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: March 31, 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
April 30, 1997: 129,221,684






<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
              March 31, 1997                                              2

              Condensed Statements of Consolidated
              Operations (Unaudited) for the three months
              ended March 31, 1996 and 1997                               3

              Condensed Statements of Consolidated
              Cash Flows (Unaudited) for the three months
              ended March 31, 1996 and 1997                               4

              Notes to Condensed Consolidated
              Financial Statements (Unaudited)                          5-7

     Item 2.  Management's Discussion and Analysis of Financial
              Condition and Results of Operations                      8-12


Part II.  Other Information: None


Signatures                                                               13



<PAGE>


                                       -2-

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

<TABLE>
<CAPTION>
                                                                 December 31,        March 31,
                                                                        1996             1997
                                                        (dollars in thousands, except per share amounts)
ASSETS
Current assets:
<S>                                                              <C>                  <C>        
     Cash and cash equivalents                                   $    36,655       $    30,573
     Accounts receivable, net                                        233,603           180,932
     Inventories, net                                                 52,743            28,687
     Net assets held for sale                                         18,684           286,700
     Prepaid expenses and other                                       34,834            28,319
                                                                 -----------       -----------
     Total current assets                                            376,519           555,211

Property and equipment, net                                          122,823           103,408
Other intangible assets, net                                         781,316           652,706
Excess of purchase price over net
     assets acquired, net                                            971,665           932,251
Deferred income tax asset, net                                       176,200           176,200
Other non-current assets                                             123,692           110,386
                                                                 -----------       -----------
                                                                 $ 2,552,215       $ 2,530,162
                                                                 ===========       ===========
LIABILITIES AND SHAREHOLDERS' EQUITY 
Current liabilities:
     Accounts payable                                            $   107,258       $    67,259
     Accrued interest payable                                         22,150            24,513
     Accrued expenses and other                                      140,959           107,487
     Deferred revenues                                               144,857           134,094
     Current maturities of long-term debt                              6,000             6,000
                                                                 -----------       -----------

     Total current liabilities                                       421,224           339,353
                                                                 -----------       -----------

Long-term debt                                                     1,565,686         1,649,643
                                                                 -----------       -----------
Other non-current liabilities                                         35,062            32,202
                                                                 -----------       -----------
Exchangeable preferred stock                                         442,729           447,478
                                                                 -----------       -----------
Common stock subject to redemption ($.01 par value,
     643,310 shares and 508,310 shares outstanding at
     December 31, 1996 and March 31, 1997, respectively)               5,957             4,801
                                                                 -----------       -----------
Shareholders' equity
     Common stock ($.01 par value, 128,349,045 shares
     and 128,657,874 shares outstanding at December 31, 1996
     and March 31, 1997, respectively)                                 1,283             1,287
     Additional paid-in-capital                                      772,642           774,473
     Accumulated deficit                                            (691,098)         (717,524)
     Cumulative foreign currency translation adjustments              (1,270)           (1,551)
                                                                 -----------       -----------

     Total shareholders' equity                                       81,557            61,486
                                                                 -----------       -----------

                                                                 $ 2,552,215       $ 2,530,162
                                                                 ===========       ===========

</TABLE>


            See notes to condensed consolidated financial statements.












<PAGE>


                                       -3-

                K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
           CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                Three Months Ended
                                                                                     March 31,

                                                                             1996              1997
                                                                (dollars in thousands, except per share amounts)
Sales, net:
<S>                                                                     <C>               <C>        
     Specialty Media                                                    $   164,047       $   173,512
     Education                                                               83,052           104,887
     Information                                                             67,854            73,892
                                                                        -----------       -----------
Total sales, net                                                            314,953           352,291

Operating costs and expenses:
     Cost of goods sold                                                      83,445            80,098
     Marketing and selling                                                   60,798            70,202
     Distribution, circulation and fulfillment                               55,481            63,387
     Editorial                                                               22,145            29,310
     Other general expenses                                                  36,074            42,503
     Corporate administrative expenses                                        5,798             6,750
     Depreciation and amortization of
          prepublication costs, property and equipment                        7,674             9,839
     Amortization of intangible assets, excess of purchase
          price over net assets acquired and other                           36,553            29,724
                                                                        -----------       -----------
Operating income                                                              6,985            20,478

