Edgar Filing: PENTON MEDIA INC

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004

FORM 10-K

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

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004

COMMISSION FILE NUMBER 1-14337
PENTON MEDIA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 36-2875386
---------------------------------------------- ----------------------------------------------
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)

1300 EAST NINTH STREET, CLEVELAND, OHIO 44114
---------------------------------------------

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

216-696-7000
---------------------------------------------

(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
---------------- ---------------------------------------

COMMON STOCK, $0.01 PAR VALUE OVER-THE-COUNTER BULLETIN BOARD

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No[ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [ ] No [X]

The aggregate market value of common stock held by non-affiliates of Penton
Media, Inc., computed by reference to the closing price as of the last business
day of the registrant's most recently completed second fiscal quarter, June 30,
2004, at a closing price of $0.41 per share, was approximately $8,912,537.
Shares of common stock held by each officer and director, their respective
spouses, and by each person who owns or may be deemed to own 10% or more of the
outstanding common stock have been excluded because such persons may be deemed
to be affiliates. This determination of affiliate status is not necessarily a
conclusive determination for other purposes.

AS OF MARCH 31, 2005 34,487,872 SHARES OF PENTON MEDIA, INC. COMMON STOCK WERE
OUTSTANDING.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

PENTON MEDIA, INC.

INDEX TO
ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2004

PART I
Item 1. Business
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders

PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Repurchases of Equity Securities
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information

PART III
Item 10. Directors and Executive Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions
Item 14. Principal Accounting Fees and Services

PART IV
Item 15. Exhibits and Financial Statement Schedules
Signatures
Schedule II -- Valuation and Qualifying Accounts

PART I

ITEM 1. BUSINESS

GENERAL

In June 2004, the Company appointed David B. Nussbaum as Chief Executive
Officer ("CEO"). Mr. Nussbaum is now Penton's chief operating decision maker.
After reviewing the Company's operations, Mr. Nussbaum and the executive team
implemented a change in the Company's reportable segments effective in the third
quarter of 2004 to conform with the way the Company's businesses are now
assessed and managed. The Company is structured along segment and industry lines
rather than by product lines. This enables us to promote our related group of
products, including publications, trade shows and conferences, and online media
products, to our customers. As a result of this change in reportable segments,
all prior periods were recast to conform with the new segment format. Our five
principal segments and the industries they serve are as follows:

INDUSTRY TECHNOLOGY
Manufacturing Business Technology
Design/Engineering Aviation
Mechanical Systems/Construction Enterprise Information Technology
Government/Compliance Electronics
LIFESTYLE RETAIL
Natural Products Food/Retail
INTERNATIONAL Hospitality
United Kingdom

Since our founding in 1892, we have grown from an industrial trade magazine
publishing company into an integrated b-to-b media company serving a wide range
of industrial, technology and retail markets. We became an independent company,
incorporated in the State of Delaware, as a result of our spinoff from Pittway
Corporation in August 1998.

Our principal executive offices are located at The Penton Media Building,
1300 East Ninth Street, Cleveland, Ohio 44114, telephone 216-696-7000.

We maintain a Web site at http://www.penton.com. The information contained
on our Web site is not incorporated by reference in this report, and you should
not consider it a part of this report. Our Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those
reports are available free of charge on our Web site as soon as reasonably
practicable after they are filed, or furnished to, the Securities and Exchange
Commission.

Unless otherwise noted herein, disclosures in this Annual Report on Form
10-K relate only to our continuing operations. Our discontinued operations
consist of Penton Media Australia Pty, Limited ("PM Australia"), which was sold
in December 2002, and Professional Trade Shows ("PTS"), which was sold in
January 2003.

Unless the context otherwise requires, the terms "we," "our," "us,"
"Company," and "Penton" as used herein refer to Penton Media, Inc. and its
subsidiaries.

RECENT DEVELOPMENTS

RESTATEMENT OF FINANCIAL STATEMENTS

On March 24, 2005, the Company's management concluded that the Company's
previously issued consolidated financial statements should be restated to
increase income tax expense to correct the computation of our valuation
allowance for deferred tax assets. Management reached this conclusion following
a comprehensive review of the Company's deferred tax assets and deferred tax
liabilities. The Company determined that certain deferred tax liabilities had
been incorrectly offset against its deferred tax assets. Under Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes," taxable
temporary differences related to indefinite-lived intangible assets or
tax-deductible goodwill (for which reversal cannot be anticipated) should not be
offset against deductible temporary differences for other indefinite-lived
intangible assets or tax-deductible goodwill when scheduling reversals of
temporary differences.

The Company evaluated the materiality of the correction on its consolidated
financial statements using the guidelines of Staff Accounting Bulletin 99,
"Materiality" ("SAB 99") and concluded that the cumulative effects of the
corrections were material to its annual consolidated financial statements for
2004, 2003 and 2002 and the related quarterly consolidated financial statements
for such periods. As a result, the Company concluded that it will restate its
previously issued consolidated financial statements to recognize the impact of
the correction, as well as other accounting adjustments that were deemed in
earlier periods to be immaterial.

These financial statements have been restated to reflect adjustments to the
Company's previously reported financial information on Form 10-K for the years
ended December 31, 2003 and 2002. The Company's 2004 and 2003 quarterly
financial information also has been restated to reflect adjustments to the
Company's previously reported financial information on Form 10-Q for the
quarters ended March 31, 2004, June 30, 2004 and September 30, 2004. As a result
of the restatement, the Company identified adjustments through the filing date
of this Form 10-K that were required to be recorded which increased previously
reported stockholders' deficit at December 31, 2003 and September 30, 2004 by
$15.4 million and $17.1 million (unaudited), respectively. For additional
information on the restatement, see Note 2 -- Restatement, in the notes to
consolidated financial statements included herein.

The Company will restate the quarterly periods ended March 31, 2004, June
30, 2004, and September 30, 2004 on Forms 10-Q/A to be filed as expeditiously as
possible.

SENIOR SUBORDINATED NOTES REPURCHASE

In February 2005, the Company repurchased $5.5 million par value of its
10 3/8% senior subordinated notes ("Subordinated Notes") for a total of $3.9
million, including $0.1 million of accrued interest, using excess cash on hand.
These notes were purchased in the open market and were trading at 69% of their
par value at the time of purchase. The repurchase resulted in a gain of
approximately $1.6 million, which will be recognized in the first quarter of
2005.

LOAN AND SECURITY AGREEMENT

On March 30, 2005, the Company received an extension until May 15, 2005 to
deliver its annual audited financial statements to its Lender Group. The terms
of our Loan and Security Agreement require us to provide annual audited
financial statements within 90 days of the end of our fiscal year.

On April 1, 2005, the Company borrowed $6.0 million under the Company's
Loan and Security Agreement. The proceeds were used to pay the interest due on
April 1 under the Company's 11 7/8% senior secured notes ("Secured Notes").

SALE OF PROPERTIES

In December 2004, the Company completed the sale of 70% of its interest in
Penton Media Germany ("PM Germany"), a consolidated subsidiary, to Neue Medien
Ulm Holdings GmbH ("Neue Medien") for $0.8 million in cash, resulting in a loss
of approximately $0.9 million classified in loss (gain) on sale of

properties, on the accompanying consolidated statements of operations. The
Company retains a 15% interest in PM Germany, which includes a call/put option.
The Company accounts for its investment using the cost method, as the Company
does not exercise significant influence.

FORWARD-LOOKING INFORMATION (SAFE HARBOR STATEMENT)

This Annual Report on Form 10-K contains statements relating to Penton
Media, Inc. (including its future results and business trends) that are
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended, and are subject to the "safe harbor" created by those sections.
Although Penton believes that the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, it can give no assurance that
its expectations will be achieved. Actual results or events may differ
materially from those projected as a result of certain risks and uncertainties.
These risks and uncertainties include, but are not limited to, those set forth
herein under the heading "Risk Factors." For this purpose, any statements
contained herein that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the foregoing, the words
"believes," "anticipates," "plans," "expects," "seeks," "estimates" and similar
expressions are intended to identify forward-looking statements. These
forward-looking statements are made only as of the date hereof, and we undertake
no obligation to update or revise any of them, whether as a result of new
information, future events or otherwise.

OUR INDUSTRY

The b-to-b media industry provides information in various formats to
targeted business and professional audiences. B-to-b media include print
products such as magazines and newsletters; in-person media such as trade shows
and conferences; and online media, such as Web sites, Web conferences,
electronic newsletters, and electronic books.

Through b-to-b media, marketers can reach targeted business and
professional audiences whose responsibilities include the buying or specifying
of products and services for their business organizations. Marketing
opportunities include advertising in specialized business magazines; exhibiting
at or sponsoring trade shows and conferences; sponsorship of digital media and
highly customized media products; and the strategic use of products related to
core media products, such as direct marketing mailing and e-mail lists, article
reprints and electronic reuse of content; and exclusive market intelligence and
data.

The b-to-b media industry suffered significant declines in 2001 and 2002 as
the weak economy, disappointing corporate profits and the lingering effects of
geopolitical events pressured many companies to reduce costs, including
marketing spending.

As the economy strengthened in 2003 and 2004 and companies gained
confidence in their business results and re-engaged in marketing investment,
b-to-b media experienced growth, albeit modest. Advertising pages in U.S. b-to-b
magazines grew 1.4%, and advertising spending in b-to-b magazines grew by 3.8%
in 2004, according to the Business Information Network ("BIN"). Net square
footage of exhibit space at trade shows held in North America grew by 1.5%, the
number of exhibiting companies expanded 1.6%, and attendance grew by 2.7%,
according to Tradeshow Week magazine. Many b-to-b media companies also
experienced significant growth in their online media product lines, as marketers
continued a trend of allocating increased spending to a wide range of Web-based
opportunities.

U.S. spending in b-to-b magazines and trade shows is projected to grow at a
compounded annual growth rate of 4.0% in the period 2003 to 2008, according to
the July 2004 Veronis Suhler Stevenson Media Merchant Bank's Communications
Industry Forecast & Report.

THE PENTON BUSINESS MODEL

Penton's strategic goal is to be the leading provider of integrated media
and marketing solutions in the target markets we serve.

Our business is organized along segment and industry lines, rather than
product lines. This business model allows our staff to develop deeper market
knowledge and experience that benefits our customers through our ability to
develop and produce the most relevant and timely information products, and our
ability to provide marketing counsel and services to marketers that reflect the
most current market conditions, trends and opportunities.

Operating in a market-focused manner also allows us to cross-promote our
related groups of publications, trade shows and conferences, online media, and
custom media solutions to our customers. This enables our customers to utilize
multiple complimentary channels for delivering their marketing message to their
best sales prospects and provides us with the opportunity to capture a larger
share of our customers' total marketing expenditure.

IN PRINT: PUBLICATIONS

We publish specialized trade magazines in the United States. Of our 33
magazines that are audited by a third-party service, 25 magazines, or 76%, hold
the number-one or number-two market share position in their target markets,
based on the number of advertising pages. Our publications are recognized for
the quality of their editorial content; since 1990, our magazines have won more
than 880 editorial awards.

We publish 43 trade magazines that are published six times or more per
year. These titles have a combined circulation of about 3.0 million subscribers.
Our magazines generate revenues primarily from the sale of advertising space and
are primarily distributed through controlled circulation free of charge to
qualified subscribers in our target industries. Subscribers to
controlled-circulation publications qualify to receive our trade magazines by
verifying, among other things, their responsibility for specific job functions,
including purchasing authority. We survey our magazine subscribers annually to
verify their continuing qualification.

BPA Worldwide, an independent auditor of magazine circulation, audits
circulation information for the majority of our publications each year. These
audits verify that we have accurately identified the number and job
responsibilities of qualified subscribers and that those subscribers are
eligible to receive the relevant publication according to our established
criteria.

Each of our publications has its own advertising sales team and rate
structure. Some advertisers may qualify for discounts based on advertising in
multiple publications. We enable marketers to be more cost efficient in their
advertising purchases by providing a single source for reaching customers and
prospects in multiple but related markets.

In addition, each of our publications has its own editorial staff. To
preserve the editorial integrity of each publication's news reporting and
analysis, we seek to maintain separation between the editorial and sales staffs
of each publication. We believe that our reputation for objective, fair, and
credible editorial content, contributes significantly to our success. Seventeen
of our publications have served their industries for more than 50 years.

Our editorial staffs meet frequently with readers of their publications to
maintain a current understanding of the information needs and interests of those
readers in an effort to serve them more effectively. We devote considerable
resources to the study of trends in our industries and strive to make our
publications the most widely used among their respective audiences. Many of our
editors and contributors are recognized as experts in their fields and are
regularly contacted by the general press to comment on developments and trends
in their markets.

We also publish print and online industry directories and buyers' guides,
which are respected sources of purchasing information for professionals in the
markets we serve.

IN PERSON: TRADE SHOWS, CONFERENCES AND ROADSHOWS

We produce 35 trade shows and conferences, which attract attendees with
purchasing and specifying responsibility.

Attendees at our trade shows and conferences are professionals and managers
in the industries we serve. Our trade shows include extensive conference
programs, which provide a forum for the exchange and dissemination of
information relevant to attendees' professional roles and responsibilities.

Trade show exhibitors pay a fixed price per square foot for booth space. In
addition, we receive revenues from attendee fees and from exhibitor sponsorships
of promotional media.

Our conferences are supported by either attendee registration fees or
marketer sponsorship fees, or a combination of both. The high quality and
unbiased nature of our conference content attract professional attendees. We are
able to cost-effectively promote to attendees by utilizing related media
products serving the same end-user audience. For example, potential attendees
are the readers of our magazines and the users of our Web sites and electronic
newsletters.

We also produce roadshow conferences, which are typically sponsored by a
single or small group of sponsors and address special topics of interest to
business attendees. The roadshow conferences take place in multiple markets as
determined by concentration of local attendees and the marketing objectives of
sponsors. As a turnkey organizer, Penton typically manages content development,
recruitment of presenters, attendee marketing and site logistics. While
sponsorship fees represent the greatest source of revenues for roadshows, we
sometimes also generate revenues from attendees.

ONLINE: WEB SITES AND ELECTRONIC NEWSLETTERS

We currently maintain 41 Web sites serving numerous markets. Our online
portfolio also includes electronic newsletters; Web conferences; sponsored
topic-specific microsites; and electronic books. These products provide timely
and focused information to highly targeted professionals, and typically are
sponsored by advertisers interested in delivering marketing information to these
professionals because of their product/service purchasing or specifying
responsibilities. We believe we have a competitive advantage in the online
business because of our established customer relationships in the markets we
serve, the industry and product development expertise of our staff, and the
opportunities we have to promote our online media to targeted audiences through
our magazines and trade shows.

CUSTOM MEDIA

Providing integrated media and marketing solutions to our customers also
involves producing customized media products that address specific marketing
communications objectives. We produce a wide range of customer-sponsored
communications, such as sponsored magazines, newsletters, catalogs, education
and training materials, electronic books and Web-based conferences.

We also sell a variety of ancillary products that our customers use in
their direct marketing and promotional efforts. These include article reprints
and rights for electronic re-use of our editorial content, and rentals of our
magazine subscriber and event attendee databases.

OUR BUSINESS SEGMENTS

Our five segments derive their revenues from in-print publications,
in-person trade shows and conferences, and online media to customers in the
industries we serve. These segment results are regularly reviewed by the
Company's executive management team to determine how resources will be allocated
to the segments and in assessing segment performance.

For information about the revenues from external customers, adjusted
segment EBITDA and total assets of each of our business segments, see Note
18 -- Segment Information, in the notes to consolidated financial statements
included herein. In addition, Item 7 -- Management's Discussion and Analysis of
Financial Condition and Results of Operations, provides a description of segment
results.

INDUSTRY SEGMENT

Content of our Industry publications, trade shows and conferences, and
online media products is geared to customers in the manufacturing,
design/engineering, mechanical systems/construction, and government/compliance
industries. Our Industry segment generated 35.2%, 36.5% and 35.0% of our total
revenues in 2004, 2003 and 2002, respectively. The percentages of the Industry
segment revenues by product line follow:

2004 2003 2002
---- ---- ----

Publishing.................................................. 92.7% 94.8% 93.6%
Trade shows and conferences................................. 2.8% 2.4% 4.3%
Online media................................................ 4.5% 2.8% 2.1%

MANUFACTURING:

Our manufacturing portfolio represented approximately 10.0% of our revenues
in 2004. This portfolio targets executives in manufacturing organizations,
managers of industrial facilities, material handling engineers, third-party
logistics providers, and management personnel in the machine tool and metals
industries. Many of our products in this portfolio have a long history and are
leaders in the industry. They include the following:

- IndustryWeek, first published in 1882, brings together senior
manufacturing executives to explore business issues, strategies, trends
and technologies that can help them succeed in today's "better, faster,
cheaper" global economy. IndustryWeek focuses on providing well-informed
ideas and best practices presented from an authoritative point-of-view.

- American Machinist, first published in 1877, focuses on the metalworking
marketplace, which consists of industries primarily engaged in
manufacturing durable goods and other metal products.

- Material Handling Management magazine reaches subscribers responsible for
material handling functions in manufacturing, warehousing and
distribution. Editorial content focuses on material handling
applications, technology and management strategies for increasing
productivity, cutting operating costs, improving safety, supporting
effective planning, and facilitating product/information flow.

- Logistics Today serves the transportation, warehousing and distribution,
technology, and global business markets. Its content focuses on what is
new, what others are doing, and what trends will impact future work.

- New Equipment Digest, first published in 1936, presents concise
descriptions and photos of new and/or improved industrial products,
materials, components, equipment and services that established companies
want to sell.

Competition for this portfolio includes the manufacturing demographic
editions of both BusinessWeek and Fortune magazines which compete against
IndustryWeek; Modern Machine Shop, published by Gardner Publications, which
competes against American Machinist; Modern Material Handling, which competes
with Material Handling Management; Logistics Management magazine, published by
Reed Business Information US ("Reed"), and Inbound Logistics, published by
Thomas Publishing Company, both of which compete with Logistics Today; and
Industrial Equipment News and Industrial Maintenance and Plant Operation, which
compete with New Equipment Digest.

DESIGN/ENGINEERING:

The design/engineering portfolio represented approximately 8.8% of our
revenues in 2004. This portfolio serves the information needs of engineers and
designers in the original equipment manufacturer ("OEM"),

medical and biomedical markets, and designers and engineers of products that
incorporate hydraulic and motion systems technologies. Leading products in this
portfolio include the following:

- Machine Design magazine, first published in 1929, holds the greatest
share of advertising pages in its market. Machine Design serves design
engineers in the OEM market, process and consulting industries. It
provides design engineers with information on new technologies,
industrial developments, research and development activities, products,
and engineering procedures for designing manufactured products. Articles
concentrate on practical applications, new developments and solutions to
design problems.

- Hydraulics & Pneumatics serves design engineers, manufacturing engineers
and other technical personnel who are involved in buying or specifying
fluid power components, systems, materials and controls.

Competition in this portfolio includes Design News and Product Design &
Development magazines, which are published by Reed.

MECHANICAL SYSTEMS/CONSTRUCTION:

The mechanical systems/construction portfolio represented approximately
6.1% of our revenues in 2004. This portfolio serves engineers, designers, and
contractors in the mechanical systems (heating/ventilation/air
conditioning/refrigeration/plumbing) markets, as well as professionals in the
architectural and construction trades. Our leading products in this portfolio
have a long history in the industry and a reputation of excellence. They
include:

- Contracting Business, first published in 1944, is dedicated to the
residential, commercial and industrial mechanical systems contracting
marketplace. Its editorial coverage includes new market opportunities,
Internet technologies, design and engineering, and the service and
maintenance of heating/ventilation, air conditioning, refrigeration and
plumbing systems.

- For 50 years, Contractor magazine has been the news magazine for
mechanical contracting. Editorial content focuses on industry news,
market trends, business management advice and new product information
exclusively for plumbing, heating and piping contractors.

- HPAC Engineering magazine, first published in 1929, serves the growing
mechanical engineered systems market in the areas of building
construction, renovation and retrofit. Editorial content features
articles in the areas of systems design and sizing, facility and energy
management controls systems, energy and water efficiency, indoor air
quality, comfort management, and deregulation.

The main competitors for this portfolio are ACHR News and Plumbing &
Mechanical magazines, both published by Business News Publishing, as well as
Engineered Systems magazine, which is published by BNP Media.

GOVERNMENT/COMPLIANCE:

The government/compliance portfolio represented approximately 10.3% of our
revenues in 2004. Products in this portfolio target government buyers and
professionals who manage industrial safety, occupational health and
environmental compliance. The leading products in this portfolio include:

- Government Product News, which was established in 1962 and ranks number
one in advertising market share, is a product information magazine read
by government managers, engineers, administrators, department heads and
procurement professionals who specify, plan and buy for city, county,
state, and federal governments. Editorial content includes products,
services and case histories.

- Occupational Hazards magazine, first published in 1938, serves the
occupational safety and industrial hygiene market. Editorial content
provides information to meet Occupational Safety and Health
Administration ("OSHA") and Environmental Protection Agency ("EPA")
compliance require-

ments, improve the management of safety, industrial hygiene and
environmental programs, and to find products and services that protect
employees and property.

Government Product News has three main competitors: American City & County,
published by Primedia; Public Works, published by Hanley Wood; and Governing
Magazine, published monthly by Congressional Quarterly Inc. Occupational Hazards
magazine's main competitors are Occupational Health & Safety magazine, which is
published by Stevens Publishing, and Industrial Safety & Hygiene News magazine,
published by Business News Publishing.

TECHNOLOGY SEGMENT

Content of our Technology publications, trade shows and conferences, and
online media products is geared to customers in the electronics, enterprise
information technology, aviation and business technologies industries. Our
Technology segment generated 29.4%, 30.0% and 34.9% of our total revenues in
2004, 2003 (as restated) and 2002, respectively. The percentage of Technology
segment revenues by product line follow:

2004 2003 2002
---- ---- ----

Publishing.................................................. 63.5% 71.1% 68.2%
Trade shows and conferences................................. 16.6% 12.5% 19.2%
Online media and ancillary.................................. 19.9% 16.4% 12.6%

ELECTRONICS:

The electronics portfolio represented approximately 9.8% of our revenues in
2004. Products in this portfolio reach electronics engineers and engineering
managers in the OEM, communications systems, microwave systems, wireless
applications and network design markets. Our largest magazines in this portfolio
include:

- Electronic Design magazine, first published in 1952, focuses on new and
emerging technologies. The magazine reaches design engineers, engineering
managers and technical executive managers at the conceptual design stage,
where many product and technology decisions are initiated.

- Microwaves & RF magazine, first published in 1962, serves engineers and
engineering managers involved in high-frequency design. Target readers
work in both commercial and military applications at radio frequency and
microwave device, component, software, systems and test levels.

- EE Product News magazine, first published in 1941, provides new-product
information to engineers and engineering managers involved in electronic
prototype design.

Competition in this portfolio includes EE Times magazine, published by CMP
Media ("CMP"); EDN and ECN magazines, both published by Reed; Electronic
Products, published by Hearst Publishing, Microwave Journal, published by
Horizon House, and RF Design, published by Primedia.

ENTERPRISE INFORMATION TECHNOLOGY:

The enterprise information technology portfolio represented approximately
15.3% of our revenues in 2004. Our products in this portfolio serve
professionals involved with the Microsoft Windows NT/2000/.NET/XP and SQL, IBM
iSeries/AS400 and Lotus Domino application server environments; information
security; graphics applications; and the emerging market addressing convergence
of home office, controls and entertainment technologies. Leading products in
this portfolio include:

- Windows IT Pro Magazine, which serves Windows IT professionals by
providing problem-solving information about the Windows platform,
including Microsoft's .NET Framework, Windows XP, Windows 2000 and
Windows NT.

- iSeries NEWS magazine, which helps iSeries and AS/400 professionals make
strategic business decisions, solve programming problems, improve
performance and security, and assess hardware and software products.

- SQL Server Magazine is the independent guide to using SQL Server as a
business application development platform.

In addition, the enterprise information technology portfolio hosts numerous
roadshows throughout the year. A roadshow is a custom conference event bringing
buyers and sellers together in multiple cities to introduce products and
services and to generate sales leads for the sponsor.

Competitors for our media serving the Microsoft arena include: Windows
Server System, published by Fawcette Technical Publications; Redmond, published
by 101 Communications; SQL Server Professional, published by Pinnacle
Publishing; SQL Server Standard, published by Central Publishing Group; the
Microsoft Developers Network; Search 400.com; SQLServerCentral.com; and the SQL
Server Worldwide User Group. Our IBM portfolio's competitors include eServer
Magazine, published by MSP Communications; SpotLight Magazine, published by
Rochester Initiative; search400.com; ITJungle.com; and Lotus Advisor Magazine
and searchdomino.com, which are produced by Advisor Media.

AVIATION:

The aviation portfolio represented approximately 1.9% of our revenues in
2004. This portfolio's products target executives in the worldwide commercial
airline industry. The leading product in this portfolio and in the market it
serves is Air Transport World magazine, which was first published in 1964.
Editorial content covers airline operations; information technology; alliances,
distribution; transport aircraft and engine programs; maintenance, repair and
operations; aero politics; safety and regulations; finance and leasing; airport
development; and air cargo. A major competitor in the aviation sector is Airline
Business magazine, which is published by Reed.

BUSINESS TECHNOLOGY:

The Business Technology portfolio represented approximately 2.4% of our
revenues in 2004. Media products in this portfolio target service providers and
other professionals who utilize Web technologies and services to achieve their
enterprises' e-business objectives. The leading product in this portfolio is
Business Finance magazine, which informs finance executives about the growing
role of finance within organizations due to changes in technology, business
strategy and economic trends and the implications of these changes for their
business practices and career development. The main competitor in the business
technology sector is CFO magazine, which is published by McGraw Hill.

LIFESTYLE SEGMENT

Content of our Lifestyle publications and trade shows and conferences is
geared to professionals in the natural products industry. Our Lifestyle segment
generated 17.0%, 15.4% and 12.9% of our total revenues in 2004, 2003 and 2002,
respectively. The percentages of the Lifestyle segment revenues by product line
follow:

2004 2003 2002
---- ---- ----

Publishing.................................................. 33.4% 34.8% 36.4%
Trade shows and conferences................................. 66.6% 65.2% 63.6%

The products in this portfolio serve the natural and organic products and
nutraceuticals markets, including producers of raw materials, manufacturers,
distributors and retailers. Leading products in this portfolio include the
following:

- The Natural Foods Merchandiser magazine provides information to companies
involved in the development, marketing, sales and distribution of natural
and organic products and dietary supplements.

- Delicious Living magazine is purchased by natural products retailers and
is distributed to their customers to educate and inform them about
natural products and healthy lifestyles. It provides articles on a wide
range of topics, including diet and nutrition, fitness, herbal medicine,
homeopathy, natural healing, cooking with natural foods, personal care,
and the environment.

- The Natural Products Expo trade shows are held annually on the West and
East Coasts of the United States, in Europe and in Asia. In addition to
extensive exhibits, the shows offer educational conferences,
entertainment and a host of social events to foster personal and
professional growth. The combined conference and trade show format is
designed to bring the industry together to learn and share information
with industry leaders.

Competition for The Natural Foods Merchandiser includes Vitamin Retailer,
published by VRM Inc., and Whole Foods Magazine, published by WFC Inc. Titles
competitive with our Delicious Living magazine include Body and Soul, published
by Omnimedia, Better Nutrition, published by Active Interest Media, and Energy
Times, published by Energy Times Inc.. The primary competitors for our Natural
Products Expos are the Fancy Foods Show, which is owned by the National
Association for the Specialty Food Trade, the Food Marketing Institute show, and
the National Nutritional Foods Association show.

RETAIL SEGMENT

Content of our Retail publications, trade shows and conferences, and online
media products is geared to customers in the foodservice, convenience store
retailing and hospitality markets. Our Retail segment generated 9.8%, 9.7% and
8.3% of our total revenues in 2004, 2003 and 2002, respectively. The percentages
of the Retail segment revenues by product line follow:

2004 2003 2002
---- ---- ----

Publishing.................................................. 92.4% 90.0% 91.1%
Trade shows and conferences................................. 6.0% 8.0% 6.9%
Online media and ancillary.................................. 1.6% 2.0% 2.0%

Our retail portfolio targets full-service restaurant operators; decision
makers in institutional foodservice and retail and large-volume baking
operations; management staff at convenience store headquarters; and executives
and management personnel in the hospitality industry. Leading magazines in this
portfolio include:

- Modern Baking magazine, which serves bakeries offering higher quality
bakery foods, including retail, supermarket in-store and specialty
wholesale bakeries, and foodservice operators that bake on premise;

- Food Management magazine, which serves the noncommercial foodservice
market, including food operations at colleges and universities, schools,
healthcare providers, the military and airlines;

- Restaurant Hospitality, which is targeted to full-service restaurants;

- Convenience Store Decisions magazine, which focuses on reaching
management personnel in the convenience store industry; and

- Lodging Hospitality magazine, which was first published in 1949 and
serves the lodging industry, including hotel owners, operators and
developers.

We also provide the bakery-net.com Web site, which has over 20,000
registered qualified users and includes a bakery buyers guide. In addition, our
National Convenience Store Advisory Group provides event forums for interaction
with top management among retail operators, manufacturers and wholesalers.

Competition for our baking magazines primarily includes Baking Buyer,
published by Sosland Publishing Co.; Baking & Snack magazine, published by
Sosland Publishing; and Snack Food and Wholesale Baking magazine published by
Stagnito Communications. Competitors for our restaurant magazines include
Nation's Restaurant News, published by Lebhar-Friedman; Restaurants and
Institutions,published by Reed; Restaurant Business, published by Ideal Media;
and Food Arts, published by M. Shanken Communications. The key competitor for
Food Management is FoodService Director, published by Ideal Media. Competitors
in the convenience store market include Convenience Store News, published by VNU
Business Publications ("VNU"), and Convenience Store Petroleum, published by CSP
Information Group. Competitors for our hospitality market include Hotel & Motel
Management magazine, owned by Advanstar Communications, and Hotel Business
magazine, owned by ICD Publications.

INTERNATIONAL SEGMENT

Content of our International publications, trade shows and conferences, and
online media products is geared to out-of-home leisure, technology and
manufacturing professionals primarily in the United Kingdom. Our International
segment generated 8.6%, 8.4% and 8.9% of our total revenues in 2004, 2003 and
2002, respectively. The percentages of the International segment revenues by
product line follow:

2004 2003 2002
---- ---- ----

Publishing.................................................. 18.0% 24.4% 15.7%
Trade shows and conferences................................. 74.0% 68.4% 83.0%
Online media and ancillary.................................. 8.0% 7.2% 1.3%

The international portfolio represented approximately 8.6% of our revenues
in 2004. This portfolio serves professionals managing leisure and recreation
facilities and outdoor sports and grounds facilities in Europe. The leading
products in this portfolio include our International Leisure Industry Week
exhibition held annually in the United Kingdom, our Internet World UK Show, and
our Motion and Control trade show. Additional information on our leading
products is as follows:

- Our Leisure Industry Week ("LIW") trade show was established in 1989 and
is the UK's largest and longest-running trade show and conference serving
the out-of-home leisure and hospitality market. The show is attended by
more than 13,000 operators of theme parks, family entertainment centers,
private and public sector leisure and sports venues, health and fitness
clubs, museum and heritage sites, and leading tourist attractions.

- The Internet World UK trade show provides networking opportunities for
industries and disciplines affected by the Internet. Internet World is a
b-to-b Internet event that covers the vertical markets that make up the
Internet industry, including new media marketing; Web content management;
enterprise content management; CRM, ISP and hosting; broadband; and 3G,
mobile and wireless, and SMS.

- The Motion and Control event targets to hydraulics and pneumatics
manufacturers and specifiers. The event is the UK's largest fluid power
exhibition encompassing all aspects of motion control and power
transmission, and is attended by users of hydraulic and pneumatic
equipment, components, supplies and services.

LIW has no direct competitors, though there are a number of shows which
cross over with some sections of LIW, including Euro Amusement Show for the
European theme park market, Hospitality Week/Hotel Olympia in the UK, and FIBO,
which targets the European fitness industry and is held in Germany, and the UK's
Professional Beauty show, which targets health center and spa markets.
Competitors for the Internet World UK trade show primarily includes Adtech,
organized by IMP; Online Marketing, produced by Centaur; and Content Management
Europe, a VNU event. The main competitor for our Motion and Control event is The
Drive Show, which is produced by Kamtech.

DIVESTITURES

In December 2004, the Company completed the sale of 70% of its interest in
PM Germany, a consolidated subsidiary, to Neue Medien Ulm Holdings GmbH ("Neue
Medien") for $0.8 million in cash. PM Germany was part of our International
segment. The sale did not qualify as discontinued operations under SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144").
Consequently, the related loss on sale of $0.9 million is included in loss on
sale of properties on the accompanying consolidated statements of operations. At
December 31, 2004, the Company retains a 15% interest in PM Germany, which
includes a call/put option. The Company accounts for its investment using the
cost method, as the Company does not exercise significant influence.

In January 2003, the Company completed the sale of the assets of its PTS
group, which was part of our Industry segment, to Cygnus Business Media, Inc.
for total consideration of approximately $3.2 million. The cash received from
the sale was used to pay down the Company's outstanding credit facility. A gain
of approximately $1.4 million on the sale was recorded in the first quarter of
2003. The results of PTS are

included as a component of discontinued operations in the accompanying
consolidated statements of operations.

In December 2002, the Company completed the sale of the assets of PM
Australia, which was part of our Technology segment, to AJB Publishing Pty
Limited for total consideration of approximately $0.1 million. Approximately
$0.01 million was paid in cash upon closing, with the remaining consideration
received in 12 equal monthly installments starting in July 2003. The cash
received from the sale was used to pay down the Company's outstanding credit
facility. The related loss on the sale of approximately $0.6 million is included
as a component of discontinued operations in the accompanying consolidated
statements of operations.

In December 2002, the Company disposed of four other properties. Three of
these properties, Streaming Media, Boardwatch and ISPCON, were part of our
Technology segment. The other property, A/E/C, was part of our Industry segment.
The aggregate consideration for these properties was approximately $0.9 million.
The cash received from these sales was used to pay down the Company's
outstanding credit facility. The sale of the properties resulted in a loss of
approximately $0.9 million and is included in operations as loss on sale of
properties in the accompanying consolidated statements of operations as these
properties did not qualify for discontinued operations treatment.

CUSTOMERS

We serve a diverse group of customers worldwide in the industries we serve.
We market our products directly to customers through our internal marketing and
sales force. None of our customers accounted for more than 1.9% of our total
revenues in 2004. Our top 10 customers accounted for approximately 5.2% of our
total revenues in 2004.

COMPETITION

We experience intense competition for our products and services. We compete
with several much larger international companies that operate in many markets
and have broad product offerings in both publishing and trade shows and
conferences. We compete for readers and advertisers in the publishing
marketplace, which is fragmented. According to industry sources, in March 2005,
there were about 1,500 publishing companies and more than 5,200 trade magazine
titles.

Our publications generally compete on the basis of:

- editorial quality and integrity;

- quantity and quality of circulation;

- the strength of complementary products serving the same niche;

- the effectiveness of sales and customer service; and

- advertising rates.

In certain markets we serve with our trade shows and conferences, we
compete for venues, exhibitors, sponsorships and show attendees.

Our trade shows and conferences generally compete on the basis of:

- the availability of attractive venues and dates;

- the quality and integrity of educational offerings;

- the ability to provide events that meet the needs of particular market
segments;

- the ability to attract qualified attendees; and

- the ability to provide high-quality show services, exhibition space
and attractive marketing and sponsorship opportunities.

As online media has gained favor for both information delivery and for
marketing purposes, there has been a major influx of new product offerings by
b-to-b media companies and other information providers who represent added
competition.

Our online media products generally compete on the basis of:

- quality and uniqueness of information content;

- quality and speed of sales lead generation;

- technical quality and the related ease of use for the end user;

- product development speed; and

- advertising and sponsorship rates.

OUR BUSINESS STRATEGY

Over the past four years, Penton has responded aggressively to the severe
downturn in our financial performance. We substantially reduced the Company's
fixed costs by reducing our net headcount by 56.5% in the period 2001 to 2004,
including 71 positions in 2004; freezing our pension plan and introducing a
defined contribution plan; reducing capital spending; outsourcing certain
corporate and division functions; renegotiating key vendor contracts; and
implementing process improvements.

Our strategy for restoring stockholder value is now directed toward
expanding revenues so that the operating leverage that these cost savings has
created will result in improved cash flows and return the Company to a positive
net cash flow position.

The key elements of our strategy are to:

- Provide each of our customer markets with a full range of media across
all information delivery channels, including print, in-person and
online media, thereby capturing a significant portion of available
marketing expenditures;

- Leverage our customers' desire to utilize online media to reach their
marketing objectives by ensuring we offer a robust portfolio of
digital media offerings, including traditional Web site advertising;
search engine advertising; Web-based conferencing; e-newsletters; and
e-books;

- Extend the market equity of our long-established, respected print
media brands by launching new products and services in emerging,
related markets;

- Provide valued services that build community and meaningful
buyer-seller connections in the markets we serve, thereby
differentiating Penton from its competitors;

- Develop a corporate culture that thrives through open communication
and effective cross-sharing of business ideas; and

- Continue to seek cost efficiencies and business process improvements.

