FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                        QUARTERLY REPORT UNDER SECTION 13
                           or 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934.


                        For Quarter Ended: June 30, 1997


                         Commission file number: 1-11106


                        K-III COMMUNICATIONS CORPORATION
             (Exact name of registrant as specified in its charter)


               DELAWARE                                   13-3647573

-------------------------------------------------------------------------------
    (State or other jurisdiction of                 (I.R.S. Employer
     incorporation or organization)                  Identification No.)

                      745 Fifth Avenue, New York, New York
                    (Address of principal executive offices)

                                      10151
                                   (Zip Code)

Registrant's telephone number, including area code            (212) 745-0100
                                                              --------------


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,  and (2) has been subject to such filing  requirements
for the past 90 days.
         Yes      X        No 
                -----         -----

Number of shares of common stock, par value $.01 per share, outstanding as of
July 31, 1997: 129,384,319



<PAGE>


                K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES

                                      INDEX


                                                                       PAGE

Part I.  Financial Information

         Item 1. Financial Statements
         -------
                 Condensed Consolidated Balance Sheets
                 (Unaudited) as of December 31, 1996 and
                 June 30, 1997                                            2

                 Condensed Statements of Consolidated
                 Operations (Unaudited) for the six months
                 ended June 30, 1996 and 1997                             3

                 Condensed Statements of Consolidated
                 Operations (Unaudited) for the three months
                 ended June 30, 1996 and 1997                             4

                 Condensed Statements of Consolidated
                 Cash Flows (Unaudited) for the six months
                 ended June 30, 1996 and 1997                             5

                 Notes to Condensed Consolidated
                 Financial Statements (Unaudited)                      6-11

         Item 2. Management's Discussion and Analysis of
         ------  Financial Condition and Results of Operations        12-20

Part II.   Other Information

         Item 4. Submission of Matters to a Vote of Security Holders     21
         -------

Signatures                                                               22






<PAGE>




                K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)


<TABLE>
<CAPTION>


                                                                                              December 31,        June 30,
                                                                                                  1996              1997
                                                                                                  ----              ----
                                                                                  (dollars in thousands, except per share amounts)

ASSETS
Current assets:
<S>                                                                                         <C>             <C>         
    Cash and cash equivalents                                                               $      36,655   $     26,268
    Accounts receivable, net                                                                      233,603        172,597
    Inventories, net                                                                               52,743         27,711
    Net assets held for sale                                                                       18,684        274,736
    Prepaid expenses and other                                                                     34,834         49,226
                                                                                            -------------   ------------
    Total current assets                                                                          376,519        550,538

Property and equipment, net                                                                       122,823        100,394
Other intangible assets, net                                                                      781,316        668,712
Excess of purchase price over net 
    assets acquired, net                                                                          971,665        963,085
Deferred income tax asset, net                                                                    176,200        176,200
Other non-current assets                                                                          123,692        104,534
                                                                                            -------------   ------------
                                                                                            $   2,552,215   $  2,563,463
                                                                                            =============   ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
    Accounts payable                                                                        $     107,258   $     58,971
    Accrued interest payable                                                                       22,150         23,026
    Accrued expenses and other                                                                    140,959        115,567
    Deferred revenues                                                                             144,857        127,501
    Current maturities of long-term debt                                                            6,000          6,000
                                                                                            -------------   ------------
    Total current liabilities                                                                     421,224        331,065
                                                                                            -------------   ------------

Long-term debt                                                                                  1,565,686      1,713,057
                                                                                            -------------   ------------
Other non-current liabilities                                                                      35,062         31,828
                                                                                            -------------   ------------
Exchangeable preferred stock                                                                      442,729        447,776
                                                                                            -------------   ------------
Common stock subject to redemption  ($.01 par value,  
    643,310 shares and 443,470 shares outstanding at 
    December 31, 1996 and June 30, 1997, respectively)                                              5,957          4,052
                                                                                            -------------   ------------
Shareholders' equity:
    Common stock ($.01 par value, 128,349,045 shares 
    and 128,895,484 shares outstanding at December 31, 1996 and
    June 30, 1997, respectively)                                                                    1,283          1,289
    Additional paid-in capital                                                                    772,642        776,150
    Accumulated deficit                                                                          (691,098)      (740,126)
    Cumulative foreign currency translation adjustments                                            (1,270)        (1,628)
                                                                                            -------------   ------------

    Total shareholders' equity                                                                     81,557         35,685
                                                                                            -------------   ------------

                                                                                            $   2,552,215   $  2,563,463
                                                                                            =============   ============
</TABLE>

            See notes to condensed consolidated financial statements.

<PAGE>
               

               K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
           CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>


                                                                                      Six Months Ended
                                                                                          June 30,

                                                                                 1996                 1997
                                                                     (dollars in thousands, except per share amounts)

Sales, net:
<S>                                                                      <C>                 <C>           
    Specialty Media                                                      $      333,647      $      361,174
    Education                                                                   172,294             199,562
    Information                                                                 144,692             160,317
                                                                         --------------      --------------
Total sales, net                                                                650,633             721,053

Operating costs and expenses:
    Cost of goods sold                                                          166,461             159,663
    Marketing and selling                                                       122,143             138,718
    Distribution, circulation and fulfillment                                   110,052             127,249
    Editorial                                                                    47,089              59,677
    Other general expenses                                                       72,542              80,839
    Corporate administrative expenses                                             9,851              12,710
    Depreciation and amortization of prepublication        
        costs, property and equipment                                            16,653              18,224
    Amortization of intangible assets, excess of
        purchase price over net assets acquired and other                        75,577              63,977
                                                                         --------------      --------------
Operating income                                                                 30,265              59,996

Other income (expense):
    Interest expense                                                            (57,597)            (68,963)
    Amortization of deferred financing costs                                     (1,867)             (1,582)
    Other, net                                                                    1,393                  18 
                                                                         --------------      --------------
Loss before income tax benefit and extraordinary charge                         (27,806)            (10,531)

Income tax benefit - carryback claim                                                  -               1,685
                                                                         --------------      --------------

Loss before extraordinary charge                                                (27,806)             (8,846)

Extraordinary charge - extinguishment of debt                                    (7,572)            (15,401)
                                                                         --------------      --------------
                                                                         
Net loss                                                                        (35,378)            (24,247)

Preferred stock dividends:
    Non-cash                                                                     (8,054)             (4,451)          
    Cash                                                                        (11,194)            (20,330)
                                                                         --------------      --------------
Loss applicable to common shareholders                                   $      (54,626)     $      (49,028)
                                                                         ==============      ==============

Loss applicable to common shareholders per 
    common share:                                                                           

Loss before extraordinary charge                                         $        (0.36)     $        (0.26)
                                                                                        
                                                                                       
Extraordinary charge                                                     $        (0.06)     $        (0.12)
                                                                         --------------      --------------
                                                                        
                                                                                       
Net loss                                                                 $        (0.42)     $        (0.38)
                                                                         ==============      ==============
                                                                        

Weighted average common shares outstanding                                  128,645,188         129,201,826
                                                                         ===============     ==============
</TABLE>

            See notes to condensed consolidated financial statements.

