<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                         FOR THE QUARTERLY PERIOD ENDED

                                 MARCH 31, 2003

                                       OR

           [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                      FOR THE TRANSITION PERIOD FROM     TO

                        COMMISSION FILE NUMBER: 001-16061

                              KEY3MEDIA GROUP, INC.
             (Exact Name of registrant as specified in its charter)

           DELAWARE                                      95-4799962
(State or other jurisdiction of             (IRS employer identification number)
incorporation or organization)

  5700 WILSHIRE BOULEVARD, SUITE 325                      90036
           LOS ANGELES, CA                              (Zip Code)
(Address of principal executive offices)

                                 (323) 954-6000
              (Registrant's telephone number, including area code)

         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 [X] No [ ]

         As of May 16, 2003, there were 68,531,919 shares of the Registrant's
voting common stock, par value $0.01 per share, outstanding.

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>                                                                                                      <C>
PART I       FINANCIAL INFORMATION....................................................................    2

     Item 1. Financial Statements.....................................................................    2

             Condensed Consolidated Balance Sheets....................................................    2
             Condensed Consolidated Statements of Operations..........................................    3
             Condensed Consolidated Statements of Cash Flows..........................................    4
             Condensed Consolidated Statement of Changes in Shareholders'
               Equity and Comprehensive Loss For the Three Months Ended March 31, 2003................    5
             Notes to Condensed Consolidated Financial Statements (Unaudited).........................    6
             Condensed Consolidating Balance Sheet....................................................   21
             Condensed Consolidated Statement of Operations...........................................   23
             Condensed Consolidating Statement of Cash Flows..........................................   25

     Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations....   27

     Item 3. Quantitative and Qualitative Disclosures about Market Risk...............................   35

     Item 4. Controls and Procedures..................................................................   35

PART II      OTHER INFORMATION........................................................................   36

     Item 1. Legal Proceedings........................................................................   36

     Item 3. Defaults Upon Senior Securities..........................................................   39

     Item 6. Exhibits and Reports on Form 8-K.........................................................   40
</TABLE>

                                        i

<PAGE>

             CAUTIONARY LEGEND REGARDING FORWARD LOOKING STATEMENTS

         Certain matters discussed in this Form 10-Q are "forward-looking
statements," including statements about Key3Media Group, Inc.'s ("KeyMedia")
future results, plans and goals and other events which have not yet occurred.
These statements are intended to qualify for the safe harbors from liability
provided by the Private Securities Litigation Reform Act of 1995. You can find
many (but not all) of these statements by looking for words like "will", "may",
"believes", "expects", "anticipates", "plans" and "estimates" and for similar
expressions. Because forward-looking statements involve risks and uncertainties,
there are many factors that could cause Key3Media's actual results to differ
materially from those expressed or implied in this release. These include, but
are not limited to, economic conditions generally and in the information
technology industry in particular; the timing of Key3Media's events and their
popularity with exhibitors, sponsors and attendees; technological changes and
developments; intellectual property rights; competition; capital expenditures;
and factors impacting Key3Media's international operations. On February 3, 2003,
Key3Media voluntarily filed for protection and reorganization under the federal
bankruptcy code as a result of declining operating profits caused in part by the
persistent difficulties experienced by participants in the IT industry and the
related reductions in IT marketing budgets, a general downturn in the economy
and the continuing adverse consequences of the September 11, 2001 terrorist
attacks on the travel industry which have been further negatively impacted by
the commencement of hostilities in Iraq during March 2003. Each of these
developments have and will continue to adversely affect participation and
attendance at Key3Media's events, although we are not able to quantify or
reliably estimate the future impact that these matters may have on our
businesses, results of operations or financial condition. We discuss some of
these and other factors that could cause actual results to differ from those
expressed or implied by forward looking statements in sections entitled "Item 1.
Business - Certain Factors That May Affect our Businesses" and "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Annual Report on Form 10-K for the year ended December 31,
2002 filed by Key3Media with the SEC. These sections contain important
cautionary statements and a discussion of many of the factors that could
materially affect the accuracy of Key3Media's forward-looking statements and
discussions, as well as any of Key3Media's other SEC filings, are incorporated
herein by reference.

         Any subsequent written or oral forward-looking statements made by us or
any person acting on our behalf are qualified in their entirety by the
cautionary statements and factors contained or referred to in this section. We
do not intend or undertake any obligation to update any forward-looking
statements to reflect events or circumstances after the date of this document or
the date on which any subsequent forward-looking statement is made or to reflect
the occurrence of unanticipated events.

                                        1

<PAGE>

                       PART I   FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                              KEY3MEDIA GROUP, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                         DECEMBER 31,          MARCH 31,
                                                                             2002                2003
                                                                                              (UNAUDITED)

                                                                                 (IN THOUSANDS)
<S>                                                                      <C>                  <C>
ASSETS
Current assets:
     Cash and cash equivalents.......................................     $   7,819            $   6,878
     Accounts receivable, net........................................        13,165               13,568
     Prepaid event expenses..........................................         3,043                5,126
     Assets held for sale............................................           323                    -
     Other current assets............................................         6,766                6,308
         Total current assets........................................        31,116               31,880
Property and equipment, net..........................................         9,487                8,881
Intangible assets, net...............................................        73,904               72,724
Assets held for sale.................................................         4,864                    -
Deferred financing costs and other assets............................         9,647                9,588
         Total assets................................................     $ 129,018            $ 123,073

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
     Current maturities of long-term obligations.....................     $ 371,769            $  10,000
     Accounts payable................................................         7,972                5,276
     Accrued expenses................................................        37,082                3,354
     Deferred revenue................................................        19,532               27,255
     Liabilities related to assets held for sale.....................           523                    -
     Other current liabilities.......................................         1,036                  903
         Total current liabilities...................................       437,914               46,788
Liabilities subject to compromise....................................             -              403,557
Commitments and contingencies Shareholders' equity (deficit):
     Preferred stock.................................................            15                   15
     Common stock....................................................           685                  685
     Additional paid-in capital......................................       476,234              476,234
     Retained earnings (deficit).....................................      (778,686)            (797,495)
     Accumulated comprehensive loss..................................        (4,257)              (4,324)
     Deferred compensation...........................................        (2,887)              (2,387)
         Total shareholders' equity (deficit)........................      (308,896)            (327,272)
         Total liabilities and shareholders' equity (deficit)........     $ 129,018            $ 123,073
</TABLE>

                             See accompanying notes.

                                        2

<PAGE>

                              KEY3MEDIA GROUP, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                            FOR THE THREE MONTHS ENDED MARCH 31,

                                                                                      2002           2003

                                                                                          (UNAUDITED)

                                                                           (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                                                <C>             <C>
Net revenues ............................................................          $  34,264       $  7,916
Operating expenses:
     Cost of production .................................................             17,704          2,515
     Selling, general and administrative ................................             22,069         15,360
     Stock based compensation ...........................................                153            500
     Depreciation and amortization ......................................              5,285          2,050
                                                                                      45,211         20,425

Loss from operations ....................................................            (10,947)       (12,509)

Reorganization items, net ...............................................                  -         (1,644)

Loss before non-operating items, income taxes, discontinued
     operations and cumulative effect of accounting change ..............            (10,947)       (14,153)

Other income (expenses):
     Interest expense (contractual interest for the three months
        ended March 31, 2003 was $9,913) ................................             (9,721)        (4,838)
     Interest income ....................................................                168             17
     Other income (expense), net ........................................                (50)           203
                                                                                      (9,603)        (4,618)
Loss before income taxes, discontinued operations and cumulative
     effect of accounting change ........................................            (20,550)       (18,771)
Income tax benefit ......................................................             (5,770)          (228)

Loss before discontinued operations and cumulative effect of
     accounting change ..................................................            (14,780)       (18,543)
Loss from discontinued operations .......................................               (819)          (266)
Cumulative effect of accounting change, net of tax ......................           (344,615)             -
         Net loss .......................................................          $(360,214)      $(18,809)

Net loss attributable to common shareholders:
Net loss ................................................................          $(360,214)      $(18,809)
Accretion on convertible preferred stock ................................             (1,000)          (492)
         Net loss attributable to common shareholders ...................          $(361,214)      $(19,301)

Net loss per common share-Basic and Diluted:
     Before cumulative effect of accounting change (after accretion
       on preferred stock) ..............................................          $   (0.24)      $  (0.28)
     Loss from discontinued operations ..................................                  -              -
     Cumulative effect of accounting change .............................              (5.05)             -
         Net loss per common share ......................................          $   (5.29)      $  (0.28)

Shares used in computing basic and diluted net loss per common share ....             68,266         68,532
</TABLE>

                             See accompanying notes.

                                        3

<PAGE>

                              KEY3MEDIA GROUP, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                 FOR THE THREE MONTHS ENDED MARCH 31,

                                                                                      2002               2003

                                                                                            (UNAUDITED)

                                                                                           (IN THOUSANDS)
<S>                                                                                <C>                <C>
Cash flows from operating activities:
     Net loss................................................................      $(360,214)         $ (18,809)
     Adjustments to reconcile net loss to net cash used in operating
         activities:
         Cumulative effect of accounting change..............................        344,615                  -
         Reorganization items, net...........................................              -              1,644
         Non-cash portion of loss on discontinued operations.................              -                289
         Depreciation and amortization.......................................          5,888              2,050
         Stock based compensation............................................            153                500
         Non-cash interest expense...........................................            398                230
         Loss on disposal of property and equipment..........................             20                  -
         Foreign exchange loss...............................................             21                  6
         Deferred income taxes...............................................         (5,770)                 -
Changes in operating assets and liabilities, net of effect from acquired &
     disposed businesses:
     Accounts receivable.....................................................          7,853               (403)
     Prepaid event expenses..................................................            769             (2,083)
     Other current assets....................................................           (125)               458
     Other assets............................................................            (12)              (171)
     Accounts payable........................................................         (2,995)            (2,696)
     Accrued expenses........................................................          5,364            (33,728)
     Deferred revenue........................................................          3,524              7,723
     Other liabilities.......................................................           (579)            31,655
         Total adjustments...................................................        359,124              5,474
         Net cash used in operating activities...............................         (1,090)           (13,335)

         Net cash used for reorganization items, net.........................              -             (1,644)

Cash flows from investing activities:
     Acquisition of businesses, net of cash acquired.........................         (1,693)                 -
     Proceeds from the sale of a business....................................              -              4,375
     Purchase of property and equipment......................................           (294)              (199)
         Net cash provided by (used in) investing activities.................         (1,987)             4,176

Cash flows from financing activities:
     Borrowings under debtor-in-possession credit and guaranty agreement.....              -             10,000
     Payments associated with issuance of preferred stock....................           (150)                 -
         Net cash provided by (used in) financing activities.................           (150)            10,000
Effects of exchange rate changes on cash.....................................             32               (138)
Net decrease in cash and cash equivalents....................................         (3,195)              (941)

Cash and cash equivalents at beginning of period.............................         41,384              7,819

Cash and cash equivalents at end of period...................................      $  38,189          $   6,878

Supplemental cash flow disclosures:
     Interest paid...........................................................      $     718          $   1,827
     Income taxes paid.......................................................      $     128          $       8
Non-cash financing activities:
     Issuance of common stock to acquire businesses..........................      $     840          $       -
</TABLE>

                             See accompanying notes.

                                       4

<PAGE>

                              KEY3MEDIA GROUP, INC.

                   CONDENSED CONSOLIDATED STATEMENT OF CHANGES
            IN SHAREHOLDERS' EQUITY (DEFICIT) AND COMPREHENSIVE LOSS

                    FOR THE THREE MONTHS ENDED MARCH 31, 2003

<TABLE>
<CAPTION>
                                                    ADDITIONAL              ACCUMULATED       TOTAL
                                PREFERRED  COMMON    PAID-IN     RETAINED  COMPREHENSIVE  COMPREHENSIVE    DEFERRED
                                  STOCK    STOCK     CAPITAL     EARNINGS  INCOME (LOSS)  INCOME (LOSS)  COMPENSATION      TOTAL
                                                                       (UNAUDITED)
                                                                     (IN THOUSANDS)
<S>                             <C>        <C>     <C>          <C>        <C>            <C>            <C>             <C>
Balance at December 31, 2002..  $   15     $  685  $ 476,234    $(778,686)  $   (4,257)                    $ (2,887)     $(308,896)
Amortization of deferred
   compensation...............      --         --         --           --           --                          500            500
Foreign currency translation
   adjustment.................      --         --         --           --          (67)            (67)          --            (67)
Net loss......................      --         --         --      (18,809)          --         (18,809)          --        (18,809)

Balance at March 31, 2003.....  $   15     $  685  $ 476,234    $(797,495)  $   (4,324)     $  (18,876)    $ (2,387)     $(327,272)
</TABLE>

                             See accompanying notes.

