                           |  |                        | 15,688  |             |  
|Accumulated deficit                                          |  |                        | (87,210 | )           |  
|Accumulated other comprehensive loss                         |  |                        | (6,559  | )           |  
|Total stockholder's equity                                   |  |                        | 216,655 |             |  
|                                                             |  |                        |         |             |  
|Statement of Operations Three Months Ended June 30, 2002     |  |                        |         |             |  
|Depreciation and amortization                                |  |                        | 17,520  |             |  
|Operating income (loss)                                      |  |                        | (5,969  | )           |  
|Loss before income taxes and minority interests              |  |                        | (21,834 | )           |  
|Provision (benefit) for income taxes                         |  |                        | (7,823  | )           |  
|Minority interests                                           |  |                        | (589    | )           |  
|Net loss                                                     |  |                        | (14,600 | )           |  
|                                                             |  |                        |         |             |  
|Statement of Operations Six Months Ended June 30, 2002       |  |                        |         |             |  
|Depreciation and amortization                                |  |                        | 35,214  |             |  
|Operating income (loss)                                      |  |                        | 15,821  |             |  
|Loss before income taxes and minority interests              |  |                        | (15,224 | )           |  
|Provision (benefit) for income taxes                         |  |                        | (5,525  | )           |  
|Minority interests                                           |  |                        | (677    | )           |  
|Net loss                                                     |  |                        | (10,376 | )           |  
|                                                             |  |                        |         |             |  
|Statement of Operations Three Months Ended June 30, 2001     |  |                        |         |             |  
|Depreciation and amortization                                |  |                        | 16,137  |             |  
|Operating income (loss)                                      |  |                        | (9,501  | )           |  
|Loss before income taxes and minority interests              |  |                        | (23,817 | )           |  
|Provision (benefit) for income taxes                         |  |                        | (6,385  | )           |  
|Minority interests                                           |  |                        | (632    | )           |  
|Net loss                                                     |  |                        | (18,064 | )           |  
|                                                             |  |                        |         |             |  
|Statement of Operations Six Months Ended June 30, 2001       |  |                        |         |             |  
|Depreciation and amortization                                |  |                        | 33,935  |             |  
|Operating income (loss)                                      |  |                        | 11,011  |             |  
|Loss before income taxes and minority interests              |  |                        | (21,426 | )           |  
|Provision (benefit) for income taxes                         |  |                        | (1,871  | )           |  
|Minority interests                                           |  |                        | (766    | )           |  
|Loss before extraordinary item and accounting change         |  |                        | (20,321 | )           |  
|Net loss                                                     |  |                        | (23,429 | )           |  

The
adjustments to previously reported financial statements have no impact on net revenue or cash flows for any period, do not impact measurements of earnings before taxes, depreciation,
amortization and taxes and have no impact on the Company's financial ratio covenants in its debt instruments.

In
addition, during 2001 the Company made a reclassification of $1.8 million out of goodwill into other intangible assets related to an adjustment to the purchase price
allocation.

7

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3.    Goodwill and Intangible Assets

Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets."
Under SFAS No. 142, goodwill and intangible assets with indefinite lives are no longer amortized. However, the Company is required to perform an initial impairment review of goodwill in 2002
and an annual impairment review thereafter, or more frequently if impairment indicators arise. Identified intangible assets that are not deemed to have indefinite lives will continue to be amortized
over their useful lives, but with no maximum life.

During
the second quarter 2002, the Company completed an initial assessment of goodwill impairment. The assessment indicated that there is the potential for a goodwill impairment charge
related to our trade show segment, which has an aggregate net book value of goodwill of approximately $528.9 million. Preliminary valuations show that the carrying value of our trade show
segment is in excess of its fair value by approximately $11.6 million. Consequently, there is the possibility for a material, non-cash impairment charge in the fourth quarter of
2002. Once final measurement of the goodwill impairment has been completed, the charge will be recorded as the cumulative effect of an accounting change as of January 1, 2002. The Company
expects to complete the impairment measurement process in the fourth quarter of 2002.

Upon
adoption of SFAS No. 142, the Company discontinued the amortization of goodwill. The following table represents a reconciliation of income before extraordinary item and
accounting change and net income adjusted for the exclusion of goodwill amortization, net of tax (in thousands):

|                                                                       |  | Three Months
Ended
June 30,
2002 |         | Three Months
Ended
June 30,
2001 |   | Six Months
Ended
June 30,
2002 |   | Six Months
Ended
June 30,
2001 |        
|---------------------------------------------------------------------- |  | -------------------------------- | ------- | -------------------------------- | - | ------------------------------ | - | ------------------------------ | -------
|
|Reported income (loss) before extraordinary item and accounting change |  | $                                | (21,708 | )                                | $ | (22,231                        | ) | $                              | (14,569
|Add: goodwill amortization, net of tax                                 |  |                                  |        |                                  |   | 5,685                          |   |                                |       
|                                                                       |  |                                  |         |                                  |   |                                |   |                                |        
|Adjusted income (loss) before extraordinary item and accounting change |  | $                                | (21,708 | )                                | $ | (16,546                        | ) | $                              | (14,569
|                                                                       |  |                                  |         |                                  |   |                                |   |                                |        
|Reported net (loss) income                                             |  | $                                | (21,708 | )                                | $ | (22,231                        | ) | $                              | (14,569
|Add: goodwill amortization, net of tax                                 |  |                                  |        |                                  |   | 5,685                          |   |                                |       
|                                                                       |  |                                  |         |                                  |   |                                |   |                                |        
|Adjusted net income (loss)                                             |  | $                                | (21,708 | )                                | $ | (16,546                        | ) | $                              | (14,569
|                                                                       |  |                                  |         |                                  |   |                                |   |                                |        

The
changes in the carrying amount of goodwill for the three months ended June 30, 2002, by operating segment, are as follows (in thousands):

|                                                                      |  | Trade Shows
and
Conferences |         | Trade
Publications |   | Marketing
Services |   | Totals
|--------------------------------------------------------------------- |  | --------------------------- | ------- | ------------------ | - | ------------------ | - | ------
|Balance as of December 31, 2001                                       |  | $                           | 557,109 |                    | $ | 131,932            |   | $     
|Acquisitions and adjustment to preliminary purchase price allocations |  |                             | 9,070   |                    |   | (65                | ) |       
|                                                                      |  |                             |         |                    |   |                    |   |       
|Balance as of June 30, 2002                                           |  | $                           | 566,179 |                    | $ | 131,867            |   | $     

During
the first quarter of 2002 we completed the acquisitions of the AIIM International Exposition and Conference and the First Global Media Group with a cumulative purchase price
totaling approximately $12.4 million in cash and assumed liabilities. We have accounted for our acquisitions under the purchase method of accounting and our results of operations include the
effect

8

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of these acquisitions from the date of purchase. Certain of the liabilities assumed and the identified intangible assets in connection with the 2001 and 2002 acquisitions have been recorded based on
preliminary estimates as of the dates of acquisition and are subject to adjustment upon completion of
the allocation of the purchase price. The pro forma operating results of the acquisitions are not material to our operating results.