<PAGE>


                K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
           CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>


                                                                                      Three Months Ended
                                                                                            June 30,

                                                                                  1996                1997
                                                                        (dollars in thousands, except per share amounts)

Sales, net:
<S>                                                                      <C>                 <C>           
    Specialty Media                                                      $       169,600     $      187,662
    Education                                                                     89,242             94,675
    Information                                                                   76,838             86,425
                                                                         ---------------     --------------
Total sales, net                                                                 335,680            368,762

Operating costs and expenses:
    Cost of goods sold                                                            83,016             79,565
    Marketing and selling                                                         61,345             68,516
    Distribution, circulation and fulfillment                                     54,571             63,862
    Editorial                                                                     24,944             30,367
    Other general expenses                                                        36,468             38,336
    Corporate administrative expenses                                              4,053              5,960
    Depreciation and amortization of 
        prepublication costs, property and equipment                               8,979              8,385
    Amortization of intangible assets, excess of
        purchase price over net assets acquired and other                         39,024             34,253
                                                                         ---------------     --------------
Operating income                                                                  23,280             39,518

Other expense:
    Interest expense                                                             (29,239)           (34,622)
    Amortization of deferred financing costs                                        (967)              (740)
    Other, net                                                                      (140)              (456)
                                                                         ---------------     --------------
                                                                         
Income (loss) before extraordinary charge                                         (7,066)             3,700

Extraordinary charge - extinguishment of debt                                     (7,572)           (13,847)
                                                                         ---------------     --------------
Net loss                                                                         (14,638)           (10,147)

Preferred stock dividends:
    Non-cash                                                                      (4,084)                 -
    Cash                                                                          (8,319)           (12,455)
                                                                         ---------------     --------------
Loss applicable to common shareholders                                   $       (27,041)    $      (22,602)
                                                                         ===============     ==============

Loss applicable to common shareholders per common share:

Loss before extraordinary charge                                         $         (0.15)    $        (0.07)
                                                                                         
Extraordinary charge                                                     $         (0.06)    $        (0.11)
                                                                                   
                                                                         ---------------     --------------
Net loss                                                                 $         (0.21)    $        (0.18)
                                                                         ===============     ==============         
                                                                         

Weighted average common shares outstanding                                   128,787,528        129,289,307
                                                                         ===============     ==============
</TABLE>


            See notes to condensed consolidated financial statements.

<PAGE>

                K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
           CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>


                                                                                   Six Months Ended
                                                                                       June 30,

                                                                                 1996          1997
                                                                               (dollars in thousands)

Operating activities:
<S>                                                                     <C>               <C>         
    Net loss                                                            $     (35,378)    $   (24,247)
    Adjustments to reconcile net loss to net cash
       provided by operating activities:
          Extraordinary charge - extinguishment of debt                         7,572          15,401
          Depreciation, amortization and other                                 94,097          83,783
          Accretion of discount on acquisition obligation,
              distribution advance and other                                    3,112           3,305
          Other, net                                                           (1,391)           (177)

       Changes in operating assets and liabilities:
       (Increase) Decrease in:
          Accounts receivable, net                                              3,883          22,515
          Inventories, net                                                     14,814           1,130
          Prepaid expenses and other                                          (13,159)        (11,333)
       Increase (Decrease) in:
          Accounts payable                                                    (23,892)        (29,085)
          Accrued interest payable                                             11,509             876
          Accrued expenses and other                                          (26,356)        (16,185)
          Deferred revenues                                                   (22,750)        (18,737)
          Other non-current liabilities                                          (946)         (1,844)
                                                                        -------------    ------------

          Net cash provided by operating activities                            11,115          25,402
                                                                        -------------    ------------

Investing activities:
    Additions to property, equipment and other                                (10,158)        (14,708)
    Proceeds from sales of property, equipment and other                          529             105
    Proceeds from sales of businesses and other                                 6,013           5,423
    Payments for businesses acquired                                         (649,436)       (142,291)
                                                                        -------------    ------------

          Net cash used in investing activities                              (653,052)       (151,471)
                                                                        -------------    ------------

Financing activities:
    Borrowings under credit agreements                                      1,619,324         523,930
    Repayments of borrowings under credit agreements                       (1,153,000)       (142,950)
    Repayment of Chase Term Loan                                             (150,000)              -
    Repayment of BONY Term Loan                                              (150,000)              -
    Proceeds from issuance of 8 1/2% Senior Notes, net of discount            298,734               -
    Repayment of acquisition obligation                                        (3,000)         (3,000)
    Proceeds from issuance of common stock, net of redemptions                  2,652           2,203
    Proceeds from the issuance of Series C (exchanged into Series D)
       Preferred Stock, net of issuance costs                                 193,720               -
    Redemptions of 10 5/8% Senior Notes                                             -        (242,787)
    Dividends paid to preferred shareholders                                  (11,194)        (20,330)
    Deferred financing costs paid                                             (14,362)         (1,617)
    Other                                                                        (467)            233
                                                                        -------------    ------------

          Net cash provided by financing activities                           632,407         115,682
                                                                        -------------    ------------

Decrease in cash and cash equivalents                                          (9,530)        (10,387)
Cash and cash equivalents, beginning of period                                 27,226          36,655
                                                                        -------------    ------------
Cash and cash equivalents, end of period                                $      17,696    $     26,268
                                                                        =============    ============

Supplemental information:
    Cash interest paid                                                  $      44,697    $     67,060
                                                                        =============    ============
</TABLE>

 
           See notes to condensed consolidated financial statements.


<PAGE>


                K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                (dollars in thousands, except per share amounts)


1.       Basis of Presentation
         ---------------------

K-III   Communications   Corporation,   together  with  its   subsidiaries,   is
collectively  referred  to as "K-III" or the  "Company".  In the  opinion of the
Company's management,  all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. All significant
intercompany  accounts and transactions  have been eliminated in  consolidation.
Certain  reclassifications have been made to the prior year financial statements
to conform to the  classification  used in the  current  period.  The  operating
results for the three and six-month  periods  ended June 30 are not  necessarily
indicative of the results that may be expected for a full year.

The Company's  operations  have been  organized  into three  business  segments:
specialty media, education and information.