Other income (expense):
     Interest expense                                                       (28,358)          (34,341)
     Amortization of deferred financing and organizational costs               (900)             (842)
     Other, net                                                               1,533               474
                                                                        -----------       -----------
Loss before income tax benefit and extraordinary charge                     (20,740)          (14,231)

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

Loss before extraordinary charge                                            (20,740)          (12,546)

Extraordinary charge - extinguishment of debt                                    --            (1,554)
                                                                        -----------       -----------

Net loss                                                                    (20,740)          (14,100)

Preferred stock dividends:
     Non-cash                                                                (3,969)           (4,451)
     Cash                                                                    (2,875)           (7,875)
                                                                        -----------       -----------

Loss applicable to common shareholders                                  $   (27,584)      $   (26,426)
                                                                        ===========       ===========

Loss applicable to common shareholders per common share:

Loss before extraordinary charge                                        $      (.21)      $      (.19)

Extraordinary charge                                                    $        --       $      (.01)
                                                                        -----------       -----------

Net loss                                                                $      (.21)      $      (.20)
                                                                        ===========       ===========


Weighted average common shares outstanding                              128,502,847       129,114,344
                                                                        ===========       ===========

</TABLE>




            See notes to condensed consolidated financial statements.






<PAGE>


                                                                 
                                      -4-

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

<TABLE>
<CAPTION>


                                                                                   Three Months Ended
                                                                                        March 31,
                                                                                1996              1997
                                                                                (dollars in thousands)
Operating activities:
<S>                                                                       <C>               <C>         
     Net loss                                                             $   (20,740)      $   (14,100)
     Adjustments to reconcile net loss to net
        cash used in operating activities:
          Extraordinary charge - extinguishment of debt                            --             1,554
          Depreciation, amortization and other                                 45,127            40,405
          Accretion of discount on acquisition obligation,
              distribution advance and other                                    1,681             1,653
          Other, net                                                           (1,359)              (95)

        Changes in operating assets and liabilities:
        (Increase) Decrease in:
            Accounts receivable, net                                           (7,716)           13,714
            Inventories, net                                                    7,923             1,408
            Prepaid expenses and other                                         (3,558)           (9,847)
        Increase (Decrease) in:
            Accounts payable                                                  (19,916)          (22,903)
            Accrued interest payable                                           14,123             2,363
            Accrued expenses and other                                        (13,074)          (12,745)
            Deferred revenues                                                  (2,823)           (8,934)
            Other non-current liabilities                                        (397)              (34)
                                                                          -----------       -----------

            Net cash used in operating activities                                (729)           (7,561)
                                                                          -----------       -----------

Investing activities:
     Additions to property, equipment and other                                (3,989)           (7,075)
     Proceeds from sales of property, equipment and other                       1,412                87
     Payments for businesses acquired                                        (210,831)          (66,435)
                                                                          -----------       -----------

            Net cash used in investing activities                            (213,408)          (73,423)
                                                                          -----------       -----------

Financing activities:
     Borrowings under credit agreements                                       235,947           174,442
     Repayments of borrowings under credit agreements                        (502,000)          (70,950)
     Proceeds from issuance of 8 1/2% Senior Notes, net of discount           298,734                --
     Proceeds from issuance of common stock, net of redemptions                 1,379               975
     Proceeds from issuance of Series C (exchanged into Series D )
            Preferred Stock, net of issuance costs                            193,721                --
     Purchases of 10 5/8% Senior Notes                                             --           (21,891)
     Dividends paid to preferred shareholders                                  (2,875)           (7,875)
     Deferred financing costs paid                                             (5,755)              (83)
     Other                                                                        (18)              284
                                                                          -----------       -----------

            Net cash provided by financing activities                         219,133            74,902
                                                                          -----------       -----------

Increase (decrease) in cash and cash equivalents                                4,996            (6,082)
Cash and cash equivalents, beginning of period                                 27,226            36,655
                                                                          -----------       -----------

Cash and cash equivalents, end of period                                  $    32,222       $    30,573
                                                                          ===========       ===========

Supplemental information:
     Cash interest paid                                                   $    11,617       $    30,001
                                                                          ===========       ===========

</TABLE>


            See notes to condensed consolidated financial statements.








