<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


(Mark One)

/ x / Quarterly report pursuant to Section 13 or 15(d) of the Securities 
      Exchange Act of 1934 for the Period ended June 30, 1998.

/  /  Transition report pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934.

Commission file number:  333-50119




                      AMERICAN LAWYER MEDIA HOLDINGS, INC.
            (Exact name of registrant as specified in its character)
         DELAWARE                                         13-3980412

(State or other jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                     Identification Number)

                              345 Park Avenue South
                            New York, New York 10010
                    (Address of principal executive offices)
                         Telephone Number (212) 779-9200
              (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. Note: This is a voluntary filing;
Registrant not yet subject to Section 13 or 15(d).

                      Yes                           No
                         -----                         -----
      APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
                            THE PRECEDING FIVE YEARS:

         INDICATE BY CHECK MARK WHETHER THE REGISTRANT HAS FILED ALL DOCUMENTS
AND REPORTS REQUIRED TO BE FILED BY SECTION 12, 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 SUBSEQUENT TO THE DISTRIBUTION OF SECURITIES UNDER A PLAN
CONFIRMED BY A COURT. YES NO


As of August 1, 1998 there were 120,000 shares of the registrant's Common Stock
outstanding.



<PAGE>



                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                  PAGE
                                                                                  ----
<S>      <C>                                                                     <C>
PART I.  FINANCIAL INFORMATION


         ITEM 1. Financial Statements...............................................3

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

         ITEM 3. Quantitative and Qualitative Disclosures About Market Risk........33

PART II. OTHER INFORMATION

         ITEM 1. Legal Proceedings.................................................33

         ITEM 2. Changes in Securities and Use of Process..........................33

         ITEM 3. Default Upon Senior Securities....................................33

         ITEM 4. Submission of Matters to a Vote of Security Holders...............33

         ITEM 5. Other Information.................................................33

         ITEM 6. Exhibits and Reports on Form 8-K..................................33


</TABLE>





<PAGE>



                                     PART I
                              FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
                      AMERICAN LAWYER MEDIA HOLDINGS, INC.


                           CONSOLIDATED BALANCE SHEETS

                       JUNE 30, 1998 AND DECEMBER 31, 1997
                      (IN THOUSANDS EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>

                                                                                       JUNE 30,         DECEMBER 31,
                                                                                         1998               1997
                                                                                       --------         ------------
<S>                                                                               <C>                <C>
                                     ASSETS
CURRENT ASSETS:
   Cash and cash equivalents..................................................... $     1,882        $     9,442
   Accounts receivable, net of allowance for doubtful accounts and returns of 
   $3,488 and $3,236, respectively...............................................      13,467             12,560
   Inventories, net..............................................................       1,510              1,482
   Other current assets..........................................................       2,540              2,716
                                                                                  ------------         ------------
        Total current assets.....................................................      19,399             26,200

PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation and
   amortization of $1,554 and $613, respectively.................................       5,718              5,630
INTANGIBLE ASSETS, net of accumulated amortization of $7,360 and $1,855,
   respectively..................................................................     157,800            163,305
GOODWILL, net of accumulated amortization of $6,432 and $498, respectively.......     185,670            159,623
DEFERRED FINANCING COSTS net of accumulated amortization of $503 and $0,
   respectively..................................................................       8,950              7,678
DEFERRED INCOME TAXES............................................................       2,878              2,934
OTHER ASSETS.....................................................................         205                158
                                                                                  ------------         ------------
        Total assets............................................................. $   380,620        $   365,528
                                                                                  ------------         ------------
                                                                                  ------------         ------------
                      LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
   Accounts payable.............................................................. $     2,842        $     3,466
   Accrued expenses..............................................................      11,298             12,130
   Accrued interest payable......................................................         877                474
   Deferred income (including deferred subscription income of $17,426 and 
   $16,502, respectively)........................................................      19,269             17,172
                                                                                  ------------         ------------
        Total current liabilities................................................      34,286             33,242
                                                                                  ------------         ------------
LONG TERM DEBT...................................................................       7,000               ----
                                                                                  ------------         ------------
SENIOR NOTES.....................................................................     175,000            175,000
                                                                                  ------------         ------------
SENIOR DISCOUNT NOTES...........................................................       37,263             35,119
                                                                                  ------------         ------------
DEFERRED INCOME TAXES............................................................      49,678             51,515
                                                                                  ------------         ------------
OTHER NONCURRENT LIABILITIES.....................................................       3,487              3,363
                                                                                  ------------         ------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
   Common stock--$.01 par value; 200,000 shares authorized; 120,000 issued and
      outstanding at June 30, 1998 and 100,000 issued and outstanding at 
      December 31, 1997..........................................................           1                  1
   Additional paid-in-capital....................................................      89,999             74,999
   Accumulated deficit...........................................................     (16,094)            (7,711)
                                                                                  ------------         ------------
        Total stockholder's equity...............................................      73,906             67,289
                                                                                  ------------         ------------
        Total liabilities and stockholders' equity............................... $   380,620        $   365,528
                                                                                  ------------         ------------
                                                                                  ------------         ------------
</TABLE>


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


                                       3


<PAGE>


                      AMERICAN LAWYER MEDIA HOLDINGS, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS

             FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 1998

                                 (IN THOUSANDS)



<TABLE>
<CAPTION>

                                                                                THREE MONTHS           SIX MONTHS
                                                                                    ENDED                 ENDED
                                                                                JUNE 30, 1998         JUNE 30, 1998
                                                                              ----------------        -------------
<S>                                                                           <C>                     <C>
NET REVENUES:
  Periodicals
    Advertising...........................................................    $   18,106              $   33,060
    Subscription..........................................................         6,027                  11,167
  Ancillary Products and Services.........................................         7,449                  13,077
  Internet Services.......................................................           709                   1,363
                                                                              ----------              ----------
      Total net revenues..................................................        32,291                  58,667
                                                                              ----------              ----------
OPERATING EXPENSES:
  Editorial...............................................................         3,779                   7,140
  Production and Distribution.............................................         6,838                  12,310
  Selling.................................................................         4,895                   9,145
  General and Administrative..............................................         7,371                  14,472
  Internet Services.......................................................         1,032                   2,142
  Depreciation and Amortization...........................................         6,413                  12,359
                                                                              ----------              ----------
      Total operating expenses............................................        30,328                  57,568
                                                                              ----------              ----------
      Operating income....................................................         1,963                   1,099
INTEREST EXPENSE, net.....................................................        (5,742)                (11,229)
                                                                              ----------              ----------
      Loss before income taxes............................................        (3,779)                (10,130)
BENEFIT FOR INCOME TAXES..................................................           810                   1,747
                                                                              ----------              ----------
      Net loss............................................................    $   (2,969)             $   (8,383)
                                                                              ----------              ----------
                                                                              ----------              ----------

</TABLE>

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



                                       4

<PAGE>



                      AMERICAN LAWYER MEDIA HOLDINGS, INC.

                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                     FOR THE SIX MONTHS ENDED JUNE 30, 1998

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>

                                          COMMON STOCK
                                       --------------------      ADDITIONAL
                                                      PAR          PAID-IN
                                        SHARES       VALUE         CAPITAL        NET LOSS         TOTAL
                                       --------    --------      -----------     ----------     ----------
<S>                                    <C>         <C>           <C>            <C>             <C>
BALANCE AT DECEMBER 31, 1997.......... 100,000     $    1        $   74,999      $  (7,711)     $   67,289
   Net Loss...........................      --         --                --         (8,383)         (8,383)
   Capital Contribution...............  20,000         --            15,000             --          15,000
                                       --------    --------      -----------     ----------     ----------
BALANCE AT JUNE 30, 1998.............. 120,000     $    1        $   89,999      $ (16,094)     $   73,906
                                       --------    --------      -----------     ----------     ----------
                                       --------    --------      -----------     ----------     ----------

</TABLE>


         The accompanying notes to consolidated financial statements are an
integral part of this statement.