In February 1997, the Financial  Accounting  Standards Board issued Statement of
Financial  Accounting Standards ("SFAS") No. 128, "Earnings Per Share". SFAS No.
128  becomes  effective  for the  Company's  consolidated  financial  statements
beginning in the fourth quarter of 1997. SFAS No. 128 will eliminate  disclosure
of primary  earnings per share,  which  includes  the  dilutive  effect of stock
options, warrants and other convertible securities ("Common Stock Equivalents"),
and instead  requires  reporting of "basic"  earnings per share,  which excludes
Common Stock Equivalents. Additionally, SFAS No. 128 changes the methodology for
fully dilutive  earnings per share. In the opinion of the Company's  management,
it is not  anticipated  that the adoption of this new  accounting  standard will
have a material effect on the reported earnings per share of the Company.

In February 1997, the Financial  Accounting Standards Board issued SFAS No. 129,
"Disclosure  of  Information  about  Capital  Structure".  SFAS No. 129  becomes
effective for the Company's  consolidated  financial statements beginning in the
fourth  quarter of 1997.  SFAS No. 129 requires  certain  disclosures  regarding
outstanding securities,  preferred stock and redeemable stock. In June 1997, the
Financial   Accounting   Standards   Board  issued  SFAS  No.  130,   "Reporting
Comprehensive  Income"  and SFAS No.  131,  "Disclosures  about  Segments  of an
Enterprise and Related  Information",  which become  effective for the Company's
1998 consolidated financial statements.  SFAS No. 130 requires the disclosure of
comprehensive  income,  defined as the change in equity of a business enterprise
during a period  from  transactions  and other  events  and  circumstances  from
nonowner sources, in the Company's consolidated  financial statements.  SFAS No.
131 requires that a public  business  enterprise  report  certain  financial and
descriptive  information about its reportable operating segments. In the opinion
of the Company's  management,  it is not anticipated  that the adoption of these
new  accounting  standards  will  have a  material  effect  on the  consolidated
financial statements of the Company.

2.       Acquisitions
         ------------

During the six-month period ended June 30, 1997, the Company  completed  several
acquisitions  which were financed through  borrowings under the Company's credit
agreements.  Cash  payments for these  acquisitions  on an  aggregate  basis was
$142,291  (net of  liabilities  assumed of  approximately  $19,955) and includes
certain   immaterial   purchase   price   adjustments   related  to  prior  year
acquisitions.   The  excess   purchase  price  over  net  assets   acquired  was
approximately $72,937.

The preliminary  purchase cost allocations for the 1997 acquisitions are subject
to  adjustment  when  additional  information  concerning  asset  and  liability
valuations  is obtained.  The final asset and  liability  fair values may differ
from those set forth in the accompanying condensed consolidated balance sheet at
June 30, 1997;  however,  the changes are not expected to have a material effect
on the consolidated financial statements of the Company.

These  acquisitions  have all been  accounted  for by the purchase  method.  The
financial  statements  include  the  operating  results  of  these  acquisitions
subsequent  to  their  respective   dates  of  acquisition.   If  the  foregoing
acquisitions had occurred on January 1, 1996, they would not have had a material
impact on the results of operations  for the three and  six-month  periods ended
June 30, 1996 and 1997.

3.        Net Assets Held for Sale
          ------------------------

In September 1996, the Company decided to divest  Katharine Gibbs Schools,  Inc.
("Katharine Gibbs"). The net assets of Katharine Gibbs were classified under the
caption net assets held for sale and were  recorded at their  carrying  value on
the accompanying  condensed  consolidated balance sheet as of December 31, 1996.
(See Note 4 - Divestiture).

On March 11, 1997,  the Company  announced its intention to divest the following
four non-core  business units:  Daily Racing Form Inc.  (including  Pro-Football
Weekly), Newbridge Communications,  Inc. (excluding Films for the Humanities and
Sciences), New Woman magazine and Krames Communications Incorporated. Subsequent
to March  11,  1997,  the  Company  decided  to sell  Stagebill.  These  planned
divestitures,  (collectively,  the "Non-Core Units"),  are part of the Company's
plan to focus on six key growth  vehicles in markets  that have  dynamic  growth
opportunities.  The Company  expects to complete the sales of the Non-Core Units
in 1997.  The net assets of the Non-Core  Units have been  classified  under the
caption net assets held for sale and are  recorded at their  aggregate  carrying
value of $274,736 on the accompanying  condensed  consolidated  balance sheet at
June 30, 1997.  The operating  results of the Non-Core Units are included in the
accompanying  statements of condensed consolidated  operations for the three and
six-month  periods  ended June 30, 1996 and 1997.  Total sales for the  Non-Core
Units were  $72,457 and  $136,755  and $65,309  and  $125,654  for the three and
six-month periods ended June 30, 1996 and 1997,  respectively.  Operating (loss)
income for the  Non-Core  Units was $(67) and $(5,488) and $7,465 and $6,621 for
the three and six-month periods ended June 30, 1996 and 1997, respectively. (See
Note 9 - Subsequent Events).

4.       Divestiture
         -----------

On May 30, 1997, the Company sold  Katharine  Gibbs pursuant to a stock purchase
agreement and received a portion of the purchase  price.  The sale is subject to
certain regulatory approvals and is expected to be completed by the end of 1997.
The  operating  results of  Katharine  Gibbs  prior to the  divestiture  are not
material to the  consolidated  operations of the Company and are included in the
accompanying  statements of condensed consolidated  operations for the three and
six-month  periods  ended June 30,  1996 and 1997.  The  proceeds  from the sale
approximate the Company's carrying value of Katharine Gibbs.


<PAGE>



5.       Inventories
         -----------

Inventories consist of the following:

                                                December 31,          June 30,
                                                    1996                1997
                                                    ----                ----
    Finished Goods                              $  41,497           $   12,570
    Work in Process                                 2,111                2,433
    Raw Materials                                  17,838               15,501
                                                ---------           ----------
                                                   61,446               30,504
    Less allowance for obsolescence                 8,703                2,793
                                                ---------           ----------
                                                $  52,743           $   27,711
                                                =========           ==========



6.       Long-term debt
         -------------

Long-term debt consists of the following:

                                                December 31,          June 30,
                                                    1996                1997
                                                    ----                ----
    Borrowings under Bank Credit Facilities   $   884,992          $ 1,185,982
    Borrowings under New Credit Facility                -               80,000
    8 1/2% Senior Notes due 2006, net             298,811              298,856
    10 1/4% Senior Notes due, 2004                100,000              100,000
    10 5/8% Senior Notes due 2002                 233,250                    -
                                              -----------          ----------- 
                                                               
    Total                                       1,517,053            1,664,838
    Acquisition obligation payable                 54,633               54,219
                                              -----------          -----------  
                                                1,571,686            1,719,057
    Less current portion                            6,000                6,000
                                              -----------          -----------
                                              $ 1,565,686          $ 1,713,057
                                              ===========          ===========


In January 1997,  the Company  purchased,  in aggregate,  $20,850 of the 10 5/8%
Senior  Notes at a  weighted  average  price of 105%,  plus  accrued  and unpaid
interest from various  brokers on the open market.  On May 1, 1997,  the Company
redeemed the $212,400 remaining  principal amount of the 10 5/8% Senior Notes at
104% plus  accrued  and unpaid  interest.  The  aggregate  premium  paid and the
write-off of related deferred financing costs are classified as an extraordinary
charge and are  recorded  at an  aggregate  value of $13,847  and $15,401 on the
accompanying  statements of condensed consolidated  operations for the three and
six-month periods ended June 30, 1997.