Trade
exhibitor and advertiser lists are amortized on an accelerated basis over six and five years, respectively, while other intangible assets are amortized on a
straight-line basis over three to 10 years and consist of the following as of June 30, 2002 and December 31, 2001 (in thousands):

|                                       |  | June 30,
2002 |         | December 31,
2001 |  
|-------------------------------------- |  | ------------- | ------- | ----------------- | -
|
|Trade exhibitor lists                  |  | $             | 163,387 |                   | $
|Advertiser lists                       |  |               | 34,890  |                   |  
|Subscriber lists                       |  |               | 23,181  |                   |  
|Other intangible assets                |  |               | 4,540   |                   |  
|Other assets                           |  |               | 23,488  |                   |  
|                                       |  |               |         |                   |  
|                                       |  |               | 249,486 |                   |  
|Accumulated amortization               |  |               | (94,899 | )                 |  
|                                       |  |               |         |                   |  
|Total intangible and other assets, net |  | $             | 154,587 |                   | $
|                                       |  |               |         |                   |  

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

|2002 |  | $ | 60,781
|---- |  | - | ------
|2003 |  |   | 42,109
|2004 |  |   | 25,408
|2005 |  |   | 17,519
|2006 |  |   | 12,328

4.    Derivative Financial Instruments

Effective January 1, 2001, the Company adopted Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" (FAS 133), which required derivative instruments be recorded on the balance sheet at fair value. Changes in the fair value of derivative financial instruments must be recognized
currently in earnings unless specific hedge accounting criteria are met. For those instruments which meet the hedging criteria, gains and losses will be recognized in other comprehensive income rather
than in earnings.

The
Company's adoption of FAS 133 on January 1, 2001 resulted in the cumulative effect of an accounting change of a reduction in income of approximately
$0.6 million, net of tax.

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

Interest Rate Risk

Variable rate debt instruments are subject to interest rate risk. The Company has entered into interest rate collar agreements with remaining maturities of up to
twenty months to manage its exposure to interest rate movements on a portion of its variable rate debt obligations. The effective portion of the cumulative gain or loss on these derivative instruments
is reported as a component of

9

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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
cap agreements is recognized in current earnings.

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

At
June 30, 2002, the Company had foreign exchange derivative contracts to sell with a notional amount totalling $2.0 million and to buy totalling $0.9 million. The
estimated fair value of the foreign exchange contracts based upon market quotes was a net liability of $0.1 million at June 30, 2002.

Accumulated Other Comprehensive Income (Loss)

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

|                                                                             |  | Interest Rate
Collar
Agreements |        | Foreign
Exchange
Contracts |   | Total |  
|---------------------------------------------------------------------------- |  | ------------------------------- | ------ | -------------------------- | - | ----- | -
|
|Accumulated other comprehensive income (loss) balance at December 31, 2001   |  | $                               | (4,189 | )                          | $ | 5     |  
|Unwound from accumulated other comprehensive Income (loss) during the period |  |                                 | 2,399  |                            |   | (5    | )
|Mark to market of hedge contracts                                            |  |                                 | (1,373 | )                          |   |      |  
|                                                                             |  |                                 |        |                            |   |       |  
|Accumulated other comprehensive income (loss) balance at June 30, 2002       |  | $                               | (3,163 | )                          | $ |      |  
|                                                                             |  |                                 |        |                            |   |       |  

The
fair value of the Company's derivatives was a net liability position of $5.8 million and $7.7 million at June 30, 2002 and December 31, 2001,
respectively, of which $4.7 million and $6.6 million is included in accrued liabilities at June 30, 2002 and December 31, 2001, respectively, and $1.1 million and
$1.1 million is included in other long-term liabilities at June 30, 2002 and December 31, 2001, respectively, in the accompanying condensed consolidated balance
sheets.

10

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Statement of Operations

The following tables summarize the effects of FAS 133 on the Company's statement of operations for the three and six month periods ended June 30,
2002 and 2001 (in thousands):

|                                                        |  | Interest Rate
Collar
Agreements |       | Foreign
Exchange
Contracts |   | Total |  
|------------------------------------------------------- |  | ------------------------------- | ----- | -------------------------- | - | ----- | -
|Three months ended June 30, 2002                        |  |                                 |       |                            |   |       |  
|Other income (expense)                                  |  | $                               | 172   |                            | $ | (238  | )
|                                                        |  |                                 |       |                            |   |       |  
|Total statement of operations impact before taxes       |  | $                               | 172   |                            | $ | (238  | )
|                                                        |  |                                 |       |                            |   |       |  
|Three months ended June 30, 2001 Other income (expense) |  | $                               | 1,846 |                            | $ | 147   |  
|                                                        |  |                                 |       |                            |   |       |  
|Total statement of operations impact before taxes       |  | $                               | 1,846 |                            | $ | 147   |  
|                                                        |  |                                 |       |                            |   |       |  
|Six months ended June 30, 2002                          |  |                                 |       |                            |   |       |  
|Other income (expense)                                  |  | $                               | 288   |                            | $ | 538   |  
|                                                        |  |                                 |       |                            |   |       |  
|Total statement of operations impact before taxes       |  | $                               | 288   |                            | $ | 538   |  
|                                                        |  |                                 |       |                            |   |       |  
|Six months ended June 30, 2001 Other income (expense)   |  | $                               | 251   |                            | $ | 630   |  
|                                                        |  |                                 |       |                            |   |       |  
|Total statement of operations impact before taxes       |  | $                               | 251   |                            | $ | 630   |  
|                                                        |  |                                 |       |                            |   |       |  

5.    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 will have the effect of more closely integrating many of the sales, marketing, technology and operating functions of Advanstar.com with its wholly owned subsidiary Advanstar
Communications Inc. (Communications) and its core activities in publishing, tradeshows and marketing services. These actions resulted in a first quarter 2001 restructuring charge of
$3.5 million, a second quarter 2001restructuring charge of $0.3 million and a fourth quarter 2001restructuring charge of $5.6 million. These charges included total severance
related payments of approximately $0.7 million, facility closure costs of approximately $6.6 million, asset impairments of approximately $1.3 million and approximately
$0.8 million of other contractual commitments. This decision by the Company resulted in a reduction in work force of 62 employees and the closing of two offices. These restructuring activities
were completed by the end of 2001, except for facility lease costs, which continue through June 2010. The asset impairment consisted of leasehold improvements from a facility the Company
vacated. All restructuring charges with the exception of the leasehold improvements have been paid in cash. During the three and six months ended June 30, 2002 the Company paid
$0.1 million and $0.2 million, respectively, related to facility lease costs. The balance of the accrual at June 30, 2002 was $6.4 million, which principally represents
remaining facility lease costs, of which approximately $0.6 million is included in accrued liabilities and approximately $5.8 million is included in other long-term
liabilities in the accompanying condensed consolidated balance sheet at June 30, 2002.

11

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6.    Debt

Credit Facility

The senior credit facility (the Credit Facility) consists of (i) $415 million of term loans payable in quarterly installments beginning
March 31, 2001 and continuing through October 11, 2007 and (ii) $80 million of revolving loan availability. As of June 30, 2002, the Company had approximately
$48.4 million of borrowings available under the Credit Facility, subject to customary conditions. The Credit Facility contains a number of covenants that, among other things, require the
Company to maintain certain financial ratios, including leverage and fixed charge coverage ratios, as defined. Failure of the Company to comply with any of these covenants may cause an event of
default under the Credit Facility.

Borrowings
under the Credit Facility are secured by substantially all of the Company's assets. In addition, as of March 31, 2002, the Company has interest rate protection
agreements for a notional amount of $250 million that effectively guarantee that the Company's interest rate on $250 million of the Company's Credit Facility will not exceed
13.00 percent, nor be less than 9.00 percent. The net interest paid or received is included in interest expense. At June 30, 2002, the estimated fair value of the interest rate
protection agreements was a net liability position to the Company of approximately $5.8 million.

