<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

                               SEPTEMBER 30, 2002

                                       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
     Incorporation or Organization)                 Identification Number)

   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 November 8, 2002, there were 68,531,919 shares of the
Registrant's voting common stock, par value $0.01 per share, outstanding.

<PAGE>


                              KEY3MEDIA GROUP, INC.

                                TABLE OF CONTENTS

                                                                        PAGE NO.
                                                                        --------


PART I         FINANCIAL INFORMATION


   Item 1.     Financial Statements........................................5

               Condensed Consolidated Balance Sheets as of
                    December 31, 2001 and September 30, 2002 (Unaudited)...5
               Condensed Consolidated Statements Of Operations for the
                   Three and Nine Months Ended September 30, 2001
                   and 2002 (Unaudited)....................................6
               Condensed Consolidated Statements Of Cash Flows for the
                   Nine Months Ended September 30, 2001 and 2002
                   (Unaudited).............................................7
               Condensed Consolidated Statement Of Changes In
                   Shareholders' Equity (Deficit) And Comprehensive
                   Loss for the Nine Months Ended September 30, 2002
                   (Unaudited).............................................8
               Notes To Condensed Consolidated Financial Statements
                   (Unaudited).............................................9

   Item 2.     Management's Discussion and Analysis of Financial
                   Condition and Results of Operations....................34


   Item 3.     Quantitative and Qualitative Disclosures about
                   Market Risk............................................48


   Item 4.     Controls and Procedures....................................48



PART II        OTHER INFORMATION


   Item 1.     Legal Proceedings..........................................49


   Item 6.     Exhibits and Reports on Form 8-K...........................52





                                       2
<PAGE>



             CAUTIONARY LEGEND REGARDING FORWARD LOOKING STATEMENTS

         Some of the information in this Form 10-Q may constitute
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. These forward-looking statements are subject to various risks and
uncertainties. The forward-looking statements include, without limitations,
statements regarding our future business plans and strategies and our future
financial position or results of operations, as well as other statements that
are not historical. You can find many 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 the actual results to differ materially
from those expressed or implied.  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.  In addition, the IT industry
has experienced a significant downturn since the spring of 2001 and terrorist
attacks on September 11, 2001 have adversely affected the economy generally and
decreased air travel in particular.  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 its businesses, results of operations or financial
condition.  As described in more detail in Item 2 of Part I of this Quarterly
Report, Key3Media has undertaken a strategic review of its operations and cost
structure and its board of directors has concluded that it cannot continue to
operate its businesses in the near term under its current capital structure and
that it would be in the best long-term interests of the holders of Key3Media's
shares and debt obligations to explore a possible restructuring (with or without
additional capital), sale, business combination and/or other reorganization
transaction which, if consummated could result in a change of control of
Key3Media. Therefore, Key3Media intends to commence a structured process to
explore these alternatives.  As part of, or after, this process, Key3Media might
make a filing under Chapter 11 of the U.S. Bankruptcy Code.  In addition, the
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 of Form 10-K for the
year ended December 31, 2001 filed by Key3Media with the SEC 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,
such statements and discussions, as well as others in 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



                                       3
<PAGE>





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.






                                       4
<PAGE>



                          PART I FINANCIAL INFORMATION

ITEM 1.       FINANCIAL STATEMENTS

                              KEY3MEDIA GROUP, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                   DECEMBER 31,      SEPTEMBER 30,
                                                                      2001               2002
                                                                   ------------      -------------
                                                                                      (UNAUDITED)
                                                                          (IN THOUSANDS)
<S>                                                                <C>               <C>
ASSETS
Current assets:
     Cash and cash equivalents ................................    $    41,384       $    18,550
     Accounts receivable, net .................................         47,032            28,349
     Prepaid event expenses ...................................          4,540             7,969
     Deferred income taxes ....................................          1,402                --
     Prepaid insurance ........................................            494             5,324
     Other current assets .....................................          2,723             4,018
                                                                   -----------       -----------
         Total current assets .................................         97,575            64,210
Property and equipment, net ...................................         18,812            12,210
Goodwill, net .................................................        454,719            14,453
Other intangibles, net ........................................        473,630           166,974
Deferred financing costs and other assets .....................         11,973            10,222
                                                                   -----------       -----------
         Total assets .........................................    $ 1,056,709       $   268,069
                                                                   ===========       ===========

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
     Accounts payable .........................................    $    22,338       $    17,764
     Accrued expenses .........................................         27,469            28,945
     Deferred revenue .........................................         62,982            49,353
     Other current liabilities ................................          1,660             1,812
                                                                   -----------       -----------
         Total current liabilities ............................        114,449            97,874
Deferred income taxes .........................................         87,557                --
Long-term obligations (net of current maturities) .............        370,000           370,000
Commitments and contingencies
Shareholders' equity (deficit):
     Preferred stock ..........................................             30                29
     Common stock .............................................            681               685
     Additional paid-in capital ...............................        476,474           476,285
     Retained earnings (deficit) ..............................         17,414          (668,953)
     Accumulated comprehensive loss ...........................         (4,085)           (4,356)
     Deferred compensation ....................................         (5,811)           (3,495)
                                                                   -----------       -----------
         Total shareholders' equity (deficit) .................        484,703          (199,805)
                                                                   -----------       -----------
         Total liabilities and shareholders' equity (deficit)..    $ 1,056,709       $   268,069
                                                                   ===========       ===========
</TABLE>




                             See accompanying notes.


                                       5
<PAGE>


                              KEY3MEDIA GROUP, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                      FOR THE THREE MONTHS ENDED    FOR THE NINE MONTHS ENDED
                                                                            SEPTEMBER 30,                 SEPTEMBER 30,
                                                                      --------------------------    -------------------------
                                                                         2001           2002           2001           2002
                                                                       ---------      ---------      ---------      ---------
                                                                                            (UNAUDITED)
                                                                              (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<S>                                                                    <C>            <C>            <C>            <C>
Net revenues:
     Services ......................................................   $  51,483      $  36,820      $ 175,156      $ 110,002
     Proceeds from insurance claim .................................        --            1,562           --            1,562
                                                                       ---------      ---------      ---------      ---------
                                                                          51,483         38,382        175,156        111,564
Operating expenses:
     Cost of production ............................................      17,842         14,385         58,418         41,821
     Selling, general and administrative ...........................      26,131         21,786         78,797         66,096
     Staff reduction severance charges .............................         308            744            308          1,584
     Reduction of goodwill and other intangibles ...................        --          300,000           --          300,000
     Stock based compensation ......................................      (7,040)           553         (1,816)         1,278
     Depreciation and amortization .................................      10,406          4,468         29,172         16,398
                                                                       ---------      ---------      ---------      ---------
                                                                          47,647        341,936        164,879        427,177
                                                                       ---------      ---------      ---------      ---------

Income (loss) from operations ......................................       3,836       (303,554)        10,277       (315,613)
                                                                       ---------      ---------      ---------      ---------

Other income (expenses):
     Interest expense ..............................................      (9,780)       (10,075)       (35,118)       (29,851)
     Interest income ...............................................         257             28          2,736            342
     Other income (expense), net ...................................         (96)          (205)         6,542           (380)
                                                                       ---------      ---------      ---------      ---------
                                                                          (9,619)       (10,252)       (25,840)       (29,889)
                                                                       ---------      ---------      ---------      ---------
Loss before income taxes, extraordinary item and cumulative
     effect of accounting change ...................................      (5,783)      (313,806)       (15,563)      (345,502)
Income tax provision (benefit) .....................................      (2,132)         1,858         (4,645)        (3,912)
                                                                       ---------      ---------      ---------      ---------

Loss before extraordinary item and cumulative effect of
     accounting change .............................................      (3,651)      (315,664)       (10,918)      (341,590)
 Extraordinary loss on retirement of debt
     (net of tax benefit of $3,220) ................................        --             --           (9,309)          --

Cumulative effect of accounting change, net of tax - Note 7 ........        --             --             --         (344,615)
                                                                       ---------      ---------      ---------      ---------
         Net loss ..................................................   $  (3,651)     $(315,664)     $ (20,227)     $(686,205)
                                                                       =========      =========      =========      =========

Net loss attributable to common shareholders:
Net loss ...........................................................   $  (3,651)     $(315,664)     $ (20,227)     $(686,205)

Accretion on convertible preferred stock ...........................        --           (1,042)          --           (3,123)
                                                                       ---------      ---------      ---------      ---------
     Net loss attributable to common shareholders ..................   $  (3,651)     $(316,706)     $ (20,227)     $(689,328)
                                                                       =========      =========      =========      =========

Net loss per common share - Basic and Diluted:
     Before extraordinary item and cumulative effect of
         accounting change (after accretion on preferred stock) ....   $   (0.05)     $   (4.62)     $   (0.16)     $   (5.04)
     Extraordinary loss on retirement of debt ......................        --             --            (0.14)          --

     Cumulative effect of accounting change ........................        --             --             --            (5.04)
                                                                       ---------      ---------      ---------      ---------
         Net loss per common share .................................   $   (0.05)     $   (4.62)     $   (0.30)     $  (10.08)
                                                                       =========      =========      =========      =========

Shares used in computing basic and diluted net loss per common
     share .........................................................      68,054         68,529         66,375         68,358
</TABLE>




                             See accompanying notes.


                                       6
<PAGE>


                              KEY3MEDIA GROUP, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                     FOR THE NINE MONTHS
                                                                                     ENDED SEPTEMBER 30,
                                                                                  -------------------------
                                                                                    2001            2002
                                                                                  ---------       ---------
                                                                                        (UNAUDITED)
                                                                                       (IN THOUSANDS)
<S>                                                                               <C>             <C>
Cash flows from operating activities:
    Net loss .................................................................    $ (20,227)      $(686,205)
    Adjustments to reconcile net loss to net cash provided by (used in)
        operating activities:
        Extraordinary loss on retirement of debt, net ........................       12,529            --
        Cumulative effect of accounting change ...............................         --           344,615
        Reduction of goodwill and other intangibles ..........................         --           300,000
        Depreciation and amortization ........................................       29,172          16,398
        Stock based compensation .............................................       (1,816)          1,278
        Non-cash interest expense ............................................       11,848           1,692
        Loss on disposal of property and equipment ...........................         --                20
        Foreign exchange loss ................................................          191              32
        Deferred income taxes ................................................        1,593          (5,770)
    Changes in operating assets and liabilities, net of effect from acquired
        businesses:
        Accounts receivable ..................................................       44,775          19,379
        Prepaid event expenses ...............................................         (901)         (2,601)
        Other current assets .................................................          265          (5,603)
        Other assets .........................................................            6              59
        Accounts payable .....................................................        4,326          (4,576)
        Accrued expenses .....................................................      (16,502)          1,192
        Deferred revenue .....................................................      (25,533)        (16,519)
        Other liabilities ....................................................      (16,922)           (617)
                                                                                  ---------       ---------
           Total adjustments .................................................       43,031         648,979
                                                                                  ---------       ---------
           Net cash provided by (used in) operating activities ...............       22,804         (37,226)
                                                                                  ---------       ---------
Cash flows from investing activities:
    Return of purchase price from acquired businesses ........................           --          17,432
    Acquisition of businesses, net of cash acquired ..........................     (106,242)         (1,865)
    Purchase of property and equipment .......................................      (12,108)           (546)
                                                                                  ---------       ---------
           Net cash provided by (used in) investing activities ...............     (118,350)         15,021
                                                                                  ---------       ---------
Cash flows from financing activities:
    Proceeds from the exercise of options to purchase common stock ...........          693              --
    Repayment of long-term obligations under credit facility .................     (300,000)             --
    Retirement of zero coupon senior debentures and accreted interest ........      (83,576)             --
    Proceeds from issuance of senior subordinated notes ......................      300,000              --
    Borrowings under revolving credit facility ...............................      110,000              --
    Payments of costs associated with the issuance of long-term obligations ..      (12,975)             --
    Payments associated with the issuance of preferred stock .................           --            (150)
                                                                                  ---------       ---------
           Net cash provided by (used in) financing activities ...............       14,142            (150)
                                                                                  ---------       ---------
Effects of exchange rate changes on cash .....................................         (522)           (479)
                                                                                  ---------       ---------
Net decrease in cash and cash equivalents ....................................      (81,926)        (22,834)

Cash and cash equivalents at beginning of period .............................      109,914          41,384
                                                                                  ---------       ---------
Cash and cash equivalents at end of period ...................................    $  27,988       $  18,550
                                                                                  =========       =========
Supplemental cash flow disclosures:
    Interest paid ............................................................    $  22,618       $  19,350
    Income taxes paid ........................................................    $     763       $     149
Non-cash financing activities:
    Additional paid-in capital resulting from stock issuance in connection
        with a business acquired .............................................    $     397       $      --
    Conversion of preferred stock to common stock ............................    $      --       $     163
</TABLE>





                             See accompanying notes.



                                       7
<PAGE>


                              KEY3MEDIA GROUP, INC.

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

                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002


<TABLE>
<CAPTION>
                                                     ADDITIONAL    RETAINED  ACCUMULATED        TOTAL
                                  PREFERRED  COMMON   PAID-IN      EARNINGS  COMPREHENSIVE  COMPREHENSIVE   DEFERRED
                                    STOCK    STOCK    CAPITAL      (DEFICIT) INCOME (LOSS)  INCOME (LOSS) COMPENSATION     TOTAL
                                  ---------  ------  ----------    --------- -------------  ------------- ------------   ---------
                                                                            (UNAUDITED)
                                                                           (IN THOUSANDS)

<S>                                <C>      <C>     <C>           <C>           <C>                       <C>           <C>
Balance at December 31, 2001 .....  $ 30     $681    $ 476,474     $  17,414     $(4,085)                  $  (5,811)    $ 484,703
Offering costs related to
   preferred stock issuance in
   December 2001 .................   --       --          (150)         --          --                          --            (150)
Conversion of preferred stock to
   common stock ..................    (1)       2          161          (162)       --                          --            --
Forfeiture of stock options ......   --       --          (349)         --          --                           349          --
Adjustment in fair value of
   options requiring variable
   accounting ....................   --       --          (689)         --          --                           689          --
Amortization of deferred
   compensation ..................   --       --          --            --          --                         1,278         1,278
Issuance of common stock to
   acquire a business ............   --         2          838          --          --                          --             840
Foreign currency translation
   adjustment ....................   --       --          --            --          (271)    $    (271)         --            (271)
Net loss .........................   --       --          --        (686,205)       --        (686,205)         --        (686,205)
                                    ----     ----    ---------     ---------     -------     ---------     ---------     ---------

Balance at September 30, 2002 ....  $ 29     $685    $ 476,285     $(668,953)    $(4,356)    $(686,476)    $  (3,495)    $(199,805)
                                    ====     ====    =========     =========     =======     =========     =========     =========
</TABLE>







                             See accompanying notes.