                                       5

<PAGE>



                      AMERICAN LAWYER MEDIA HOLDINGS, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

             FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 1998

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                       THREE MONTHS           SIX MONTHS
                                                                           ENDED                 ENDED
                                                                       JUNE 30, 1998         JUNE 30, 1998
                                                                       -------------         -------------
<S>                                                                    <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss........................................................       (2,969)                (8,383)
   Adjustments to reconcile net loss to net cash (used in) provided
      by operating activities
      Depreciation and amortization................................        6,413                 12,359
      Decrease (increase) in-
         Accounts receivable, net..................................         (411)                   874
         Inventories...............................................          (21)                   137
         Other current assets......................................           61                    233
         Deferred financing costs..................................         (918)                (1,272)
         Other assets..............................................          (17)                     9
      Increase (decrease) in-
         Accounts payable..........................................         (452)                (1,228)
         Accrued expenses..........................................         (405)                (1,523)
         Accrued interest payable..................................       (3,863)                   403
         Deferred income...........................................        ( 955)                   694
         Other noncurrent liabilities..............................         (585)                (1,715)
                                                                        ----------             ----------
           Total adjustments.......................................       (1,153)                 8,971
                                                                        ----------             ----------
           Net cash (used in) provided by operating activities.....       (4,122)                   588
                                                                        ----------             ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures............................................         (369)                  (558)
   Purchase of business:
      Working capital, other than cash.............................          426                    426
      Property plant and equipment.................................         (450)                  (450)
      Cost in excess of net assets of company acquired.............      (20,718)               (31,980)
      Acquisition related costs and expenses.......................            8                    270
                                                                        ----------             ----------
           Net cash used in investing activities...................      (21,103)               (32,292)
                                                                        ----------             ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Capital contribution............................................       15,000                 15,000
   Issuance of debt................................................        7,000                  7,000
   Accretion of interest on Senior Discount Notes..................        1,072                  2,144
                                                                        ----------             ----------
           Net cash provided from financing activities.............       23,072                 24,144
                                                                        ----------             ----------
           Net decrease in cash and cash equivalents...............       (2,153)                (7,560)
CASH AND CASH EQUIVALENTS, beginning of period.....................        4,035                  9,442
                                                                        ----------             ----------
CASH AND CASH EQUIVALENTS, end of period...........................  $     1,882            $     1,882
                                                                        ----------             ----------
                                                                        ----------             ----------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
   Cash paid during the period for-
      Income taxes.................................................  $        21            $       255
                                                                        ----------             ----------
      Interest.....................................................  $     9,294            $     9,297
                                                                        ----------             ----------

</TABLE>

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


                                       6


<PAGE>



                      AMERICAN LAWYER MEDIA HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 1998

1.       ACQUISITIONS

         Pursuant to an Asset Purchase Agreement dated as of March 3, 1998,
among Corporate Presentations, Inc., its sole stockholder and LegalTech, LLC, a
wholly-owned indirect subsidiary of American Lawyer Media Holdings, Inc.,
("Holdings") LegalTech, LLC agreed to purchase substantially all of the assets
and assume certain of the liabilities of Corporate Presentations, Inc. for
approximately $10.8 million (the "LegalTech Acquisition"). Corporate
Presentations, Inc. is a producer of trade shows and conferences for the legal
community. For advisory services rendered to the Company (as defined below) in
connection with the LegalTech Acquisition, the Company paid WP Management
Partners, LLC ("WPMP"), an affiliate of Holdings, a fee of 1% of the purchase
price of the LegalTech Acquisition.

         On April 22, 1998, effective as of April 1, 1998, the Company
consummated the acquisition of substantially all of the legal publishing-related
assets and assumed certain liabilities of Legal Communications, Ltd ("LCL") for
an aggregate purchase price of approximately $20.1 million (the "LCL
Acquisition"). LCL is a publisher of regional legal publications. For advisory
services rendered to the Company in connection with the LCL Acquisition, the
Company paid WPMP, an affiliate of Holdings, a fee of 1% of the purchase price
of the LCL Acquisition.

         The LegalTech Acquisition and LCL Acquisition have been accounted for
under the purchase method of accounting and the results of operations of the
acquired businesses have been included in the financial statements since the
effective dates of the respective acquisitions. The excess of the purchase price
over net assets acquired was allocated to goodwill. In the accompanying
consolidated statements of operations, the excess of purchase price over net
assets acquired is being amortized over fifteen years.

         The following unaudited pro forma information presents a summary of
consolidated results of operations of the Company as if the LegalTech
Acquisition and LCL Acquisition had occurred on January 1, 1998 (in thousands):

<TABLE>
<CAPTION>

                                                     FOR THE THREE              FOR THE SIX
                                                      MONTHS ENDED              MONTHS ENDED
                                                     JUNE 30, 1998             JUNE 30, 1998
                                                     -------------             -------------
<S>                                                <C>                       <C>
Net revenues...................................... $       36,331            $       62,707
Net loss.......................................... $       (2,511)           $       (7,925)

</TABLE>


         These unaudited pro forma results have been prepared for comparative
purposes only and include certain adjustments, such as additional amortization
expense as a result of goodwill. They do not purport to be indicative of the
results of operations which actually would have resulted had the combination
been in effect on January 1, 1998, or of future results of operations of the
consolidated entities.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

         The consolidated financial statements include the accounts of Holdings
and its wholly-owned subsidiary, American Lawyer Media, Inc. which, unless the
context otherwise requires, are collectively referred to herein as the
"Company." The accounts of American Lawyer Media, Inc. include the accounts of
its wholly-owned



                                        7

<PAGE>



                      AMERICAN LAWYER MEDIA HOLDINGS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  JUNE 30, 1998

2.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

subsidiaries, ALM, LLC, Counsel Connect, LLC, National Law Publishing Company,
Inc. ("NLP"), and ALM IP, LLC. The accounts of NLP include its wholly-owned
subsidiary NLP IP Company. Intercompany transactions and balances have been
eliminated in consolidation.

         The unaudited consolidated financial statements for the three and six
month periods ended June 30, 1998 have been prepared in accordance with the
instructions to Form 10-Q and include, in the opinion of management, all
adjustments (consisting only of normal recurring accruals) necessary for a fair
presentation of the results of operations for such periods. They do not,
however, include all of the information and disclosures required by generally
accepted accounting principles for audited financial statements.

         For further information, reference is made to the consolidated
financial statements for the fiscal year ended December 31, 1997 and the
footnotes related thereto included in the Company's 1997 Annual Report on Form
10-K from which the December 31, 1997 balances presented herein have been
derived. The results of operations for the three and six month periods ended
June 30, 1998 are not necessarily indicative of the results of operations for
the full year.

USE OF ESTIMATES

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

CONCENTRATIONS OF CREDIT RISK

         The Company's financial instruments that are exposed to concentration
of credit risk consist primarily of cash and cash equivalents and trade accounts
receivable. The Company believes it is not exposed to any significant credit
risk related to cash and cash equivalents. Concentrations of credit risk with
respect to trade accounts receivable are, except for amounts due from legal
advertising ad agents ("Legal Ad Agents"), generally limited due to the large
number of customers comprising the Company's customer base. Such Legal Ad Agents
do not have significant liquid net worth and, as a result, the Company is
exposed to a certain level of credit concentration risk in this area, for which
the Company believes it has adequately provided.

REVENUE RECOGNITION

         Periodical Advertising revenues are generated from the placement of
display and classified advertisements, as well as legal notices, in the
Company's publications. Advertising revenue is recognized upon release of the
related publications.

         Periodical Subscription revenues are recognized on a pro rata basis as
issues of a subscription are served.

         Ancillary revenues consist principally of third-party printing
revenues, newsletter subscriptions, sales of professional books, seminar and
conference income, income from a daily fax service of court decisions and income
from electronic products. Printing revenue is recorded upon shipment. Book
revenues are recognized upon shipment and are reflected net of estimated
returns. Newsletter revenues are recognized on the same basis as subscription




                                        8

<PAGE>


                      AMERICAN LAWYER MEDIA HOLDINGS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  JUNE 30, 1998

2.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

revenues. Seminar and conferences revenues are recognized when the seminar or
conference is held. Daily fax service revenue is recognized upon fulfillment of
orders. Income from electronic products is recognized monthly as the service is
provided.

         Internet Service revenues consist primarily of revenues from
subscriptions and advertising. Internet subscription income is recognized on a
pro-rata basis over the life of a subscription, generally one year. Internet
advertising revenues are recognized upon the release of an advertisement on the
website.

DEFERRED SUBSCRIPTION INCOME

         Deferred subscription income results from advance payments or orders
for subscriptions received from subscribers and is amortized on a straight-line
basis over the life of the subscription as issues are served. Subscription
receivables of approximately $2,659,000 and $1,772,000 are included in accounts
receivable in the accompanying consolidated June 30, 1998 and December 31, 1997
balance sheets, respectively.

ADVERTISING AND PROMOTION COSTS

         Advertising and promotion expenditures, which totaled approximately
$1,449,000 and $2,763,000 for the three and six month periods ended June 30,
1998, respectively, are expensed as the related advertisements or campaigns are
released.

CASH AND CASH EQUIVALENTS

         The Company considers time deposits and certificates of deposit with
original maturities of three months or less to be cash equivalents.

INVENTORIES

         Inventories consist principally of paper and related binding materials
utilized by the Company and its outside printers and professional books
published and sold by the Company. Inventories are stated at the lower of cost,
as determined by the average cost method, or market.