The write-off of the unamortized  deferred  financing costs of $7,572 related to
the  Company's  May 1996  bank  debt  refinancing  has been  reclassified  as an
extraordinary  charge on the accompanying  statements of condensed  consolidated
operations for the three and six-month periods ended June 30, 1996 to conform to
the 1997 presentation.

On April 21, 1997, the Company  entered into a new 364-day credit  facility with
The Bank of New York,  Bankers  Trust  Company,  The Bank of Nova Scotia and The
Chase Manhattan Bank as agents (the "New Credit  Facility")  which expires April
20,  1998.  Under  the  terms  of the  New  Credit  Facility,  the  Company  has
commitments of $150,000 which can be borrowed in the form of revolving loans.

The proceeds of all  revolving  loans under the New Credit  Facility can be used
for  general  corporate  and  working  capital  purposes  of the Company and its
subsidiaries,   including,   without  limitation,  the  financing  of  permitted
acquisitions.

The amounts borrowed  pursuant to the New Credit Facility bear interest at rates
per annum  identical  to those in the Bank Credit  Facilities  at the  Company's
option as follows:  (i) the higher of (a) the Federal Funds  Effective Rate plus
1/2% and (b) the prime  lending  rate as in effect  from time to time (the "Base
Rate");  plus in each case, an applicable margin of up to 1/8 of 1% as specified
in the New Credit Facility or (ii) the Eurodollar Rate plus an applicable margin
ranging from 1/2% to 1 1/2% as specified in the New Credit Facility.

Under the New Credit  Facility, the Company has agreed to pay commitment fees
equal to 1/8 of 1% per annum on the daily average aggregate unutilized revolving
loan commitment.

The  covenants  in the New Credit  Facility  are  identical to those in the Bank
Credit  Facilities and, among other things,  limit the ability of the Company to
change the nature of its businesses,  incur certain indebtedness,  create liens,
sell assets, engage in mergers,  consolidations or transactions with affiliates,
make investments in or loans to certain  subsidiaries,  make guarantees and make
certain  restricted  payments.  The Company is also prohibited from declaring or
making  dividend  payments  on the common  stock in excess of $25,000 per annum,
unless the fixed charge  coverage  ratio,  interest  coverage ratio and leverage
ratio are at certain levels as specified in the New Credit Facility.

As under the Bank Credit  Facilities,  borrowings  under the New Credit Facility
are guaranteed by each of the domestic wholly-owned subsidiaries of the Company.
Such  guarantees are full,  unconditional  and joint and several.  The Company's
foreign  subsidiaries  are not guarantors of the above  indebtedness.  The total
assets,  revenues,   income  or  equity  of  such  foreign  subsidiaries,   both
individually  and on a combined basis,  are  inconsequential  in relation to the
total assets, revenue, income or equity of the Company.

In May  1997,  the  Company,  through  its  Bank  Credit  Facilities,  solicited
commitments of $150,000 under the Tranche B Revolving Loan Facility  ("Tranche B
Facility"). The Company has the right to solicit additional commitments of up to
$100,000  under the  Tranche  B  Facility.  As of June 30,  1997,  $150,000  was
outstanding under the Tranche B Facility.
<PAGE>

The commitments under the Tranche B Facility are subject to mandatory reductions
semi-annually  on June 30 and  December 31 with the first  reduction on June 30,
1999 and the final reduction on June 30, 2004. The mandatory  reductions for the
Tranche B Facility loan commitments are as follows:

                            Years Ending
                             December 31,
                             -----------
         1999                $   15,000
         2000                    30,000
         2001                    30,000
         2002                    30,000
         2003                    30,000
         2004                    15,000
                             ----------
                             $  150,000




7.       Exchangeable Preferred Stock
         ----------------------------

Exchangeable Preferred Stock consists of the following:

                                                December 31,       June 30,
                                                     1996            1997
                                                     ----            ----
$2.875 Senior Exchangeable Preferred Stock      $   98,266     $    98,402
$11.625 Series B Exchangeable Preferred Stock      150,513         155,122
$10.000 Series D Exchangeable Preferred Stock      193,950         194,252
                                                ----------     -----------
                                                $  442,729     $   447,776
                                                ==========     ===========


$2.875 Senior Exchangeable Preferred Stock

The  Company  authorized  4,000,000  shares of $.01 par value  Senior  Preferred
Stock, all of which was issued and outstanding at December 31, 1996 and June 30,
1997. The  liquidation  and  redemption  value at December 31, 1996 and June 30,
1997 was $100,000.

$11.625 Series B Exchangeable Preferred Stock

The Company  authorized  2,000,000  shares of $.01 par value  Series B Preferred
Stock,   1,531,526  shares  and  1,576,036  shares  of  which  were  issued  and
outstanding  at  December  31,  1996  and  June  30,  1997,  respectively.   The
liquidation  and  redemption  value at  December  31, 1996 and June 30, 1997 was
$153,153 and $157,604 respectively.

Commencing  in the second  quarter of 1997,  the Company  elected to satisfy its
Series B Exchangeable Preferred Stock dividend requirements in cash.

$10.000 Series D Exchangeable Preferred Stock

The Company  authorized  2,000,000  shares of $.01 par value  Series D Preferred
Stock, all of which was issued and outstanding at December 31, 1996 and June 30,
1997. The  liquidation  and  redemption  value at December 31, 1996 and June 30,
1997 was $200,000.

8.       Loss per Common Share
         --------------------

Loss per common share for the three and  six-month  periods  ended June 30, 1996
and 1997 was computed  using the weighted  average number of common stock shares
outstanding   during  each  period.  The  effect  of  the  assumed  exercise  of
non-qualified stock options is not included because the effect is anti-dilutive.
Loss per common  share  assuming  full  dilution is not  presented  because such
calculation is antidilutive.

9.       Subsequent Events
         -----------------

In July 1997, the Company executed definitive agreements to sell the outstanding
capital stock of Krames  Communications  Incorporated  and the net assets of New
Woman  magazine.  These sales are expected to close in August 1997.  The Company
also expects to recover the carrying value of these net assets held for sale.

In July and August 1997, the Company completed two product-line  acquisitions in
the  specialty  consumer  magazines  group for an  aggregate  purchase  price of
approximately $30,100.