<PAGE>


                                       -5-

                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  classifications  used in the current  period.  The  operating
results  for  the  three  month  periods  ended  March  31 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" which
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 will exclude  Common
Stock Equivalents.  Additionally, SFAS No. 128 changes the methodology for fully
diluted  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.

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

During the  three-month  period  ended March 31,  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 $66,435 (net of liabilities  assumed of  approximately  $5,741) and includes
certain   immaterial   purchase   price   adjustments   related  to  prior  year
acquisitions.   The  excess   purchase  price  over  net  assets   acquired  was
approximately $30,408.


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
March 31, 1997; however,  the changes are not expected to have a material effect
on the consolidated financial position 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-month  periods ended March 31,
1996 and 1997.



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


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.  These
planned  divestitures,  in addition to Katharine Gibbs Schools,  Inc., which the
Company had decided to divest in 1996, collectively, the ("Non-Core Units"), are
part of the Company's plan to focus on six key  businesses in markets that have
strong  demographics  and 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 $18,684  and  $286,700  on the
accompanying  condensed  consolidated  balance  sheets at December  31, 1996 and
March 31, 1997,  respectively.  The operating  results of the Non-Core Units are
included in the accompanying statements of condensed consolidated operations for
the  three-month  periods  ended  March 31,  1996 and 1997.  Total sales for the
Non-Core Units were $68,616 and $66,203 for three-month periods ending March 31,
1996 and 1997, respectively.  Operating income (loss) for the Non-Core Units was
$(4,712) and $505 for the  three-month  periods  ending March 31, 1996 and 1997,
respectively.


<PAGE>


                                       -6-


4.   Inventories
     -----------

Inventories consist of the following:

                                               December 31,    March 31,
                                                   1996          1997
                                                   ----          ----
         Finished Goods                         $ 41,497       $ 13,047
         Work in Process                           2,111            118
         Raw Materials                            17,838         18,297
                                                --------       --------
                                                  61,446         31,462
         Less allowance for obsolescence           8,703          2,775
                                                --------       --------
                                                $ 52,743       $ 28,687
                                                ========       ========




5.   Long-term debt
     --------------

Long-term debt consists of the following:
                                            December 31,       March 31,
                                                  1996            1997
                                                  ----            ----    
     Borrowings under New Bank Facilities     $  884,992     $   988,484
     8 1/2% Senior Notes due 2006, net           298,811         298,833
     10 1/4% Senior Notes due 2004               100,000         100,000
     10 5/8% Senior Notes due 2002               233,250         212,400
                                              ----------      ----------
     Total                                     1,517,053       1,599,717
     Acquisition obligation payable               54,633          55,926
                                              ----------      ----------
                                               1,571,686       1,655,643
        Less: current portion                      6,000           6,000
                                              ----------      ----------
                                              $1,565,686      $1,649,643
                                              ==========      ==========

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.  The premium  paid on the
purchase and the write-off of related deferred financing costs are classified as
an extraordinary  charge and are recorded at an aggregate value of $1,554 on the
accompanying statement of condensed consolidated operations for the three months
ending March 31, 1997. (See Note 8 - Subsequent Events).




6. Exchangeable Preferred Stock
   ----------------------------

Exchangeable Preferred Stock consists of the following:

                                                  December 31,       March 31,
                                                      1996              1997
                                                      ----              ----
$2.875 Senior Exchangeable Preferred Stock         $ 98,266          $ 98,334
$11.625 Series B Exchangeable Preferred Stock       150,513           155,043
$10.000 Series D Exchangeable Preferred Stock       193,950           194,101
                                                   --------          --------
                                                   $442,729          $447,478
                                                   ========          ========


$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 March
31, 1997. The  liquidation  and redemption  value at December 31, 1996 and March
31, 1997 was $100,000.






<PAGE>


                                       -7-

$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  March  31,  1997,  respectively.  The
liquidation  and  redemption  value at December  31, 1996 and March 31, 1997 was
$153,153 and $157,604, respectively.