                                       8
<PAGE>




                              KEY3MEDIA GROUP, INC.

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

1.       BASIS OF PRESENTATION

         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 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, 2001 and the audited consolidated financial statements contained
therein.

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

         Certain reclassifications have been made to prior period amounts to
conform to current period presentation.

         The accompanying financial statements do not include any adjustments
relating to the recoverability and classification of asset carrying amounts or
the amount and classification of liabilities that might occur as a result of the
process described in Note 5.

2.       RECENT ACCOUNTING PRONOUNCEMENT

         In July 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No.142 "Goodwill and Other
Intangible Assets," which establishes financial accounting and reporting for
acquired goodwill and other intangible assets and supersedes APB Opinion No.17,
"Intangible Assets." The Company adopted SFAS No.142 beginning with the first
quarter of 2002. See Note 7 for further discussion on the Company's adoption of
SFAS No.142.

         In October 2001, FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 144 supersedes SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed of," however it retains the fundamental provisions of SFAS
No. 121 related to the recognition and measurement of the impairment of
long-lived assets to be "held and used." In addition, SFAS No. 144



                                       9
<PAGE>


                              KEY3MEDIA GROUP, INC.

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




provides, among other things, more guidance on estimating cash flows when
performing a recoverability test and establishes more restrictive criteria to
classify an asset as "held for sale." The Company's adoption of the provisions
of SFAS No. 144 on January 1, 2002 did not effect its financial position or
results of operations.

         In April 2002, FASB issued SFAS No. 145, "Rescission of FASB Statements
No. 4, 44, and 62, Amendment of FASB Statement No. 13, and Technical
Corrections." For most companies, SFAS No.145 will require, among other things,
gains and losses on extinguishments of debt to be classified as income or loss
from continuing operations rather than as extraordinary items as previously
required under SFAS No. 4. The Company will adopt the provisions of SFAS No. 145
related to the rescission of SFAS No. 4 on January 1, 2003. At such time, the
Company will reclassify the extraordinary loss on extinguishments of debt to
continuing operations for prior periods. With regards to the other provisions of
SFAS No. 145, the Company has adopted them and such adoption did not effect its
financial position or results of operations.

         In June 2002, FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities," which addresses financial and
reporting for costs associated with exit or disposal activities and nullifies
Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring)". The principal difference
between SFAS No. 146 and EITF No. 94-3 relates to the requirements for
recognition of a liability for a cost associated with an exit or disposal
activity. SFAS No. 146 requires that a liability for a cost associated with an
exit or disposal activity be recognized when the liability is incurred while
EITF No. 94-3 requires that the liability be recognized at the date of an
entity's commitment to an exit plan. The provisions of SFAS No. 146 are
effective for exit or disposal activities that are initiated after December 15,
2002, with early application encouraged. The Company adopted SFAS No. 146 in the
second quarter of 2002.

3.       COMPUTATION OF NET INCOME (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
income (loss) per share as the effect of their inclusion would have been
anti-dilutive.



                                       10
<PAGE>
                              KEY3MEDIA GROUP, INC.

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




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

<TABLE>
<CAPTION>
                                                            FOR THE THREE MONTHS            FOR THE NINE MONTHS
                                                             ENDED SEPTEMBER 30,            ENDED SEPTEMBER 30,
                                                          -------------------------       -------------------------
                                                            2001            2002            2001            2002
                                                          ---------       ---------       ---------       ---------

<S>                                                       <C>             <C>             <C>             <C>
Net loss .............................................    $  (3,651)      $(315,664)      $ (20,227)      $(686,205)
Accretion on convertible preferred stock .............         --            (1,042)           --            (3,123)
                                                          ---------       ---------       ---------       ---------

Net loss attributable to common shareholders .........    $  (3,651)      $(316,706)      $ (20,227)      $(689,328)
                                                          ---------       ---------       ---------       ---------
Weighted average common shares .......................       68,054          68,529          66,375          68,358
                                                          ---------       ---------       ---------       ---------
Denominator for basic calculation ....................       68,054          68,529          66,375          68,358
                                                          ---------       ---------       ---------       ---------
Net loss per common share - basic ....................    $   (0.05)      $   (4.62)      $   (0.30)      $  (10.08)
                                                          =========       =========       =========       =========

Weighted average effect of anti-dilutive securities:
   Warrants ..........................................         --              --              --              --
   Stock options .....................................         --              --              --              --
   Preferred stock ...................................         --              --              --              --
                                                          ---------       ---------       ---------       ---------
Total weighted average effect of anti-dilutive
   securities ........................................         --              --              --              --
                                                          ---------       ---------       ---------       ---------
Denominator for diluted calculation ..................       68,054          68,529          66,375          68,358
                                                          ---------       ---------       ---------       ---------
Net loss per common share - diluted ..................    $   (0.05)      $   (4.62)      $   (0.30)      $  (10.08)
                                                          =========       =========       =========       =========
</TABLE>


4.       COMPREHENSIVE LOSS

The components of comprehensive loss were as follows:

<TABLE>
<CAPTION>
                                               FOR THE THREE MONTHS            FOR THE NINE MONTHS
                                                ENDED SEPTEMBER 30,            ENDED SEPTEMBER 30,
                                             -------------------------       -------------------------
                                               2001            2002            2001            2002
                                             ---------       ---------       ---------       ---------

<S>                                          <C>             <C>             <C>             <C>
Net loss ................................    $  (3,651)      $(315,664)      $ (20,227)      $(686,205)
Other comprehensive adjustment:

Foreign currency translation adjustment .         (166)             82            (296)           (271)
                                             ---------       ---------       ---------       ---------
Total comprehensive loss ................    $  (3,817)      $(315,582)      $ (20,523)      $(686,476)
                                             =========       =========       =========       =========
</TABLE>



                                       11
<PAGE>

                              KEY3MEDIA GROUP, INC.

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





5.       LONG-TERM OBLIGATIONS

         Long-term obligations consist of the following:

<TABLE>
<CAPTION>
                                                  DECEMBER 31,    SEPTEMBER 30,
                                                     2001             2002
                                                  ------------    -------------

<S>                                                 <C>             <C>
Borrowings under revolving credit facility .....    $ 80,000        $ 80,000
11.25%, senior subordinated notes ..............     290,000         290,000
                                                    --------        --------
                                                     370,000         370,000
Less current maturities ........................        --              --
                                                    --------        --------
Total ..........................................    $370,000        $370,000
                                                    ========        ========
</TABLE>

         On June 26, 2001, the Company issued $300,000 of unsecured senior
subordinated notes (the "Notes") that mature on June 15, 2011. The Notes bear
interest at a rate of 11.25% per annum, payable semi-annually on June 15 and
December 15 of each year. The net proceeds from the offering of the Notes were
approximately $292,000, after deducting the underwriting discount and other sale
expenses. These net proceeds and cash on hand were used by the Company to repay
its existing term loan bank borrowings and to repurchase and retire zero coupon
debentures issued in August 2000 in connection with the spin-off from Ziff-Davis
Inc. ("ZDI").

         The Notes may be redeemed beginning on June 15, 2006 at an initial
redemption price of 105.625% of the principal amount, plus accrued and unpaid
interest. The redemption price declines ratably each year after 2006 to 100% of
their principal amount, plus accrued and unpaid interest to the redemption date,
beginning on June 15, 2009. In addition, the Company may redeem a portion of the
Notes in one or more redemptions prior to June 15, 2004 using certain equity
proceeds as long as the aggregate principal amount of the Notes outstanding
after each redemption is at least $195,000. The Notes are guaranteed by the
Company's wholly owned subsidiaries, Key3Media Events, Inc. ("Key3Media
Events"), Key3Media Von Events Inc. and Key3Media BCR Events, Inc., as to
principal, premium, if any, and interest. In addition, the Notes are
subordinated to all of the Company's senior indebtedness (as defined) and will
be structurally subordinated to all liabilities of the subsidiaries that do not
guarantee the Notes. If the Company acquires new subsidiaries, in most cases
they will be required to guarantee the Notes. The Notes contain various
financial covenants including, amongst other things, (i) limitations on
dividends and other restricted payments, (ii) limitations on the incurrence of
indebtedness, and (iii) limitations on the sale or exchange of assets.

         Concurrent with the issuance of the Notes and repayment of existing
term loan bank borrowings, the Company amended and restated its bank credit
facility previously entered into on August 3, 2000 to eliminate the term loan
facility and increase the revolving credit facility under which its syndicate of
banks committed to lend up to $150,000 for general corporate purposes, which
could include acquisitions (the "Amended and Restated Credit Facility"). The



                                       12
<PAGE>

                              KEY3MEDIA GROUP, INC.

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



Company may borrow, repay and re-borrow under the increased revolving loan
facility until June 26, 2004, at which time it must repay any outstanding
amounts. Loans under the Amended and Restated Credit Facility are guaranteed by
the Company's wholly owned subsidiaries (other than foreign and unrestricted
subsidiaries, as defined) and are secured by substantially all of their assets.

         Subject to certain conditions, our revolving credit facility does not
prohibit us from borrowing on a term loan basis an aggregate principal amount of
up to $200,000. These borrowings can be senior and can share in the collateral
securing the revolving credit facility. In addition, we may be required to
prepay any term loans under this part of the credit facility from the net cash
proceeds of assets sales outside the ordinary course of our business, the net
cash proceeds of additional debt and a portion of our excess cash flow (as
defined in our amended and restated credit agreement). No lender has committed
to lend us money under this provision.

         At the Company's election, loans under the Amended and Restated Credit
Facility will bear interest at a margin over either (1) a base rate equal to the
higher of the federal funds rate plus 1/2% and Citibank, N.A.'s base rate or (2)
the Eurodollar rate (as defined). The margin that the Company must pay will vary
between 1.00% and 3.25% depending on which rate the Company chooses as its base
rate and the ratio of its total debt to EBITDA (earnings before interest, taxes,
depreciation and amortization) as defined in the Amended and Restated Credit
Facility. The Amended and Restated Credit Facility contains various financial
covenants including, amongst other things, (i) limitations on dividends, (ii)
limitations on the incurrence of indebtedness, (iii) limitations on the sale or
exchange of assets and (iv) maintenance of minimum leverage and interest
coverage ratio.

         On November 27, 2001, the Company raised $52,000 through the private
placement of 1,000 shares of Series A 5.5% Convertible Redeemable Preferred
Stock and 1,080 shares of Series B 5.5% Convertible Redeemable Preferred Stock,
in each case for $25.00 per share. Concurrent with the issuance of this
convertible preferred stock, the Company repaid $30,000 of the borrowings under
the Amended and Restated Credit Facility and further amended that facility to
replace its existing financial covenants to maintain a minimum interest coverage
ratio and maximum senior debt and total debt to pro forma EBITDA ratios with new
covenants that require it to maintain a ratio of pro forma EDITDA to fixed
charges (which will include interest, domestic taxes and annual capital
expenditures of up to $5,000) of at least 1.1 to 1 and to limit total senior
debt to $120,000; total debt to $410,000 and annual capital expenditures to
$15,000. The revised covenants will remain in effect until there have been two
consecutive quarters in which the Company's pro forma EDITDA for the previous
twelve months is equal to or greater than $85,000, after which time the
preexisting covenants will be reinstated.

         On June 26, 2002, the Company further amended its Amended and Restated
Credit Facility. This amendment modifies the existing financial covenants until
April 1, 2003, including replacing the fixed charge coverage ratio with minimum
quarterly EBITDA requirements through March 31, 2003, and limits total senior
debt to $100,000 and total debt to



                                       13
<PAGE>

                              KEY3MEDIA GROUP, INC.

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





$390,000. In addition, the margin percentage that the Company must pay on its
loans under the Amended and Restated Credit Facility changed to a range of 1.00%
to 4.00% from the prior range of 1.00% to 3.25%, depending on which rate the
Company chooses as its base ratio and the ratio of its total debt to EBITDA, as
defined.

         The Company was in compliance with the financial covenants included in
its Amended and Restated Credit Facility as of September 30, 2002;  primarily
due to the inclusion in operating income of insurance proceeds for claims
arising from losses incurred as a result of the events of September 11, 2001,
the reversal of $1,755 of accruals recorded in 2001 for production costs at the
COMDEX/Fall 2001 tradeshow which were in excess of the production costs actually
incurred at that tradeshow and, to a lesser extent, continuing benefits from the
cost reduction and expense control programs initiated during the second half of
2001.  However, because of the continuing difficulties being experienced in the
industries the Company serves, it is likely the Company will not be in
compliance with these financial covenants for the quarter ended December 31,
2002.  The Company is currently negotiating with its lenders to obtain waivers
of certain non-financial technical covenant defaults that currently exist and
other modifications to the Amended and Restated Credit Facility.  In addition,
there is substantial risk that the Company will be unable to pay the interest
payment on its Notes due on December 16, 2002, and it is in the early stages of
discussing this development with some of the larger holders of the Notes.

         If the Company becomes noncompliant with its financial covenants in its
Amended and Restated Credit Facility and is unable to successfully modify and
amend those financial covenants or is unsuccessful in obtaining waivers with
respect to its noncompliance, the Company's lenders have the option to require
the Company to immediately repay all of its borrowings under the Amended and
Restated Credit Facility. The Company does not currently have sufficient funds
to make such a repayment. In addition, any acceleration of the borrowings under
the Company's Amended and Restated Credit Facility or failure to pay any
scheduled interest payments on its Notes would be an event of default in respect
of its Notes and could result in the acceleration of the maturity of those Notes
(although the subordination provisions of the Notes would require the prior
payment of the bank borrowings). The Company does not currently have sufficient
funds to repay its Notes in full.

         At September 30, 2002, the Company had $18,231 of unused borrowings
under its Amended and Restated Credit Facility, after considering a $1,769
letter of credit issued in connection with a facility lease agreement.

6.       BUSINESS COMBINATIONS

         On January 7, 2002, the Company completed its acquisition of ExpoNova
Events & Exhibitions (ExpoNova) previously announced on November 20, 2001. The
Company paid an


                                       14
<PAGE>



                              KEY3MEDIA GROUP, INC.