PROPERTY, PLANT AND EQUIPMENT

         Property, plant and equipment is stated at cost, with the exception of
fixed assets acquired as part of the acquisition on August 27, 1997, effective
as of August 1, 1997, of substantially all of the publishing-related assets and
assumption of certain of the liabilities of American Lawyer Media, L.P. by the
Company (the "ALM Acquisition"), the acquisition on December 22, 1997 of all of
the issued and outstanding capital stock of NLP (the "NLP Acquisition"), and the
LCL Acquisition, which are stated at approximate fair market value as of the
date of the acquisitions. Significant improvements are capitalized, while
expenditures for maintenance and repairs are charged to expense as incurred.
Depreciation is calculated using the straight-line method over the estimated
remaining useful





                                        9

<PAGE>


                      AMERICAN LAWYER MEDIA HOLDINGS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  JUNE 30, 1998

2.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

lives of the assets acquired as part of the ALM Acquisition, the NLP Acquisition
and the LCL Acquisition. Assets purchased after the ALM Acquisition, the NLP
Acquisition and the LCL Acquisition are depreciated using the straight-line
method over the following estimated useful lives:

<TABLE>
<S>                                                      <C>
Buildings...........................................       25 years
Furniture, machinery and equipment..................      5-9 years
Computer equipment and software.....................      3-6 years
</TABLE>

         Leasehold improvements are amortized over the shorter of the remaining
lease term or the estimated useful life.

GOODWILL

         Goodwill represents the excess of purchase price over the fair value of
net assets acquired. It is stated at cost less accumulated amortization and is
amortized on a straight-line basis over a fifteen-year useful life. The Company
periodically assesses the recoverability of goodwill by determining whether the
amortization of goodwill over its estimated remaining life can be recovered
through projected undiscounted future consolidated operating cash flows.

INTANGIBLE ASSETS

         Intangible assets represent advertiser commitments, trademarks,
customer and subscriber lists and non-compete agreements. They are stated at
cost less accumulated amortization and are amortized on a straight-line basis
over a weighted average useful life of fifteen years.

INCOME TAXES

         Deferred income taxes are provided for the temporary differences
between the financial reporting and the tax basis of the Company's assets and
liabilities and principally consist of nondeductible goodwill and identified
intangibles relating to NLP, accelerated depreciation, allowance for doubtful
accounts, certain accrued liabilities not currently deductible for tax purposes
and net operating loss carry forwards.

REPORTING COMPREHENSIVE INCOME

         Effective with fiscal years beginning after December 15, 1997,
companies are required to adopt the Statement of Financial Accounting Standards
(SFAS) No. 130 "Reporting Comprehensive Income." The Statement establishes
standards for the reporting and display of comprehensive income and its
components in a full set of general-purpose financial statements. Comprehensive
income includes net income and other comprehensive income, which comprises
certain specific items reported directly in stockholders' equity. Other
comprehensive income comprises items such as unrealized gains and losses on debt
and equity securities classified as available-for-sale securities, minimum
pension liability adjustments, and foreign currency translation adjustments.
Since the Company does not currently have any of these other comprehensive
income items, the Company's comprehensive income equals its net income.
Therefore, SFAS No. 130 has no impact on the way the Company reports or has
reported its financial statements.




                                       10

<PAGE>


                      AMERICAN LAWYER MEDIA HOLDINGS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  JUNE 30, 1998

2.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

         In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities." The Statement establishes accounting and
reporting standards requiring that every derivative instrument (including
certain derivative instruments embedded in other contracts) be recorded in the
balance sheet as either an asset or liability measured at its fair value. The
Statement requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative's gains and losses to
offset related results on the hedged item in the income statement, and requires
that a company must formally document, designate and assess the effectiveness of
transactions that receive hedge accounting.

         SFAS 133 is effective for fiscal years beginning after June 15, 1999.
SFAS 133 cannot be applied retroactively. SFAS 133 must be applied to (a)
derivative instruments, and (b) certain derivative instruments embedded in
hybrid contracts that were issued, acquired, or substantively modified after
December 31, 1997 (and, at the company's election, before January 1, 1998).

         Currently, the Company expects that the impact of adopting SFAS 133
will be immaterial.

3.       DEBT

         On December 22, 1997, Holdings issued $63,275,000 principal amount at
maturity of 12.25% Senior Discount Notes (the "Senior discount Notes") due
December 15, 2008, at a discount rate of $553.14 per Senior Discount Note. Net
proceeds for Holdings were $33,775,000, net of discounts and commissions of
$1,225,000. The Senior Discount Notes accrue interest compounded semi-annually
at a rate of 12.25% to an aggregate principal amount of $63,275,000 by December
15, 2002. Commencing June 15, 2003, cash interest will be payable semi-annually
until maturity each June 15 and December 15. The Senior Discount Notes are
senior, unsecured obligations of Holdings. The Senior Discount Notes may be
redeemed at any time by Holdings, in whole or in part, at various redemption
prices that include accrued and unpaid interest as well as any existing
liquidating damages. The Senior Discount Notes contain certain covenants that,
among other things, limit the incurrence of additional indebtedness by the
Company and its subsidiaries, the payment of dividends and other restricted
payments by the Company and its subsidiaries, restrictions on distributions from
Restricted Subsidiaries, asset sales, transactions with affiliates, incurrence
of liens and mergers and consolidations. Financing costs associated with the
debt have been capitalized and are being amortized over the term of the Senior
Discount Notes. Amortization of deferred financing costs is recorded as interest
expense in the accompanying consolidated statement of operations. Assuming that
there is no redemption of the Senior Discount Notes prior to maturity, the
entire principal will be payable on December 15, 2008.

         On December 22, 1997, the Company issued $175,000,000 of 9.75% senior
notes ("Senior Notes") due December 15, 2007. The Senior Notes accrue interest
at 9.75% which is payable in cash semi-annually on June 15 and December 15 (the
first interest payment was made on June 15, 1998). The Senior Notes are fully
and unconditionally guaranteed on a joint and several and senior unsecured basis
by each of the Company's existing and future subsidiaries. The Senior Notes may
be redeemed at any time by the Company, in whole or in part, at various
redemption prices that include accrued and unpaid interest as well as any
existing liquidated damages. The Senior Notes contain certain covenants that,
among other things, limit the incurrence of additional indebtedness by the
Company and its subsidiaries, the payment of dividends and other restricted
payments by the Company and its subsidiaries, asset sales, transactions with
affiliates, the incurrence of liens, and mergers and consolidations. Financing
costs associated with this debt have been capitalized and are being amortized
over the term of the Senior Notes. Amortization of deferred financing costs is
recorded as interest expense in the accompanying consolidated statements



                                       11

<PAGE>



                      AMERICAN LAWYER MEDIA HOLDINGS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  JUNE 30, 1998


3.       DEBT (CONTINUED)

of operations. Assuming there is no redemption of the Senior Notes prior to
maturity, the entire principal will be payable on December 15, 2007.

         On March 25, 1998, Holdings and the Company (as the "Borrower") entered
into a credit agreement with various banks that established a combined revolving
loan commitment in the initial principal amount of $40,000,000 (the "Revolving
Credit Facility"). Financing costs associated with the Revolving Credit Facility
have been capitalized and are being amortized over the term of the agreement.
The Revolving Credit Facility is guaranteed by Holdings and, on a joint and
several basis, by all subsidiaries of the Company. In addition, the Revolving
Credit Facility is secured by a first priority security interest in
substantially all of the properties and assets of the Company and its domestic
subsidiaries, including a pledge of the equity securities of such subsidiaries,
and a pledge by Holdings of all of the stock of the Company. The Revolving
Credit Facility bears interest at a fluctuating rate determined by reference to
(i) the Base Rate (as defined in the Revolving Credit Facility) plus a margin
ranging from .25% to 1.5%, or (ii) the Eurodollar Rate (as defined in the
Revolving Credit Facility) plus a margin ranging from 1.25% to 2.5%, as the case
may be. The applicable margin is based on the Company's consolidated total
leverage ratio. The Base Rate equals the higher of (a) the rate of interest
publicly announced from time to time by Bank of America as its reference rate,
or (b) the Federal funds rate plus .5%. The Eurodollar Rate is based on (i) the
interest rate per annum at which deposits in U.S. Dollars are offered by Bank of
America's applicable lending office to major banks in the offshore market in an
aggregate principal amount approximately equal to the amount of the loan made to
the Company, and (ii) the maximum reserve percentage in effect under regulations
issued from time to time by the Federal Reserve Board. The Company is also
required to pay customary fees with respect to the Revolving Credit Facility,
including an up-front arrangement fee, annual administrative agency fees, and
commitment fees on the unused portion of the Revolving Credit Facility. The
Revolving Credit Facility includes both affirmative and negative covenants that
include meeting certain financial ratios. As of June 30, 1998, there was
$7,000,000 of debt outstanding under the Revolving Credit Facility.




                                       12

<PAGE>



                           AMERICAN LAWYER MEDIA, L.P.