                                       5

<PAGE>

                              KEY3MEDIA GROUP, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

         1.       ORGANIZATION AND NATURE OF OPERATIONS

         These unaudited condensed consolidated financial statements have been
prepared by the management of Key3Media Group, Inc. (the "Company") in
accordance with generally accepted accounting principles for interim financial
information and the applicable rules and regulations of the Securities and
Exchange Commission. Accordingly, they do not include all information and
footnotes required by generally accepted accounting principles for complete
financial statements. However, in the opinion of management, the interim
financial statements reflect all adjustments necessary for a fair presentation
of the results for the periods presented. The results of operations for the
interim periods are not necessarily indicative of the results of operations to
be expected for the full year.

         These interim unaudited condensed consolidated financial statements
have been prepared on a going concern basis, which assumes continuity of
operations and realization of assets and satisfaction of liabilities in the
ordinary course of business, and in accordance with Statement of Position 90-7
("SOP 90-7"), "Financial Reporting by Entities in Reorganization under the
Bankruptcy Code." Accordingly, all pre-petition liabilities subject to
compromise have been segregated in the unaudited condensed consolidated balance
sheet and classified as Liabilities subject to compromise, at the estimated
amount of allowable claims. Liabilities not subject to compromise are separately
classified as current and non-current. Revenues, expenses, realized gains and
losses, and provisions for losses resulting from the reorganization are reported
separately as Reorganization items, net, except for those required to be
reported as discontinued operations in conformity with Statement of Financial
Accounting Standards ("SFAS") No. 144 "Accounting for the Impairment or Disposal
of Long-Lived Assets," ("SFAS No. 144") in the unaudited condensed consolidated
statements of operations. Cash used for reorganization items is disclosed
separately in the unaudited condensed consolidated statement of cash flows.

         These unaudited condensed consolidated financial statements should be
read together with the Company's Annual Report on Form 10-K for the year ended
December 31, 2002 and the audited consolidated financial statements contained
therein.

         The Company is a leading producer of business-to-business events,
principally trade shows, conferences, and customized marketing and education
programs with operations in the United States, Canada, Europe and Japan.

         Certain reclassifications were made to prior period consolidated
financial statements to conform to current period presentation.

                                       6

<PAGE>

                              KEY3MEDIA GROUP, INC.

               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

              (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)--(CONTINUED)

         2.       RECENT ACCOUNTING PRONOUNCEMENTS

         Statement of Financial Accounting Standards No. 148, "Accounting for
Stock-Based Compensation -- Transition and Disclosure an Amendment of FASB
Statement No. 123" ("SFAS 148"), was issued in December 2002. SFAS 148 amends
SFAS 123 to provide alternative methods of transition for a voluntary change to
the fair value-based method of accounting for stock-based employee compensation.
In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require
more prominent disclosures in both annual and interim financial statements
regarding the method of accounting for stock-based employee compensation and the
effect of the method used on reported results. The alternative methods of
transition of SFAS 148 are effective for fiscal years ending after December 15,
2002. The disclosure provision of SFAS 148 is effective for interim periods
beginning after December 15, 2002. The Company records stock-based compensation
using the intrinsic value method as prescribed under Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees," and Financial
Accounting Standards Board (FASB) Interpretation No. 44, "Accounting for Certain
Transactions Involving Stock Compensation-an interpretation of APB Opinion No.
25 (FIN 44)." The Company's adoption of SFAS 148 did not have a material impact
on its operating results or financial position.

         3.       PROCEEDINGS UNDER CHAPTER 11 OF THE BANKRUPTCY CODE AND BASIS
                  OF PRESENTATION

         On February 3, 2003 ("Petition Date") Key3Media Group, Inc. and five of
its U.S. subsidiaries (collectively "the Debtors") filed voluntary petitions for
reorganization under Chapter 11 of the federal bankruptcy laws ("Bankruptcy
Code" or "Chapter 11") in the United States Bankruptcy Court for the District of
Delaware ("Court"). The reorganization is being jointly administered under the
caption "In re Key3Media Inc., et al. case No. 03-10323." Included in the
unaudited condensed consolidated financial statements are subsidiaries operating
outside of the United States, which have not commenced Chapter 11 cases or other
similar proceedings elsewhere, and are not Debtors. Key3Media Group, Inc. and
all of its consolidated subsidiaries are collectively referred to herein as
"Key3Media," or "the Company." The Company decided to seek judicial
reorganization based upon a comprehensive recapitalization plan designed to
provide a strong financial foundation for the Company. The plan is backed by
investment funds managed by Thomas Weisel Capital Partners ("TWCP"), which owned
as of February 3, 2003, approximately 68% of Key3Media's bank debt and
approximately 38% of its 11.25% Senior Subordinated notes due 2011.

         On February 4, 2003, the Court gave interim approval for $12,500 of a
$30,000 debtor-in-possession Credit and Guaranty Agreement ("DIP Credit
Facility") to be

                                       7

<PAGE>

                              KEY3MEDIA GROUP, INC.

               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

              (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)--(CONTINUED)

provided by TWCP for payment of permitted pre-petition claims, working capital
needs, and other general corporate purposes. On March 26, 2003, the Court gave
final approval of the DIP Credit Facility, which requires the Company, amongst
other things, to maintain certain financial covenants and restricts liens,
indebtedness, capital expenditures, dividend payments and sales of assets. In
addition, the DIP Credit Facility maintains a requirement that the Court enter
the Plan of Reorganization on or before June 30, 2003. If this requirement is
not met, then there is an Event of Default under the DIP Credit Facility.

         On February 14, 2003, the United States Trustee appointed the
Creditors' Committee and on April 7, 2003, the Court approved the retention of
legal counsel for the Creditors' Committee. On April 9, 2003, the Company and
TWCP reached an agreement in principle with the Creditors' Committee concerning
the terms of the Company's reorganization plan. The reorganization plan has been
distributed to voting creditors and equity holders. A Court hearing has been
scheduled for June 4, 2003, to approve the plan.

         As a debtor-in-possession, Key3Media is authorized to continue to
operate as an ongoing business, but may not engage in transactions outside the
ordinary course of business without the approval of the Court, after notice and
an opportunity for hearing. Under the Bankruptcy Code, actions to collect
pre-petition indebtedness, as well as most other pending litigation, are stayed
and other contractual obligations against Key3Media may not be enforced. In
addition, under the Bankruptcy Code, Key3Media may assume or reject executory
contracts, including lease obligations. Parties affected by these rejections may
file claims with the Court in accordance with the reorganization process. Absent
an order from the Court, substantially all pre-petition liabilities are subject
to settlement under a plan of reorganization to be voted upon by creditors and
approved by the Court.

         The accompanying unaudited condensed consolidated financial statements
do not purport to reflect or provide for the consequences of the bankruptcy
proceedings. In particular, these consolidated financial statements do not
purport to show (a) as to assets, their realizable value on a liquidation basis
or their availability to satisfy liabilities; (b) as to liabilities, the amounts
that may be allowed for claims or contingencies, or the status and priority
thereof; (c) as to stockholder accounts, the effect of any changes that may be
made in the capitalization of the Company; and (d) as to operations, the effect
of any changes that may be made in its business.

         The Company's unaudited condensed consolidated financial statements
have been prepared on a going concern basis, which contemplates continuity of
operations, realization of assets and the liquidation of liabilities and
commitments in the normal

                                       8

<PAGE>

                              KEY3MEDIA GROUP, INC.

               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

              (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)--(CONTINUED)

course of business. The Company's recurring losses and bankruptcy filing raise
substantial doubt about the Company's ability to continue as a going concern.
The ability of Key3Media to continue as a going concern is predicated upon
numerous issues, including the Company's ability to achieve the following:

                  -        Implement its long-term strategy to revitalize its
                           business and return Key3Media to profitability;

                  -        Take appropriate action to offset the negative
                           effects that the Chapter 11 filing has had on the
                           business, including the loss in customers and the
                           impairment of vendor relations;

                  -        Operate within the framework of the DIP Credit
                           Facility, including its limitations on capital
                           expenditures, its financial covenants, the ability to
                           generate cash flows from operations or seek other
                           sources of financing and the availability of
                           projected vendor credit terms;

                  -        Attract, motivate and/or retain key executives and
                           other employees;

                  -        Confirmation by the Court of the Company's plan of
                           reorganization.

         These challenges are in addition to those operational and competitive
challenges faced by Key3Media in connection with its general business
activities.

         4.       COMPUTATION OF NET LOSS PER SHARE

         Basic earnings per share are calculated using the weighted average of
the number of common shares outstanding.

         Diluted earnings per share are calculated using the weighted average of
the number of common shares outstanding plus the dilutive effect of stock
options, warrants and preferred stock, calculated using the treasury method.
These dilutive securities were excluded from the calculation of diluted net loss
per share as the effect of their inclusion would have been anti-dilutive.

                                       9

<PAGE>

                              KEY3MEDIA GROUP, INC.

               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

              (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)--(CONTINUED)

         A summary of the shares used to compute earnings per common share is as
follows:

<TABLE>
<CAPTION>
                                                                FOR THE THREE MONTHS
                                                                  ENDED MARCH 31,
                                                                 2002         2003
<S>                                                            <C>          <C>
Net loss ...................................................   $(360,214)   $ (18,809)
Accretion on convertible preferred stock ...................      (1,000)        (492)

Net loss attributable to common shareholders ...............   $(361,214)   $ (19,301)
Weighted average common shares .............................      68,266       68,532
Denominator for basic calculation ..........................      68,266       68,532
Net loss per common share-basic ............................   $   (5.29)   $   (0.28)

Weighted average effect of anti-dilutive securities:
   Warrants ................................................           -            -
   Stock options ...........................................           -            -
   Preferred stock .........................................           -            -
Total weighted average effect of anti-dilutive securities ..           -            -
Denominator for diluted calculation ........................      68,266       68,532
Net income loss per common share-diluted ...................   $   (5.29)   $   (0.28)
</TABLE>

         5.       COMPREHENSIVE LOSS

The components of comprehensive loss were as follows:

<TABLE>
<CAPTION>
                                                                FOR THE THREE MONTHS
                                                                  ENDED MARCH 31,
                                                                 2002         2003
<S>                                                            <C>          <C>
Net loss ...................................................   $(360,214)   $ (18,809)
Other comprehensive adjustment:
   Foreign currency translation adjustment .................          20          (67)
Total comprehensive loss ...................................   $(360,194)   $ (18,876)
</TABLE>

         6.       REORGANIZATION ITEMS, NET

         Reorganization items, net represents amounts the Company has incurred
as a result of the Chapter 11 proceedings in accordance with SOP 90-7. The
amount for

                                       10

<PAGE>

                              KEY3MEDIA GROUP, INC.

               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

              (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)--(CONTINUED)

Reorganization items, net in the unaudited condensed consolidated statement of
operations includes a charge of $1,650 for professional services partially
off-set by a credit of $6 related to interest income.

         7.       LIABILITIES SUBJECT TO COMPROMISE

         Under bankruptcy law, actions by creditors to collect indebtedness the
Company owes prior to the Petition Date are stayed and certain other
pre-petition contractual obligations may not be enforced against the Company.
The Company has received approval from the Court to pay certain pre-petition
liabilities including employee salaries and wages, benefits and other employee
obligations. All pre-petition liabilities classified as Liabilities subject to
compromise in the March 31, 2003 unaudited condensed consolidated balance sheet
may be adjusted as a result of negotiations, payments authorized by Court order,
additional rejections of executory contracts including leases, or other events.

         Pursuant to an order of the Court, the Company mailed notices to all
know creditors that the deadline for filing proofs of claim with the Court was
April 17, 2003. Amounts that the Company has recorded may be different than
amounts filed by the Company's creditors.

         The following table summarizes the components of the liabilities
included in Liabilities subject to compromise in the unaudited condensed
consolidated balance sheet as of March 31, 2003.

<TABLE>
<CAPTION>
                                                               MARCH 31,
                                                                 2003
<S>                                                            <C>
Senior subordinated notes and interest .....................   $ 310,753
Borrowings under revolving credit facility and interest ....      81,799
Accounts payable ...........................................       2,344
Lease abandonment and other facility costs .................       5,781
Other ......................................................       2,880
Total ......................................................   $ 403,557
</TABLE>

         8.       LONG-TERM OBLIGATIONS

         Long-term obligations consist of the following:

                                       11

<PAGE>

                              KEY3MEDIA GROUP, INC.