DOMESTIC AND FOREIGN REVENUES AND ASSETS

Domestic revenues of our products and services constituted 89.7%, 90.2%,
and 89.1% of total revenues for the years ended December 31, 2004, 2003 (as
restated) and 2002, respectively. Foreign revenues totaled 10.3%, 9.8% and 10.9%
of our revenues for the years ended December 31, 2004, 2003 (as restated) and
2002, respectively. In 2004, 2003 (as restated) and 2002, 81.9%, 81.0% and
74.9%, respectively, of these foreign revenues were generated by Penton Media
Europe Limited, a subsidiary of Penton located in the United Kingdom. See Note
18 -- Segment Information, in the notes to consolidated financial statements
included herein, for a description of the Company's assets located in the United
States and in the United Kingdom.

PRODUCTION AND DISTRIBUTION

All of the Company's print products are printed and bound by independent
printers. We have a non-cancelable service contract through 2006 that provides
for the printing of a majority of our magazines. In 2005, we signed a new
printing agreement with our current service provider, which extends through
2011. If additional printing capacity is needed, we believe that additional
printing services are readily available at competitive prices.

The principal raw material used in our print publications is paper. We
believe that the existing arrangements providing for the supply of paper are
adequate, and, in any event, alternative sources are available. Paper costs
accounted for approximately 8.0%, 7.8% and 8.4% of our total editorial,
production and circulation costs for the years ended December 31, 2004, 2003 and
2002, respectively. Paper prices are affected by a variety of factors, including
demand, capacity, pulp supply, and general economic conditions.

Substantially all of our publications are delivered by the United States
Postal Service within the continental United States. Consequently, postage costs
are subject to postage rate changes. Postage costs represent a significant
expense, accounting for approximately 13.3%, 14.5% and 14.2% of our total
editorial, production and circulation costs for the years ended December 31,
2004, 2003 and 2002, respectively. Most of the Company's magazines are packaged
and delivered to the United States Postal Service directly by the printer.
Postage rates increased on June 30, 2002. In April 2003, President Bush signed
legislation that will hold postal rates stable until at least 2006.

TRADEMARKS AND INTELLECTUAL PROPERTY RIGHTS

We regard our copyrights, trademarks, service marks and similar
intellectual property as critical to our success and rely upon copyright and
trademark laws, as well as confidentiality agreements with our employees and
others, to protect our rights. We pursue the registration of our material
trademarks in the United States and, depending upon use, in other countries.
Effective trademark and copyright protection may not be available in every
country in which our publications and services are available.

We may be subject to claims of alleged infringement of our trademarks or
our licenses of trademarks and other intellectual property rights of third
parties from time to time in the ordinary course of business. We do not believe
that any legal proceedings or claims are likely to have, individually or in the
aggregate, a material adverse effect on our business, financial condition or
results of operations.

SEASONALITY

We may experience seasonal fluctuations as trade shows and conferences held
in one quarter in the current year may be held in a different quarter in future
years.

EMPLOYEES

On December 31, 2004, we employed 779 people, primarily in the United
States. None of our employees are represented by a labor union, and we consider
relations with our employees to be good.

RISK FACTORS

The following are factors that may affect our actual operating results and
could cause results to differ materially from those in any forward-looking
statements. In addition to the other information contained in this document, you
should carefully consider the following risk factors.

We are incurring substantial operating losses, we anticipate additional future
losses and we must increase our revenues to become profitable.

We incurred net losses of $67.2 million, $93.1 million and $296.5 million
in 2004, 2003 (as restated) and 2002 (as restated), respectively. We face an
environment of uncertainty, and visibility for the Company's

business, particularly advertising sales, remains limited. We expect that we
will continue to incur operating losses in the near term.

In order to return to profitability, we must achieve substantial revenue
growth. Revenue growth will depend on a recovery in marketing spending in
traditional b-to-b media along with continued growth from new online media
offerings. Although we have implemented a number of expense reduction and
restructuring initiatives to more closely align our cost structure with the
current business environment, expense reductions alone, without revenue growth,
will not return us to profitability. We cannot assure you as to whether or when
we will return to profitability or whether we will be able to sustain such
profitability, if achieved.

We depend on advertising revenues, which decrease during economic downturns and
fluctuate from period to period.

For the years ended December 31, 2004, 2003 (as restated), and 2002, about
58.6%, 62.0% and 59.7%, respectively, of our revenues came from advertising in
our publications. Our advertising revenues fluctuate with general economic
cycles, and any material decline in these revenues could have a material adverse
effect on our business, results of operations and financial condition.
Historically, advertising revenues have increased during economic recoveries and
decreased during both general economic downturns and regional economic
recessions. In a general economic downturn or a recession, advertisers reduce
their advertising budgets, intensify their attempts to negotiate lower
advertising rates and pay outstanding invoices more slowly. We have experienced
some of these effects in 2002, 2003 and 2004. Our advertising revenues decreased
by 9.0% from 2002 to 2003 and by 2.4% between 2003 and 2004. If the anticipated
recovery in marketing spending in traditional b-to-b media does not take place,
or is significantly delayed, our results of operations may be adversely
affected.

We have a significant amount of debt.

At December 31, 2004, we had total indebtedness of approximately $329.1
million, net of approximately $3.0 million of original-issue discount on our
Subordinated Notes and approximately $0.5 million of original-issue discount on
our Secured Notes. Subject to restrictions in our debt instruments, we had the
ability to incur additional indebtedness of approximately $39.7 million under
our credit facility at December 31, 2004.

The level of our indebtedness could have important consequences, including:

- Limiting cash flow available for general corporate purposes, including
capital expenditures, because a substantial portion of our cash flow
from operations must be dedicated to servicing our debt;

- Limiting our ability to obtain additional debt financing in the future
for working capital, capital expenditures or acquisitions;

- Making us more vulnerable in the event of a further downturn in
general economic conditions or in our business; and

- Limiting our flexibility in reacting to competitive and other changes
in our industry.

Our current debt levels have subjected us to the risks described above. If
new debt is added to our current debt levels, these risks could intensify.

We may not be able to service our debt.

Our ability to pay or to refinance our indebtedness will depend upon our
future operating performance, which will be affected by general economic,
financial, competitive, business, and other factors beyond our control.

We cannot assure you that our business will generate sufficient cash flow
from operations, that currently anticipated revenues and cost-saving efforts
will be realized on schedule or at all, or that future borrowings will be
available to us under our credit facility or otherwise in amounts sufficient to
enable us to service our debt

obligations, to pay our indebtedness at maturity or otherwise, or to fund our
other liquidity needs. If we are unable to meet our debt obligations or fund our
other liquidity needs, we may need to further restructure or refinance our
indebtedness, sell assets or seek additional equity capital. We cannot assure
you that we will be able to accomplish those actions on satisfactory terms, if
at all, which could cause us to default on our obligations and impair our
liquidity. Our ability to restructure or refinance will depend on the capital
markets and our financial condition at such time. Any refinancing of our debt
could be at higher interest rates and may require us to comply with more onerous
covenants, which could further restrict our business operations. In addition,
the terms of the convertible preferred stock and warrants to purchase common
stock, including the conversion price, dividend and liquidation preference
adjustment provisions, could result in substantial dilution to holders of our
common stock. The redemption price premiums, and board representation rights,
could negatively impact our ability to access the equity markets in the future.

Because a significant portion of our operations are currently conducted
through our subsidiaries, our ability to pay our indebtedness is also dependent
on the cash flows of our subsidiaries and the distribution of those cash flows
to us, or upon loans or other payments of funds by our subsidiaries to us. The
ability of our subsidiaries to make distributions or other payments to us will
depend upon their operating results, applicable laws and any contractual
restrictions contained in the instruments governing their indebtedness. If money
generated by our subsidiaries is not available to us, our ability to repay our
indebtedness may be adversely affected.

The terms of our debt instruments and convertible preferred stock impose
financial and operating restrictions.

The indentures governing our Subordinated Notes and our Secured Notes, our
loan and security agreement and our convertible preferred stock contain
restrictive covenants that limit our ability to engage in a variety of
transactions, including incurring or guaranteeing additional indebtedness,
making investments, creating liens on our assets, transferring or selling our
assets, paying dividends or engaging in certain mergers, acquisitions or
consolidations. The terms of our credit facility prohibit us from voluntarily
prepaying certain indebtedness.

A breach of any of the covenants or other provisions in our debt
instruments could result in a default thereunder. Upon the occurrence of an
event of default under our debt instruments, the lenders could elect to declare
all amounts outstanding thereunder to be immediately due and payable and
terminate all commitments to extend further credit, which would adversely affect
our ability to fund our operations. An acceleration of amounts due under our
loan and security agreement would cause us to be in default under the indenture
governing our Subordinated Notes and our Secured Notes, resulting in the
acceleration of all outstanding amounts, and vice versa, given certain
thresholds. If we are unable to repay any accelerated amounts under our debt
instruments, the respective lenders/holders could proceed against the collateral
granted to them to secure that indebtedness. If the lenders/holders under our
debt instruments accelerate the repayment of borrowings, we cannot assure you
that we will have sufficient assets to repay all of our indebtedness.

We are controlled by our Series C preferred stockholders whose interests may
differ from the interests of the common stockholders.

Effective at the annual meeting of stockholders on July 15, 2004, the
number of board members was reduced from 11 to 8. With this reduction, the
holders of the convertible preferred stock achieved and now constitute a
majority of the Company's Board of Directors. In addition, the Board of
Directors named Royce Yudkoff as its non-executive chairman. Mr. Yudkoff is a
co-founder of ABRY Partners, LLC and currently serves as its president and
managing partner. Affiliates of ABRY Partners, LLC own the majority of the
Company's convertible preferred stock.

Circumstances may occur in which the interests of our Series C preferred
stockholders could be in conflict with the interests of our common stockholders.
As a result of their majority position, the Series C preferred stockholders have
the power to appoint new management as well as the power to approve acquisitions
or sales of our assets. If the Company is sold, we cannot assure the common
stockholders that

there will be enough proceeds from the sale to pay off all of our outstanding
debt, the outstanding amount due to the Series C preferred stockholders, and
have funds remaining for the common stockholders. If the Company would have been
sold as of March 31, 2005, the bondholders would be entitled to receive $330.3
million and the Series C preferred stockholders would be entitled to receive
$144.8 million before the common stockholders would receive anything for their
common shares.

If the U.S. and European economies worsen, the cost-saving efforts we
implemented may not be sufficient to achieve the benefits we expect.

In 2002 and 2003, we experienced a significant decline in revenue, due
primarily to weak economic conditions, which were exacerbated by the threat of
additional terrorist attacks and the war with Iraq. Although revenues in 2004
increased by 3.2%, we cannot predict what the economy will do in the future. We
have taken a number of steps designed to improve our profits and margins despite
consistent-level or declining revenues. We have sold properties that were
underperforming; restructured a number of our businesses and support
departments; and reduced overhead infrastructure by consolidating and closing
several facilities, centralizing enterprise information technology services and
outsourcing certain corporate functions. As a result, we recorded special
charges to our income of $16.4 million in 2002, $5.9 million in 2003 (as
restated), and $6.2 million in 2004. If the U.S. and European economies worsen,
or if additional terrorist attacks occur, our revenues may decline. If revenues
decline beyond our expectations, the cost-saving efforts we implemented in 2002,
2003 and in 2004 will likely not achieve the benefits we expect. We may be
forced to take additional cost-saving steps that could result in additional
charges and otherwise have a material adverse affect on our business.

The profitability and success of our trade shows and conferences could be
adversely affected if we are unable to obtain desirable dates and locations.

In 2004, about 24.2% of our revenues came from trade shows and conferences.
We compete for desirable dates and venues for our trade shows and conferences.
If this competition intensifies, we may be unable to schedule important
engagements. If we are unable to obtain desirable dates and venues for events,
the profitability and future success of these events could be adversely
affected. Although we generally reserve venues and dates more than one year in
advance, these reservations are not binding until we sign a contract with a
facility operator. These contracts generally hold venues and dates for only one
year. In addition, because trade shows and conferences are held on pre-scheduled
dates at specific locations, the success of a particular trade show or
conference depends upon events outside or our control, such as natural
catastrophes, labor strikes and transportation shutdowns.

A significant portion of our revenues and operating margin is generated from our
Natural Products Expo East and Natural Products Expo West trade shows. A major
decline in the performance of these shows would significantly reduce our
revenues and operating income.

For the year ended December 31, 2004, our Natural Products Expo East and
Natural Products Expo West trade shows represented approximately 10.3% of our
total revenue and approximately 28.9% of operating margin. We expect that the
Natural Products Expo East and Natural Products Expo West trade shows will
continue to represent a significant portion of our overall revenue and operating
margin in the future. Therefore, a significant decline in the performance of one
or both of the Natural Products Expo East and Natural Products Expo West trade
shows could have a material adverse effect on our financial condition and
results of operations.

A terrorist attack or the outbreak of disease could have a significant effect on
our trade shows.

The events of September 11, 2001 had a material adverse impact on the
Company. The occurrence of another terrorist attack could again have a material
adverse impact on the Company and its operations.

In 2003, there was an outbreak of Severe Acute Respiratory Syndrome
("SARS"), which primarily had an adverse impact on the Company's Asia trade
show. If there were another outbreak of a disease (such as

SARS) that affected travel behavior, particularly in the U.S., it could have a
material adverse impact on the Company's trade show operations.

Our trade shows, conferences and publishing revenues vary due to the movement of
annual events or publication mailing dates and the timing of our customers'
product launches.

Our trade shows, conferences and publishing revenues are seasonal, due
primarily to the timing of our large trade shows and conferences and the mailing
dates of our magazines and industry directories. Because event revenues are
recognized when a particular event is held, and publication revenues are
recognized in the month publications are mailed, we may also experience
fluctuations in quarterly revenues based on the movement of annual events or
mailing dates from one quarter to another. In 2004, about 25.6% of our total
revenues was generated during the first quarter, about 24.0% during the second,
about 24.8% during the third, and about 25.6% of our revenues was generated
during the fourth quarter.

In addition, our trade show and conference revenues may fluctuate from
period to period based on the spending patterns of our customers. Many of our
large customers concentrate their trade show participation around major product
launches. Because we cannot always know or predict when our large customers
intend to launch new products, it is difficult to anticipate any related
fluctuations in our trade show and conference revenues.

We depend on key personnel and the loss of any of those employees could impair
our success.

We benefit from the leadership and experience of our senior management team
and other key employees, and we depend on their continuing services in order to
successfully implement our business strategy. In addition, our success is
dependent on our ability to attract, train, retain and motivate high-quality
personnel. Although we have entered into employment agreements with David
Nussbaum, Preston L. Vice and Darrell Denny, they and other key personnel may
not remain in our employment. The loss of a number of key personnel could have a
material adverse effect on our business, results of operations and financial
condition. We do not maintain "key person" life insurance with respect to our
senior management team.

Competition may adversely affect our earnings and results of operations.

We experience intense competition for our products and services. If we fail
to compete effectively, our earnings and results of operations could be
adversely affected. We compete for readers and advertisers in the publishing
marketplace and for trade show and conference venues, exhibitors, sponsorships
and show attendees. Because our industry is relatively easy to enter, we
anticipate that additional competitors, some of whom may have greater resources
than we do, may enter these markets and intensify competition.

Our overall operations may be adversely affected by risks associated with
international operations.

We have operations outside the United States. The following risks in
international markets could have a material adverse effect on our future
international operations and, consequently, on our business, results of
operations and financial condition:

- the uncertainty of product acceptance by different cultures;

- difficulties in staffing and managing multinational operations;

- general economic and political uncertainties and potential for social
unrest;

- limitations on our ability to enforce legal rights and remedies;

- reduced protection for intellectual property rights in some countries;

- state-imposed restrictions on the repatriation of funds; and

- potentially adverse tax consequences.

New product launches or acquired products may reduce our earnings or generate
losses.

Our future success will depend in part on our ability to continue offering
new products and services that gain market acceptance by addressing the needs of
specific audience groups within our targeted industries. Our efforts to
introduce new or to integrate acquired products may not be successful or
profitable. The process of internally researching, developing, launching,
gaining acceptance and establishing profitability for a new product, or
assimilating and marketing an acquired product, is both risky and costly.

Costs related to the development of new products and services are expensed
as incurred and, accordingly, our profitability from year to year may be
adversely affected by the number, timing, and scope of new product launches.

The infringement or invalidation of our proprietary rights could have an adverse
effect on our business.

We regard our copyrights and trademarks, including our Internet domain
names, service marks and similar intellectual property, as critical to our
success. We rely on copyright and trademark laws in the United States and other
jurisdictions and on confidentiality agreements with some of our employees and
others to protect our proprietary rights. If any of these rights were infringed
or invalidated, our business could be adversely affected. In addition, our
business activities could infringe or be alleged to infringe upon the
proprietary rights of others, who could assert infringement claims against us.
If we are forced to defend against any such claims, whether they are with or
without merit or are determined in our favor, then we may face costly
litigation, diversion of technical and management personnel, or product and
service delays. As a result of such a dispute, we may have to develop
non-infringing technology or enter into royalty or licensing agreements. Such
royalty or licensing agreements, if required, may be unavailable on terms
acceptable to us, or at all. If there is a successful claim of infringement
against us and we are unable to develop non-infringing technology or enter into
royalty or licensing agreements on a timely basis, our business could be
adversely affected.

We seek to register our trademarks in the United States and elsewhere.
These registrations could be challenged by others or invalidated through
administrative process or litigation. In addition, our confidentiality
agreements with some of our employees or others may not provide adequate
protection of our proprietary rights in the event of unauthorized use or
disclosure of our proprietary information, or if our proprietary information
otherwise becomes known or is independently developed by competitors.

Reliance on principal vendors could adversely affect our business.

We rely on our principal vendors and their ability or willingness to sell
products to us on favorable price and other terms. Many factors outside our
control may harm these relationships and the ability or willingness of these
vendors to sell these products to us on such terms. Currently, our principal
vendors are paper suppliers, the United States Postal Service and printing
suppliers. If any of our principal vendors discontinues or temporarily
terminates its services and we are unable to find adequate alternatives, we may
experience increased prices, interruptions and delays in services. These factors
could adversely affect our business.

Increases in paper or postage costs could cause our expenses to increase and may
adversely affect our business.

Paper and postage are necessary expenses relating to our print products and
magazine distribution. In 2004, these expenses accounted for approximately 8.0%
and 13.3%, respectively, of our total editorial, production and circulation
costs. Significant increases in paper prices or in postage prices may have an
adverse effect on our business. We do not use forward contracts, and all of our
paper supply vendor arrangements provide for price adjustments to reflect
prevailing market prices. We use the United States Postal Service for domestic
distribution of substantially all of our magazines and marketing materials. If
we cannot pass significant increases in paper and postage costs through to our
customers, our financial condition and results of operations could be materially
adversely affected.

ITEM 2. PROPERTIES

The Company leases all of its principal properties. The general
characteristics of the leased properties are as follows:

LEASE APPROXIMATE
SEGMENT LOCATION PRINCIPAL USE EXPIRATION SQUARE FEET
------- -------------------------- --------------- ---------- -----------

Industry/Corporate........... Cleveland, Ohio(1) General Offices 2010 161,000
Industry/Corporate........... Cleveland, Ohio Warehousing 2006 28,000
Industry..................... Fremont, California(2) General Offices 2005 13,550
Industry..................... Washington, D.C. General Offices 2005 5,200
Technology................... Darien, Connecticut(3) General Offices 2009 18,200
Technology................... New York, New York(2) General Offices 2009 10,000
Technology................... Paramus, New Jersey General Offices 2008 11,000
Technology................... Loveland, Colorado General Offices 2005 35,650
Technology................... Loveland, Colorado(4) Warehousing 2006 7,500
Technology................... Isleworth, Middlesex, U.K. General Offices 2014 7,600
Technology................... London, U.K.(4) General Offices 2010 12,000
Technology................... Los Gatos, California(2) General Offices 2005 5,375
Lifestyle.................... Boulder, Colorado General Offices 2006 29,000
Retail....................... Des Plaines, Illinois General Offices 2007 5,500

---------------

(1) The Company is no longer occupying 57,500 square feet of office space at its
Cleveland, Ohio facility. The Company has sublet 28,766 square feet of this
space.

(2) The Company has sublet these offices for the remainder of their respective
lease terms.

(3) The Company has sublet a portion of the space for the remainder of the lease
terms.

(4) The Company is no longer occupying this space.

The Company has other smaller properties, including sales and/or general
offices under leases expiring through 2013, located in cities throughout the
United States, the United Kingdom and Hong Kong. We believe our facilities are
suitable and adequate for our present needs.

ITEM 3. LEGAL PROCEEDINGS

On November 3, 2003, a lawsuit was brought against the Company for an
unspecified amount by Allison & Associates, Inc. under the Telephone Consumer
Protection Act ("TCPA") which prohibits the transmission of unsolicited fax
advertisements. The lawsuit is a punitive class action that seeks to represent a
class of plaintiffs comprised of all individuals and entities who, during the
period November 3, 1999, through the present, received one or more facsimiles
sent by or on behalf of the Company advertising the commercial availability of
its products or services and who did not give their prior expressed permission
or invitation to receive such faxes. The statutory penalty for a single
violation of the TCPA is $500, although the penalty can increase to $1,500 per
violation if the Company is found to have willfully or knowingly violated these
laws. The case is currently pending in the Richmond County, Georgia, Superior
Court, and the Company is complying with the Court's order for discovery. A
hearing on class certification is currently scheduled for May 3, 2005. The
Company is uncertain as to the outcome of this case.

In the normal course of business, Penton is subject to a number of lawsuits
and claims, both actual and potential in nature. While management believes that
resolution of existing claims and lawsuits will not have a material adverse
effect on Penton's financial statements, management is unable to estimate the
magnitude or financial impact of claims and lawsuits that may be filed in the
future.

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

No matters were submitted to a vote of security holders during the fourth
quarter of 2004.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER REPURCHASES OF EQUITY SECURITIES

In June 2003, the Company was notified by the New York Stock Exchange
("NYSE") that it would begin delisting procedures of the Company's common stock.
The NYSE reached its decision because Penton had been unable to comply with the
NYSE's continued listing criteria, which include minimum levels for stock price,
market capitalization, and stockholders' equity. The NYSE took this action at
that time because Penton was not expected to be able to increase its equity to
the minimum listing requirements within the required time frame. On June 17,
2003, Penton's stock began trading on the Over-the-Counter Bulletin Board under
the symbol PTON.

The following tables set forth, for the periods indicated, the high and low
sales prices for Penton's common stock.

PRICE RANGE OF
COMMON STOCK
---------------
HIGH LOW
------ ------

For the year ended December 31, 2004:
First Quarter............................................. $1.31 $0.60
Second Quarter............................................ $0.78 $0.35
Third Quarter............................................. $0.42 $0.12
Fourth Quarter............................................ $0.17 $0.08

PRICE RANGE OF
COMMON STOCK
---------------
HIGH LOW
------ ------

For the year ended December 31, 2003:
First Quarter............................................. $0.84 $0.32
Second Quarter............................................ $0.80 $0.29
Third Quarter............................................. $1.70 $0.59
Fourth Quarter............................................ $1.52 $1.14

The Company had approximately 812 record holders of its common stock on
March 31, 2005.

Our dividend policy is determined by our Board of Directors. Any decision
to pay dividends in the future will be made by our Board of Directors based upon
the results of our operations and financial condition and such other matters as
our Board of Directors considers relevant. The terms of our outstanding
convertible preferred stock, however, limit the payment of dividends on the
common stock until all accrued dividends have been paid on the convertible
preferred stock. We may not pay accrued dividends on the convertible preferred
stock unless approved by the holders of not less than 75% of the then
outstanding shares of the convertible preferred stock. Furthermore, the
Company's ability to pay dividends is restricted by certain covenants in our
bond indentures and credit facility. No dividends were paid in 2003 or 2004.

ITEM 6. SELECTED FINANCIAL DATA

The following table presents our selected financial data. You should read
the following information together with our audited consolidated financial
statements and related notes and Item 7 -- Management's Discussion and Analysis
of Financial Condition and Results of Operations, appearing elsewhere herein.

All historical amounts have been restated to reflect the classification of
(a) our Direct Mail segment, which was sold in March 2000; (b) our PM Australia
component, which was sold in December 2002; and (c) our PTS component, which was
sold in January 2003, as discontinued operations.

YEAR ENDED DECEMBER 31,
---------------------------------------------------------
RESTATED
(DOLLARS AND SHARES IN THOUSANDS, ---------------------------------
EXCEPT PER SHARE DATA) 2004 2003(1) 2002(1) 2001(11) 2000
--------------------------------- --------- --------- --------- --------- ---------

OPERATING RESULTS:
Revenues........................................ $ 212,663 $ 205,977 $ 234,935 $ 358,871 $ 399,717
Operating expenses(2)........................ 242,259 253,164 482,488 440,493 344,444
--------- --------- --------- --------- ---------
Operating income (loss)......................... (29,596) (47,187) (247,553) (81,622) 55,273
Interest expense(4).......................... (38,010) (39,686) (38,193) (30,487) (19,485)
Interest income.............................. 278 523 768 1,862 5,352
Gain on sale of investments(9)............... -- -- 1,491 -- 110,210
Gain on extinguishment of debt(8)............ -- -- 277 -- --
Other, net(10)............................... 86 (724) (676) (2,015) (9,535)
Benefit (provision) for income taxes(3)...... 51 (6,795) 30,369 16,318 (61,790)
--------- --------- --------- --------- ---------
Income (loss) from continuing operations........ (67,191) (93,869) (253,517) (95,944) 80,025
Income (loss) from discontinued operations... -- 738 (3,252) (8,163) (435)
Cumulative effect of accounting change(6).... -- -- (39,700) --
--------- --------- --------- --------- ---------
Net income (loss)............................... (67,191) (93,131) (296,469) (104,107) 79,590
--------- --------- --------- --------- ---------
Amortization of deemed dividend and accretion
of preferred stock(7)...................... (12,190) (8,536) (46,435) -- --
--------- --------- --------- --------- ---------
Net income (loss) applicable to common
stockholders................................. $ (79,381) $(101,667) $(342,904) $(104,107) $ 79,590
========= ========= ========= ========= =========
Earnings per common share -- basic:
Income (loss) from continuing operations..... $ (2.35) $ (3.07) $ (9.26) $ (3.00) $ 2.52
Net income (loss) applicable to common
stockholders............................... $ (2.35) $ (3.05) $ (10.59) $ (3.26) $ 2.51
Basic average shares outstanding............. 33,725 33,299 32,374 31,917 31,730

Earnings per common share -- diluted:
Income (loss) from continuing operations..... $ (2.35) $ (3.07) $ (9.26) $ (3.00) $ 2.50
Net income (loss) applicable to common
stockholders............................... $ (2.35) $ (3.05) $ (10.59) $ (3.26) $ 2.49
Diluted average shares outstanding........... 33,725 33,299 32,374 31,917 32,010
CASH FLOWS AND OTHER DATA:
Cash flows:
Operating(5)................................. $ (20,464) $ 27,715 $ (16,585) $ (18,248) $ 9,420
Investing.................................... $ (1,452) $ 1,502 $ (2,659) $ (29,550) $(111,168)
Financing.................................... $ 95 $ (6,531) $ 5,959 $ 56,326 $ 83,306
Capital expenditures............................ $ (2,317) $ (3,294) $ (3,855) $ (7,602) $ (27,272)
Depreciation and amortization................... $ 10,758 $ 13,808 $ 19,347 $ 44,048 $ 32,811
BALANCE SHEET DATA:
Total assets.................................... $ 247,374 $ 321,444 $ 415,449 $ 700,638 $ 781,757
Goodwill........................................ $ 176,162 $ 214,411 $ 251,972 $ 493,141 $ 574,626
Total debt...................................... $ 329,064 $ 328,613 $ 333,137 $ 364,765 $ 302,125
Total long-term liabilities and deferred
credits...................................... $ 366,545 $ 366,168 $ 363,468 $ 369,965 $ 314,668
Mandatorily redeemable preferred stock.......... $ 67,162 $ 54,972 $ 46,435 $ -- $ --
Stockholders' equity (deficit).................. $(236,236) $(160,290) $ (72,608) $ 220,530 $ 336,569

---------------

Footnotes:

(1) The information contained in the selected financial data has been restated
for 2003 and 2002. The impact of the restatement is as follows:

YEAR ENDED DECEMBER 31,
---------------------------------------------------------
AS PREVIOUSLY AS PREVIOUSLY
REPORTED AS RESTATED REPORTED AS RESTATED
2003 2003 2002 2002
------------- ----------- ------------- -----------
(DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE DATA)

OPERATING RESULTS:
Revenues............................. $ 206,260 $ 205,977 $ 235,106 $ 234,935
Operating expenses................. 255,013 253,164 482,659 482,488
--------- --------- --------- ---------
Operating income (loss).............. (48,753) (47,187) (247,553) (247,553)
Interest expense................... (39,686) (39,686) (38,193) (38,193)
Interest income.................... 523 523 768 768
Gain on sale of investments........ - - 1,491 1,491
Gain on extinguishment of debt..... - - 277 277
Other, net......................... (724) (724) (676) (676)
Benefit (provision) for income
taxes........................... 53 (6,795) 40,514 30,369
--------- --------- --------- ---------

Income (loss) from continuing
operations......................... (88,587) (93,869) (243,372) (253,517)
Income (loss) from discontinued
operations...................... 738 738 (3,252) (3,252)
Cumulative effect of accounting
change.......................... -- -- (39,700) (39,700)
--------- --------- --------- ---------
Net income (loss).................... (87,849) (93,131) (286,324) (296,469)
--------- --------- --------- ---------
Amortization of deemed dividend and
accretion of preferred stock.... (8,886) (8,536) (46,174) (46,435)
--------- --------- --------- ---------
Net income (loss) applicable to
common stockholders................ $ (96,735) $(101,667) $(332,498) $(342,904)
========= ========= ========= =========
Earnings per common share -- basic:
Income (loss) from continuing
operations...................... $ (2.93) $ (3.07) $ (8.94) $ (9.26)
Net income (loss) applicable to
common stockholders............. $ (2.91) $ (3.05) $ (10.27) $ (10.59)
Basic average shares outstanding... 33,299 33,299 32,374 32,374
Earnings per common share -- diluted:
Income (loss) from continuing
operations...................... $ (2.93) $ (3.07) $ (8.94) $ (9.26)
Net income (loss) applicable to
common stockholders............. $ (2.91) $ (3.05) $ (10.27) $ (10.59)
Diluted average shares
outstanding..................... 33,299 33,299 32,374 32,374
CASH FLOWS AND OTHER DATA:
Cash flows:
Operating....................... $ 27,715 $ 27,715 $ (16,585) $ (16,585)
Investing....................... $ 626 $ 1,502 $ (3,307) $ (2,659)
Financing....................... $ (5,655) $ (6,531) $ 6,607 $ 5,959
Capital expenditures............... $ (3,294) $ (3,294) $ (3,855) $ (3,855)
Depreciation and amortization...... $ 13,790 $ 13,808 $ 19,329 $ 19,347
BALANCE SHEET DATA:
Total assets....................... $ 318,890 $ 321,444 $ 414,772 $ 415,449
Goodwill........................... $ 214,411 $ 214,411 $ 251,972 $ 251,972
Total debt......................... $ 328,613 $ 328,613 $ 333,137 $ 333,137
Total long-term liabilities and
deferred credits................ $ 348,816 $ 366,168 $ 352,664 $ 363,468
Mandatorily redeemable preferred
stock........................... $ 55,060 $ 54,972 $ 46,174 $ 46,435
Stockholders' equity (deficit)..... $(144,929) $(160,290) $ (62,201) $ (72,608)

As discussed in Note 2 -- Restatement, of the notes to the consolidated
financial statements appearing elsewhere herein, adjustments made to the
2003 and 2002 financial statements were classified as "deferred tax
adjustments" and "other accounting adjustments."

The increase in net loss in 2003 was due primarily to an increase of $6.8
million in income tax expense due to the correction of our deferred taxes
offset in part by a decrease of $2.0 million in impairment of asset charges
as our minority interest in consolidated subsidiaries balance should have
been reduced when certain assets contributed in 2002 by our minority
interest partner were impaired.
26

The increase in net loss in 2002 was due primarily to an increase of $10.1
million in income tax expense due to the correction of our deferred taxes.

The amortization of the deemed dividend and accretion Preferred stock
decreased by $0.3 million in 2003 and increased by $0.3 million in 2002. In
June 2003, it was discovered that the Company should not have only been
accruing the dividends on the preferred stock from the time of issuance but
should have also been accreting some of the preferred stock.

Total assets increased in 2003 due to the establishment of a receivable and
corresponding payable for $4.6 million related to the tentative settlement
in the Meckler lawsuit between Penton's insurance carrier and the
plaintiff. This amount was offset in part by a reduction of $2.6 million in
accounts receivable related to certain trade show receivables that were
recorded at their full contract amounts even though the contract stipulated
that only a portion of the contract was due.

Total assets increased in 2002 due to the establishment of a deferred tax
asset of $0.5 million and $0.2 million in tenant reimbursements, which were
improperly classified in 2001.

The increase in long-term liabilities and deferred credits in 2003 and 2002
is due primarily to the establishment of a deferred tax liability of $6.8
million and $10.1 million, respectively. The 2003 liability also includes
the offset adjustments related to the $4.6 Meckler lawsuit and $2.6 trade
show receivable adjustments discussed above.

(2) Operating expenses include the following charges: (a) impairment of
Internet asset charges of $2.1 million in 2000; (b) impairment of asset
charges of $39.7 million, $43.8 million, $223.4 million and $59.8 million,
in 2004, 2003, 2002 and 2001, respectively; (c) restructuring and other
charges of $6.2 million, $5.9 million (as restated), $16.4 million, and
$18.8 million in 2004, 2003, 2002 and 2001, respectively (of which $1.0
million is classified with discontinued operations in 2002); (d) loss on
sale of properties of $0.9 million in 2004 and 2002, respectively; and (e)
amortization of goodwill in 2000 and 2001.

(3) In 2004 and 2003 (as restated), for income taxes includes a $33.9 million
and $25.8 million charge, respectively, to establish a valuation allowance
for our net deferred tax assets and net operating loss carryforwards.

(4) Included in interest expense in 2003 is approximately $0.9 million related
to the write-off of unamortized financing fees associated with the
commitment reduction of our credit facility revolver in January 2003 from
$40.0 million to $20.1 million. Also included in interest expense in 2003
is approximately $1.0 million related to the write-off of unamortized
financing fees associated with the replacement of our senior secured credit
facility in August 2003 with a new four-year loan agreement. Included in
interest expense in 2002 is approximately $0.7 million related to the
write-off of unamortized finance fees associated with the commitment
reduction of our credit facility revolver from $185.0 million to $40.0
million in March 2002 and approximately $1.4 million related to hedging
activities.

(5) Included in cash flows from operations in 2003 is a tax refund of $52.7
million.

(6) In 2002, Penton adopted Statement of Financial Accounting Standard ("SFAS")
No. 142 and recorded a transitional one-time, non-cash goodwill impairment
charge of $39.7 million related to two of our reporting units, which are
part of our Technology segment. The charge was recorded as a cumulative
effect of accounting change.

(7) In 2002, the amortization of deemed dividend and accretion of preferred
stock included a $42.1 million, one-time, non-cash charge, which was the
result of stockholder approval on May 31, 2002 to remove the 10-year
mandatory redemption date on our convertible preferred stock.

(8) The extinguishment of debt of $0.3 million in 2002 consists of a gain on
the purchase of $10.0 million face value of our Subordinated Notes in March
2002, at prevailing market prices, offset by the write-off

of unamortized deferred financing costs associated with the payoff of our
term loan A and term loan B facilities.

(9) Penton sold its stock in Jupitermedia Corporation and recognized a gain
from its sale of $1.5 million and $110.2 million in 2002 and 2000,
respectively.

(10) Included in 2001 other, net on the consolidated income statement is
approximately $0.8 million of proceeds related to the write-off of Internet
investments for LeisureHub.com. In 2000 other, net includes a loss of
approximately $9.5 million related to the Company reducing the carrying
value of its investment in Cayenta and LeisureHub.com to zero.

(11) 2001 reported total assets of $700.4 million and reported total long-term
liabilities and deferred credits of $369.8 million were restated to $700.6
million and $370.0 million, respectively, due to approximately $0.2 million
in tenant reimbursements, which were improperly classified.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Set forth below is a discussion and analysis of our financial condition and
results of operations. You should read this discussion and analysis in
conjunction with the audited consolidated financial statements of Penton Media,
Inc. included elsewhere in this document. This "Management's Discussion and
Analysis of Financial Condition and Results of Operations" contains
forward-looking statements. See "Forward-Looking Information (Safe Harbor
Statement)" and "Risk Factors" in Item 1 of this annual report on Form 10-K for
a discussion of the uncertainties, risks and assumptions associated with these
statements.