                                  BALANCE SHEET

                                  JUNE 30, 1997

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>

                                          ASSETS                                                 1997
                                                                                            ----------
<S>                                                                                         <C>
CURRENT ASSETS:
   Cash and cash equivalents..............................................................  $     420
   Accounts receivable, net of allowance for doubtful accounts of $1,614..................      6,234
   Inventories, net.......................................................................        371
   Other current assets...................................................................        590
                                                                                            ----------
                  Total current assets....................................................      7,615
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation and
   amortization of 7,187                                                                        5,594
INTANGIBLE ASSETS, net of accumulated amortization of $20,480.............................      4,673
GOODWILL, net of accumulated amortization of $244.........................................        969
OTHER ASSETS..............................................................................        165
                                                                                            ----------
         Total Assets.....................................................................  $  19,016
                                                                                            ----------
                                                                                            ----------


                  LIABILITIES AND PARTNERS' ACCUMULATED DEFICIT

CURRENT LIABILITIES:
   Accounts payable.......................................................................  $     907
   Accrued expenses.......................................................................      4,489
   Deferred income (including deferred subscription income of $7,441).....................      7,955
                                                                                            ----------
   Total current liabilities..............................................................     13,351
                                                                                            ----------
DUE TO GENERAL PARTNER....................................................................     34,165
                                                                                            ----------
OTHER NONCURRENT LIABILITIES..............................................................        867
                                                                                            ----------
COMMITMENTS AND CONTINGENCIES
PARTNERS' ACCUMULATED DEFICIT.............................................................     (29,367)
                                                                                            ----------
   Total liabilities and partners' accumulated deficit....................................  $  19,016
                                                                                            ----------
                                                                                            ----------

</TABLE>

         The accompanying notes to financial statements are an integral part of
this balance sheet.



                                       13

<PAGE>



                           AMERICAN LAWYER MEDIA, L.P.

                            STATEMENTS OF OPERATIONS

             FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 1997

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                          THREE MONTHS            SIX MONTHS
                                                                          ENDED JUNE 30,         ENDED JUNE 30,
                                                                              1997                    1997
                                                                          --------------        ----------------
<S>                                                                       <C>                   <C>
NET REVENUES:
   Periodicals
      Advertising.......................................................  $      8,177          $      15,522
      Subscription......................................................         3,083                  5,799
      Ancillary Products and Services...................................         1,847                  3,673
      Internet Services.................................................           844                  1,896
                                                                          -------------          -------------
      Total net revenues................................................        13,951                 26,890
                                                                          -------------          -------------
OPERATING EXPENSES:

      Editorial.........................................................         1,678                  3,385
      Production and Distribution.......................................         3,101                  6,021
      Selling...........................................................         2,064                  3,952
      General and Administrative........................................         4,158                  8,390
      Internet Services.................................................         3,001                  5,691
      Depreciation and Amortization.....................................           680                  1,314
                                                                          -------------          -------------
         Total operating expenses.......................................        14,682                 28,753
                                                                          -------------          -------------
         Operating loss.................................................          (731)                (1,863)
INTEREST EXPENSE, net...................................................          (628)                (1,204)
                                                                          -------------          -------------
         Net Loss....................................................... $      (1,359)       $        (3,067)
                                                                          -------------          -------------
                                                                          -------------          -------------

</TABLE>

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





                                       14

<PAGE>



                           AMERICAN LAWYER MEDIA, L.P.

                    STATEMENT OF CHANGES IN PARTNERS' CAPITAL

                             AND ACCUMULATED DEFICIT

                     FOR THE SIX MONTHS ENDED JUNE 30, 1997

                                 (IN THOUSANDS)


<TABLE>
<CAPTION>

                                                                                                      PARTNERS'
                                                           CONTRIBUTED                               ACCUMULATED
                                                             CAPITAL              NET LOSSES           DEFICIT
                                                       ---------------       ---------------      ---------------
<S>                                                    <C>                   <C>                  <C>
BALANCE AT DECEMBER 31, 1996.........................  $     31,677          $     (57,977)       $     (26,300)
      Net loss.......................................           --                 (3,067)              (3,067)
                                                       ---------------       ---------------      ---------------
BALANCE AT JUNE 30, 1997.............................  $     31,677          $     (61,044)       $     (29,367)
                                                       ---------------       ---------------      ---------------
                                                       ---------------       ---------------      ---------------

</TABLE>

         The accompanying notes to financial statements are an integral part of
this statement.




                                       15

<PAGE>



                           AMERICAN LAWYER MEDIA, L.P.

                            STATEMENTS OF CASH FLOWS

             FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 1997

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                          THREE MONTHS           SIX MONTHS
                                                                             ENDED                 ENDED
                                                                         JUNE 30, 1997         JUNE 30, 1997
                                                                         -------------         -------------

<S>                                                                      <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
      Net loss.....................................................      $    (1,359)          $  (3,067)
   Adjustments to reconcile net loss to net cash used
         in operating activities:
        Depreciation and amortization..............................              680               1,314
        Allowance for doubtful accounts............................              106                 258
      Decrease (increase) in-
        Accounts receivable and due from affiliate.................              (33)                987
        Inventories................................................               41                 150
        Other current assets ......................................              115                 (54)
        Other assets ..............................................              (43)                (66)
      Increase (decrease) in-
        Accounts payable...........................................             (226)               (975)
        Accrued expenses...........................................             (260)             (1,509)
        Deferred income............................................              115                 (53)
        Other liabilities..........................................               86               1,121
                                                                         -------------         -------------
                Total adjustments..................................              581               1,173
                                                                         -------------         -------------
                Net cash used in operating activities..............             (778)             (1,894)
                                                                         -------------         -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures............................................           (1,208)             (1,791)
                                                                         -------------         -------------
                Net cash used in investing activities..............           (1,208)             (1,791)
                                                                         -------------         -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
      Net borrowings from general partner .........................            1,950               4,015
                                                                         -------------         -------------
                Net cash provided by financing activities .........            1,950               4,015
                                                                         -------------         -------------
                Net (decrease) increase in cash and cash equivalents             (36)                330
                                                                         -------------         -------------
CASH AND CASH EQUIVALENTS, beginning of period ....................              456                  90
                                                                         -------------         -------------
CASH AND CASH EQUIVALENTS, end of period ..........................      $       420           $     420
                                                                         -------------         -------------
                                                                         -------------         -------------
</TABLE>

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



                                       16

<PAGE>




                           AMERICAN LAWYER MEDIA, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 1997


1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF PRESENTATION

         The unaudited financial statements for the three and six month periods
ended June 30, 1997 have been prepared in accordance with the instructions to
Form 10-Q and include, in the opinion of management, all adjustments (consisting
only of normal recurring accruals) necessary for a fair presentation of the
results of operations for such periods. They do not, however, include all of the
information and disclosures required by generally accepted accounting principles
for audited financial statements. For further information, reference is made to
the financial statements for the fiscal year ended December 31, 1996 and the
footnotes related thereto included in American Lawyer Media, Inc.'s 1997 Annual
Report on Form 10-K. The results of operations for the three and six month
periods ended June 30, 1997 are not necessarily indicative of the results of
operations for the full year.

REVENUE RECOGNITION

         Periodical Advertising revenues are generated from the placement of
display and classified advertisements, as well as legal notices, in the
Company's publications. Advertising revenue is recognized upon release of the
related publications.

         Periodical Subscription revenues are recognized on a pro rata basis as
issues of a subscription are served.

         Ancillary revenues consist principally of third-party printing
services, newsletter subscriptions, sales of professional books, seminar income,
and a daily fax service of court decisions. Printing revenue is recognized upon
shipment. Book revenues are recognized upon shipment and are reflected net of
estimated returns. Newsletter revenues are recognized on the same basis as
subscription revenues. Seminar revenues are recognized when the seminar is held.
The daily fax service revenue is recognized upon fulfillment of orders.

         Internet Service revenues consist primarily of revenues from
subscriptions and advertising. Internet subscription income is recognized on a
pro-rata basis over the life of a subscription, generally one year. Internet
advertising revenues are recognized upon the release of an advertisement on the
website.

DEFERRED SUBSCRIPTION INCOME

         Deferred subscription income results from advance payments or orders
for magazine subscriptions received from subscribers. Subscription receivables
of $1,013,100 are included in accounts receivable in the accompanying balance
sheet.

CIRCULATION PROMOTION (SUBSCRIPTION DIRECT MAIL) COSTS

         Circulation promotion costs are charged to expense upon the release of
the campaign.




                                       17

<PAGE>



                           AMERICAN LAWYER MEDIA, L.P.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                                  JUNE 30, 1997


1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

USE OF ESTIMATES

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

         The Company considers time deposits and certificates of deposit with
original maturities of three months or less to be cash equivalents.

INVENTORIES

         Inventories consist principally of paper utilized by the Company and
its outside printers and professional books published and sold by the Company.
Inventories are stated at the lower of cost or market.

PROPERTY, PLANT AND EQUIPMENT

         Property, plant and equipment is stated at cost. Significant
improvements are capitalized, while expenditures for maintenance and repairs are
charged to expense as incurred. Depreciation is calculated using the
straight-line method over the estimated useful lives of the assets as follows:

<TABLE>
<S>                                                               <C>
Machinery and equipment..........................................    5 years
Buildings .......................................................   25 years
Furniture and fixtures ..........................................    5 years
Computer equipment and software..................................  3-5 years

</TABLE>

         Leasehold improvements are amortized over the shorter of the remaining
lease term or the estimated useful life. The cost and accumulated depreciation
of property sold or retired are removed from the accounts upon disposition.