               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

              (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)--(CONTINUED)

<TABLE>
<CAPTION>
                                                              DECEMBER 31,  MARCH 31,
                                                                 2002         2003
<S>                                                           <C>           <C>
Borrowings under revolving credit facility .................   $  81,769    $  81,769
11.25%, senior subordinated notes ..........................     290,000      290,000
Debtor-in-possession credit facility .......................           -       10,000
                                                                 371,769      381,769
Less amount subject to compromise ..........................           -     (371,769)
Less current maturities ....................................    (371,769)     (10,000)
Total ......................................................   $       -    $       -
</TABLE>

         Following our Petition Date of February 3, 2003, and in conjunction
with our filing under Chapter 11, the Company entered into a $30,000
debtor-in-possession Credit and Guaranty Agreement ("DIP Credit Facility") with
TWCP. On February 4, 2003, the Court gave interim approval for up to $12,500 of
funding under the DIP Credit Facility and on March 26, 2003, the Court gave
final approval for the entire $30,000 DIP Credit Facility. The DIP Credit
Facility has been afforded superpriority claim status in the Chapter 11 case and
is collateralized by liens on certain of our assets (subject to valid and
unavoidable prepetition liens and certain other permitted liens) and provides
that proceeds be used for payment of permitted pre-petition claims, working
capital needs, and other general corporate purposes. Borrowings under the DIP
Credit Facility bear interest at 7.0% per annum and interest is payable the last
business day of the month. The DIP Credit Facility stipulates that a
participation fee be paid on all borrowings at an amount not to exceed 1% of the
total principal amount of borrowings.

         Under the DIP Credit Facility, the Company is required, among other
things, to maintain specified levels of selling, general and administrative
expenses (as defined), provide cash reporting and ensure that accounts payables
are paid within forty-five (45) days, unless such amounts are disputed in good
faith. The DIP Credit Facility also contains other customary covenants,
including certain reporting requirements and covenants that restrict the
Company's ability to incur or create liens, indebtedness and guarantees, make
dividend payments, sell or dispose of assets, and enter into affiliate
transactions, mergers and consolidations. Failure to satisfy these covenants
would (in some cases, after the expiration of a grace period) result in an event
of default that could cause, absent the receipt of appropriate waivers, the
funds necessary to maintain our operations to become unavailable. The DIP Credit
Facility contains other customary events of default, including a provision that
the Court must enter the Plan of Reorganization on or before June 30, 2003. The
maturity date of the DIP Credit Facility is June 30, 2003, with a twelve (12)
month extension at the discretion of the lender after the Company's request for
extension is submitted.

                                       12

<PAGE>

                              KEY3MEDIA GROUP, INC.

               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

              (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)--(CONTINUED)

         On December 16, 2002, the Company failed to pay the semi-annual
interest payment due on its 11.25% senior subordinated notes (the "Notes"). This
non-payment of interest continued past the 30 day grace period and became an
event of default in respect of the Notes. Further, this event of default under
the Notes constituted a cross-default under the Company's Amended and Restated
Credit Facility. In addition, as of December 31, 2002, the Company was not in
compliance with the financial and certain other covenants contained in its
Amended and Restated Credit Facility.

         On January 23, 2003 and January 28, 2003, the Company further amended
its Amended and Restated Credit Facility providing for, amongst other things,
consents to the sale of the VON assets and subordination of liens in connection
with the Company obtaining debtor-in-possession financing, and waivers for
certain other technical defaults that existed at each amendment date.

         As of the Petition Date, the Company ceased accruing interest on the
unsecured pre-petition debt classified as Liabilities subject to compromise in
the unaudited condensed consolidated balance sheet in accordance with SOP 90-7.
Interest at the stated contractual amount on the unsecured debt that was not
charged to results of operations for the three months ended March 31, 2003 was
$5,075.

         9.       DISPOSITION OF BUSINESS

         On January 24, 2003, the Company completed the sale of the assets of
its Key3Media VON Events, Inc. (VON) subsidiary to Pulver.com VON Events, Inc.,
an affiliate of the prior owners of the VON events. The Company has accounted
for these operations as discontinued operations in the accompanying condensed
consolidated financial statements. For the three months ended March 31, 2002 and
2003, VON's revenues were $86 and $0, respectively. The Company's net loss from
operations from VON was $820 and $225 for the three months ended March 31, 2002
and 2003, respectively.

         10.      STOCK COMPENSATION PLANS

         Following is the reconciliation of the Company's reported operating
results to the pro forma results if it accounted for its option grants under the
fair value method prescribed by SFAS 123 for the three months ended March 31,
2002 and 2003:

<TABLE>
<CAPTION>
                                                                          FOR THE THREE MONTHS
                                                                            ENDED MARCH 31,
                                                                           2002         2003
<S>                                                                      <C>          <C>
Net loss as reported .................................................   $(360,214)   $ (18,809)
</TABLE>

                                       13

<PAGE>

                              KEY3MEDIA GROUP, INC.

               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

              (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)--(CONTINUED)

<TABLE>
<CAPTION>
                                                                          FOR THE THREE MONTHS
                                                                            ENDED MARCH 31,
                                                                           2002         2003
<S>                                                                      <C>          <C>
Add: stock-based employee compensation expense included in reported
net loss .............................................................         153          500
Deduct: stock-based employee compensation expense under fair value
method for all awards ................................................      (3,458)      (3,206)
Pro forma net loss ...................................................   $(363,519)   $ (21,515)

Basis and diluted net loss per common share-as
reported .............................................................   $   (5.29)   $   (0.28)

Basis and diluted net loss per common share-pro forma ................   $   (5.34)   $   (0.32)
</TABLE>

         11.      COMMITMENTS AND CONTINGENCIES

         The following discussion pertains to legal proceedings that existed as
of February 3, 2003, the date the Company filed its petition for relief under
chapter 11 of the U.S. Bankruptcy Code. By operation of Section 362 of the U.S.
Bankruptcy Code, generally all actions and proceedings against the Company were
automatically stayed on February 3, 2003, subject to further proceedings in the
bankruptcy court.

         On August 31, 2001, Key3Media Events provided notice of termination of
its then existing leased office space in Needham, Massachusetts to the landlord
of the existing space. The annual rental payments (net of operating expenses)
for the prior space were approximately $1,400. The Company entered into a lease
for new office space in Needham and relocated to its new offices on October 1,
2001. The Company estimated that its total annual occupancy costs under the new
lease would be approximately $1,700 greater than those under the prior lease.
The landlord of the prior office space has taken the position that Key3Media
Events is in breach of the lease agreement and that it did not have the right to
terminate the lease. On or about November 6, 2001, Interface Group -
Massachusetts, LLC, the landlord under the prior lease, sued Key3Media Events in
the Superior Court, County of Norfolk, Commonwealth of Massachusetts for breach
of contract, breach of the implied covenant of good faith and fair dealing and
violations of Mass. Gen L. c. 93A (unfair and deceptive acts and practices). The
landlord has requested payment of rent for the remainder of the term of the
lease in an amount in excess of $6,500, treble damages, attorneys' fees, costs
and expenses, pre-judgment interest and costs of suit. In December 2001,
Key3Media Events filed an answer and counterclaim to

                                       14

<PAGE>

                              KEY3MEDIA GROUP, INC.

               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

              (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)--(CONTINUED)

the Interface complaint and a motion to dismiss the Mass. Gen L. c. 93A claim.
The counterclaim included causes of action for (i) breach of contract, (ii)
breach of implied covenant of good faith and fair dealing, (iii) tortious
interference with business relationship, (iv) trespass, (v) breach of the
covenant of quiet enjoyment and constructive eviction, (vi) violation of Mass.
Gen L. c. 93A, (vii) a request for declaratory relief, (viii) civil conspiracy
and (ix) fraud. In February 2002, Interface filed an opposition to motion to
dismiss and an amended complaint alleging breach of contract, breach of implied
covenant of good faith and fair dealing and violations of Mass. Gen L. c. 93A.
Also in February 2002, Key3Media Events filed an answer and counterclaim to the
amended complaint and a motion to dismiss the Mass. Gen L. c. 93A claim and
Interface filed a motion to dismiss counts (iii), (v), (vi), (viii) and (ix) of
the counterclaim. In March 2002, Interface filed a second amended complaint
adding a claim for trustee process and to add Fleet Bank of Massachusetts and
Citizens Bank of Massachusetts as trustee defendants. Interface also filed a
motion for Ex Parte Approval of Trustee Process Attachment. The court denied the
ex parte motion, however the court subsequently held a hearing at which it found
that Interface had established a reasonable likelihood of prevailing on its
claims and it awarded a trustee attachment in the amount of $711 representing
rent for the period of October 2001 through May 2002. On September 26, 2002
Interface was awarded an attachment on certain of Key3Media Events' assets in
the amount of $711 located in Massachusetts and on or before October 15, 2002,
Interface attached these assets. Interface has withdrawn its Massachusetts
attachment with respect to all but $67 in cash and has obtained an attachment on
$711 in a parallel action in the Superior Court, County of Los Angeles, State of
California. The California Action was filed on August 21, 2002, for the sole
purpose of seeking pre-judgment attachments in California based on the
Massachusetts claims. Interface obtained a Right to Attach Order in California
on or about October 24, 2002, and subsequently levied upon that Order. In
December 2002, a Third Party Claim was filed in the California Action by Morgan
Stanley & Co. asserting a superior interest in the assets Interface was seeking
to attach. Before the Third Party Claim was adjudicated, a Notice of Stay was
filed in California as a result of the bankruptcy petition. The two parallel
cases are stayed, as of February 3, 2003, pursuant to the automatic stay
provisions of Section 362 of the U.S. Bankruptcy Code.

         On November 15, 2002, Interface Group Massachusetts, LLC filed a
complaint in United States District Court, District of Massachusetts, against
the Company's chairman, Fredric D. Rosen, alleging tortious interference with
respect to the lease that is the subject of the dispute in the litigation
between Key3Media Events and Interface in Massachusetts. On November 25, 2002,
Rosen, as chairman, requested indemnity from the Company and the claim was
submitted to the Company's directors and officers' liability insurer. On
January, 22, 2003, Rosen filed a motion to dismiss. On April 10, 2003, the
motion to dismiss was granted on personal jurisdiction grounds.

                                       15

<PAGE>

                              KEY3MEDIA GROUP, INC.

               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

              (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)--(CONTINUED)

         Key3Media Events is the plaintiff and counter-defendant in a case filed
October 18, 2000, in the Eighth Judicial District Court, Clark County, Nevada.
The suit arises out of a dispute between Key3Media Events, Inc. on the one hand,
and the Venetian Casino Resort, LLC, and Interface Group-Nevada, Inc., on the
other hand, concerning COMDEX/Fall. Key3Media Events initiated the action,
seeking damages and injunctive relief against defendants for their alleged
actual and threatened breaches of lease, meeting space, and credit extension
agreements in connection with the COMDEX/Fall 2000 show. The Venetian and
Interface Group-Nevada counter sued for compensatory damages "in excess of
$10,000" based on an asserted breach of an alleged oral agreement to host
keynote speeches at The Venetian, asserted breach of an alleged agreement not to
sublease certain facilities, intentional misrepresentation, and breach of the
implied covenant of good faith and fair dealing. The counterclaims include a
prayer for punitive damages. On October 19, 2001, the counter-defendants
specified their alleged damages in their supplemental response to plaintiff's
third request for production of documents. The response alleged damages of over
$3,000 arising from breaches related to COMDEX/Fall 2000 and over $2,000 arising
from breaches related to COMDEX/Fall 2001. On July 22, 2002, Key3Media Events
sought and was granted leave to amend its complaint. On July 23, 2002, Key3Media
Events filed its first amended complaint. The amended complaint included causes
of action for declaratory relief, injunctive relief, breach of contract,
tortious interference, civil conspiracy, intentional misrepresentation/fraud,
predatory price fixing and restraint of trade. The amended complaint seeks
injunctive and declaratory relief, compensatory damages, punitive damages,
treble damages, interest and attorneys' fees. On July 29, 2002, the Venetian and
Interface Group-Nevada, Inc. filed a motion to dismiss the intentional
misrepresentation/fraud, predatory price fixing and restraint of trade causes of
action. On September 19, 2002, the Venetian and Interface Group-Nevada, Inc.,
filed their answer to the first amended complaint and counterclaim for breach of
contract, unjust enrichment, breach of implied covenant of good faith and fair
dealing, negligent and intentional misrepresentation, accounting, abuse of
process, intentional interference with contract and declaratory relief and
seeking compensatory damages in excess of $10 and punitive damages in excess of
$10 and declaratory relief. A jury trial was scheduled for January 21, 2003 but
subsequently postponed. The case was stayed on February 3, 2003, pursuant to the
automatic stay provisions of Section 362 of the U.S. Bankruptcy Code. Interface
has subsequently moved to have the case removed and transferred to the U.S.
Bankruptcy Court for the District of Delaware. On May 13, 2003, Interface's
motions were granted. Key3Media Events has filed a motion for reconsideration
and an emergency ex parte motion to stay entry of the order.

         On or about December 27, 2001, Key3Media Events filed a complaint
against Krause International, Inc., E.J. Krause & Associates (Argentina), Inc.,
and E.J. Krause & Associates, Inc. (collectively, "Krause"), with respect to
Krause's management of COMDEX Argentina 2001. The complaint includes causes of
action for breach of contract, misrepresentation and fraud, fraudulent
misrepresentation, negligent

                                       16

<PAGE>

                              KEY3MEDIA GROUP, INC.