OVERVIEW

Penton Media is a diversified business-to-business ("b-to-b") media
company. We provide media products that deliver proprietary business information
to owners, operators, managers and professionals in the industries we serve.
Through these products, we offer industry suppliers multiple ways to reach their
customers and prospects as part of their sales and marketing efforts. In June
2004, the Company appointed David B. Nussbaum as Chief Executive Officer
("CEO"). Mr. Nussbaum is now Penton's chief operating decision maker. After
reviewing the Company's operations, Mr. Nussbaum and the executive team
implemented a change in the Company's reportable segments effective in the third
quarter of 2004 to conform with the way the Company's businesses are now
assessed and managed. The Company is structured along segment and industry lines
rather than by product lines. This enables us to promote our related group of
products, including publications, trade shows and conferences, and online media
products, to our customers. As a result of this change in reportable segments,
all prior periods were recast to conform with the new segment format. Our five
principal segments and the industries they serve are as follows:

INDUSTRY TECHNOLOGY
Manufacturing Business Technology
Design/Engineering Aviation
Mechanical Systems/Construction Enterprise Information Technology
Government/Compliance Electronics

LIFESTYLE RETAIL
Natural Products Food/Retail
Hospitality
INTERNATIONAL
United Kingdom

We believe we have leading media products in each of the industries we
serve. We are structured along segment and industry lines rather than by product
lines. This enables us to promote our related media products to our customers.

As the economy strengthened in 2003 and 2004 and companies gained
confidence in their business results and re-engaged in marketing investment,
b-to-b media experienced growth, albeit modest. Advertising pages in U.S. b-to-b
magazines grew 1.4% and spending in b-to-b magazines grew by 3.8% in 2004,
according to the Business Information Network ("BIN"). Net square footage of
exhibit space at trade shows held in North America grew by 1.5%, the number of
exhibiting companies expanded 1.6%, and attendance grew by 2.7%, according to
Tradeshow Week magazine. Many b-to-b media companies also experienced
significant growth in their online media product lines, as marketers continued a
trend of allocating increased spending to a wide range of Web-based
opportunities.

Mirroring the industry's modest growth trends, Penton's revenues in 2004
expanded approximately 3%. It is the first year since 2000 that revenues grew
year-on-year. Publishing revenues continued a declining trend; however, the rate
of decline was only 2.9% after double-digit declines for the past two years.
While we believe that our print advertising business has stabilized, and we do
not expect it to grow significantly in the near term. We are planning for modest
growth in 2005 but continue to focus on margin improvement of this business
through process efficiencies and improved vendor contracts. Growth in the
Company's event and online business also followed industry trends, with revenues
expanding 16.2% and 27.0%, respectively. Management expects the revenue growth
rate for these product lines to outpace the growth rate for publishing
throughout 2005.

We continue to note that b-to-b marketers are employing a range of
integrated media solutions to achieve their marketing objectives, and that they
are highly interested in media solutions that provide a measurable return on
their marketing investment. Because electronic media and customized media offer
unique return-on-investment metrics, marketers are allocating more significant
portions of their media spending to these products.

Penton management has responded to these trends by expanding our online
media infrastructure. We appointed a senior executive in the summer of 2004 to
lead our electronic media business strategy initiatives and restructure our
online media development teams to leverage our internal staff and accelerate
product development. We also have added online media product management and
sales and marketing competencies in certain business units to accommodate
growing volumes. In addition, we have added to our custom media development and
project management staffs to help facilitate growth in this service area.

We are focused on applying proper resources to these efforts, even as we
have significantly reduced costs of the business over the past few years and
continue to recognize the importance of continued cost management to expand
profits and margins. Our intention is to center ongoing cost-reduction efforts
primarily on overhead areas and to apply optimal staffing and investment
resources to our products and our customer service areas.

MANAGEMENT OBJECTIVES

Management's key objective is to restore value for our stockholders. We are
focused on conserving cash and maintaining sound liquidity. We reduced long-term
debt from $329.1 million to $323.6 million in February 2005 through the
repurchase of $5.5 million face value of our Subordinated Notes on the open
market. The purchase will result in a reduction of the Company's annual interest
payments by $0.6 million. We continue to work with our Board of Directors on
strategies for strengthening the Company's balance sheet.

Operationally, we are focused on driving revenues and profitability with
the goal of reaching a positive net cash flow position in the near term.

Over the past four years, we have responded to the severe downturn in our
financial performance by reducing the Company's fixed costs by reducing our net
headcount by 56.5% in the period 2001 to 2004, including 71 positions in 2004;
freezing our pension plan and introducing a defined contribution plan; reducing
capital spending; outsourcing certain corporate and division functions;
renegotiating key vendor contracts; and
29

implementing process improvements. We continue to manage a disciplined
cost-management effort throughout the Company, with a particular focus on
overhead areas.

Our critical focus is on driving revenue growth, so that the operating
leverage that our cost savings has created results in improved cash flows and
returns the Company to a positive net cash flow position. The senior operating
managers of the business are executing strategies that we believe address unique
incremental revenue generation opportunities within their respective markets. We
expect to invest in such opportunities, including certain small, yet strategic
acquisitions and a range of new product launches.

SIGNIFICANT EVENTS

Restatement of Financial Statements

The Company evaluated the materiality of the correction on its consolidated
financial statements using the guidelines of SAB 99 and concluded that the
cumulative effects of the corrections were material to its annual consolidated
financial statements for 2004, 2003 and 2002 and the related quarterly
consolidated financial statements for such periods. As a result, the Company
concluded that it will restate its previously issued consolidated financial
statements to recognize the impact of the correction, as well as other
accounting adjustments that were deemed in earlier periods to be immaterial.

The Company will restate the quarterly periods ended March 31, 2004; June
30, 2004; and September 30, 2004 on Forms 10-Q/A to be filed as expeditiously as
possible following the filing of the Form 10-Q for the quarterly period ended
March 31, 2005.

Senior Subordinated Notes Repurchase

In February 2005, the Company repurchased $5.5 million par value of its
10 3/8% senior subordinated notes for a total of $3.9 million, including $0.1
million of accrued interest, using excess cash on hand. These notes were
purchased in the open market and were trading at 69% of their par value at the
time of purchase. The repurchase resulted in a gain of approximately $1.6
million.

Loan and Security Agreement

On April 1, 2005, the Company borrowed $6.0 million under the Company's
Loan and Security Agreement. The proceeds were used to pay the interest due on
April 1 under the Company's Secured Notes.

Sale of Properties

In December 2004, the Company completed the sale of 70% of its interest in
PM Germany, a consolidated subsidiary, to Neue Medien Ulm Holdings GmbH ("Neue
Medien") for $0.8 million in cash. The sale did not qualify as discontinued
operations under SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" ("SFAS 144"). Consequently, the related loss on sale of $0.9
million is included in loss on sale of properties, on the accompanying
consolidated statements of operations. The Company retains a 15% interest in PM
Germany, which includes a call/put option. The Company accounts for its
investment using the cost method, as the Company does not exercise significant
influence.

Exchange of Convertible Preferred Stock

On September 13, 2004, the Company filed a Certificate of Designations
governing a new series of convertible preferred stock, $0.01 par value (the
"Series C Preferred"), with the Secretary of State for the State of Delaware.
The Series C Preferred stock was exchanged on a share-for-share basis with the
Company's Series B Convertible Preferred Stock, $0.01 par value (the "Series B
Preferred"). The Certificate of Designations for the Series C Preferred stock is
identical to the Series B Preferred stock Certificate of Designations except
that:

- the new series allows for the sharing of the liquidation preference with
the new Series M Preferred Stock (discussed below),

- certain technical and correcting amendments have been made to the
Certificate of Designations for the Series C Preferred stock, including
fixing the formula used to calculate the "Change of Control Cap" (as
defined in the Series C Preferred stock Certificate of Designations), and

- certain conforming changes were made to the Series C Preferred stock
Certificate of Designations to account for the fact that the Series C
Preferred stock was issued in exchange for the Series B Preferred stock.

Series M Preferred Stock

On September 13, 2004, the Company filed a Certificate of Designations for
a new series of preferred stock, $0.01 par value (the "Series M Preferred"),
with the Secretary of State for the State of Delaware. The Board of Directors of
the Company created the Series M Preferred stock for issuance to certain
employees of the Company as a long-term incentive plan to incentitize management
by giving them an equity stake in the performance of the Company. The Series M
Preferred stock is limited to 150,000 shares, of which 68,625 shares have been
issued as of December 31, 2004. The Series M Preferred stock is treated under
fixed plan accounting and is classified in the mezzanine section of the balance
sheet because redemption is outside the control of the Company.

Among other rights and provisions, the Series M Preferred stock Certificate
of Designations provides that the holder of each share will receive a cash
distribution upon any liquidation, dissolution, winding-up or change of control
of the Company. The amount of such distribution is first a percentage of what
the holders of Series C Preferred stock and second a percentage of what the
holders of the Company's common stock would receive upon such liquidation,
dissolution, winding-up or change of control.

New Chairman and Chief Executive Officer

On June 21, 2004, the Board of Directors announced the appointment of David
B. Nussbaum as CEO of Penton. Mr. Nussbaum succeeded Thomas L. Kemp. The Company
had announced on March 24, 2004 that Mr. Kemp would be leaving the Company.

Mr. Nussbaum was previously an executive vice president with the Company
and president of the Company's former Technology and Lifestyle Media Division.
Mr. Nussbaum joined Penton in 1998 after an 18-year career with Miller Freeman,
Inc., where he was a senior vice president responsible for its New York
Division.

In addition, on June 14, 2004, the Board of Directors named Royce Yudkoff
as its non-executive chairman. Mr. Yudkoff is a co-founder of ABRY Partners,
LLC, a media-focused private equity investment firm based in Boston, and
currently serves as its president and managing partner.

Board of Director Changes

Effective at the annual meeting of stockholders on July 15, 2004, the
number of board members was reduced from 11 to 8. With this reduction, the
holders of the Series C Preferred stock constitute a majority of the Company's
Board of Directors. Upon the Series C Preferred stockholders obtaining this
majority, the conversion price of the Company's convertible preferred stock
adjusted back to $7.61 (see Preferred Stock Leverage Ratio Event of
Non-Compliance below).

The Company announced on June 14, 2004, that the Series C Preferred
stockholders had appointed Mr. Yudkoff as a director to replace Daniel C. Budde,
who resigned effective June 11, 2004. At the same meeting, the Board named Mr.
Yudkoff its non-executive chairman.

At the Company's Board of Directors meeting held on July 21, 2004, the
Board named Mr. Nussbaum as a director and decreased the number of directors to
seven.

Management Restructuring

On June 24, 2004, the Company announced a reorganization of its corporate
leadership structure. These changes, which are aimed at accelerating product and
service development, driving revenue growth, and flattening the Company's
organizational structure, included the following actions:

- Daniel J. Ramella, president and Chief Operating Officer of Penton Media,
Inc. and president of the Company's Industry Media Division, and William
C. Donohue, who managed the Retail Media group operation, left the
Company as of June 30, 2004.

- David B. Nussbaum, the Company's new CEO, assumed the senior operating
responsibilities for the Industry group and Darrell Denny, president of
the Company's IT Media and Lifestyle Media groups, assumed the operating
responsibilities for the Retail Media, IT Media and Lifestyle Media
groups.

- Eric Shanfelt, director of eMedia strategy for Penton's IT Media Group
and New Hope Natural Media business, assumed the newly created corporate
position of vice president of eMedia Strategy as Penton moves to expand
its online media portfolio.

Senior Executive Bonus and Termination Benefits

As noted above, on June 21, 2004, Penton's Board of Directors announced the
appointment of David B. Nussbaum as CEO of the Company. In addition to the
Company's standard executive incentive and benefit package, Mr. Nussbaum
received a signing bonus of approximately $1.7 million and 30,000 shares of
Series M Preferred stock. In addition, the Board accelerated the vesting of
135,000 deferred shares granted to Mr. Nussbaum on February 3, 2004. Mr.
Nussbaum used the net proceeds from his signing bonus and 288,710 shares of
Penton common stock, which were returned to the Company, to repay his executive
loan balance in full.

On March 24, 2004, the Company announced that its Chairman and CEO, Thomas
L. Kemp, would be leaving the Company. Mr. Kemp's employment was terminated
effective June 30, 2004, and on July 1, 2004,

Mr. Kemp and the Company signed a Separation Agreement and General Release. Mr.
Kemp's separation agreement includes the following:

- A lump-sum payment of approximately $2.3 million, of which $0.8 million
has been placed in escrow. Included in this payment is severance of
approximately $1.8 million per Mr. Kemp's employment agreement, $0.3
million related to performance units granted on May 22, 2003, and $0.2
million related to the settlement of Mr. Kemp's accrued supplemental
executive retirement plan obligation;

- The accelerated vesting of 100,000 stock options granted to Mr. Kemp
prior to his termination making them immediately exercisable; and

- The immediate vesting of 125,000 performance shares in accordance with
the terms of his performance share agreement dated February 5, 2002.

In addition, the Board and Mr. Kemp agreed upon a number of provisions
related to Mr. Kemp's outstanding executive loan balance. The underlying goal of
these provisions was to mitigate any tax exposure to the Company should the loan
be discharged at a future date. Specifically, $0.8 million of the lump-sum
payment described above has been placed in escrow and will be returned to Mr.
Kemp only if he pays off the entire loan balance by its due date. Furthermore,
Mr. Kemp has granted Penton a security interest in approximately 1.1 million
shares of Penton common stock. These pledged securities could be transferred to
Penton's ownership under certain circumstances and used to pay down the
outstanding loan balance.

On June 28, 2004, Mr. Kemp was granted 514,706 deferred shares that vested
on January 3, 2005. In return for these shares, Mr. Kemp agreed to comply with
the terms of certain restrictive covenants, including a non-compete and a
non-solicitation covenant.

At December 31, 2004, $2.7 million in termination benefits related to Mr.
Kemp have been included in selling, general and administrative expenses on the
consolidated statements of operations.

On June 27, 2004, the Company announced that its President and Chief
Operating Officer, Daniel J. Ramella, would be leaving the Company as part of a
management restructuring plan. Mr. Ramella's employment was terminated effective
June 30, 2004, and on July 1, 2004, Mr. Ramella and the Company signed a
Separation Agreement and General Release agreement. Mr. Ramella's separation
agreement includes the following:

- A lump-sum payment of approximately $1.7 million. Included in this
payment is severance of approximately $1.4 million per Mr. Ramella's
employment agreement, $0.1 million related to performance units granted
on May 22, 2003, and $0.2 million related to the settlement of Mr.
Ramella's accrued supplemental executive retirement plan obligation;

- The accelerated vesting of 139,999 stock options granted to Mr. Ramella
prior to his termination making them immediately exercisable; and

- The immediate vesting of 90,000 performance shares in accordance with the
terms of his performance share agreement dated February 5, 2002.

In addition, the Board agreed to discharge the balance of Mr. Ramella's
$2.6 million executive loan in return for the full and final settlement of any
claims Mr. Ramella may have had against the Company.

At December 31, 2004, $1.4 million in termination benefits related to Mr.
Ramella were included in restructuring and other charges on the consolidated
statements of operations.

PREFERRED STOCK LEVERAGE RATIO EVENT OF NON-COMPLIANCE

2003 and March 26, 2004 to the current maximum rate of 10% per annum. The
dividend rate will adjust back to 5% as of the date on which the leverage ratio
is less than 7.5. The leverage ratio event of non-compliance does not represent
an event of default or violation under any of the Company's outstanding notes or
the loan agreement. As such, there is no acceleration of any outstanding
indebtedness as a result of this event. In addition, this event of
non-compliance and the resulting consequences have not resulted in any cash
outflow from the Company.

If the Company had been sold on December 31, 2004, the bondholders would
have been entitled to receive $335.8 million and the Series C Preferred
stockholders would have been entitled to receive $122.5 million before the
common stockholders would have received any amounts for their common shares. The
amount the Series C Preferred stockholders would be entitled to receive could
increase significantly in the future under certain circumstances. Stockholders
are urged to read the terms of the Series C Preferred stock carefully.

RESULTS OF OPERATIONS

Since early 2001, the Company, like many of our customers and competitors,
has been adversely impacted by the broad economic slowdown. The b-to-b media
industry, in particular, has experienced severe declines as companies have
reduced their overall marketing expenditures in response to the global economic
slowdown and the resulting pressure on their businesses.

The overall slowdown in b-to-b media has impacted our margins and operating
income. As a result of sharply reduced revenues across our magazines and trade
shows, we recorded special charges of $51.3 million, $57.3 million, and $239.7
million in 2004, 2003 (as restated) and 2002, respectively, primarily for asset
impairments and restructuring and other costs resulting from our cost reduction
initiatives and the closure of certain facilities.

REVENUES

We recognize advertising revenues from Penton's trade magazines in the
month the publications are mailed. Amounts received in advance of trade shows
and conferences are deferred and recognized in the month the events are held.
Online media revenues, primarily advertising revenues, are recognized in the
period the obligation is fulfilled or delivered.

Our magazines generate revenues primarily from the sale of advertising
space. Our magazines are primarily controlled circulation and are distributed
free of charge to qualified subscribers in our target industries. Subscribers to
controlled-circulation publications qualify to receive our trade magazines by
verifying their responsibility for specific job functions, including purchasing
authority. We survey our magazine subscribers annually to verify their
continuing qualification. Trade show exhibitors pay a fixed price per square
foot of booth space. In addition, we receive revenues from attendee fees at
trade shows and from exhibitor sponsorships of promotional media. Our
conferences are supported by either attendee registration fees or marketer
sponsorship fees, or a combination of each. Online media revenues are generated
from a variety of sources, such as: advertising on Web sites, including
search-engine advertising; sponsorship of Web conferences; advertising in and
sponsorships of electronic newsletters; sponsorship of content on Web sites and
in electronic books; and listings in online databases and directories.

The following table summarizes our net revenues:

RESTATED RESTATED
-------- --------
2004 2003 CHANGE 2002 CHANGE
------ -------- ------ -------- ------
(IN MILLIONS)

Revenues.................................. $212.7 $206.0 3.2% $234.9 (12.3)%

As the general economy and many of the markets Penton serves strengthened
in 2004, Penton's revenues stabilized. Overall revenues for the Company grew
3.2% in 2004, after a year-over-year decline of 12.3% in 2003 and double-digit
declines in 2002 and 2001. Publishing revenues, which have experienced the most
significant declines in the most recent economic downturn, stabilized in 2004,
with a modest 2.9% decline

compared with a 10.6% decline in 2003 over 2002. The Company's manufacturing
titles experienced revenue growth in 2004, reversing declines in 2003. Magazines
serving enterprise IT markets continued to struggle in 2004; however, we are
beginning to see improvements in those titles in 2005.

Mirroring b-to-b media industry trends, in-person media revenues improved
by 16.2% in 2004 compared with a 22.0% revenue decline in 2003. Online media
revenues expanded 27.0%, compared with 9.2% in 2003.

Visibility continues to be somewhat limited for b-to-b magazine
advertising, and marketers are continuing to direct greater portions of their
expenditures toward a broader variety of media, particularly online media. As
such, we are planning for modest growth in publishing revenues through the near
term, and expect revenue growth rates for trade shows and conferences and online
media to outpace publishing revenue growth in 2005.

A summary of revenues by product for the year ended December 31, 2004 and
2003 are as follows (in thousands):

YEARS ENDED
DECEMBER 31,
-------------------
RESTATED
2004 2003
-------- --------

Publishing.................................................. $143,648 $147,888
Trade Shows & Conferences................................... 51,391 44,209
Online Media................................................ 17,624 13,880
-------- --------
Total Revenues............................................ $212,663 $205,977
======== ========

Revenue trends within each segment are further detailed below in the
segment discussion section.

2004 vs. 2003

Total revenues increased $6.7 million, or 3.2%, from $206.0 million in 2003
(as restated) to $212.7 million in 2004. The increase was due primarily to an
increase in trade show and conference revenues of $7.2 million, or 16.2%, from
$44.2 million for 2003 to $51.4 million for 2004, and an increase in online
media revenues of $3.7 million, or 27.0%, from $13.9 million for 2003 to $17.6
million for 2004. This increase was partially offset by a decrease in publishing
revenues of $4.3 million, or 2.9%, from $147.9 million for 2003 (as restated) to
$143.6 million for 2004.

The $4.3 million, or 2.9%, decrease in publishing revenues was due
primarily to decreases in advertising revenues and revenues from subscriptions
and list rentals. The two primary reasons for the decrease in magazine revenues
is the period-on-period decrease in our IT Media publications and the
elimination of our Internet World magazine in June of 2003, which generated
revenues of approximately $1.1 million in 2003.

The $3.7 million, or 27.0%, increase in online media revenues was due
primarily to increases in sponsorship revenues for electronic newsletters, Web
conferences and sponsorships of content on Web sites and in electronic books.
Period-on-period increases were realized by most of Penton's online media
products, with Windows IT Pro, IndustryWeek and Business Finance electronic
media generating the largest increases.

The $7.2 million, or 16.2%, increase in trade show and conference revenues
for 2004 compared with the same prior-year period was due primarily to an
increase in sponsorship and attendee revenues offset by a decrease in exhibitor
revenues from booth rentals. Increased trade show and conference revenues were
due primarily to: (i) the improved revenue for two of our fall technology
conferences -- SQL Server and ASP/VS Connections; (ii) the year-on-year results
of a highly successful Natural Products Expo West show held in March 2004; (iii)
the biannual Motion & Control event, which was held in the United Kingdom in
2004; and (iv) the year-on-year results of our Windows IT Pro roadshows.

A summary of revenues by product for the year ended December 31, 2003 and
2002 are as follows (in thousands):

YEARS ENDED DECEMBER 31,
RESTATED
------------------------
2003 2002
---------- ----------

Publishing.................................................. $147,888 $165,515
Trade Shows & Conferences................................... 44,209 56,707
Online Media................................................ 13,880 12,713
-------- --------
Total Revenues............................................ $205,977 $234,935
======== ========

Revenue trends within each segment are further detailed below in the
segment discussion section.

2003 vs. 2002

Total revenues decreased $28.9 million, or 12.3%, from $234.9 million in
2002 (as restated) to $206.0 million in 2003 (as restated). The decrease was due
primarily to a decrease in publishing revenues of $17.6 million, or 10.6%, from
$165.5 million in 2002 (as restated) to $147.9 million in 2003 (as restated) and
a decrease in trade show and conference revenues of $12.5 million, or 22.0%,
from $56.7 million in 2002 to $44.2 million in 2003. Online media revenues
increased $1.2 million, or 9.2%, from $12.7 million in 2002 to $13.9 million in
2003. Included in revenues for 2002 were publishing revenues of $1.3 million,
trade show and conference revenues of $5.4 million and online media revenues of
$0.8 million associated with properties sold in December 2002, which were not
classified as discontinued operations.

The $17.6 million decrease in publishing revenues was due primarily to a
decrease in our Industry and Technology segments. Our manufacturing and
design/engineering portfolios accounted for $6.9 million of the decrease, while
our Internet technology, electronics and enterprise information technology
portfolios accounted for an additional $11.9 million of the decrease. The
decrease was offset by improvements in our Germany operations publications.
Overall, advertising revenues accounted for 9.0% of the 10.6% publishing revenue
decrease as companies remained cautious about their marketing budgets.
Subscription revenues, which represent about 6.5% of our total 2003 publishing
revenues, decreased by approximately $1.7 million when compared with 2002. List
rental revenues and licensing revenues also showed declines in 2003 when
compared with 2002.

The $12.5 million decrease in our trade show and conference revenues was
due primarily to a decrease of $12.4 million in our Technology segment and a
decrease of $2.7 million in our Industry segment. These declines were partially
offset by revenue improvements in our Lifestyle segment of $0.9 million and an
increase in our Retail segment of $1.7 million. Exhibitor revenues, which
represent about 69.0% of 2003 trade show and conference revenues, declined
nearly 24.2%, due primarily to a decrease in booth rentals. Exhibitor
cancellation revenues declined $3.3 million from $4.5 million in 2002 to $1.2
million in 2003. Attendee revenues declined nearly $1.9 million; however,
sponsorship revenues more than offset this decrease.

The $1.2 million increase in online media revenues was due primarily to an
increase in our International segment of $1.0 million and an increase in our
Industry segment of $0.4 million, offset by a decrease of $0.2 million in our
Technology segment. Most of the increase in online media revenues was due to
increases in electronic newsletters and Web conferences.

EDITORIAL, PRODUCTION AND CIRCULATION

2004 2003 CHANGE 2002 CHANGE
----- ----- ------ ------ ------
(IN MILLIONS)

Editorial, production and circulation............ $93.7 $92.6 1.2% $103.9 (10.9)%
Percent of revenues.............................. 44.1% 45.0% 44.2%

Our editorial, production and circulation expenses include personnel costs,
purchased editorial costs, exhibit hall costs, online media costs, postage
charges, circulation qualification costs and paper costs. The

increase in editorial, production and circulation expenses for the year ended
2004 compared with the same period in 2003 primarily reflect costs associated
with our biannual Motion & Control event which was held in 2004; costs
associated with a full year of Logistics Today, which was launched in September
2003; and costs associated with an increase in the number of roadshows held
during 2004. These cost increases were partially offset by lower headcount and
personnel-related costs, lower postage costs, and lower paper and printing
costs. Expenses in 2003 include some costs attributable to unprofitable
properties, which have been eliminated, particularly Internet World magazine.

The decrease in editorial, production and circulation expenses for 2003
compared to 2002 primarily reflects the effects of our expense reduction
initiatives including, lower headcount and personnel-related costs and the
elimination of some unprofitable properties. The decrease also reflects lower
costs due to decreases in volume, as well as the sale of four properties in
December 2002, which were not classified as discontinued operations. These
properties accounted for $3.1 million of the decrease.

SELLING, GENERAL AND ADMINISTRATIVE

RESTATED RESTATED
2004 2003 CHANGE 2002 CHANGE
----- -------- ------ -------- ------
(IN MILLIONS)

Selling, general and administrative............ $89.2 $89.5 (0.3)% $119.5 (25.1)%
Percent of revenues............................ 42.0% 43.4% 50.9%

Our selling, general and administrative ("SG&A") expenses include personnel
costs, independent sales representative commissions, product marketing and
facility costs. Our SG&A expenses also include costs of corporate functions,
including accounting, finance, legal, human resources, information systems, and
communications. The decrease in SG&A expenses for the year ended December 31,
2004 compared with the same period in 2003 was due primarily to a $2.7 million
charge related to executive separation costs for Mr. Kemp, who left the Company
on June 30, 2004; a signing bonus of $1.7 million paid to Mr. Nussbaum (net of a
reversal of $1.1 million related to Mr. Nussbaum's executive loan); and $0.4
million in other executive-related separation costs. These additional costs were
partially offset by the restructuring efforts undertaken in 2003 and 2004, which
have resulted in lower headcount and personnel-related costs and lower facility
costs.

The decrease in SG&A expenses for 2003 compared with 2002 was due primarily
to cost savings associated with additional office closings completed in the
second half of 2002 and in 2003 as well as other facility cost reductions;
additional staff reductions completed in 2002 and 2003; continued cost
reductions across all corporate functions; continued division overhead cost
reduction; a pension plan curtailment gain of $2.2 million recognized in 2003;
reduced marketing expenses; and the sale of properties in December 2002, which
were not classified as discontinued operations. These properties accounted for
$5.1 million of the decrease.

IMPAIRMENT OF ASSETS

2004 2003 CHANGE 2002 CHANGE
----- ----- ------ ------ ------
(IN MILLIONS)

Impairment of assets................................. $39.7 $43.8 (9.4)% $223.4 (80.4)%

2004 IMPAIRMENTS

During the third quarter of 2004, the Company completed its annual goodwill
impairment review in accordance with SFAS 142, which resulted in a non-cash
charge of $37.8 million and reduced the carrying value of goodwill for two
reporting units in our Technology segment and one reporting unit in our
International segment. As a result of the impairment of goodwill for three of
our seven reporting units, the Company also completed an assessment at September
30, 2004 of its other intangibles in accordance with SFAS No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), and recorded
a non-cash charge of $1.9 million. The 2004 goodwill impairment charge is due
primarily to lower than expected future cash flows in two of our reporting units
in our Technology segment and by lower than expected future cash

flows in our International segment. Impaired long-lived assets in 2004 relate to
exhibitor lists and advertising relationships in our Information Technology
market due to lower than expected revenues and lower retention rates.

2003 IMPAIRMENTS

During the third quarter of 2003, we completed our annual impairment test
of goodwill and other intangible assets under the provisions of SFAS 142 and
recorded a non-cash charge of $37.6 million related to the reduction of the
carrying value of goodwill in three of our seven identified reporting units. We
utilized a third-party valuation company to assist management in determining the
fair value of the reporting units. Two of the reporting units are part of our
Technology segment and one of the reporting units is part of our Retail segment.
The fair value of our reporting units was determined using the income approach,
which is similar to the discounted cash flows approach.

Due to the impairment of goodwill in three of our seven reporting units, as
noted above, we also completed an assessment in accordance with SFAS 144 at
September 30, 2003 (as restated) and recorded non-cash charges of $6.2 million.
These charges primarily relate to the write-off of trade names and advertiser
relationships for properties in our Technology segment. The fair value of the
asset groups was determined using the income approach.

2002 IMPAIRMENTS

During the third quarter of 2002, we completed our transitional goodwill
impairment test under SFAS 142 for January 1, 2002 and recorded a non-cash
charge of $39.7 million to reduce the carrying value of goodwill for two of our
seven identified reporting units. Penton utilized a third-party valuation
company to determine the fair value of its reporting units. Both of these
reporting units are part of the Company's Technology segment. The charge is
reflected as a cumulative effect of accounting change in the accompanying
consolidated statements of operations.

During the third quarter, a number of events occurred that indicated that a
possible additional impairment of goodwill might exist. These events included
lower-than-expected revenues and adjusted EBITDA results for the year; a letter
from the NYSE indicating that the Company had fallen below minimum listing
standards; a significant decline in the Company's stock price; and the decision
by management to potentially sell or dispose of certain non-core assets. As a
result of these triggering events and circumstances, the Company completed an
additional SFAS 142 impairment review at September 30, 2002. This review
resulted in a non-cash charge of approximately $203.3 million, further reducing
the carrying value of goodwill for these two reporting units in our Technology
segment. The fair value of the reporting units for the initial and interim
impairment test was determined using the income approach.

Because of the events noted above, we also completed an assessment in
accordance with SFAS 144 and recorded a non-cash charge of $20.0 million. This
charge primarily relates to the write-off of mailing/exhibitor lists and sponsor
relationships for properties in our Technology segment. The fair value of the
asset groups was determined using the income approach.

PROVISION FOR LOAN IMPAIRMENT

2004 2003 CHANGE 2002 CHANGE
---- ---- ------- ----- ------
(IN MILLIONS)

Provision for loan impairment.......................... $1.7 $7.6 (77.4)% $ -- n/m

EITF 00-23, "Issues Related to the Accounting for Stock Compensation under
APB Opinion No. 25 and FASB Interpretation No. 44," requires that once a Company
forgives all or part of a recourse note it must consider all other existing
recourse notes as nonrecourse prospectively (variable accounting). Consequently,
the Company recognized $0.1 million in additional paid-in capital in excess of
par equal to the fair market value of the stock issued in conjunction with the
establishment of the executive loans. In addition, the Company recorded a $1.8
million provision for loan impairment on the remaining unreserved loan balance.

Additionally, the Company reversed the $1.1 million reserve established in June
2003 related to Mr. Nussbaum's loan against his signing bonus of $1.7 million,
which was recorded in selling, general and administrative expenses on the
consolidated statements of operations. Going forward, all future awards
exercised with recourse notes shall be presumed to be exercised with nonrecourse
notes with any dividends recorded as compensation expense and interest recorded
as part of the exercise price.

At December 31, 2004 and 2003, the outstanding loan balance due under the
Executive Loan Program was approximately $5.8 million and $9.5 million,
respectively. The loan balance, net of amounts reserved of $5.8 million and $7.6
million at December 31, 2004 and 2003, respectively, is classified in the
stockholders' deficit section of the consolidated balance sheets as notes
receivable from officers. At December 31, 2004, all executive loans are fully
reserved for.

During the second quarter of 2003, the Company determined that certain
executives would probably be unable to repay a significant portion of the
outstanding balance due under their executive loans without a significant
recovery in the Company's stock price. Consequently, the Company recorded a
provision for loan impairment in the amount of $7.6 million, reflecting the
amount by which the carrying value of each individual's loan exceeded the
underlying estimated fair value of the assets available to repay the loan. The
Company will recognize any recoveries of amounts reserved only upon payment of
the loans. The notes are full recourse loans, and the Company intends to pursue
collection of all amounts when due. In addition to the factors noted above,
additional considerations in determining whether a reserve was necessary
included the delisting of the Company's common stock from the NYSE in the second
quarter and the continued uncertainty of an economic recovery in the markets
served by the Company.

RESTRUCTURING CHARGES

RESTATED
2004 2003 CHANGE 2002 CHANGE
---- -------- ------ ----- -------
(IN MILLIONS)

Restructuring and other charges..................... $6.2 $5.9 4.6% $15.4 (61.8)%
Percent of revenues................................. 2.9% 2.9% 6.6%

Commencing in 2001 with the effects of the economic slowdown and continuing
through 2004, we implemented a number of cost reduction initiatives to more
closely align our cost structure with the current business environment. In 2004,
2003 (as restated) and 2002 (as restated), operating costs, as reported in the
consolidated statement of operations, were reduced by $1.3 million, $39.7
million and $96.9 million, respectively. Specific actions taken are as follows:

- Reduced staffing levels by approximately 1,000 positions through
terminations and attrition;

- Shut down or consolidated more than 30 facilities worldwide;

- Reduced benefit costs by increasing employee contributions for health
care;

- Froze the benefits of the Company's defined benefit pension plan and
supplemental executive retirement plan;

- Suspended the Company match for our defined contribution plan;

- Eliminated unprofitable properties;

- Restructured various under-performing events by either eliminating these
events or by co-locating them with other events and realigning management
structures;

- Sold non-core and non-strategic properties;

- Reduced the production cost of various under-performing magazines through
process improvements, automation of pre-press work, new printing
contracts and selective reduction in frequency and circulation levels;

- Commenced a plan to centralize all information technology and accounting
services; and

- Effectively outsourced various corporate and divisional functions.

The Company is actively attempting to sublease all vacant facilities. For
facilities that the Company no longer occupies and which have not yet been
subleased, management makes assumptions to estimate sublease income, including
the number of years a property will be subleased, square footage, market trends,
property location and the price per square foot based on discussions with
realtors and/or parties that have shown interest in the space. The Company
records estimated sublease income as a credit to restructuring and other charges
in the consolidated statements of operations.

Personnel costs include payments for severance, benefits and outplacement
services.

For a more detailed discussion of activity under our restructuring plans,
including adjustments, see Note 16 -- Business Restructuring Charges, in the
notes to consolidated financial statements included herein.

2004 RESTRUCTURING CHARGES

In 2004, the Company restructured its operations by flattening its
organizational structure as well as implementing other cost-saving strategies,
recording restructuring charges of $5.2 million. The following sets forth
details concerning the principal components of this charge:

- Personnel costs of $4.7 million are associated with the elimination of 68
positions, including several executive positions, primarily in the United
States. Approximately 93% of the eliminated positions are in the United
States, with the remainder primarily in the United Kingdom. As of
December 31, 2004, the elimination of 67 positions and payments of $4.0
million had been completed.

- Office closure costs of $0.1 million relate primarily to the closure of a
warehouse in Colorado.

- Other exit costs of $0.4 million relate primarily to the cancellation of
an agreement with a former employee to provide trade show and conference
services to selected Penton events.

2003 RESTRUCTURING CHARGES

In order to meet continued revenue challenges in 2003, the Company recorded
restructuring charges of $4.7 million. The following sets forth detail
concerning the principal components of this charge:

- Personnel costs of $2.7 million (as restated) are associated with the
elimination of 85 positions, of which 79 position eliminations and
payments of $1.1 million were completed by year end 2003 with the
remainder completed in 2004. Approximately 91% of the positions
eliminated are in the United States, with most of the remaining positions
in the United Kingdom.

- Office closure costs of $3.8 million relate primarily to the closure of
one floor at the Company's corporate headquarters and the partial closure
of one additional facility. This charge was offset by $2.3 million of
estimated sublease income related to these facilities.

- The charge for other exit costs of $0.7 million relates primarily to
equipment leases at closed facilities, cancellations of certain contracts
and broker commissions.

Included in restructuring and other charges in 2003 are approximately $0.6
million related to our 401(k) plan for employees who had rescissionary rights
and $0.8 million related to legal fees written off related to the Alidina suit.

2002 RESTRUCTURING CHARGES

During 2002, we recorded restructuring charges of $16.4 million ($1.0
million of which is classified as discontinued operations). The following sets
forth additional detail concerning the principal components of this charge:

- Personnel costs of $10.3 million were associated with the elimination of
over 316 positions. Approximately 93% of the positions eliminated were in
the United States, with most of the remaining positions in the United
Kingdom.

- Office closure costs of $5.1 million related to nine offices primarily in
the United States. These amounts were offset by approximately $1.7
million related to two facilities that were subleased in 2002.
Adjustments of $1.2 million primarily relate to escalation provisions,
which had not been taken into consideration when the original 2002
liability was recorded.