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



estimated initial purchase price of $3,360 in cash and issued 178 shares of its
common stock with a fair value approximating $840 for a total purchase price of
$4,200. Additionally, in connection with this acquisition, ExpoNova retained and
subsequently exercised a right to require the Company to purchase another
tradeshow and conference business subject to certain conditions. This exercise
of this put resulted in no additional payments as consideration by the Company
when it completed this purchase transaction on April 9, 2002. The initial
purchase price was determined by applying a multiple to the average EBITDA (as
defined in the purchase agreement) for the years 2000, 2001, and 2002. For the
purpose of the closing, an estimate of 2001 and 2002 EBITDA was used to
calculate the estimated initial purchase price with ten percent of the total
cash and securities given as consideration placed into escrow. Upon the final
determination of the purchase price, the escrow amount and additional amounts,
if any, due to each party were or will be distributed as required by the
purchase agreement.

         On September 10, 2001, the Company, in three separate transactions,
acquired: (i) the Next Generation Networks and Next Generation Ventures
tradeshows and conferences (the "NGN Assets"), (ii) the Opticon and VoiceCon
tradeshows and conferences and the Business Communications Review magazine (the
"BCR Assets"); and (iii) the Voice on the Net Conferences and Session Initiation
Protocol Summits (collectively, the "Pulver Assets"). Each of the BCR Assets and
the NGN Assets relate to events that target the networking industry while the
Pulver Assets relate to events that target the networking and Internet Protocol
communications industries. The Company acquired these assets to strengthen its
presence in the networking trade show and event business.

         In connection with each of these acquisitions, the initial purchase
price was determined by applying a multiple to the average EBITDA (as defined in
the purchase agreements) for the years 2000 and 2001 attributable to each group
of assets acquired. For purposes of each acquisition closing, an estimate of
2001 EBITDA was used to calculate the estimated initial purchase price with a
portion of this estimated initial purchase price placed into an escrow account
pending final determination of the initial purchase price based upon audited
financial results for 2001. Upon the final determination of the initial purchase
price, the escrow amounts and additional amounts, if any, due each party will be
distributed as required by the purchase agreements. The following data shows the
estimated initial purchase price for each acquisition described above and the
respective changes for each purchase price from the date of acquisition to
September 30, 2002:

<TABLE>
<CAPTION>
                                                             PULVER           BCR            NGN         EXPONOVA         TOTAL
                                                            ---------      ---------      ---------      ---------      ---------

<S>                                                         <C>            <C>            <C>            <C>           <C>
Cash and cash equivalents ................................  $    --        $    --        $    --        $   1,706      $   1,706
Accounts receivable and prepaid expenses .................        654          1,314          1,036          2,046          5,050
Fixed assets, net ........................................       --             --             --              163            163
Identifiable intangible assets ...........................      7,245           --            3,386           --           10,631
Goodwill .................................................     33,965         12,339         41,195          4,954         92,453
Accounts payable and accrued expenses ....................       --             (565)           (13)        (1,780)        (2,358)
Deferred revenue .........................................     (2,772)        (1,452)        (3,044)        (2,889)       (10,157)
Common stock issued ......................................       --             --             --             (840)          (840)
                                                            ---------      ---------      ---------      ---------      ---------
Total cash paid ..........................................     39,092         11,636         42,560          3,360         96,648
</TABLE>



                                       15
<PAGE>






                              KEY3MEDIA GROUP, INC.

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


<TABLE>
<CAPTION>
                                                             PULVER           BCR            NGN         EXPONOVA         TOTAL
                                                            ---------      ---------      ---------      ---------      ---------

<S>                                                         <C>            <C>            <C>            <C>           <C>
Working capital adjustment included in purchase price ....      2,410            702          2,022           --            5,134
Common stock issued ......................................       --             --             --              840            840
                                                            ---------      ---------      ---------      ---------      ---------
Purchase price at September 30, 2002 .....................  $  41,502      $  12,338      $  44,582      $   4,200      $ 102,622
                                                            =========      =========      =========      =========      =========

Estimated initial purchase price time of acquisition .....  $  59,957      $  13,765      $  44,582      $   4,200      $ 122,504
Net return of purchase price charged to Goodwill in
        fiscal year 2001 .................................     (2,450)          --             --             --           (2,450)
Net return of purchase price charged to Goodwill in
        fiscal year 2002 .................................    (16,005)        (1,427)          --             --          (17,432)
                                                            ---------      ---------      ---------      ---------      ---------
Purchase price at September 30, 2002 .....................  $  41,502      $  12,338      $  44,582      $   4,200      $ 102,622
                                                            =========      =========      =========      =========      =========
</TABLE>


         The following table shows the portion of the estimated initial purchase
price currently held in escrow for each acquisition described above as of
September 30, 2002:

<TABLE>
<CAPTION>
                                                            PULVER         BCR           NGN        EXPONOVA       TOTAL
                                                           --------      --------      --------     --------      --------

<S>                                                        <C>           <C>           <C>          <C>           <C>
Balance as of December 31, 2001 .........................  $ 20,250      $  1,377      $  4,458     $    420      $ 26,505
Return of purchase price to Company .....................   (16,005)       (1,427)         --           --         (17,432)
Payment of escrow proceeds to Seller ....................    (4,245)         --            --           --          (4,245)
Additional escrow funding by Seller .....................      --              50         4,373         --           4,423
Reduction in fair value of common stock held ............      --            --            --            (82)          (82)
                                                           --------      --------      --------     --------      --------
Balance as of September 30, 2002 ........................  $   --        $   --        $  8,831     $    338      $  9,169
                                                           ========      ========      ========     ========      ========
</TABLE>

         The estimated initial purchase price was preliminarily allocated based
on the estimated fair values of the assets acquired at their date of purchase
subject to final determination of the initial purchase price. This preliminary
allocation resulted in total acquired identifiable intangible assets related
primarily to exhibitor lists of $10,631, which are being amortized on a
straight-line basis over 3 years. The resulting total goodwill of $92,453 has
not been amortized but has been subjected to impairment testing in accordance
with SFAS No. 142. See note 7.

         The Pulver asset purchase agreement includes provisions for purchase
price adjustments in each of 2002, 2003 and 2004. In each instance, EBITDA for
the year will be compared to the average EBITDA attributable to the Pulver
Assets for 2000 and 2001 (the "Base EBITDA"). If the EBITDA for any such year
exceeds the Base EBITDA, then the purchase price will increase by an amount
equal to 50% of such excess multiplied by 8.75; conversely, if the EBITDA for
any such year is less than the Base EBITDA, then the purchase price will
decrease by an amount equal to 50% of the shortfall multiplied by 8.75.
Notwithstanding the foregoing, the maximum increase or decrease in purchase
price for any year is $6,000 provided however, if the price increases as a
result of the EBITDA for 2002, then the maximum increase or decrease will be
$5,000 for each subsequent year. During the third quarter ended September 30,
2002, the Company and the sellers of the Pulver assets agreed to eliminate the
provisions related to purchase price adjustments for 2002, 2003 and 2004 and set
a final purchase price of $41,502; accordingly, the balance of funds held in
escrow were distributed.




                                       16
<PAGE>


                              KEY3MEDIA GROUP, INC.

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




         In each of the NGN and BCR purchase agreements there is an incentive
provision to increase the purchase price of the assets acquired. To the extent
that (i) revenues for the year 2003 are greater than the average revenue for
2000 and 2001, and provided that (ii) the percentage that EBITDA bears to
revenue for 2003 is not less than the comparable percentage of EBITDA to average
revenue for 2000 and 2001, then additional purchase consideration will be due
each seller. For the portion of revenue increase up to $3,000, the additional
consideration will be the amount of the increase; for that portion of the
revenue increase from $3,001 to $6,000 the additional consideration will be 1.25
times the amount of the increase; and for that portion of the increase from the
above $6,000 the additional increase will be 1.5 times the amount of the
increase.

         As of September 30, 2002, the purchase prices for BCR and NGN were
determined resulting in a final determination of purchase price for BCR; however
in connection with the final determination of purchase price for NGN, the
Company and the sellers of NGN agreed to a preliminary final purchase price
based upon applying a multiple to the average EBITDA for years 2000 and 2001
which did not include any proceeds from a pending insurance claim for event
interruption and cancellation submitted by NGN's sellers for one of its events
which they believed was impacted by the events that occurred on September 11,
2001. The determination of this preliminary final purchase price required NGN's
sellers to deposit $4,373, into the escrow as a potential return of purchase
price pending resolution of the insurance claim previously noted. On September
20, 2002, a proof of loss was accepted by the insurance company and proceeds
from the claim were subsequently received by the Company totaling $1,562. Final
distribution of the amounts held in escrow will occur upon execution of an
agreement and release between the Company's wholly owned subsidiary, Key3Media
Events, and the sellers of NGN and receipt by the escrow agent of distribution
instructions from the Company and the sellers of NGN.

         These acquisitions have been recorded using the purchase method of
accounting. Accordingly, the accompanying consolidated statements of operations
do not include any revenues and expenses related to these acquisitions prior to
the respective closing dates.

         On June 1, 2001, the Company's wholly owned subsidiary, Key3Media
Events, acquired and received from SOFTBANK America Inc. ("SB America") all the
outstanding equity shares of SOFTBANK Forums Inc. ("SB Forums") for a purchase
price equal to (i) ten times the EBITDA of SB Forums for 2001 minus (ii) $450.
The Company paid the purchase price in shares of its common stock, which were
valued at $10 per share for this purpose. The Company initially issued 2,955
shares of its common stock to SB America, which was based on an estimate that SB
Forums' EBITDA for 2001 will be $3,000. Based on SB Forums' EBITDA for 2001, the
Company was not required to issue any additional shares in connection with this
acquisition.

         Because SB America owned in excess of 50% of the voting common shares
of the Company at the June 1, 2001 closing of this transaction and continued to
be a majority shareholder through the record date for voting on the transaction,
the Company recorded the acquisition as of this closing date. Accordingly, the
results of SB Forums are included in the


                                       17
<PAGE>


                              KEY3MEDIA GROUP, INC.

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



Company's statement of operations beginning on June 1, 2001. Furthermore, as
this transaction is between companies under common control, this business
combination has been recorded using the historical cost basis of the assets and
liabilities acquired; consequently, the fair value of common shares issued of
approximately $29,800 was reduced by $29,403 to equal the historical cost of the
net assets acquired of $397. This reduction in value was accomplished by
adjusting additional paid-in capital.

         Following are the Company's unaudited pro forma results for the nine
months ended September 30, 2001 and 2002, respectively, assuming the
acquisitions described above occurred on January 1, 2001:

<TABLE>
<CAPTION>
                                                                     FOR THE NINE MONTHS
                                                                     ENDED SEPTEMBER 30,
                                                                  ------------------------
                                                                     2001          2002
                                                                  ---------      ---------
<S>                                                               <C>            <C>
         Net revenue ...........................................  $ 197,950      $ 111,564
         Loss before extraordinary item and cumulative effect ..    (11,858)      (341,590)
         Net loss ..............................................    (21,167)      (686,205)
         Loss before extraordinary item and cumulative effect
                 per common share - diluted ....................      (0.17)         (5.04)
         Net loss per common share - diluted ...................      (0.31)        (10.08)
</TABLE>


         These pro forma results of operations have been prepared for
comparative purposes only and are not necessarily indicative of the results of
operations which actually would have resulted had the acquisitions occurred on
January 1, 2001.

7.       GOODWILL AND OTHER INTANGIBLE ASSETS - ADOPTION OF STATEMENT NO. 142

         In July 2001, FASB issued SFAS No. 142 "Goodwill and Other Intangible
Assets," which establishes financial accounting and reporting for acquired
goodwill and other intangible assets and supersedes APB Opinion No. 17,
"Intangible Assets". The Company adopted SFAS No. 142 beginning with the first
quarter of 2002. SFAS No. 142 requires that goodwill and intangible assets that
have indefinite useful lives not be amortized but, instead, tested at least
annually for impairment while intangible assets that have finite useful lives
continue to be amortized over their respective useful lives. Accordingly, the
Company ceased amortization of all goodwill, which is its only intangible asset
with an indefinite useful life, on January 1, 2002, and will continue to
amortize its intangible assets with finite useful lives, consisting primarily of
trade names and advertiser and exhibitor lists, over their respective useful
lives.

         SFAS No. 142 requires that goodwill and other intangibles be tested for
impairment using a two-step process. The first step is to determine the fair
value of the reporting unit, which may be calculated using a discounted cash
flow methodology, and compare this value to its carrying value. If the fair
value exceeds the carrying value, no further work is required and no impairment
loss would be recognized. The second step is an allocation of the fair value of



                                       18
<PAGE>




                              KEY3MEDIA GROUP, INC.

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



the reporting unit to all of the reporting unit's assets and liabilities under a
hypothetical purchase price allocation. Based on the evaluation performed to
adopt SFAS No. 142, the Company recorded a non-cash charge of $344,615, net of
tax benefit of $80,385, to reduce the carrying value of goodwill and other
intangibles related to the COMDEX reporting unit to their estimated fair value.
This charge is nonoperational in nature and is reported as a cumulative effect
of an accounting change in the accompanying Consolidated Statement of
Operations. The Company utilized a combination of discounted cash flow
methodology and relative market measures to determine fair value.

         As a result of the strategic review of its operations undertaken during
the third quarter ending September 30, 2002, which lead to the announced
reduction and consolidation of its event schedule for 2003 and closing of its
regional office in Needham, Massachusetts, the Company conducted a review of its
goodwill and intangible assets and recorded an additional non-cash charge of
$300,000 to reduce the value of goodwill and other intangibles related to its
portfolio of reporting units to their estimated fair value. The strategic review
and resulting charge recognizes the sustained economic downturns experienced in
the information technology and networking industries serviced by the Company as
shown by the significant decline in the results of operations of the Company. A
combination of discounted cash flow methodology and relative market measures was
used by the Company to determine fair value.

         In the event that the economic downturn continues for a prolonged
period of time, or conditions change as a result of the process currently
contemplated as discussed in Note 5, the value of goodwill and intangible assets
may vary from current estimates; accordingly, additional impairment charges may
be recorded in future periods.

         The following table reflects the Company's comparative net loss before
the cumulative effect of accounting change and goodwill amortization under SFAS
No. 142:

<TABLE>
<CAPTION>
                                                            FOR THE THREE MONTHS            FOR THE NINE MONTHS
                                                            ENDED SEPTEMBER 30,             ENDED SEPTEMBER 30,
                                                         --------------------------      ---------------------------
                                                           2001            2002             2001            2002
                                                         ---------      -----------      ----------      -----------

<S>                                                      <C>            <C>              <C>             <C>
Reported loss before cumulative effect of accounting
     change ..........................................   $  (3,651)     $  (315,664)     $  (20,227)     $  (341,590)
Add back: Goodwill amortization, net of taxes ........       2,025             --             6,760             --
                                                         ---------      -----------      ----------      -----------
Adjusted loss before cumulative effective of
     accounting change ...............................      (1,626)        (315,664)        (13,467)        (341,590)
Cumulative effect of accounting change ...............        --               --              --           (344,615)
                                                         ---------      -----------      ----------      -----------
Adjusted net loss ....................................   $  (1,626)     $  (315,664)     $  (13,467)     $  (686,205)
                                                         =========      ===========      ==========      ===========

Basic and diluted earnings per common share:
Reported loss before cumulative effect of accounting
     change (after accretion on preferred stock) .....   $   (0.05)     $     (4.62)     $    (0.30)     $     (5.04)
Goodwill amortization, net of taxes ..................        0.03             --              0.10             --
                                                         ---------      -----------      ----------      -----------
</TABLE>


                                       19
<PAGE>




                              KEY3MEDIA GROUP, INC.