               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

              (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)--(CONTINUED)

misrepresentation, and tortious interference with business relations and seeks
actual damages, punitive damages, interest, attorneys' fees and costs. On or
about February 8, 2002, Krause answered the complaint, and filed a counter-claim
alleging breach of contract, unjust enrichment, and an additional claim for
breach of contract. The counter-claim seeks damages in the amount of $452 plus
interest, and reasonable attorneys' fees and costs. The parties have
subsequently filed various responsive documents including a reply to the
counterclaim by Key3Media Events and a motion to dismiss by Krause. On or about
March 27, 2002, counsel for Krause requested permission to amend its
counter-claim to add E.J. Krause y Asociados Argentina S.R.L., an Argentine
corporation owned in part by Reed Elsevier Overseas BV, as a third party, to add
additional counter-claims and to request compensatory damages of not less than
$10,451 and punitive damages of $10,000. On or about April 12, 2002, Krause and
E.J. Krause Asociados Argentina S.R.L. filed their answer and first amended
counterclaim alleging breach of contract, unjust enrichment, fraudulent
inducement to contract, breach of implied covenant of good faith and fair
dealing, intentional misrepresentation, constructive fraud, negligent
misrepresentation, breach of fiduciary duty, torts arising from breach of
contract and tortious interference with prospective advantage. The amended
counterclaim seeks compensatory damages of not less than $10,451 and punitive
damages of $10,000. On or about August 30, 2002, E.J. Krause & Associates, Inc.
filed a similar answer and counterclaim. The case was stayed on February 3,
2003, pursuant to the automatic stay provisions of Section 362 of the U.S.
Bankruptcy Code.

         On or about February 4, 2002, Key3Media Events filed a complaint
against Krause International, Inc., E.J. Krause and Associates, Inc. and E.J.
Krause de Mexico SA de CV (collectively, "Krause"), with respect to Krause's
management of COMDEX Mexico for the years 2001 and 2002. The complaint alleges
breach of oral contract, breach of written contract, declaratory relief, breach
of covenant of good faith and fair dealing, breach of fiduciary duty, fraud,
negligent misrepresentation, and violation of California Business and
Professions Code Section 17200 and seeks actual damages, punitive and exemplary
damages in an amount of at least $10,000, attorneys' fees and costs,
disgorgement and interest. On or about March 12, 2002, Krause filed a motion to
dismiss the complaint on the grounds of improper venue or, alternately, to
change venue to the United States District Court for the District of Maryland. A
hearing was held on this issue on April 29, 2002 and on May 9, 2002, the court
granted the portion of the motion for transfer of venue. Key3Media Events'
subsequent motion for reconsideration was denied. On or about July 26, 2002
Krause filed an answer and counterclaim for breach of contract, unjust
enrichment, fraudulent inducement to contract, breach of implied covenant of
good faith and fair dealing, intentional misrepresentation, constructive fraud,
negligent misrepresentation, torts arising from breach of contract and tortious
interference with prospective advantage. The amended counterclaim seeks

                                       17

<PAGE>

                              KEY3MEDIA GROUP, INC.

               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

              (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)--(CONTINUED)

compensatory damages of not less than $10,670 and punitive damages of $10,000.
The case was stayed on February 3, 2003, pursuant to the automatic stay
provisions of Section 362 of the U.S. Bankruptcy Code.

         On July 1, 2002, Commerce and Industry Insurance Company ("CIC") sued
the Company for declaratory relief in the Supreme Court of the State of New
York. The complaint arises out of the Company's event cancellation policy with
CIC covering its 2001 COMDEX/Fall event. On July 31, 2002, the Company sued CIC
in the Superior Court of the State of California, County of Los Angeles, for
breach of contract, tortious breach of implied covenant of good faith and fair
dealing and declaratory relief arising out of the Company's event cancellation
policy with CIC covering its 2001 Networld + Interop/Atlanta and 2001
COMDEX/Fall events. The complaint seeks compensatory damages of $9,147 and
$52,423 with respect to the 2001 Networld + Interop/Atlanta and 2001 COMDEX/Fall
events, respectively, punitive damages, interest and reasonable attorneys' fees.
The dispute arises out of CIC's response to the Company's insurance claim for
losses incurred in connection with these two events as a result of the tragedies
of September 11, 2001. Each of the Company and CIC have moved to dismiss or stay
the other party's suit in New York and California, respectively. On November 5,
2002, the California court rejected CIC's motion to dismiss or stay the
California action. The New York court has not yet rendered a decision on the
Company's pending motion to dismiss or stay the New York action. On March 10,
2003, CIC filed a motion for summary adjudication of the second, fourth and
fifth causes of action in the California case, all of which relate to the 2001
COMDEX/Fall event; on April 10, 2003 Key3Media filed its response. A hearing on
the motion for summary judgment is scheduled for July 30, 2003. The parties
have engaged in various settlement discussions but have not reached an
agreement.

         In connection with its spin-off from ZDI, the Company and its
subsidiaries have received an indemnification from ZDI against all liabilities
not related to its businesses, including the class actions and derivative
litigation filed against ZDI discussed in the Company's Registration Statement
on Form S-1 (No.333-36828).

         The Company and its subsidiaries are subject to various other claims
and legal proceedings arising in the normal course of business. Management
believes that the ultimate liability, if any, in the aggregate will not be
material to the Company's financial position, results of operations or cash
flows.

         12.      SEGMENT INFORMATION

         The Company operates in one business segment, the production and
management of trade shows, conferences, and customized marketing and education
programs. The Company holds events either directly or through international
contract events.

                                       18

<PAGE>

                              KEY3MEDIA GROUP, INC.

               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

             (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)-- (CONTINUED)

         Financial information by geographic areas is as follows:

<TABLE>
<CAPTION>
                                                  FOR THE THREE MONTHS ENDED
                                                           MARCH 31,
                                                     2002              2003
<S>                                               <C>               <C>
Net revenues:
    North America ......................          $  29,366         $  3,830
    Europe .............................              3,617            2,987
    Far East ...........................              1,281            1,099
        Total ..........................          $  34,264         $  7,916

Other income (expenses):
    North America ......................          $  (9,567)        $ (4,671)
    Europe .............................                (19)              34
    Far East ...........................                (17)              19
        Total ..........................          $  (9,603)        $ (4,618)
Total assets:
    North America ......................          $ 600,210         $104,319
    Europe .............................             12,866           12,459
    Far East ...........................              6,417            6,295
        Total ..........................          $ 619,493         $123,073
</TABLE>

         13.      SUBSEQUENT EVENTS

         On April 11, 2003, the Company borrowed $4,000 under its DIP Credit
Facility, leaving a remaining borrowing base of $16,000.

         On May 9, 2003, the Company, together with its direct and indirect
subsidiaries, filed a certain First Amended Joint Plan of Reorganization (the
"Plan") and a certain Disclosure Statement Pursuant to Section 1125 of the
Bankruptcy Code with Respect to the Debtors' First Amended Joint Plan of
Reorganization (the "Disclosure Statement") in the Company's bankruptcy case.
The Plan contains provisions providing for the assumption and rejection of
leases and executory contracts by the Company. The Disclosure Statement has been
approved by the bankruptcy court as containing "adequate information" pursuant
to section 1125 of the Bankruptcy Code. A bankruptcy court hearing has been
scheduled for June 4, 2003, to approve the Plan.

         14.      FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTOR AND SUBSIDIARY
                  NON-GRANTOR

         In connection with the issuance of the Company's $290,000 Notes, the
Company's U.S.-based subsidiaries, Key3Media Events and Key3Media BCR Events,

                                       19

<PAGE>

                              KEY3MEDIA GROUP, INC.

               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

              (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)--(CONTINUED)

Inc., guaranteed the payment of principal, premium and interest on the Notes.
Presented below is condensed consolidating financial information for the parent
company (Key3Media Group, Inc.) only, the subsidiary guarantors only and the
subsidiary non-guarantors as a group as of December 31, 2002 and March 31, 2003
and for the three months ended March 31, 2003 and 2002. The parent company and
the subsidiary guarantors filed voluntary petitions for reorganization under
Chapter 11 as of February 3, 2003.

                                       20

<PAGE>

                              KEY3MEDIA GROUP, INC.

                      CONDENSED CONSOLIDATING BALANCE SHEET

                                 (IN THOUSANDS)

                                DECEMBER 31, 2002

<TABLE>
<CAPTION>
                                                                                                       ELIMINATIONS
                                                           PARENT                                          AND
                                                           COMPANY       SUBSIDIARY     SUBSIDIARY     CONSOLIDATING
                                                            ONLY          GUARANTOR   NON-GUARANTORS     ENTRIES       CONSOLIDATED
<S>                                                      <C>             <C>          <C>              <C>             <C>
ASSETS
Current assets:
        Cash and cash equivalents....................    $      24       $   5,026       $ 2,769       $       -       $   7,819
        Accounts receivable, net.....................            -           7,711         5,454               -          13,165
        Prepaid events expenses......................            -           1,407         1,636               -           3,043
        Deferred income taxes........................            -           1,402             -          (1,402)              -
        Assets held for sale.........................            -             323             -               -             323
        Other current assets.........................       16,298          13,401         1,174         (24,107)          6,766
                Total current assets.................       16,322          29,270        11,033         (25,509)         31,116
        Intercompany receivable......................      413,451           6,169         8,039        (427,659)              -
        Property and equipment, net..................            -           8,997           490               -           9,487
        Intangibles assets, net......................            -          67,617         6,287               -          73,904
        Assets held for sale.........................            -           4,864             -               -           4,864
        Investment in subsidiaries...................     (260,973)         93,333             -         167,640               -
        Deferred financing costs and other assets....        9,719              26           (98)              -           9,647
                Total assets.........................    $ 178,519       $ 210,276       $25,751       $(285,528)      $ 129,018

LIABILITIES & SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
        Current maturities of long-term obligations..    $ 371,769       $       -       $     -       $       -       $ 371,769
        Accounts payable.............................            -           4,644         3,328               -           7,972
        Accrued expenses.............................       18,056          14,756         4,270               -          37,082
        Deferred revenue.............................            -          13,233         6,299               -          19,532
        Liabilities related to assets held for sale..            -             523             -               -             523
        Other current liabilities....................            -            (216)        1,252               -           1,036
                Total current liabilities............      389,825          32,940        15,149               -         437,914
        Intercompany payable.........................            -         421,492         6,167        (427,659)              -
        Deferred income taxes........................            -          25,509             -         (25,509)              -
Shareholders' equity (deficit):
        Preferred stock..............................           15               -             -               -              15
        Common stock.................................          685               -             -               -             685
        Additional paid-in-capital...................      569,567         386,557        12,185        (492,075)        476,234
        Retained deficit.............................     (778,686)       (656,222)       (3,493)        659,715        (778,686)
        Accumulated comprehensive loss...............            -               -        (4,257)              -          (4,257)
        Deferred compensation........................       (2,887)              -             -               -          (2,887)
             Total shareholders' equity (deficit)....     (211,306)       (269,665)        4,435         167,640        (308,896)
             Total liabilities & shareholders'
               equity (deficit)......................    $ 178,519       $ 210,276       $25,751       $(285,528)      $ 129,018
</TABLE>

                                       21

<PAGE>

                              KEY3MEDIA GROUP, INC.

                      CONDENSED CONSOLIDATING BALANCE SHEET

                                   (UNAUDITED)

                                 (IN THOUSANDS)

                                 MARCH 31, 2003

<TABLE>
<CAPTION>
                                                                                        ELIMINATIONS
                                                                          SUBSIDIARY        AND
                                           PARENT COMPANY  SUBSIDIARY        NON-       CONSOLIDATING
                                                ONLY       GUARANTORS     GUARANTORS      ENTRIES       CONSOLIDATED
<S>                                        <C>             <C>            <C>           <C>             <C>
ASSETS
Current assets:
     Cash and cash equivalents.........      $      501    $    5,704     $      673     $        -      $    6,878
     Accounts receivable, net..........               -         9,171          4,397              -          13,568
     Prepaid events expenses...........               -         3,630          1,496              -           5,126
     Deferred income taxes.............               -             -              -              -               -
     Other current assets..............               2         4,363          1,943              -           6,308
         Total current assets..........             503        22,868          8,509              -          31,880
     Intercompany receivable...........         437,391      (438,372)           981              -               -
     Property and equipment, net.......               -         8,414            467              -           8,881
     Intangibles assets, net...........               -        66,444          6,280              -          72,724
     Investment in subsidiaries........        (313,537)       54,241              -        259,296               -
     Other assets......................           9,489            15             84              -           9,588
         Total assets..................      $  133,846    $ (286,390)    $   16,321     $  259,296      $  123,073

LIABILITIES & SHAREHOLDERS' EQUITY
(DEFICIT)
Current liabilities
     Current maturities of long-term
       obligation........................    $   10,000    $        -     $        -     $        -      $   10,000
     Accounts payable..................               -         1,619          3,657              -           5,276
     Accrued expenses..................               -         1,706          1,648              -           3,354
     Deferred revenue..................               -        21,263          5,992              -          27,255
     Other current liabilities.........               -           296            607              -             903
         Total current liabilities.....          10,000        24,884         11,904              -          46,788
     Intercompany payable..............               -             -              -              -               -
     Deferred income taxes.............               -             -              -              -               -
     Liabilities subject to compromise.         392,553        11,004              -              -         403,557
Shareholders' equity (deficit)                                                                    -
     Preferred stock...................              15             -              -              -              15
     Common stock......................             685             -              -              -             685
     Additional paid-in-capital........         530,475       347,465         12,185       (413,891)        476,234
     Retained earnings.................        (797,496)     (669,743)        (3,444)       673,187        (797,495)
     Accumulated comprehensive loss....               -             -         (4,324)             -          (4,324)
     Deferred compensation.............          (2,387)            -              -              -          (2,387)
         Total shareholders' equity
           (deficit).....................      (268,707)     (322,278)         4,417        259,296        (327,272)
         Total liabilities & shareholders'
              equity (deficit).........      $  133,846    $ (286,390)    $   16,321     $  259,296      $  123,073
</TABLE>

                                       22

<PAGE>

                              KEY3MEDIA GROUP, INC.