Senior Subordinated Debt and Discount Notes

On October 11, 2000, in connection with the acquisition of the Company, the Company issued 15 percent senior discount notes due October 2011
(the Discount Notes) with a principal amount at maturity of $103.2 million and warrants to purchase shares of common stock of Holdings for consideration of $50.0 million, to DLJ
Investment Partners. The notes bear interest at 15 percent, payable semiannually beginning October 2005, and have an implied yield to maturity of approximately 17.2 percent. The
Discount Notes are redeemable at the Company's option at specified premiums through 2007 and at par thereafter. The Discount Notes may also be redeemed at a premium upon a qualifying change of control
of the Company.

On
January 9, 2001, in connection with the acquisition of the Company, the 9.25 percent senior subordinated notes due in 2008 (the Notes) were tendered at an offer price in
cash equal to 101 percent of the aggregate principal amount, plus accrued interest. The Company financed the repurchase of the Notes with bridge financing. The premium paid on the tender of the
Notes of approximately $1.0 million, net of related tax benefits, is reflected as an extraordinary item in the accompanying 2001 consolidated statement of operations.

On
February 21, 2001, the Company's wholly owned subsidiary, Advanstar Communications Inc. (Communications) issued $160.0 million of unsecured, 12 percent
Series B senior subordinated notes, due 2011 (the Replacement Notes). Interest on the Replacement Notes is payable semiannually on February 15 and August 15 of each years,
commencing August 15, 2001. The Replacement Notes are fully and unconditionally guaranteed on a senior subordinated basis, jointly and severally, by Communications and its wholly owned domestic
subsidiaries. As part of tendering of the Notes, the Company wrote-off remaining unamortized deferred financing costs of approximately $1.6 million, net of related tax benefits,
which is reflected as an extraordinary item in the accompanying 2001 condensed consolidated statement of operations.

Concurrent
with the issuance of the Replacement Notes, Advanstar issued units comprised of 15 percent Discount Notes with an aggregate principal amount at maturity of
approximately $68.6 million and warrants to purchase shares of common stock of Holdings for consideration of approximately $34.8 million of which approximately $5.6 million was
paid to Holdings pursuant to the issuance of the warrants. Holdings contributed the proceeds (approximately $5.6 million) from the

12

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warrants to the Company. The notes bear interest at 15 percent, payable semiannually beginning October 2005, and have an implied yield to maturity of 17.2 percent. The Discount
Notes are redeemable at the Company's option at specified premiums through 2007 and at par thereafter. The Discount Notes may also be redeemed at a premium upon a qualifying change of control of the
Company. Neither Communications nor any of its subsidiaries guaranteed the Discount Notes. Advanstar, Inc., however, is a holding company and its ability to pay interest on these Discount Notes
will be dependent upon the receipt of dividends from its subsidiaries, including Communications. The credit facility and the senior subordinated notes impose substantial restrictions on our
subsidiaries' ability to pay dividends.

The
Company used the proceeds from issuance of the Replacement Notes and the Discount Notes to repay and terminate the bridge financing and to repay approximately $45.0 million of
term loan borrowings under the Credit Facility. Concurrent with the issuance of the Discount Notes, DLJ Investment Partners, an affiliate of DLJMB, exchanged its senior discount notes issued as part
of the DLJ Acquisition for like units.

Accretion
of debt discount on the Discount Notes was approximately $3.7 million and $3.2 million for the three months ended June 30, 2002 and 2001, respectively, and
approximately $7.2 million and
$5.7 million for the six months ended June 30, 2002 and 2001, respectively. These amounts are included in interest expense in the accompanying condensed consolidated statements of
operations.

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

|                                                                                                        |  | June 30,
2002 |         | December 31,
2001 |  
|------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | ----------------- | -
|Term loan A, interest at LIBOR plus 3.25%; 5.09% at June 30, 2002, due quarterly through April 11, 2007 |  | $             | 82,500  |                   | $
|Term loan B, interest at LIBOR plus 4.00%; 5.84% June 30, 2002, due quarterly through October 11, 2008  |  |               | 280,800 |                   |  
|Revolving credit loan, interest at LIBOR plus 3.25%; 5.12% at June 30, 2002, due April 11, 2007         |  |               | 29,000  |                   |  
|Senior subordinated notes at 12.00%, due 2011                                                           |  |               | 160,000 |                   |  
|Senior discount notes at 15.00%, due October 11, 2011, net of discount                                  |  |               | 92,201  |                   |  
|Acquisition note payable, interest at 5.50%, due monthly through 2004                                   |  |               | 5,000   |                   |  
|                                                                                                        |  |               |         |                   |  
|                                                                                                        |  |               | 649,501 |                   |  
|LessCurrent maturities                                                                                 |  |               | (17,000 | )                 |  
|                                                                                                        |  |               |         |                   |  
|                                                                                                        |  | $             | 632,501 |                   | $
|                                                                                                        |  |               |         |                   |  

The
Company's credit facility contains certain financial covenants, including a minimum fixed charge coverage ratio and a maximum leverage ratio. Additionally, certain financial
covenants under the Replacement Notes include a maximum leverage ratio, limitations on certain asset dispositions, payments, debt incurrence, dividends and other restricted payments. In
March 2002, the Company obtained an amendment to the Credit Facility providing for certain revisions to the quarterly financial covenants applicable in 2002 and 2003. The Company was in
compliance with all covenants as of June 30, 2002.

13

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7.    Comprehensive Income

The tables below present comprehensive 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
June 30,
2002 |         | Three Months
Ended
June 30,
2001 |  
|--------------------------------------------------------------- |  | -------------------------------- | ------- | -------------------------------- | -
|
|Net income (loss)                                               |  | $                                | (21,708 | )                                | $
|Change in cumulative translation adjustment                     |  |                                  | (518    | )                                |  
|Change in unrealized losses on derivative financial Instruments |  |                                  | (1,290  | )                                |  
|                                                                |  |                                  |         |                                  |  
|Comprehensive loss                                              |  | $                                | (23,516 | )                                | $
|                                                                |  |                                  |         |                                  |  

|                                                                |  | Six Months
Ended
June 30,
2002 |         | Six Months
Ended
June 30,
2001 |  
|--------------------------------------------------------------- |  | ------------------------------ | ------- | ------------------------------ | -
|
|Net income (loss)                                               |  | $                              | (14,569 | )                              | $
|Change in cumulative translation adjustment                     |  |                                | (1,092  | )                              |  
|Change in unrealized losses on derivative financial Instruments |  |                                | 1,021   |                                |  
|                                                                |  |                                |         |                                |  
|Comprehensive loss                                              |  | $                              | (14,640 | )                              | $
|                                                                |  |                                |         |                                |  