- Other exit costs of $1.6 million include contractual obligations
associated with cancellation of certain trade show venues, hotel
contracts and service agreements.

2001 RESTRUCTURING CHARGES

During 2001, we recorded restructuring charges of $19.8 million. The
following sets forth additional detail concerning the principal components of
this charge:

- Personnel costs of $6.8 million were associated with the elimination of
over 400 positions. The elimination of all positions and related payments
were completed in 2003. Approximately 84% of the positions eliminated
were in the United States, with most of the remaining positions in the
United Kingdom and Germany.

- Office closure costs of $8.7 million related to the closure of more than
20 offices worldwide. These lease obligations continue through 2013.

Other exit costs of $4.4 million include the write-off of capitalized
software development costs associated with the discontinuance of the industry
exchange component of New Hope Natural Media's Healthwell.com. In the third
quarter of 2001, we determined that some first-quarter restructuring initiatives
would not require the level of spending that had been originally estimated and
approximately $1.0 million was reversed.

SUMMARY OF RESTRUCTURING ACTIVITIES

The following table summarizes the restructuring activity for the years
ended December 31, 2004, 2003 and 2002 (in thousands):

SEVERANCE
AND OTHER FACILITY OTHER
PERSONNEL COSTS CLOSING COSTS EXIT COSTS TOTAL
--------------- ------------- ---------- --------

2001 charges................................. $ 6,774 $ 8,669 $ 4,364 $ 19,807
2001 adjustments............................. (23) -- (994) (1,017)
2001 cash payments........................... (4,468) (267) (2,423) (7,158)
------- ------- ------- --------
Accrual at December 31, 2001................. 2,283 8,402 947 11,632
2002 charges................................. 10,344 3,421 1,648 15,413
2002 adjustments............................. 65 1,246 (363) 948
2002 cash payments........................... (7,569) (2,283) (1,217) (11,069)
------- ------- ------- --------
Accrual at December 31, 2002................. 5,123 10,786 1,015 16,924
2003 charges................................. 2,736 1,505 661 4,902
2003 adjustments............................. (18) (17) (10) (45)
2003 cash payments........................... (6,044) (3,273) (965) (10,282)
------- ------- ------- --------
Accrual at December 31, 2003 (as restated)... 1,797 9,001 701 11,499
2004 charges................................. 4,752 51 364 5,167
2004 adjustments............................. 116 657 255 1,028
2004 cash payments........................... (5,830) (2,217) (903) (8,950)
------- ------- ------- --------
Accrual at December 31, 2004................. $ 835 $ 7,492 $ 417 $ 8,744
======= ======= ======= ========

At December 31, 2004, the Company had an accrued restructuring balance of
$8.7 million. We expect to make cash payments in 2005 of approximately $3.3
million, comprised of $0.7 million for employee separation costs, $2.2 million
for lease obligations and $0.4 million for other contractual obligations. The
balance of severance costs will be paid through 2007. We expect to pay the
balance of facility costs, primarily long-term leases, through the end of the
respective lease terms, which extend through 2013. Amounts due within one year
of approximately $2.7 million and $3.7 million at December 31, 2004 and December
31, 2003, respectively, are classified in other accrued expenses on the
consolidated balance sheets. Amounts due after one year of approximately $6.0
million and $7.6 million at December 31, 2004 and December 31, 2003,
respectively, are included in other non-current liabilities on the consolidated
balance sheets.

The Company expects to realize sufficient savings from its 2004
restructuring efforts to recover the employee termination costs by July 31,
2005. Savings from terminations of contracts and lease costs will be realized
over the estimated lives of the contracts or leases.

LOSS ON SALE OF PROPERTIES

In December 2004, the Company completed the sale of 70% of its interest in
PM Germany for a loss on sale of $0.9 million. At December 31, 2004, the Company
retains a 15% interest in PM Germany, which is accounted for using the cost
method, as the Company does not exercise significant influence. See Note 3 --
Disposals, in the notes to consolidated financial statements included herein.

In 2002, we recognized a $0.9 million loss from the sale of four properties
in December 2002, including Streaming Media, Boardwatch and ISPCON, which were
part of our Technology segment, and A/E/C, which was part of our Industry
segment.

DEPRECIATION AND AMORTIZATION

2004 2003 CHANGE 2002 CHANGE
----- ----- ------ ----- ------
(IN MILLIONS)

Depreciation and amortization........................ $10.8 $13.8 (22.1)% $19.3 (28.6)%
Percent of revenues.................................. 5.1% 6.7% 8.2%

The decrease in depreciation and amortization for 2004 compared to 2003 is
due to lower amortization expense related to intangible assets of properties
sold in January 2003, as well as the write-off of approximately $1.9 million and
$6.2 million of intangibles in the third quarter of 2004 and 2003 (as restated),
respectively.

The decrease in depreciation and amortization for 2003 compared to 2002 is
due to lower amortization expense related to intangible assets of properties
sold in December 2002 and January 2003, as well as the write-off of
approximately $6.2 million and $20.0 million of intangibles in the third quarter
of 2003 (as restated) and 2002, respectively.

OTHER INCOME (EXPENSE)

Other income (expense) consists of the following:

2004 2003 CHANGE 2002 CHANGE
------ ------ ------ ------ ------
(IN MILLIONS)

Interest expense.................................. $(38.0) $(39.7) (4.2)% $(38.2) 3.9%
Interest income................................... $ 0.3 $ 0.5 (46.8)% $ 0.8 (31.9)%
Other, net........................................ $ 0.1 $ (0.7) n/a $ 1.1 n/a

Interest expense for 2004 does not include any unusual or one-time items.
Included in interest expense in 2003 is approximately $0.9 million related to
the write-off of unamortized financing fees associated with the commitment
reduction of our credit facility revolver in January 2003 from $40.0 million to
$20.1 million. Also included in interest expense in 2003 is approximately $1.0
million related to the write-off of unamortized financing fees associated with
the replacement of our senior secured credit facility in August 2003 with a new
four-year loan agreement (see Item 1 Business -- Recent Developments and Note
7 -- Debt). Included in interest expense in 2002 is approximately $0.7 million
related to the write-off of unamortized financing fees associated with the
commitment reduction of our credit facility revolver from $185.0 million to
$40.0 million in March 2002 and approximately $1.4 million related to hedging
activities. The increase in interest expense comparing 2003 and 2002 also
reflects the higher weighted-average interest rate.

Significant items included in other net, are as follows:

- In January 2002, Penton sold its remaining 11.8% ownership interest in
Jupitermedia Corporation (formerly known as INT Media Group, Inc.) for
$5.8 million and recognized a $1.5 million gain from its sale.

- In March 2002, we purchased $10.0 million face value of our Subordinated
Notes at prevailing market prices, resulting in a gain of $1.4 million.
This gain was offset by the write-off of unamortized deferred financing
costs of approximately $1.1 million associated with the payoff of our
term loan A and term loan B facilities, which also occurred in March
2002.

TAXES

In 2004 and 2002 (as restated), the Company recorded a benefit for income
taxes of $0.1 million and $30.4 million, respectively. The Company recorded a
provision for income taxes of $6.8 million in 2003 (as restated). The Company
recorded valuation allowances to offset their respective annual income tax
benefits from operations as well as the amount by which their deferred tax
assets exceeded their deferred tax liabilities, excluding the deferred tax
liability related to indefinite-lived intangibles as of 2004, 2003, and 2002.
The effective tax rates for 2004 and 2003 were a benefit of 0.1% and a provision
of 7.8%, respectively. The change in the effective tax rate for 2004 is due to
the Company realizing a tax benefit related to the reversal of approximately
$2.9 million of contingent liabilities for which the statutes of limitations
have expired.
43

The effective tax rates for 2003 and 2002 were a provision of 7.8% and a
benefit of 10.7%, respectively. The change in the effective tax rate for 2003 is
due to the net operating loss available for carryforward being offset by a
valuation allowance for the Company's net deferred tax assets and net operating
loss carryforwards not expected to be utilized. The difference in the effective
tax rate between the periods is due to the establishment of the valuation
allowance in the third quarter of 2002.

The calculation of our tax liabilities involves dealing with uncertainties
in the application of complex tax regulations. We recognize liabilities for
anticipated tax audit issues based on our estimate of whether, and the extent to
which, additional taxes will be due. If we ultimately determine that payment of
these amounts is unnecessary, we reverse the liability and recognize a tax
benefit during the period in which we determine that the liability is no longer
necessary. We also recognize tax benefits to the extent that it is probable that
our positions will be sustained when challenged by the taxing authorities. As of
December 31, 2004 we had not recognized tax benefits of approximately $2.2
million relating to various state tax positions. Should the ultimate outcome be
unfavorable, we would be required to make a cash payment for all tax reductions
claimed as of that date.

DISCONTINUED OPERATIONS

2004 2003 CHANGE 2002 CHANGE
---- ---- ------ ----- ------
(IN MILLIONS)

Discontinued operations................................ $ -- $0.7 n/m $(3.3) n/m
Percent of revenues.................................... n/a 0.4% (1.4)%

Discontinued operations for all periods presented include the results of PM
Australia, which was sold in December 2002, and the results of PTS, which was
sold in January 2003. PM Australia was part of our Technology segment, and PTS
was part of our Industry segment.

The $0.7 million of income recognized for 2003 was due primarily to a gain
of approximately $1.4 million associated with the sale of PTS, offset by one
month of operations for PTS and settlement costs for certain pending lawsuits
related to PM Australia. The loss from discontinued operations in 2002 of $3.3
million is due primarily to PTS where revenues decreased from $12.7 million in
2001 to $8.7 million in 2002. The revenue decrease was due primarily to the
significant economic slowdown, which started in 2001, was exacerbated by the
events of September 11, 2001, and continued through all of 2002. The loss from
discontinued operations in 2002 also included $1.0 million related to
restructuring charges and $0.6 million related to the loss from the sale of PM
Australia in December 2002.

SEGMENTS

As of July 2004, Mr. Nussbaum is Penton's chief operating decision maker.
Mr. Nussbaum and the executive team assess and manage the Company's operations
differently than the prior management team, resulting in a change in the
Company's reportable segments effective in the third quarter of 2004. As a
result of this change in reportable segments, all prior periods have been recast
to conform with the new segment format.

The Company's newly designated segments include: Industry, Technology,
Lifestyle, Retail and International. The results of these newly established
segments will, consistent with past practice, be regularly reviewed by the
Company's chief operating decision maker and the executive team to determine how
resources will be allocated to each segment and to assess the performance of
each segment. The segments derive their revenues from publications, trade shows
and conferences, and online media products.

The executive management team evaluates performance of the segments based
on revenues and adjusted segment EBITDA. As such, in the analysis that follows,
we have used adjusted segment EBITDA, which we define as net income (loss)
before interest, taxes, depreciation and amortization, non-cash compensation,
executive separation costs, impairment of assets, restructuring charges,
provision for loan impairment, (gain) loss on sale of properties, discontinued
operations, general and administrative costs, and other non-operating items.
General and administrative costs include functions such as finance, accounting,
human

resources and information systems, which cannot reasonably be allocated to each
segment. See Note 18 - Segment Information, in the notes to consolidated
financial statements included herein, for a reconciliation of total adjusted
segment EBITDA to loss from continuing operations before income taxes and
cumulative effect of accounting change.

Financial information by segment for 2004, 2003 and 2002, adjusted for
discontinued operations, is summarized as follows (in thousands):

ADJUSTED SEGMENT
REVENUES ADJUSTED SEGMENT EBITDA EBITDA MARGIN
------------------------------ ---------------------------- ----------------------
2004 2003 2002 2004 2003 2002 2004 2003 2002
-------- -------- -------- ------- -------- ------- ---- -------- ----
RESTATED RESTATED

Industry............. $ 74,729 $ 75,225 $ 82,224 $20,351 $18,928 $20,580 27.2% 25.2% 24.8%
Technology........... 62,443 61,743 81,882 12,258 8,876 4,359 19.6% 14.4% 5.3%
Lifestyle............ 36,223 31,756 30,256 14,141 11,571 10,528 39.0% 36.4% 34.8%
Retail............... 20,943 19,936 19,555 5,543 5,432 4,905 26.5% 27.2% 25.1%
International........ 18,325 17,317 21,018 117 697 436 0.6% 4.0% 2.1%
-------- -------- -------- ------- ------- -------
Total................ $212,663 $205,977 $234,935 $52,410 $45,504 $40,808 24.6% 22.1% 17.4%
======== ======== ======== ======= ======= =======

INDUSTRY

Our Industry segment, which represented 35.2%, 36.5% and 35.0% of total
Company revenues for 2004, 2003 and 2002, respectively, serves customers in the
manufacturing, design/engineering, mechanical systems/construction, and
government/compliance industries. For the years ended December 31, 2004, 2003
and 2002, respectively, 92.7%, 94.8% and 93.6% of this segment's revenues were
generated from publications, 2.8%, 2.4% and 4.3% from trade shows and
conferences, and 4.5%, 2.8% and 2.1% from online media and ancillary sources.

As part of our product portfolio restructuring initiative in 2002, the
Company completed the sale of its A/E/C trade shows in December 2002 and its PTS
trade shows in January 2003, both of which were part of our Industry segment.
PTS was included as a component of discontinued operations in the accompanying
consolidated statements of operations, while A/E/C did not qualify for
discontinued operations treatment. We continually respond to opportunities in
the Industry markets we serve by developing new products that serve our
customers' changing information and marketing needs. We expect to introduce new
products in 2005.

2004 vs. 2003

Revenues for this segment decreased $0.5 million, or 0.7%, from $75.2
million for the year ended December 31, 2003 to $74.7 million for the same
period in 2004. The decrease was due primarily to lower publication revenues of
$2.1 million partially offset by improved online media revenues of $1.3 million
and an increase in trade show and conference revenues of $0.3 million. Lower
publishing revenues were due primarily to lower advertising revenues from our
government/compliance group. The increase in online media revenues was primarily
from year-on-year improvements in our manufacturing, government/compliance and
design/engineering Web sites. The IndustryWeek Web site in our manufacturing
unit increased by 77.1% when comparing the year ended December 31, 2003 to the
same period in 2004. The increase in trade show and conferences revenues was
attributed to our Comfortech HVAC conference, which showed a 25.9% year-on-year
revenue increase.

Adjusted segment EBITDA for our Industry portfolio increased $1.4 million,
or 7.5%, from $18.9 million for the year ended December 31, 2003 to $20.4
million for the same period in 2004. This increase is due to our online media
products, which increased by $1.0 million, and our trade shows and conferences,
which increased $0.6 million. These increases were partially offset by a
decrease of $0.2 million in publishing. The increase in adjusted segment EBITDA
margins was due primarily to cost reduction efforts.

2003 vs. 2002

Revenues for this segment decreased $7.0 million, or 8.5%, from $82.2
million in 2002 to $75.2 million in 2003. The decrease was due primarily to
lower revenues from publications of $5.5 million and lower revenues from trade
shows and conferences of $1.8 million. Online media revenues increased $0.3
million from $1.8 million in 2002 to $2.1 million in 2003. Print advertising in
our design/engineering and government portfolios contributed most significantly
to the declines in publishing revenues in 2003; these portfolios accounted for
approximately $4.2 million of the decrease. The decrease in trade show and
conference revenues was due primarily to the loss of approximately $1.7 million
in revenues that were associated with the A/E/C trade shows, which were sold in
December 2002.

Adjusted segment EBITDA for our Industry portfolio decreased $1.7 million,
or 8.0%, from $20.6 million in 2002 to $18.9 million in 2003. Industry
publications decreased $2.0 million, while trade shows and conferences decreased
$0.1 million. These decreases were partially offset by an increase of $0.4
million in the segment's online media portfolio. The improvement in adjusted
segment EBITDA margins was due primarily to the improvement of online media.

TECHNOLOGY

Our Technology segment, which represented 29.4%, 30.0% and 34.9% of total
Company revenues in 2004, 2003 (as restated) and 2002, respectively, serves
customers in the business technology, enterprise information technology,
electronics, and aviation markets. For the years ended December 31, 2004, 2003
(as restated) and 2002, respectively, 63.5%, 71.1% and 68.2% of this segment's
revenues were generated from publications, 16.6%, 12.5% and 19.2% from trade
shows and conferences, and 19.9%, 16.4% and 12.6% from online media and
ancillary sources.

As part of our product portfolio restructuring initiative in 2002, the
Company completed the sale of three properties and discontinued one property in
this segment. These properties include Streaming Media, Boardwatch, ISPCON and
PM Australia. PM Australia was included as a component of discontinued
operations in the accompanying consolidated statements of operations, while
Streaming Media, Boardwatch and ISPCON did not qualify for discontinued
operations treatment. The elimination of these properties improved the adjusted
EBITDA of our Technology segment in 2003. We are continually looking for
opportunities in the Technology segment to develop new products.

2004 vs. 2003

Revenues for this segment increased $0.6 million, or 1.0%, from $61.8
million for the year ended December 31, 2003 (as restated) to $62.4 million for
the same period in 2004. The increase was due primarily to higher trade show and
conference revenues of $2.7 million and higher online media revenues of $2.3
million, offset by a decrease in publishing revenues of $4.4 million. The
increase in trade show and conference revenues was due primarily to an increase
of $1.4 million or 66.5% in Windows IT Pro roadshow revenues in 2004 compared
with 2003. The fall ASP/VS Connections and SQL server conferences, which are
both IT Media events, contributed a $1.5 million increase over 2003 revenues.
The increase in online media revenues was due to year-over-year improvements in
Windows online custom media, the Windows Web sites, Business Finance webcasts
and eMedia in our Electronics OEM group. The decrease in the segment's
publishing revenues was due partially to a decline in our Windows IT Pro and
e-Pro magazines of $3.3 million, and the elimination of over $1.1 million in
revenues related to our Internet World magazine. Internet World was discontinued
in 2003. e-Pro was discontinued in May 2004.

Adjusted segment EBITDA for our Technology portfolio increased $3.4
million, or 37.3%, from $8.9 million for the year ended December 31, 2003 (as
restated) to $12.3 million for the same period in 2004. The increase was
attributable to online media of $2.0 million and trade shows and conferences of
$2.1 million. Overhead costs for the segment also improved by $0.5 million.
These improvements were partially offset by a decline of $1.2 million in the
segment's publications. The increase in adjusted segment EBITDA margins was due
to cost reduction efforts taken.

2003 vs. 2002

Revenues for this segment decreased $20.1 million, or 24.5%, from $81.9
million in 2002 (as restated) to $61.8 million in 2003 (as restated). The
decrease was due primarily to lower revenues from publications of $11.8 million
and lower revenues from trade shows and conferences of $8.1 million. Consistent
with most b-to-b technology media, Penton's products suffered through a third
full year of difficult conditions in 2003. Our print media serving the
enterprise information technology and electronics OEM portfolios experienced the
greatest market challenges. Online media revenues decreased $0.2 million from
$10.3 million in 2002 to $10.1 million in 2003.

Adjusted segment EBITDA for our Technology portfolio increased $4.5
million, or 103.6%, from $4.4 million in 2002 (as restated) to $8.9 million in
2003 (as restated). Trade shows and conferences accounted for $3.3 million of
the increase, while general and administrative and facility costs improved by
$1.9 million. These improvements were partially offset by a decrease in the
segment's publications of $0.5 million and a decrease in online media of $0.2
million. The significant adjusted segment EBITDA increase for trade shows and
conferences and the lower general and administrative and facility costs were due
primarily to our restructuring activities taken in 2002 and 2003.

LIFESTYLE

Our Lifestyle segment, which represented 17.0%, 15.4% and 12.9% of total
Company revenues in 2004, 2003 and 2002, respectively, serves customers in our
natural products industry sector. Products in this sector serve the natural and
organic products and nutraceuticals markets, including producers of raw
materials, manufacturers, distributors and retailers. For the years ended
December 31, 2004, 2003, and 2002, respectively, 33.4%, 34.8% and 36.4% of this
segment's revenues were generated from publications and 66.6%, 65.2% and 63.6%
from trade shows and conferences.

2004 vs. 2003

Revenues for this segment increased $4.5 million, or 14.1%, from $31.7
million for the year ended December 31, 2003 to $36.2 million for the same
period in 2004. Trade shows and conferences accounted for $3.4 million of the
increase and publishing revenues accounted for $1.0 million. The increase in our
Lifestyle segment was due primarily to the success of the Natural Products Expo
West and East events, which were held in the first and fourth quarter of 2004,
respectively. Natural Products Expo West experienced a 20.2% year-over-year
increase in revenues and the East event had a 15.0% year-over-year improvement
in revenues. Publishing revenues in the segment also grew, with improvements
experienced by Delicious Living and The Natural Foods Merchandiser magazines.

Adjusted segment EBITDA for the Lifestyle segment increased $2.6 million,
or 22.2%, from $11.6 million for the year ended December 31, 2003 to $14.1
million for the same period in 2004. Trade shows and conferences accounted for
$2.0 million and publications accounted for $1.4 million of the increase, offset
by $0.8 million higher overhead costs.

2003 vs. 2002

Revenues for this segment increased $1.5 million in 2003 when compared with
2002. The Natural Products Expo East and the Natural Products Expo West trade
shows accounted for all of this increase as publication revenues in 2003 were
flat with 2002.

Adjusted segment EBITDA for the Lifestyle segment increased $1.1 million to
$11.6 million in 2003, from $10.5 million in 2002. Trade shows and conferences
increased $1.0 million, from $10.9 million in 2002 to $11.9 million in 2003.
Publications for this segment were flat when compared with 2002. Adjusted
segment EBITDA margins improved from 34.8% in 2002 to 36.4% in 2003, due
primarily to stable revenues and cost reduction measures taken in 2003.

RETAIL

Our Retail segment, which represented 9.8%, 9.7% and 8.3% of total Company
revenues for 2004, 2003 and 2002, respectively, serves customers in the
food/retail and hospitality sectors. Revenues for this segment are primarily
generated from publishing sales, which comprised approximately 92.4%, 90.0% and
91.1% of total 2004, 2003 and 2002 revenues, respectively. Trade shows and
conferences make up a majority of the remaining revenues for this segment, while
online media revenues generated $0.3 million, $0.4 million and $0.4 million in
revenues in 2004, 2003 and 2002, respectively.

2004 vs. 2003

Revenues for this segment increased $1.0 million, or 5.0%, from $19.9
million for the year ended December 31, 2003 to $20.9 million for the same
period in 2004. The increase was due primarily to year-over-year revenue
improvements in our Restaurant Hospitality and Lodging Hospitality magazines
offset by lower year-on-year revenues from our Convenience Store Decisions
magazine, slightly lower trade show and conference revenues, and a modest
decline in online media revenues.

Adjusted segment EBITDA for the Retail segment remained flat for the year
ended December 31, 2003 compared with the same period in 2004. Although EBITDA
for publications increased by $1.2 million due to revenue increases noted above,
these improvements were offset by a slight decrease from trade shows and
conferences and higher overhead costs.

2003 vs. 2002

Revenues for this segment increased $0.4 million, or 1.9%, from $19.6
million in 2002, to $19.9 million in 2003. This increase was due primarily to an
increase in trade show and conference revenues of $0.3 million and an increase
in publishing revenues of $0.1 million. Online media revenues remained flat.

Adjusted segment EBITDA for the Retail segment increased $0.5 million, or
10.7%, from $4.9 million in 2002 to $5.4 million in 2003. Publications and trade
shows and conferences accounted for $0.2 million and $0.3 million of the
increase, respectively. Online media remained flat. Improvements across the
board were due to higher revenues and cost reduction measures taken, including
staff reductions, office closings, and process improvements.

INTERNATIONAL

Our International segment represented 8.6%, 8.4% and 8.9% of total Company
revenues for 2004, 2003 and 2002, respectively, serves customers in the European
markets. For the year ended December 31, 2004 and 2003, respectively, 18.0%,
24.4% and 15.7% of this segment's revenues were generated from publications,
74.0%, 68.4% and 83.0% from trade shows and conferences, and 8.0%, 7.2% and 1.3%
from online media products.

2004 vs. 2003

Revenues for this segment increased $1.0 million, or 5.8%, from $17.3
million for the year ended December 31, 2003 to $18.3 million for the same
period in 2004. The increase was due primarily to an improvement in trade show
and conference revenues of $1.7 million and an increase in online media revenues
of $0.2 million, offset by a decrease in publishing revenues of $0.9 million.
The increase in trade show and conference revenues was due primarily to our
biannual Motion & Control event, which was held in 2004, and the year-on-year
improvement of trade shows and conferences produced in Germany. The increase in
online media revenues was due primarily to the launch of our Service Management
Online 365 virtual event in 2004. The decrease in publishing revenues was due
primarily to our German operations, which discontinued a number of magazines in
2004.

Adjusted segment EBITDA for the International segment decreased $0.6
million, or 83.2%, from $0.7 million for the year ended December 31, 2003 to
$0.1 million for the same period in 2004. The decrease was due primarily to
year-over-year performance declines of European trade shows and conferences.
This
48

trend has continued into the first quarter of 2005. The Company may be required
to record additional impairment charges in addition to those already taken in
2004, if this trend continues.

2003 vs. 2002

Revenues for this segment decreased $3.7 million, or 17.6%, from $21.0
million for the year ended December 31, 2002 to $17.3 million for the same
period in 2003. The decrease was due primarily to a decline in trade show and
conferences revenues of $5.6 million. These decreases were partially offset by
an increase in online media revenues of $1.0 million and an increase in
publishing revenues of $0.9 million. The decrease in trade show and conferences
revenues was due primarily to our Internet World Berlin trade show and the sale
of our ISPCON London trade show. Also contributing to the decrease was our
biannual Motion & Control event, which was held in 2002 and not in 2003. The
increase in online media revenues is due primarily to the launch of our iSeries
Online in 2003. The increase in publishing was due primarily to our German
operations.

Adjusted segment EBITDA for the International segment increased $0.3
million, or 59.7%, from $0.4 million for the year ended December 31, 2002 to
$0.7 million for the same period in 2003. The increase was due primarily to the
increase in online products and overhead cost reductions.

LIQUIDITY AND CAPITAL RESOURCES

Current Liquidity

At December 31, 2004, our principal sources of liquidity are our existing
cash reserves of $7.7 million and available borrowing capacity under our credit
facility of $39.7 million.

In February 2005, we repurchased $5.5 million of our 10 3/8% senior
subordinated notes for $3.9 million, including $0.1 million of accrued interest,
using excess cash on hand. The notes were purchased in the open market and were
trading at 69% of their par value at the time of purchase. The repurchase is
expected to reduce interest costs by approximately $0.6 million annually. We may
from time to time seek to retire additional outstanding debt through cash
purchases on the open market, privately negotiated transactions or otherwise.
Such repurchases, if any, will depend on the prevailing market conditions, our
liquidity requirements, contractual restrictions and other factors. The amounts
involved may be material.

Our cash requirements for the next 12 months are primarily to fund:

- operations;

- debt service costs, which are expected to be approximately $36.3 million
in 2005;

- capital expenditures of approximately $1.5 million;

- payments related to our business restructuring initiatives of
approximately $3.3 million, comprising $0.7 million for employee
separation costs, $2.2 million for lease obligations and $0.4 million for
other contractual obligations; and

- contributions totaling $1.6 million to our employees' Retirement and
Savings Plan accounts. No cash contributions are expected to be made in
2005 related to our defined benefit pension plan.

We have no principal repayment requirements until maturity of our Secured
Notes in October 2007. In addition, we have no bank debt and no maintenance
covenants on our existing bond debt.

We believe that our existing sources of liquidity, along with revenues
expected to be generated from operations, will be sufficient to fund our
operations, anticipated capital expenditures, working capital, and other
financing requirements. However, we cannot assure you that this will be the
case, and if we continue to incur operating losses and negative cash flows in
the future, we may need to reduce further our operating costs or obtain
alternate sources of financing, or both, to remain viable. Our ability to meet
cash operating requirements depends upon our future performance, which is
subject to general economic conditions and to financial, competitive, business,
and other factors. The Company's ability to return to sustained profitability at
acceptable levels will depend on a number of risk factors, many of which are
largely beyond the Company's

control. Some of the risk factors that have had and/or may have a negative
impact on the Company's business and financial results are discussed in "Risk
Factors" under Item 1 of this document. If we are unable to meet our debt
obligations or fund our other liquidity needs, particularly if our revenues
deteriorate, we may be required to raise additional capital through financing
arrangements or the issuance of private or public debt or equity securities. We
cannot assure you that such additional financing will be available at acceptable
terms. In addition, the terms of our convertible preferred stock and warrants
issued, including the conversion price, dividend and liquidation adjustment
provisions could result in substantial dilution to common stockholders. The
redemption price premiums and board representation rights could negatively
impact our ability to access the equity markets in the future.

The Company has implemented, and continues to implement, various
cost-cutting programs and cash conservation plans, which involve the limitation
of capital expenditures and the control of working capital.

Our loan and security agreement contains several provisions, which could
have a significant impact as to the classification as well as the acceleration
of payments for any borrowings outstanding under the agreement, including the
following: (i) the obligation of the lender to provide any advances under the
loan agreement is subject to no material adverse change events; (ii) reserves
may be established against the borrowing base for sums that the Company is
required to pay, such as taxes and assessments and other types of required
payments, and has failed to pay; (iii) in the event of a default under the loan
agreement, the lender has the right to direct all cash that is deposited in the
Company's lock boxes to be sent to the lender to pay down outstanding
borrowings; (iv) the loan agreement establishes cross-defaults to the Company's
other indebtedness (such as the Secured Notes and Subordinated Notes) such that
a default under the loan agreement could cause a default under the notes
agreements and vice versa; however, default triggering thresholds are different
in the loan agreement and the notes; (v) if the Company is in default of any
material agreement to which it is a party and the counter-party to that
agreement has the right to terminate such agreement as a result of the default,
this constitutes an event of default under the loan agreement. Under the loan
agreement, the lenders reserve the right to deem the notes in default, and in
those limited circumstances, could accelerate payment of the outstanding loan
balances should the Company undergo a material adverse event. Even though the
criteria defining a material adverse event are subjective, the Company does not
believe that the exercise of the lenders' right is probable nor does it foresee
any material adverse events in 2005. In addition, the Company believes that the
11 7/8% senior secured and 10 3/8% senior subordinated note agreements are
long-term in nature. Accordingly, the Company continues to classify its notes as
long term. At December 31, 2004, the Company was in compliance with all of the
above provisions.

Analysis of Cash Flows

Penton's cash and cash equivalents at December 31, 2004, was $7.7 million
compared with $29.6 million at December 31, 2003. Cash used by operating
activities was $20.5 million for the year ended December 31, 2004, compared with
cash provided by operations of $27.7 million for the year ended December 31,
2003. Operating cash flows for the year ended December 31, 2004, reflected a net
loss of $67.2 million and a net decrease in working capital items of $14.4
million, partially offset by non-cash charges (primarily impairment of asset
charges and depreciation and amortization) of approximately $61.1 million.
Operating cash flows for the year ended December 31, 2003, reflected a net loss
of $93.1 million, offset by a net increase in working capital items (due
primarily to a tax refund of $52.7 million) of approximately $42.7 million and
non-cash charges (primarily impairment of asset charges, depreciation and
amortization, provision for loan impairment and deferred income tax) of
approximately $78.2 million. Operating cash flows for the year ended December
31, 2002, reflected a net loss of $296.5 million, which was offset by non-cash
charges (primarily impairment of asset charges, cumulative effect of accounting
change, restructuring charges and depreciation and amortization) of
approximately $328.7 million.

The decrease in cash from operating activities in 2004 compared to 2003 was
due primarily to the tax refund of $52.7 million received in January 2003 and
the absence of such benefit in 2004. Excluding this refund from 2003 operating
activities, the cash used from operations in 2004 actually improved by nearly
$4.6 million. Also contributing to the decrease in cash from operating
activities in 2004 compared to 2003 was the increase in accounts receivable, net
and the decrease in unearned income, both due to timing of when
50

trade shows are held and when deposits are due and collected. The increase in
operating cash flows for 2003 compared with 2002 was due primarily to the tax
refund received in January 2003 of approximately $52.7 million, compared with a
tax refund of $12.2 million received in February 2002 and the increase in
unearned income due primarily to the timing of exhibition deposit payments and
the timing of when trade shows are held.

Investing activities used $1.5 million of cash in 2004. The use of $2.3
million for capital expenditures was partially offset by cash proceeds of $0.8
million from the sale of 70% of our interest in PM Germany. Capital expenditures
in 2004 were primarily for computer hardware and software. Investing activities
provided $1.5 million of cash in 2003 (as restated) due primarily to proceeds
from the sale of PTS in January 2003 of $3.2 million and repayment of a note
receivable of $1.6 million. These proceeds were partially offset by capital
expenditures of $3.3 million. Capital expenditures in 2003 were primarily for
desktop computers and management information systems. Investing activities used
$2.7 million of cash in 2002 (as restated). Capital expenditures of
approximately $3.9 million and earnout payments of approximately $5.5 million
were offset by proceeds of $5.8 million from the sale of approximately 3.0
million shares of Jupitermedia Corporation common stock, as well as proceeds
received from the sale of certain properties in December 2002.

Financing activities provided $0.1 million of cash in 2004 primarily as a
result of an increase in cash overdrafts partially offset by an increase in
restricted cash. Financing activities used $6.5 million of cash for 2003 (as
restated) primarily for the repayment of $4.5 million of our senior secured
credit facility, the payment of financing fees of approximately $2.0 million and
the payoff of a note payable of $0.4 million. These uses were partially offset
by $0.7 million of restricted cash and proceeds of approximately $0.3 million
from the partial repayment of an officer's loan. Financing activities provided
$6.0 million of cash in 2002 (as restated), due to the issuance of our Secured
Notes, the sale of 50,000 shares of Series B Preferred stock, amounts drawn
under our revolving credit facility, and proceeds received from the repayment of
executive loans. These proceeds were primarily offset by the pay down of our
senior secured credit facility; the purchase of $10.0 million face value of our
Subordinated Notes at prevailing market prices; the payment of financing fees
associated with the amendment to our senior credit facility and the issuance of
our Secured Notes; and the payment of the short-term portion of our note
payable.

DEBT SERVICE

At December 31, 2004, we had total indebtedness of $329.1 million. Our
principal obligations are described below.

Subordinated Notes:

In June 2001, we issued $185.0 million of 10 3/8% Subordinated Notes due
June 2011. Interest on the notes is payable semiannually, on June 15 and
December 15. The Subordinated Notes are fully and unconditionally, jointly and
severally guaranteed, on a senior subordinated basis, by the assets of our
domestic subsidiaries, which are 100% owned by the Company, and may be redeemed,
in whole or in part, on or after June 15, 2006. In addition, we may redeem up to
35% of the aggregate principal amount of the Subordinated Notes before June 15,
2004 with the proceeds of certain equity offerings. The Subordinated Notes were
offered at a discount of $4.2 million. This discount is being amortized using
the interest method over the term of the Subordinated Notes. Costs representing
underwriting fees and other professional fees of approximately $1.7 million are
being amortized over the term of the Subordinated Notes. The Subordinated Notes
are our unsecured senior subordinated obligations, subordinated in right of
payment to all existing and future senior indebtedness, including the loan
agreement and the Secured Notes discussed below.

The Subordinated Notes are jointly and severally irrevocably and
unconditionally guaranteed on a senior subordinated basis by each of our present
and future domestic subsidiaries. The indenture governing the Subordinated Notes
contains covenants that, among other things, restrict our and our subsidiaries'
ability to borrow money; pay dividends on or repurchase capital stock; make
certain investments; enter into agreements that restrict our subsidiaries from
paying dividends or making other distributions, making loans or otherwise
transferring assets to us or to any other subsidiaries; create liens on assets;
engage in transactions with

affiliates; sell assets, including capital stock of our subsidiaries; and merge,
consolidate or sell all or substantially all of our assets and the assets of our
subsidiaries. Our ability to obtain dividends from our subsidiaries is
restricted only if we are in default under our loan agreement or if we have
exceeded our limitation of additional indebtedness, as specified in the
indenture.

Secured Notes:

In March 2002, Penton issued $157.5 million of 11 7/8% Secured Notes due in
2007. Interest is payable on the Secured Notes semiannually on April 1 and
October 1. The Secured Notes are fully and unconditionally, jointly and
severally guaranteed, on a senior basis, by all of our domestic subsidiaries,
which are 100% owned by the Company, and also the stock of certain subsidiaries.
We may redeem the Secured Notes, in whole or in part, during the periods October
1, 2005 through October 1, 2006 and thereafter at redemption prices of 105.9375%
and 100.0000% of the principal amount, respectively, together with accrued and
unpaid interest to the date of redemption. In addition, at any time prior to
October 1, 2005, upon certain public equity offerings of our common stock, up to
35% of the aggregate principal amount of the Secured Notes may be redeemed at
our option, within 90 days of such public equity offering, with cash proceeds
from the offering at a redemption price equal to 111.875% of the principal
amount, together with accrued and unpaid interest to the date of redemption.