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


<TABLE>
<CAPTION>
                                                            FOR THE THREE MONTHS            FOR THE NINE MONTHS
                                                            ENDED SEPTEMBER 30,             ENDED SEPTEMBER 30,
                                                         --------------------------      ---------------------------
                                                           2001            2002             2001            2002
                                                         ---------      -----------      ----------      -----------

<S>                                                      <C>            <C>              <C>             <C>
Adjusted loss before cumulative effect of accounting
     change ..........................................       (0.02)           (4.62)          (0.20)           (5.04)
Cumulative effect of accounting change ...............        --               --              --              (5.04)
                                                         ---------      -----------      ----------      -----------
Adjusted net loss ....................................   $   (0.02)     $     (4.62)     $    (0.20)     $    (10.08)
                                                         =========      ===========      ==========      ===========
</TABLE>

         The following table displays the intangible assets that continue to be
subject to amortization and aggregate amortization expense and intangible assets
not subject to amortization:

<TABLE>
<CAPTION>
                                                               AS OF SEPTEMBER 30, 2002
                                                    ------------------------------------------
                                                   GROSS CARRYING   ACCUMULATED
                                                       AMOUNT       AMORTIZATION        NET
                                                   --------------   ------------      --------
<S>                                                   <C>             <C>             <C>
Intangible assets subject to amortization:
     Trade names ................................     $418,000        $259,408        $158,592
     Advertiser and exhibitor lists .............       10,631           3,835           6,796
     Other ......................................        3,172           1,586           1,586
                                                      --------        --------        --------
                                                       431,803         264,829         166,974
Intangible assets not subject to amortization:
     Goodwill ...................................       14,453            --            14,453
                                                      --------        --------        --------
Total ...........................................     $446,256        $264,829        $181,427
                                                      ========        ========        ========

Estimated amortization expense:
     For the year ended 12/31/02 ................     $ 11,604
     For the year ended 12/31/03 ................     $  8,618
     For the year ended 12/31/04 ................     $  7,243
     For the year ended 12/31/05 ................     $  4,880
     For the year ended 12/31/06 ................     $  4,880
</TABLE>

         The following table displays the changes in the gross carrying amounts
of goodwill by brand for the nine months ended September 30, 2002:

<TABLE>
<CAPTION>
                                          COMDEX         FORUMS         PULVER           NGN           OTHER          TOTAL
                                         ---------      ---------      ---------      ---------      ---------      ---------
<S>                                      <C>            <C>            <C>            <C>            <C>            <C>
Balance as of December 31, 2001 ......   $ 277,642      $ 160,424      $  49,970      $  41,195      $  13,766      $ 542,997
Goodwill acquired during the year ....        --             --             --             --            4,954          4,954
Adjustment to purchase price .........        --             --          (16,005)          --           (1,427)       (17,432)
Impairment losses ....................    (277,642)          --             --             --             --         (277,642)
Reduction of goodwill ................        --         (158,820)       (27,000)       (41,195)        (9,805)      (236,820)
Write off of fully amortized balance .        --           (1,604)          --             --             --           (1,604)
                                         ---------      ---------      ---------      ---------      ---------      ---------
Balance as of September 30, 2002 .....   $    --        $    --        $   6,965      $    --        $   7,488      $  14,453
                                         =========      =========      =========      =========      =========      =========
</TABLE>

8.       STAFF REDUCTION SEVERANCE CHARGES

         In the second half of 2001, the Company initiated several cost
reduction and expense containment programs that reduced its temporary employment
costs, travel and entertainment


                                       20
<PAGE>




                              KEY3MEDIA GROUP, INC.

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




expenses and most significantly, its total employment costs through staff
reductions. The Company has continued these cost reductions efforts in 2002
through reviewing its organizational structure and consolidating certain
operations.

         On July 26, 2002, the Company announced that it was undertaking a
strategic review of its operations in response to the sustained economic
downturns being experienced in the information technology, networking and trade
show industries. On September 18, 2002, the Company announced the completion of
the initial phase of its strategic business review which includes a
consolidation of the 2003 event schedule and the closing of its regional office
in Needham, Massachusetts. As a result of these actions and previously untaken
cost reduction efforts in the first half of 2002, the Company recorded charges
of $744 and $1,584 for the three and nine month periods ending September 30,
2002, respectively. These charges are classified in the Consolidated Statement
of Operations as "Staff Reduction Severance Charges" and related to termination
and benefit costs incurred as a result of staff reductions.

         The following table displays a rollforward of the accrual balance
related to the Staff Reduction Severance Charges:

<TABLE>
<CAPTION>
                                                 AMOUNT
                                                 -------

<S>                                             <C>
         Balance as of December 31, 2001 ....    $ 1,100
              Accruals / Charges ............      1,584
              Payments / Utilization ........     (1,837)
                                                 -------
         Balance as of September 30, 2002 ...    $   847
                                                 =======
</TABLE>


         In connection with the announced closure of the regional office in
Needham, Massachusetts, the Company anticipates that it will incur additional
staff reduction severance and other charges during the fourth quarter ended
December 31, 2002.

9.       COMMITMENTS AND CONTINGENCIES

         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 estimates that its total annual occupancy costs under the new
lease will 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



                                       21
<PAGE>



                              KEY3MEDIA GROUP, INC.

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



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 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. The value of these assets is currently in dispute. On
August 21, 2002, Interface filed a parallel action against Key3Media Events in
the Superior Court, County of Los Angeles, State of California. Key3Media Events
moved to have the California action dismissed or stayed. On October 2, 2002,
with the exception of any attachment proceedings in California, the California
action was stayed. Thereafter, Interface applied for and received a right to
attach up to $711 of Key3Media Events' assets in California. Based upon the
dispute as to the value of the assets attached in Massachusetts, on November 5,
2002, the California court stayed Interface's right to execute the attachment of
Key3Media Events' assets in California. On October 12, 2002, Interface filed a
motion with the court in Massachusetts to increase the attachment amount to the
full amount of rent claimed by Interface.

         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


                                       22
<PAGE>



                              KEY3MEDIA GROUP, INC.

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




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, tortuous
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 October 22, 2002,
however, at the joint request of the parties the trial was postponed until
January 21, 2003. Discovery is ongoing.

         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 $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 tortuous 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.


                                       23
<PAGE>

                              KEY3MEDIA GROUP, INC.

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



         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 indictment 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 $10,700 and punitive damages of $10,000

         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.

         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


                                       24
<PAGE>
                              KEY3MEDIA GROUP, INC.

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



liability, if any, in the aggregate will not be material to the Company's
financial position, results of operations or cash flows.

10.      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.

         Financial information by geographic areas is as follows:

<TABLE>
<CAPTION>
                               FOR THE THREE MONTHS          FOR THE NINE MONTHS
                               ENDED SEPTEMBER 30,           ENDED SEPTEMBER 30,
                             ------------------------      ------------------------
                               2001           2002           2001           2002
                             ---------      ---------      ---------      ---------
<S>                          <C>            <C>            <C>            <C>
Net revenues:
North America ............   $  39,721      $  22,170      $ 149,929      $  87,669
Europe ...................      11,054            403         11,974          5,327
Far East .................         708         15,809         13,253         18,568
                             ---------      ---------      ---------      ---------
Total ....................   $  51,483      $  38,382      $ 175,156      $ 111,564
                             =========      =========      =========      =========

Other income (expenses):
North America ............   $  (9,642)      $(10,118)     $ (25,875)     $ (29,634)
Europe ...................          60           (133)            78           (187)
Far East .................         (37)            (1)           (43)           (68)
                             ---------      ---------      ---------      ---------
Total ....................   $  (9,619)     $ (10,252)     $ (25,840)     $ (29,889)
                             =========      =========      =========      =========
</TABLE>

<TABLE>
<CAPTION>
                              AS OF SEPTEMBER 30,
                           -------------------------
                              2001           2002
                           ----------     ----------
<S>                        <C>            <C>
Total assets:
North America ..........   $1,042,238     $  246,130
Europe .................        6,656         13,863
Far East ...............        4,548          8,076
                           ----------     ----------
Total ..................   $1,053,442     $  268,069
                           ==========     ==========
</TABLE>

11.      FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS AND SUBSIDIARY
         NON-GUARANTORS

         In connection with the Company's $290,000 Notes, the Company's
U.S.-based subsidiaries, Key3Media Events, Key3Media Von Events, Inc. and
Key3Media BCR Events, 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,
2001 and September 30, 2002 and for the nine and three months ended September
30, 2001 and 2002.


                                       25
<PAGE>


                              KEY3MEDIA GROUP, INC.

                      CONDENSED CONSOLIDATING BALANCE SHEET

                                DECEMBER 31, 2001

<TABLE>
<CAPTION>
                                                                                               ELIMINATIONS
                                                PARENT                                              AND
                                                COMPANY        SUBSIDIARY       SUBSIDIARY     CONSOLIDATING
                                                 ONLY          GUARANTORS     NON-GUARANTORS      ENTRIES       CONSOLIDATED
                                              -----------      -----------    --------------   -------------    ------------
                                                                              (In thousands)
<S>                                           <C>              <C>             <C>              <C>              <C>
ASSETS
Current assets:
    Cash and cash equivalents .............   $    24,953      $    13,682     $     2,749      $      --        $    41,384
    Accounts receivable, net ..............          --             38,510           8,522             --             47,032
    Prepaid event expenses ................          --              4,183             357             --              4,540
    Deferred income taxes .................          --              1,402            --               --              1,402
    Other current assets ..................        15,293            1,193           2,062          (15,331)           3,217
                                              -----------      -----------     -----------      -----------      -----------
        Total current assets ..............        40,246           58,970          13,690          (15,331)          97,575
    Intercompany receivable ...............       409,183            5,493           7,864         (422,540)            --
    Property and equipment, net ...........          --             18,347             465             --             18,812
    Goodwill, net .........................          --            454,719            --               --            454,719
    Other intangibles, net ................          --            472,340           1,290             --            473,630
    Investment in subsidiaries ............       513,088          111,117            --           (624,205)            --
    Deferred financing costs and other
        assets ............................        11,839              148             (14)            --             11,973
                                              -----------      -----------     -----------      -----------      -----------
        Total assets ......................   $   974,356      $ 1,121,134     $    23,295      $(1,062,076)     $ 1,056,709
                                              ===========      ===========     ===========      ===========      ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
    Accounts payable ......................   $      --        $    17,321     $     5,017      $      --        $    22,338
    Accrued expenses ......................         2,701           21,128           3,640             --             27,469
    Deferred revenue ......................          --             56,643           6,339             --             62,982
    Other current liabilities .............          --                712             948             --              1,660
                                              -----------      -----------     -----------      -----------      -----------
        Total current liabilities .........         2,701           95,804          15,944             --            114,449
    Intercompany payable ..................          --            417,045           5,498         (422,543)            --
    Deferred income taxes .................         1,750          101,135            --            (15,328)          87,557
    Long-term obligations (net of current
        maturities) .......................       370,000             --              --               --            370,000
Shareholders' equity:
    Preferred stock .......................            30             --              --               --                 30
    Common stock ..........................           681             --              --               --                681
    Additional paid-in capital ............       587,591          408,541           7,985         (527,643)         476,474
    Retained earnings (deficit) ...........        17,414           98,609          (2,047)         (96,562)          17,414
    Accumulated comprehensive loss ........          --               --            (4,085)            --             (4,085)
    Deferred compensation .................        (5,811)            --              --               --             (5,811)
                                              -----------      -----------     -----------      -----------      -----------
        Total shareholders' equity ........       599,905          507,150           1,853         (624,205)         484,703
                                              -----------      -----------     -----------      -----------      -----------
        Total liabilities and
           shareholders' equity ...........   $   974,356      $ 1,121,134     $    23,295      $(1,062,076)     $ 1,056,709
                                              ===========      ===========     ===========      ===========      ===========
</TABLE>




                                       26
<PAGE>


                              KEY3MEDIA GROUP, INC.

                      CONDENSED CONSOLIDATING BALANCE SHEET

                               SEPTEMBER 30, 2002

<TABLE>
<CAPTION>
                                                                                           ELIMINATIONS
                                                 PARENT                       SUBSIDIARY        AND
                                                 COMPANY       SUBSIDIARY        NON-      CONSOLIDATING
                                                  ONLY         GUARANTORS     GUARANTORS      ENTRIES      CONSOLIDATED
                                                ---------      ----------     ----------   -------------   ------------
                                                                             (Unaudited)
                                                                           (In thousands)

<S>                                             <C>            <C>            <C>            <C>            <C>
ASSETS
Current assets:
    Cash and cash equivalents ...............   $      80      $  13,860      $   4,610      $    --        $  18,550
    Accounts receivable, net ................        --           22,310          6,039           --           28,349
    Prepaid event expenses ..................        --            5,254          2,715           --            7,969
    Deferred income taxes ...................        --            1,402           --           (1,402)          --
    Prepaid insurance .......................       5,324           --             --             --            5,324
    Other current assets ....................      10,899         14,922          2,304        (24,107)         4,018
                                                ---------      ---------      ---------      ---------      ---------
        Total current assets ................      16,303         57,748         15,668        (25,509)        64,210
      Intercompany receivable ...............     413,611          6,142          8,073       (427,826)          --
      Property and equipment, net ...........        --           11,711            499           --           12,210
      Goodwill, net .........................        --            9,499          4,954           --           14,453
      Other intangibles, net ................        --          165,683          1,291           --          166,974
      Investment in subsidiaries ............    (157,220)        97,886           --           59,334           --
      Deferred financing costs and other
        assets ..............................      10,147            204           (129)          --           10,222
                                                ---------      ---------      ---------      ---------      ---------
        Total assets ........................   $ 282,841      $ 348,873      $  30,356      $(394,001)     $ 268,069
                                                =========      =========      =========      =========      =========
LIABILITIES AND SHAREHOLDERS' EQUITY
(DEFICIT)
Current Liabilities:
    Accounts payable ........................   $    --        $  14,040      $   3,724      $    --        $  17,764
    Accrued expenses ........................      10,404         12,540          6,001           --           28,945
    Deferred revenue ........................        --           41,135          8,218           --           49,353
    Other current liabilities ...............        --              (51)         1,863           --            1,812
                                                ---------      ---------      ---------      ---------      ---------
        Total current liabilities ...........      10,404         67,664         19,806           --           97,874
    Intercompany payable ....................        --          421,684          6,142       (427,826)          --
    Deferred income taxes ...................        --           25,509           --          (25,509)          --
    Long-term obligations (net of current
         maturities) ........................     370,000           --             --             --          370,000
Shareholders' equity (deficit):
    Preferred stock .........................          29           --             --             --               29
    Common stock ............................         685           --             --             --              685
    Additional paid-in capital ..............     574,171        391,110         12,185       (501,181)       476,285
    Retained earnings (deficit) .............    (668,953)      (557,094)        (3,421)       560,515       (668,953)
    Accumulated comprehensive loss ..........        --             --           (4,356)          --           (4,356)
    Deferred compensation ...................      (3,495)          --             --             --           (3,495)
                                                ---------      ---------      ---------      ---------      ---------
        Total shareholders' equity
            (deficit) .......................     (97,563)      (165,984)         4,408         59,334       (199,805)
                                                ---------      ---------      ---------      ---------      ---------
        Total liabilities and
           shareholders' equity (deficit) ...   $ 282,841      $ 348,873      $  30,356      $(394,001)     $ 268,069
                                                =========      =========      =========      =========      =========
</TABLE>


                                       27
<PAGE>


                              KEY3MEDIA GROUP, INC.