In July 1997,  the Company  entered  into four,  three-year  and two,  four-year
interest rate swap  agreements,  with an aggregate  notional amount of $600,000.
Under these new swap agreements,  which commence on January 1, 1998, the Company
receives a floating rate of interest  based on three-month  LIBOR,  which resets
quarterly,  and the Company pays a fixed rate of interest, each quarter, for the
terms of the respective agreements.  The weighted average fixed rate of interest
under these agreements is 6.33%.



<PAGE>


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

INTRODUCTION

K-III   Communications   Corporation,   together  with  its   subsidiaries,   is
collectively  referred to as "K-III" or the "Company".  The following discussion
and analysis of K-III's unaudited  financial condition and results of operations
should  be  read  in  conjunction  with  the  unaudited  condensed  consolidated
financial  statements  and notes thereto.  The Company  organizes its businesses
into three segments:  specialty media (specialty  consumer,  technical and trade
magazines),   education  (classroom  and  workplace  learning)  and  information
(consumer and business directories).  Most of the Company's products are premier
brands with  leadership  positions in the specialty  niche markets in which such
products  compete.  Management  believes  that a  meaningful  comparison  of the
results  of  operations  for 1996 and 1997 is  obtained  by using  this  segment
information.

                K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                  Unaudited Results of Consolidated Operations
                             (dollars in thousands)
<TABLE>
<CAPTION>

                                                        Six Months Ended                   Three Months Ended
                                                            June 30,                            June 30,
                                                      1996            1997                 1996           1997
                                                      ----            ----                 ----           ----
Sales, net:
<S>                                             <C>             <C>                  <C>             <C>        
    Specialty Media                             $   333,647     $   361,174          $   169,600     $   187,662
    Education                                       172,294         199,562               89,242          94,675
    Information                                     144,692         160,317               76,838          86,425
                                                -----------     -----------          -----------     -----------  
        Total                                   $   650,633     $   721,053          $   335,680     $   368,762
                                                ===========     ===========          ===========     ===========

Operating income (loss):
    Specialty Media                             $    23,810     $    45,190          $    15,291     $    27,621
    Education                                        10,037          12,611                5,126           6,774
    Information                                       6,633          14,649                7,104          11,179
    Corporate                                       (10,215)        (12,454)              (4,241)         (6,056)
                                                -----------     -----------          -----------     ----------- 
       Total                                         30,265          59,996               23,280          39,518

Other income (expense):
    Interest expense                                (57,597)        (68,963)             (29,239)        (34,622)
    Amortization of deferred financing
        costs                                        (1,867)         (1,582)                (967)           (740)
    Other, net                                        1,393              18                 (140)           (456)
                                                -----------     -----------          -----------     -----------
                                                          
Income (loss) before income tax benefit
       and extraordinary charge                     (27,806)        (10,531)              (7,066)          3,700
                                                                                      

Income tax benefit - carryback claim                      -           1,685                    -               -
                                                -----------     -----------          -----------     -----------
Income (loss) before extraordinary charge           (27,806)         (8,846)              (7,066)          3,700

Extraordinary charge - extinguishment
      of debt                                        (7,572)        (15,401)              (7,572)        (13,847)
                                                -----------     -----------          -----------     -----------
                                                  
                                                 
Net loss                                        $   (35,378)    $   (24,247)         $   (14,638)     $  (10,147)
                                                ============    ===========          ===========      ==========
</TABLE>


<PAGE>



RESULTS OF OPERATIONS (dollars in thousands, except per share amounts)

Six Months Ended June 30, 1997 Compared to Six Months Ended June 30, 1996:

Consolidated Results:

Consolidated  sales  increased by 10.8% to $721,053 in the 1997 period over 1996
due to strong growth in all segments as well as the impact of  acquisitions,  in
particular  Westcott  which  added  $33,052  to  revenue  growth.   Consolidated
operating  income was $59,996 in the 1997 period as compared to $30,265 in 1996.
This 98.2%  improvement was driven by an increase in sales, the impact of recent
acquisitions  and a decrease in  amortization  of intangible  assets,  excess of
purchase price over net assets acquired and other, partially offset by increases
in  marketing  and  selling,  distribution,  circulation  and  fulfillment,  and
editorial  expenses.  Paper  costs,  which  in the  first  six  months  of  1997
represented  approximately  8%  of  the  Company's  total  operating  costs  and
expenses,  were  approximately  15% lower in the first six months of 1997 versus
the same period in 1996. All three segments experienced declines in paper prices
with the  greatest  impact  occurring in the  specialty  media  segment.  As the
Company had anticipated, paper prices have increased moderately during the third
quarter  of 1997.  Interest  expense  increased  by $11,366 or 19.7% in the 1997
period over 1996 primarily due to the increased  level of borrowings  associated
with  acquisitions.   The  consolidated  loss  before  income  tax  benefit  and
extraordinary  charge decreased by $17,275 to $10,531 in the first six months of
1997 versus $27,806 in the 1996 period due primarily to an increase in operating
income,  offset by an increase in interest  expense.  The $7,829 increase in the
extraordinary  charge reflects the aggregate  premium paid on the redemptions of
the  Company's  10 5/8% Senior  Notes and an  additional  write-off  of deferred
financing costs.


Specialty Media:

The specialty  media  segment's  sales  increased by $27,527 or 8.3% in the 1997
period over 1996 due largely to greater  advertising  and  circulation  revenue,
particularly at Seventeen,  the largest teen, fashion and beauty magazine in the
United States, and Soap Opera Digest,  which has become a weekly publication and
continues to gain market share. Also, strong  advertising  revenue growth at the
Company's   telecommunications   trade  publications  and  certain  acquisitions
contributed to the increase in sales.  Operating  income increased by $21,380 or
89.8% in the 1997 period over 1996.  The increase was the result of the increase
in sales and the impact of acquisitions, as well as a decrease in paper prices.

Education:

     The  education  segment's  sales  increased by $27,268 or 15.8% in the 1997
period over 1996. The increase in sales reflected gains at Channel One and Films
for the Humanities and Sciences,  along with the addition of Westcott, which the
Company  acquired in May 1996,  offset by declines at Newbridge  Communications,
Inc. ("Newbridge"),  which the Company intends to divest by the end of 1997. The
education  segment's operating income increased to $12,611 in the 1997 period as
compared to $10,037 in the 1996 period.

Information

     The  information  segment's sales increased by $15,625 or 10.8% in the 1997
period  over  1996  primarily  because  of  organic  growth  at  both  the  Haas
advertiser-sponsored  apartment guides and Bacon's as well as acquisitions.  The
information  segment's  operating income increased to $14,649 in the 1997 period
as compared to $6,633 in the 1996 period.