                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

                                   (UNAUDITED)

                                 (IN THOUSANDS)

                    FOR THE THREE MONTHS ENDED MARCH 31, 2002

<TABLE>
<CAPTION>
                                                                                              ELIMINATIONS
                                                                                                  AND
                                                   PARENT       SUBSIDIARY     SUBSIDIARY    CONSOLIDATING
                                                COMPANY ONLY    GUARANTOR     NON-GRANTOR       ENTRIES       CONSOLIDATED
<S>                                            <C>             <C>            <C>            <C>              <C>
Net revenues................................   $          -    $    30,183    $     4,944     $      (863)    $     34,264
Operating expenses:
    Cost of production......................              -         15,370          2,334               -           17,704
    Selling, general and administrative.....            164         19,743          2,208             (46)          22,069
    Stock based compensation................            153              -              -               -              153
    Depreciation and amortization...........              -          5,158            127               -            5,285
                                                        317         40,271          4,669             (46)          45,211
Income (loss) from operations...............           (317)       (10,088)           275            (817)         (10,947)
Other income (expenses):
    Interest expense........................         (9,667)           (29)           (29)              4           (9,721)
    Interest income.........................             59             78             35              (4)             168
    Intercompany activity...................              -              -           (817)            817                -
    Other income (expense), net.............              -              8            (58)              -              (50)
                                                     (9,608)            57           (869)            817           (9,603)
Loss before income taxes, discontinued
    operations and cumulative effect of
    accounting change.......................         (9,925)       (10,031)          (594)              -          (20,550)
Income tax provision (benefit)..............         (2,680)        (2,916)          (174)              -           (5,770)
Loss before discontinued operations and
    cumulative effect of accounting change..         (7,245)        (7,115)          (420)              -          (14,780)
Loss from discontinued operations...........              -           (819)             -               -             (819)
Cumulative effect of accounting change......              -       (344,615)             -               -         (344,615)
Equity in earnings (loss) in subsidiaries...       (352,969)             -              -         352,969                -
Net loss....................................   $   (360,214)   $  (352,549)   $      (420)    $   352,969     $   (360,214)
</TABLE>

                                       23

<PAGE>

                              KEY3MEDIA GROUP, INC.

                 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

                                   (UNAUDITED)

                                 (IN THOUSANDS)

                    FOR THE THREE MONTHS ENDED MARCH 31, 2003

<TABLE>
<CAPTION>
                                                                                             ELIMINATIONS
                                                                                                 AND
                                               PARENT COMPANY   SUBSIDIARY     SUBSIDIARY    CONSOLIDATING
                                                    ONLY         GUARANTOR    NON-GRANTOR      ENTRIES       CONSOLIDATED
<S>                                            <C>              <C>           <C>            <C>             <C>
Net revenues.................................    $       -      $    4,102     $  4,139        $    (325)     $   7,916
Operating expenses:
     Cost of production......................            -             253        2,262                -          2,515
     Selling, general and administrative.....           30          13,421        1,962              (53)        15,360
     Stock based compensation................          500               -            -                -            500
     Depreciation and amortization...........            -           1,933          117                -          2,050
                                                       530          15,607        4,341              (53)        20,425
Loss from operations.........................         (530)        (11,505)        (202)            (272)       (12,509)

Reorganization items, net....................           (2)          1,646            -                -          1,644

Loss before non-operating items, income
  taxes, discontinued operations and
  cumulative effect of accounting change.....         (528)        (13,151)        (202)                        (14,153)

Other income (expenses):
     Interest expense........................       (4,809)            (57)          (2)              30         (4,838)
     Interest income.........................            -               8           39              (30)            17
     Intercompany activity...................            -               -         (272)             272              -
     Other income (expense), net.............            -              35          168                -            203
                                                    (4,809)            (14)         (67)             336         (4,618)
Loss before income taxes, discontinued
      operations and cumulative effect of
      accounting change......................       (5,337)        (13,165)        (269)               -        (18,771)
Income tax provision (benefit)...............            -               8         (236)               -           (228)
Loss before discontinued operations and
      cumulative effect of accounting change.       (5,337)        (13,173)         (33)               -        (18,543)
Loss from discontinued operations............            -            (266)           -                -           (266)
Cumulative effect of accounting change.......            -               -            -                -              -
Equity in earnings (loss) in subsidiaries....      (13,472)              -            -           13,472              -
Net loss.....................................    $ (18,809)     $  (13,439)    $    (33)       $  13,472      $ (18,809)
</TABLE>

                                       24

<PAGE>

                              KEY3MEDIA GROUP, INC.

                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

                                   (UNAUDITED)

                                 (IN THOUSANDS)

                    FOR THE THREE MONTHS ENDED MARCH 31, 2002

<TABLE>
<CAPTION>
                                                                                                      ELIMINATIONS
                                                                                                          AND
                                                       PARENT         SUBSIDIARY   SUBSIDIARY NON-   CONSOLIDATING
                                                    COMPANY ONLY      GUARANTOR        GRANTOR          ENTRIES       CONSOLIDATED
<S>                                                 <C>            <C>             <C>               <C>              <C>
Cash flows from operating activities:
Net loss.........................................   $   (360,214)  $    (352,549)   $       (420)    $     352,969    $   (360,214)
Adjustments to reconcile net loss to net cash
  provided by (used in) operating activities:
    Cumulative effect of accounting change.                    -         344,615               -                 -         344,615
    Depreciation and amortization................              -           5,761             127                 -           5,888
    Stock based compensation.....................            153               -               -                 -             153
    Non-cash interest expense....................            398               -               -                 -             398
    Equity in earnings (loss) of subsidiaries....        352,969               -               -          (352,969)              -
    Loss on disposal of property and equipment...              -               -              20                 -              20
    Foreign exchange loss........................              -               -              21                 -              21
    Deferred income taxes........................         (2,680)         (2,916)           (174)                -          (5,770)
Changes in operating assets & liabilities, net of
  effect from acquired businesses:
    Accounts receivable..........................              -           6,245           1,608                 -           7,853
    Prepaid event expenses.......................              -             595             174                 -             769
    Other current assets.........................              -            (220)             95                 -            (125)
    Other assets.................................              -             (37)             25                 -             (12)
    Accounts payable.............................              -            (216)         (2,779)                -          (2,995)
    Accrued expenses.............................          7,498          (1,513)           (621)                -           5,364
    Deferred revenue.............................              -           3,576             (52)                -           3,524
    Other liabilities............................              -            (621)             42                 -            (579)
        Total adjustments........................        358,338         355,269          (1,514)         (352,969)        359,124
        Net cash provided by (used in)
          operating activities...................         (1,876)          2,720          (1,934)                -          (1,090)

Cash flows from investing activities:
    Acquisition of businesses,  net of cash
        acquired.................................              -          (3,360)          1,667                 -          (1,693)
    Purchase of property and equipment...........              -            (279)            (15)                -            (294)
        Net cash provided by (used in)
          investing activities...................              -          (3,639)          1,652                 -          (1,987)

Cash flows from financing activities:
    Net transactions with SOFTBANK, ZDI &
        affiliates excluding non-cash
        transactions with affiliates.............         (9,938)         10,477            (539)                -               -
    Payments associated with issuance of
        preferred stock..........................           (150)              -               -                 -            (150)
        Net cash provided by (used in)
          financing activities...................        (10,088)         10,477            (539)                -            (150)
Effects of exchange rate changes on cash.........              -               -              32                 -              32
Net increase (decrease) in cash and cash
  equivalents....................................        (11,964)          9,558            (789)                -          (3,195)
Cash and cash equivalents at the beginning of
  period.........................................         24,953          13,682           2,749                 -          41,384
Cash and cash equivalents at the end of period...   $     12,989   $      23,240    $      1,960     $           -    $     38,189
</TABLE>

                                       25

<PAGE>

                              KEY3MEDIA GROUP, INC.

                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

                                   (UNAUDITED)

                                 (IN THOUSANDS)

                    FOR THE THREE MONTHS ENDED MARCH 31, 2003

<TABLE>
<CAPTION>
                                                                                                      ELIMINATIONS
                                                            PARENT                                         AND
                                                            COMPANY      SUBSIDIARY     SUBSIDIARY    CONSOLIDATING
                                                             ONLY        GUARANTOR      NON-GRANTOR      ENTRIES       CONSOLIDATED
<S>                                                      <C>            <C>             <C>           <C>              <C>
Cash flows from operating activities:
Net loss..............................................   $   (18,809)   $   (13,439)    $       (33)   $    13,472     $   (18,809)
Adjustments to reconcile net loss to net cash used
  in operating activities:
     Reorganization items, net........................            (2)         1,646               -              -           1,644
     Non-cash portion of loss on discontinued
       operations.....................................             -            289               -              -             289
     Depreciation and amortization....................             -          1,933             117              -           2,050
     Stock based compensation.........................           500              -               -              -             500
     Non-cash interest expense........................           230              -               -              -             230
     Equity in earnings (loss) of subsidiaries........        13,472              -               -        (13,472)              -
     Foreign exchange loss............................             -              -               6              -               6
Changes in operating assets & liabilities, net of
  effect of disposed business:
     Accounts receivable..............................             -         (1,460)          1,057              -            (403)
     Prepaid event expenses...........................             -         (2,223)            140              -          (2,083)
     Other current assets.............................            (2)         9,038          (8,578)             -             458
     Other assets.....................................             -             11            (182)             -            (171)
     Accounts payable.................................             -         (3,025)            329              -          (2,696)
     Accrued expenses.................................       (18,056)       (13,050)         (2,622)             -         (33,728)
     Deferred revenue.................................             -          8,030            (307)             -           7,723
     Other Liabilities................................        20,784         11,516            (645)             -          31,655
         Total adjustments............................        16,926         12,705         (10,685)       (13,472)          5,474
         Net cash provided by (used in) operating
           activities.................................        (1,883)          (734)        (10,718)             -         (13,335)

         Net cash used for reorganization items, net..             2         (1,646)              -              -          (1,644)

Cash flows from investing activities:

     Proceeds from the sale of a business.............             -          4,375               -              -           4,375
     Purchase of property & equipment.................             -           (176)            (23)             -            (199)
         Net cash provided by (used in) investing
           activities.................................             -          4,199             (23)             -           4,176

Cash flows from financing activities:
     Net transactions with SOFTBANK, ZDI &
         affiliates excluding non-cash transactions
         with affiliates..............................        (7,642)        (1,141)          8,783              -               -
     Borrowings under debtor-in-possession credit
         and guaranty agreement.......................        10,000              -               -              -          10,000
         Net cash provided by (used in) financing
           activities.................................         2,358         (1,141)          8,783              -          10,000
Effects of exchange rate changes on cash..............             -              -            (138)             -            (138)
Net increase (decrease) in cash and cash equivalents..           477            678          (2,096)             -            (941)
Cash and cash equivalents at the beginning of period..            24          5,026           2,769              -           7,819
Cash and cash equivalents at the end of period........   $       501    $     5,704     $       673    $         -     $     6,878
</TABLE>

                                       26

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

         As a result of the continuing difficulties being experienced by our
operations, our high debt load and the other factors described in this "Item 2
-- Management's Discussion and Analysis of Financial Condition and Results of
Operations", we filed for protection and reorganization under chapter 11 of the
U.S. Bankruptcy Code on February 3, 2003. We are seeking approval of a plan of
reorganization which, if completed, will discharge any and all interests or
claims that holders of our common stock and preferred stock have with respect to
our company and its assets. As a result, we believe our shares no longer have
any value and do not believe any investor should pay anything for such shares.
Although the ultimate distributions to holders of our Notes will depend on the
approval of our proposed plan of reorganization, it is virtually certain that
whatever they receive will, in present value terms, represent only a very small
percentage of the aggregate principal amount of, and accrued interest on, our
Notes. Accordingly, we believe our Notes have very little value and any
potential purchaser of our Notes should proceed with extreme caution. If our
company is liquidated instead of reorganized, we believe that the holders of our
shares and the holders of our Notes would likely receive nothing. For a more
detailed description of the risks involved with our company, see "Item 1 --
Business -- Risk Factors" included in our Annual Report on Form 10-K for the
year ended December 31, 2002.