INTANGIBLES AND GOODWILL

         Intangible assets, consisting primarily of noncompete agreements and
subscription lists, are valued at the appraised market value of the assets at
the date of acquisition, net of accumulated amortization. Intangibles are
amortized over the expected useful lives of the respective assets, ranging from
two to thirteen years. Goodwill represents the excess of purchase price over the
fair value of net assets acquired, less accumulated amortization.
Goodwill is being amortized on a straight-line basis over 40 years.



                                       18

<PAGE>



                           AMERICAN LAWYER MEDIA, L.P.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                                  JUNE 30, 1997


1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

ACCOUNTS PAYABLE

         Included in accounts payable are $716,300 of bank overdrafts as of June
30, 1997.

2.       INCOME TAXES

         No provision has been made in the accompanying statements of operations
for income taxes since, pursuant to provisions of the Internal Revenue Code, the
net loss appearing on the accompanying statements of operations is reportable by
each of the partners on their individual tax returns.

3.       DUE TO GENERAL PARTNER

         Due to General Partner consists of borrowings from WCI/AMLAW Inc. and
interest accrued thereon. The borrowings bear interest at 1% under prime and do
not have a stated maturity date. This amount has been included in long-term
liabilities in the accompanying balance sheet since the amount is not intended
to be repaid within the next year.



                                       19

<PAGE>



                      NATIONAL LAW PUBLISHING COMPANY, INC.

                           CONSOLIDATED BALANCE SHEET

                                  JUNE 30, 1997

                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>

CURRENT ASSETS:                                                                                  1997
                                                                                             -----------
<S>                                                                                          <C>
   Cash and cash equivalents..............................................................   $      659
   Accounts receivable, net of allowances for doubtful accounts and sales returns
      of $665.............................................................................        7,300
   Inventories, net.......................................................................          879
   Deferred income taxes..................................................................        4,293
   Other current assets...................................................................          714
 
      Total current assets ...............................................................       13,845
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation and
   amortization of $1,993.................................................................        2,615
INTANGIBLE ASSETS, net of accumulated amortization of $11,066.............................      125,591
DEFERRED INCOME TAXES.....................................................................          577
OTHER ASSETS..............................................................................        1,518
                                                                                             -----------
      Total assets .......................................................................    $ 144,146
                                                                                             -----------
                                                                                             -----------
                      LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES:
   Accounts payable ......................................................................    $   1,836
   Accrued expenses ......................................................................        3,903
   Deferred income (including deferred subscription income of $8,671) ....................        9,602
                                                                                             -----------
      Total current liabilities ..........................................................       15,341
                                                                                             -----------
LONG-TERM DEBT ...........................................................................       64,200
                                                                                             -----------
OTHER NONCURRENT LIABILITIES .............................................................        1,601
                                                                                             -----------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
  Common stock, $.01 par value; 125,000 shares authorized; 89,609 shares issued and
     outstanding..........................................................................            1
   Paid-in capital........................................................................       66,165
  Accumulated deficit.....................................................................       (3,162)

     Total stockholders' equity...........................................................       63,004
                                                                                             -----------
     Total liabilities and stockholders' equity ..........................................     $144,146
                                                                                             -----------
                                                                                             -----------
</TABLE>


         The accompanying notes are an integral part of this balance sheet.



                                       20

<PAGE>



                      NATIONAL LAW PUBLISHING COMPANY, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS

             FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 1997

                                 (IN THOUSANDS)


<TABLE>
<CAPTION>

                                                                       THREE MONTHS               SIX MONTHS
                                                                           ENDED                     ENDED
                                                                       JUNE 30, 1997             JUNE 30, 1997
                                                                       -------------             -------------
<S>                                                                  <C>                       <C>
REVENUES:
   Periodicals
      Advertising..................................................  $       6,599             $      12,948
      Subscription.................................................          2,484                     4,798
   Ancillary products and services.................................          4,197                     7,058
   Internet services...............................................            280                       551
                                                                       -------------             -------------
        Total net revenues.........................................         13,560                    25,355
                                                                       -------------             -------------
OPERATING EXPENSES:
   Editorial.......................................................          1,568                     2,988
   Production and distribution.....................................          2,659                     4,926
   Selling.........................................................          2,369                     4,489
   General and administrative......................................          2,110                     4,541
   Internet services...............................................            417                       828
   Depreciation and amortization...................................          1,889                     3,779

        Total operating costs and expenses.........................         11,012                    21,551
                                                                       -------------             -------------
        Operating income...........................................          2,548                     3,804
INTEREST EXPENSE, NET..............................................         (1,335)                   (2,713)
                                                                       -------------             -------------
   Income before income taxes......................................          1,213                     1,091
PROVISION FOR INCOME TAXES.........................................           (499)                   (1,253)
                                                                       -------------             -------------
   Net Income/(Loss)...............................................   $        714             $        (162)
                                                                       -------------             -------------
                                                                       -------------             -------------

</TABLE>

         The accompanying notes are an integral part of these statements.




                                                        21

<PAGE>



                      NATIONAL LAW PUBLISHING COMPANY, INC.

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                     FOR THE SIX MONTHS ENDED JUNE 30, 1997

                                 (IN THOUSANDS)


<TABLE>
<CAPTION>


                                          COMMON        PAID-IN         ACCUMULATED          TREASURY
                                          STOCK         CAPITAL          (DEFICIT)            STOCK            TOTAL
                                         --------      ---------        ------------         ---------        --------

<S>                                     <C>          <C>                <C>                 <C>              <C>
BALANCE AT DECEMBER 31, 1996.........   $     1      $  66,165          $  (3,000)          $      --        $  63,166
         Net Loss....................        --             --               (162)                 --             (162)
                                         --------      ---------        ------------         ---------        --------
BALANCE AT JUNE 30, 1997.............   $       1    $  66,165          $  (3,162)          $      --        $  63,004
                                         --------      ---------        ------------         ---------        --------
                                         --------      ---------        ------------         ---------        --------

</TABLE>

         The accompanying notes are an integral part of this statement.



                                       22

<PAGE>



                      NATIONAL LAW PUBLISHING COMPANY, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

             FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 1997

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                                    THREE
                                                                                   MONTHS              SIX MONTHS
                                                                                    ENDED                 ENDED
                                                                                JUNE 30, 1997         JUNE 30, 1997
                                                                                -------------         -------------
<S>                                                                             <C>                   <C>          
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income/(loss).......................................................     $     714              $    (162)
   Adjustments to reconcile net loss to net cash provided by operating
      activities...........................................................
      Depreciation and amortization........................................         1,889                  3,779
      Decrease in deferred income taxes....................................          (650)                    0
      Decrease (increase) in--
        Accounts receivable................................................           (52)                    88
        Inventories........................................................            (7)                   (43)
        Prepaid expenses and other current assets..........................          (137)                    64
        Other assets.......................................................            54                     43
      Increase (decrease) in--
      Accounts payable and accrued expenses................................         1,107                  2,222
      Deferred income......................................................          (414)                   454
      Other noncurrent liabilities.........................................             5                     30
                                                                                -------------         -------------
        Net cash provided by operating activities..........................         2,509                  6,475
                                                                                -------------         -------------
CASH FLOWS FROM INVESTING ACTIVITIES:

   Additions to furniture, equipment and leasehold improvements............          (136)                  (304)
                                                                                -------------         -------------
        Net cash used in investing activities..............................          (136)                  (304)
CASH FLOWS FROM FINANCING ACTIVITIES:
   Repayments of debt......................................................         (2,000)                (6,100)
                                                                                -------------         -------------
      Net cash used in financing activities ...............................         (2,000)                (6,100)
                                                                                -------------         -------------
      Net increase in cash and cash equivalents............................            373                     71

CASH AND CASH EQUIVALENTS, beginning of period.............................            286                    588
                                                                                -------------         -------------
CASH AND CASH EQUIVALENTS, end of period ..................................     $      659             $      659
                                                                                -------------         -------------
                                                                                -------------         -------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Cash paid during the period for--
   Interest................................................................     $    1,413             $     1,949
                                                                                -------------         -------------
   Income taxes............................................................     $      212             $       212
                                                                                -------------         -------------

</TABLE>

         The accompanying notes are an integral part of this statement.



                                       23

<PAGE>



                      NATIONAL LAW PUBLISHING COMPANY, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  JUNE 30, 1997


1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF PRESENTATION

         The unaudited financial statements for the three and six month periods
ended June 30, 1997 have been prepared in accordance with the instructions to
Form 10-Q and include, in the opinion of management, all adjustments (consisting
only of normal recurring accruals) necessary for a fair presentation of the
results of operations for such periods. They do not, however, include all of the
information and disclosures required by generally accepted accounting principles
for audited financial statements. For further information, reference is made to
the financial statements for the fiscal year ended December 31, 1996 and the
footnotes related thereto included in American Lawyer Media, Inc.'s 1997 Annual
Report on Form 10-K. The results of operations for the three and six month
periods ended June 30, 1997 are not necessarily indicative of the results of
operations for the full year.