14

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8.    Segment Information

|                                 |  | Trade Shows
and
Conferences |         | Trade
Publications |   | Marketing
Services |  | Corporate
and
Other |        | Totals
|-------------------------------- |  | --------------------------- | ------- | ------------------ | - | ------------------ |  | ------------------- | ------ | ------
|
|Three months ended June 30, 2002 |  |                             |         |                    |   |                    |  |                     |        |       
|Revenues                         |  | $                           | 21,934  |                    | $ | 37,049             |  | $                   | 4,095  |       
|Contribution margin              |  |                             | 8,042   |                    |   | 12,694             |  |                     | 1,979  |       
|Segment assets                   |  |                             | 678,990 |                    |   | 185,384            |  |                     | 31,936 |       
|                                 |  |                             |         |                    |   |                    |  |                     |        |       
|Three months ended June 30, 2001 |  |                             |         |                    |   |                    |  |                     |        |       
|Revenues                         |  | $                           | 30,110  |                    | $ | 40,733             |  | $                   | 4,476  |       
|Contribution margin              |  |                             | 7,104   |                    |   | 12,116             |  |                     | 2,525  |       
|Segment assets                   |  |                             | 666,858 |                    |   | 200,333            |  |                     | 30,599 |       

|                               |  | Trade Shows
and
Conferences |         | Trade
Publications |   | Marketing
Services |  | Corporate
and
Other |        | Totals
|------------------------------ |  | --------------------------- | ------- | ------------------ | - | ------------------ |  | ------------------- | ------ | ------
|
|Six months ended June 30, 2002 |  |                             |         |                    |   |                    |  |                     |        |       
|Revenues                       |  | $                           | 98,399  |                    | $ | 65,723             |  | $                   | 7,671  |       
|Contribution margin            |  |                             | 50,787  |                    |   | 18,435             |  |                     | 3,568  |       
|Segment assets                 |  |                             | 678,990 |                    |   | 185,384            |  |                     | 31,936 |       
|                               |  |                             |         |                    |   |                    |  |                     |        |       
|Six months ended June 30, 2001 |  |                             |         |                    |   |                    |  |                     |        |       
|Revenues                       |  | $                           | 119,674 |                    | $ | 75,373             |  | $                   | 8,646  |       
|Contribution margin            |  |                             | 55,309  |                    |   | 19,340             |  |                     | 4,381  |       
|Segment assets                 |  |                             | 666,858 |                    |   | 200,333            |  |                     | 30,599 |       

Contribution
margin is defined as net revenue less cost of production and selling, editorial and circulation costs.

15

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The
reconciliation of total segment contribution margin to consolidated pre-tax income (loss) is as follows (in thousands):

|                                                      |  | Three Months
Ended
June 30,
2002 |         | Three Months
Ended
June 30,
2001 |  
|----------------------------------------------------- |  | -------------------------------- | ------- | -------------------------------- | -
|
|Total segment contribution margin                     |  | $                                | 22,808  |                                  | $
|General and administrative                            |  |                                  | (11,257 | )                                |  
|Restructuring charge                                  |  |                                  |        |                                  |  
|Depreciation and amortization                         |  |                                  | (17,314 | )                                |  
|Interest expense                                      |  |                                  | (17,058 | )                                |  
|Other income (expense), net                           |  |                                  | 1,193   |                                  |  
|                                                      |  |                                  |         |                                  |  
|Consolidated loss before taxes and minority interests |  | $                                | (21,628 | )                                | $
|                                                      |  |                                  |         |                                  |  

|                                                      |  | Six Months
Ended
June 30,
2002 |         | Six Months
Ended
June 30,
2001 |  
|----------------------------------------------------- |  | ------------------------------ | ------- | ------------------------------ | -
|
|Total segment contribution margin                     |  | $                              | 74,292  |                                | $
|General and administrative                            |  |                                | (23,257 | )                              |  
|Restructuring charge                                  |  |                                |        |                                |  
|Depreciation and amortization                         |  |                                | (34,221 | )                              |  
|Interest expense                                      |  |                                | (33,280 | )                              |  
|Other income (expense), net                           |  |                                | 2,235   |                                |  
|                                                      |  |                                |         |                                |  
|Consolidated loss before taxes and minority interests |  | $                              | (14,231 | )                              | $
|                                                      |  |                                |         |                                |  

9.    Related-Party Transactions

Financial Advisory Fees and Agreements

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

Advanstar
Holdings Corp. has agreed to pay CSFB an annual advisory fee of $0.5 million, until the earlier to occur of (1) an initial public offering of Holdings,
(2) the date when the DLJ Merchant Banking funds own less than 162/3% of the shares of Holdings' common stock held by them on the closing date of the acquisition and
(3) October 11, 2005. Payment of the advisory fee will be dependent upon the receipt of dividends from its subsidiaries, including the Company.

10.  New Accounting Pronouncements

In August 2001, the Financial Accounting Standards Board (FASB) issued Financial Accounting Standards No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets" (SFAS No. 144). This statement addresses financial accounting and reporting for the impairment or disposal of long-lived assets.
FAS 144 retains and expands upon the fundamental provisions of existing guidance related to the recognition and measurement of the impairment of long-lived assets to be held and
used

16

---

and the measurement of long-lived assets to be disposed of by sale. Generally, the provisions of SFAS No. 144 are effective for financial statements issued for fiscal years
beginning after December 15, 2001. The Company has adopted SFAS No. 144 on January 1, 2002. The adoption of SFAS No. 144 did not impact the results of operations or
financial position of the Company for the three or six month period ended June 30, 2002.

In
May 2002, the FASB issued Financial Accounting Standards No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections" (SFAS No. 145). SFAS No. 145 rescinds FASB Statement No. 4, "Reporting Gains and Losses from Extinguishment of
Debt",and an amendment of that Statement, FASB Statement No. 64, "Extinguishments of Debt Made to Satisfy Sinking-Fund
Requirements". SFAS No. 145 also rescinds FASB Statement No. 44, "Accounting for Intangible Assets of Motor Carriers". SFAS No. 145 amends FASB Statement No. 13,
"Accounting for Leases", to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have
economic effects that are similar to sale-leaseback transactions. SFAS No. 145 also amends other existing authoritative pronouncements to make various technical corrections, clarify
meanings, or describe their applicability under changed conditions. SFAS No. 145 is generally effective for fiscal years beginning after May 15, 2002. The Company has not adopted SFAS
No. 145. The adoption of SFAS No. 145 is not expected to have a significant impact of the results of operations or financial position of the Company, but in accordance with the
transition provisions will result in the Company's fiscal 2001 extraordinary item being reclassified in the statement of operations.

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

17

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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/A 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 and 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. 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 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/A filed with the Securities and Exchange Commission on November 25, 2002.

General

We are a worldwide provider of integrated, business-to-business 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 with our marketing services segment.

Trade
shows and conferences accounted for approximately 57% and 58% of total revenue in each of the six month periods ended June 30, 2002 and 2001, respectively. Trade
publications accounted for approximately 38% and 37% of total revenue in each of the six month periods ended June 30, 2002 and 2001, respectively, while marketing services accounted for
approximately 5% of total revenue in each of the six month periods ended June 30, 2002 and 2001. Our revenue reaches its highest levels during the first and third quarters of the year due to
the timing of the MAGIC trade shows and our other large trade shows and conferences. In comparing results between years, we may experience fluctuations in quarterly revenue based on the movement of
trade show dates from one quarter to another because trade show and conference revenue is recognized when a particular event is held.

In
2001, we more tightly focused the activities of Advanstar.com. These plans will have the effect of more closely integrating many of the sales, marketing, technology and operating
functions of Advanstar.com with our core activities in publishing, tradeshows, and marketing services. As a result of the reorganization and redirection of the activities of Advanstar.com during 2001,
management

18

---

anticipates that there will be a significant reduction in the levels of funding by the Company to Advanstar.com during 2002 and subsequent periods.