$10.00 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 March
31, 1997. The  liquidation  and redemption  value at December 31, 1996 and March
31, 1997 was $200,000.


7.   Loss per Common Share
     ---------------------

Loss per common share for the three-month  periods ended March 31, 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 antidilutive.
Loss per common  share  assuming  full  dilution is not  presented  because such
calculation is antidilutive.


8.  Subsequent Events
    -----------------

In April 1997, the Company completed two product-line  acquisitions,  QWIZ, Inc.
in  workplace  learning and  IntelliChoice,  Inc. in business  directories.  The
aggregate purchase price approximated $53,000.

On April 21, 1997, the Company  entered into a credit  agreement  with The Chase
Manhattan Bank, The Bank of New York, Bankers Trust Company and The Bank of Nova
Scotia as agents  (the  "Credit  Agreement").  Under the Credit  Agreement,  the
Company has commitments of $150,000 which may be utilized through the incurrence
of revolving  credit loans. The proceeds of the Credit Agreement may be used for
general corporate and working capital purposes,  including the redemption of the
10 5/8% Senior  Notes as well as to finance  certain  future  acquisitions.  The
Credit  Agreement expires on April 20, 1998. As of May 14, 1997, the Company has
borrowed $80,000 under the Credit Agreement.

The amounts borrowed under the Credit Agreement bear interest, at the same rates
per annum as the Bank Credit Facilities, at the Company's option: (i) the higher
of (a) the Federal Funds Effective Rate as published by the Federal Reserve Bank
of New York plus 0.5% and (b) the prime commercial lending rate announced by the
administrative  agent from time to time; plus in each case, an applicable margin
of up to 1/8 of 1% as specified in the Credit  Agreement or (ii) the  Eurodollar
Rate plus an applicable  margin ranging from 1/2 of 1% to 1 1/2% as specified in
the Credit Agreement.

The  Company  has agreed to pay a  commitment  fee of 1/8 of 1% per annum on the
daily average unutilized commitment of the $150,000 Credit Agreement.

On May 1, 1997, the Company redeemed $212,400 principal amount of 10 5/8% Senior
Notes,  at a  redemption  price  of 104%  of the  outstanding  principal  amount
thereof, plus accrued and unpaid interest to the date of redemption of $11,284.






<PAGE>


                                                                 

                                      -8-

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,  education
     and information.  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)


                                               Three Months Ended
                                                     March 31,
                                              1996              1997
                                              ----              ----
Sales, net:
     Specialty Media                       $ 164,047         $ 173,512
     Education                                83,052           104,887
     Information                              67,854            73,892
                                           ---------         ---------
         Total                             $ 314,953         $ 352,291
                                           =========         =========


Operating income (loss):
     Specialty Media                           8,230            17,569
     Education                                 4,911             5,837
     Information                                (182)            3,470
     Corporate                                (5,974)           (6,398)
                                           ---------         ---------

     Total                                     6,985            20,478


Other income (expense):
     Interest expense                        (28,358)          (34,341)
     Amortization of deferred financing
        and organizational costs                (900)             (842)
     Other, net                                1,533               474
                                           ---------         ---------

Loss before income tax benefit and
     extraordinary charge                    (20,740)          (14,231)

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

Loss before extraordinary charge             (20,740)          (12,546)

Extraordinary charge - extinguishment
     of debt                                      --            (1,554)
                                           ---------         ---------

Net loss                                   $ (20,740)        $ (14,100)
                                           ==========        =========





<PAGE>


                                      -9-

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

Three Months Ended March 31, 1997 Compared to Three Months Ended March 31, 1996:
--------------------------------------------------------------------------------

Consolidated Results:
---------------------

Consolidated  sales  increased by 11.9% to $352,291 in the first quarter of 1997
from $314,953 in 1996. The sales increase  resulted from growth in all segments,
as well as from the impact of recent acquisitions, in particular, Westcott which
added  $22,828 to the sales  growth in the first  quarter of 1997.  Consolidated
operating  profit  increased to $20,478 in the first quarter of 1997 as compared
to operating  profit of $6,985 in the same period in 1996. This  improvement was
primarily  due to the  increases  in sales and a  decrease  in  amortization  of
intangible  assets,  excess of purchase price over net assets acquired and paper
price  reductions.  Average  paper  prices were 23.2% lower in the 1997  quarter
versus 1996.  Interest expense increased by $5,983 or 21.1% in the first quarter
1997 over 1996  primarily  due to the increased  level of borrowings  associated
with  acquisitions.  The consolidated net loss decreased by $6,640 to $14,100 in
the first  quarter of 1997 versus  $20,740 in 1996 due primarily to the increase
in operating profit.