USE OF ESTIMATES

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estates.

CONCENTRATIONS OF CREDIT RISK

         National Law Publishing Company, Inc.'s ("NLP's") financial instruments
that are exposed to concentration of credit risk consist primarily of cash and
cash equivalents and trade accounts receivable. NLP believes it is not exposed
to any significant credit risk related to cash and cash equivalents.
Concentrations of credit risk with respect to trade accounts receivables are,
except for amounts due from legal advertising ad agents ("Legal Ad Agents"),
generally limited due to the large number of customers comprising NLP's customer
base. Such Legal Ad Agents do not have significant liquid net worth and, as a
result, NLP is exposed to a certain level of credit concentration risk in this
area, for which NLP believes it has adequately provided.

REVENUE RECOGNITION

         Periodical Advertising revenues are generated from the placement of
display and classified advertisements, as well as legal notices, in NLP's
publications. Advertising revenue is recognized upon release of the related
publications.

         Periodical Subscription revenues are recognized on a pro rata basis as
issues of a subscription are served.

         Ancillary revenues consist principally of newsletter subscriptions,
sales of professional books, seminar income and income from electronic products.
Book revenues are recognized upon shipment and are reflected net of estimated
returns. Newsletter revenues are recognized on the same basis as subscription
revenues. Seminar revenues are recognized when the seminar is held. Income from
electronic products is recognized monthly as the service is provided.

         Internet Service revenues consist primarily of revenues from
subscriptions and advertising. Internet subscription income is recognized on a
pro-rata basis over the life of a subscription, generally one year. Internet
advertising revenues are recognized upon the release of an advertisement on the
website.





                                       24

<PAGE>



                      NATIONAL LAW PUBLISHING COMPANY, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  JUNE 30, 1997


1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

DEFERRED SUBSCRIPTION INCOME

         Deferred subscription income results from advance payments or orders
for subscriptions received from subscribers and is amortized on a straight-line
basis over the life of the subscription as issues are served. Subscription
receivables of approximately $1,422,000 are included in accounts receivable in
the accompanying consolidated balance sheet.

EXPENSE RECOGNITION

         ADVERTISING AND PROMOTION COSTS-- Advertising expenditures are expensed
when the particular advertisement is released. The Company capitalizes direct
response promotion costs. At June 30, 1997 approximately $1,371,000 of direct
response promotional costs was recorded in other assets on the accompanying
consolidated balance sheet. Advertising expense was approximately $1,000,000 and
$1,819,000 for the three and six month periods ended June 30, 1997,
respectively. The amortization of direct response promotion expenditures is
included in selling expense in the accompanying consolidated statement of
operations.

         EDITORIAL COSTS-- All editorial costs are expensed as incurred.

CASH AND CASH EQUIVALENTS

         NLP considers time deposits and certificates of deposit with original
maturities of three months or less to be cash equivalents.

INVENTORIES

         Inventories consist principally of professional books published and
sold by NLP and related binding materials utilized. Inventories are stated at
the lower of cost, as determined by the average cost method, or market.

PROPERTY, PLANT AND EQUIPMENT

         Furniture, equipment and leasehold improvements are stated at cost less
accumulated depreciation and amortization. Furniture, equipment and purchased
software are depreciated on a straight-line basis over their respective
estimated useful lives. Repairs and maintenance are charged to expense as
incurred. Leasehold improvements are amortized over the lives of the
improvements or the term of the related lease, whichever is shorter.

INTANGIBLE ASSETS

         Intangible assets include deferred financing costs with the
amortization and/or write-off of such costs classified as part of amortization
expense. Goodwill represents the excess of purchase price over the fair value of
net assets acquired.

2.       LONG-TERM DEBT

         On December 1, 1995, NLP entered into a revolving credit facility
agreement (the "Credit Agreement") with the First National Bank of Boston (the
"Bank"), as a lender and as an agent for other lenders, under which NLP
Acquisition Co., Inc. ("NAI") borrowed $15,674,061 and The New York Law
Publishing Company ("NYLP")




                                       25

<PAGE>



                      NATIONAL LAW PUBLISHING COMPANY, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  JUNE 30, 1997

2.       LONG-TERM DEBT (CONTINUED)

borrowed $55,225,939 (aggregating $70,900,000) in connection with Boston
Ventures' acquisition of NLP. Upon NAI's merger into NLP, NYLP assumed the
$15,674,061 of Bank debt, in the form of a dividend from NYLP to NLP. NLP's
borrowing capacity under the Credit Agreement, including cash loans and standby
letters of credit of up to $6.0 million, is $70.5 million at June 30, 1997, and
decreases semi-annually to $67.0 million at December 31, 1997. As of June 30,
1997, $64.2 million was outstanding under the Credit Agreement.

         The Credit Agreement requires, among other things, that NLP maintain
certain minimum levels of consolidated operating cash flow and certain
prescribed ratios of consolidated funded debt to consolidated operating cash
flows, consolidated operating cash flow to interest expense and consolidated
adjusted operating cash flow to consolidated fixed charges, as defined. The
Credit Agreement contains other restrictive covenants, including limitations on
indebtedness, investments and acquisitions, the disposition of assets,
transactions with affiliates and distributions to stockholders.







                                       26

<PAGE>



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

         THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE 
HISTORICAL CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY, INCLUDING THE
NOTES THERETO, INCLUDED ELSEWHERE IN THIS FORM 10-Q.

OVERVIEW

         In August 1997, the Investors, through ALM (as defined in Holdings'
Registration Statement on Form S-4 (File No. 333-50119) (the "Registration
Statement"), consummated the ALM Acquisition, and in December 1997, ALM
consummated the NLP Acquisition. The ALM Acquisition and NLP Acquisition (the
"Acquisitions") have been accounted for using the purchase method of accounting.
The results of operations of Old ALM have been included in the financial
statements of the Company since August 1, 1997, the effective date of the ALM
Acquisition, and the results of operations of NLP have been included in the
financial statements of the Company since December 22, 1997, the closing date of
the NLP Acquisition. As a result, the Acquisitions will prospectively affect the
Company's results of operations in certain significant respects. In connection
with the ALM Acquisition, the purchase price was $63.0 million and the excess of
the purchase price over the book value of net tangible assets acquired was $67.7
million. The aggregate purchase price for the NLP Acquisition was $203.2
million, and the excess of the purchase price over the book value of net
tangible assets acquired was $257.6 million. The excess purchase price of both
Acquisitions has been allocated to the tangible and intangible assets acquired
by the Company based upon their respective fair values as of the applicable
acquisition date.

FOR THE SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
1997

         The following discussion compares the financial results of Holdings for
the six months ended June 30, 1998, which includes the financial results of the
acquisitions of LegalTech and LCL, to financial information for the six months
ended June 30, 1997 which was derived from the combination of Old ALM and NLP.
As a result, the financial information for the combined six months ended June
30, 1997 has not been prepared on a basis in conformity with GAAP. The following
table presents the calculation for such combined period and for the six months
ended June 30, 1998 (in thousands):




                                       27

<PAGE>


<TABLE>
<CAPTION>

                                                                                                           AMERICAN
                                                                                                            LAWYER
                                                                                                             MEDIA
                                                   OLD ALM             NLP           COMBINED           HOLDINGS, INC.
                                                  ----------       ----------      -------------       --------------
                                                                                                        FOR THE SIX
                                                            FOR THE SIX MONTHS                            MONTHS
                                                                   ENDED                                   ENDED
                                                               JUNE 30, 1997                           JUNE 30, 1998
                                                -----------------------------------------------        ---------------
<S>                                             <C>                <C>               <C>                <C>
OPERATING DATA:
Revenues:
Periodicals
   Advertising................................. $   15,522         $   12,948        $   28,470         $    33,060
   Subscription................................      5,799              4,798            10,597              11,167
Ancillary Products and Services................      3,673              7,058            10,731              13,077
Internet Services..............................      1,896                551             2,447               1,363
                                                -----------        -----------       -----------        ------------
      Total revenues...........................     26,890             25,355            52,245              58,667
                                                -----------        -----------       -----------        ------------
Operating Costs and Expenses:
Editorial......................................      3,385              2,988             6,373               7,140
Production and Distribution....................      6,021              4,926            10,947              12,310
Selling........................................      3,952              4,489             8,441               9,145
General and Administrative.....................      8,390              4,541            12,931              14,472
Internet Services..............................      5,691                828             6,519               2,142
Depreciation and Amortization..................      1,314              3,779             5,093              12,359
                                                -----------        -----------       -----------        ------------
      Total Operating Costs and Expenses.......     28,753             21,551            50,304              57,568
                                                -----------        -----------       -----------        ------------
      Operating income/(loss).................. $   (1,863)       $     3,804        $    1,941         $     1,099
                                                -----------        -----------       -----------        ------------
                                                -----------        -----------       -----------        ------------
</TABLE>