Our business and results of operations in 2002 have been significantly impacted by the downturn in the U.S. economy, particularly in our Information
Technology & Communications cluster and Travel & Hospitality cluster. The events of September 11th also impacted our results, including cancellations and reductions in ad pages,
particularly in our travel industry publications. However, we are seeing early indications of stabilization in advertising in many of our markets, except for continuing downward pressure in our
technology and travel markets. For the second quarter, advertising pages increased 3.8% over the same period last year across all our sectors other than our travel and technology markets. Despite
these early indications, the economic outlook in the publishing sector continues to be challenging, and forward visibility on our advertising revenue and pages is limited, due to the concerns of our
customers related to the overall business environment. Our trade show segment continues to be impacted by the economic recession, particularly in our technology sectors, with reductions in booth
space and attendance compared to the same period last year. We expect any improvement in the performance of our trade show segment to lag behind any general economic recovery as it lagged the downturn
in the economy going into recession beginning in 2000.

In
response to the decline in revenues throughout 2001 and into 2002, we implemented early and aggressive cost management actions, including the layoff of staff, reductions in travel and
other operating costs, and reorganization of certain support functions and processes. Through these cost initiatives, we were able to minimize the effect on Adjusted EBITDA for the quarter and
year-to-date periods.

The
persistence of the general economic slowdown in the U.S. will likely result in continued weakness in overall marketing and advertising expenditures by our customers throughout most
of 2002. As a result, we expect our revenues and EBITDA to reflect this overall weakness. However, we believe that our balanced portfolio between trade shows and publications and our diversification
across many industry sectors may mitigate the overall impact from continued weakness in general economic conditions and reduce potential volatility of any one sector.



Acquisitions



We
account for our acquisitions under the purchase method of accounting and our results of operations include the effect of these acquisitions from the date of purchase. The pro forma
operating results of the acquisitions are not material to our operating results.

19

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The Acquisition

During the first quarter of 2001, we recorded an extraordinary charge of approximately $2.6 million, net of a deferred tax benefit of approximately
$1.5 million, in connection with the refinancing of the 9.25% senior subordinated notes with the 12.00% senior subordinated notes and the concurrent offering of additional senior discount
notes. See Note 5 in the Notes to our Condensed Consolidated Financial Statements included within this report for further details.



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. For the
six months ended June 30, 2002, approximately 83% of our trade shows and conferences revenue was from the sale of exhibit space. Events are generally held on an annual basis in major
metropolitan or convention areas such as New York City or Las Vegas. At many of our trade shows, a portion of exhibit space is reserved and partial payment is received as much as a year in advance.
The sale of exhibit space is affected 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 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 affected by new product releases, circulation quality,
readership and general market conditions. Advertising revenue is recognized on the publication issue date, and subscription revenue, if any, is recognized over the subscription period, typically one
year.

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 affected by the success of the event or publication from which these products are derived, the quality of the sales team and general
market conditions. Revenue is generally recognized when the applicable product is shipped.

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



Trade Shows and Conferences

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

20

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

Trade Publications

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

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.

Significant Accounting Policies and Estimates

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

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



21

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Restatement of Financial Information Relating to Intangible Assets

We have determined that the method of amortization of certain intangible assets acquired in the acquisition of our company consisting of intangible assets related
to trade exhibitor lists and advertiser lists, should reflect the pattern in which the economic benefit would be realized. Accordingly, at the completion of the allocation period and as a result of
the finalization of a valuation of intangible assets, amortization of the affected intangible assets which was recognized on a straight-line basis in 2001 and
an accelerated basis in 2002 was adjusted to reflect accelerated methods which correspond to our projections of future cash flows directly related to these intangible assets.

While
the adjustments to previously reported financial statements increase our net loss for the three and six months ended June 30, 2002 and 2001, respectively, these adjustments
have no impact on net revenue or cash flows for any period, do not impact measurements of EBITDA (defined below) and have no impact on the financial ratio covenants in our debt instruments. See
Note 2 in the Notes to our Condensed Consolidated Financial Statements for a summary of the restatement of certain previously issued financial information relating to intangible assets.

Selected Financial Data

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

We
define "EBITDA" as operating income plus amortization and depreciation. EBITDA does not represent, and should not be considered to be, an alternative to net income or cash flow from
operations as determined in accordance with GAAP, and our calculation thereof may not be comparable to that reported by other companies. We believe that EBITDA provides useful information regarding
our ability to service and/or incur indebtedness and is used by many other companies. Our key financial covenants under our existing credit facility, which impact the amount of indebtedness we are
permitted to incur, are based, in part, on our EBITDA. EBITDA does not take into account our working capital requirements, debt service requirements and other commitments. Accordingly, EBITDA is not
necessarily indicative of amounts that may be available to us for discretionary uses.

To
calculate EBITDA for the three months ended June 30, 2002 and 2001, we adjusted operating income by $(0.8) million and $(0.8) million, respectively, to reflect minority
interest. To calculate

22

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EBITDA for the six months ended June 30, 2002 and 2001, we adjusted operating income by $(0.9) million and $(1.1) million, respectively, to reflect minority interest.

|                                                     |                              | Three Months
Ended
June 30,          |         | Six Months
Ended
June 30, |       
|---------------------------------------------------- | ---------------------------- | ------------------------------------ | ------- | ------------------------- | ------
|
|
|In thousands                                         |                              |                                      |         |                           |       
|Net revenue:                                         |                              |                                      |         |                           |       
|                                                     | Trade shows and conferences  |                                      | $       | 21,934                    |       
|                                                     | Publications                 |                                      |         | 37,049                    |       
|                                                     | Marketing services and other |                                      |         | 4,913                     |       
|                                                     |                              |                                      |         |                           |       
|                                                     |                              | Total net revenues                   |         |                           | 63,896
|Cost of production and selling:                      |                              |                                      |         |                           |       
|                                                     | Trade shows and conferences  |                                      |         | 13,892                    |       
|                                                     | Publications                 |                                      |         | 24,355                    |       
|                                                     | Marketing services and other |                                      |         | 2,841                     |       
|                                                     |                              |                                      |         |                           |       
|                                                     |                              | Total cost of production and selling |         |                           | 41,088
|General and administrative expenses                  |                              |                                      | 11,257  |                           |       
|Restructuring charge                                 |                              |                                      |        |                           |       
|Depreciation and amortization                        |                              |                                      | 17,314  |                           |       
|                                                     |                              |                                      |         |                           |       
|                                                     |                              | Operating income (loss)              |         |                           | (5,763
|Other income (expense):                              |                              |                                      |         |                           |       
|                                                     | Interest expense, net        |                                      |         | (17,058                   | )     
|                                                     | Other income (expense)       |                                      |         | 1,193                     |       
|Provision (benefit) for income taxes                 |                              |                                      | (510    | )                         |       
|Minority interests                                   |                              |                                      | (590    | )                         |       
|                                                     |                              |                                      |         |                           |       
|Loss before extraordinary item and accounting change |                              | $                                    | (21,708 | )                         | $     
|                                                     |                              |                                      |         |                           |       
|EBITDA                                               |                              | $                                    | 10,734  |                           | $     
|                                                     |                              |                                      |         |                           |       

Results of Operations

Three Months Ended June 30, 2002 Compared to the Three Months Ended June 30, 2001

Net Revenue

Total net revenue decreased $12.5 million, or 16.3%, to $63.9 million in the second quarter of 2002 from $76.4 million for the second quarter
of 2001.

Net
revenue from trade shows and conferences declined $8.2 million, or 27.2%, to $21.9 million for the second quarter of 2002 from $30.1 million in the second
quarter of 2001. This decrease was primarily attributable to the cancellation of our iEB internet trade show in our technology market as well as the lag effect of the economic downturn in 2001 on our
2002 events, partially offset by a shift in the timing of when events take place. The downturn in the U.S. economy continued to impact revenue in our trade shows due to our customers' concern over its
ongoing impact on their marketing efforts. Revenue for the quarter was also impacted by a net shift in the timing of three trade shows. Two were held in the first quarter of 2001, but moved to the
second quarter of 2002 and another event was held in the second quarter of 2001, but moved to the first quarter of 2002. Adjusting second quarter 2001 results for these movements, second quarter 2002
trade show revenue declined by $12.4 million, or 36.0%.