Specialty Media:
----------------

The specialty  media  segment's  sales  increased by $9,465 or 5.8% in the first
quarter  of 1997  versus  1996  primarily  due to greater  advertising  revenue,
particularly at Seventeen,  New York and the Company's  telecommunications trade
publications, plus certain acquisitions. The specialty media segment's operating
profit  increased  to $17,569 in the first  quarter 1997 from $8,230 in the 1996
period  due  to  the  increased  sales,  the  impact  of  acquisitions  and  the
stabilization of paper prices in 1997.

Education:
----------

The education segment's sales increased by $21,835 or 26.3% in the first quarter
of 1997 versus 1996. The increase in sales  reflected gains at Weekly Reader 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. Channel One's sales were held back because of one client's
major advertising campaign which was deferred to the second quarter of 1997. The
education  segment had  operating  profit of $5,837 in the first quarter of 1997
versus an operating profit of $4,911 in 1996.

Information:
------------

The information segment's sales increased by $6,038 or 8.9% in the first quarter
of 1997 over 1996. The increase in revenues was driven by  double-digit  organic
growth in the apartment and home buyers  guides,  increased  revenues at Bacon's
CD-ROM database plus the effect of  acquisitions.  The operating  profit for the
information segment increased to $3,470 compared to an operating loss of $182 in
the 1996 period.

Liquidity and Capital Resources
-------------------------------

Consolidated  working  capital  (deficiency)  including  current  maturities  of
long-term  debt was $215,858 at March 31, 1997 compared to $(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 $(48,978) at March 31, 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 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.  The
Company believes EBITDA is a standard measure commonly  reported and widely used
by  analysts,  investors  and other  interested  parties in the media  industry.
Accordingly,  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>


                                      -10-

                                                   Three  Months Ended
                                                        March 31,
                                                  1996             1997
                                                  ----             ----
EBITDA:

     Specialty Media                         $   27,089       $   30,687
     Education                                   17,021           21,861
     Information                                 12,900           14,243
     Corporate                                   (5,798)          (6,750)
                                             ----------       ----------
     Total                                   $   51,212       $   60,041
                                             ==========       ==========


Net Cash Provided by (Used in)
       Operating Activities:

     Specialty Media                         $    6,360       $   17,559
     Education                                      697           (1,927)
     Information                                 13,461           15,639
     Corporate                                  (21,247)         (38,832)
                                             ----------       ----------
     Total                                   $     (729)      $   (7,561)
                                             ==========       ========== 


Net Cash Used in Investing
       Activities:

     Specialty Media                         $ (184,844)      $  (42,856)
     Education                                   (2,292)          (4,201)
     Information                                (26,004)         (26,028)
     Corporate                                     (268)            (338)
                                             ----------       ----------
     Total                                   $ (213,408)      $  (73,423)
                                             ==========       ========== 


Net Cash Provided by (Used in)
       Financing Activities:

     Specialty Media                         $   (3,372)      $      (43)
     Education                                   (1,443)             317
     Information                                 (1,630)             (34)
     Corporate                                  225,578           74,662
                                             ----------       ----------
     Total                                   $  219,133       $   74,902
                                             ==========       ==========


Excess (Deficiency) of Earnings
       to Fixed Charges:

     Specialty Media                         $    8,106       $   16,955
     Education                                    4,405            5,339
     Information                                 (1,148)           2,017
     Corporate                                  (32,103)         (38,542)
                                             ----------       ----------
     Total                                   $  (20,740)      $  (14,231)
                                             ==========       ========== 