         Overview. Net revenues increased by $6.4 million, or 12.3%, from $52.2
million for the six months ended June 30, 1997 to $58.7 million for the six
months ended June 30, 1998. Total operating costs and expenses increased $7.3
million, or 14.4%, from $50.3 million for the six months ended June 30, 1997 to
$57.6 million for the six months ended June 30, 1998 due to a $7.3 million
increase in depreciation and amortization resulting from the ALM Acquisition and
the NLP Acquisition. As a result, operating income decreased $0.8 million, or
43.4%, from $1.9 million for the six months ended June 30, 1997 to $1.1 million
for the six months ended June 30, 1998, while EBITDA increased $6.4 million, or
91.3%, from $7.0 million for the six months ended June 30, 1997 to $13.4 million
for the six months ended June 30, 1998. Internet Services revenues decreased
$1.1 million, or 44.3%, from $2.4 million for the six months ended June 30, 1997
to $1.3 million for the six months ended June 30, 1998. Internet Services
expenses decreased $4.4 million, or 67.1%, from $6.5 million for the six months
ended June 30, 1997 to $2.1 million for the six months ended June 30, 1998.
Accordingly, excluding the net operating loss from Internet Services, operating
income decreased $4.1 million, or 68.8%, from $6.0 million for the six months
ended June 30, 1997 to $1.9 million for the six months ended June 30, 1998,
while EBITDA increased $3.1 million, or 28.2%, from $11.1 million to $14.2
million over the same periods.

         Revenues. Advertising revenues increased $4.6 million, or 16.1%, from
$28.5 million for the six months ended June 30, 1997 to $33.1 million for the
six months ended June 30, 1998. The acquisition of LCL accounted for $1.2
million of this increase. Without LCL, revenues increased $3.3 million, or
11.5%, due principally to an increase in advertising rates as well as an overall
increase in advertising pages.





                                       28

<PAGE>



         Subscription revenues increased $0.6 million, or 5.4%, from $10.6
million for the six months ended June 30, 1997 to $11.2 million for the six
months ended June 30, 1998. This increase was primarily due to the acquisition
of LCL.

         Revenues from ancillary products and services increased $2.3 million,
or 21.9%, from $10.7 million for the six months ended June 30, 1997 to $13.1
million for the six months ended June 30, 1998. The additions of LCL and
LegalTech accounted for $0.9 million of the increase. The remaining $1.4 million
of this increase was due to additional seminars held in the first half of 1998
as well as an increase in the number of book updates released. In addition, a
portion of book sales historically recorded in the fourth quarter of 1997 were
shipped and included in the first quarter results of 1998.

         Revenues from Internet Services decreased $1.1 million, or 44.3%, from
$2.4 million for the six months ended June 30, 1997 to $1.4 million for the six
months ended June 30, 1998. This decrease is attributable primarily to the
shutdown of Counsel Connect, Old ALM's internet service.

         Operating Expenses. Total operating costs and expenses increased $7.3
million, or 14.4%, from $50.3 million for the six months ended June 30, 1997 to
$57.6 million for the six months ended June 30, 1998. This increase is primarily
due to a $7.3 million increase in depreciation and amortization resulting from
the ALM Acquisition and the NLP Acquisition. The inclusion of $2.0 million in
expenses from LCL and LegalTech as well as other normal operating expense
increases were offset by the reduction in internet service expenses.

         Editorial expenses increased by $0.8 million, or 12.0%, from $6.4
million for the six months ended June 30, 1997 to $7.1 million for the six
months ended June 30, 1998 as a number of key vacant positions were filled. The
addition of LCL accounted for $0.1 million of the increase.

         Production and distribution expenses increased $1.4 million, or 12.5%,
from $10.9 million for the six months ended June 30, 1997 to $12.3 million for
the six months ended June 30, 1998. The addition of LCL and LegalTech accounted
for $0.7 million of the increase. The remainder of this increase is primarily
the result of the increased book sales as well as higher paper usage at ALM's
printing facilities.

         Selling expenses increased $0.7 million, or 8.3%, from $8.4 million for
the six months ended June 30, 1997 to $9.1 million for the six months ended June
30, 1998. This increase is primarily the result of the additions of LCL and
LegalTech.

         General and administrative expenses increased $1.5 million, or 11.9%,
from $12.9 million for the six months ended June 30, 1997 to $14.5 million for
the six months ended June 30, 1998. This increase reflects $0.7 million of costs
associated with the addition of LCL and LegalTech. The balance of the increase
is primarily the result of costs associated with one time charges, transitional
factors and salary increases.

         Internet Services expenses decreased $4.4 million, or 67.1%, from $6.5
million for the six months ended June 30, 1997 to $2.1 million for the six
months ended June 30, 1998. This decrease is the direct result of the shutdown
of Counsel Connect.

         Depreciation and amortization expenses increased $7.3 million, or
142.7%, from $5.1 million for the six months ended June 30, 1997 to $12.4
million for the six months ended June 30, 1998. This increase is primarily due
to increased amortization from both the ALM Acquisition and the NLP Acquisition.

         Operating Income. As a result of the above factors, operating income
decreased $0.8 million, or 43.4%, from $1.9 million for the six months ended
June 30, 1997 to $1.1 million for the six months ended June 30, 1998, while
EBITDA increased $6.4 million, or 91.3%, from $7.0 million for the six months
ended June 30, 1997 to $13.5 million for the six months ended June 30, 1998.
Excluding the LCL and LegalTech acquisitions, EBITDA increased $5.8 million, or
82.8%, from $7.0 million for the six months ended June 30, 1997 to $12.8 million
for the six months ended June 30, 1998.


                                       29

<PAGE>



FOR THE THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 1997

         The following discussion compares the financial results of Holdings for
the quarter ended June 30, 1998, which includes the financial results of the
acquisitions of LegalTech and LCL, to financial information for the quarter
ended June 30, 1997 which was derived from the combination of Old ALM and NLP.
As a result, the financial information for the combined quarter ended June 30,
1997 has not been prepared on a basis in conformity with GAAP. The following
table presents the calculation for such combined period and for the quarter
ended June 30, 1998 (in thousands):

<TABLE>
<CAPTION>

                                                                                                             AMERICAN
                                                                                                           LAWYER MEDIA
                                                   OLD ALM                 NLP            COMBINED        HOLDINGS, INC.
                                                  -----------          ----------        ----------     ----------------
                                                                                                              FOR THE
                                                                                                              QUARTER
                                                         FOR THE QUARTER ENDED                                 ENDED
                                                             JUNE 30, 1997                                 JUNE 30, 1998
                                                  --------------------------------------------------     ----------------
<S>                                                <C>                  <C>              <C>              <C>
OPERATING DATA:
Revenues:
Periodicals
      Advertising........................          $   8,177            $  6,599          $  14,776        $  18,106
      Subscription.......................              3,083               2,484              5,567            6,027
Ancillary Products and Services..........              1,847               4,197              6,044            7,449
Internet Services........................                844                 280              1,124              709
                                                   -----------          --------          ----------       ----------
   Total revenues........................             13,951              13,560             27,511           32,291
                                                   -----------          --------          ----------       ----------
Operating Costs and Expenses:
Editorial................................              1,678               1,568              3,246            3,779
Production and Distribution..............              3,101               2,659              5,760            6,838
Selling..................................              2,064               2,369              4,433            4,895
General and Administrative...............              4,158               2,110              6,268            7,371
Internet Services........................              3,001                 417              3,418            1,032
Depreciation and Amortization............                680               1,889              2,569            6,413
                                                   -----------          --------          ----------       ----------
   Total Operating Costs and
Expenses                                              14,682              11,012             25,694           30,328
                                                   -----------          --------          ----------       ----------
   Operating income/(loss)...............          $    (731)           $   2,548         $    1,817        $   1,963
                                                   -----------          --------          ----------       ----------
                                                   -----------          --------          ----------       ----------

</TABLE>

         Overview. Net revenues increased by $4.8 million, or 17.4%, from 
$27.5 million for the quarter ended June 30, 1997 to $32.3 million for the 
quarter ended June 30, 1998. Total operating costs and expenses increased 
$4.6 million, or 18.0%, from $25.7 million for the quarter ended June 30, 
1997 to $30.3 million for the quarter ended June 30, 1998 due to a $3.8 
million increase in depreciation and amortization resulting from the ALM and 
NLP acquisitions. As a result, operating income increased only $0.1 million, 
from $1.8 million for the quarter ended June 30, 1997 to $1.9 million for the 
quarter ended June 30, 1998, while EBITDA increased $4.0 million, or 91.0%, 
from $4.4 million for the quarter ended June 30, 1997 to $8.4 million for the 
quarter ended June 30, 1998. Internet Services revenues decreased $0.4 
million, or 36.9%, from $1.1 million for the quarter ended June 30, 1997 to 
$0.7 million for the quarter ended June 30, 1998. Internet Services expenses 
decreased $2.4 million, or 69.8%, from $3.4 million for the quarter ended 
June 30, 1997 to $1.0 million for the quarter ended June 30, 1998. 
Accordingly, excluding the net operating loss from Internet Services, 
operating income decreased $1.8 million, or 44.4%, from $4.1 million for the

                                       30

<PAGE>



quarter ended June 30, 1997 to $2.3 million for the quarter ended June 30, 1998,
while EBITDA increased $2.0 million, or 30.2%, from $6.7 million to $8.7 million
over the same periods.