                 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001

<TABLE>
<CAPTION>
                                                                                              ELIMINATIONS
                                                   PARENT                                          AND
                                                   COMPANY      SUBSIDIARY      SUBSIDIARY    CONSOLIDATING
                                                    ONLY        GUARANTORS    NON-GUARANTORS     ENTRIES     CONSOLIDATED
                                                  ---------     ----------    --------------  -------------  ------------
                                                                               (Unaudited)
                                                                              (In thousands)

<S>                                               <C>            <C>            <C>            <C>            <C>
Net revenues ..................................   $    --        $ 152,167      $  26,423      $  (3,434)     $ 175,156

Operating expenses:
     Cost of production .......................        --           46,266         12,152           --           58,418
     Selling, general and administrative ......         181         74,171          4,445           --           78,797
     Staff reduction severance charges ........        --              308           --             --              308
     Stock based compensation .................      (1,816)          --             --             --           (1,816)
     Depreciation and amortization ............        --           28,504            668           --           29,172
                                                  ---------      ---------      ---------      ---------      ---------
                                                     (1,635)       149,249         17,265           --          164,879
                                                  ---------      ---------      ---------      ---------      ---------
Income (loss) from operations .................       1,635          2,918          9,158         (3,434)        10,277
Other income (expenses):
     Interest expense .........................     (20,689)       (14,424)            (5)          --          (35,118)
     Interest income ..........................         203          2,462             71           --            2,736
     Intercompany activity ....................        --             --           (3,434)         3,434           --
     Other income (expense), net ..............        --            6,691           (149)          --            6,542
                                                  ---------      ---------      ---------      ---------      ---------
                                                    (20,486)        (5,271)        (3,517)         3,434        (25,840)
                                                  ---------      ---------      ---------      ---------      ---------
Income loss before income taxes and
     extraordinary item .......................     (18,851)        (2,353)         5,641           --          (15,563)
Income tax provision (benefit) ................      (5,410)        (1,310)         2,075           --           (4,645)
                                                  ---------      ---------      ---------      ---------      ---------
Income (loss) before extraordinary item .......     (13,441)        (1,043)         3,566           --          (10,918)
Extraordinary loss on retirement of debt, net .      (4,268)        (5,041)          --             --           (9,309)
Equity in earnings (loss) in subsidiaries .....      (2,518)          --             --            2,518           --
                                                  ---------      ---------      ---------      ---------      ---------
        Net income (loss) .....................   $ (20,227)     $  (6,084)     $   3,566      $   2,518      $ (20,227)
                                                  =========      =========      =========      =========      =========
</TABLE>


                                       28
<PAGE>




                              KEY3MEDIA GROUP, INC.

                 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002


<TABLE>
<CAPTION>
                                                                                                 ELIMINATIONS
                                                    PARENT                                            AND
                                                    COMPANY       SUBSIDIARY      SUBSIDIARY     CONSOLIDATING
                                                     ONLY         GUARANTORS    NON-GUARANTORS      ENTRIES       CONSOLIDATED
                                                   ---------      ----------    --------------   -------------    ------------
                                                                               (Unaudited)
                                                                              (In thousands)
<S>                                                <C>             <C>             <C>             <C>             <C>
Net revenues:
     Services .................................    $    --         $  89,015       $  24,036       $  (3,049)      $ 110,002
     Proceeds from insurance claim ............         --             1,562            --              --             1,562
                                                   ---------       ---------       ---------       ---------       ---------
                                                        --            90,577          24,036          (3,049)        111,564
Operating expenses:
     Cost of production .......................         --            28,347          13,474            --            41,821
     Selling, general and administrative ......          880          58,908           6,449            (141)         66,096
     Staff reduction severance charges ........         --             1,426             158            --             1,584
     Reduction of goodwill and other
     intangibles ..............................         --           300,000            --              --           300,000
     Stock based compensation .................        1,278            --              --              --             1,278
     Depreciation and amortization ............         --            16,005             393            --            16,398
                                                   ---------       ---------       ---------       ---------       ---------
                                                       2,158         404,686          20,474            (141)        427,177
                                                   ---------       ---------       ---------       ---------       ---------
Income (loss) from operations .................       (2,158)       (314,109)          3,562          (2,908)       (315,613)
Other income (expenses):
     Interest expense .........................      (29,752)           (107)            (95)            103         (29,851)
     Interest income ..........................          102             231             112            (103)            342
     Intercompany activity ....................         --              --            (2,908)          2,908            --
     Other income (expense), net ..............         --                17            (397)           --              (380)
                                                   ---------       ---------       ---------       ---------       ---------
                                                     (29,650)            141          (3,288)          2,908         (29,889)
                                                   ---------       ---------       ---------       ---------       ---------
Income (loss) before income taxes and
     cumulative effect of accounting change ...      (31,808)       (313,968)            274            --          (345,502)
Income tax provision (benefit) ................       (2,680)         (2,880)          1,648            --            (3,912)
                                                   ---------       ---------       ---------       ---------       ---------
Loss before cumulative effect of
     accounting change ........................      (29,128)       (311,088)         (1,374)           --          (341,590)
Cumulative effect of accounting change ........         --          (344,615)           --              --          (344,615)
Equity in earnings (loss) in subsidiaries .....     (357,077)           --              --           357,077            --
                                                   ---------       ---------       ---------       ---------       ---------
        Net income (loss) .....................    $(386,205)      $(655,703)      $  (1,374)      $ 357,077       $(686,205)
                                                   =========       =========       =========       =========       =========
</TABLE>




                                       29
<PAGE>




                              KEY3MEDIA GROUP, INC.

                 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

                  FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001



<TABLE>
<CAPTION>
                                                                                           ELIMINATIONS
                                                PARENT                                          AND
                                                COMPANY      SUBSIDIARY      SUBSIDIARY    CONSOLIDATING
                                                 ONLY        GUARANTORS    NON-GUARANTORS     ENTRIES     CONSOLIDATED
                                               ---------     ----------    --------------  -------------  ------------
                                                                               (Unaudited)
                                                                              (In thousands)

<S>                                            <C>            <C>            <C>            <C>            <C>
Net revenues ..............................    $   --         $ 39,913       $ 12,219       $   (649)      $ 51,483

Operating expenses:
     Cost of production ...................        --           13,534          4,308           --           17,842
     Selling, general and administrative ..          41         24,260          1,830           --           26,131
     Staff reduction severance charges ....        --              308           --             --              308
     Stock based compensation .............      (7,040)          --             --             --           (7,040)
     Depreciation and amortization ........        --           10,027            379           --           10,406
                                               --------       --------       --------       --------       --------
                                                 (6,999)        48,129          6,517           --           47,647
                                               --------       --------       --------       --------       --------
Income (loss) from operations .............       6,999         (8,216)         5,702           (649)         3,836
Other income (expenses):
     Interest expense .....................      (9,782)            (1)             3           --           (9,780)
     Interest income ......................          46            147             64           --              257
     Intercompany activity ................        --             --             (649)           649           --
     Other income (expense), net ..........        --             --              (96)          --              (96)
                                               --------       --------       --------       --------       --------
                                                 (9,736)           146           (678)           649         (9,619)
                                               --------       --------       --------       --------       --------
Income (loss) before income taxes .........      (2,737)        (8,070)         5,024           --           (5,783)
Income tax provision (benefit) ............      (1,269)        (2,779)         1,916           --           (2,132)
                                               --------       --------       --------       --------       --------
                                                 (1,468)        (5,291)         3,108           --           (3,651)
Equity in earnings (loss) in subsidiaries .      (2,183)          --             --            2,183           --
                                               --------       --------       --------       --------       --------
         Net income (loss) ................    $ (3,651)      $ (5,291)      $  3,108       $  2,183       $ (3,651)
                                               ========       ========       ========       ========       ========
</TABLE>




                                       30
<PAGE>





                              KEY3MEDIA GROUP, INC.

                 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

                  FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002


<TABLE>
<CAPTION>
                                                                                              ELIMINATIONS
                                                 PARENT                                            AND
                                                 COMPANY       SUBSIDIARY      SUBSIDIARY     CONSOLIDATING
                                                  ONLY         GUARANTORS    NON-GUARANTORS      ENTRIES      CONSOLIDATED
                                                ---------      ----------    --------------   -------------   ------------
                                                                               (Unaudited)
                                                                              (In thousands)

<S>                                             <C>             <C>             <C>             <C>             <C>
Net revenues:
     Services ..............................    $    --         $  22,133       $  16,256       $  (1,569)      $  36,820
     Proceeds from insurance claim .........         --             1,562            --              --             1,562
                                                ---------       ---------       ---------       ---------       ---------
                                                     --            23,695          16,256          (1,569)         38,382
Operating expenses:
     Cost of production ....................         --             4,823           9,562            --            14,385
     Selling, general and administrative ...          212          19,544           2,074             (44)         21,786
     Staff reduction severance charges .....         --               586             158            --               744
     Reduction of goodwill and other
     intangibles ...........................         --           300,000            --              --           300,000
     Stock based compensation ..............          553            --              --              --               553
     Depreciation and amortization .........         --             4,354             114            --             4,468
                                                ---------       ---------       ---------       ---------       ---------
                                                      765         329,307          11,908             (44)        341,936
                                                ---------       ---------       ---------       ---------       ---------
Income (loss) from operations ..............         (765)       (305,612)          4,348          (1,525)       (303,554)
Other income (expenses):
     Interest expense ......................      (10,060)            (78)            (36)             99         (10,075)
     Interest income .......................         --                89              38             (99)             28
     Intercompany activity .................         --              --            (1,525)          1,525            --
     Other income (expense), net ...........         --              --              (205)           --              (205)
                                                ---------       ---------       ---------       ---------       ---------
                                                  (10,060)             11          (1,728)          1,525         (10,252)
                                                ---------       ---------       ---------       ---------       ---------
Income (loss) before income taxes ..........      (10,825)       (305,601)          2,620            --          (313,806)
Income tax provision (benefit) .............         --                36           1,822            --             1,858
                                                ---------       ---------       ---------       ---------       ---------
                                                  (10,825)       (305,637)            798            --          (315,664)
Equity in earnings (loss) in subsidiaries ..       (4,839)           --              --             4,839            --
                                                ---------       ---------       ---------       ---------       ---------
        Net income (loss) ..................    $ (15,664)      $(305,637)      $     798       $   4,839       $(315,664)
                                                =========       =========       =========       =========       =========
</TABLE>




                                       31
<PAGE>



                              KEY3MEDIA GROUP, INC.

                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001

<TABLE>
<CAPTION>
                                                                                                       ELIMINATIONS
                                                             PARENT                                         AND
                                                             COMPANY      SUBSIDIARY     SUBSIDIARY    CONSOLIDATING
                                                              ONLY        GUARANTORS   NON-GUARANTORS     ENTRIES     CONSOLIDATED
                                                            ---------     ----------   --------------  -------------  ------------
                                                                                         (Unaudited)
                                                                                        (In thousands)


<S>                                                         <C>            <C>            <C>            <C>            <C>
Cash flows from operating activities:
     Net income (loss) ..................................   $ (20,227)     $  (6,084)     $   3,566      $   2,518      $ (20,227)
     Adjustments to reconcile net loss to net cash
        provided by (used in) operating activities:
            Extraordinary loss on retirement of debt, net       5,745          6,784           --             --           12,529
            Depreciation and amortization ...............        --           28,504            668           --           29,172
            Stock based compensation ....................      (1,816)          --             --             --           (1,816)
            Non-cash interest expense ...................      10,935            913           --             --           11,848
            Equity in earnings (loss) in subsidiaries ...       2,518           --             --           (2,518)          --
            Foreign exchange loss .......................        --              106             85           --              191
            Deferred income taxes .......................        --           11,850           --          (10,257)         1,593
            Changes in operating assets and liabilities,
               net of effect from acquired businesses:
            Accounts receivable .........................        --           37,239          7,536           --           44,775
            Prepaid event expenses ......................        --           (2,427)         1,526           --             (901)
            Other current assets ........................      (6,892)          (101)        (5,581)        12,839            265
            Other assets ................................        --              (67)            73           --                6
            Accounts payable ............................        --            5,114           (788)          --            4,326
            Accrued expenses ............................       9,407        (30,971)         7,644         (2,582)       (16,502)
            Deferred revenue ............................        --          (12,907)       (12,626)          --          (25,533)
            Other liabilities ...........................        --          (15,350)        (1,572)          --          (16,922)
                                                            ---------      ---------      ---------      ---------      ---------
                 Total adjustments ......................      19,897         28,687         (3,035)        (2,518)        43,031
                                                            ---------      ---------      ---------      ---------      ---------
                 Net cash provided by (used in) .........
                   operating activities .................        (330)        22,603            531           --           22,804
                                                            ---------      ---------      ---------      ---------      ---------


Cash flows from investing activities:
     Acquisition of businesses, net of cash acquired ....        --         (113,970)         7,728           --         (106,242)
     Purchase of property and equipment .................        --          (11,869)          (239)          --          (12,108)
                                                            ---------      ---------      ---------      ---------      ---------
                 Net cash provided by (used in)
                   investing activities .................        --         (125,839)         7,489           --         (118,350)
                                                            ---------      ---------      ---------      ---------      ---------

Cash flows from financing activities:
     Net transactions with SOFTBANK, ZDI and affiliates
        excluding non-cash transactions with affiliates .    (313,166)       322,191         (9,025)          --             --
     Proceeds from the exercise of options to purchase
        common stock ....................................         693           --             --             --              693
     Repayment of long-term obligations under credit
        facility ........................................        --         (300,000)          --             --         (300,000)
     Retirement of zero coupon senior debentures and
        accreted interest ...............................     (83,576)          --             --             --          (83,576)
     Proceeds from the issuance of senior subordinated
        notes ...........................................     300,000           --             --             --          300,000
     Borrowing under revolving credit facility ..........     110,000           --             --             --          110,000
     Payments of costs associated with the issuance of
        long-term obligations ...........................     (12,975)          --             --             --          (12,975)
                                                            ---------      ---------      ---------      ---------      ---------
              Net cash provided by (used in) financing ..
                 activities .............................         976         22,191         (9,025)          --           14,142
                                                            ---------      ---------      ---------      ---------      ---------
Effects of exchange rate changes on cash ................        --             --             (522)          --             (522)
                                                            ---------      ---------      ---------      ---------      ---------
Net increase (decrease) in cash and cash equivalents ....         646        (81,045)        (1,527)          --          (81,926)
Cash and cash equivalents at beginning of period ........       4,777        101,714          3,423           --          109,914
                                                            ---------      ---------      ---------      ---------      ---------
Cash and cash equivalents at end of period ..............   $   5,423      $  20,669      $   1,896      $    --        $  27,988
                                                            =========      =========      =========      =========      =========
</TABLE>


                                       32
<PAGE>




                              KEY3MEDIA GROUP, INC.