The Secured Notes were offered at a discount of $0.8 million, which is
being amortized, using the interest method, over the term of the Secured Notes.
Costs representing underwriting fees and other professional fees of $6.6 million
are being amortized over the term of the Secured Notes. The Secured Notes rank
senior in right to all of our senior subordinated indebtedness, including our
Subordinated Notes. The guarantees are senior secured obligations of each of our
subsidiary guarantors and rank senior in right of payment to all subordinated
indebtedness of the subsidiary guarantors, including the guarantees of our
Subordinated Notes, and equal in right of payment with all of our senior
indebtedness. The notes and guarantees are secured by a lien on substantially
all of our assets and those of our subsidiary guarantors, other than specified
excluded assets. Excluded assets consist of, among other things, the capital
stock of Duke Communications International, Inc. and Internet World Media, Inc.;
the capital stock of our foreign subsidiaries directly owned by us or the
subsidiary guarantors which exceed 65% of the outstanding capital stock or
equity interest of such foreign subsidiaries; and all of the capital stock of
our other foreign subsidiaries.

The indenture governing the Secured Notes contain covenants that, among
other things, restrict our and our subsidiaries' ability to borrow money; pay
dividends on or repurchase capital stock; make certain investments; enter into
agreements that restrict our subsidiaries from paying dividends or other
distributions, making loans or otherwise transferring assets to us or to any
other subsidiaries; create liens on assets; engage in transactions with
affiliates; sell assets, including capital stock of our subsidiaries; and merge,
consolidate or sell all or substantially all of our assets and the assets of our
subsidiaries. Our ability to obtain dividends from our subsidiaries is
restricted only if we are in default under our loan agreement or if we have
exceeded our limitation of additional indebtedness, as specified in such
agreement.

Loan and Security Agreement:

In August 2003, the Company entered into a four-year revolving loan and
security agreement. Pursuant to the terms of the loan and security agreement,
the Company can borrow up to the lesser of (i) $40.0 million; (ii) 2.25x the
Company's last twelve months adjusted EBITDA measured monthly through August 13,
2005 and 2.0x thereafter; (iii) 40% of the Company's last six months of
revenues; or (iv) 25% of the Company's enterprise value, as determined annually
by a third party. The revolving credit facility bears interest at LIBOR plus
5.0% subject to a LIBOR minimum of 1.5%. The Company must comply with a
quarterly financial covenant limiting the ratio of maximum bank debt to the last
twelve months adjusted EBITDA to 2.25x from June 30, 2004 through March 31, 2005
and 2.0x thereafter. The loan agreement permits the Company to sell assets of up
to $12.0 million in the aggregate during the term or $5.0 million in any single
asset sale, and complete acquisitions of up to $5.0 million per year. Included
in the loan agreement are two stand-by letters of credit of $0.1 million and
$0.2 million, respectively, required by two of the Company's facility leases.
The amounts of the letters of credit reduce the availability under the credit
facility. As of December 31, 2004, no
52

amounts were drawn under the stand-by letters of credit. Costs representing bank
fees and other professional fees of $1.9 million are being amortized over the
life of the loan agreement. At December 31, 2004, $39.7 million was available
under the loan agreement.

Consolidated Adjusted EBITDA

Pursuant to the terms of the loan and security agreement, the Company can
borrow up to the lesser of (i) $40.0 million; (ii) 2.25x the Company's last 12
months' Consolidated Adjusted EBITDA measured monthly through August 13, 2005
and 2.0x thereafter; (iii) 40% of the Company's last six months of revenues; or
(iv) 25% of the Company's enterprise value, as determined annually by a third
party. In addition, under our loan and security agreement, we are not permitted
to allow the ratio of outstanding indebtedness to Consolidated Adjusted EBITDA
to exceed 2.25 to 1.00 for the 12-month period ending March 31, 2005 and 2.0 to
1.00 thereafter.

Consolidated EBITDA is a non-GAAP financial measure that is presented not
as a measure of operating results, but rather as a measure of our ability to
service debt. It should not be construed as an alternative to either income/loss
before income taxes, or cash flows from operating activities. Our inability to
borrow based on the terms of the loan and security agreement could have a
material adverse effect on our liquidity and operations. Accordingly, management
believes that the presentation of Consolidated Adjusted EBITDA will provide
investors with information needed to assess our ability to continue to have
access to funds as necessary. The following table presents a reconciliation of
EBITDA and Consolidated adjusted EBITDA to net loss (in thousands). Other
companies may calculate similarly titled measures differently than we do.

YEARS ENDED DECEMBER 31,
-------------------------------
RESTATED
--------------------
2004 2003 2002
-------- -------- ---------

Net loss.................................................... $(67,191) $(93,131) $(296,469)
Interest expense............................................ 38,010 39,686 38,193
(Benefit) provision for income taxes........................ (51) 6,795 (30,369)
Depreciation and amortization............................... 10,758 13,808 19,347
-------- -------- ---------
EBITDA...................................................... (18,474) (32,842) (269,298)
Loan and Security Agreement Adjustments:
Restructuring and other charges............................. 6,165 5,895 15,436
Loss on sale of properties.................................. 1,033 -- 888
Provision for loan impairment............................... 1,717 7,600 --
Asset write-downs and impairments........................... 39,651 43,760 223,424
Executive separation costs.................................. 2,728 -- --
Non-cash compensation....................................... 733 1,373 2,979
Interest income............................................. (278) (523) (768)
Discontinued operations, net of taxes....................... -- (738) 3,252
Cumulative effect of accounting change, net of taxes........ -- -- 39,700
Other, net.................................................. (86) 724 (1,092)
-------- -------- ---------
Consolidated Adjusted EBITDA................................ $ 33,189 $ 25,249 $ 14,521
======== ======== =========
Credit Ratings:

Our credit ratings as of the date of this report are as follows:

S&P MOODY'S
--- -------

$169.5 million 10 3/8% Senior Subordinated Notes............ CC Ca
$157.5 million 11 7/8% Senior Secured Notes................. CCC B3
Corporate Rating............................................ CCC Caa3

A change in the rating of our debt instruments by outside rating agencies
would not negatively impact our ability to access our revolver. A rating
reflects only the view of a rating agency and is not a recommendation to buy,
sell or hold securities. Any rating can be revised upward or downward at any
time by a rating agency if such rating agency decides that circumstances warrant
such a change.

CONVERTIBLE PREFERRED STOCK

In March 2002, we entered into an agreement with a group of investors to
sell 50,000 shares of Series B Preferred stock and warrants to purchase 1.6
million shares of our common stock for $50.0 million. We received gross proceeds
of $40.0 million from the sale of 40,000 shares of convertible preferred stock
and warrants to purchase 1,280,000 shares of our common stock on March 19, 2002
and gross proceeds of $10.0 million from the sale of 10,000 shares of
convertible preferred stock and warrants to purchase 320,000 shares of our
common stock on March 28, 2002.

of Designations for the Series C Preferred stock is identical to the Series B
Preferred stock Certificate of Designations except that:

- the new series allows for the sharing of the liquidation preference with
the new Series M Preferred Stock (discussed below),

At December 31, 2004, the amount due to the Series C Preferred
stockholders, including principal and accrued dividends, was $67.2 million. The
convertible preferred stock currently accrues dividends at the maximum rate of
10% per annum. If the Company had been sold on December 31, 2004, the Series C
Preferred stockholders would have been entitled to receive $122.5 million for
their shares. The amount the Series C Preferred stockholders would be entitled
to receive could increase significantly in the future under certain
circumstances. See Note 11 -- Mandatorily Redeemable Convertible Preferred
Stock, in the notes to consolidated financial statements included herein.

CONTRACTUAL OBLIGATIONS

The following are summaries of our contractual obligations and other
commercial commitments as of December 31, 2004 (in thousands):

ANNUAL PAYMENTS DUE
--------------------------------------------------------------
2005 2006 2007 2008 AFTER 2008 TOTAL
------- ------- -------- ------- ---------- --------

10 3/8% Senior Subordinated
Notes(1)....................... $ -- $ -- $ -- $ -- $175,000 $175,000
11 7/8% Senior Secured
Notes(1)....................... -- -- 157,500 -- -- 157,500
Letter of Credit................. 100 -- -- -- -- 100
Interest on indebtedness(1)...... 36,859 36,859 36,859 18,156 45,391 174,124
Capital lease obligations........ 24 24 25 25 4 102
Operating leases
obligations(2)................. 7,504 5,433 4,884 4,649 8,483 30,953
Printing contract
obligation(3).................. 7,167 6,823 -- -- -- 13,990
Communications service
agreement(4)................... 800 800 -- -- -- 1,600
Expected pension
contributions(5)............... -- -- 1,800 -- -- 1,800
Other long-term obligations
reflected in the balance
sheet.......................... 1,063 43 31 -- -- 1,137
------- ------- -------- ------- -------- --------
Total............................ $53,517 $49,982 $201,099 $22,830 $228,878 $556,306
======= ======= ======== ======= ======== ========

---------------

(1) There are no required debt principal payments until October 2007. Interest
is paid semi-annually in June and December for the Subordinated Notes and
April and October for the Secured Notes. In February 2005, the Company
repurchased $5.5 million par value of its 10 3/8% senior subordinated notes
for a total of $3.9 million. The notes were purchased in the open market and
were trading at 69% of their par value at the time of purchase. As a result
of this repurchase, future interest payments will be reduced annually by
$0.6 million.

(2) We lease all of our facilities and certain equipment under non-cancelable
operating leases. The leases expire at various dates through 2014 and some
contain various provisions for rental adjustments.

(3) In December 1999, Penton entered into a print agreement with R.R. Donnelley,
which entitles them to the exclusive right to print and produce certain
Penton magazines through November 30, 2006. Under

the agreement, which is non-cancelable, Penton is obligated to pay certain
minimum amounts. These minimum amounts will be adjusted annually based on
changes in the Consumer Price Index. In February 2005, the Company signed a
new agreement with R.R. Donnelley, which expires in December 2011, unless a
minimum revenue commitment of $42.0 million is not reached, at which time
the agreement would extend until the commitment is reached.

(4) In February 2004, the Company amended its communication services agreement
with Sprint, originally entered into in 2002, to extend the term to February
2007. The agreement provides for annual minimum usage levels by Penton of
$0.8 million each year.

(5) Penton made a $1.5 million cash contribution to its defined benefit pension
plan for 2004. Based on current estimates the Company expects to make a
contribution of approximately $1.8 million in 2007. No contributions are
expected in 2005 or 2006. Due to the presence of significant variables,
actual future contributions may differ materially.

In 2004, the Company made contributions totaling $1.7 million to employees'
Retirement Savings Plan accounts. We expect to make contributions totaling $1.6
million in 2005. Contributions are made at the discretion of our Board of
Directors.

The Company is self-insured for health and workers' compensation benefits
up to certain stop-loss limits. In 2004, the Company paid approximately $3.6
million in health and workers' compensation claims. The Company expects payments
in 2005 to range between $3.5 million and $4.0 million.

In December 2003, the Company entered into an agreement with a former
employee to provide trade show and conference services to select Penton events.
Under the agreement, the former employee was to receive guaranteed minimum
payments of $0.7 million in 2005 unless the contract was cancelled. In December
2004, the Company terminated the agreement, which required a $0.2 million
cancellation fee. The fee will be paid in twelve equal installments throughout
2005.

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no special purpose entities or off-balance sheet debt,
other than operating leases in the ordinary course of business, which are fully
disclosed in Note 10 -- Commitments and Contingencies of the notes to the
consolidated financial statements appearing elsewhere herein.

The Company has stand-by letters of credit of $0.1 million and $0.2
million, respectively, required by two of the Company's facility leases. At
December 31, 2004, no amounts were drawn under the stand-by letters of credit.
Letters of credit are purchased guarantees that ensure our performance or
payment to third parties in accordance with specified terms and conditions.

Under certain agreements, indemnification provisions may require the
Company to make payments to third parties. In connection with certain facility
leases, we may be required to indemnify our lessors for certain claims. The
Company has agreed to indemnify the purchasers of several of our properties from
all claims prior to the sale. The Company will also indemnify its directors,
officers, employees and agents to the maximum extent permitted under the laws of
the State of Delaware. The duration of these indemnity provisions under the
terms of each agreement varies. The majority of indemnities do not provide for
any limitation of the maximum potential future payments we could be obligated to
make.

In 2004, we did not make any payments under any of these indemnification
provisions or guarantees, and we have not recorded any liability for these
indemnities in the accompanying consolidated balance sheets.

RELATED PARTY TRANSACTIONS

See Note 17 -- Related Party Transactions, in the notes to consolidated
financial statements included herein for a complete description of all related
party transactions.

FOREIGN CURRENCY

The functional currency of our foreign operations is their local currency.
Accordingly, assets and liabilities of foreign operations are translated to U.S.
dollars at the rates of exchange on the balance sheet date; income and expense
are translated at the average rates of exchange prevailing during the year.
There were no significant foreign currency transaction gains or losses for the
periods presented.

SEASONALITY

We may experience seasonal fluctuations as trade shows and conferences held
in one quarter in the current year may be held in a different quarter in future
years.

INFLATION

The impact of inflation on our results of operations has not been
significant in recent years.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 1 -- Description of Business and Significant Accounting Policies,
in the notes to consolidated financial statements included herein.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities. On an ongoing basis, we evaluate our estimates, including those
related to bad debts, intangible assets, income taxes, restructuring, pension
benefits, contingencies and litigation. We base our estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

We believe the following critical accounting policies affect our more
significant judgments and estimates used in the preparation of our consolidated
financial statements. We have discussed the application of these critical
accounting estimates with the Audit Committee of our Board of Directors.

REVENUE RECOGNITION

Advertising revenues from Penton's trade magazines are recognized in the
month the publications are mailed. Subscription revenues are recognized over the
subscription period, typically one year. Amounts received in advance of trade
shows and conferences are deferred and recognized in the month the events are
held. Online media revenues primarily include advertising revenues such as
banner advertising, sponsorships, e-newsletters, e-books and web seminars.
Revenue is recognized in the period the obligation is fulfilled or delivered.

When a sale involves multiple deliverables where the deliverables are
governed by more than one authoritative standard, we evaluate all deliverables
to determine whether they represent separate units of accounting based on the
following criteria:

- whether the delivered item has value to the customer on a stand-alone
basis;

- whether there is objective and reliable evidence of the fair value of the
undelivered item(s); and

- if the contract includes a general right of return relative to the
delivered item, delivery or performance of the undelivered item(s) is
considered probable and is substantially in our control.

Our determination of whether deliverables within a multiple element
arrangement can be treated separately for revenue recognition purposes involves
significant estimates and judgment, such as whether fair value can be
established on undelivered obligations and/or whether delivered elements have
standalone value to the customer. Changes in our assessment of the accounting
units in an arrangement and/or our ability to establish fair values could
significantly change the timing of revenue recognition.

COLLECTIBILITY OF ACCOUNTS RECEIVABLE

In order to record our accounts receivable at their net realizable value,
we must assess their collectibility. A considerable amount of judgment is
required in order to make this assessment, including an analysis of historical
bad debts, a review of the aging of our receivables and the current
creditworthiness of our customers. Generally, individual credit assessments of
all current and potential customers occur prior to any credit being extended and
at regular intervals thereafter. The following factors are considered as part of
the credit assessment:

- a customer's ability to meet and sustain its financial commitments;

- a customer's current and projected financial condition;

- the positive or negative effects of the current and projected industry
outlook; and

- the economy in general.

After considering all of the above factors, we record an allowance for
doubtful accounts for those receivables that we feel are uncollectible. In
general, if a balance has been outstanding for 90 days, we require cash with any
future order. Balances outstanding in excess of 120 days are placed in
collections. Based on historical collections of amounts placed for collection,
we reserve 50% of all such amounts. In addition, a detailed subjective
assessment of each account placed for collection is performed and additional
reserves are recorded as needed.

The decrease in our allowance for doubtful accounts from $4.3 million at
December 31, 2002, to $3.7 million at December 31, 2003, and to $2.8 million at
December 31, 2004 primarily reflects the general improvement in the overall
economy during those periods. It appears that our customers are feeling the
impact of this improvement as our days-sales-outstanding ratio has steadily
decreased over the period.

IMPAIRMENT OF LONG-LIVED ASSETS

We continually monitor and review long-lived assets, including fixed
assets, goodwill and intangible assets, for impairment whenever events or
changes in circumstances indicate that the carrying amount of any such asset may
not be recoverable. Factors that could trigger an impairment test include, but
are not limited to:

- a permanent decline in cash flows;

- continued decreases in utilization of a long-lived asset;

- a change in business strategy;

- a significant adverse change in the business climate or legal factors;

- unanticipated competition;

- loss of key personnel;

- the likelihood that a reporting unit or a significant portion of a
reporting unit will be sold or disposed of; and/or

- recognition of a goodwill impairment loss in the financial statements of
a subsidiary that is a component of a reporting unit.

The process involves management determining if the cash flows expected to
be generated from the use of a long-lived asset group and its eventual
disposition (undiscounted and without interest charges) are less than the
carrying amount of the asset group. If the criteria are met, the fair value is
determined using appropriate assumptions. The estimate of cash flows is based
upon, among other things, certain assumptions about expected future operating
performance, growth rates and other factors. Our estimates may differ from
actual cash flows due to, among other things, technological changes, economic
conditions, changes to our business model, or changes in our operating
performance. The determination of impairment requires significant management
judgment, including establishing asset groupings.

Goodwill is tested annually on September 30 of each year for impairment
using the fair-value-based test prescribed by SFAS 142. The estimates and
assumptions described above (along with other factors such as discount rates)
affect the amount of impairment recognized.

The Company completed its annual SFAS 142 impairment review at September
30, 2004, which resulted in a non-cash impairment charge of approximately $37.8
million. This goodwill impairment charge is due primarily to lower-than-expected
future cash flows in two reporting units in our Technology segment and
lower-than-expected future cash flows in our International segment.

The Company completed its annual SFAS 142 impairment review at September
30, 2003, which resulted in a non-cash goodwill impairment charge of
approximately $37.6 million to reduce the carrying value of goodwill for two
reporting units, that are part of our Technology segment and one reporting unit,
that is part of our Retail segment.

During the third quarter of 2002, Penton completed its initial impairment
test under SFAS 142 for January 1, 2002 and recorded a non-cash charge of $39.7
million to reduce the carrying value of goodwill for two of our seven identified
reporting units. In addition, a number of events occurred during the third
quarter that indicated an additional impairment of goodwill might exist. As a
result of these triggering events and circumstances, the Company completed an
additional SFAS 142 impairment review at September 30, 2002. This review
resulted in a non-cash impairment charge of approximately $203.3 million to
further reduce the carrying value of goodwill for the two reporting units, which
are part of our Technology segment.

The Company's SFAS 142 evaluations were performed by management with the
assistance of a third-party valuation firm, utilizing assumptions and
projections we believe to be reasonable and supportable, and that reflect
management's best estimate of projected future cash flows. Considerable judgment
was required in selecting discount rates, developing cash flow projections and
developing balance sheets for each reporting unit. Slight changes in any of
these assumptions could create a material impact on the impairment charge
recorded by the Company.

DEFERRED TAX ASSET VALUATION AND TAX CONTINGENCIES

In 2004 and 2003 (as restated), the Company recorded a $33.9 million and
$25.8 million charge, respectively, to establish a full valuation allowance for
its net deferred tax assets and net operating loss carryforwards. The valuation
allowance was calculated in accordance with the provisions of SFAS No. 109,
"Accounting for Income Taxes" ("SFAS 109"), which places primary importance on
the Company's operating results in the most recent three-year period when
assessing the need for a valuation allowance. Although we believe that our
results for the last three years were heavily affected by impairments and
planned restructuring activities, which were undertaken to right-size our cost
structure, the cumulative losses represented sufficient negative evidence to
require a valuation allowance under the provisions of SFAS 109. We intend to
maintain a valuation allowance until sufficient positive evidence exists to
support its reversal. Until such time, except for minor foreign and state tax
provisions, the Company will have no reported tax provision, net of valuation
allowance adjustments. See Note 8 -- Income Taxes, in the notes to consolidated
financial statements included herein, for additional information regarding this
charge.

We are subject to ongoing examinations by certain taxation authorities of
the jurisdictions in which we operate. We regularly assess the status of these
examinations and the potential for adverse outcomes to

determine the adequacy of the provision for income and other taxes. We believe
that we have adequately provided for tax adjustments that we believe are
probable as a result of any ongoing examination.

RESTRUCTURING RESERVE

Restructuring reserves include estimated costs for severance benefits,
lease termination expenses and other costs. If the future payments of these
costs were to differ from our estimates, we may need to increase or decrease our
reserves. Specifically, for leased premises that the Company no longer occupies,
management makes certain assumptions as to when or if these premises will be
subleased and at what price. Assumptions include the number of years of any
sublease, square footage, market trends, property locations and the price per
square foot. These assumptions involve significant judgments and estimations. We
have based our assumptions on discussions with brokers and/or parties that have
shown interest in the space.

At each reporting date, we evaluate our accruals related to workforce
reduction charges, contract settlement and lease costs to ensure that these
accruals are still appropriate. In certain instances, we may determine that
these accruals are no longer required because of efficiencies in carrying out
our restructuring plan. In these cases, we reverse any related accrual to income
when it is determined that it is no longer required. Alternatively, in certain
circumstances, we may determine that certain accruals are insufficient as new
events occur or as additional information is obtained. In these cases, we would
increase the applicable existing accrual with the offset recorded against
income.

DIVESTITURES

Pursuant to SFAS 142, reporting unit level goodwill should be allocated to
individual properties that are sold, if these properties qualify as a "business"
under Emerging Issues Task Force ("EITF") Issue No. 98-3, "Determining Whether a
Nonmonetary Transaction Involves Receipt of Productive Assets or of a Business"
("EITF 98-3"). We undertook a detailed analysis of each property sold in 2002,
2003 and 2004 to determine if it qualified as a business. Considerable judgment
is required to determine if a transferred set of activities possesses all of the
criteria for a business under EITF 98-3. In addition, further judgment is
required to determine if missing elements (for a business) are major or minor
items.

The allocation of reporting unit goodwill to the individual properties is
further affected by whether a business is considered to be integrated. SFAS 142
states that if a business is not integrated, the initial goodwill that was
generated upon the acquisition of that business will be included in the
computation of the gain or loss on the disposition of that unit. Considerable
judgment is required to determine if a particular property has been integrated.
Factors such as length of time since acquisition, common management, knowledge
sharing, synergies between properties and shared services such as legal and
accounting have to be considered carefully in determining whether a property is
integrated. The Company has concluded that all the properties classified as
discontinued operations have been integrated, and as such, the goodwill has been
allocated to each property sold based on its relative fair value. The difference
between the initial goodwill generated upon acquisition and the amount allocated
using relative fair value can be material.

In order for a property to be classified as discontinued operations, it
must meet the definition of a component under SFAS 144. A component is defined
as a reportable segment, a reporting unit, a subsidiary, an asset group or any
group of assets for which there is clearly distinguishable cash flows and such
cash flows will be eliminated upon the sale. This assessment requires
significant judgment.

PENSION PLANS

Assumptions used in determining the projected benefit obligation and the
fair value of plan assets for our pension plans are determined by us in
consultation with our outside actuary. Changes in assumptions are based upon our
historical data, such as the rate of compensation increase and the long-term
rate of return on plan assets. Assumptions, including the discount rate and the
long-term rate of return on plan assets, are evaluated and updated at least
annually. Based upon our evaluation, we have changed the discount rate from
6.75% at December 31, 2002 to 6.0% at December 31, 2003, to 5.91% at December
31, 2004. We use a discount rate 1.0% lower for lump-sum distributions. The
discount rate decrease in 2003 and 2004 reflects the decrease in
60

Moody's Aa corporate bond yields, which were 6.52% at December 31, 2002, 6.01%
at December 31, 2003, and 5.66% at December 31, 2004 and the underlying stream
of expected benefit payments.

Based upon our evaluation, we have changed our expected long-term rate of
return on plan assets to 8.5% from 9.0% used in 2002 and 2003. The expected
long-term rate of return of 8.5% is based on the actual historical rates of
return of published indices consistent with the plan's targeted asset
allocation. The historical rates are then discounted to consider fluctuations in
the historical rates as well as potential changes in the investment environment.

Changes in pension expense may occur in the future due to changes in our
expected rate of return on plan assets and discount rate resulting from economic
events. A decrease of 0.25% in the discount rate would increase pension expense
approximately $0.3 million, while a decrease of 0.25% in the expected return on
asset rate would increase pension expense by approximately $0.1 million.

COMMITMENTS AND CONTINGENCIES

We are subject to legal proceedings related to employment, intellectual
property, contract disputes and other matters. In order to determine the amount
of reserves required, we assess the likelihood of any adverse judgments or
outcomes to these matters as well as potential ranges of probable losses. A
determination of the amount of reserves required for these contingencies is made
after analysis of each individual issue and discussion with our legal counsel.
The required reserves may change in the future due to new developments in each
matter or changes in approach, such as a change in settlement strategy.

SELF INSURANCE

The Company is self-insured for employee health benefits up to a certain
stop-loss limit. The Company is also self-insured in Ohio for workers
compensation up to a certain stop-loss limit. Such costs are accrued based on
known claims and an estimate of incurred, but not reported ("IBNR") claims. IBNR
claims are estimated using historical claims information and other data provided
by claims administrators. This estimation process is subjective, and to the
extent that future actual results differ from original estimates, adjustments to
recorded accruals may be necessary.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the potential loss arising from adverse changes in market
rates and prices, such as foreign currency exchange rates and interest rates. We
do not enter into financial instruments for trading or speculative purposes. As
of December 31, 2004, the Company was exposed to the following market risks:

INTEREST RATE RISK

Our cash and cash equivalents are not subject to significant interest rate
risk due to the short maturities of these instruments. As of December 31, 2004,
the carrying value of our cash and cash equivalents approximates fair value.

FAIR VALUE RISK

Our long-term debt consists of senior notes with interest at fixed rates.
Consequently, we do not have significant interest rate risk exposure related to
our long-term debt. However, the fair value of our senior notes fluctuates with
the market, as they are publicly traded.

The table below provides information about the expected cash flows
associated with our long-term debt obligations and their fair value at December
31, 2004 (in thousands):

EXPECTED MATURITY DATE
FOR THE YEARS ENDED DECEMBER 31,
----------------------------------------------------------------
2004 2005 2006 2007 2011 TOTAL FAIR VALUE
---- ---- ---- -------- -------- -------- ----------

Long-Term Debt:
10 3/8% Senior Subordinated Notes... $ -- $ -- $ -- $ -- $175,000 $175,000 $115,500
Interest rate......................... 10 3/8% 10 3/8% 10 3/8% 10 3/8% 10 3/8% 10 3/8%
11 7/8% Senior Secured Notes........ $ -- $ -- $ -- $157,500 $ -- $157,500 $157,500
Interest rate..................... 11 7/8% 11 7/8% 11 7/8% 11 7/8% 11 7/8% 11 7/8%

The Company currently does not manage the fair value risk related to its
senior notes.

FOREIGN CURRENCY EXCHANGE RATE RISK

We maintain assets and operations in the United Kingdom and in various
other countries. As a result, we may be exposed to fluctuations in currency
rates relative to these markets. At December 31, 2004, a hypothetical 10%
strengthening or weakening of the U.S. dollar relative to the currencies of
foreign countries in which we operate would have resulted in an immaterial
impact on our financial results and cash flows.

2003 MARKET RISK

At December 31, 2003, the Subordinated Notes had a carrying amount of
$171.7 million and a fair value of $116.8 million and the Secured Notes had a
carrying amount of $156.9 million and a fair value of $153.0 million. The fair
value of the notes is determined by quotations in the open market.

At December 31, 2003, the Company was exposed to interest rate risk due to
the variable rate on our notes receivable. As of December 31, 2003, a
hypothetical 10% increase in the interest rate would have resulted in an
immaterial impact on our financial results and cash flows.

PENTON MEDIA, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

FINANCIAL STATEMENTS:
Report of Independent Registered Public Accounting Firm..... 64
Consolidated Balance Sheets at December 31, 2004 and 2003... 65
Consolidated Statements of Operations for the Years Ended
December 31, 2004, 2003 and 2002.......................... 67
Consolidated Statements of Cash Flows for the Years Ended
December 31, 2004, 2003 and 2002.......................... 68
Consolidated Statements of Stockholders' Equity (Deficit)
and of Comprehensive Loss for the Years Ended December 31,
2004, 2003 and 2002....................................... 69
Notes to Consolidated Financial Statements.................. 70

FINANCIAL STATEMENT SCHEDULE:
Consolidated Financial Statement Schedule II -- Valuation
and Qualifying Accounts................................... 146

All other schedules have been omitted because the required information is
not present or is not present in amounts sufficient to require submission of the
schedule or because the information required is included in the consolidated
financial statements or notes thereto.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of Penton Media, Inc.:

In our opinion, the consolidated financial statements listed in the
accompanying index present fairly, in all material respects, the financial
position of Penton Media, Inc. (the "Company") and its subsidiaries at December
31, 2004 and 2003, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 2004, in conformity
with accounting principles generally accepted in the United States of America.
In addition, in our opinion, the financial statement schedule listed in the
accompanying index presents fairly, in all material respects, the information
set forth therein when read in conjunction with the related consolidated
financial statements. These financial statements and financial statement
schedule are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements and the financial
statement schedule based on our audits. We conducted our audits of these
statements in accordance with standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 1 -- Description of Business and Significant
Accounting Policies to the consolidated financial statements, effective January
1, 2002, the Company changed its method of accounting for goodwill and other
intangible assets to comply with the provisions of Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets."

As described in Note 2 -- Restatement to the consolidated financial
statements, the Company has restated its previously issued consolidated
financial statements.

/s/ PricewaterhouseCoopers LLP

Cleveland, Ohio
April 14, 2005

PENTON MEDIA, INC.

CONSOLIDATED BALANCE SHEETS

DECEMBER 31,
----------------------
RESTATED
---------
2004 2003
--------- ---------
(DOLLARS IN THOUSANDS)

ASSETS
Current assets:
Cash and cash equivalents................................. $ 7,661 $ 29,626
Restricted cash........................................... 125 --
Accounts receivable, net.................................. 30,571 27,170
Notes receivable.......................................... -- 571
Inventories............................................... 856 875
Deferred tax asset........................................ 276 253
Prepayments, deposits and other........................... 3,672 9,625
-------- --------
Total current assets.............................. 43,161 68,120
-------- --------
Property and equipment, net................................. 14,793 18,928
Other assets:
Goodwill.................................................. 176,162 214,411
Other intangible assets, net.............................. 6,846 10,883
Other non-current assets.................................. 6,412 9,102
-------- --------
189,420 234,396
-------- --------
$247,374 $321,444
======== ========

DECEMBER 31,
----------------------
RESTATED
---------
2004 2003
--------- ---------
(DOLLARS IN THOUSANDS)

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable.......................................... $ 6,808 $ 6,402
Accrued compensation and benefits......................... 5,880 8,458
Other accrued expenses.................................... 13,937 22,747
Unearned income, principally trade show and conference
deposits............................................... 23,274 22,535
--------- ---------
Total current liabilities......................... 49,899 60,142
--------- ---------
Long-term liabilities and deferred credits:
Senior secured notes, net of discount..................... 157,047 156,915
Senior subordinated notes, net of discount................ 172,017 171,698
Net deferred pension credits.............................. 10,568 11,040
Deferred tax liability.................................... 19,903 17,245
Other non-current liabilities............................. 7,010 9,270
--------- ---------
366,545 366,168
--------- ---------
Commitments and contingencies
Minority interest........................................... - 450
--------- ---------
Mandatorily redeemable convertible preferred stock, par
value $0.01 per share; 50,000 shares authorized, issued
and outstanding; redeemable at $1,000 per share........... 67,162 54,972
--------- ---------

Series M preferred stock, par value $0.01 per share; 150,000
shares authorized, 68,625 shares issued and outstanding at
December 31, 2004......................................... 4 -
--------- ---------

Redeemable common stock, par value $0.01 per share; 4,191
shares issued and outstanding at December 31, 2003........ - 2
--------- ---------

Stockholders' deficit:
Preferred stock, par value $0.01 per share; 1,800,000
shares authorized; none issued or outstanding.......... -- --
Common stock, par value $0.01 per share; 155,000,000
shares authorized; 33,832,004 and 33,220,877 shares
issued and outstanding at December 31, 2004 and 2003,
respectively........................................... 337 332
Capital in excess of par value............................ 215,027 226,355
Retained deficit.......................................... (450,067) (382,876)
Notes receivable from officers, less reserve of $5,848 and
$7,600 at December 31, 2004 and 2003, respectively..... -- (1,897)
Accumulated other comprehensive loss...................... (1,533) (2,204)
--------- ---------
(236,236) (160,290)
--------- ---------
$ 247,374 $ 321,444
========= =========

The accompanying notes are an integral part of these consolidated financial
statements.
66

PENTON MEDIA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------
RESTATED
-----------------------
2004 2003 2002
--------- ---------- ----------
(DOLLARS AND SHARES IN THOUSANDS,
EXCEPT PER SHARE DATA)

Revenues.................................................... $212,663 $ 205,977 $ 234,935
-------- --------- ---------
Operating expenses:
Editorial, production and circulation..................... 93,700 92,617 103,894
Selling, general and administrative (including $2.7
million of executive separation costs in 2004).......... 89,235 89,484 119,499
Impairment of assets (including goodwill)................. 39,651 43,760 223,424
Provision for loan impairment............................. 1,717 7,600 --
Restructuring and other charges........................... 6,165 5,895 15,436
Loss on sale of properties................................ 1,033 -- 888
Depreciation and amortization............................. 10,758 13,808 19,347
-------- --------- ---------
242,259 253,164 482,488
-------- --------- ---------
Operating loss.............................................. (29,596) (47,187) (247,553)
Other income (expense):
Interest expense.......................................... (38,010) (39,686) (38,193)
Interest income........................................... 278 523 768
Other, net................................................ 86 (724) 1,092
-------- --------- ---------
(37,646) (39,887) (36,333)
-------- --------- ---------
Loss from continuing operations before income taxes and
cumulative effect of accounting change.................... (67,242) (87,074) (283,886)
Provision (benefit) for income taxes........................ (51) 6,795 (30,369)
-------- --------- ---------
Loss from continuing operations before cumulative effect of
accounting change......................................... (67,191) (93,869) (253,517)
Discontinued operations:
Gain (loss) from discontinued operations (including gain
(loss) on disposal of $1.4 million and ($0.6) million in
2003 and 2002, respectively), net of taxes.............. -- 738 (3,252)
-------- --------- ---------
Loss before cumulative effect of accounting change.......... (67,191) (93,131) (256,769)
-------- --------- ---------
Cumulative effect of accounting change, net of taxes........ -- -- (39,700)
-------- --------- ---------
Net loss.................................................... (67,191) (93,131) (296,469)
Amortization of deemed dividend and accretion of preferred
stock..................................................... (12,190) (8,536) (46,435)
-------- --------- ---------
Net loss applicable to common stockholders.................. $(79,381) $(101,667) $(342,904)
======== ========= =========
Earnings per common share -- basic and diluted:
Loss from continuing operations applicable to common
stockholders............................................ $ (2.35) $ (3.07) $ (9.26)
Discontinued operations, net of taxes..................... -- 0.02 (0.10)
Cumulative effect of accounting change, net of taxes...... -- -- (1.23)
-------- --------- ---------
Net loss applicable to common stockholders................ $ (2.35) $ (3.05) $ (10.59)
======== ========= =========
Weighted-average number of shares outstanding:
Basic and diluted......................................... 33,725 33,299 32,374
======== ========= =========

The accompanying notes are an integral part of these consolidated financial
statements.
67

PENTON MEDIA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31,
----------------------------------
RESTATED
----------------------
2004 2003 2002
--------- --------- ----------
(DOLLARS IN THOUSANDS)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $(67,191) $(93,131) $(296,469)
Adjustments to reconcile net loss to net cash provided by
(used for) operating activities:
Depreciation and amortization........................ 10,758 13,808 19,347
(Gain) loss from discontinued operations............. -- (738) 3,252
Loss on sale of properties........................... 1,033 -- 888
Deferred income taxes................................ 2,635 6,848 24,257
Retirement and deferred compensation plans........... (472) (2,467) (1,378)
Provision for losses on accounts receivable.......... 1,833 2,162 8,303
Provision for loan impairment........................ 1,717 7,600 --
Non-cash restructuring charge........................ 2,261 3,112 10,901
Asset impairments and writedowns..................... 39,651 43,760 263,165
Other, net........................................... 1,675 4,067 (51)
Changes in assets and liabilities, excluding effects from
acquisitions and dispositions:
Accounts receivable.................................. (5,238) 5,665 11,212
Income tax receivable................................ (608) 53,392 (38,797)
Inventories.......................................... 18 151 326
Prepayments and deposits............................. 5,869 (5,222) 2,510
Accounts payable and accrued expenses................ (15,022) (9,010) (11,628)
Unearned income...................................... 744 (491) (12,863)
Other, net........................................... (127) (1,791) 440
-------- -------- ---------
Net cash provided by (used for) operating
activities....................................... (20,464) 27,715 (16,585)
-------- -------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures...................................... (2,317) (3,294) (3,855)
Acquisitions, including earnouts paid, net of cash
acquired................................................ -- (7) (5,527)
(Increases) decreases in note receivable.................. 65 1,553 (29)
Proceeds from sale of Jupitermedia Corporation stock...... -- -- 5,801
Net proceeds from sale of investments and properties...... 800 3,250 951
-------- -------- ---------
Net cash provided by (used for) investing
activities....................................... (1,452) 1,502 (2,659)
-------- -------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of mandatorily redeemable
convertible preferred stock............................. -- -- 46,123
Proceeds from senior secured notes........................ -- -- 156,717
Repurchase of senior subordinated notes................... -- -- (8,375)
Proceeds from senior secured credit facility.............. -- -- 6,000
Repayment of senior secured credit facility............... -- (4,500) (182,087)
Payment of note payable................................... -- (417) (2,804)
Decrease (increase) in restricted cash.................... (125) 677 (677)
Payment of financing costs................................ (10) (2,045) (9,814)
Employee stock purchase plan payments..................... -- (113) (434)
Proceeds from repayment of officers' loans................ -- 250 703
Increase (decrease) in cash overdraft balance............. 230 (383) 607
-------- -------- ---------
Net cash provided by (used for) financing
activities....................................... 95 (6,531) 5,959
-------- -------- ---------
Effect of exchange rate changes on cash..................... (144) 169 (135)
-------- -------- ---------
Net increase (decrease) in cash and cash
equivalents...................................... (21,965) 22,855 (13,420)
Cash and cash equivalents at beginning of year.............. 29,626 6,771 20,191
-------- -------- ---------
Cash and cash equivalents at end of year.................... $ 7,661 $ 29,626 $ 6,771
======== ======== =========