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Net
revenue from publications, marketing services and other declined $4.3 million, or 9.3%, to $42.0 million for the second quarter of 2002 from $46.3 million in
2001. Advertising pages decreased approximately 4.3% across our portfolio but the decline was concentrated heavily in our technology and travel sectors, which continue to slump due to the condition of
the technology markets and the reduced levels of non-business travel since September 11. Advertising pages increased 3.8% in aggregate across all of our other industry sectors other
than travel and technology. We also cancelled several small publications and directories which were published in the second quarter of 2001 offset by revenue from
several product launches in the pharmaceutical and health care sectors. Despite early indications of stability in the publishing sector, the economic outlook continues to be challenging, and forward
visibility on our advertising revenue and pages is limited, due to the concerns of our customers related to the overall business environment.

Cost of Production and Selling

Cost of production and selling expenses decreased $13.9 million, or 25.3%, to $41.1 million for the second quarter of 2002 from $55.0 million
for the comparable period of 2001.

Expenses
of trade shows and conferences declined $9.1 million, or 39.6%, to $13.9 million for the second quarter of 2002 from $23.0 million in 2001. This decrease
was primarily due to the cancellation of our iEB internet trade show, a reduction in variable trade show costs in line with the reduction in trade show revenue and aggressive cost management on staff
and discretionary direct trade show costs. Adjusting first quarter 2001 results for movements of events between quarters, trade show and conference expenses in 2002 declined $10.4 million, or
42.7%.

Expenses
of publication, marketing services and other declined $4.8 million, or 14.9%, to $27.2 million in the second quarter of 2002 from $32.0 million in the
second quarter of 2001. This decrease was due primarily to savings attributable to our ongoing cost reduction programs, a 15% reduction in paper costs and cost savings associated with cancelled
publications.

General and Administrative Expenses

General and administrative expenses decreased $3.2 million, or 22.4%, to $11.3 million in the second quarter of 2002 from $14.5 million in
the second quarter of 2001. This decrease is primarily attributable to our ongoing cost and headcount reduction programs. In response to the decline in revenues throughout 2001 and into 2002, we
implemented early and aggressive cost management actions, including staff reductions of approximately 8.4%, reductions in travel and other operating costs, reorganization of certain support functions
and processes and a restructuring of our internet activities resulting in staff reductions of approximately 63.6% and significant reductions in other operating costs of Advanstar.com.

Restructuring Charge and other

In the second quarter of 2001 we recorded a restructuring charge of $0.3 million related to our plans to more tightly focus our internet activities.

Depreciation and Amortization

Depreciation and amortization expense decreased $8.9 million to $17.3 million in the second quarter of 2002 from $26.2 million in the second
quarter of 2001 primarily due to the adoption in January 2002 of SFAS No. 142, "Goodwill and Other Intangible Assets." Upon adoption we discontinued the amortization of goodwill. In the
second quarter of 2001 we also began amortizing certain intangible assets on an accelerated declining balance method of amortization, resulting in less amortization in 2002. This decrease was
partially offset by the amortization of additional intangible assets. As part of our purchase price allocation related to the Acquisition, approximately $137.6 million

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of intangible assets were reclassified from goodwill to other intangibles subsequent to the first quarter of 2001.

Interest Expense, Net

Net interest expense increased $0.4 million, or 2.0%, to $17.1 million in the second quarter of 2002 from $16.7 million in the second quarter
of 2001 due to additional indebtedness necessary to fund the Acquisition, partially offset by a decrease in our weighted average interest rate. In February 2001, we replaced our then
outstanding $150.0 million 9.25% senior subordinated notes with $160.0 million 12.00% Series B senior subordinated notes, and issued an additional $68.6 million our 15.0%
senior discount notes.

Approximately
$165.0 million of our total debt is at a fixed rate through coupon rates on our senior subordinated notes with an additional $250.0 million covered by our
interest rate protection agreements. While we do not anticipate a significant change in interest rates in the near term, a 100 basis point increase in interest rates on variable rate debt would have
resulted in an increase in interest expense for the quarter of $0.4 million.

Other Income (Expense)

Other income declined $1.1 million to $1.2 million in the second quarter of 2002 from $2.3 million in the second quarter of 2001. We reported
a non-cash loss of approximately $0.1 million in the second quarter of 2002 related to our foreign currency and interest rate hedging activities, compared to a non-cash
gain of approximately $2.0 million in the comparable period of 2001. During the second quarter of 2002 we also recorded a non-cash foreign exchange gain of $1.2 million,
compared to $0.4 million in the second quarter of 2001.

Income Taxes

The income tax benefit decreased $11.8 million to $0.5 million in the second quarter of 2002 from $12.3 million in 2001. The Company's
reduced its tax rate in the second quarter of 2001 to reflect the impact of non-deductible goodwill amortization. The tax rate of 2.3% in fiscal 2002 is impacted by the limitation of tax
benefits on reported losses to the extent of reversing existing deferred tax liabilities. After utilization of all deferred tax liabilities, a full valuation allowance against all potential deferred
tax assets will be provided due to the Company's report losses before tax since the acquisition.

EBITDA

EBITDA increased $4.8 million, or 83.0%, to $10.7 million in the second quarter of 2002 from $5.9 million in the second quarter of 2001. The
increase was primarily due the significant reduction in the level of our internet activities in 2002 and reductions in general and administrative expense. Adjusting first quarter 2001 for the movement
of trade shows from one quarter to another, EBITDA in the second quarter of 2002 increased by $1.9 million from the second quarter of 2001.

Six Months Ended June 30, 2002 Compared to the Six Months Ended June 30, 2001

Net Revenue

Total net revenue declined $31.8 million, or 15.5%, to $173.8 million in the first half of 2002 from $205.6 million for the first half of
2001.

Net
revenue from trade shows and conferences declined $21.3 million, or 17.8%, to $98.4 million for the first half of 2002 from $119.7 million in the same period of
2001. This decrease was attributable to declines in our technology sector which continues to suffer from the overall technology market slump; the cancellation of three events in our iEB internet group
in the U.S., Europe and Brazil along

25

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with several smaller events across our other sectors; and our fashion sector, which was impacted by a difficult apparel retail business environment and by our market repositioning of our east coast
fashion events. Revenue for the first half was also impacted by a shift in the timing of trade shows held in the first half of 2001 but not scheduled in the first half of 2002. Adjusting first half
results for this movement, first half 2002 trade show revenue declined by $18.5 million, or 15.8%.

Net
revenue from publications, marketing services and other declined $10.6 million, or 12.3%, to $75.4 million for the first half of 2002 from $86.0 million in 2001.
Advertising pages decreased approximately 7.8% across our portfolio. The page decline was heavily concentrated in our technology and travel sectors. Advertising pages remained flat across all of our
industry sectors other than travel and technology. We also cancelled several small publications and directories which were published in the first half of 2001 offset by revenue from several product
launches in the pharmaceutical and health care sectors.

Cost of Production and Selling

Cost of production and selling expenses declined $27.4 million, or 21.6%, to $99.5 million for the first half of 2002 from $126.9 million for
the comparable period of 2001.