         The discussion below should be read in conjunction with our historical
consolidated financial statements and the notes thereto. Certain
reclassifications have been made to prior period data to conform to current
period presentation. Historical results and percentage relationships set forth
in the condensed consolidated financial statements, including trends which might
appear, should not be taken as indicative of future operations. We consider
portions of this information to be forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, both as amended, with respect to our expectations for
future periods. See "Cautionary Legend Regarding Forward Looking Statements".

         We utilize the term EBITDA in the following discussion. EBITDA
represents income before taxes plus depreciation and amortization, and interest
expense net of interest income. EBITDA should not be considered as an
alternative to, or more meaningful than, operating income as determined in
accordance with GAAP, cash flows from operating activities as determined in
accordance with GAAP, or as a measure of liquidity. We believe EBITDA provides
meaningful additional information on our operating results and on our ability to
service our long-term debt and other obligations and to fund our operations.
Because EBITDA is not calculated in the same manner by all companies, the
representation herein may not be comparable to other similarly titled measures
of other companies.

         We believe that, although not prescribed under generally accepted
accounting principles ("GAAP"), EBITDA and Adjusted EBITDA provide stockholders
and potential investors with valuable measures in evaluating our operating
performance. The

                                       27

<PAGE>

most directly comparable GAAP measure, operating income (loss), includes
depreciation and amortization and stock based compensation. EBITDA and Adjusted
EBITDA exclude these items because they do not directly influence the ongoing
operations of the business. It is important to note, however, that not all
companies calculate adjusted EBITDA in the same manner, and adjusted EBITDA as
presented may not be comparable to similarly titled measures by other companies.

A reconciliation of our operating loss to our adjusted EBITDA for the three
months ended March 31, 2002 and 2003 is as follows (in thousands):

<TABLE>
<CAPTION>
                                                  FOR THE THREE MONTH
                                                     ENDED MARCH 31,
                                                   2002          2003
<S>                                             <C>           <C>
Operating loss..............................    $  (10,947)   $  (12,509)
Other income (expense), net.................           (50)          203
Adjusted operating income (loss)............       (10,997)      (12,306)
Plus: Depreciation & amortization...........         5,285         2,050
EBITDA......................................        (5,712)      (10,256)

Plus:  Stock based compensation.............           153           500
Adjusted EBITDA.............................    $   (5,559)   $   (9,756)
</TABLE>

RECENT DEVELOPMENTS

         On January 24, 2003, we completed the sale of the assets of our
Key3Media VON Events (VON) subsidiary to Pulver.com VON Events, Inc., an
affiliate of the prior owners of the VON events. In connection with this sale,
we were required to account for the operations of these assets as discontinued
operations and make certain reclassification to prior period financial
statements to conform to this new presentation.

         On May 9, 2003, we, together with our direct and indirect subsidiaries,
filed a certain First Amended Joint Plan of Reorganization (the "Plan") and a
certain Disclosure Statement Pursuant to Section 1125 of the Bankruptcy Code
with Respect to the Debtors' First Amended Joint Plan of Reorganization (the
"Disclosure Statement") in our bankruptcy case. The Plan contains provisions
providing for our assumption and rejection of leases and executory contracts.
The Disclosure Statement has been approved by the bankruptcy court as containing
"adequate information" pursuant to section 1125 of the Bankruptcy Code. A
bankruptcy court hearing has been scheduled for June 4, 2003, to approve the
Plan.

RESULTS OF OPERATIONS

         Our results for the first quarters of 2003 and 2002 are not directly
comparable because (i) we held our JavaOne event in the first quarter of 2002
and this event will not be held until the second quarter of 2003 and (ii) three
of our events held in the first quarter of 2002 (COMDEX Spring, COMDEX Vancouver
and Seybold Seminars New York) were eliminated from our event schedule for
fiscal 2003 when we announced our

                                       28

<PAGE>

consolidated event schedule in September 2002 (collectively, the "Non-Comparable
Events"). Our results for the first quarter of 2003 also benefited from the
effects of a staff reduction program that commenced in September 2001 and
continued through 2002 and other cost reduction programs implemented during 2002
to reduce our temporary personnel and travel and entertainment costs, including
the closing of our regional office in Needham, Massachusetts (collectively, the
"Expense Reduction Programs").

         THREE MONTHS ENDED MARCH 31, 2003 COMPARED WITH THREE MONTHS ENDED
         MARCH 31, 2002

         Our total revenue decreased $26.3 million, or 76.9%, to $7.9 million in
the first quarter of 2003 from $34.3 million in the comparable period in 2002.
This decrease was attributable primarily to the inclusion in the first quarter
of 2002 of the results from the Non-Comparable Events, which were not included
in the first quarter of 2003. Excluding the Non-Comparable Events, our revenue
for the first quarter of 2002 would have been $10.8 million, resulting in a
decrease of $2.9 million, or 26.9%, to $7.9 million in the comparable period in
2003.

         Exhibitor services revenue decreased by $13.5 million, or 69.6%, to
$5.9 million in the first quarter of 2003 from $19.4 million in the comparable
period in 2002 due primarily to the inclusion of the Non-Comparable Events in
the first quarter of 2002. Excluding the Non-Comparable Events, exhibitor
revenue for the first quarter of 2002 would have been $7.1 million, resulting in
a decrease of $1.2 million, or 16.7%, to $5.9 million in the comparable period
in 2003. The net paid square footage decreased to 61,141 in the first quarter of
2003 from 166,823 in the comparable period in 2002. The average rental rate per
square foot paid by exhibitors decreased 10.1% to $32.63 in the first quarter of
2003 from $36.28 in comparable period in 2002. These decreases were primarily
due to the inclusion in the first quarter of 2002 of our Non-Comparable Events.
The Non-Comparable Events represented approximately 80,000 of the total net paid
square footage for the first quarter of 2002 and had an average rental rate per
square foot paid by exhibitors of approximately $49.00.

         Conference fees decreased $10.3 million, or 90.8%, to $1.0 million in
the first quarter of 2003 from $11.4 million in the first quarter of 2002 due
primarily to the inclusion of the Non-Comparable Events in the first quarter of
2002. Excluding the Non-Comparable Events, conference fees for the first quarter
of 2002 would have been $1.4 million, resulting in a decrease of $0.4 million,
or 25.2%, to $1.0 million in the comparable period in 2003. The number of
participants at our conferences decreased to 1,105 in the first quarter of 2003
from 8,471 in the first quarter of 2002, and the average revenue per conference
participant decreased to $948 in the first quarter of 2002 from $1,342 in the
first quarter of 2002. These decreases were due primarily to the inclusion of
the Non-Comparable Events in the first quarter of 2002. The Non-Comparable
Events represented approximately 6,400 of the conference participants for the
first quarter of 2002 and had an average revenue per conference attendee of
approximately $1,570.

         Advertising and sponsorship revenues decreased $2.5 million, or 72.1%,
to $1.0 million in the first quarter of 2003 from $3.5 million in the first
quarter of 2002 due

                                       29

<PAGE>

primarily to the inclusion of the Non-Comparable Events in the first quarter of
2002 and a decrease in corporate sponsorship revenue of $1.1 million in the
first quarter of 2003 compared to 2002. Excluding the Non-Comparable Events,
advertising and sponsorship revenues for the first quarter of 2002 would have
been $2.4 million, resulting in a decrease of $1.4 million, or 58.8%, to $1.0
million in the comparable period in 2003.

         Cost of production decreased $15.2 million, or 85.8%, to $2.5 million
in the first quarter of 2003 from $17.7 million in the comparable period in
2002. As a percentage of revenue, cost of production represented 31.8% of
revenue in the first quarter of 2003 compared to 51.7% in the first quarter of
2002. The aggregate dollar and percentage decreases in the cost of production
were due primarily to the timing of our JavaOne event which we held in the first
quarter of 2002 but will be held in the second quarter of 2003 and the
elimination of three of our events, COMDEX Spring, COMDEX Vancover and Seybold
Seminars New York, from the 2003 event calendar that were held in the first
quarter of 2002. Excluding the Non-Comparable Events, cost of production would
have been $3.1 million for the first quarter of 2002, resulting in a decrease of
$0.6 million, or 17.9%, to $2.5 million in the comparable period in 2003.
Excluding the Non-Comparable Events, cost of production as a percentage of
revenue would have been 28.3% in the first quarter of 2002 compared to 31.8% in
the first quarter of 2003.

         Our SG&A expenses decreased $6.7 million, or 30.4%, to $15.4 million in
the first quarter of 2003 from $22.1 million in the first quarter of 2002. The
decrease in our SG&A expenses on a dollar basis was primarily due to the Expense
Reduction Programs, which included the staff reduction program and the closing
of our regional office in Needham, Massachusetts in December 2002. This decrease
in SG&A expenses was also impacted by reductions in our rent expense and
professional fees, partially off-set by higher insurance costs. We had
approximately 650 employees on March 31, 2002 compared to approximately 350
employees on March 31, 2003.

         Non-cash stock-based compensation increased $0.3 million to $0.5
million in the first quarter of 2003 from $0.2 million in the first quarter of
2002. The increase was attributable to the reversal of previously recorded
expense in the first quarter of 2002 that did not exist in the same period in
2003, resulting from the application of variable accounting stock-based
compensation valuation principles. Using this accounting treatment, we must
record the fair value of these options at the close of each accounting period
and recognize the increase or decrease in fair value from period to period as an
increase or decrease in stock-based compensation.

         Other income (expense), net decreased $5.0 million or 51.9%, to expense
of $4.6 million in the first quarter of 2003 from expense of $9.6 million in the
first quarter of 2002. The decrease was attributable to lower net interest
expense. As of February 3, 2003 (the "Petition Date"), we ceased accruing
interest on our Notes in accordance with SOP 90-7. Interest at the stated
contractual amount on our Notes that was not charged to our results of
operations for the first quarter of 2003 was $5.1 million.

         As a result of the foregoing, our EBITDA decreased by $4.5 million, or
79.6%, to a loss of $10.3 million in the first quarter of 2003 from a loss of
$5.7 million in the first

                                       30

<PAGE>

quarter of 2002. After adjusting to exclude non-cash stock based compensation in
both periods, our adjusted EBITDA would have been a loss of $9.8 million for the
first quarter of 2003 compared to a loss of $5.6 million in the first quarter of
2002. Excluding the Non-Comparable Events, our adjusted EBITDA would have been a
loss of $14.4 million, up $8.8 million from the adjusted EBIDTA in the first
quarter of 2002.

         In connection with our filing under Chapter 11, we have classified
revenue and expense amounts directly attributable to our reorganization to a
line item titled "Reorganization items, net." The amount of $1.6 million for the
first quarter of 2003 is comprised of professional fees and, to a minor extent,
interest income earned on unused borrowings from our DIP Credit Facility. For
the first quarter of 2002, we had no similar expenses or revenues.

         Depreciation and amortization decreased $3.2 million, or 61.2%, to $2.1
million in the first quarter of 2003 from $5.3 million in the first quarter of
2003. The decrease is principally due to our adoption of Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets," (SFAS No.
142) effective January 1, 2002. SFAS No. 142 requires, among other things, that
goodwill and intangible assets with indefinite useful lives no longer be
amortized, but instead tested for impairment at least annually in accordance
with the provisions of SFAS No. 142. Upon adoption on January 1, 2002, we
recognized a cumulative effect of a change in accounting principle of $344.6
million, net of tax benefit of $80.4 million. This amount represents the
difference between the fair value and carrying value of goodwill and other
intangibles related to the COMDEX reporting unit as of January 1, 2002. In
addition, we wrote-off over $190.0 million of trade name intangibles subject to
amortization from April 1, 2002 through December 31, 2002, which in turn
effected the amount of amortization expense recognized in the first quarter of
2003.

         The benefit for income tax decreased $5.5 million, or 96.0%, to a
benefit for income tax of $0.2 million in the first quarter of 2003 from a
benefit of $5.8 million in the comparable period in 2002. This decrease was
principally the result of the elimination of changes in deferred taxes in the
first quarter of 2003 as compared to the same period in 2002. As of December 31,
2002, we recorded a full valuation allowance for our net deferred tax assets and
net operating loss carryforwards. The benefit for the first quarter of 2003 is
related to our foreign operations. As a percentage of loss before income taxes
and cumulative effect of accounting change, this balance represents 1.2% in the
first quarter of 2003 compared to 28.0% in the same period in 2003.