                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002

<TABLE>
<CAPTION>
                                                                                                        ELIMINATIONS
                                                              PARENT                                         AND
                                                              COMPANY      SUBSIDIARY     SUBSIDIARY    CONSOLIDATING
                                                               ONLY        GUARANTORS   NON-GUARANTORS     ENTRIES     CONSOLIDATED
                                                             ---------     ----------   --------------  -------------  ------------
                                                                                         (Unaudited)
                                                                                        (In thousands)

<S>                                                          <C>            <C>            <C>            <C>            <C>
Cash flows from operating activities:
     Net loss ............................................   $(686,205)     $(655,703)     $  (1,374)     $ 657,077      $(686,205)
     Adjustments to reconcile net loss to net cash
        provided by (used in) operating activities:
           Cumulative effect of accounting change ........        --          344,615           --             --          344,615
           Reduction of goodwill and other intangibles ...        --          300,000           --             --          300,000
           Depreciation and amortization .................        --           16,005            393           --           16,398
           Stock based compensation ......................       1,278           --             --             --            1,278
           Non-cash interest expense .....................       1,692           --             --             --            1,692
           Equity in earnings (loss) of subsidiaries .....     657,077           --             --         (657,077)          --
           Loss on disposal of fixed assets ..............        --             --               20           --               20
           Foreign exchange loss .........................        --             --               32           --               32
           Deferred income taxes .........................      (2,680)        (2,916)          (174)          --           (5,770)
           Changes in operating assets and liabilities,
              net of effect from acquired business:
           Accounts receivable ...........................        --           16,200          3,179           --           19,379
           Prepaid event expenses ........................        --           (1,071)        (1,530)          --           (2,601)
           Other current assets ..........................        --           (6,054)           451           --           (5,603)
           Other assets ..................................        --              (56)           115           --               59
           Accounts payable ..............................        --           (2,768)        (1,808)          --           (4,576)
           Accrued expenses ..............................       7,703         (8,588)         2,077           --            1,192
           Deferred revenue ..............................        --          (15,508)        (1,011)          --          (16,519)
           Other liabilities .............................        --             (763)           146           --             (617)
                                                             ---------      ---------      ---------      ---------      ---------
              Total adjustments ..........................     665,070        639,096          1,890       (657,077)       648,979
                                                             ---------      ---------      ---------      ---------      ---------
              Net cash provided by (used in) operating
                     activities ..........................     (21,135)       (16,607)           516           --          (37,226)
                                                             ---------      ---------      ---------      ---------      ---------

Cash flows from investing activities:
     Return of purchase price from acquired business .....        --           17,432           --             --           17,432
     Acquisition of business, net of cash acquired .......        --           (3,360)         1,495           --           (1,865)
     Purchase of property and equipment ..................        --             (436)          (110)          --             (546)
                                                             ---------      ---------      ---------      ---------      ---------
              Net cash provided by investing activities ..        --           13,636          1,385           --           15,021
                                                             ---------      ---------      ---------      ---------      ---------

Cash flows from financing activities:
     Net transactions with SOFTBANK, ZDI and affiliates
        excluding non-cash transactions with affiliates ..      (3,588)         3,149            439           --             --
     Payments associated with the issuance of preferred
        stock ............................................        (150)          --             --             --             (150)
                                                             ---------      ---------      ---------      ---------      ---------
              Net cash provided by (used in) financing
                     activities ..........................      (3,738)         3,149            439           --             (150)
                                                             ---------      ---------      ---------      ---------      ---------
Effects of exchange rate changes on cash .................        --             --             (479)          --             (479)
                                                             ---------      ---------      ---------      ---------      ---------
Net increase (decrease) in cash and cash equivalents .....     (24,873)           178          1,861           --          (22,834)
Cash and cash equivalents at beginning of period .........      24,953         13,682          2,749           --           41,384
                                                             ---------      ---------      ---------      ---------      ---------
Cash and cash equivalents at end of period ...............   $      80      $  13,860      $   4,610      $    --        $  18,550
                                                             =========      =========      =========      =========      =========

</TABLE>




                                       33
<PAGE>


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

         The discussion below should be read in conjunction with our historical
consolidated financial statements and the notes thereto. Historical results and
percentage relationships set forth in the 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 matter by all companies, the
representation herein may not be comparable to other similarly titled measures
of other companies.

RECENT DEVELOPMENTS

         On July 28, 2002, we announced the undertaking of a strategic review of
our operations in response to the sustained economic downturns being experienced
in the information technology, networking and trade show industries. The review
initially focused on our operations in light of the recent trend toward reduced
market demand with a view to modifying our operating structure as necessary to
compete in the current operating environment. We engaged financial and legal
advisors to assist us in evaluating our available options. During the course of
this review, when we announced our results for the second quarter of 2002, we
disclosed that we believed it was likely that we would not be in compliance with
the financial covenants contained in our senior bank credit facility for the
quarters ending September 30, and December 31, 2002 and that we were commencing
discussions on this matter with our banks. On September 18, 2002, we announced
that we were reducing and consolidating our event schedule for 2003 and closing
our regional office in Needham, Massachusetts.

         Notwithstanding our previous disclosure, we were in compliance with the
financial covenants in our senior credit facility for the quarter ended
September 30, 2002, primarily due to the inclusion in operating income of
insurance proceeds for claims arising from losses incurred as a result of the
events of September 11, 2001, the reversal of previously recorded accruals for
production costs at our COMDEX/Fall 2001 tradeshow which were in excess of the
production costs actually incurred at that tradeshow and, to a lesser extent,
continuing benefits from the cost reduction and expense control programs that we
initiated during the second half of 2001 (collectively, the



                                       34
<PAGE>


"Expense Reduction Programs"). However, because of the continuing difficulties
being experienced in the industries we serve, we continue to believe that we
will not be in compliance with these financial covenants for the quarter ended
December 31, 2002. We are currently negotiating with the lenders under our
senior bank credit facility seeking to obtain waivers of certain non-financial
technical covenant defaults that currently exist and other modifications to the
credit facility.  In addition, there is substantial risk that we will be unable
to pay the interest payment on our senior subordinated notes due on December 16,
2002, and we are in the early stages of discussing this development with some of
the larger holders of our notes.


         As a result of the review and developments described above, our board
of directors has decided we cannot continue to operate our businesses in the
near term under our existing capital structure and that it would be in the best
long-term interests of the holders of our shares and debt obligations to explore
a possible restructuring (with or without additional capital), sale, business
combination and/or other reorganization transaction which, if consummated could
result in a change of control of our company.  Therefore, we intend to commence
a structured process through our financial advisor Houlihan Lokey Howard & Zukin
to explore these alternatives shortly after our  COMDEX/Fall tradeshow event,
which will be held from November 18 through November 22, 2002.  As part of, or
after, this process, we might make a filing under Chapter 11 of the U.S.
Bankruptcy Code. Our board believes that this process represents the best
alternative in these difficult times for preserving the value of our brands and
businesses for our stakeholders and maintaining continuity of services to our
exhibitor and attendee clients.

         The accompanying financial statements do not include any adjustments
relating to the recoverability and classification of asset carrying amounts or
the amount and classification of liabilities that might occur as a result of the
process described above.

         In connection with the announced closure of the regional office in
Needham, Massachusetts, we anticipate that we will incur additional staff
reduction severance and other charges during the fourth quarter of 2002.

         On October 23, 2002, the New York Stock Exchange (NYSE) gave notice of
early termination of its sponsorship agreement. On November 1, 2002, the
American Express Travel Related Service Company, Inc. gave notice of early
termination of its sponsorship agreement. Pursuant to these early termination
notices, the sponsorship agreements will end in the fourth quarter of 2002.
These agreements contributed approximately $2.4 million to our revenue this
year.

         On October 30, 2002, The Bank of New York tendered its resignation as
Trustee, Registrar and Paying Agent with respect to our senior subordinated
notes.  The resignation will become effective when we appoint a successor
trustee, which we are currently in the process of identifying.

         Bruce M. Ramer resigned as a director of our company on July 15, 2002,
James A. Wiatt resigned as a director on July 25, 2002, James E. Moore resigned
as a director on August 8, 2002, John A. Pritzker resigned as a director on
August 23, 2002, G. Andrea Botta resigned as a director on August 28, 2002 and
Pamela C. Alexander resigned as a


                                       35
<PAGE>


director on October 3, 2002, in each case citing demands on their time except
for Mr. Botta who did not provide a reason.

         On July 29, 2002, NYSE suspended the trading of our common stock and
the NYSE commenced procedures to delist our shares from the exchange. The NYSE
said it was taking this action due to the abnormally low recent selling prices
of the shares. On July 31, 2002, our common stock began trading on
Over-The-Counter Bulletin Board under the symbol KMED.

RESULTS OF OPERATIONS

         Our results for the three and nine months ended September 30, 2002 were
adversely impacted by the continuing difficulties being experienced in the IT
industry and the economy in general. In addition, our results for the three
months ended September 30, 2002 and 2001 are not directly comparable because (i)
the third quarter of 2001 included the results from one event that we will not
hold until the fourth quarter of 2002 (our NetWorld+Interop Paris event), (ii)
the third quarter of 2002 included the results from one event that we held in
the second quarter of 2001 (our NetWorld+Interop Tokyo event), and (iii) we made
several acquisitions in the last month of the third quarter of 2001 and in early
2002, including pulver.com's two major brands, Voice on the Net Conferences and
Session Initiation Protocol Summits, significant assets of BCR Enterprises,
assets comprising Next Generation Networks and Next Generation Ventures, and
ExpoNova (collectively, the "Acquisitions"). The shift in timing of our
NetWorld+Interop Tokyo and NetWorld+Interop Paris events and the Acquisitions
make our results for the three months ended September 30, 2002 and 2001 not
directly comparable and the shift in timing of our NetWorld+Interop Paris event
and the Acquisitions make our results for the nine months ended September 30,
2002 and 2001 not directly comparable. Our results for the three and nine months
ended September 30, 2002 also benefited from the Expense Reduction Programs.

         THREE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED WITH THREE MONTHS ENDED
         SEPTEMBER 30, 2001

         Except as otherwise noted therein, each of the changes discussed below
in (i) our actual results is attributable primarily to the absence of the
results from the NetWorld+Interop Paris event in the third quarter of 2002, and
a significant decrease in the size and scope of our NetWorld+Interop Atlanta and
Seybold Seminars San Francisco events in the third quarter of 2002, partially
offset by the inclusion in the third quarter of 2002 of the results from the
NetWorld+Interop Tokyo event and, with respect to SG&A, the benefits of the
Expense Reduction Programs, and (ii) our adjusted results after excluding the
results from NetWorld+Interop Tokyo event from the third quarter of 2002, the
results from NetWorld+Interop Paris event from the third quarter of 2001, and
the results of the Acquisitions in the third quarter of 2002 and 2001
(collectively, the "Non-Comparable Results") is attributable primarily to the
significant decrease in the size and scope of our NetWorld+Interop Atlanta and
Seybold Seminars San Francisco events in the third quarter of 2002 as a result
of the continuing difficulties in the IT industry and the economy in general.



                                       36
<PAGE>


         Our total revenue decreased $13.1 million, or 25.4%, to $38.4 million
in the third quarter of 2002 from $51.5 million in the comparable period in
2001. Excluding the Non-Comparable Results, adjusted revenue in 2002 would have
been $25.6 million, a decrease of $15.0 million, or 37.0%, from $40.6 million in
2001. Revenues in 2002 included $1.6 million of proceeds resulting from the
recovery of an insurance claim for event interruption and cancellation for one
of our events that was impacted by the events that occurred on September 11,
2001.

         Exhibitor services revenue decreased by $11.6 million, or 27.6%, to
$30.4 million in the third quarter of 2002 from $42.0 million in the comparable
period of 2001. Excluding the Non-Comparable Results, adjusted exhibitor
services revenue in the third quarter of 2002 would have been $19.3 million, a
decrease of $12.2 million, or 38.7%, from $31.5 million in the comparable period
of 2001. The net paid square footage decreased to 373,061 in the third quarter
of 2002 from 594,659 in the comparable period of 2001. The average rental rate
per square foot paid by exhibitors decreased 7.1% to $44.80 in the third quarter
of 2002 from $48.24 in the comparable period of 2001. The decrease in the
average rental rate per square foot paid by exhibitors was due to the inclusion
of our NetWorld+Interop Tokyo event in the third quarter of 2002 which had a
lower rental rate than the average rental rate for the other events we held in
the third quarter of 2001. Excluding the Non-Comparable Results, adjusted net
paid square footage would have decreased 58.1% in 2002 to 165,911 from 396,392
in 2001, and adjusted average rental rate per square foot paid by exhibitors
would have been $50.40 in 2002, a decrease of 4.7% from $52.90 in 2001.