Expenses
of trade shows and conferences declined $16.8 million, or 26.0%, to $47.6 million for the first half of 2002 from $64.4 million in 2001. This decrease was
primarily due to aggressive cost management activities affecting direct trade show related costs and staffing. Adjusting first half 2001 results for movements of events between quarters, trade show
and conference expenses in 2002 declined $14.9 million, or 23.9%.

Expenses
of publication, marketing services and other declined $10.7 million, or 17.1%, to $51.9 million in the first half of 2002 from $62.6 million in the first
half of 2001. This decrease was due primarily to savings attributable to our ongoing cost reduction programs including the restructuring of our internet activities, a reduction in paper costs and cost
savings associated with cancelled publications. Printing and postage pricing remained stable during the period. Paper costs have declined 15.0% since January 2002 due to excess industry
capacity and low demand. We expect paper prices to experience upward pressure over the next 12 months as economic recovery increases global demand.

General and Administrative Expenses

General and administrative expenses declined $6.7 million, or 22.4%, to $23.3 million in the first half of 2002 from $30.0 million in the
comparable period of 2001. This decrease is primarily attributable to our ongoing cost and headcount reduction programs. In response to the decline in revenues throughout 2001 and into 2002, we
implemented early and aggressive cost management actions, including staff reductions of approximately 9.7%, reductions in travel and other operating costs, reorganization of certain support functions
and processes and a restructuring of our internet activities resulting in staff reduction of approximately 66.7% and significant reductions in other operating costs of Advanstar.com.

26

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Restructuring Charge and other

In the first half of 2001we recorded a restructuring charge of $3.8 million related to our plans to more tightly focus our internet activities, including
severance related payments of $0.7 million, facility closure costs of approximately $1.0 million, asset impairments of $1.3 million and $0.8 million of other contractual
commitments.

Depreciation and Amortization

Depreciation and amortization expense decreased $9.8 million to $34.2 million in the first half of 2002 from $44.0 million in the first half
of 2001 primarily due to the adoption in January 2002 of SFAS No. 142, "Goodwill and Other Intangible Assets." Upon adoption we discontinued the amortization of goodwill. In the second
quarter of 2001 we also began amortizing certain intangible assets on an accelerated declining balance method of amortization, resulting in less amortization in 2002. This decrease was partially
offset by the amortization of additional intangible assets. As part of our purchase price allocation related to the Acquisition, approximately $137.6 million of intangible assets were
reclassified from goodwill to other intangibles subsequent to the first quarter of 2001.

Interest Expense, Net

Net interest expense decreased $0.6 million, or 1.8%, to $33.3 million in the first half of 2002 from $33.9 million in the first half of 2001
due to a decrease in our weighted average interest rate, partially offset by the additional indebtedness necessary to fund the Acquisition. In February 2001, we replaced our then outstanding
$150.0 million 9.25% senior subordinated notes with $160.0 million 12.00% senior subordinated notes, and issued an additional $68.6 million our 15.0% senior discount notes.

Other Income (Expense)

Other income increased $0.8 million to $2.2 million in the first half of 2002 from $1.4 million in the first half of 2001. We reported a
non-cash gain of approximately $2.0 million in the first half of 2002 related
to our foreign currency and interest rate hedging activities, compared to a non-cash gain of approximately $1.4 million in the comparable period of 2001.

Provision (Benefit) for Income Taxes

The income tax benefit decreased $7.5 million to $0.3 million in the first half of 2002 from $7.8 million in the first half of 2001. The tax
rate of 2.3% in fiscal 2002 is impacted by the limitation of tax benefits on reported losses to the extent of reversing existing deferred tax liabilities. After utilization of all deferred tax
liabilities, a full valuation allowance against all potential deferred tax assets will be provided due to the Company's report losses before tax since the acquisition

EBITDA

EBITDA increased $6.2 million, or 14.2%, to $50.1 million in the first half of 2002 from $43.9 million in the first half of 2001. The
increase was primarily due the significant reduction in the level of our internet activities in 2002, the restructuring charge taken in 2001 and reductions in general and administrative expense. We
continue to aggressively manage and reduce costs in response to declines in revenue and sustain our EBITDA margins which are 28.8% for the first half of 2002 compared to 21.3% for the same period last
year. Adjusting first quarter 2001 for the movement of trade shows from one quarter to another, EBITDA in the first half of 2002 increased by $5.3 million from the first half of 2001.

27

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Liquidity and Capital Resources

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

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

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

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

Debt service.

As of June 30, 2002, we had total indebtedness of $649.5 million and approximately $48.4 million of borrowings available under our revolving
credit facility, subject to customary conditions. We repaid $5.0 million on the revolving credit facility during the second quarter of 2002.

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

Borrowings
under the credit facility generally bear interest based on a margin over, at our option, the base rate or the reserve-adjusted London-interbank offered rate (LIBOR). The
applicable margin for revolving credit loans and term loan A will vary based upon our ratio of consolidated debt to EBITDA, as defined in the credit facility, and the applicable margin for term loan B
is 4.00% over LIBOR and 2.75% over the base rate. Our obligations under the credit facility are guaranteed by Advanstar Holdings Corp., our parent company, and all our existing and future domestic
subsidiaries and are secured by substantially all of the assets of our company and the subsidiary guarantors, including a pledge of the capital stock of all our existing and future domestic
subsidiaries, a pledge of no more than 65% of the voting stock of any foreign subsidiary directly owned by our company or any domestic subsidiary, a pledge of all intercompany indebtedness in favor of
our company and our domestic subsidiaries, a pledge of Advanstar Communications Inc. and Advanstar IH, Inc.'s capital stock by us, and a pledge of our capital stock by our parent,
Advanstar Holdings Corp. The credit facility contains covenants and events of default that, among other things, limit our ability to incur debt, pay dividends and make investments.

28

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As
a result of the decline in our operating results through 2001 and the anticipated decline in our operating results through much of 2002, we believe that we would have failed to
satisfy certain of the financial covenants contained in our Credit Facility as of March 31, 2002. Accordingly, we sought and obtained an amendment to the Credit Facility in March 2002
which provided for certain revisions to our quarterly financial covenants in 2002 and 2003..As of June 30, 2002 we were in compliance with these covenants.

Senior subordinated notes.The Replacement Notes mature in 2011 and are guaranteed by each of Advanstar Communications'
existing and future domestic restricted subsidiaries. Interest on the Replacement Notes is payable semi-annually in cash. The Replacement Notes contain covenants and events of default
that, among other things, limit our ability to incur debt, pay dividends and make investments. As of June 30, 2002 we were in compliance with these covenants.

Senior discount notes.As part of the financing for the Acquisition, we issued senior discount notes due October 2011
(the Discount Notes) with a principal amount at maturity of $103.2 million. Concurrently with the closing of the offering of the Replacement Notes, we sold additional Discount Notes due
October 2011 with an additional aggregate principal amount at maturity of $68.6 million. These Discount Notes do not require cash interest payments until 2006 and contain covenants and
events of default that, among other things, limit our ability and that of our subsidiaries to incur debt, pay dividends and make investments. As of June 30, 2002 we were in compliance with
these covenants. 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 Replacement Notes impose substantial restrictions on our subsidiaries' ability to pay dividends.