The accompanying notes are an integral part of these consolidated financial
statements.
68

PENTON MEDIA, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
AND OF COMPREHENSIVE LOSS

CAPITAL IN ACCUMULATED
EXCESS OF RETAINED NOTES OTHER
COMMON PAR EARNINGS RECEIVABLE COMPREHENSIVE
STOCK VALUE (DEFICIT) OFFICERS INCOME (LOSS) TOTAL
------ ---------- --------- ---------- ------------- ---------
(DOLLARS IN THOUSANDS)

Balance at December 31, 2001.......................... $319 $227,245 $ 6,724 $(10,824) $(2,934) $ 220,530
---- -------- --------- -------- ------- ---------
Comprehensive loss:
Net loss............................................. -- -- (296,469) -- -- (296,469)
Other comprehensive loss:
Reclassification adjustment for realized gain on
securities sold.................................. -- -- -- -- (808) (808)
Reclassification adjustment of net loss on cash
flow hedge discontinuation....................... -- -- -- -- 1,439 1,439
Foreign currency translation adjustment............ -- -- -- -- (674) (674)
---------
Comprehensive loss................................... (296,512)
---------
Issuance of common stock:
Deferred shares...................................... 5 2,972 -- 31 -- 3,008
Employee stock purchase plan shares.................. -- (434) -- -- -- (434)
Purchase of treasury stock........................... (1) (386) -- 387 -- --
Contingent shares.................................... 5 1,542 -- -- -- 1,547
Warrants issued with preferred stock.................. -- 4,015 -- -- -- 4,015
Amortization of deemed dividend and accretion of
preferred stock...................................... -- (4,330) -- -- -- (4,330)
Reclassification to redeemable common stock........... (11) (1,107) -- -- -- (1,118)
Notes receivable from officers........................ -- -- -- 686 -- 686
---- -------- --------- -------- ------- ---------
Balance at December 31, 2002 (as restated)............ 317 229,517 (289,745) (9,720) (2,977) (72,608)
Comprehensive loss:
Net loss............................................. -- -- (93,131) -- -- (93,131)
Other comprehensive loss:
Foreign currency translation adjustment............... -- -- -- -- 795 795
Minimum pension liability adjustment.................. -- -- -- -- (22) (22)
---------
Comprehensive loss................................... (92,358)
---------
Issuance of common stock:
Deferred shares...................................... 4 3,578 -- -- -- 3,582
Stock options........................................ -- 11 -- -- -- 11
Performance shares................................... -- 13 -- -- -- 13
Management stock purchase plan shares................ -- 779 -- -- -- 779
Employee stock purchase plan shares.................. -- (113) -- -- -- (113)
Amortization of deemed dividend and accretion of
preferred stock...................................... -- (8,535) -- -- -- (8,535)
Reclassification to redeemable common stock........... 11 1,105 -- -- -- 1,116
Reserve for loan impairment........................... -- -- -- 7,600 -- 7,600
Notes receivable from officers........................ -- -- -- 223 -- 223
---- -------- --------- -------- ------- ---------
Balance at December 31, 2003 (as restated)............ 332 226,355 (382,876) (1,897) (2,204) (160,290)
Comprehensive loss:
Net loss............................................. -- -- (67,191) -- -- (67,191)
Other comprehensive loss:
Foreign currency translation adjustment.............. -- -- -- -- 649 649
Minimum pension liability adjustment................. -- -- -- -- 22 22
---------
Comprehensive loss................................... (66,520)
---------
Issuance of common stock:
Deferred shares...................................... 5 750 -- -- -- 755
Stock options........................................ -- 11 -- -- -- 11
Performance shares................................... 3 110 -- -- -- 113
Management stock purchase plan shares................ -- 212 -- -- -- 212
Amortization of deemed dividend and accretion of
preferred stock...................................... -- (12,190) -- -- -- (12,190)
Reclassification from redeemable common stock......... -- 2 -- -- -- 2
Reserve for loan impairment........................... -- (93) -- 834 -- 741
Repayment of notes receivable from officers........... (3) (130) -- 1,063 -- 930
---- -------- --------- -------- ------- ---------
Balance at December 31, 2004.......................... $337 $215,027 $(450,067) $ -- $(1,533) $(236,236)
==== ======== ========= ======== ======= =========

The accompanying notes are an integral part of these consolidated financial
statements.
69

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 -- DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

Penton Media, Inc. ("Penton" or the "Company"), which was founded in 1892,
is a leading diversified business-to-business media company. Penton became an
independent company, incorporated in the State of Delaware, as a result of our
spin-off from Pittway Corporation in August 1998. Penton provides media products
that deliver proprietary business information to owners, operators, managers and
professionals in the industries that are served. Through these products, the
Company offers industry suppliers multiple ways to reach their customers and
prospects as part of their sales and marketing efforts. The Company publishes
specialized trade magazines, produces trade shows and conferences, and provides
a range of online media products, including Web sites, electronic newsletters
and Web-based conferences.

In 2004, the Company implemented a change in its reportable segments to
conform with the way the Company's businesses are now assessed and managed. Our
five segments are Industry, Technology, Lifestyle, Retail and International. Our
segments are structured along industry lines, which enables the Company to
promote our related groups of products to our customers. Penton's integrated
media portfolios serve the following markets: design/engineering,
government/compliance, manufacturing, mechanical systems/construction, aviation,
Internet technologies, enterprise information technology, electronics, natural
products, food/retail and leisure/hospitality.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements are prepared in accordance with
accounting principles generally accepted in the United States of America and
include the accounts of the Company and each of its subsidiaries. All
intercompany accounts and transactions have been eliminated in consolidation.

The financial statements of entities, which are controlled by Penton
through voting equity interests are consolidated. Entities that are jointly
controlled and entities that are not controlled, but those on which Penton has
the ability to exercise significant influence, are accounted for using the
equity method. Variable Interest Entities ("VIEs"), which include, but are not
limited to, special purpose entities, trusts, partnerships, certain joint
ventures and other legal structures, as defined in Financial Accounting
Standards Board ("FASB") Interpretation ("FIN") No. 46 (Revised 2003),
"Consolidation of Variable Interest Entities -- an Interpretation of Accounting
Research Bulletin No. 51" ("FIN 46(R)"), are entities in which equity investors
do not have the characteristics of a "controlling financial interest" or there
is not sufficient equity at risk for the entity to finance its activities
without additional subordinated financial support. VIEs are consolidated by
Penton when it is determined that Penton will, as the primary beneficiary,
absorb the majority of a VIE's expected losses and/or expected residual returns.
The Company presently does not hold an interest in any VIEs.

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with
generally accepted accounting principles in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the reported amounts of revenues and
expenses during the reporting period. Management reviews its estimates based
upon currently available information on an ongoing basis. Actual results could
differ from these estimates.

CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH

Cash and cash equivalents include primarily cash on hand and short-term
investments with original maturity of three months or less. At December 31,
2004, the Company had $0.1 million of restricted cash,

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

related to medical self insurance requirements. At December 31, 2004 and 2003,
the Company had cash overdrafts of $0.5 million and $0.2 million, respectively.

ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE

The Company establishes its credit policies based on an ongoing evaluation
of its customers' credit worthiness and competitive market conditions and
establishes its allowance for doubtful accounts based on an assessment of
exposures to credit losses at each balance sheet date. Trade accounts receivable
are considered past due after 30 days and delinquent after 90 days. The Company
believes its allowance for doubtful accounts is sufficient based on the credit
exposures outstanding at December 31, 2004.

INVENTORIES

Inventories, which consist primarily of paper stock, are stated at the
lower of cost or market, cost being determined on the basis of the last-in,
first-out ("LIFO") method. The difference between cost determined on a LIFO
basis and a first-in, first-out basis was insignificant at December 31, 2004 and
2003.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Penton records depreciation
using the straight-line method over the following estimated useful lives:

Computer equipment and software.......... 3-5 years
Web site development costs............... 3 years
Furniture, fixtures and equipment........ 3-10 years
Leasehold improvements................... Estimated useful lives or lease term,
whichever is shorter

Depreciation expense was $6.4 million, $8.0 million and $8.8 million for
the years ended December 31, 2004, 2003 and 2002, respectively.

Maintenance and repair expenditures are charged to appropriate expense
accounts in the period incurred; replacements, renewals and betterments are
capitalized. Upon sale or other disposition of property, the cost and
accumulated depreciation of such properties are eliminated from the accounts,
and the gains or losses thereon are reflected in operations.

GOODWILL, OTHER INTANGIBLE ASSETS AND LONG-LIVED ASSETS

The Company adopted Statement of Financial Accounting Standards ("SFAS"),
No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"), on January 1,
2002. Under SFAS 142, goodwill and certain other intangible assets having
indefinite lives, which were previously amortized over the periods benefited,
are no longer being amortized to earnings, but instead are subject to periodic
testing for impairment. The Company does not have other intangibles with
indefinite lives. Goodwill is tested for impairment on an annual basis or
between annual tests if events occur or circumstances change that could indicate
a reduction in the fair value of a reporting unit below its carrying amount. If
the carrying amount of the reporting unit's goodwill exceeds the implied fair
value of that goodwill, an impairment loss is recognized in an amount equal to
that excess.

In January 2002, the Company also adopted SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("SFAS 144"). This statement
requires long-lived assets with determinable lives to be grouped with other
assets and liabilities at the lowest level for which there are identifiable cash
flows that are largely independent of the cash flows of other groups of assets
and liabilities. An impairment exists only if the carrying amount of the
long-lived assets, or group, is not recoverable and exceeds its fair value.
Intangible

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

assets determined to have definite lives are amortized over their remaining
useful lives. Intangible and other long-lived assets with determinable lives are
reviewed for impairment whenever events and circumstances indicate that the
carrying amount may not be recoverable pursuant to SFAS 144. In reviewing for
impairment, the Company compares the undiscounted cash flows generated by such
assets to the carrying value of such assets. If the total cash flows are less
than the carrying amount, the Company compares the carrying value of such assets
to the fair value determined using the income approach, which is similar to the
discounted cash flows approach. Impairment is recognized equal to the difference
between the asset's fair value and its carrying amount.

DEFERRED FINANCING COSTS

Costs incurred in obtaining long-term financing are included in other
non-current assets, in the accompanying consolidated balance sheets, and are
amortized over the term of there related indebtedness using the effective
interest method.

REVENUE RECOGNITION

Advertising revenues from Penton's trade magazines are recognized in the
month the publications are mailed. Subscription revenues are recognized over the
subscription period, typically one year. Amounts received in advance of trade
shows and conferences are deferred and recognized on the last day of the event,
in the month the event is held. Online media revenues primarily include
advertising revenues such as banner advertising, sponsorships, e-newsletters,
e-books and web seminars. Revenue is recognized in the period the obligation is
fulfilled or delivered.

When a sale involves multiple deliverables where the deliverables are
governed by more than one authoritative standard, the Company evaluates all
deliverables to determine whether they represent separate units of accounting
based on the following criteria:

- whether the delivered item has value to the customer on a stand-alone
basis;

- whether there is objective and reliable evidence of the fair value of the
undelivered item(s); and

- if the contract includes a general right of return relative to the
delivered item, delivery or performance of the undelivered item(s) is
considered probable and is substantially in our control.

ADVERTISING AND PROMOTION EXPENSES

Advertising and promotion costs are expensed as incurred. These costs
amounted to $6.4 million, $6.7 million and $11.9 million in 2004, 2003 and 2002,
respectively.

SELF INSURANCE

The Company is self-insured for a portion of its risk on workers'
compensation and employee medical costs. The arrangements provide for stop loss
insurance to manage the Company's risk. Operations are charged with the cost of
claims reported and an estimate of claims incurred but not reported. The Company
does not provide health care benefits to retired employees.

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

INCOME TAXES

Income taxes are accounted for using the asset and liability method
pursuant to the provisions of SFAS No. 109 "Accounting for Income Taxes" ("SFAS
109"). Deferred tax assets and liabilities are recognized for the expected
future tax consequences attributable to temporary differences between the
financial statement carrying amounts and the tax basis of assets and
liabilities. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.

The Company assesses the recoverability of its deferred tax assets in
accordance with SFAS 109. Accordingly, the Company recorded a valuation
allowance for its net deferred tax assets and net operating loss carryforwards
of $106.0 million and $72.1 million as of December 31, 2004 and 2003,
respectively. See Note 8 -- Income Taxes for additional information.

RESTRUCTURING

The Company adopted SFAS No. 146, "Accounting for Costs Associated with
Exit or Disposal Activities," ("SFAS 146") effective for all exit or disposal
activities initiated after December 31, 2002. SFAS 146 requires that liabilities
for costs associated with exit or disposal activities be recognized when the
liabilities are incurred, rather than when an entity commits to an exit plan.
SFAS 146 changes the timing of liability and expense recognition related to exit
or disposal activities, but not the ultimate amount of such expenses.

TRANSLATION OF FOREIGN CURRENCIES

The functional currency of Penton's foreign operations is their local
currency. Accordingly, assets and liabilities of foreign operations are
translated to U.S. dollars at the rates of exchange at year-end; income and
expense are translated at the average rates of exchange prevailing during the
applicable year. The effects of translation are included in accumulated other
comprehensive loss in stockholders' equity (deficit). There were no significant
foreign currency transaction gains or losses in 2004, 2003 or 2002.

STOCK BASED COMPENSATION PLANS

At December 31, 2004, the Company has various stock-based compensation
arrangements (see Note 13 -- Common Stock and Common Stock Award Programs). The
Company accounts for these plans under the recognition and measurement
principles of Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees" ("APB 25"), and related interpretations. For stock option
plans, no compensation is recognized as all grants are issued at the market
value of the Company's stock.

The following table illustrates the effects on net loss and earnings per
share as if the Company had applied the fair value recognition provision of SFAS
No. 123, "Accounting for Stock-Based Compensation"

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

("SFAS 123"), as amended by SFAS No. 148, "Accounting for Stock-Based
Compensation Transition and Disclosure" ("SFAS 148"), (in thousands, except per
share data):

RESTATED
---------------------
2004 2003 2002
-------- --------- ---------

Net loss applicable to common stockholders:
As reported........................................ $(79,381) $(101,667) $(342,904)
Add: Compensation expense included in net loss
applicable to common stockholders, net of related
tax effects...................................... 750 112 2,553
Less: Total stock-based compensation expense
determined under fair value based methods for all
awards, net of related tax effects............... (3,223) (1,539) (5,914)
-------- --------- ---------
Pro forma.......................................... $(81,854) $(103,094) $(346,265)
======== ========= =========
Earnings per common share -- basic and diluted:
As reported...................................... $ (2.35) $ (3.05) $ (10.59)
Pro forma........................................ $ (2.43) $ (3.10) $ (10.70)

The weighted-average fair value of options granted in 2004 and 2003 was
$0.84 and $0.32, respectively. No options were granted in 2002. The fair value
of each option grant was estimated on the date of grant using the Black-Scholes
option-pricing model, under the following assumptions for 2004 and 2003:

2004 2003
------- -------

Risk-free interest rate..................................... 3.65% 3.62%
Dividend yields............................................. 0.0% 0.0%
Expected volatility......................................... 136.29% 104.8%
Expected life............................................... 7 years 7 years

EARNINGS PER SHARE

Basic earnings per share are based upon the weighted-average number of
common shares outstanding plus the weighted-average number of fully vested
Restricted Stock Units and deferred shares. Diluted earnings per share also
includes the effect of stock options and other common stock equivalents
outstanding during the period, if they are dilutive. In periods of a net loss
position, basic and diluted weighted average shares are the same.

NEW ACCOUNTING STANDARDS

In March 2004, the Emerging Issues Task Force ("EITF") reached a final
consensus on EITF Issue 03-6, "Participating Securities and the Two-Class Method
Under FASB Statement 128, Earnings Per Share" ("EITF 03-6"). EITF 03-6 addresses
the computation of earnings per share by companies that have issued securities
other than common stock that participate in dividends and earnings of the
issuing entity. EITF 03-6 is effective for the quarter ended June 30, 2004 and
requires the restatement of previously reported earnings per share. The adoption
of this issue did not have an effect on the Company's earnings per share as the
Company already used the two-class method for its participating securities.

In December 2004, the FASB issued SFAS 123 (revised 2004), "Share-Based
Payment" ("SFAS 123(R)"), which replaces SFAS 123 and supersedes APB 25. SFAS
123-R requires recognition of an expense when a company exchanges its equity
instruments for goods or services, based on the fair value of the share-based
compensation at the grant date. The related expense is recognized over the
period in which the share-based compensation vests. SFAS 123(R) permits either a
prospective or one of two modified

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

versions of retrospective application under which financial statements for prior
periods are adjusted on a basis consistent with the pro forma disclosures
required for those periods by the original SFAS 123. The Company is required to
adopt the provisions of SFAS 123(R) effective January 1, 2006, at which time the
Company will begin recognizing an expense for unvested share-based compensation
that has been issued or will be issued after that date. Prior periods may be
restated. In March 2005, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 107, "TOPIC 14: Share-based payment" ("SAB 107").
SAB 107 addresses the interaction between SFAS 123(R) and certain SEC rules and
regulations and provides views regarding the valuation of share-based payment
arrangements for public companies. This bulletin is effective immediately. The
Company has not yet finalized its decision concerning the transition method it
will utilize to adopt SFAS 123(R) and its impact on the financial statements.

In March 2005, the FASB Staff issued Interpretation No. 47, "Accounting for
Conditional Asset Retirement Obligations" ("FIN 47"). FIN 47 clarifies the term
conditional asset retirement obligation as used in FASB Statement No. 143,
"Accounting for Asset Retirement Obligations" as well as other issues related to
asset retirement obligations. FIN 47 is effective for fiscal years ending after
December 15, 2005. The Company is in the process of determining if this
interpretation will have any impact on its financial statements.

NOTE 2 -- RESTATEMENT

The consolidated financial statements for the years ended December 31, 2003
and 2002 and the related quarterly financial data for the years ended December
31, 2004 and 2003 included in this Annual Report on Form 10-K have been restated
to reflect adjustments to our previously reported quarterly financial data and
annual financial statements included in our Form 10-K for the year ended
December 31, 2003. In addition, previously filed quarterly financial data on
Form 10-Q for the quarters ended March 31, 2004, June 30, 2004 and September 30,
2004 have been restated in this annual report on Form 10-K. See Note
21 -- Quarterly Results (Unaudited) for the effect of the restatement on
quarterly periods of 2004 and 2003. The Company intends to file amendments to
all of our 2004 Form 10-Qs as expeditiously as possible.

The Company performed a comprehensive review of the Company's deferred tax
assets and deferred tax liabilities and determined that certain deferred tax
liabilities had been incorrectly offset against its deferred tax assets. In
addition to correcting the deferred tax issue, the restatement also includes
other accounting adjustments that were deemed in earlier periods to be
immaterial. The cumulative effect of these corrections is an increase in
stockholders' deficit at December 31, 2003 and September 30, 2004 of $15.4
million and $17.1 million (unaudited), respectively. The corrections are further
described as follows:

DEFERRED TAX ADJUSTMENTS

On March 24, 2005, the Company's management concluded that its previously
issued consolidated financial statements should be restated to increase income
tax expense and establish a corresponding deferred tax liability of $6.8 million
and $10.1 million for the years ended December 31, 2003 and 2002, respectively,
to correct the computation of our valuation allowance for deferred tax assets
over those periods.

Management reached this conclusion following a comprehensive review of the
Company's deferred tax assets and deferred tax liabilities. Under SFAS 109,
taxable temporary differences related to indefinite-lived intangible assets or
tax-deductible goodwill (for which reversal cannot be anticipated) should not
have been offset by the Company against deductible temporary differences for
other indefinite-lived intangible assets or tax-deductible goodwill when
scheduling reversals of temporary differences.

OTHER ACCOUNTING ADJUSTMENTS

Other accounting adjustments represent items previously identified but
deemed to be immaterial and recorded in the period Penton identified the error
or in a subsequent period. Adjustments in this category

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

change the timing of income and expense items that were previously recognized.
The impact of these adjustments was a decrease in net loss of $1.7 million in
2003 and an increase in net loss of $1.7 million in 2004. Of this amount, the
largest item represents an adjustment of $2.0 million between the third quarter
of 2003 and the fourth quarter of 2004. In September 2003, our minority interest
in consolidated subsidiaries balance should have been reduced when certain
assets contributed in 2002 by our minority interest partner were impaired.
Additionally, revenues were reduced by approximately $0.2 million in 2002 due to
the reclassification of sales discounts, which were originally classified in
selling, general and administrative expenses. The amortization of deemed
dividend and accretion of preferred stock decreased by $0.3 million in 2003 and
increased by $0.3 million in 2002. In June 2003, it was discovered that the
Company should not have only been accruing the dividends on the preferred stock
from the time of issuance but should have also been accreting some of the
preferred stock. Other less significant income statement adjustments were also
recorded for items related to tenant improvements in 2001, and subscription
revenues and restructuring charges in 2003.

The following adjustments affected the classification of certain balance
sheet accounts:

- In February 2004, a tentative settlement agreement was reached in the
Meckler lawsuit. The settlement amount of $4.6 million, which was paid in
its entirety by Penton's insurance company, should have been recorded as
a liability and corresponding receivable at December 31, 2003, as
required by FIN 39, "Offsetting of Amounts Related to Certain Contracts."
The 2003 restated balance sheet includes the $4.6 million in current
assets under prepayments, deposits and other and in current liabilities
under other accrued expenses.

- At December 31, 2003 certain trade show receivables were recorded at
their full contract amounts even though the contract stipulated that only
a portion of the contract was due. This correction reduced accounts
receivable and unearned income by $2.6 million.

- Other less significant balance sheet adjustments were also recorded for
items related to tenant improvements in 2001, and subscription revenues,
restructuring charges and accounts payable in 2003.

OTHER

All previously reported amounts affected by the restatement that appear
elsewhere in these notes to the consolidated financial statements have also been
restated.

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table sets forth the effects of the restatement adjustments
discussed above on the Consolidated Statement of Operations for the years ended
December 31, 2003 and 2002.

YEARS ENDED DECEMBER 31,
-----------------------------------------------------
AS PREVIOUSLY AS PREVIOUSLY
REPORTED RESTATED REPORTED RESTATED
2003 2003 2002 2002
------------- --------- ------------- ---------
(DOLLARS AND SHARES IN THOUSANDS,
EXCEPT PER SHARE DATA)

Revenues............................. $206,260 $ 205,977 $ 235,106 $ 234,935
-------- --------- --------- ---------
Editorial, production and
circulation........................ 92,617 92,617 103,894 103,894
Selling, general and
administrative..................... 89,502 89,484 119,688 119,499
Impairment of assets................. 45,797 43,760 223,424 223,424
Provision for loan impairment........ 7,600 7,600 -- --
Restructuring and other charges...... 5,707 5,895 15,436 15,436
Loss (gain) on sale of properties.... -- -- 888 888
Depreciation and amortization........ 13,790 13,808 19,329 19,347
Interest expense..................... 39,686 39,686 38,193 38,193
Interest income...................... (523) (523) (768) (768)
Other, net........................... 724 724 (1,092) (1,092)
-------- --------- --------- ---------
Loss from continuing operations
before income taxes................ (88,640) (87,074) (283,886) (283,886)
Provision (benefit) for income
taxes.............................. (53) 6,795 (40,514) (30,369)
-------- --------- --------- ---------
Loss from continuing operations
before accounting change........... (88,587) (93,869) (243,372) (253,517)
Gain (loss) from discontinued
operations......................... 738 738 (3,252) (3,252)
Cumulative effect of accounting
change, net of taxes............... -- -- (39,700) (39,700)
-------- --------- --------- ---------
Net loss............................. (87,849) (93,131) (286,324) (296,469)
Amortization of deemed dividend and
accretion of preferred stock....... (8,886) (8,536) (46,174) (46,435)
-------- --------- --------- ---------
Net loss applicable to common
stockholders....................... $(96,735) $(101,667) $(332,498) $(342,904)
======== ========= ========= =========
Earnings per common share -- basic
and diluted:
Loss from continuing operations
applicable to common............ $ (2.93) $ (3.07) $ (8.94) $ (9.26)
Discontinued operations, net of
taxes........................... 0.02 0.02 (0.10) (0.10)
Cumulative effect of accounting
change, net of taxes............ -- -- (1.23) (1.23)
-------- --------- --------- ---------
Net loss applicable to common
stockholders.................... $ (2.91) $ (3.05) $ (10.27) $ (10.59)
======== ========= ========= =========
Weighted-average number of shares
outstanding:
Basic and diluted............... 33,299 33,299 32,374 32,374
======== ========= ========= =========

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table sets forth the effects of the restatement adjustments
discussed above on the Consolidated Balance Sheet at December 31, 2003.

DECEMBER 31, 2003
-------------------------
AS PREVIOUSLY
REPORTED RESTATED
------------- ---------
(DOLLARS IN THOUSANDS)

ASSETS
Current assets:
Cash and cash equivalents................................. $ 29,626 $ 29,626
Accounts receivable, net.................................. 29,721 27,170
Notes receivable.......................................... 571 571
Inventories............................................... 875 875
Deferred tax assets....................................... -- 253
Prepayments, deposits and other........................... 4,898 9,625
--------- ---------
Total current assets................................... 65,691 68,120
--------- ---------
Property and equipment, net................................. 18,803 18,928
Goodwill.................................................... 214,411 214,411
Other intangible assets, net................................ 10,883 10,883
Other non-current assets.................................... 9,102 9,102
--------- ---------
Total Assets................................................ $ 318,890 $ 321,444
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable.......................................... $ 6,300 $ 6,402
Accrued compensation and benefits......................... 8,458 8,458
Other accrued expenses.................................... 17,916 22,747
Unearned income, principally trade show and conference
deposits............................................... 24,780 22,535
--------- ---------
Total current liabilities............................ 57,454 60,142
--------- ---------
Senior secured notes, net of discount....................... 156,915 156,915
Senior subordinated notes, net of discount.................. 171,698 171,698
Net deferred pension credits................................ 11,040 11,040
Deferred tax liability...................................... -- 17,245
Other non-current liabilities............................... 9,163 9,270
--------- ---------
Total Liabilities........................................... 406,270 426,310
--------- ---------
Commitments and contingencies
Minority interest........................................... 2,487 450
--------- ---------
Mandatorily redeemable convertible preferred stock.......... 55,060 54,972
--------- ---------
Series M preferred stock.................................... -- --
--------- ---------
Redeemable common stock..................................... 2 2
--------- ---------

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 2003
-------------------------
AS PREVIOUSLY
REPORTED RESTATED
------------- ---------
(DOLLARS IN THOUSANDS)

Stockholders' deficit:
Preferred stock, par value $0.01 per share; 1,800,000
shares authorized; none issued or outstanding.......... - -
Common stock, par value $0.01 per share; 155,000,000
shares authorized; 33,220,877 shares issued and
outstanding at 2003, respectively...................... 332 332
Capital in excess of par value............................ 226,266 226,355
Retained deficit.......................................... (367,449) (382,876)
Notes receivable from officers............................ (1,897) (1,897)
Accumulated other comprehensive loss...................... (2,181) (2,204)
--------- ---------
Total Stockholders' Deficit................................. (144,929) (160,290)
--------- ---------
Total Liabilities and Stockholders' Deficit................. $ 318,890 $ 321,444
========= =========

The following table sets forth the effects of the restatement adjustments
discussed above on the Consolidated Statements of Cash Flows for the years ended
December 31, 2003 and 2002:

YEARS ENDED DECEMBER 31,
---------------------------------------------------
AS PREVIOUSLY AS PREVIOUSLY
REPORTED RESTATED REPORTED RESTATED
2003 2003 2002 2002
------------- -------- ------------- --------
(DOLLARS IN THOUSANDS)

Cash flow from operating activities..... $27,715 $27,715 $(16,585) $(16,585)
Cash flow from investing activities..... $ 626 $ 1,502 $ (3,307) $ (2,659)
Cash flow from financing activities..... $(5,655) $(6,531) $ 6,607 $ 5,959
Cash and cash equivalents............... $29,626 $29,626 $ 6,771 $ 6,771

NOTE 3 -- DISPOSALS

In December 2004, the Company completed the sale of 70% of its interest in
PM Germany, a consolidated subsidiary, to Neue Medien Ulm Holdings GmbH ("Neue
Medien") for $0.8 million in cash. The sale did not qualify as discontinued
operations under SFAS 144; consequently, the related loss on sale of $0.9
million is included in loss (gain) on sale of properties, on the accompanying
consolidated statements of operations. At December 31, 2004, the Company retains
a 15% interest in PM Germany, which includes a call/put option. The Company
accounts for its investment using the cost method, as the Company does not
exercise significant influence.

At December 31, 2002, the net assets of our Professional Trade Shows
("PTS") group were classified as held for sale. The sale was completed in
January 2003 for approximately $3.8 million, including an earnout of $0.6
million based on reaching certain performance objectives in 2003. At December
31, 2003, these performance objectives had not been reached. The sale resulted
in a gain of approximately $1.4 million, which was recorded in the first quarter
of 2003. PTS was part of our Industry segment. The results of PTS are reported
as discontinued operations for all periods presented.

In December 2002, the Company disposed of the net assets of Penton Media
Australia ("PM Australia") for approximately $0.01 million in cash at closing
and $0.1 million received through July 2004. The sale resulted in a loss of
approximately $0.6 million. PM Australia was part of our Technology segment. The
results of PM Australia are reported as discontinued operations for all periods
through the date of sale.

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Operating results for the discontinued components, which include PM
Australia and PTS for the years ended December 31, 2003 and 2002 are as follows
(in thousands):

2003 2002
----- -------

Revenues.................................................... $ -- $ 8,719
===== =======
Operating loss before income taxes.......................... $(649) $(2,696)
Loss on sale of PM Australia................................ -- (556)
Gain on sale of PTS......................................... 1,387 --
----- -------
Income (loss) from discontinued operations.................. $ 738 $(3,252)
===== =======

In addition to the above components, the Company recognized a $0.9 million
loss included in operating expenses as loss on sale of properties related to the
sale of four properties in December 2002, including Streaming Media, Boardwatch
and ISPCON, which were part of our Technology segment, and AEC, which was part
of our Industry segment. The aggregate consideration for these properties was
approximately $0.9 million in cash.

NOTE 4 -- ACCOUNTS RECEIVABLE, NET

Trade accounts receivable are recorded at the invoiced amount and do not
bear interest. The allowance for doubtful accounts is our best estimate of the
amount of probable credit losses in our existing accounts receivable. The
Company determines the allowance based on historical write-off experience by
industry and regional economic data. The Company reviews the allowance for
doubtful accounts monthly. Past due balances over 90 days and over a specified
amount are reviewed individually for collectibility. All other balances are
charged against the allowance when the Company believes it is probable the
receivable will not be recovered. We do not have any off-balance-sheet credit
exposure related to our customers.

Accounts receivable, net consist of the following at December 31, 2004 and
2003 (in thousands):

RESTATED
--------
2004 2003
------- --------

Trade....................................................... $32,619 $30,683
Employee.................................................... 15 20
Other....................................................... 763 170
------- -------
33,397 30,873
Less: Allowance for doubtful accounts....................... (2,826) (3,703)
------- -------
Accounts receivable, net.................................... $30,571 $27,170
======= =======

Following are the changes in the allowance for doubtful accounts during the
years ended December 31, 2004, 2003 and 2002 (in thousands):

2004 2003 2002
------- ------- --------

Balance at the beginning of the year................... $ 3,703 $ 4,323 $ 10,976
Additions.............................................. 1,833 2,162 6,539
Write-offs, net of recoveries.......................... (2,710) (2,782) (13,192)
------- ------- --------
Balance at the end of the year......................... $ 2,826 $ 3,703 $ 4,323
======= ======= ========

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 5 -- PROPERTY AND EQUIPMENT, NET

Property and equipment, net, consists of the following at December 31, 2004
and 2003 (in thousands):

RESTATED
--------
2004 2003
-------- --------

Leasehold improvements...................................... $ 8,603 $ 8,703
Furniture and fixtures...................................... 10,938 21,172
Computer hardware and software.............................. 22,128 20,667
Website development costs................................... 3,784 4,292
Other....................................................... 329 426
-------- --------
45,782 55,260
Less: Accumulated depreciation.............................. (30,989) (36,332)
-------- --------
Property and Equipment, net................................. $ 14,793 $ 18,928
======== ========

Included in property and equipment are assets which were acquired under
capital leases in the amount of $0.1 million and $0.2 million at December 31,
2004 and 2003, respectively.

NOTE 6 -- GOODWILL AND OTHER INTANGIBLES

IMPAIRMENT OF GOODWILL

The Company has selected September 30 of each year to perform its annual
impairment reviews under SFAS 142, which are performed by management with the
assistance of a third party valuation firm. The evaluations utilize both an
income and market valuation approach and contain reasonable and supportable
assumptions and projections and reflect management's best estimate of projected
future cash flows. If the assumptions and estimates underlying these goodwill
impairment evaluations are not achieved, additional impairment charges may be
necessary. Impairment charges are reflected as impairment of assets in the
accompanying consolidated statements of operations.

In 2004, the Company recorded a non-cash goodwill impairment charge of
$37.8 million. This goodwill impairment charge is due primarily to lower than
previously expected future cash flows in two reporting units in our Technology
segment and by lower than previously expected future cash flows in our
International segment.

In 2003, the Company recorded a non-cash goodwill impairment charge of
$37.6 million. This goodwill impairment charge is due primarily to the reduction
of the fair value of goodwill in three of our reporting units due to lower than
previously expected future cash flows. Two of the reporting units are part of
the Company's Technology segment and one is part of our Retail segment.

During the third quarter of 2002, Penton completed its initial impairment
test under the provisions of SFAS 142 for January 1, 2002 and recorded a
non-cash goodwill impairment charge of $39.7 million to reduce the carrying
value of goodwill for two of our reporting units in the Technology segment. The
charge is reflected as a cumulative effect of an accounting change in the
accompanying consolidated statements of operations.

During the third quarter of 2002, a number of events occurred that
indicated an additional possible impairment of goodwill might exist. These
events included our determination in July of lower-than-expected revenues and
adjusted EBITDA results for the year; a letter from the New York Stock Exchange
indicating that the Company had fallen below minimum listing standards; a
significant decline in the Company's stock price; and the decision by management
to potentially sell or dispose of certain non-core assets. As a result of these
triggering events and circumstances, the Company completed an additional SFAS
142 impairment

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

review at September 30, 2002. This review resulted in a non-cash goodwill
impairment charge of approximately $203.3 million to further reduce the carrying
value of goodwill for two reporting units in our Technology segment.

Changes in the carrying amount of goodwill during 2002, 2003 and 2004, by
operating segment, are as follows (in thousands):

GOODWILL
-----------------------------------------------------------------------
INDUSTRY TECHNOLOGY LIFESTYLE RETAIL INTERNATIONAL TOTAL
-------- ---------- --------- ------- ------------- ---------

Balance at December 31,
2001....................... $37,237 $ 336,790 $84,924 $34,190 $ -- $ 493,141
Cumulative effect accounting
change..................... -- (39,700) -- -- -- (39,700)
Activity and
earnouts(1)(2)............. (959) 2,790 -- -- -- 1,831
Impairment charge............ -- (203,300) -- -- -- (203,300)
------- --------- ------- ------- ------- ---------
Balance at December 31,
2002....................... 36,278 96,580 84,924 34,190 -- 251,972
Earnouts..................... -- 7 -- -- -- 7
Impairment charge............ -- (29,202) -- (8,366) -- (37,568)
------- --------- ------- ------- ------- ---------
Balance at December 31,
2003....................... 36,278 67,385 84,924 25,824 -- 214,411
Allocation due to segment
change..................... (501) (8,424) -- -- 8,925 --
Activity(3).................. -- -- -- -- (449) (449)
Impairment charge............ -- (32,615) -- -- (5,185) (37,800)
------- --------- ------- ------- ------- ---------
Balance at December 31,
2004....................... $35,777 $ 26,346 $84,924 $25,824 $ 3,291 $ 176,162
======= ========= ======= ======= ======= =========

---------------

(1) The $959 represents goodwill related to PTS.