         Conference fees increased $0.2 million, or 7.6%, to $3.4 million in the
third quarter of 2002 from $3.2 million in the comparable period of 2001.
Excluding the Non-Comparable Results, adjusted conference fees in the third
quarter of 2002 would have been $2.6 million, a decrease of $0.6 million, or
18.1%, from $3.2 million in the comparable period of 2001. The number of
participants at our conferences increased to 4,161 in the third quarter of 2002
from 2,989 in the comparable period of 2001, and the average revenue per
conference participant decreased 22.7% to $829 in the third quarter of 2002 from
$1,072 in the comparable period of 2001. The decrease in the average revenue per
conference participant was due to the inclusion of our NetWorld+Interop Tokyo
event in the third quarter of 2002 which had lower revenue per conference
participant than the average revenue per conference participant for the other
events we held in the third quarter of 2001. Excluding the Non-Comparable
Results, the adjusted number of conference participants decreased to 2,333 in
2002 from 2,989 in 2001, and adjusted average revenue per conference attendee
increased 11.2% to $1,193 in 2002 from $1,072 in 2001.

         Advertising and sponsorship revenues decreased $3.3 million, or 53.1%,
to $2.9 million in the third quarter of 2002 from $6.2 million in the comparable
period of 2001. Excluding the Non-Comparable Results, adjusted advertising and
sponsorship revenues in 2002 would have been $2.1 million, a decrease of $3.8
million, or 64.3%, from $5.9 million in 2001.


                                       37
<PAGE>


         Cost of production decreased $3.5 million, or 19.4%, to $14.4 million
in the third quarter of 2002 from $17.8 million in the comparable period of
2001. As a percentage of revenue, cost of production represented 37.5% of
revenue in the third quarter of 2002 compared to 34.7% in the same period of
2001. Excluding the Non-Comparable Results, adjusted cost of production would
have been $7.4 million in 2002, a decrease of $5.6 million or 43.2%, from $13.0
million in 2001. Adjusted cost of production as a percentage of adjusted revenue
would have been 28.9% in the third quarter of 2002 down from 32.1% in the
comparable period of 2001. This decrease was primarily due to the inclusion in
revenue of the proceeds from the recovery of an insurance claim in the third
quarter of 2002 and the reversal of approximately $1.8 million of accruals
related to 2001 events in 2002. Based on current information, we do not have any
outstanding obligation with any vendor for any 2001 event that necessitates an
accrual balance as of September 30, 2002. Excluding the insurance proceeds and
accrual reversals, adjusted cost of production as a percentage of adjusted
revenue would have been 38.5% in the third quarter of 2002.

         Our SG&A expenses decreased $4.3 million, or 16.6%, to $21.8 million in
the third quarter of 2002 from $26.1 million in the comparable period of 2001.
Our SG&A expenses as a percentage of revenue were 56.8% in the third quarter of
2002 compared to 50.8% in the same period of 2001. The decrease in our SG&A
expenses on a dollar basis was primarily due to the effects of the Expense
Reduction Programs we initiated during the third quarter of 2001, which reduced
our total employment costs through staff reductions and, to a lesser extent,
lower temporary employment costs and travel and entertainment expenses.

         We recognized $0.7 million in staff reduction severance charges in the
third quarter of 2002 compared to $0.3 million in same period of 2001. These
charges related to severance and termination benefit costs incurred during these
periods. The increase in 2002 compared to 2001 related principally to staff
reductions in connection with the announced future closing of our Needham,
Massachusetts office in December 2002.

         In connection with the strategic review performed during the third
quarter of 2002, we conducted a review of our goodwill and intangible assets and
recorded an additional non-cash charge of $300.0 million to reduce the value of
goodwill and other intangibles related to our portfolio of reporting units to
their estimated fair value. The strategic review and resulting charge recognizes
the sustained economic downturns experienced in the information technology and
networking industries we service as shown by the significant decline in our
results of operations. We used a combination of discounted cash flow methodology
and relative market measures to determine fair value.

         Non-cash stock-based compensation increased $7.6 million to $0.6
million of expense in the third quarter of 2002 from $7.0 million of income in
the comparable period of 2001. The increase was attributable to the reversal of
previously recorded expense, resulting from the application of variable
accounting valuation principles.

         Other income (expense), net increased $0.6 million or 6.6%, to expense
of $10.3 million in the third quarter of 2002 from expense of $9.6 million in
the comparable



                                       38
<PAGE>



period of 2001. The increase was attributable to a higher net interest expense
that resulted from a slightly higher average interest rate (including
amortization of deferred financing costs) on our primary debt obligations in
2002 than in 2001.

         As a result of the foregoing, our EBITDA decreased by $313.4 million,
or 2,215.7%, to a lose of $299.3 million in the third quarter of 2002 from $14.1
million in the comparable period of 2001. After adjusting to exclude non-cash
stock based compensation and staff reduction severance costs in both periods and
reduction of goodwill and other intangibles in 2002, our adjusted EBITDA would
have been $2.0 million in the third quarter of 2002 compared to $7.4 million in
the same period of 2001. Excluding the Non-Comparable Results, our adjusted
EBITDA would have been a loss of $2.7 million in 2002, down $4.3 million from
adjusted EBIDTA of $1.6 million in 2001.

         In the event that the economic downturn continues for a prolonged
period of time, or conditions change as a result of the process currently
contemplated as discussed above in "Recent Developments", the value of goodwill
and intangible assets may vary from current estimates; accordingly, additional
impairment charges may be recorded in future periods.

         Depreciation and amortization decreased $5.9 million, or 57.1%, to $4.5
million in the third quarter of 2002 from $10.4 million in the comparable period
of 2001. 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 and the elimination of depreciation
expense for fixed assets that were fully depreciated in the first half of 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.
We recognized approximately $3.2 million of amortization expense in the third
quarter of 2002 related to goodwill and intangible assets with indefinite useful
lives.

         We are recording a provision for income tax of $1.9 million in the
third quarter of 2002 resulting from our international operations. We did not
record any benefit resulting from our domestic operating losses. A full
valuation allowance has been provided to reduce the value of our deferred tax
assets to nil due to the uncertainty of their future realization.

         As a result of the foregoing, we incurred a net loss of $315.7 million
in the third quarter of 2002 compared to net loss of $3.7 million in the same
period of 2001.

         NINE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED WITH NINE MONTHS ENDED
         SEPTEMBER 30, 2001

         Except as otherwise noted therein, each of the changes discussed below
is attributable primarily to the adverse impact of continuing difficulties in
the IT industry and the economy in general on the major events we held during
the first nine months of 2002 and, to a lesser extent, the absence of the
results from our NetWorld+Interop Paris event in the third quarter of 2002,
partially offset by the inclusion of the results from the



                                       39
<PAGE>


Acquisitions for nine months in 2002 compared to only one month in 2001 and,
with respect to SG&A, the benefits of the Expense Reduction Programs. The major
events we held during the first nine months of 2002 were our Seybold Seminars
New York, COMDEX Chicago, JavaOne , NetWorld+Interop Las Vegas, NetWorld+Interop
Atlanta, NetWorld+Interop Tokyo and Seybold Seminars San Francisco events
(collectively, the "Major Events").

         Our total revenue decreased $63.6 million, or 36.3%, to $111.6 million
for the nine months ended September 30, 2002 from $175.2 million in the
comparable period of 2001. Excluding the results of the NetWorld+Interop Paris
event from the first nine months of 2001 and the results from the Acquisitions
from the first nine months of 2002 and 2001 (collectively, the "Nine Month
Non-Comparable Results"), revenue for the first nine months of 2002 would have
been $99.5 million, a decrease of $64.5 million, or 39.3%, from $164.0 million
in 2001.

         In connection with our Major Events, exhibitor services revenue was
lower in the first nine months of 2002 compared to the same period in 2001 due
to a decrease in the amount of net paid square footage and exhibitor related
revenue at each of our Major Events. The decrease in the amount of net paid
square footage was partially off-set by increases in the rental rate per square
foot paid by exhibitors for our Seybold Seminars New York, COMDEX Chicago and
Seybold Seminars San Francisco events. Our conference revenue from the Major
Events in 2002 was lower in the first nine months of 2002 compared to the same
period in 2001 due to the decreases in the number of conference participants and
the average revenue per conference participants. The revenue from advertising
and sponsorship for the Major Events was lower in 2002 compared to the same
period in 2001 due to a reduction in the number of advertisers and sponsors.

         Exhibitor services revenue decreased by $45.7 million, or 37.1%, to
$77.5 million for the nine months ended September 30, 2002 from $123.2 million
in the comparable period of 2001. Excluding the Nine Month Non-Comparable
Results, adjusted exhibitor revenue for 2002 would have been $69.7 million, a
decrease of $43.5 million, or 38.4%, from $113.2 million in 2001. The net paid
square footage decreased to 858,344 for the nine months ended September 30, 2002
from 1,562,888 in the comparable period of 2001. The average rental rate per
square foot paid by exhibitors decreased 5.5% to $47.85 for the nine months
ended September 30, 2002 from $50.64 in the comparable period of 2001. This
decrease in net paid square footage was primarily due to lower net square
footage from our Major Events and the exclusion of the NetWorld+Interop Paris
event partially off-set by the inclusion of net square footage from the
Acquisitions, in each case in the nine months ended September 30, 2002. The
decrease in the average rental rate per square foot paid by exhibitors was
principally due to the lower than average rate for our COMDEX Nordic event
acquired through ExpoNova and our NetWorld+Interop Tokyo event. The COMDEX
Nordic and NetWorld+Interop Tokyo events represented approximately 10% and 25%,
respectively, of the total net square footage for the nine months ended
September 30, 2002 and had a rental rate per square foot that was approximately
50% and 85%, respectively, of the average rental rate for this


                                       40
<PAGE>


period. Excluding the Nine Month Non-Comparable Results, adjusted net paid
square footage would have decreased 44.6% in 2002 to 755,654 from 1,364,621 in
2001, and adjusted average rental rate per square foot paid by exhibitors would
have been $50.19 in 2002, a decrease of 4.1% from $52.34 in 2001.

         Conference fees decreased $10.2 million, or 31.9%, to $21.8 million for
the nine months ended September 30, 2002 from $32.0 million in the comparable
period of 2001 primarily due to lower conference attendance at the Major Events
partially off-set by the inclusion of operating results from the Acquisitions,
in each case in the nine months ended September 30, 2002. Excluding the Nine
Month Non-Comparable Results, adjusted conference fees would have been $17.9
million in 2002, a decrease of $13.7 million, or 43.3%, from $31.6 million in
2001. The number of participants at our conferences decreased to 16,492 for the
nine months ended September 30, 2002 from 21,514 in the comparable period of
2001, and the average revenue per conference participant decreased 11.1% to
$1,320 for the nine months ended September 30, 2002 from $1,485 in the
comparable period of 2001. The decrease in the number of participants was
primarily due to lower conference participant attendance at our Major Events
partially off-set by the inclusion of participant attendance from the
Acquisitions, in each case in the nine months ended September 30, 2002. The
decrease in the average revenue per conference participant was due to the lower
than average revenue per conference participant from our COMDEX Nordic event
acquired through ExpoNova. This event represented approximately 10% of the total
conference attendance for the nine months ended September 30, 2002 and had a
revenue per conference participant amount that was approximately 15% of the
average revenue per conference participant for this period. Excluding the Nine
Month Non-Comparable Results, adjusted conference participant attendance would
have decreased 33.3% in 2002 to 14,355 from 21,514 in 2001, and adjusted average
revenue per conference participant would have been $1,423 in 2002, a decrease of
4.2% from $1,485 in 2001.

         Advertising and sponsorship revenues decreased $9.2 million, or 46.2%,
to $10.7 million for the nine months ended September 30, 2002 from $20.0 million
in the comparable period of 2001 primarily due to lower advertising and
sponsorship revenues from our Major Events and the exclusion of the
NetWorld+Interop Paris event, partially off-set by the inclusion of operating
results from the Acquisitions, in each case in the nine months ended September
30, 2002. Excluding the Nine Month Non-Comparable Results, adjusted advertising
and sponsorship revenues for 2002 would have been $10.2 million, a decrease of
$8.9 million or 46.5%, from $19.1 million in 2001.

         Cost of production decreased $16.6 million, or 28.4%, to $41.8 million
for the nine months ended September 30, 2002 from $58.4 million in the
comparable period of 2001. As a percentage of revenue, cost of production
represented 37.5% of revenue for the nine months ended September 30, 2002
compared to 33.4% in the same period of 2001. The aggregate dollar decreases in
the cost of production was primarily due to lower costs at the Major Events and,
to a lesser extent, the exclusion of the NetWorld+Interop Paris event, partially
offset by the inclusion of operating results from the Acquisitions, in each case
in the nine months ended September 30, 2002. Excluding


                                       41
<PAGE>


the Nine Month Non-Comparable Results, adjusted cost of production would have
been $34.9 million in 2002, a decrease of $19.0 million or 35.2%, from $53.9
million in 2001. Adjusted cost of production as a percentage of adjusted revenue
would have been 35.1% for the nine months ended September 30, 2002 up from 32.9%
in the comparable period of 2001. This increase was primarily due to additional
higher margin revenue from sources such as management fees and sponsorship
revenue for the nine months ended September 30, 2001 compared to the same period
in 2002.

         Our SG&A expenses decreased $12.7 million, or 16.1%, to $66.1 million
for the nine months ended September 30, 2002 from $78.8 million in the
comparable period of 2001. Our SG&A expenses as a percentage of revenue were
59.2% for the nine months ended September 30, 2002 compared to 45.0% in the same
period of 2001. The decrease in our SG&A expenses on a dollar basis was
primarily due to the effects of the Expense Reduction Programs we that we
initiated during the second half of 2001. These reductions were partially
off-set by incremental SG&A expenses attributable to the Acquisitions. Excluding
the increases of SG&A expenses attributable to the Acquisitions from the nine
months ended September 30, 2002 and 2001, our adjusted SG&A expenses would have
been $62.4 million in 2002, a decrease of $16.1 million, or 20.5%, from $78.5
million in 2001. As a percentage of adjusted revenue, adjusted SG&A expenses
represent 62.7% of revenue in 2002 compared to 47.9% in the same period of 2001.
This increase was primarily attributable to reduced revenue contributions from
like events in the third quarter of 2002 compared to the same period in 2001.

         We recognized $1.6 million in staff reduction severance charges for the
nine months ended September 30, 2002 compared to $0.3 million in same period of
2001. The increase in 2002 compared to 2001 related principally to staff
reductions in connection with the announced closing of our Needham,
Massachusetts office in December 2002.

         In connection with the strategic review performed during the third
quarter of 2002, we conducted a review of our goodwill and intangible assets and
recorded an additional non-cash charge of $300.0 million to reduce the value of
goodwill and other intangibles related to our portfolio of reporting units to
their estimated fair value. The strategic review and resulting charge recognizes
the sustained economic downturns experienced in the information technology and
networking industries we service as shown by the significant decline in our
results of operations. We used a combination of discounted cash flow methodology
and relative market measures to determine fair value.