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

Payment due by PeriodContractual Obligation

Less Than 1 Year

1 to 3 Years

Over 3 YearsIndebtedness (excluding interest)

$
17.0

$
53.3

$
658.8Operating leases


6.7


15.4


17.2Total

$
23.7

$
68.7

$
676.0


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

Capital expenditures.Capital expenditures in the first half of 2002 were approximately $3.3 million. We anticipate
that we will spend between $7.0 and $8.0 million on capital expenditures in 2002, primarily for expenditures related to our desktop computers and management information systems. Based on
current estimates, management believes that the amount of capital expenditures permitted to be made under the credit facility will be adequate to grow our business according to our business strategy
and to maintain the properties and business of our continuing operations.

Acquisitions and investments.We have provided funding to Advanstar.com, our subsidiary, to support its operations. We
provided funding of approximately $1.5 million in the first half of 2002 and anticipate that we will provide approximately $1.0 million to $1.5 million of additional funding in
2002. Our debt instruments limit the total amount we can invest in Advanstar.com. Based on current estimates, we anticipate that we will be able to make these investments within those limitations.

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

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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.



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

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

We
anticipate that our operating cash flow, together with borrowings under the credit facility, will be sufficient to meet our anticipated future operating expenses, capital expenditures
and debt service and other obligations as they become due. However, our ability to make scheduled payments of principal, to pay interest on or to refinance our indebtedness and to satisfy our other
debt obligations will depend upon our future operating performance, which will be affected by general economic, financial, competitive, legislative, regulatory, business and other factors beyond our
control.

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

Cash flows from operating activities.Net cash provided by operations decreased $1.1 million to $0.1 million in
2002 from $1.2 million in 2001. The decrease was primarily due to an increase in working capital items and cash interest expense due to the timing of interest payments on our Replacement Notes
compared to our old 9.25% senior subordinated notes and an increase in working capital, partially offset by a significant reduction in operating expenditures of Advanstar.com.

Cash flows used in investing activities.Net cash used in investing activities declined $0.8 million to
$16.6 million in 2002, from $17.4 million in 2001. This decline was principally due to reduced capital expenditures, partially offset by increased investments in acquisitions during the
period

Cash flows from financing activities.Net cash used by financing activities increased $28.4 million to
$15.3 million in 2002, from a source of cash of $13.2 million in 2001. This increase was principally due to payments on long-term debt and financing costs related to the
amendment to our senior credit agreement during the quarter. In 2001 we refinanced our 9.25% senior subordinated notes (as more fully discussed above), issued an additional $68.6 million in
exchange for proceeds of $35.0 million of our Discount Notes and made additional borrowings under our operating line of credit during the first half of 2001.

New Accounting Pronouncements

In August 2001, the Financial Accounting Standards Board (FASB) issued Financial Accounting Standards No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets" (SFAS No. 144). This statement addresses financial accounting and reporting for the impairment or disposal of long-lived assets.
FAS 144 retains and expands upon the fundamental provisions of existing guidance related to the recognition and measurement of the impairment of long-lived assets to be held and
used

30

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and the measurement of long-lived assets to be disposed of by sale. Generally, the provisions of SFAS No. 144 are effective for financial statements issued for fiscal years
beginning after December 15, 2001. The Company has adopted SFAS No. 144 on January 1, 2002. The adoption of SFAS No. 144 did not impact the results of operations or
financial position of the Company for the three or six month period ended June 30, 2002.

In
May 2002, the FASB issued Financial Accounting Standards No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections" (SFAS No. 145). SFAS No. 145 rescinds FASB Statement No. 4, "Reporting Gains and Losses from Extinguishment of
Debt",and an amendment of that Statement, FASB Statement No. 64, "Extinguishments of Debt Made to Satisfy Sinking-Fund
Requirements". SFAS No. 145 also rescinds FASB Statement No. 44, "Accounting for Intangible Assets of Motor Carriers". SFAS No. 145 amends FASB Statement No. 13,
"Accounting for Leases", to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have
economic effects that are similar to sale-leaseback transactions. SFAS No. 145 also amends other existing authoritative pronouncements to make various technical corrections, clarify
meanings, or describe their applicability under changed conditions. SFAS No. 145 is generally effective for fiscal years beginning after May 15, 2002. The Company has not adopted SFAS
No. 145. The adoption of SFAS No. 145 is not expected to have a significant impact of the results of operations or financial position of the Company, but in accordance with the
transition provisions will result in the Company's fiscal 2001 extraordinary item being reclassified in the statement of operations.

In
June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." This statement addresses financial accounting and reporting
for costs associated with exit or disposal activities and requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. The provisions
of SFAS No. 146 are effective for exit or
disposal activities that are initiated after December 31, 2002. The adoption of SFAS 146 is not expected to have a significant impact of 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.We rely significantly on variable rate and fixed rate debt in our capital structure. At June 30, 2002,
we had fixed rate debt of $257.2 million and variable rate debt of $392.3 million. The pre-tax earnings and cash flows impact for the next year resulting from a 100 basis
point increase in interest rates on variable rate debt would be a reduction of pre-tax earnings of $3.9 million, holding other variables constant and excluding the impact of our
interest rate protection agreements. Under the credit facility, we are required to enter into interest rate protection agreements that have the effect of causing at least half of the outstanding term
loan borrowings and senior subordinated notes to be fixed-rate borrowings. We have entered into agreements to cap the interest rate on $250.0 million of borrowings under our credit
facility, which would have the effect of reducing the impact of interest rate increases on our earnings and cash flows.

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

31

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

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

Our
strategy for management of currency risk relies primarily upon conducting our operations in a country's respective currency and may, from time to time, involve currency derivatives,
primarily
forward exchange contracts, to reduce our exposure to currency fluctuations. As of June 30, 2002, there were open foreign exchange derivative contracts to sell with a notional amount totaling
$2.0 million and to buy with a notional amount totaling $0.9 million. The estimated fair value of the foreign exchange contracts based upon market quotes was a net liability of
approximately $0.1 million. The potential loss in fair value resulting from a hypothetical 10% adverse change in quoted foreign currency exchange rates amounts to an additional loss of
approximately $0.1 million. Actual results may differ.

32

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PART II        Other Information

|Item 4.    |  | Submissions of Matters to a Vote of Security Holders.
None                                                                                                                                           
|---------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 6.    |  | Exhibits and Reports on Form 8-K                                                                                                                                                                     
|Item 6(a). |  | Exhibits                                                                                                                                                                                             
|           |  | 99.1  CEO's Certificate Pursuant to §906 of the Sarbanes-Oxley Act of 2002.                                                                                                                         
|           |  | 99.2  CFO's Certificate Pursuant to §906 of the Sarbanes-Oxley Act of 2002.                                                                                                                         
|Item 6(b). |  | Reports on Form 8-K                                                                                                                                                                                  
|           |  | A report on Form 8-K was filed by the Company on April 18, 2002 to report an event under Item 4  Changes in Registrant's Certifying Accountant. No financial statements were filed with such report.

33

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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.                                                                                        
|---------------- |  | -------------------------------------------------------------------------------------------------------
|December 6, 2002 |  | /s/DAVID W. MONTGOMERYDavid W. Montgomery Vice President-Finance, Secretary and
Chief Financial Officer

34

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CERTIFICATION

I,
Robert L. Krakoff, certify that:



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

Date:
December 6, 2002

35

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CERTIFICATION

I,
David W. Montgomery, certify that:



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

Date:
December 6, 2002

36

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Exhibit Index

|Exhibit No. |  | Document                                                             
|----------- |  | ---------------------------------------------------------------------
|99.1        |  | CEO's Certificate Pursuant to §906 of the Sarbanes-Oxley Act of 2002.
|99.2        |  | CFO's Certificate Pursuant to §906 of the Sarbanes-Oxley Act of 2002.

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