(2) The $2,790 consists of acquisition costs reclassified to goodwill and
adjustments for contingent consideration.

(3) Represents goodwill related to PM Germany, which was sold in December 2004.

IMPAIRMENT OF LONG-LIVED ASSETS

Due to the impairments of goodwill in 2004, 2003 and 2002, the Company also
completed annual assessments of its long-lived assets in accordance with the
provisions of SFAS 144 and recorded non-cash charges of $1.9 million, $6.2
million and $20.0 million in 2004, 2003 (as restated) and 2002, respectively.
These charges relate primarily to the write-off of trade names and subscriber
and advertiser relationships for properties in our Technology segment.

The fair value of the asset groups was determined using the income
approach, which is similar to the discounted cash flows approach. The charges
are reflected as impairment of assets in the accompanying consolidated
statements of operations.

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

At December 31, 2004 and 2003, other intangibles recorded in the
consolidated balance sheets are amortized over three to fifteen years and are
comprised of the following assets (in thousands):

GROSS NET
RANGE CARRYING ACCUMULATED BOOK
OF LIVES VALUE AMORTIZATION VALUE
-------- -------- ------------ ------

Trade names................................... 3-15 $ 5,053 $ (4,063) $ 990
Mailing/exhibitor lists....................... 7-15 9,256 (5,478) 3,778
Advertiser relationships...................... 7 5,624 (4,242) 1,382
Subscriber relationships...................... 6 1,929 (1,361) 568
Other......................................... 3 151 (23) 128
------- -------- ------
Balance at December 31, 2004.................. $22,013 $(15,167) $6,846
======= ======== ======

GROSS NET
RANGE CARRYING ACCUMULATED BOOK
OF LIVES VALUE AMORTIZATION VALUE
-------- -------- ------------ -------

Trade names.................................. 3-15 $ 5,255 $ (3,779) $ 1,476
Mailing/exhibitor lists...................... 7-15 9,341 (4,925) 4,416
Advertiser relationships..................... 7 7,200 (3,346) 3,854
Subscriber relationships..................... 6 2,100 (973) 1,127
Non-compete agreements....................... 3 176 (166) 10
------- -------- -------
Balance at December 31, 2003................. $24,072 $(13,189) $10,883
======= ======== =======

Total amortization expense for 2004, 2003 and 2002 were $2.3 million, $3.9
million and $8.7 million, respectively. Amortization expense estimated for these
intangibles for 2005 through 2009 are as follows (in thousands):

YEAR ENDED
DECEMBER 31, AMOUNT
------------ ------

2005................................................... $1,778
2006................................................... $1,587
2007................................................... $ 938
2008................................................... $ 402
2009................................................... $ 401

NOTE 7 -- DEBT

LOAN AND SECURITY AGREEMENT

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

complete acquisitions of up to $5.0 million per year. Included in the loan
agreement are two stand-by letters of credit of $0.1 million and $0.2 million,
respectively, required by two of the Company's facility leases. The amounts of
the letters of credit reduce the availability under the credit facility. As of
December 31, 2004, no amounts were drawn under the stand-by letters of credit.
Costs representing bank fees and other professional fees of $1.9 million are
being amortized over the life of the loan agreement. At December 31, 2004, $39.7
million was available under the loan agreement. There were no amounts
outstanding, see Note 23 -- Subsequent Events.

The loan and security agreement contains several provisions, which could
have a significant impact as to the classification as well as the acceleration
of payments for borrowings outstanding under the agreement, including the
following: (i) the obligation of the lender to provide any advances under the
loan agreement is subject to no material adverse change events; (ii) reserves
may be established against the borrowing base for sums that the Company is
required to pay, such as taxes and assessments and other types of required
payments, and has failed to pay; (iii) in the event of a default under the loan
agreement, the lender has the right to direct all cash that is deposited in the
Company's lock boxes to be sent to the lender to pay down outstanding
borrowings; (iv) the loan agreement establishes cross-defaults to the Company's
other indebtedness (such as the 11 7/8% senior secured notes and 10 3/8% senior
subordinated notes) such that a default under the loan agreement could cause a
default under the note agreements and vice versa; however, default-triggering
thresholds are different in the loan agreement and the notes; (v) if the Company
is in default of any material agreement to which it is a party and the
counter-party to that agreement has the right to terminate such agreement as a
result of the default, this constitutes an event of default under the loan
agreement. Under the loan agreement, the lenders reserve the right to deem the
notes in default, and in those limited circumstances, could accelerate payment
of the outstanding loan balances should the Company undergo a material adverse
event. Even though the criteria defining a material adverse event are
subjective, the Company does not believe that the exercise of the lenders' right
is probable nor does it foresee any material adverse events in 2005. In
addition, the Company believes that the 11 7/8% senior secured and 10 3/8%
senior subordinated note agreements are long-term in nature. Accordingly, the
Company continues to classify its notes as long term. See Note 23 -- Subsequent
Events.

SENIOR SECURED NOTES

In March 2002, Penton issued $157.5 million of 11 7/8% senior secured notes
(the "Secured Notes") due in 2007. Interest is payable on the Secured Notes
semiannually on April 1 and October 1. The Secured Notes are fully and
unconditionally, jointly and severally guaranteed on a senior basis by all of
the assets of Penton's domestic subsidiaries, which are 100% owned by the
Company, and also by the stock of certain subsidiaries. Condensed consolidating
financial information is presented in Note 22 -- Guarantor and Non-guarantor
Subsidiaries. Penton may redeem the Secured Notes, in whole or in part, during
the periods October 1, 2005 through October 1, 2006 and thereafter at redemption
prices of 105.9% and 100.0% of the principal amount, respectively, together with
accrued and unpaid interest. In addition, at any time prior to October 1, 2005,
up to 35% of the aggregate principal amount of the Secured Notes may be redeemed
at Penton's option, within 90 days of certain public equity offerings of its
common stock, at a redemption price equal to 111.875% of the principal amount,
together with accrued and unpaid interest.

The Secured Notes were offered at a discount of $0.8 million, which is
being amortized using the interest method, over the term of the Secured Notes.
In 2004, 2003 and 2002, respectively, the Company recorded $0.3 million, $0.2
million and $0.1 million of amortization expense related to the discount. Costs
representing underwriting fees and other professional fees of $6.6 million are
being amortized, using the effective interest method, over the term of the
Secured Notes. Net proceeds of $150.1 million were used to pay down $83.6
million of Penton's term loan A facility and $49.0 million of its term loan B
facility under the Company's previous loan agreement and to repurchase $10.0
million of the Company's 10 3/8% senior subordinated notes for $8.3 million,
excluding interest. The remaining net proceeds of $9.2 million were used
84

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

for general corporate purposes. The Secured Notes rank senior in right to all of
Penton's subordinated indebtedness, including the 10 3/8% senior subordinated
notes due in 2011. The indenture governing the Secured Notes contains covenants
that, among other things, limit the Company's ability to pay dividends, incur
additional debt, sell assets and enter into mergers or consolidations. The
Company's ability to obtain dividends from its subsidiaries is only restricted
if Penton is in default under its debt arrangement or if the Company has
exceeded its limitation of additional indebtedness, as specified in the
indenture.

SENIOR SUBORDINATED NOTES

In June 2001, Penton issued $185.0 million of 10 3/8% senior subordinated
notes (the "Subordinated Notes") due in 2011. Interest is payable on the
Subordinated Notes semiannually on June 15 and December 15. The Subordinated
Notes are fully and unconditionally, jointly and severally guaranteed, on a
senior subordinated basis, by the assets of Penton's domestic subsidiaries,
which are 100% owned by the Company. Condensed consolidating financial
information is presented in Note 22 -- Guarantor and Non-guarantor Subsidiaries.
The notes may be redeemed in whole or in part on or after June 15, 2006. The
Subordinated Notes were offered at a discount of $4.2 million, which is being
amortized using the interest method, over the term of the Subordinated Notes. In
2004, 2003 and 2002, respectively, the Company recorded $1.0 million, $0.6
million and $0.4 million of amortization expense related to the discount. Costs
representing underwriting fees and other professional fees of $1.7 million are
being amortized over the term of the Subordinated Notes. Net proceeds of $180.2
million were used to pay down $136.0 million under our previous revolving credit
facility, $12.8 million under our previous term loan A and $7.2 million under
our previous term loan B. The remaining net proceeds of $24.2 million were used
for general corporate purposes. The Subordinated Notes are unsecured senior
subordinated obligations of the Company, subordinated in right of payment to all
existing and future senior indebtedness of the Company, including the credit
facility. The indenture governing the Subordinated Notes contains covenants
that, among other things, restrict the Company's ability to borrow money, pay
dividends on or repurchase capital stock, make investments, sell assets and
enter into mergers or consolidations. The Company's ability to obtain dividends
from its subsidiaries is only restricted if Penton is in default under its debt
arrangement or if the Company has exceeded its limitation of additional
indebtedness, as specified in such agreement.

In March 2002, the Company repurchased $10.0 million of its Subordinated
Notes with $8.7 million of the proceeds from the Secured Notes offering,
completed in March 2002, resulting in a gain of $1.4 million, which is
classified in other net in the consolidated statements of operations.

CASH PAID FOR INTEREST

Cash paid for interest for 2004, 2003 and 2002 was $36.9 million, $36.9
million and $29.9 million, respectively.

Included in interest expense in the consolidated statements of operations
for the years ended December 31, 2003 and 2002 are write-offs of unamortized
financing fees of approximately $1.9 million and $0.7 million, respectively,
related to refinancing of debt. In addition, 2003 interest expense includes a
net deferred loss on cash flow hedges of $1.4 million and net losses on interest
swaps that did not qualify as hedges under SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS 133") of $0.1 million.

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 8 -- INCOME TAXES

The source of loss from continuing operations before income taxes and
cumulative effect of accounting change for the years ended December 31, 2004,
2003 and 2002, consists of (in thousands):

RESTATED
--------------------
2004 2003 2002
-------- -------- ---------

U.S. domestic....................................... $(69,993) $(80,967) $(258,963)
Foreign............................................. 2,751 (6,107) (24,923)
-------- -------- ---------
$(67,242) $(87,074) $(283,886)
======== ======== =========

The provision (benefit) for income in the consolidated statements of
operations for the years ended December 31, 2004, 2003 and 2002 are as follows
(in thousands):

RESTATED
-------------------
2004 2003 2002
-------- -------- --------

Current:
Federal............................................ $ -- $ -- $(52,718)
State and local.................................... (3,367) 100 (1,554)
Foreign............................................ 681 (153) (354)
-------- -------- --------
(2,686) (53) (54,626)
-------- -------- --------
Deferred:
Federal............................................ 2,292 5,958 17,981
State and local.................................... 343 890 6,276
Foreign............................................ -- -- --
-------- -------- --------
2,635 6,848 24,257
-------- -------- --------
$ (51) $ 6,795 $(30,369)
======== ======== ========

There is no net income tax provision (benefit) recorded for discontinued
operations, cumulative effect of accounting change, or other comprehensive
income for 2004, 2003 and 2002.

The difference between the actual income tax provision (benefit) on
continuing operations before income taxes and cumulative effect of accounting
change and the tax provision (benefit) computed by applying the

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

statutory federal income tax rate of 35% to income before income taxes and
cumulative effect of accounting change for the years ended December 31, 2004,
2003 and 2002 are as follows (in thousands):

RESTATED
-------------------
2004 2003 2002
-------- -------- --------

Income tax benefit at statutory rate................. $(23,534) $(30,475) $(99,360)
Tax effect of:
Non-deductible goodwill impairment................. 5,807 10,661 58,759
Loss on basis difference from dispositions......... (937) -- (23,878)
State income tax benefit, net of federal
provision....................................... (4,653) 317 (9,136)
Non-deductible goodwill............................ 151 432 1,650
Foreign tax items.................................. (60) (560) (1,204)
Non-deductible expenses............................ 710 245 305
Other items, net................................... (365) (244) (215)
Basis difference on certain international
subsidiaries.................................... (11,048) -- --
Valuation allowance................................ 33,878 26,419 42,710
-------- -------- --------
Actual income tax provision (benefit).............. $ (51) $ 6,795 $(30,369)
======== ======== ========
Effective income tax rate............................ 0.1% (7.8)% 10.7%
======== ======== ========

The components of deferred tax assets and liabilities at December 31, 2004,
2003 and 2002 are as follows (in thousands):

RESTATED
-------------------
2004 2003 2002
--------- -------- --------

Deferred tax assets:
Deferred pension credits.......................... $ 4,255 $ 4,580 $ 5,643
Accrued vacation.................................. 292 530 968
Bad debts......................................... 787 898 1,053
Reserves recorded for financial reporting
purposes....................................... 372 847 1,159
Loan impairment................................... 2,317 3,060 --
Indefinite life intangibles....................... 14,828 8,841 11,113
Definite life intangibles......................... 1,829 1,209 --
Restructuring charges............................. 3,817 4,288 5,660
Net operating loss carryforwards.................. 64,233 48,218 21,527
Foreign tax credits............................... 1,125 1,125 249
Deferred compensation............................. 1,697 378 2,194
Other............................................. 223 155 36
Basis difference on certain international
subsidiaries................................... 11,048 -- --
--------- -------- --------
Total deferred tax assets...................... 106,823 74,129 49,602
--------- -------- --------

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

RESTATED
-------------------
2004 2003 2002
--------- -------- --------

Deferred tax liabilities:
Depreciation...................................... (816) (2,000) (2,113)
Indefinite life intangibles....................... (19,627) (16,992) (10,144)
Definite life intangibles......................... -- -- (1,123)
--------- -------- --------
Total deferred tax liabilities................. (20,443) (18,992) (13,380)
--------- -------- --------
Net deferred tax asset.............................. 86,380 55,137 36,222
--------- -------- --------
Valuation allowance............................... (106,007) (72,129) (46,366)
--------- -------- --------
Total net deferred tax liability.................... $ (19,627) $(16,992) $(10,144)
========= ======== ========

SFAS 109 required that deferred tax assets be reduced by a valuation
allowance, if based on available evidence, it is more likely than not that the
deferred tax assets will not be realized. Under generally accepted accounting
principles, available evidence includes the reversal of existing taxable
temporary differences. Upon the adoption of SFAS 142 on January 1, 2002 (See
Note 1 -- Description of Business and Significant Accounting Policies), the
Company can no longer amortize tax deductible goodwill and indefinite-lived
intangible assets for financial reporting purposes. Therefore, the deferred tax
liability related to the taxable temporary differences caused by different
amortization periods for identified intangibles will not reverse unless the
underlying assets are sold or an impairment is recorded. The Company had net
deferred tax liabilities related to indefinite-lived intangibles for 2004, 2003
and 2002 of $19.6 million, $17.0 million and $10.1 million respectively. As the
Company has cumulative losses in recent years, it recorded valuation allowances
to offset their respective annual income tax benefits from operations as well as
the amount by which their deferred tax assets exceeded their deferred tax
liabilities, excluding the deferred tax liability related to indefinite-lived
intangibles. In 2003 and 2002, the Company established a valuation allowance
related to discontinued operations and cumulative effect of accounting change of
$3.0 million and $3.7 million, respectively.

At December 31, 2004, the Company had federal operating loss carryforwards
of $142.7 million for tax purposes, which will begin expiring from 2022 to 2024.
A full valuation has been provided on the federal operating loss carryforwards.

At December 31, 2004, the Company had state operating loss carryforwards of
$373.6 million for tax purposes, which will begin expiring from 2006 to 2024. A
full valuation has been provided on the state operating loss carryforwards.

At December 31, 2004, the Company had available foreign tax credit
carryforwards of approximately $1.1 million, which will begin expiring from 2007
to 2008. A full valuation allowance has been provided on the foreign tax credit
carryforwards.

During 2004, the Company paid net cash tax payments of $0.7 million ($0.2
million of tax refunds for prior years less cash paid for taxes in 2004 of $0.9
million). For 2003 and 2002, net cash tax refunds were $52.0 million and $17.6
million, respectively.

Prior to 2004, the Company did not provide for federal income taxes or tax
benefits on the undistributed earnings or losses of its international
subsidiaries because earnings were considered indefinitely reinvested, in the
opinion of management. In 2004 the Company has provided federal income tax
benefits, subject to valuation allowance, on temporary differences on certain
international subsidiaries.

The American Job Creation Act of 2004 was signed into law in October of
2004. Due to the Company's U.S. tax loss position, the law should not have a
material impact on our income taxes.

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 9 -- EMPLOYEE BENEFIT PLANS

Penton maintains three retirement plans: a defined benefit plan; a
supplemental executive retirement plan ("SERP"); and a defined contribution
plan.

DEFINED BENEFIT PLAN AND SERP

Penton's defined benefit pension plan covers all employees who were Plan
participants at December 31, 2003. Retirement benefits for employees in foreign
countries generally are provided by national statutory programs. Benefits for
domestic employees are based on years of service and annual compensation as
defined by the plan.

In November 2003, the Company's defined benefit plan was amended to freeze
the accrual of any benefits under the plan after December 31, 2003. As a result,
the Company recorded a curtailment gain of $2.2 million for the year ended
December 31, 2003. This amount is included in selling, general and
administrative expenses in the consolidated statements of operations. The
benefit accruals in the frozen plan are payable to participating employees when
they qualify for retirement.

Restructuring efforts in 2002 triggered a need for a revised valuation of
our defined benefit pension plan. Pursuant to this revised valuation, the
Company recorded a curtailment gain of $0.9 million and a settlement gain of
$1.1 million in 2002. These amounts have been recorded as part of selling,
general and administrative expenses on the consolidated statements of
operations. Due to this revised valuation, the Company also updated its
assumptions resulting in additional pension expense of $0.7 million for 2002.

In November 2003, Penton's SERP was amended to freeze benefits effective on
January 1, 2004. As a result, the Company recorded a curtailment charge of $0.3
million for the year ended December 31, 2003. This amount is included in
selling, general and administrative expenses in the consolidated statements of
operations. In place of the SERP, the Company will accrue throughout the year an
amount equal to between 3% and 6% of the participants eligible salary plus an
investment return equal to the Moody's AA Corporate Bond note. The accrued
percentage is based on each executive's age and years of service.

As a result of the elimination of four plan participants, the SERP was
revalued in 2002. Pursuant to this revised valuation, the Company recorded a
curtailment charge of $0.1 million and an immaterial settlement charge, which
were recorded as part of selling, general and administrative expenses on the
consolidated statements of operations. The SERP plan is an unfunded,
non-qualified plan and hence has no plan assets.

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table sets forth the change in benefit obligation, change in
plan assets, funded status of the plans, amounts recognized in the consolidated
balance sheets, and assumptions for the defined benefit plan and SERP at
December 31, 2004 and 2003 (in thousands, expect for percentages):

DEFINED BENEFIT PLAN SERP
--------------------- -------------
2004 2003 2004 2003
--------- --------- ----- -----

CHANGE IN BENEFIT OBLIGATION:
Benefit obligation, January 1......................... $ 43,646 $ 40,098 $ 869 $ 771
Service cost....................................... -- 1,870 -- 73
Interest cost...................................... 2,571 2,640 41 52
Benefits paid...................................... (3,653) (2,733) (414) --
Actuarial loss..................................... 2,080 4,480 (47) 44
Curtailments....................................... -- (2,709) -- (71)
-------- -------- ----- -----
Benefit obligation, December 31....................... 44,644 43,646 449 869
-------- -------- ----- -----
CHANGE IN PLAN ASSETS:
Fair value of plan assets, January 1.................. 33,990 29,178 -- --
Actual return on plan assets....................... 3,560 7,545 -- --
Contribution....................................... 1,543 -- 414 --
Benefits paid...................................... (3,653) (2,733) (414) --
-------- -------- ----- -----
Fair value of plan assets, December 31................ 35,440 33,990 -- --
-------- -------- ----- -----
FUNDED STATUS OF THE PLAN:
Projected benefit obligation in excess of the fair
value of assets, December 31....................... (9,204) (9,656) (449) (869)
Unrecognized actuarial gain........................... (1,364) (2,927) (11) 22
-------- -------- ----- -----
Net deferred pension credits.......................... $(10,568) $(12,583) $(460) $(847)
======== ======== ===== =====
AMOUNTS RECOGNIZED IN THE CONSOLIDATED BALANCE SHEETS:
Accrued benefit cost.................................. $(10,568) $(12,583) $(460) $(847)
Additional minimum liability.......................... -- -- -- (22)
Accumulated other comprehensive income................ -- -- -- 22
-------- -------- ----- -----
Net amount recognized, December 31.................... $(10,568) $(12,583) $(460) $(847)
======== ======== ===== =====
WEIGHTED-AVERAGE ASSUMPTIONS AS OF DECEMBER 31:
Discount rates:
Pre-retirement..................................... 5.91% 6.00% 5.91% 6.00%
Post-retirement.................................... 4.91% 5.00% 4.91% 5.00%
Expected return on plan assets........................ 8.50% 9.00% n/a n/a
Weighted-average salary increase rate................. n/a 4.00% n/a 4.00%

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table summarizes the components of our defined benefit
pension expense and assumptions for the years ended December 31, 2004, 2003 and
2002 (in thousands, except for percentages):

DEFINED BENEFIT PLAN
----------------------------------
2004 2003 2002
------- ---------- ----------

NET PERIODIC PENSION COST (BENEFIT):
Service cost......................... $ -- $ 1,870 $ 2,268
Interest cost........................ 2,571 2,640 2,911
Expected return on assets............ (2,951) (3,002) (3,452)
Amortization of:
Prior service cost................. -- 69 95
Actuarial gain..................... -- (550) (1,133)
------- ---------- ----------
Net pension expense (income) before
curtailment and settlement gains..... (380) 1,027 689
------- ---------- ----------
Curtailment gain..................... -- (2,206) (946)
Settlement gain...................... (92) -- (1,121)
------- ---------- ----------
Total net periodic pension cost
(benefit)....................... $ (472) $ (1,179) $ (1,378)
======= ========== ==========
WEIGHTED-AVERAGE ASSUMPTIONS USED TO
DETERMINE NET PERIODIC PENSION COST:
Discount rates:
Pre-retirement..................... 6.00% 6.75/6.00%** 7.25/6.75%*
Post-retirement.................... 5.00% 5.75/5.00%** 6.25/5.75%*
Expected return on plan assets....... 8.50% 9.00% 9.00%
Weighted-average salary increase
rate............................... n/a 4.00% 4.00%

---------------

* Pursuant to the revised valuation in 2002, as discussed above, a discount
rate of 7.25% and 6.25% was used from January 1, 2002 to August 31, 2002 (the
valuation date), and a rate of 6.75% and 5.75% was used for the remainder of
the year.

** A discount rate of 6.75% and 5.75% was used from January 1, 2003 to November
15, 2003, and a rate of 6.00% and 5.00% was used for the remainder of the
year.

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table summarizes the components of SERP pension expense and
assumptions for the years ended December 31, 2004, 2003 and 2002 (in thousands,
except for percentages):

SERP
-----------------------------------
2004 2003 2002
----- ----------- -----------

NET PERIODIC PENSION COST:
Service cost....................... $ -- $ 73 $ 82
Interest cost...................... 41 52 63
Amortization of:
Prior service cost............... -- 26 37
Actuarial loss................... 1 -- --
----- ----------- -----------
Net pension expense................... 42 151 182
----- ----------- -----------
Curtailment loss................... -- 312 110
Settlement loss.................... (15) -- 17
----- ----------- -----------
Total net periodic pension
cost.......................... $ 27 $ 463 $ 309
===== =========== ===========
WEIGHTED-AVERAGE ASSUMPTIONS USED TO
DETERMINE NET PERIODIC PENSION COST:
Discount rates:
Pre-retirement................... 6.00% 6.75/6.00%** 7.25/6.75%*
Post-retirement.................. 5.00% 5.75/5.00%** 6.25/5.75%*
Expected return on plan assets..... n/a n/a n/a
Weighted-average salary increase
rate............................. n/a 4.00% 4.00%

---------------

** A discount rate of 6.75% and 5.75% was used from January 1, 2003 to November
15, 2003, and a rate of 6.00% and 5.00% was used for the remainder of the
year.

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table summarizes the balance sheet change in accrued cost and
additional minimum liability for our defined benefit plan and SERP at December
31, 2004 and 2003 (in thousands):

DEFINED BENEFIT PLAN SERP
--------------------- -------------
2004 2003 2004 2003
--------- --------- ----- -----

CHANGE IN ACCRUED COST:
Accrued pension cost, January 1....... $(12,583) $(13,762) $(847) $(384)
Cost recognized....................... 380 (1,027) (42) (151)
Employer contributions................ 1,543 -- 414 --
Adjustment for settlements............ 92 -- 15 --
Adjustment for curtailments........... -- 2,206 -- (312)
-------- -------- ----- -----
Accrued pension cost, December 31..... $(10,568) $(12,583) $(460) $(847)
======== ======== ===== =====
ADDITIONAL MINIMUM LIABILITY:
Accumulated benefit obligation,
December 31........................ $(44,644) $(43,646) $(449) $(869)
Fair value of assets.................. 35,440 33,990 449 --
Unfunded accumulated benefit
obligation......................... 9,204 9,656 -- 869
Additional minimum liability.......... -- -- -- 22
-------- -------- ----- -----
Reduction in stockholder deficit,
December 31........................ $ -- $ -- $ -- $ 22
======== ======== ===== =====

The Company estimates that benefit payments under our defined benefit plan
and SERP for future years will be as follows (in thousands):

DEFINED BENEFIT PLAN SERP
-------------------- ----

ESTIMATED FUTURE PAYMENTS:
2005...................................................... $1,919 $15
2006...................................................... 2,187 15
2007...................................................... 2,688 29
2008...................................................... 2,194 16
2009...................................................... 2,047 15
2010-2014................................................. 12,046 176

The Company does not expect to make any contributions to the defined
benefit pension plan in 2005 and only an immaterial amount to the SERP plan.

INVESTMENT POLICY

The Investment Committee of the Board of Directors has developed and
implemented an investment policy to effectively manage the defined benefit plan
assets in the context of meeting the plan's obligations. The portfolios
investment objectives are to maximize plan assets within designated risk and
return profiles; optimize returns of invested assets consistent with prudent
risk-taking; provide returns that exceed relevant market averages and benchmarks
of comparable size portfolios; and produce returns that are consistent with
those of asset classes indices weighted by policy target weights. All assets are
managed externally according to guidelines the Company has established
individually with the investment manager. Fixed income securities are required
to carry a AA or better rating, those not carrying these ratings require
approval of the Investment

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Committee. The Investment Committee periodically reviews the overall plan
performance, the risk level, asset allocation and the investment manager's
performance to evaluate the effectiveness of the program.

The current asset allocation consists primarily of listed stocks and
corporate bonds. Investment policy decisions and asset allocation strategies are
refined based on information, analysis and recommendations as provided by the
investment manager. The following table indicates Penton's 2005 targeted asset
allocation and breaks down its 2004 and 2003 asset allocation:

PERCENTAGE OF
PLAN ASSETS AT
TARGET DECEMBER 31,
ALLOCATION ---------------
2005 2004 2003
---------- ------ ------

ASSET CATEGORY
Equity securities......................................... 70.0% 74.7% 72.9%
Debt and fixed income securities.......................... 29.0 25.3 27.0
Other..................................................... 1.0 -- 0.1
----- ----- -----
Total..................................................... 100.0% 100.0% 100.0%
===== ===== =====

For 2004, the Company assumed a long-term rate of return of 8.5%. In
developing this rate, the Company evaluated the actual historical rates of
return for the plan since Penton was spun-off in 1998 as well as input from our
pension fund consultant and our actuarial consultant on asset class return and
long-term inflation rate expectations.

RETIREMENT AND SAVINGS PLAN

The Penton Media, Inc. Retirement and Savings Plan (the "RSP") is a 401(k)
contribution plan that covers substantially all domestic employees of the
Company. The RSP permits participants to defer up to a maximum of 25% of their
compensation. Beginning in 2004, the Company made monthly contributions to each
employee's retirement account equal to between 3% and 6% of the employee's
annual salary, based on age and years of service. Beginning in 2005, the Company
will make quarterly contributions to eligible employees who are employed on the
last day of the quarter equal to 3% of the employee's annual salary. The
Company's contributions become fully vested once the employee completes five
years of service. In 2004 the Company made total contributions of $1.7 million
to the RSP and expects to make contributions of approximately $1.6 million in
2005.

NOTE 10 -- COMMITMENTS AND CONTINGENCIES

LEASES

Penton leases certain office space and equipment under non-cancelable
operating leases. Some of the leases contain renewal options and/or rent
escalations, which are charged to expense on a straightlined basis. Certain
equipment leases include options to purchase during or at the end of the lease
term. Following is a

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

schedule of approximate annual future minimum rental payments required under
operating leases that have non-cancelable lease terms in excess of one year as
of December 31, 2004 (in thousands):

YEARS ENDING DECEMBER 31,
-------------------------

2005........................................................ $ 7,504
2006........................................................ 5,433
2007........................................................ 4,884
2008........................................................ 4,649
2009........................................................ 4,335
Thereafter.................................................. 4,148
-------
$30,953
=======

The Company does not have any significant capital leases.

For the years ended December 31, 2004, 2003 and 2002, the total rent
expense (including taxes, insurance and maintenance when included in the rent
payment) incurred by Penton was approximately $4.6 million, $5.1 million and
$6.7 million, respectively. In addition, rent expense classified as part of
restructuring and other charges in the consolidated statements of operations
were $2.2 million, $3.3 million and $2.3 million for the years ended 2004, 2003
and 2002, respectively.

LEGAL PROCEEDINGS

On November 3, 2003, a lawsuit was brought against the Company for an
unspecified amount by Allison & Associates, Inc. under the Telephone Consumer
Protection Act ("TCPA"), which prohibits against the transmission of unsolicited
fax advertisements. The lawsuit is a punitive class action that seeks to
represent a class of plaintiffs comprised of all individuals and entities who,
during the period November 3, 1999, through the present, received one or more
facsimiles sent by or on behalf of the Company advertising the commercial
availability of its products or services and who did not give their prior
expressed permission or invitation to receive such faxes. The statutory penalty
for a single violation of the TCPA is $500, although the penalty can increase to
$1,500 per violation if the Company is found to have willfully or knowingly
violated these laws. The case is currently pending in the Richmond County,
Georgia, Superior Court, and the Company is complying with the Court's order for
discovery. A hearing on class certification is currently scheduled for May 3,
2005. The Company is uncertain as to the outcome of this case.

In connection with the acquisition of Mecklermedia Corporation in 1998, a
lawsuit was brought against the Company on December 1, 1998 by Ariff Alidina
(the "Plaintiff"), a former stockholder of Mecklermedia Corporation, in the
United States Federal District Court in the Southern District of New York for an
unspecified amount, as well as other relief. The Plaintiff had claimed that the
Company violated the federal securities laws by selling Mr. Meckler, a
beneficial owner of approximately 26% of the shares of Mecklermedia, an 80.1%
interest in Jupitermedia Corporation for what the Plaintiff alleges was a below-
market price, thereby giving to Mr. Meckler more consideration for his common
stock in Mecklermedia Corporation than was paid to other stockholders of
Mecklermedia Corporation. On May 16, 2001, the United States District Court for
the Southern District of New York granted the Plaintiff's motion for
certification of a class consisting of all former stockholders of Mecklermedia
who tendered their shares in the tender offer. By letter dated November 3, 2003,
plaintiffs' counsel informed the Court that a settlement had been reached in the
case. In July 2004, the Federal District Court approved the settlement between
the former stockholders of Mecklermedia and the Company for $4.6 million. The
class settlement was paid entirely from insurance proceeds in August 2004. As
part of the settlement, the Company wrote off $0.8 million in related legal
fees, which are not expected to be reimbursed from the insurance carrier. This
amount was classified with restructuring and other expenses in the consolidated
statements of operations.

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

TAX MATTERS

CURRENT LIQUIDITY

The Company believes that its existing sources of liquidity, along with
revenues expected to be generated from operations, will be sufficient to fund
operations, anticipated capital expenditures, working capital, and other
financing requirements. However, if the Company continues to incur operating
losses and negative cash flows in the future, Penton may need to further reduce
its operating costs or obtain alternate sources of financing, or both, to remain
viable. The Company's ability to meet cash operating requirements depends upon
its future performance, which is subject to general economic conditions and to
financial, competitive, business, and other factors. The Company's ability to
return to sustained profitability at acceptable levels will depend on a number
of risk factors, many of which are largely beyond the Company's control. If the
Company is unable to meet its debt obligations or fund its other liquidity
needs, particularly if the revenue environment deteriorates, Penton may be
required to raise additional capital through additional financing arrangements
or the issuance of private or public debt or equity securities. Such additional
financing may not be available at acceptable terms. In addition, the terms of
our convertible preferred stock and warrants issued, including the conversion
price, dividend and liquidation adjustment provisions could result in
substantial dilution to common stockholders. The redemption price premiums and
board representation rights could negatively impact our ability to access the
equity markets in the future.

OTHER COMMITMENTS

At December 31, 2004, Penton had in place a print agreement with R.R.
Donnelley & Sons Company ("R.R. Donnelley"), which entitles R.R. Donnelley to
the exclusive right to print and produce certain magazines for a period of seven
years beginning December 1, 1999 through November 30, 2006. Under the agreement,
which is non-cancelable, Penton is obligated to pay certain minimum amounts.
These minimum amounts will be adjusted annually based on changes in the Consumer
Price Index.

The following schedule sets forth the minimum liability under the agreement
with R.R. Donnelley as of December 31, 2004 (in thousands):

YEARS ENDING
DECEMBER 31,
------------

2005................................................... $ 7,167
2006................................................... 6,823
-------
$13,990
=======

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Effective January 1, 2005, Penton and R.R. Donnelley replaced the print
agreement with a new seven-year agreement. See Note 23 -- Subsequent Events.

The Company entered into a two-year agreement with Sprint in July 2002. The
agreement, which was amended in 2004, provides for annual minimum usage levels
by Penton of approximately $0.8 million each year.

NOTE 11 -- MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK

PREFERRED STOCK LEVERAGE RATIO EVENT OF NON-COMPLIANCE

On September 13, 2004, the Company filed a Certificate of Designations
governing a new series of convertible preferred stock, $0.01 par value (the
"Series C Preferred") with the Secretary of State for the State of Delaware. The
Series C Preferred stock was exchanged on a share-for-share basis with the
Company's Series B Convertible Preferred Stock, $0.01 par value (the "Series B
Preferred"). The Certificate of Designations for the Series C Preferred stock is
identical to the Series B Preferred stock Certificate of Designations except:

- The new series allows for the sharing of the liquidation preference with
the new Series M Preferred stock (discussed below);

- Certain technical and correcting amendments have been made to the
Certificate of Designations for the Series C Preferred stock, including
fixing the formula used to calculate the "Change of Control Cap" (as
defined in the Series C Preferred stock Certificate of Designations); and

- Certain conforming changes were made to the Series C Preferred stock
Certificate of Designations to account for the fact that the Series C
Preferred stock was issued in exchange for the Series B Preferred stock.

At December 31, 2004, an event of non-compliance continues to exist under
our Series C Preferred stock because the Company's leverage ratio of 11.8
(defined as debt less cash balances in excess of $5.0 million plus the
liquidation value of the convertible preferred stock and unpaid dividends
divided by adjusted EBITDA) exceeds 7.5. Upon the occurrence of this event of
non-compliance, the 5% per annum dividend rate on the preferred stock increased
by one percentage point as of April 1, June 30, September 28 and December 27,
2003 and March 26, 2004 to the current maximum rate of 10% per annum. The
dividend rate will adjust back to 5% as of the date on which the leverage ratio
is less than 7.5. The leverage ratio event of non-compliance does not represent
an event of default or violation under any of the Company's outstanding notes or
the loan agreement. As such, there is no acceleration of any outstanding
indebtedness as a result of this event. In addition, this event of
non-compliance and the resulting consequences have not resulted in any cash
outflow from the Company.

If the Company had been sold on December 31, 2004, the bondholders would
have been entitled to receive $335.8 million and the Series C Preferred
stockholders would have been entitled to receive $122.5 million before the
common stockholders would have received any amounts for their common shares. The
amount the Series C Preferred stockholders would be entitled to receive could
increase significantly in the future under certain circumstances. Common
stockholders are urged to read the terms of the Series C Preferred stock
agreement carefully.

Under the conversion terms of the preferred stock, each holder has a right
to convert dividends into additional shares of common stock. At December 31,
2004, no dividends have been declared. However, in light of each holder's
conversion right and considering the increase in the dividend rate and the
concurrent reduction of the conversion price as noted above, the Company has
recognized a deemed dividend for the beneficial conversion feature inherent in
the accumulated dividend based on the original commitment date(s). At December
31, 2004, 2003 and 2002, $12.2 million, $8.5 million and $4.3 million,
respectively have been
97

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

reported as an increase in the carrying value of the convertible preferred stock
and a charge to capital in excess of par value in light of the stockholders'
deficit.