         Non-cash stock-based compensation increased $3.1 million to $1.3
million of expense for the nine months ended September 30, 2002 from $1.8
million of income in the comparable period of 2001. The increase was
attributable to the reversal of previously recorded expense, resulting from the
application of variable accounting valuation principles.

         Other income (expense), net increased $4.0 million or 15.7%, to an
expense of $29.9 million for the nine months ended September 30, 2002 from an
expense of $25.8 million in the comparable period of 2001. The increase was
attributable to the inclusion of $6.7 million of income from the GES agreement
to settle in the first nine months of


                                       42
<PAGE>


2001, partially offset by a lower net interest expense that resulted from lower
average interest rates on our primary debt obligations in 2002 than in 2001. For
the nine months ended September 30, 2002, our average interest rate (including
amortization of deferred financing costs) on our primary debt obligations was
under 11.0%, while our rate for the comparable period of 2001 was over 12.0%.
The higher rate in 2001 was principally due to the amortization of a discount on
our Zero Coupon Debentures that we retired in June 2001.

         As a result of the foregoing, our EBITDA for the nine months ended
September 30, 2002 was a loss of $299.6 million, down from $46.0 million in the
comparable period of 2001. After adjusting to exclude non-cash stock based
compensation and staff reduction severance costs in both periods and reduction
of goodwill and other intangibles in 2002, our adjusted EBITDA would have been
$3.3 million for the nine months ended September 30, 2002 compared to $44.5
million in the comparable period of 2001. After excluding the Nine Month
Non-Comparable Results, our adjusted EBITDA would have been $2.0 million in
2002, down $36.1 million from our adjusted EBIDTA of $38.1 million in 2001.

         Depreciation and amortization decreased $12.8 million, or 43.8%, to
$16.4 million for the nine months ended September 30, 2002 from $29.2 million in
the comparable period of 2001. 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 and the elimination
of depreciation expense for fixed assets that were fully depreciated in the
first half of 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. We recognized approximately $9.6 million of
amortization expense for the nine months ended September 30, 2002 related to
goodwill and intangible assets with indefinite useful lives.

         The benefit for income tax decreased $0.7 million, or 15.8%, to a
benefit for income tax of $3.9 million for the nine months ended September 30,
2002 from a benefit of $4.6 million in the comparable period in 2001. As a
percentage of loss before income taxes, extraordinary items and the cumulative
effect of accounting change, this balance represents 1.13% for the nine months
ended September 30, 2002 compared to 29.85% in the same period of 2001. No
benefit in excess of the $3.9 million was recorded for the nine months ended
September 30, 2002 as we have provided a full valuation allowance against our
deferred tax assets.

         In connection with the adoption of SFAS No. 142, 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.



                                       43
<PAGE>

         As a result of the foregoing, we incurred a net loss of $386.2 million
for the nine months ended September 30, 2002 compared to net loss of $20.2
million in the comparable period in 2001.

LIQUIDITY AND CAPITAL RESOURCES

         On September 30, 2002, our balance of cash and cash equivalents was
$18.6 million and we had a working capital deficit of $33.7 million compared to
cash and cash equivalents of $28.0 million and working capital deficit of $64.2
million in the comparable period of 2001. This decrease in cash and cash
equivalents was principally due to the cash portion of our net loss and a
reduction in net working capital, partially offset by purchase price escrow
amounts relating to the Acquisitions that were returned to us, in each case
during the nine months ended September 30, 2002.

         During the nine month period ended September 30, 2002, we met our
liquidity needs principally through cash on hand and the return of purchase
price escrow amounts relating to the Acquisitions. Net cash used in operating
activities was $37.2 million in this nine month period, compared to net cash
provided by operating activities of $22.8 million in the same period of 2001.
This decrease is primarily attributable to the cash portion of our net loss and
a reduction in net working capital.

         Net cash provided by investing activities was $15.0 million in the nine
months ended September 30, 2002, compared to net cash used in investing
activities of $118.4 million in the same period in 2001. The activity for 2002
related to $17.4 million of purchase price escrow amounts relating to the
Acquisitions returned to us, partially offset by $1.9 million used to acquire a
business and $0.5 million used to purchase property and equipment. The activity
for 2001 related to $106.2 million used in business combinations and $12.1
million used to purchase property and equipment.

         Net cash used in financing activities was $0.2 million in the nine
months ended September 30, 2002, compared to net cash provided by financing
activities of $14.1 million in the same period of 2001. The activity for 2002
related to payments associated with issuance of preferred stock in the fourth
quarter of 2001, while the activity in 2001 related to the refinancing of
indebtedness.

         We anticipate that our capital expenditures for 2002 will total
approximately $1.0 million, principally related to ongoing infrastructure
initiatives, and replacement and upgrades of property and equipment.

         We were in compliance with the financial covenants included in our
borrowing agreements as of September 30, 2002, primarily due to the inclusion in
operating income of insurance proceeds for claims arising from losses incurred
as a result of the events of September 11, 2001, the reversal of previously
recorded accruals for production costs at our COMDEX/Fall 2001 tradeshow which
were in excess of the production costs actually incurred at that tradeshow and,
to a lesser extent, continuing benefits from the Expense Reduction Programs. In
order to remain in compliance with our senior bank revolving credit facility,
among other things, we must generate sufficient EBITDA from our events


                                       44
<PAGE>

so that we maintain at the end of each quarterly period the following required
pro forma EBITDA: $1.0 million for September 30, 2002; $34.0 million for
December 31, 2002; and a loss of $16.0 million for March 31, 2003.

         So far in 2002, we have held seven of our major events, Seybold
Seminars New York, COMDEX Chicago, JavaOne , NetWorld+Interop Las Vegas,
NetWorld+Interop Atlanta, NetWorld+Interop Tokyo and Seybold Seminars San
Francisco. Each of the events occurring in the United States was adversely
impacted by the continuing difficulties in the IT industry and the economy in
general. We expect the same will be true of our COMDEX Las Vegas tradeshow,
which we will hold between November 18 and 22, 2002.

         While we were in compliance with the financial covenants in our senior
credit facility for the quarter ended September 30, 2002, because of the
continuing difficulties being experienced in the industries we serve, we
continue to believe that we will not be in compliance with these financial
covenants for the quarter ended December 31, 2002.  We are currently negotiating
with the lenders under our senior bank credit facility seeking to obtain waivers
of certain non-financial technical covenant defaults that currently exist and
other modifications to the credit facility.  In addition, there is substantial
risk that we will be unable to pay the interest payment on our senior
subordinated notes due on December 16, 2002, and we are in the early stages of
discussing this development with some of the larger holders of our notes.

         If we fail to comply with the financial covenants in our senior bank
revolving credit facility and are unable to successfully modify and amend those
financial covenants or are unsuccessful in obtaining waivers with respect to our
noncompliance, our lenders have the option to require us to immediately repay
all our borrowings under the facility. We do not currently have sufficient funds
to make such a repayment. In addition, any acceleration of the borrowings under
our senior bank credit facility or failure to pay any scheduled interest
payments on our senior subordinated notes would be an event of default in
respect of our senior subordinated notes and could result in the acceleration of
the maturity of those notes (although the subordination provisions of the notes
would require the prior payment of the bank borrowings). We do not currently
have sufficient funds to repay our senior subordinated notes in full.

         In connection with the announced closure of the regional office in
Needham, Massachusetts, we anticipate that we will incur additional staff
reduction severance and other charges during the fourth quarter of 2002.

         Following is a summary of our contractual obligations in excess of one
year from September 30, 2002 (in millions):


                                       45
<PAGE>

<TABLE>
<CAPTION>
                                           Three Months
                                             Ending                 Year ending December 31,
                                           December 31,   -------------------------------------------
                                              2002         2003        2004         2005        2006      Thereafter      Total
                                           ------------   ------      -------      ------      ------     ----------      -----
<S>                                          <C>          <C>         <C>          <C>         <C>         <C>           <C>
Long-term debt ..........................    $  --        $  --       $  80.0      $  --       $  --       $  290.0      $  370.0
Operating leases ........................       1.4          5.9          6.2         6.3         5.6          10.2          35.6
Total contractual cash
   obligations ..........................    $  1.4       $  5.9      $  86.2      $  6.3      $  5.6      $  300.2      $  405.6
</TABLE>


         At September 30, 2002, we have $20.0 million unused borrowings under
our senior bank credit facility before considering the $1.8 million letter of
credit outstanding.

         In connection with the acquisition of businesses during 2001 and in
January 2002, a portion of the purchase price in each transaction 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 we would be required to make an additional payment to the
sellers or entitled to a return of purchase price. As of September 30, 2002, the
following table lists the amounts currently held in escrow:

<TABLE>
<CAPTION>
                                     Amount
                                     ------
<S>                                  <C>
         NGN Assets ............     $8,831
         ExpoNova ..............        338
                                     ------
                                     $9,169
                                     ======
</TABLE>


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 "Basis of Presentation" of the Consolidated Financial Statements
(unaudited) included elsewhere in this Form 10-Q, and Note 2 "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, 2001
are also important to an understanding of our financial statements.

                                       46
<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.

         We adopted Financial Accounting Standards (SFAS) No. 142 "Goodwill and
Other Intangible Assets," beginning with the first quarter of 2002. SFAS No. 142
requires that goodwill and intangible assets that have indefinite useful lives
not be amortized but, instead, tested at least annually for impairment while
intangible assets that have finite useful lives continue to be amortized over
their respective useful lives. Accordingly, we ceased amortization of all
goodwill, which was our only intangible asset with an indefinite useful life, on
January 1, 2002, and will continue to amortize our intangible assets with finite
useful lives, consisting primarily of trade names and advertiser and exhibitor
lists, over their respective useful lives. SFAS No. 142 requires that goodwill
be tested for impairment using a two-step process. The first step is to
determine the fair value of the reporting unit, which may be calculated using a
discounted cash flow methodology, and compare this value to its carrying value.
If the fair value exceeds the carrying value, no further work is required and no
impairment loss would be recognized. The second step is an allocation of the
fair value of the reporting unit to all of the reporting unit's assets and
liabilities under a hypothetical purchase price allocation.

         Based on the evaluation performed to adopt SFAS No. 142, along with
continuing difficulties being experienced in the IT industry and declining
operating results, we recorded a non-cash charge of $344.6 million, net of tax
benefit of $80.4 million, to reduce the carrying value of the COMDEX reporting
unit to its estimated fair value. We utilized a combination of discounted cash
flow methodology and relative market measures that involve judgment and
estimation to determine fair value. In connection with the strategic review
performed during the third quarter of 2002, we conducted a review of our
goodwill and intangible assets and recorded an additional non-cash charge


                                       47
<PAGE>

of $300.0 million to reduce the value of goodwill and other intangibles related
to our portfolio of reporting units to their estimated fair value. The strategic
review and resulting charge recognizes the sustained economic downturns
experienced in the information technology and networking industries we service
as shown by the significant decline in our results of operations. We used a
combination of discounted cash flow methodology and relative market measures to
determine fair value. For additional information regarding long-lived assets,
see Note 7, "Goodwill and Other Intangible Assets - Adoption of Statement No.
142" included in the Consolidated Financial Statements (unaudited) appearing
elsewhere in this Form 10-Q.

         In the event that the economic downturn continues for a prolonged
period of time, or conditions change as a result of the process currently
contemplated as discussed above in "Recent Developments", the value of goodwill
and intangible assets may vary from current estimates; accordingly, additional
impairment charges may be recorded in future periods.

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, Canada, and Latin America. 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.




                                       48
<PAGE>


                            PART II OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS

         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 estimate that our total annual occupancy costs under the new lease will 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. The value of these assets is currently in dispute. On
August 21, 2002, Interface filed a parallel action against Key3Media Events in
the Superior Court, County of Los Angeles, State of California. Key3Media Events
moved to have the California action dismissed or stayed. On October 2, 2002,
with the exception of any attachment proceedings in California, the California
action was stayed. Thereafter, Interface applied for and received a right to
attach up to $711,111 of



                                       49
<PAGE>


Key3Media Events' assets in California. Based upon the dispute as to the value
of the assets attached in Massachusetts, on November 5, 2002, the California
court stayed Interface's right to execute the attachment of Key3Media Events'
assets in California. On October 12, 2002, Interface filed a motion with the
court in Massachusetts to increase the attachment amount to the full amount of
rent claimed by Interface.

         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, tortuous 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
$10,000 and punitive damages in excess of $10,000 and declaratory relief. A jury
trial was scheduled for October 22, 2002, however, at the joint request of the
parties the trial was postponed until January 21, 2003. Discovery is ongoing.

         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




                                       50
<PAGE>


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 tortuous 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.

         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 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 indictment 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 $10.7 million and punitive damages of
$10.0 million.

         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. The



                                       51
<PAGE>

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.

         In connection with its spin-off from ZDI, our subsidiaries and we have
received an indemnification from ZDI against all liabilities not related to our
businesses, including the class actions and derivative litigation filed against
ZDI 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 6.       EXHIBITS AND REPORTS ON FORM 8-K

     (a)      Exhibits

              None

     (b)      Reports on Form 8-K

              On July 12, 2002, we filed a Current Report on Form 8-K (Items 5
              and 7) concerning our continued listing on the New York Stock
              Exchange.

              On July 17, 2002, we filed a Current Report on Form 8-K (Item 5)
              announcing the resignation of Bruce M. Ramer as a director of
              Key3Media.

              On July 30, 2002, we filed a Current Report on Form 8-K (Item 5)
              announcing the resignation of James A. Wiatt as a director of
              Key3Media.

              On August 12, 2002, we filed a Current Report on Form 8-K (Item 5)
              announcing the resignation of James E. Moore as a director of
              Key3Media.

              On August 14, 2002, we filed a Current Report on Form 8-K (Item 9)
              concerning the signing of the certifications required by Section
              906 of the Sarbanes-Oxley Act.

              On August 28, 2002, we filed a Current Report on Form 8-K (Item 5)
              announcing the resignation of John A. Pritzker as a director of
              Key3Media and announcing an adjustment to the purchase price and
              escrow arrangement


                                       52
<PAGE>

              for our Voice on Net Conferences and Sessions Initiation Protocol
              Summits acquisition.

              On August 30, 2002, we filed a Current Report on Form 8-K (Item 5)
              announcing the resignation of G. Andrea Botta as a director of
              Key3Media.




                                       53
<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: November 14, 2002




                                       54
<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



                                       55
<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: November 14, 2002




                                       56
<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



                                       57
<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: November 14, 2002


                                       58