RESULTS OF OPERATIONS  (dollars in thousands, except per share amounts)

Three  Months  Ended June 30, 1997  Compared to the Three  Months Ended June 30,
1996:

Consolidated Results:

     Consolidated  sales  increased by 9.9% to $368,762 in the second quarter of
1997 from $335,680 in 1996. The sales  increase  resulted from organic growth in
all  segments,  as well as the  impact of recent  acquisitions,  in  particular,
Westcott  which added $10,224 to the sales growth in the second quarter of 1997.
Consolidated operating income increased to $39,518 in the second quarter of 1997
as  compared  to $23,280 in the same period in 1996.  This 70%  improvement  was
primarily  due  to the  increases  in  sales,  a  decrease  in  amortization  of
intangible  assets,  excess of purchase price over net assets acquired and paper
price  reductions,  partially  offset by  increases  in  marketing  and selling,
distribution,  circulation and fulfillment, and editorial expenses. Paper costs,
which  in  the  second  quarter  of  1997  represented  approximately  9% of the
Company's total operating costs and expenses, were approximately 8% lower in the
1997  quarter  versus 1996.  All three  segments  experienced  declines in paper
prices with the greatest impact occurring in the specialty media segment. As the
Company had  anticipated,  paper prices have  increased  moderately in the third
quarter of 1997.  Interest  expense  increased  by $5,383 or 18.4% in the second
quarter of 1997 over 1996  primarily  due to the  increased  level of  borrowing
associated   with   acquisitions.   The   consolidated   income   (loss)  before
extraordinary  charge was $3,700 in the second  quarter of 1997 as  compared  to
$(7,066) in the 1996 period.  This  improvement was the result of an increase in
operating income, offset by an increase in interest expense. The $6,275 increase
in  the  extraordinary  charge  reflects  the  aggregate  premium  paid  on  the
redemptions of the Company's 10 5/8% Senior Notes and an additional write-off of
deferred financing costs.

Specialty Media:

     The specialty  media  segment's  sales increased by $18,062 or 10.7% in the
second  quarter of 1997 versus 1996  primarily  due to greater  circulation  and
advertising  revenue,  particularly at Seventeen,  the largest teen, fashion and
beauty  magazine in the United  States,  Soap Opera  Digest,  which has become a
weekly  publication  and  continues  to gain  market  share,  and the  Company's
telecommunications  and textiles  publications,  plus certain acquisitions.  The
specialty media segment's  operating  income  increased to $27,621 in the second
quarter of 1997 as compared  to $15,291 in the 1996 period due to the  increased
sales, the impact of acquisitions and a decrease in paper prices in 1997.

Education:

The education  segment's sales increased by $5,433 or 6.1% in the second quarter
of 1997 versus 1996.  The increase in sales  reflected  gains at Channel One and
Films for the Humanities and Sciences along with the addition of Westcott, which
the Company  acquired in May 1996,  offset by declines at  Newbridge,  which the
Company intends to divest by the end of 1997. The education  segment's operating
income  increased to $6,774 in the second  quarter of 1997 as compared to $5,126
in the 1996 period.

Information:

The  information  segment's  sales  increased  by $9,587 or 12.5% in the  second
quarter of 1997  versus  1996.  The  increase  in  revenues  was driven by a 31%
increase in the Haas advertiser-sponsored  guides for apartments,  computers and
homes,  increased  revenues  at  Bacon's  CD-ROM  database  plus the  effect  of
acquisitions.  The operating  income for the  information  segment  increased to
$11,179 in the second quarter of 1997 as compared to $7,104 in the 1996 period.

Liquidity and Capital Resources

Consolidated  working capital including current maturities of long-term debt was
$219,473 at June 30, 1997 compared to a working capital  deficiency of $(44,705)
at December 31, 1996. Excluding the effect of the reclassification of net assets
held  for  sale,  consolidated  working  capital  deficiency  including  current
maturities of long-term debt would have been $(28,845) at June 30, 1997 compared
to $(69,317) at December 31, 1996.  Consolidated  working  capital  reflects the
expensing  of  editorial  and product  development  costs when  incurred and the
recording of deferred  revenues as a current  liability.  Advertising  costs are
expensed   when  the   promotional   activities   occur   except   for   certain
direct-response  advertising  costs which are  capitalized as other  non-current
assets and amortized over the estimated period of future benefit.

Earnings before interest,  taxes,  depreciation,  amortization and provision for
one-time  charges,  or EBITDA,  is a widely used and commonly  reported standard
measure  utilized by analysts,  investors  and other  interested  parties in the
analysis of the media industry.  EBITDA is included in the following  discussion
to provide additional  information for determining the ability of the Company to
meet its future  debt  service  requirements  and to pay cash  dividends  on its
preferred  stock.  EBITDA is not intended to represent cash flow from operations
and  should  not be  considered  as an  alternative  to net income or loss as an
indicator of the Company's  operating  performance or to cash flows as a measure
of liquidity.  This  information  is disclosed  herein to permit a more complete
comparative  analysis of the Company's operating  performance  relative to other
companies in its industry.
<PAGE>
<TABLE>
<CAPTION>


                                                       Six Months Ended                    Three Months Ended
                                                           June 30,                             June 30,
                                                     1996            1997                 1996            1997
                                                     ----            ----                 ----            ----
EBITDA:

<S>                                           <C>            <C>                  <C>             <C>         
     Specialty Media                          $     61,684   $     73,384         $     34,306    $     42,697
     Education                                      36,293         44,940               19,272          23,079
     Information                                    34,369         36,583               21,758          22,340
     Corporate                                      (9,851)       (12,710)              (4,053)         (5,960)
                                              ------------   ------------         ------------    ------------
                                                 
      Total                                   $    122,495   $    142,197         $     71,283    $     82,156
                                              ============   ============         ============    ============
                                                                           
                                                 

Net Cash Provided by (Used in)
        Operating Activities:

     Specialty Media                          $     31,078   $     62,529          $    24,718    $     44,970
     Education                                       8,695         11,567                7,998          13,494
     Information                                    32,327         30,351               18,867          14,712
     Corporate                                     (60,985)       (79,045)             (39,738)        (40,213)
                                              ------------   ------------         ------------    ------------

        Total                                 $     11,115   $     25,402          $    11,845    $     32,963
                                              ============   ============          ===========    ============

Net Cash Used in Investing
        Activities:

     Specialty Media                          $   (194,028)  $    (44,905)         $    (9,184)   $     (2,049)
     Education                                    (423,487)       (62,400)            (421,195)        (58,199)
     Information                                   (35,085)       (43,510)              (9,081)        (17,482)
     Corporate                                        (452)          (656)                (184)           (318)
                                              ------------   ------------         ------------    ------------  

        Total                                 $   (653,052)  $   (151,471)         $  (439,644)   $    (78,048)
                                              ============   ============          ===========    ============  

Net Cash Provided by (Used in)
        Financing Activities:

     Specialty Media                          $     (5,526)  $     (1,642)        $     (2,154)   $     (1,599)
     Education                                      (1,606)            53                 (163)           (264)
     Information                                    (2,676)        (1,222)              (1,046)         (1,188)
     Corporate                                     642,215        118,493              416,636          43,831
                                              ------------   ------------         ------------    ------------  