         Net loss on discontinued operations decreased $0.6 million, to $0.3
million in the first quarter of 2003 from $0.8 million in the first quarter of
2002. The decrease was primarily attributable to a reduced level of operations
in the first quarter of 2003 compared to the same period in 2002 as we commenced
the process of selling this operation in the fourth quarter of 2002 and
consummated the sale in January 2003.

         As noted above, we recognized a cumulative effect of a change in
accounting principle of $344.6 million, net of tax benefit of $80.4 million in
the first quarter of 2002,

                                       31

<PAGE>

in connection with our adoption of FASB No. 142. In the first quarter of 2003,
we had no such charge.

         As a result of the foregoing, we incurred a net loss of $18.8 million
in the first quarter of 2003 compared to a net loss of $360.2 million in the
first quarter of 2002.

LIQUIDITY AND CAPITAL RESOURCES

         On March 31, 2003, our balance of cash and cash equivalents was $6.9
million and we had a working capital deficit of $14.9 million compared to cash
and cash equivalents of $38.2 million and working capital deficit of $37.9
million at March 31, 2002. These decreases are primarily attributable to the
cash portion of our net loss, a reduction of working capital and use of cash to
purchase property and equipment, partially off-set by proceeds from the sale of
a business in the first quarter of 2003.

         During the first quarter of 2003, we met our liquidity needs
principally through cash on hand, borrowings under our DIP Credit Facility and
proceeds from the sale of a business in the first quarter of 2003. Net cash used
in operating activities was $13.3 million in the first quarter of 2003, compared
$1.1 million in the first quarter of 2002. This increase is primarily
attributable to a reduction in net working capital and a higher net cash loss in
the first quarter of 2003 compared to the same period in 2002.

         In the first quarter of 2003, we used $1.6 million of cash to pay
reorganization related costs, mostly professional fees. We had no similar
activities in the same period in 2002.

         Net cash provided by investing activities was $4.2 million in the first
quarter of 2003, of which $4.4 million was proceeds from the sale of a business
partially off-set by $0.2 million used to purchase property and equipment,
compared to net cash used in investing activities of $2.0 million, of which $1.7
million was used to used to acquire businesses and $0.3 million was used to
purchase property and equipment in the same period in 2002.

         Net cash provided by financing activities was $10.0 million in the
first quarter of 2003, compared to net cash used in financing activities of $0.2
million in the same period in 2002. The activity for 2003 related to borrowings
under our DIP Credit Facility compared to activity for 2002 related to payments
associated with issuance of preferred stock.

         Our cash needs are satisfied through cash on hand and funds available
under our DIP Credit Facility. The level of cash generated by our business is
dependent, in significant part, on our level of sales and the credit extended by
our vendors. Since our filing for reorganization under Chapter 11, most of our
vendors have resumed normal trade terms. In addition, while we have experienced
since the filing lower than expected sales, we have plans for the remainder of
the year to restore our businesses and maintain a cost structure that maximizes
our cash resources. If, however, we experience a significant disruption of terms
with our vendors, sales fail to improve, and/or the DIP

                                       32

<PAGE>

Credit Facility for any reason becomes unavailable and/or actual results differ
materially from our expectations, our cash resources could be adversely
affected.

         Following is a summary of our contractual obligations as of March 31,
2003 (in millions) presuming that we assume these obligations in connection with
our plan of reorganization:

<TABLE>
<CAPTION>
                            NINE MONTHS
                              ENDING
                            DECEMBER 31,           YEAR ENDING DECEMBER 31,
                                2003        2004     2005     2006     2007    THEREAFTER     TOTAL
<S>                         <C>            <C>      <C>      <C>      <C>      <C>           <C>
Long-term debt                $  381.8     $    -   $    -   $    -   $    -     $   -       $ 381.8
Operating leases                   4.4        6.2      6.3      5.6      3.3       6.9          32.7
Total Contractual Cash
Obligations                   $  386.2     $  6.2   $  6.3   $  5.6   $  3.3     $ 6.9       $ 414.5
</TABLE>

         In connection with the January 7, 2002 purce of ExpoNova Events &
Exhibitions, a portion of the purchase price was placed in an escrow account,
subject to the determination of the final purchase price. To the extent the
final purchase price is calculated to be more or less than the initial estimate,
then, subject to the bankruptcy, we would be required to make an additional
payment to the sellers or entitled to a return of purchase price. As of March
31, 2002, we had $0.3 million currently held in escrow.

         As of May 15, 2003, we have borrowed $14 million under the DIP Credit
Facility and have a remaining $16 million of borrowings available.

SEASONALITY

         Our revenue is highly seasonal, but our cash flows are more stable.
This is because our customers pay us for an event during the 12 months preceding
the event, but we do not recognize the payments we receive as revenue until the
event occurs. Historically, our largest events occur in the second quarter
(NetWorld+Interop, Las Vegas) and the fourth quarter (COMDEX Fall). As a result,
the majority of our revenue is recorded in these quarters. We may also
experience seasonal fluctuations as events held in one quarter in one year may
be held in a different quarter in other years.

MANAGEMENT'S DISCUSSION OF CRITICAL ACCOUNTING POLICIES

         Management believes that the accounting policies discussed below are
important to an understanding of our financial statements because they require
management to exercise judgment and estimate the effects of uncertain matters in
the preparation and reporting of financial results. Accordingly, management
cautions that these policies and the judgments and estimates they involve are
subject to revision and adjustment in the future. While they involve less
judgment, management believes that the other accounting policies discussed in
Note 1 "Organization and Nature of Operations" of the Consolidated Financial
Statements (unaudited) included elsewhere in this Form 10-Q, and Note 3 "Summary
of Significant Accounting Polices" of the Consolidated Financial Statements
included in our Annual Report on Form 10-K for the year ended December 31, 2002
are also important to an understanding of our financial statements.

                                       33

<PAGE>

         We determine our allowance for doubtful accounts using a number of
factors including historical collection experience, the financial prospects of
specific customers and market sectors, and general economic conditions.
Generally, we establish an allowance for doubtful accounts based on our
collection experience when measured by the amount of time an account receivable
is past its payment due date. In certain circumstances where we believe an
account is unable to meet its financial obligations to us, we record a specific
allowance for doubtful accounts to reduce the account receivable to the amount
we believe will be collected. In some instances, we have been able to collect on
past due amounts when accounts execute a contract for a subsequent trade show,
seminar, conference or exposition.

         We evaluate our long-lived assets for impairment based on accounting
pronouncements that require management to assess fair value of these assets by
estimating the future cash flows that will be generated by the assets and then
selecting an appropriate discount rate to determine the present value of these
future cash flows. An evaluation for impairment must be conducted when
circumstances indicate that an impairment may exist; but not less frequently
than on an annual basis. The determination of impairment is subjective and based
on facts and circumstances specific to our company and the relevant long-lived
asset. Factors indicating an impairment condition exists may include permanent
declines in cash flows, continued decreases in utilization of a long-lived asset
or a change in business strategy. At March 31, 2002, we have a net intangible
asset balance of $72.7 million and a net property and equipment balance of $8.9
million.

         For fiscal year 2002, we recorded a full valuation allowance for our
net deferred tax assets and net operating loss carryforwards. The valuation
allowance was calculated in accordance with the provisions of SFAS 109, which
places primary importance on our operating results in the most recent three-year
period when assessing the need for a valuation allowance. Although we believe
that our results for the last three years were heavily affected by temporary but
persistent difficulties experienced by the industry we serve, impairments and
planned restructuring activities, which were undertaken to right-size our cost
structure, the cumulative losses represented sufficient negative evidence to
require a valuation allowance under the provisions of SFAS 109. We intend to
maintain a valuation allowance until sufficient positive evidence exists to
support its reversal. Until such time, except for minor foreign tax provisions,
the Company will have no reported tax provision, net of valuation allowance
adjustments.

RECENT ACCOUNTING PRONOUNCEMENTS

         Statement of Financial Accounting Standards No. 148, "Accounting for
Stock-Based Compensation -- Transition and Disclosure an Amendment of FASB
Statement No. 123" ("SFAS 148"), was issued in December 2002. SFAS 148 amends
SFAS 123 to provide alternative methods of transition for a voluntary change to
the fair value-based method of accounting for stock-based employee compensation.
In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require
more prominent disclosures in both annual and interim financial statements
regarding the method of accounting for stock-based employee compensation and the
effect of the method used on reported

                                       34

<PAGE>

results. The alternative methods of transition of SFAS 148 are effective for
fiscal years ending after December 15, 2002. The disclosure provision of SFAS
148 is effective for interim periods beginning after December 15, 2002. The
Company records stock-based compensation using the intrinsic value method as
prescribed under Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," and Financial Accounting Standards Board (FASB)
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation-an interpretation of APB Opinion No. 25 (FIN 44)." The Company's
adoption of SFAS 148 did not have a material impact on its operating results or
financial position.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         We are exposed to various market risks, which include 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 grading or speculative purposes. We do not hedge our
foreign currency rate risk.

         Currencies. We maintain operations, cash and other assets in Europe,
Japan, and Canada. 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.

ITEM 4.  CONTROLS AND PROCEDURES

         Within the 90-day period prior to the filing of this report, an
evaluation was carried out under the supervision and with the participation of
our management, including our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rule 13a-14(c) under the Securities
Exchange Act of 1934). Based upon that evaluation, the Chief Executive Officer
and Chief Financial Officer concluded that the design and operation of these
disclosure controls and procedures were effective. No significant changes were
made in our internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation.

                                       35

<PAGE>

                         PART II   OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         The following discussion pertains to legal proceedings that existed as
of February 3, 2003, the date we filed our petition for relief under chapter 11
of the U.S. Bankruptcy Code. By operation of Section 362 of the U.S. Bankruptcy
Code, generally all actions and proceedings against us were automatically stayed
on February 3, 2003, subject to further proceedings in the bankruptcy court.

         On August 31, 2001, Key3Media Events provided notice of termination of
its then existing leased office space in Needham, Massachusetts to the landlord
of the existing space. The annual rental payments (net of operating expenses)
for the prior space were approximately $1.4 million. We entered into a lease for
new office space in Needham and relocated to its new offices on October 1, 2001.
We estimated that our total annual occupancy costs under the new lease would be
approximately $1.7 million greater than those under the prior lease. The
landlord of the prior office space has taken the position that Key3Media Events
is in breach of the lease agreement and that it did not have the right to
terminate the lease. On or about November 6, 2001, Interface Group -
Massachusetts, LLC, the landlord under the prior lease, sued Key3Media Events in
the Superior Court, County of Norfolk, Commonwealth of Massachusetts for breach
of contract, breach of the implied covenant of good faith and fair dealing and
violations of Mass. Gen L. c. 93A (unfair and deceptive acts and practices). The
landlord has requested payment of rent for the remainder of the term of the
lease in an amount in excess of $6.5 million, treble damages, attorneys' fees,
costs and expenses, pre-judgment interest and costs of suit. In December 2001,
Key3Media Events filed an answer and counterclaim to the Interface complaint and
a motion to dismiss the Mass. Gen L. c. 93A claim. The counterclaim included
causes of action for (i) breach of contract, (ii) breach of implied covenant of
good faith and fair dealing, (iii) tortious interference with business
relationship, (iv) trespass, (v) breach of the covenant of quiet enjoyment and
constructive eviction, (vi) violation of Mass. Gen L. c. 93A, (vii) a request
for declaratory relief, (viii) civil conspiracy and (ix) fraud. In February
2002, Interface filed an opposition to motion to dismiss and an amended
complaint alleging breach of contract, breach of implied covenant of good faith
and fair dealing and violations of Mass. Gen L. c. 93A. Also in February 2002,
Key3Media Events filed an answer and counterclaim to the amended complaint and a
motion to dismiss the Mass. Gen L. c. 93A claim and Interface filed a motion to
dismiss counts (iii), (v), (vi), (viii) and (ix) of the counterclaim. In March
2002, Interface filed a second amended complaint adding a claim for trustee
process and to add Fleet Bank of Massachusetts and Citizens Bank of
Massachusetts as trustee defendants. Interface also filed a motion for Ex Parte
Approval of Trustee Process Attachment. The court denied the ex parte motion,
however the court subsequently held a hearing at which it found that Interface
had established a reasonable likelihood of prevailing on its claims and it
awarded a trustee attachment in the amount of $711,111 representing rent for the
period of October 2001 through May 2002. On September 26, 2002 Interface was
awarded an attachment on certain of Key3Media Events' assets in the amount of
$711,111 located in Massachusetts and on or before October 15, 2002, Interface
attached these assets. Interface has withdrawn its Massachusetts attachment with
respect to all but

                                       36

<PAGE>

$67,000 in cash and has obtained an attachment on $711,000 in a parallel action
in the Superior Court, County of Los Angeles, State of California. The
California Action was filed on August 21, 2002, for the sole purpose of seeking
pre-judgment attachments in California based on the Massachusetts claims.
Interface obtained a Right to Attach Order in California on or about October 24,
2002, and subsequently levied upon that Order. In December 2002, a Third Party
Claim was filed in the California Action by Morgan Stanley & Co. asserting a
superior interest in the assets Interface was seeking to attach. Before the
Third Party Claim was adjudicated, a Notice of Stay was filed in California as a
result of the bankruptcy petition. The two parallel cases are stayed, as of
February 3, 2003, pursuant to the automatic stay provisions of Section 362 of
the U.S. Bankruptcy Code.