         Revenues. Advertising revenues increased $3.3 million, or 22.5%, from
$14.8 million for the quarter ended June 30, 1997 to $18.1 million for the
quarter ended June 30, 1998. The acquisition of LCL accounted for $1.2 million
of this increase. Without LCL, revenues increased $2.1 million, or 15.0%, due
principally to an increase in advertising rates as well as an overall increase
in advertising pages.

         Subscription revenues increased $0.5 million, or 8.3%, from $5.6
million for the quarter ended June 30, 1997 to $6.0 million for the quarter
ended June 30, 1998. This increase was primarily due to the addition of LCL.

         Revenues from ancillary products and services increased $1.4 million,
or 23.2%, from $6.0 million for the quarter ended June 30, 1997 to $7.4 million
for the quarter ended June 30, 1998. This increase was due to the additions of
LCL and LegalTech as well as an increase in the number of book updates in the
quarter.

         Revenues from Internet Services decreased $0.4 million, or 36.9%, from
$1.1 million for the quarter ended June 30, 1997 to $0.7 million for the quarter
ended June 30, 1998. This decrease is attributable primarily to the shutdown of
Counsel Connect, Old ALM's internet service.

         Operating Expenses. Total operating costs and expenses increased $4.6
million, or 18.0%, from $25.7 million for the quarter ended June 30, 1997 to
$30.3 million for the quarter ended June 30, 1998. This increase is due to a
$3.8 million increase in depreciation and amortization resulting from the ALM
and NLP acquisitions as well as the inclusion of $2.0 million in expenses from
LCL and LegalTech.

         Editorial expenses increased by $0.5 million, or 16.4%, from $3.2
million for the quarter ended June 30, 1997 to $3.8 million for the quarter
ended June 30, 1998 as a number of key vacant positions were filled. The
addition of LCL accounted for $0.1 million of the increase.

         Production and distribution expenses increased $1.1 million, or 18.7%,
from $5.7 million for the quarter ended June 30, 1997 to $6.8 million for the
quarter ended June 30, 1998. The addition of LCL and LegalTech accounted for
$0.7 million of the increase. The remainder of this increase is primarily the
result of the increased book sales recorded in the second quarter as well as
higher paper usage at the Company's printing facilities.

         Selling expenses increased $0.5 million, or 10.4%, from $4.4 million
for the quarter ended June 30, 1997 to $4.9 million for the quarter ended June
30, 1998. This increase is primarily the result of the additions of LCL and
LegalTech.

         General and administrative expenses increased $1.1 million, or 17.6%,
from $6.3 million for the quarter ended June 30, 1997 to $7.4 million for the
quarter ended June 30, 1998. This increase reflects $0.7 million of costs
associated with the additions of LCL and LegalTech. Transition costs associated
with the Company's new corporate structure also contributed to the increase.

         Internet Services expenses decreased $2.4 million, or 69.8%, from $3.4
million for the quarter ended June 30, 1997 to $1.0 million for the quarter
ended June 30, 1998. This decrease is the direct result of the shutdown of
Counsel Connect.

         Depreciation and amortization expenses increased $3.8 million, or
149.6%, from $2.6 million for the quarter ended June 30, 1997 to $6.4 million
for the quarter ended June 30, 1998. This increase is primarily due to increased
amortization from both the ALM Acquisition and the NLP Acquisition.

         Operating Income. As a result of the above factors, operating income
increased $0.1 million, or 8.0%, from $1.8 million for the quarter ended June
30, 1997 to $1.9 million for the quarter ended June 30, 1998, while EBITDA
increased $4.0 million, or 91.0%, from $4.4 million for the quarter ended June
30, 1997 to $8.4 million for the quarter ended June 30, 1998. Excluding the LCL
Acquisition and the LegalTech Acquisition, EBITDA increased $3.3




                                       31

<PAGE>



million, or 76.2%, from $4.4 million for the quarter ended June 30, 1997 to $7.7
million for the quarter ended June 30, 1998.

LIQUIDITY AND CAPITAL RESOURCES

         WORKING CAPITAL. The Company has favorable cash flow characteristics
resulting from its high level of advance payments by subscribers, low working
capital investment, minimal capital expenditure requirements, predictable cost
structure and high margins. Because cash receipts associated with subscriptions
are received toward the beginning of a subscription cycle, the Company's
periodicals business requires minimal investment in working capital.

         LIQUIDITY. For the purposes of the Senior Discount Notes and the Senior
Notes, the Revolving Credit Facility is a form of Permitted Indebtedness (as
defined in the Senior Discount Notes Indenture) and does not contravene the
financial restriction regarding incurrence of additional indebtedness. See
"Description of the Discount Notes--Certain Definitions" in the Registration
Statement. Holdings' principal sources of funds are anticipated to be cash flows
from operating activities, which may be supplemented by borrowings under the
Revolving Credit Facility. See "Description of Other Indebtedness--Revolving
Credit Facility" in the Registration Statement. Based upon the successful
implementation of its strategy, Holdings believes that these funds will be
sufficient to meet its current and future financial obligations, including the
payment of principal and interest on the Senior Discount Notes, working capital,
capital expenditures and other obligations. No assurance can be given, however,
that this will be the case. Holdings' future operating performance and ability
to service or refinance the Senior Discount Notes and to repay, extend or
refinance the Revolving Credit Facility and any other credit agreements to which
it is a party will be subject to future economic conditions and to financial,
business and other factors, many of which are beyond Holdings' control. See
"Risk Factors" in the Registration Statement.

         CAPITAL EXPENDITURES. Holdings' operations are not capital intensive.
Capital expenditures were $0.6 million for the six months ended June 30, 1998.
Capital spending in 1998 is expected to be $3.5 million. This is higher than
historical and expected future spending due to the anticipated consolidation of
ALM and NLP offices in 1998.

         NET CASH PROVIDED BY OPERATING ACTIVITIES. Net cash provided by
operating activities was $0.6 million for the six months ended June 30, 1998 as
a net loss of $8.4 million, along with reductions in accounts payable and
accrued expenses of $1.2 million and $1.5 million respectively, were more than
offset by depreciation and amortization of $12.4 million.

         NET CASH USED IN INVESTING ACTIVITIES. Net cash used in investing
activities was $32.3 million for the six months ended June 30, 1998. In March
1998, the Company acquired Corporate Presentations, Inc. for $10.8 million in
cash and incurred $0.2 million in deal costs. In April 1998, the Company
acquired LCL for $20.1 million in cash and incurred $0.5 million of deal costs.
In addition, capital expenditures were $0.6 million in the first half of 1998.

         NET CASH PROVIDED BY FINANCING ACTIVITIES. Net cash provided by
financing activities totaled $24.1 million for the quarter ended June 30, 1998
which was the direct result of a $15.0 million capital contribution made by U.S.
Equity Partners, L.P., $7.0 million in debt drawn on the Revolving Credit
Facility, and the accretion of interest on the Senior Discount Notes.

         YEAR 2000 COMPLIANCE. The Company is in the process of modifying,
upgrading or replacing its computer software applications and systems which the
Company expects will accommodate the "Year 2000" dating changes necessary to
permit correct recording of year dates for 2000 and later years. The Company
does not expect that the cost of its Year 2000 compliance program will be
material to its financial condition or results of operations. The Company
believes that it will be able to achieve compliance by the end of 1999, and does
not currently anticipate any material disruption in its operations as the result
of any failure by the Company to be in compliance. The Company does not
currently have any information concerning the compliance status of its suppliers
and customers.




                                       32

<PAGE>



ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         Not applicable.
                                     PART II
                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         The Company is a party to various litigation matters incidental to the
conduct of its business. The Company does not believe that the outcome of any of
the matters in which it is currently involved will have a material adverse
effect on its financial condition or on the results of its operations.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

         None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         None.

ITEM 5.  OTHER INFORMATION.

         None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

         (a)    Exhibits.

                27.1 Financial Data Schedule for American Lawyer Media Holdings,
                      Inc.

         (b)    Reports on Form 8-K.

                None.






                                       33

<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.



                              AMERICAN LAWYER MEDIA
                              HOLDINGS, INC.


      August 14, 1998        /s/ William L. Pollak
                             -------------------------------------
                             William L. Pollak
                             President and Chief Executive Officer


      August 14, 1998       /s/ Anup Bagaria
                            ---------------------------------------
                            Anup Bagaria
                            Vice President




                                             34

<PAGE>