        Total                                 $    632,407   $    115,682         $    413,273    $     40,780
                                              ============   ============          ===========    ============   

Excess (Deficiency) of Earnings
        to Fixed Charges:

     Specialty Media                          $     23,366   $     47,588         $     14,886    $     30,633
     Education                                       8,946         11,646                4,541           6,307
     Information                                     3,436          7,438                4,958           5,421
     Corporate                                     (63,554)       (77,203)             (31,451)        (38,661)
                                              ------------   ------------         ------------    ------------   

        Total                                 $    (27,806)  $    (10,531)        $     (7,066)   $      3,700
                                              ============   ============          ===========    ============

Excess (Deficiency) of Earnings to
        Fixed Charges and Preferred Stock
        Dividends:

     Specialty Media                          $     23,366   $     47,588         $     14,886    $     30,633
     Education                                       8,946         11,646                4,541           6,307
     Information                                     3,436          7,438                4,958           5,421
     Corporate                                     (82,802)      (101,984)             (43,854)        (51,116)
                                              ------------   ------------         ------------    ------------ 

        Total                                 $    (47,054)  $    (35,312)        $    (19,469)   $     (8,755)
                                              ============   ============          ===========    ============ 
</TABLE>
<PAGE>

Consolidated  EBITDA  increased by $19,702 or 16.1% in the six months ended June
30,  1997 over 1996  mainly as a result of growth in  existing  operations,  new
product  additions  and  acquisitions  of products  and  businesses.  The EBITDA
increase in the specialty  media  segment was  primarily  due to strong  organic
growth in  circulation  and  advertising  revenue as well as savings  from paper
price  declines.  The  EBITDA  increase  in the  education  segment  is  largely
attributable to Westcott,  which was acquired in the second quarter of 1996. The
EBITDA  increase in the  information  segment came from increases in advertising
revenue  at  the  apartment  guides,   distribution  revenues  at  the  consumer
directories  and new  products at Bacon's.  The net cash  provided by  operating
activities during the six months ended June 30, 1997, after interest payments of
$67,060,  was $25,402.  Net cash provided by operating  activities  increased by
$14,287  during the six months  ended June 30, 1997 over 1996 due  primarily  to
EBITDA growth.  Capital  expenditures  were $14,708 during the 1997 period which
was an increase of $4,550 from the 1996  period.  Payments for  acquisitions  of
$142,291  (including certain immaterial  purchase price adjustments  relating to
previous acquisitions) were made during the first six months of 1997.

Consolidated EBITDA increased by $10,873 or 15.3% in the three months ended June
30,  1997 over 1996  mainly as a result of growth in  existing  operations,  new
product  additions  and  acquisitions  of products  and  businesses.  The EBITDA
increase in the specialty  media  segment was  primarily  due to strong  organic
growth in  circulation  and  advertising  revenue as well as savings  from paper
price  declines.  The  EBITDA  increase  in the  education  segment  is  largely
attributable to Westcott,  which was acquired in the second quarter of 1996. The
EBITDA  increase in the  information  segment came from increases in advertising
revenue  at  the  apartment  guides,   distribution  revenues  at  the  consumer
directories  and new  products at Bacon's.  The net cash  provided by  operating
activities  during the three months ended June 30, 1997, after interest payments
of $37,059,  was $32,963. Net cash provided by operating activities increased by
$21,118  during the three months ended June 30, 1997 over 1996 due  primarily to
EBITDA growth.  Capital  expenditures  were $7,633 during the three months ended
June 30, 1997 which was an increase of $1,464 from the 1996 period. Payments for
acquisitions of $75,856 (including certain immaterial purchase price adjustments
relating to previous  acquisitions) were made during the three months ended June
30, 1997.

The  Company's  earnings  (defined  as pretax  income  or loss  from  continuing
operations)  are  inadequate to cover  (exceed)  fixed charges and fixed charges
plus  preferred  stock  dividends by $27,806 and $47,054 and $10,531 and $35,312
for the six-month periods ended June 30, 1996 and 1997, respectively, and $7,066
and $19,469 and $(3,700) and $8,755 for the  three-month  periods ended June 30,
1996 and 1997,  respectively.  Fixed  charges  consist  of  interest  expense on
long-term debt and other non-current  obligations  (including current maturities
on long-term debt),  amortization of deferred  financing costs, and that portion
of operating  rental expense that represents  interest.  Such earnings have been
reduced by non-cash charges (including  depreciation,  amortization and non-cash
dividends) of approximately $105,263 and $91,539 for the six-month periods ended
June  30,  1996  and  1997,  respectively,  and  $54,486  and  $44,517  for  the
three-month  periods  ended June 30,  1996 and 1997,  respectively.  Adjusted to
eliminate these non-cash charges, earnings would have exceeded fixed charges and
fixed  charges  plus  preferred  stock  dividends by  approximately  $69,403 and
$58,209 and $76,557 and $56,227 for the  six-month  periods  ended June 30, 1996
and 1997  respectively,  and $43,336 and $35,017 and $48,217 and $35,762 for the
three-month periods ended June 30, 1996 and 1997, respectively.

Financing Arrangements
----------------------

In January 1997,  the Company  purchased,  in aggregate,  $20,850 of the 10 5/8%
Senior  Notes at a  weighted  average  price of 105%,  plus  accrued  and unpaid
interest from various  brokers on the open market.  On May 1, 1997,  the Company
redeemed the $212,400 remaining  principal amount of the 10 5/8% Senior Notes at
104% plus  accrued  and unpaid  interest.  The  aggregate  premium  paid and the
write-off of related deferred financing costs are classified as an extraordinary
charge and are  recorded  at an  aggregate  value of $13,847  and $15,401 on the
accompanying  statements of condensed consolidated  operations for the three and
six-month periods ended June 30, 1997.

The write-off of the unamortized  deferred  financing costs of $7,572 related to
the  Company's  May  1996  bank   refinancing   has  been   reclassified  as  an
extraordinary  charge on the accompanying  statements of condensed  consolidated
operations for the three and six-month periods ended June 30, 1996 to conform to
the 1997 presentation.

On April 21, 1997, the Company  entered into a new 364-day credit  facility with
The Bank of New York,  Bankers  Trust  Company,  The Bank of Nova Scotia and The
Chase Manhattan Bank as agents (the "New Credit  Facility")  which expires April
20,  1998.  Under  the  terms  of the  New  Credit  Facility,  the  Company  has
commitments of $150,000 which can be borrowed in the form of revolving loans.

The proceeds of all  revolving  loans under the New Credit  Facility can be used
for  general  corporate  and  working  capital  purposes  of the Company and its
subsidiaries,   including,   without  limitation,  the  financing  of  permitted
acquisitions.