         On November 15, 2002, Interface Group Massachusetts, LLC filed a
complaint in United States District Court, District of Massachusetts, against
our chairman, Fredric D. Rosen alleging tortious interference with respect to
the lease that is the subject of the dispute in the litigation between Key3Media
Events and Interface in Massachusetts. On November 25, 2002, Mr. Rosen, as
chairman, requested we indemnify him and the claim was submitted to our
directors and officers' liability insurer. On January 22, 2003, Rosen filed a
motion to dismiss. On April 10, 2003, the motion to dismiss was granted on
personal jurisdiction grounds.

         Key3Media Events is the plaintiff and counter-defendant in a case filed
October 18, 2000, in the Eighth Judicial District Court, Clark County, Nevada.
The suit arises out of a dispute between Key3Media Events, Inc. on the one hand,
and the Venetian Casino Resort, LLC, and Interface Group-Nevada, Inc., on the
other hand, concerning COMDEX/Fall. Key3Media Events initiated the action,
seeking damages and injunctive relief against defendants for their alleged
actual and threatened breaches of lease, meeting space, and credit extension
agreements in connection with the COMDEX/Fall 2000 show. The Venetian and
Interface Group-Nevada, Inc. counter sued for compensatory damages "in excess of
$10,000" based on an asserted breach of an alleged oral agreement to host
keynote speeches at The Venetian, asserted breach of an alleged agreement not to
sublease certain facilities, intentional misrepresentation, and breach of the
implied covenant of good faith and fair dealing. The counterclaims include a
prayer for punitive damages. On October 19, 2001, the counter-defendants
specified their alleged damages in their supplemental response to plaintiff's
third request for production of documents. The response alleged damages of over
$3.0 million arising from breaches related to COMDEX/Fall 2000 and over $2.0
million arising from breaches related to COMDEX/Fall 2001. On July 22, 2002,
Key3Media Events sought and was granted leave to amend its complaint. On July
23, 2002, Key3Media Events filed its first amended complaint. The amended
complaint included causes of action for declaratory relief, injunctive relief,
breach of contract, tortious interference, civil conspiracy, intentional
misrepresentation/fraud, predatory price fixing and restraint of trade. The
amended complaint seeks injunctive and declaratory relief, compensatory damages,
punitive damages, treble damages, interest and attorneys' fees. On July 29,
2002, the Venetian and Interface Group-Nevada, Inc. filed a motion to dismiss
the intentional misrepresentation/fraud, predatory price fixing and restraint of
trade causes of action. On September 19, 2002, the Venetian and Interface
Group-Nevada, Inc., filed their answer to

                                       37

<PAGE>
 the first amended complaint and counterclaim for breach of contract, unjust
enrichment, breach of implied covenant of good faith and fair dealing, negligent
and intentional misrepresentation, accounting, abuse of process, intentional
interference with contract and declaratory relief and seeking compensatory
damages in excess of $10,000 and punitive damages in excess of $10,000 and
declaratory relief. A jury trial was scheduled for January 21, 2003 but
subsequently postponed. The case was stayed on February 3, 2003, pursuant to the
automatic stay provisions of Section 362 of the U.S. Bankruptcy Code. Interface
has subsequently moved to have the case removed and transferred to the U.S.
Bankruptcy Court for the District of Delaware. On May 13, 2003, Interface's
motions were granted. Key3Media Events has filed a motion for reconsideration
and an emergency ex parte motion to stay entry of the order.

         On or about December 27, 2001, Key3Media Events filed a complaint
against Krause International, Inc., E.J. Krause & Associates (Argentina), Inc.,
and E.J. Krause & Associates, Inc. (collectively, "Krause"), with respect to
Krause's management of COMDEX Argentina 2001. The complaint includes causes of
action for breach of contract, misrepresentation and fraud, fraudulent
misrepresentation, negligent misrepresentation, and tortious interference with
business relations and seeks actual damages, punitive damages, interest,
attorneys' fees and costs. On or about February 8, 2002, Krause answered the
complaint, and filed a counter-claim alleging breach of contract, unjust
enrichment, and an additional claim for breach of contract. The counter-claim
seeks damages in the amount of $451,983 plus interest, and reasonable attorneys'
fees and costs. The parties have subsequently filed various responsive documents
including a reply to the counterclaim by Key3Media Events and a motion to
dismiss by Krause. On or about March 27, 2002, counsel for Krause requested
permission to amend its counter-claim to add E.J. Krause y Asociados Argentina
S.R.L., an Argentine corporation owned in part by Reed Elsevier Overseas BV, as
a third party, to add additional counter-claims and to request compensatory
damages of not less than $10.5 million and punitive damages of $10.0 million. On
or about April 12, 2002, Krause and E.J. Krause Asociados Argentina S.R.L. filed
their answer and first amended counterclaim alleging breach of contract, unjust
enrichment, fraudulent inducement to contract, breach of implied covenant of
good faith and fair dealing, intentional misrepresentation, constructive fraud,
negligent misrepresentation, breach of fiduciary duty, torts arising from breach
of contract and tortious interference with prospective advantage. The amended
counterclaim seeks compensatory damages of not less than $10.5 million and
punitive damages of $10.0 million. On or about August 30, 2002, E.J. Krause &
Associates, Inc. filed a similar answer and counterclaim. The case was stayed on
February 3, 2003, pursuant to the automatic stay provisions of Section 362 of
the U.S. Bankruptcy Code.

         On or about February 4, 2002, Key3Media Events filed a complaint
against Krause International, Inc., E.J. Krause and Associates, Inc. and E.J.
Krause de Mexico SA de CV (collectively, "Krause"), with respect to Krause's
management of COMDEX Mexico for the years 2001 and 2002. The complaint alleges
breach of oral contract, breach of written contract, declaratory relief, breach
of covenant of good faith and fair dealing, breach of fiduciary duty, fraud,
negligent misrepresentation, and violation of California Business and
Professions Code Section 17200 and seeks actual damages, punitive and exemplary
damages in an amount of at least $10.0 million, attorneys' fees and costs,
disgorgement and interest. On or about March 12, 2002, Krause filed a motion to
dismiss the complaint on the grounds of improper venue or, alternately, to
change

                                       38

<PAGE>

venue to the United States District Court for the District of Maryland. A
hearing was held on this issue on April 29, 2002 and on May 9, 2002, the court
granted the portion of the motion for transfer of venue. Key3Media Events'
subsequent motion for reconsideration was denied. On or about July 26, 2002
Krause filed an answer and counterclaim for breach of contract, unjust
enrichment, fraudulent inducement to contract, breach of implied covenant of
good faith and fair dealing, intentional misrepresentation, constructive fraud,
negligent misrepresentation, torts arising from breach of contract and tortious
interference with prospective advantage. The amended counterclaim seeks
compensatory damages of not less than $10.6 million and punitive damages of
$10.0 million. The case was stayed on February 3, 2003 pursuant to the automatic
stay provisions of Section 362 of the U.S. Bankruptcy Code.

         On July 1, 2002, Commerce and Industry Insurance Company ("CIC") sued
us for declaratory relief in the Supreme Court of the State of New York. The
complaint arises out of our event cancellation policy with CIC covering its 2001
COMDEX/Fall event. On July 31, 2002, we sued CIC in the Superior Court of the
State of California, County of Los Angeles, for breach of contract, tortious
breach of implied covenant of good faith and fair dealing and declaratory relief
arising out of our event cancellation policy with CIC covering its 2001 Networld
+ Interop/Atlanta and 2001 COMDEX/Fall events. Our complaint seeks compensatory
damages of $9.1 million and $52.4 million with respect to the 2001 Networld +
Interop/Atlanta and 2001 COMDEX/Fall events, respectively, punitive damages,
interest and reasonable attorneys' fees. The dispute arises out of CIC's
response to our insurance claim for losses incurred in connection with these two
events as a result of the tragedies of September 11, 2001. We and CIC have moved
to dismiss or stay the other party's suit in New York and California,
respectively. On November 5, 2002, the California court rejected CIC's motion to
dismiss or stay the California action. The New York court has not yet rendered a
decision on our pending motion to dismiss or stay the New York action. On March
10, 2003, CIC filed a motion for summary adjudication of the second, fourth and
fifth causes of action in the California case, all of which relate to the 2001
COMDEX/Fall event; on April 10, 2003 we filed our response. A hearing on the
motion for summary judgment is scheduled for July 30, 2003. The parties have
engaged in various settlement discussions but have not reached an agreement.

         In connection with its spin-off from Ziff-Davis, we and our
subsidiaries have received an indemnification from Ziff-Davis against all
liabilities not related to our businesses, including the class actions and
derivative litigation filed against Ziff-Davis discussed in our Registration
Statement on Form S-1 (No. 333-36828).

         We and our subsidiaries are subject to various other claims and legal
proceedings arising in the normal course of business. Our management believes
that the ultimate liability, if any, in the aggregate will not be material to
our financial position, results of operations or cash flows.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         On December 16, 2002, we failed to make the semi-annual interest
payment on our Notes and when we did not cure this non-payment within 30-days we
were in default

                                       39

<PAGE>

on our Notes. Additionally, due to cross-default provisions contained in our
senior bank credit facility, the default on our Notes also triggered a default
on senior bank credit facility. As a result of our Chapter 11 filing on February
3, 2002, we have not made principal or interest payments on our Notes, senior
bank credit facility or other unsecured indebtedness incurred prior to February
3, 2002.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)      Exhibits

         None

     (b)      Reports on Form 8-K

         On January 3, 2003, we filed a Current Report on Form 8-K (Item 1)
announcing the Triax Holdings Ltd. purchase of a controlling stake in our
company from SOFTBANK America, Inc. and SOFTBANK Holdings, Inc.

         On January 8, 2003, we filed a Current Report on Form 8-K (Item 5)
announcing the resignation of Michael B. Solomon as a director of Key3Media.

         On February 5, 2003, we filed a Current Report on Form 8-K (Item 3)
announcing Key3Media and its subsidiaries filing for relief under Chapter 11 of
the United States Bankruptcy Code.

         On February 6, 2003, we filed a Current Report on Form 8-K (Item 5)
announcing Key3Media's receiving interim Bankruptcy Court approval of
debtor-in-possession financing.

         On March 31, 2003, we filed a Current Report on Form 8-K (Item 5)
announcing Key3Media's receiving final Bankruptcy Court approval of $30 million
debtor-in-possession financing.

                                       40

<PAGE>

                                   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.

                                         KEY3MEDIA GROUP, INC.

                                         By:    /s/ Peter B. Knepper
                                             --------------------------
                                         Name:     Peter B. Knepper
                                         Title:    Executive Vice President and
                                                   Chief Financial Officer

Date: May 20, 2003

                                       41

<PAGE>

                                  CERTIFICATION

I, Fredric D. Rosen, certify that:

         1. I have reviewed this quarterly report on Form 10-Q of Key3Media
Group, Inc.;

         2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;

         3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

         4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

            a) designed such disclosure controls and procedures to ensure that
         material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

            b) evaluated the effectiveness of the registrant's disclosure
         controls and procedures as of a date within 90 days prior to the filing
         date of this quarterly report (the "Evaluation Date"); and

            c) presented in this quarterly report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date;

         5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

            a) all significant deficiencies in the design or operation of
         internal controls which could adversely affect the registrant's ability
         to record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

            b) any fraud, whether or not material, that involves management or
         other employees who have a significant role in the registrant's
         internal controls; and

<PAGE>

         6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

                                               /s/ Fredric D. Rosen
                                           ----------------------------
                                           Name:     Fredric D. Rosen
                                           Title:    Chief Executive Officer and
                                                     Chairman of the Board

Date: May 20, 2003

<PAGE>

                                  CERTIFICATION

I, Peter B. Knepper, certify that:

         1. I have reviewed this quarterly report on Form 10-Q of Key3Media
Group, Inc.;

         2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;

         3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

         4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

            a) designed such disclosure controls and procedures to ensure that
         material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

            b) evaluated the effectiveness of the registrant's disclosure
         controls and procedures as of a date within 90 days prior to the filing
         date of this quarterly report (the "Evaluation Date"); and

            c) presented in this quarterly report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date;

         5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

            a) all significant deficiencies in the design or operation of
         internal controls which could adversely affect the registrant's ability
         to record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

            b) any fraud, whether or not material, that involves management or
         other employees who have a significant role in the registrant's
         internal controls; and

<PAGE>

         6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

                                             /s/ Peter B. Knepper
                                         ---------------------------
                                         Name:     Peter B. Knepper
                                         Title:    Executive Vice President and
                                                   Chief Financial Officer

Date: May 20, 2003