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

     Specialty Media                         $    8,106       $   16,955
     Education                                    4,405            5,339
     Information                                 (1,148)           2,017
     Corporate                                  (38,947)         (50,868)
                                             ----------       ----------
     Total                                   $  (27,584)      $  (26,557)
                                             ==========       ========== 





<PAGE>


                                      -11-

Consolidated  EBITDA  increased by $8,829 in the first quarter of 1997 over 1996
mainly as a result of growth from existing operations, new product additions and
acquisitions of businesses. The net cash used in operating activities during the
first quarter of 1997,  after  interest  payments of $30,001,  was $7,561 versus
$729 in the first quarter of 1996, after interest payments of $11,617.  Net cash
used in operating  activities  increased by $6,832  during the first  quarter of
1997 over 1996 due  primarily to an increase in prepaid  expenses and a decrease
in accrued interest payable offset by EBITDA growth.  Capital  expenditures were
$7,075 during the first quarter of 1997 which was an increase of $3,086 from the
1996 period.  Payments for acquisitions of $66,435 (including certain immaterial
purchase price adjustments  relating to previous  acquisitions) were made during
the first quarter of 1997.

The  Company's  earnings  (defined  as pretax  income  or loss  from  continuing
operations)  are  inadequate  to cover  fixed  charges  and fixed  charges  plus
preferred  stock  dividends by $20,740 and $27,584 for the first quarter of 1996
and $14,231 and $26,557 for the first quarter of 1997.  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,
write-off  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  $50,777  and  $47,022  for the  first  quarter  of 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  $26,068 and $23,193 for the first quarter of 1996 and $28,340 and
$20,465 for the first quarter of 1997.

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

In April 1997, the Company completed two product-line  acquisitions,  QWIZ, Inc.
in  workplace  learning and  IntelliChoice,  Inc. in business  directories.  The
aggregate purchase price approximated $53,000.

On April 21, 1997,  the Company entered into a credit  agreement  with The Chase
Manhattan Bank, The Bank of New York, Bankers Trust Company and The Bank of Nova
Scotia as agents  (the  "Credit  Agreement").  Under the Credit  Agreement,  the
Company has commitments of $150,000 which may be utilized through the incurrence
of revolving  credit loans. The proceeds of the Credit Agreement may be used for
general corporate and working capital purposes,  including the redemption of the
10 5/8% Senior  Notes as well as to finance  certain  future  acquisitions.  The
Credit  Agreement expires on April 20, 1998. As of May 14, 1997, the Company has
borrowed $80,000 under the Credit Agreement.

The amounts borrowed under the Credit Agreement bear interest, at the same rates
per annum as the Bank Credit Facilities, at the Company's option: (i) the higher
of (a) the Federal Funds Effective Rate as published by the Federal Reserve Bank
of New York plus 0.5% and (b) the prime commercial lending rate announced by the
administrative  agent from time to time; plus in each case, an applicable margin
of up to 1/8 of 1% as specified in the Credit  Agreement or (ii) the  Eurodollar
Rate plus an applicable  margin ranging from 1/2 of 1% to 1 1/2% as specified in
the Credit Agreement.

The  Company  has agreed to pay a  commitment  fee of 1/8 of 1% per annum on the
daily average unutilized commitment of the $150,000 Credit Agreement.

On May 1, 1997, the Company redeemed $212,400 principal amount of 10 5/8% Senior
Notes,  at a  redemption  price  of 104%  of the  outstanding  principal  amount
thereof, plus accrued and unpaid interest to the date of redemption of $11,284.


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 quarter of 1997.  Overall,  the Company's
average  paper prices were 23.2% lower in the first  quarter 1997 over 1996.  In
the first  quarter 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.


<PAGE>


                                      -12-

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 these  assumptions may not materialize  and  unanticipated  events will occur
which can affect the Company's results.






















































<PAGE>


                                      -13-

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: May 15, 1997                      /s/ William F. Reilly
      ------------                      ----------------------
                                        Chairman and Director
                                        (Principal Executive Officer)




Date: May 14, 1997                      /s/ Curtis A. Thompson
      ------------                      ------------------------
                                        Vice President
                                        (Principal Accounting Officer)