The amounts borrowed  pursuant to the New Credit Facility bear interest at rates
per annum  identical  to those in the Bank Credit  Facilities  at the  Company's
option as follows:  (i) the higher of (a) the Federal Funds  Effective Rate plus
1/2% and (b) the prime  lending  rate as in effect  from time to time (the "Base
Rate");  plus in each case, an applicable margin of up to 1/8 of 1% as specified
in the New Credit Facility or (ii) the Eurodollar Rate plus an applicable margin
ranging from 1/2% to 1 1/2% as specified in the New Credit Facility.

Under the New Credit  Facility,  the Company has agreed to pay  commitment  fees
equal to 1/8 of 1% per annum on the daily average aggregate unutilized revolving
loan commitment.

The  covenants  in the New Credit  Facility  are  identical to those in the Bank
Credit  Facilities and, among other things,  limit the ability of the Company to
change the nature of its businesses,  incur certain indebtedness,  create liens,
sell assets, engage in mergers,  consolidations or transactions with affiliates,
make investments in or loans to certain  subsidiaries,  make guarantees and make
certain  restricted  payments.  The Company is also prohibited from declaring or
making  dividend  payments  on the common  stock in excess of $25,000 per annum,
unless the fixed charge  coverage  ratio,  interest  coverage ratio and leverage
ratio are at certain levels as specified in the New Credit Facility.

As under the Bank Credit  Facilities,  borrowings  under the New Credit Facility
are guaranteed by each of the domestic wholly-owned subsidiaries of the Company.
Such  guarantees are full,  unconditional  and joint and several.  The Company's
foreign  subsidiaries  are not guarantors of the above  indebtedness.  The total
assets,  revenues,   income  or  equity  of  such  foreign  subsidiaries,   both
individually  and on a combined basis,  are  inconsequential  in relation to the
total assets, revenue, income or equity of the Company.

In May  1997,  the  Company,  through  its  Bank  Credit  Facilities,  solicited
commitments of $150,000 under the Tranche B Revolving Loan Facility  ("Tranche B
Facility"). The Company has the right to solicit additional commitments of up to
$100,000  under the  Tranche  B  Facility.  As of June 30,  1997,  $150,000  was
outstanding under the Tranche B Facility.


The commitments under the Tranche B Facility are subject to mandatory reductions
semi-annually  on June 30 and  December 31 with the first  reduction on June 30,
1999 and the final reduction on June 30, 2004. The mandatory  reductions for the
Tranche B Facility loan commitments are as follows:

                            Years Ending
                             December 31,
                             ------------
         1999                $   15,000
         2000                    30,000
         2001                    30,000
         2002                    30,000
         2003                    30,000
         2004                    15,000
                             ----------
                             $  150,000


Recent Developments
-------------------

In July 1997, the Company executed definitive agreements to sell the outstanding
capital stock of Krames  Communications  Incorporated  and the net assets of New
Woman  magazine.  These sales are expected to close in August 1997.  The Company
also expects to recover the carrying value of these net assets held for sale.

In July and August 1997, the Company completed two product-line  acquisitions in
the  specialty  consumer  magazines  group for an  aggregate  purchase  price of
approximately $30,100.

In July 1997,  the Company  entered  into four,  three-year  and two,  four-year
interest rate swap  agreements,  with an aggregate  notional amount of $600,000.
Under these new swap agreements,  which commence on January 1, 1998, the Company
receives a floating rate of interest  based on three-month  LIBOR,  which resets
quarterly,  and the Company pays a fixed rate of interest, each quarter, for the
terms of the respective agreements.  The weighted average fixed rate of interest
under these agreements is 6.33%.



Impact of Inflation
-------------------

The impact of inflation was  immaterial  during 1996 and 1997 with the exception
of paper prices in early 1996.  Paper prices  declined  around mid-year 1996 and
continued that trend through the first six months of 1997.  Moderate paper price
increases  occurred  in July 1997 for most of the  grades  of paper  used by the
Company. In the first six months of 1997, paper costs represented  approximately
8% of the Company's  total  operating  costs and  expenses.  Postage for product
distribution and direct mail solicitations is also a significant  expense of the
Company.  The Company uses the U.S.  Postal Service for  distribution of many of
its products and marketing  materials.  Postage costs increase  periodically and
can be expected to increase in the future. In the past, the effects of inflation
on  operating  expenses  have  substantially  been offset by K-III's  ability to
increase  selling  prices.  No assurances can be given that the Company can pass
such cost increases  through to its customers.  In addition to pricing  actions,
the  Company is  continuing  to examine  all  aspects of the  manufacturing  and
purchasing processes to identify ways to offset some of these price increases.


Forward Looking Information
---------------------------

This report contains certain forward-looking statements concerning the Company's
operations,  economic performance and financial condition.  These statements are
based upon a number of assumptions and estimates which are inherently subject to
uncertainties  and  contingencies,  many of which are beyond the  control of the
Company, and reflect future business decisions which are subject to change. Some
of the assumptions may not materialize and unanticipated  events may occur which
can affect the Company's results.


<PAGE>


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

(a)       The Annual Meeting of Shareholders was held on May 15, 1997.

(b)       At the meeting,  incumbent  directors  William F.  Reilly,  Henry R. 
Kravis, George R. Roberts,  Michael T. Tokarz, Perry Golkin, Charles G. McCurdy,
Beverly C. Chell and Meyer Feldberg were re-elected.

(c) Set forth below is a  description  of the items that were voted upon at such
meeting and the number of votes cast for, against or withheld,  plus abstentions
and broker non-votes, as to each such matter and each director.

(i)       Election of Directors:

An election of eight  directors was held and the shares so present were voted as
follows for the election of each of the following:

                               Number of                    Number of
                           Shares Voted For              Shares Withheld
                           ----------------              ---------------
William F. Reilly             121,861,143                      605,606
Henry R. Kravis               121,862,218                      604,531
George R. Roberts             119,152,419                    3,314,330
Michael T. Tokarz             121,864,034                      602,715
Perry Golkin                  121,874,580                      592,169
Charles G. McCurdy            121,864,866                      601,883
Beverly C. Chell              121,861,666                      605,083
Meyer Feldberg                121,874,235                      572,514


(ii) The approval of Deloitte & Touche LLP as independent public accountants for
the  Company  for the fiscal year ending  December  31, 1997 was  ratified  with
122,441,074 votes for, 14,442 votes against and 11,233 votes abstaining.




<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.


                        K-III Communications Corporation
                                  (Registrant)





Date:     August 13, 1997                 /s/  William F. Reilly
          --------------------        ----------------------------------------
                                                 (Signature)
                                 Chairman, Chief Executive Officer and Director
                                         (Principal Executive Officer)






Date:     August 13, 1997               /s/  Curtis A. Thompson
          --------------------        ----------------------------------------
                                                 (Signature)
                                        Vice President and Controller
                                        (Principal Accounting Officer)