ISSUANCE OF MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK AND WARRANTS

On March 19, 2002, the Company issued 40,000 shares of Series B Preferred
stock, par value $0.01 per shares and warrants (the "warrants") to purchase
1,280,000 shares of Penton's common stock, par value $0.01 per share, for $40.0
million in a private placement to institutional investors and affiliated
entities. On March 28, 2002, the Company issued an additional 10,000 shares of
Series B Preferred stock, par value $0.01 per share, and warrants to purchase an
additional 320,000 shares of Penton's common stock, par value $0.01 per share,
for $10.0 million to the same group of investors. The net proceeds from the sale
of the Series B Preferred stock and warrants were used to repay the term loan
indebtedness outstanding under Penton's senior credit facility.

The net proceeds of $46.2 million from the issuance of the convertible
preferred stock and warrants, net of issuance costs of $3.8 million, were
allocated to the convertible preferred stock and warrants based on the relative
fair values of each security as of the respective commitment dates noted above.
Approximately $4.1 million of the net proceeds were allocated to the warrants
and were recorded in capital in excess of par value, resulting in a discount to
the convertible preferred stock. The fair value of the warrants was determined
using the Black-Scholes pricing model.

The balance of the net proceeds of approximately $42.1 million was
allocated to the convertible preferred stock, which, because of the mandatory
redemption date and other redemption provisions, was classified outside of
permanent equity. Pursuant to the provisions of EITF 98-5, "Accounting for
Convertible Securities with Beneficial Conversion Features or Contingently
Adjustable Conversion Ratios," ("EITF 98-5") and EITF 00-27, "Application of
Issue 98-5 to Certain Convertible Instruments," ("EITF 00-27") the entire amount
of $42.1 million was initially recorded as a beneficial conversion feature in
capital in excess of par value, resulting in an additional discount to the
convertible preferred stock. The amount of the beneficial conversion feature was
determined pursuant to Issue 2 of EITF 00-27. As such, the most beneficial
"accounting conversion price" at the issue date of the preferred shares was
compared with the closing market price of the stock on that date, and the
intrinsic spread was multiplied by the number of most beneficial shares into
which the preferred shares can be converted. This beneficial conversion feature
was being recognized, using the interest method, as a deemed dividend to the
preferred stockholders and an increase in the carrying value of the preferred
stock from the issuance date to the 10-year mandatory redemption date.

The preferred stock was also initially being accreted to its maximum
redemption amount possible pursuant to Topic D-98, "Classification and
Measurement of Redeemable Securities," using the interest method from the
issuance date to the 10-year mandatory redemption date.

In April 2002, the Company reached an agreement with the preferred
stockholders to eliminate the scheduled 10-year redemption date of the preferred
stock, and on May 31, 2002, the Company's common stockholders approved an
amendment to remove the scheduled redemption feature. In exchange for removing
the scheduled redemption date, the Company agreed to grant the holders of the
preferred stock the right to require Penton to seek a buyer for substantially
all of its assets or issued and outstanding capital stock beginning on March 19,
2008, if any preferred stock remains outstanding. The Company sought the
amendment to eliminate the requirement to accrete the preferred stock to the
maximum possible redemption amount by such date. However, it did not seek to
eliminate the preferred stockholders' right to require the Company to redeem the
security upon the occurrence of certain contingent events, including a change in
control or liquidation, dissolution or winding-up of Penton. To the extent that
redemption of the preferred stock becomes probable in the future pursuant to a
contingent redemption provision of the preferred stock, accretion to the maximum
redemption amount will be required at such time.

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Prior to the stockholder approval to remove the scheduled redemption date,
the Company was required to accrete a portion of the maximum redemption amount.
Accordingly, approximately $2.5 million was accreted, using the interest method,
prior to May 31, 2002. In addition, certain features of the preferred stock had
to be accounted for as embedded derivatives, which required mark-to-market
accounting that could have potentially resulted in significant swings in net
income and earnings per share. The preferred shares agreement has a number of
conversion and redemption provisions that represented derivatives under SFAS 133
prior to the elimination of the mandatory redemption date. The Company
determined that certain of these derivatives do not qualify for scope exemption
and are not clearly and closely related to the host contract. As such, these
embedded derivatives were required to be bifurcated and recorded at fair value.
The fair values of these derivatives were calculated using the Black-Scholes
pricing model.

As a result of stockholder approval on May 31, 2002, accretion was no
longer required and the $42.1 million of unamortized beneficial conversion
feature was recognized immediately as a charge to capital in excess of par and
as a reduction of income available to common stockholders in the consolidated
statements of operations. In addition, mark-to-market accounting for the
embedded derivatives was no longer required subsequent to May 31, 2002. Pursuant
to SFAS 133, the elimination of the mandatory redemption feature made the
preferred shares agreement more akin to an equity instrument than a debt
instrument. Consequently, the embedded derivatives noted above, which related to
the conversion or redemption options, either qualified for a scope exemption or
did not constitute derivatives pursuant to SFAS 133. Therefore, the elimination
of the mandatory redemption feature also eliminated the requirement to
mark-to-market these derivatives.

The elimination of the mandatory redemption date does not alter the
mezzanine classification of the preferred shares in the consolidated balance
sheets because of the existence of other redemption provisions in the preferred
shares agreement, such as the optional redemption by the holders of the
preferred shares in the event of a change in control. Dividends on the preferred
stock will continue to be accrued and will be reflected as a reduction in
earnings applicable to common stockholders.

SUMMARY OF TERMS OF CONVERTIBLE PREFERRED STOCK

Below is a description of the material terms of the preferred stock and
warrants reflecting the effects of the stockholder approval of the transaction
and the elimination of the mandatory redemption date discussed above.

Liquidation Preference

The preferred stock has preferences over the common stock in the event of
liquidation or change in control, dissolution or winding-up. Upon the occurrence
of any such event, the preferred stockholders will be entitled to be paid in
cash, subject to the satisfaction of Penton's obligations under the indentures
governing the Company's Subordinated Notes and Secured Notes.

The initial liquidation value of the preferred stock is $1,000 per share.
If the preferred stock is not converted or redeemed prior to March 19, 2008, the
liquidation value will increase to $4,570 per share. The liquidation preference
is the liquidation value plus accrued and unpaid dividends.

Dividends

From the date of issuance until March 19, 2008, the dividends on the
preferred stock accrues daily on the sum of the then-applicable liquidation
preference and the accrued dividends thereon. Initially the annual rate was 5%
per annum. However, upon the occurrence of certain triggering events, the
dividend rate increases by one percentage point, with additional
one-percentage-point increases every ninety days up to a maximum increase of
five percentage points. One of those triggering events is a leverage ratio event
of non-compliance. As noted above, a leverage ratio event of non-compliance
initially occurred on April 1, 2003 and continues to

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

exist as of the date of this filing. Consequently, the dividend rate is
currently 10%. The dividend rate will adjust back to 5% (to the extent of any
preferred shares still outstanding) once the leverage ratio is less than 7.5.

From and after March 19, 2008, the dividends will accrue at a rate of 15%
per annum. Preferred dividends of $11.4 million were accrued at December 31,
2004.

Dividends are payable semiannually in cash only if declared by Penton's
Board of Directors and approved by holders of no less than 75% of the preferred
stock then outstanding. The provisions of Penton's notes limit its ability to
pay dividends in cash, and the Company has no present intention to either
declare or pay cash dividends on the preferred stock.

Conversion Provisions

Each share of preferred stock is convertible into common stock at each
holder's option and, subject to certain restrictions, at Penton's option.
Preferred stock is convertible into Penton common stock by multiplying the
number of shares of preferred stock to be converted by the liquidation value
plus accrued and unpaid dividends divided by the conversion price. The
conversion price for the preferred stock is $7.61 per share, subject to certain
anti-dilution adjustments. Among others, the restrictions on Penton's right to
force conversion include the market price of the common shares being equal to or
greater than the applicable share minimum noted below.

Company's Redemption Provisions

The Company can redeem the preferred stock at any time, in whole or in
part, at a cash redemption price equal to the product of the number of shares of
common stock into which the preferred shares can be converted and the greater of
the volume weighted-average closing share price of Penton's common stock for the
preceding 30 trading days or the applicable minimum share price derived from the
following schedule (as may be adjusted for stock splits and similar
transactions):

If being redeemed prior to the third anniversary............ $15.18
If being redeemed after the third, but before the fourth
anniversary............................................... $17.51
If being redeemed after the fourth, but before the fifth
anniversary............................................... $19.31
If being redeemed after the fifth, but before the sixth
anniversary............................................... $23.26

Holders' Redemption Provisions

The preferred stockholders have the right to require the Company to redeem
the security upon the occurrence of certain contingent events, including a
change in control or liquidation, dissolution or winding-up of Penton.

Conversion Prices

The initial conversion price is $7.61 per share (subject to certain
anti-dilution adjustments) until the sixth anniversary of issuance, at which
time the price may be adjusted to the lesser of (a) the conversion price in
effect on the sixth anniversary or (b) the greater of 90% of the market price of
the Company's common stock on the conversion date or $4.50.

If Penton fails to comply with specific covenants contained in the purchase
agreement, the conversion price of the preferred stock will be reduced by $0.76
(adjusted for stock splits and similar transactions) until such failure is no
longer in existence, and every 90 days thereafter, the conversion price shall be
reduced by an additional $0.76 up to a maximum reduction of $3.80 (adjusted for
stock splits and similar transactions). The conversion price will adjust to what
it would have been absent such breach (to the extent of any shares of preferred
stock still outstanding) once the breach is cured. No such reduction to the
conversion price will be

100

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

made at any time that representatives of the investors constitute a majority of
the Board of Directors. In addition, if Penton's leverage ratio, as previously
defined, exceeds 7.5 to 1.0 for any quarterly period beginning on December 31,
2002, and such leverage ratio remains in excess of 7.5 to 1.0 for a period of 90
days, the conversion price of the preferred stock will be reduced by $0.76
(adjusted for stock splits and similar transactions). The conversion price will
be reduced by another $0.76 (adjusted for stock splits and similar
transactions), subject to a maximum reduction not to exceed $3.80 (adjusted for
stock splits and similar transactions) every 90 days until the leverage ratio is
less than 7.5 to 1.0. The conversion price will adjust to what it would have
been absent such event (to the extent of any shares of preferred stock still
outstanding) once the leverage ratio is less than 7.5 to 1.0. No such reduction
to the conversion price will be made at any time that representatives of the
investors constitute a majority of the Board of Directors.

Board Representation

The preferred stockholders were initially entitled to three Board seats.
When the leverage ratio event of non-compliance first occurred on April 1, 2003,
the holders of a majority of the preferred stock were able to nominate two
additional members to our Board of Directors. Since the event of non-compliance
was not cured by June 30, 2003, the holders of a majority of the preferred stock
then outstanding had the right to elect one less than a minimum majority of our
Board of Directors. As the holders of the preferred stock already maintained one
less than a minimum majority of our Board, no change was necessary. In July
2004, at the Company's annual stockholders' meeting, changes were made to its
Board of Directors such that the preferred stockholders now constitute a
majority of the Board.

At such time as the holders of preferred stock cease to hold shares of
preferred stock having an aggregate liquidation preference of at least $25.0
million, they will lose the right to appoint the director for one of these Board
seats. On March 19, 2008, the holders of a majority of the preferred stock then
outstanding, if any, will be entitled to appoint one less than a minimum
majority of the Board of Directors. In addition, if the Company initiates or
consents to proceedings under any applicable bankruptcy, insolvency,
composition, or other similar laws, the holders of a majority of the preferred
stock may appoint a minimum majority of Penton's Board of Directors. At such
time as the holders of preferred stock cease to hold shares of preferred stock
having an aggregate liquidation preference of at least $10.0 million, and such
holders' beneficial ownership of Penton's preferred stock and common stock
constitutes less than 5% of the aggregate voting power of the Company's voting
securities, the holders of preferred stock will no longer have the right to
appoint any directors to the Board of Directors.

Penton has also granted the holders of the preferred stock the right to
have representatives attend meetings of the Board of Directors after such time
as they are no longer entitled to appoint any members to the Board of Directors
and until such time as they no longer own any preferred stock, warrants or
shares of common stock issued upon conversion of the preferred stock or exercise
of the warrants.

Voting Rights

The holders of the preferred stock are entitled to vote on all matters
submitted to a vote of Penton's stockholders, voting as a single class with the
common stockholders on an as-converted basis. In addition, Penton may not,
without the affirmative vote of the holders of not less than 75% of the
preferred stock then outstanding, declare and pay dividends, impact the existing
classes of capital stock or increase the size of the Board, among other
conditions.

Covenants

The terms of the preferred stock have several financial and non-financial
covenants. As of December 31, 2004, Penton was in compliance with all such
covenants, except the preferred stock leverage ratio, as discussed above.
101

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Sales Rights

The terms of the preferred stock require that Penton maintain a leverage
ratio, as previously defined, of 7.5 to 1.0 for the twelve month period ending
on the last day of December, March, June, and September of each year beginning
with the period ending on December 31, 2002. If Penton is not in compliance with
this covenant for four consecutive fiscal quarters, then the holders of a
majority of the preferred stock have the right to cause the Company to seek a
buyer for all of its assets or all of its issued and outstanding capital stock.
As discussed previously, as of December 31, 2004, the leverage ratio has
exceeded 7.5 for four consecutive quarters and the preferred stockholders have
the right to cause the Company to seek a buyer for all of the assets or the
issued and outstanding capital stock of the Company.

In exchange for removing the scheduled redemption date, as approved at the
2002 annual stockholders' meeting, as discussed above, the Company agreed to
grant the holders of the preferred stock the right to require the Company to
seek a buyer for substantially all of its assets or issued and outstanding
capital stock beginning on March 19, 2008. The holders of the preferred stock
will not have this right if less than 3,500 shares of preferred stock (as
adjusted for stock splits and similar transactions) are then outstanding.

Warrants

The initial exercise price of the warrants was $7.61 per share. The
warrants are subject to anti-dilution and other adjustments that mirror those
applicable to the preferred stock. The warrants are immediately exercisable and
expire 10 years after issuance.

SERIES M PREFERRED STOCK

In September 2004, the Company filed a Certificate of Designations for a
new series of preferred stock, $0.01 par value (the "Series M Preferred") with
the Secretary of State for the State of Delaware. The Board of Directors of the
Company created the Series M Preferred stock for issuance to certain officers
and other key employees of the Company as a long-term incentive plan for
management by giving them an equity stake in the performance of the Company. The
Series M Preferred stock is limited to 150,000 shares of which 68,625 shares
were issued as of December 31, 2004. The Series M Preferred stock is treated
under fixed plan accounting and is classified in the mezzanine section of the
consolidated balance sheets because redemption is outside the control of the
Company. The Company recognized an immaterial amount of expense related to the
Series M Preferred in 2004.

Among other rights and provisions, the Series M Preferred provides that the
holder of each share will receive a cash distribution upon any liquidation,
dissolution, winding-up or change of control of the Company. The amount of such
distribution is first a percentage of what the holders of Series C Preferred
stock and second a percentage of what the holders of the Company's common stock
would receive upon such liquidation, dissolution, winding-up or change of
control.

NOTE 12 -- COMMON STOCK AND COMMON STOCK AWARD PROGRAMS

BOARD OF DIRECTOR CHANGES

Effective at the annual meeting of stockholders on July 15, 2004, the
number of board members decreased from eleven to eight. Furthermore, at the
Company's Board of Directors meeting held on July 21, 2004, the Board named Mr.
Nussbaum as a director and decreased the number of directors from eight to
seven.

102

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

EQUITY AND PERFORMANCE INCENTIVE PLAN

There are 5,500,000 shares of common stock reserved for issuance under the
Company's 1998 Equity and Performance Incentive Plan.

Stock Options

The Company has stock option plans under which employees and directors may
be granted options to purchase shares of the Company's common stock. Options
granted under the plans generally vest equally over three years from the date of
grant. However, most options granted are not exercisable until the third
anniversary. All options granted pursuant to the plans expire no later than 10
years from the date the option was granted.

At December 31, 2004, a total of 1,432,675 options are outstanding. In 2004
and 2003, employees exercised 17,000 and 30,249 options, respectively. No
options were exercised in 2002.

In February 2004, 473,700 options were granted to certain executives and
other eligible employees at an exercise price of $0.90 per share. No
compensation expense was recorded by the Company as a result of this grant.

In July 2002, Penton filed a tender offer for eligible employees who had
options outstanding with exercise prices greater than or equal to $16.225 per
share. The offer to exchange options expired on August 22, 2002, at which time
860,100 options, out of a total of 917,600 eligible options, had been cancelled.
In February 2003, 334,850 new options were granted at an exercise price of $0.37
per share. No compensation expense was recorded by the Company as a result of
the tender offer. The following table presents a summary of Penton's stock
option activity and related information for the years ended 2002, 2003 and 2004
(in thousands, except per share amounts):

NUMBER OF OPTIONS
--------------------- WEIGHTED-AVERAGE
EMPLOYEES DIRECTORS EXERCISE PRICE
--------- --------- ----------------

Balance, December 31, 2001........................ 2,786 143 $15.98
Canceled.......................................... (1,332) -- 19.42
------ ---
Balance, December 31, 2002........................ 1,454 143 13.05
------ ---
Granted........................................... 599 20 0.37
Exercised......................................... (30) -- 0.37
Canceled.......................................... (275) -- 11.54
------ ---
Balance, December 31, 2003........................ 1,748 163 9.36
------ ---
Granted........................................... 474 -- 0.90
Exercised......................................... (17) -- 0.37
Canceled.......................................... (935) -- 10.62
------ ---
Balance, December 31, 2004........................ 1,270 163 5.85
====== ===

103

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table summarizes information about stock options outstanding
at December 31, 2004 (in thousands, except number of years and per share
amounts):

OPTIONS OUTSTANDING OPTIONS EXERCISABLE
--------------------------------------------------- ------------------------
WEIGHTED- OPTIONS
AVERAGE WEIGHTED- EXERCISABLE WEIGHTED-
NUMBER REMAINING AVERAGE AT AVERAGE
RANGE OF OF CONTRACTUAL EXERCISE DECEMBER 31, EXERCISE
EXERCISE PRICES OPTIONS LIFE PRICE 2004 PRICE
--------------- ------- ----------- --------- ------------ ---------

$26.00-28.75 36 5.6 years $28.10 36 $28.10
16.225-24.29 204 4.6 years 20.17 204 20.15
6.89-6.89..... 405 6.9 years 6.89 405 6.89
0.90-0.90..... 322 9.1 years 0.90 -- 0.90
0.37-0.37..... 466 6.9 years 0.37 182 0.37
----- ---
0.37-28.75.... 1,433 7.0 years 5.85 827 9.65
===== ===

Deferred Shares

In February 2004, 445,000 deferred shares were granted to certain
executives and in June 2004, the Board granted 514,706 deferred shares to one
executive. Furthermore, in June 2004, the Board accelerated the vesting of
345,000 deferred shares originally granted in February 2004 to two executives.
At December 31, 2004, 614,706 deferred shares are outstanding. Of these shares,
100,000 shares vest one-fourth on each three-month anniversary following the
date of grant, and 514,706 shares vested on January 3, 2005. During 2004,
587,785 deferred shares were issued for Penton common stock under this plan, of
which, 292,271 deferred shares were returned to the Company by executives to
cover the taxes related to the issuance of these shares and to pay down a
portion of an executive loan.

Compensation expense is being recognized over the related vesting period
based on the fair value of the shares at the date of grant. During 2004, 2003
and 2002, approximately $0.6 million, $1.4 million and $4.3 million,
respectively, were charged to expense under this plan. The Board of Directors
may authorize the payment of dividend equivalents on such shares on a current,
deferred or contingent basis, either in cash or in additional shares of common
stock. At December 31, 2004, no such authorization has been made.

Performance Shares

In 2004, the Company issued common stock related to 11,250 performance
shares, which were earned as of December 31, 2003. Furthermore, a total 255,000
performance shares were immediately vested in accordance with the respective
performance share agreements when the employment of three executives was
terminated in June 2004. These shares were issued in July 2004. At December 31,
2004, no performance shares are outstanding.

Performance shares are generally not issuable until earned. Compensation
expense related to these shares is recorded over the performance period. For the
year ended December 31, 2004, $0.1 million was charged to expense for this plan.
For the years ended December 31, 2003 and 2002, an immaterial amount and $1.4
million, respectively, was credited to expense. These credits resulted from the
decrease in the Company's stock price.

REDEEMABLE COMMON STOCK

At December 31, 2003, the Company classified 4,191 common shares outside of
stockholders' deficit because the redemption of the stock was not within the
control of the Company. Redeemable common stock relates to common stock that may
be subject to rescissionary rights. The purchase of common stock by certain

104

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

employees in the Company's 401(k) plan from May 2001 through March 2003 was not
registered under the federal securities laws. As a result, such purchasers of
our common stock during that period may have had the right to rescind their
purchases for an amount equal to the purchase price paid for the shares, plus
interest from the date of purchase. On March 14, 2004, all rescissionary rights
expired.

EMPLOYEE STOCK PURCHASE PLAN

In 2004, the Company terminated its Employee Stock Purchase Plan. The plan
allowed employees the opportunity to purchase shares of Penton common stock at
85% of the lower of the market price at the beginning or end of each quarter.
This plan was deemed to be non-compensatory. Employees purchased 65,711 shares
and 542,450 shares in 2003 and 2002, respectively. No shares were purchased in
2004.

MANAGEMENT STOCK PURCHASE PLAN

The Company has a Management Stock Purchase Plan ("MSPP") for designated
officers and other key employees. Participants in the plan may elect to receive
restricted stock units ("RSUs") in lieu of a designated portion of up to 100% of
their annual incentive bonus. Each RSU represents the right to receive one share
of Penton common stock. RSUs are granted at a 20% discount from fair market
value on the date awarded. RSUs vest two years after the date of grant and are
settled in shares of common stock after a period of deferral (of no less than
two years) selected by the participant, or upon termination of employment. The
discount is recorded as compensation expense over the minimum vesting period.
The amounts of expense recognized for the years 2004, 2003 and 2002 were not
material.

In February 2004, a total of 595 RSUs were granted at $0.84 per share. At
December 31, 2004, 2003 and 2002, 79,424, 106,392 and 56,079 RSUs were
outstanding, respectively. During 2004, 2003 and 2002, the Company issued 24,611
shares, 35,850 shares and 17,472 shares, respectively, of common stock under
this plan.

EXECUTIVE LOAN PROGRAM

In 2000, the Company established an Executive Loan Program, which allowed
Penton to issue shares of Company common stock at fair market value to six key
executives, in exchange for full recourse notes. In December 2001, the loan
notes were amended to cease interest charges as well as to extend the maturity
date from the fifth anniversary of the first loan date to six months following
the seventh anniversary of the first loan date. No payments are required until
maturity, at which time all outstanding amounts are due.

In June 2004, Mr. Nussbaum repaid his outstanding loan balance with
proceeds from his signing bonus and 288,710 shares of Penton common stock, which
were returned to the Company. In addition, the Board agreed to discharge the
outstanding balance due on Mr. Ramella's executive loan in exchange for Mr.
Ramella releasing the Company of any claims he may have had. The Board also
agreed upon a number of provisions related to Mr. Kemp's outstanding executive
loan balance. See Note 15 -- Executive Bonus and Termination Benefits for a
detailed discussion of events related to the above transactions.

EITF 00-23, "Issues Related to the Accounting for Stock Compensation under
APB Opinion No. 25 and FASB Interpretation No. 44" ("EITF 00-23") requires that
when a Company forgives all or part of a recourse note it must consider all
other existing recourse notes as nonrecourse prospectively (variable
accounting). Consequently, the Company recognized $0.1 million in additional
paid in capital in excess of par equal to the fair market value of the stock
issued in conjunction with the establishment of the loans. In addition, the
Company recorded a $1.8 million provision for loan impairment on the remaining
unreserved loan balance in 2004. Additionally, the Company reversed the $1.1
million reserve established in June 2003 related to Mr. Nussbaum's loan note
against his signing bonus of $1.7 million, which was recorded in selling,
general and administrative expenses on the consolidated statements of
operations. In the future, all awards exercised with

105

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

recourse notes shall be presumed to be exercised with nonrecourse notes with any
dividends recorded as compensation expense and interest recorded as part of the
exercise price.

PERFORMANCE UNITS

In 2003, the Company granted 490,155 performance units to certain key
executives. Subject to the attainment of certain performance goals over a
three-year period from January 1, 2003 through December 31, 2005, each grantee
can earn a cash award in respect to each performance unit. In 2004 and 2003,
approximately $0.5 million and $0.2 million, respectively, was recognized as
expense. A total of 195,012 performance units worth $0.4 million were
immediately vested in accordance with their respective performance share
agreements when the employment of two executives was terminated in June 2004.
These amounts were paid in July 2004.

TREASURY STOCK

In 2004 and 2003, five executives returned 157,271 shares and 89,214
shares, respectively, to the Company to cover taxes for deferred shares issued
during the year. In addition, in 2004, one executive returned 288,710 shares
valued at $0.1 million, to pay down a portion of his executive loan balance. In
2003, the Company issued 19,050 shares of treasury stock to employees under the
management stock purchase plan.

Treasury stock is purchased for constructive retirement and is carried at
cost and recorded as a net decrease in capital in excess of par value.

NOTE 13 -- COMPREHENSIVE LOSS

Comprehensive loss, which is displayed in the consolidated statements of
stockholders' deficit, represents net loss plus the results of certain
stockholder equity changes not reflected in the consolidated statements of
operations.

The after-tax components of other comprehensive loss for the year ended
December 31, 2004, 2003 and 2002, respectively, are as follows (in thousands):

RESTATED
--------------------
2004 2003 2002
-------- -------- ---------

Net loss............................................ $(67,191) $(93,131) $(296,469)
Minimum pension liability adjustment, net of
taxes............................................. 22 (22) --
Reclassification adjustment for gain on sale of
securities, net of taxes of $0.3 million in
2002.............................................. -- -- (808)
Reclassification adjustment for cash flow hedges,
net of taxes of $0.6 million in 2002.............. -- -- 1,439
Foreign currency translation adjustments............ 649 795 (674)
-------- -------- ---------
Comprehensive loss.................................. $(66,520) $(92,358) $(296,512)
======== ======== =========

106

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Accumulated other comprehensive loss as of December 31, 2004 and 2003 are
as follows (in thousands):

2004 2003
------- -------

Foreign currency translations............................... $(1,533) $(2,182)
Minimum pension liability................................... -- (22)
------- -------
Accumulated other comprehensive loss........................ $(1,533) $(2,204)
======= =======

NOTE 14 -- EARNINGS PER SHARE

Earnings per share have been computed pursuant to the provisions of SFAS
No. 128, "Earnings Per Share" ("SFAS 128"). Computations of basic and diluted
earnings per share for the years ended December 31, 2004, 2003 and 2002 are as
follows (in thousands, except per share data):

YEARS ENDED DECEMBER 31,
--------------------------------
RESTATED
---------------------
2004 2003 2002
-------- --------- ---------

Net loss........................................... $(67,191) $ (93,131) $(296,469)
Amortization of deemed dividend and accretion of
preferred stock.................................. (12,190) (8,536) (46,435)
-------- --------- ---------
Net loss applicable to common stockholders......... $(79,381) $(101,667) $(342,904)
======== ========= =========
Number of shares -- basic and diluted:
Weighted-average shares outstanding................ 33,725 33,299 32,374
======== ========= =========
Per share:
Loss applicable to common stockholders -- basic and
diluted.......................................... $ (2.35) $ (3.05) $ (10.59)

Our preferred stock and RSUs are participating securities, such that in the
event a dividend is declared or paid on the common stock, the Company must
simultaneously declare and pay a dividend on the preferred stock and the RSUs as
if the preferred stock and the RSUs had been converted into common stock. EITF
03-6 requires that participating securities included in the scope of EITF 03-6
be included in the computation of basic earnings per share if the effect of
inclusion is dilutive. Vested RSUs and vested deferred shares are always
included in the computation of basic earnings per share as they are considered
equivalent to common stock. For participating securities included in the scope
of EITF 03-6, the use of the two-class method to determine whether the inclusion
of such securities is dilutive is required. Furthermore, non-vested RSUs are
included in basic EPS using the two-class method in accordance with SFAS 128. To
the extent not included in basic earnings per share, the redeemable preferred
stock and the non-vested RSUs are considered in the diluted earnings per share
calculation under the "if-converted" method and "treasury stock" method,
respectively. At December 31, 2004, 2003 and 2002, redeemable preferred stock
and non-vested RSUs were excluded from the calculation of basic earnings per
share as the results were anti-dilutive.

Due to the net loss applicable to common stockholders in 2004, 1,432,675
stock options, 115,000 performance shares, 539,706 non-vested deferred shares,
73,695 non-vested RSUs and 1,600,000 warrants were excluded from the calculation
of diluted earnings per share as the result would have been anti-dilutive. Due
to the net loss applicable to common stockholders in 2003, 1,911,280 stock
options, 381,250 performance shares, 99,579 non-vested deferred shares, 100,696
non-vested RSUs, and 1,600,000 warrants were excluded from the calculation of
diluted earnings per share as the result would have been anti-dilutive. Due to
the net loss applicable to common stockholders in 2002, 1,597,355 stock options,
603,003 performance shares, 234,542 non-vested deferred shares, 47,677
non-vested RSUs and 1,600,000 warrants were excluded from the calculation of
diluted earnings per share as the result would have been anti-dilutive.

107

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 15 -- EXECUTIVE BONUS AND TERMINATION BENEFITS

In June 2004, Penton's Board of Directors announced the appointment of
David B. Nussbaum as Chief Executive Officer ("CEO") of the Company. In addition
to the Company's standard executive incentive and benefit package, Mr. Nussbaum
received a signing bonus of approximately $1.7 million and 30,000 shares of the
new Series M Preferred Stock. The Board also accelerated the vesting of 135,000
deferred shares granted to Mr. Nussbaum in February 2004. Mr. Nussbaum used the
net proceeds from his signing bonus and 288,710 shares of Penton common stock,
which were returned to the Company, to repay his executive loan balance in full.

In March 2004, the Company announced that its Chairman and CEO, Thomas L.
Kemp, would be leaving the Company. Mr. Kemp's employment was terminated
effective June 30, 2004, and on July 1, 2004, Mr. Kemp and the Company signed a
Separation Agreement and General Release agreement. The separation agreement
stipulated a lump-sum payment of $2.3 million (including the settlement of Mr.
Kemp's accrued SERP obligation of $0.2 million), the acceleration of 100,000
stock options, and the acceleration of 125,000 performance shares.

In addition, the Board and Mr. Kemp agreed upon a number of provisions
related to Mr. Kemp's outstanding executive loan balance. The underlying goal of
these provisions is to ensure that there are sufficient funds available to pay
any amount due to taxing authorities in case the loan is discharged at a future
date. Specifically, $0.8 million of the $2.3 million lump-sum payment has been
placed in escrow and will be returned to Mr. Kemp only if he pays off the entire
loan balance by its due date. Furthermore, Mr. Kemp has granted Penton a
security interest in approximately 1.1 million shares of Penton common stock.
These pledged securities could be transferred to Penton's ownership under
certain circumstances and the proceeds used to pay down the outstanding loan
balance.

Furthermore, in June 2004, Mr. Kemp was granted 514,706 deferred shares
that vested on January 3, 2005. In return for these shares, Mr. Kemp agreed to
comply with the terms of certain restrictive covenants, including a non-compete
and a non-solicitation covenant. See Note 23 -- Subsequent Events.

In June 2004, the Company announced that its President and Chief Operating
Officer, Daniel J. Ramella, would be leaving the Company as part of a management
restructuring plan. Mr. Ramella's employment was terminated effective June 30,
2004, and on July 1, 2004, Mr. Ramella and the Company signed a Separation
Agreement and General Release agreement. The separation agreement stipulated a
lump-sum payment of $1.7 million (including the settlement of Mr. Ramella's
accrued SERP obligation of $0.2 million), and the acceleration of 139,999 stock
options, 210,000 deferred shares and 90,000 performance shares. In addition, the
Board agreed to discharge the $2.6 million outstanding balance on Mr. Ramella's
executive loan in return for full and final settlement of any claims Mr. Ramella
might have against the Company.

NOTE 16 -- BUSINESS RESTRUCTURING CHARGES

Since 2001, the Company implemented a number of cost reduction initiatives
to improve its operating cost structure. The cost reduction initiatives included
workforce reductions, the consolidation and closure of over 30 facilities, and
the cancellation of various contracts. The costs associated with restructuring
activities are included in restructuring and other charges in the consolidated
statements of operations.

108

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Personnel costs include payments for severance, benefits and outplacement
services.

2001 RESTRUCTURING PLAN

In 2001, as part of a broad cost reduction initiative, the Company
announced certain expense reduction initiatives, including a reduction in
workforce of approximately 400 employees, the closure of more than 20 offices
worldwide and other exit costs primarily related to the write-off of
computerized software development costs. Adjustments to other exit costs of
approximately $1.0 million in 2001 primarily relate to the reversal of certain
restructuring initiatives that did not require the level of spending that had
originally been estimated. Adjustments to the 2001 Plan in 2002 and 2003 of $0.6
million and $0.3 million, respectively, were made to facility closing costs to
reflect changes in sublease assumption.

Activity and liability balances related to the 2001 restructuring plan are
as follows (in thousands):

SEVERANCE
AND OTHER FACILITY OTHER
PERSONNEL COSTS CLOSING COSTS EXIT COSTS TOTAL
--------------- ------------- ---------- -------

Charged to costs and expenses......... $ 6,774 $ 8,669 $ 4,364 $19,807
Adjustments........................... (23) -- (994) (1,017)
Cash payments......................... (4,468) (267) (2,423) (7,158)
------- ------- ------- -------
Restructuring balance, December 31,
2001................................ 2,283 8,402 947 11,632
Adjustments........................... (135) (459) (422) (1,016)
Cash payments......................... (2,129) (1,590) (250) (3,969)
------- ------- ------- -------
Restructuring balance, December 31,
2002................................ 19 6,353 275 6,647
Adjustments........................... (8) 598 82 672
Cash payments......................... (11) (1,304) (357) (1,672)
------- ------- ------- -------
Restructuring balance, December 31,
2003................................ -- 5,647 -- 5,647
Adjustments........................... -- 288 -- 288
Cash payments......................... -- (1,394) -- (1,394)
------- ------- ------- -------
Restructuring balance, December 31,
2004................................ $ -- $ 4,541 $ -- $ 4,541
======= ======= ======= =======

The Company completed payments related to the reduction in workforce and
other exit cost in 2003. The Company expects to pay the obligations for the
non-cancelable leases over their respective lease terms, which expire at various
dates through 2013.

2002 RESTRUCTURING PLAN

In 2002, the Company announced a number of expense reduction and
restructuring initiatives intended to further improve its operating cost
structure. The actions included costs of $5.1 million related to the closure of
nine additional offices worldwide. These amounts were offset in part by
approximately $1.7 million related to our New York, NY and Burlingame, CA
offices that were subleased in 2002. In addition, the Company reduced the
workforce by approximately 316 employees and recorded a liability for other
contractual obligations related primarily to the cancellation of trade show
venues, hotel contracts and service agreements. Facility closing cost
adjustments of $1.7 million in 2002 relate primarily to rent escalation
provisions, which had not been taken into consideration when the original 2002
liability was recorded. Adjustments to the 2002 plan in 2003 and 2004 of $0.6
million and $0.3 million, respectively, were made to facility closing costs to
reflect changes in sublease assumption.

109

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Activity and liability balances related to the 2002 restructuring plan are
as follows (in thousands):

SEVERANCE
AND OTHER FACILITY OTHER
PERSONNEL COSTS CLOSING COSTS EXIT COSTS TOTAL
--------------- ------------- ---------- -------

Charged to costs and expenses......... $10,344 $ 3,421 $1,648 $15,413
Adjustments........................... 200 1,705 59 1,964
Cash payments......................... (5,440) (693) (967) (7,100)
------- ------- ------ -------
Restructuring balance, December 31,
2002................................ 5,104 4,433 740 10,277
Adjustments........................... (45) (604) (92) (741)
Cash payments......................... (4,928) (1,469) (375) (6,772)
------- ------- ------ -------
Restructuring balance, December 31,
2003................................ 131 2,360 273 2,764
Adjustments........................... 25 300 291 616
Cash payments......................... (64) (708) (564) (1,336)
------- ------- ------ -------
Restructuring balance, December 31,
2004................................ $ 92 $ 1,952 $ -- $ 2,044
======= ======= ====== =======

The Company completed payments related to other exit costs in 2004. The
balance of severance costs relates to an executive who will be paid through
2007. Obligations for the non-cancelable leases will be paid over their
respective lease terms, which expire at various dates through 2010.

In 2002, restructuring charges of $1.0 million were classified as part of
discontinued operations.

2003 RESTRUCTURING PLAN

In order to meet continued revenue challenges in 2003, the Company
implemented a number of additional expense reduction and restructuring
activities totaling $4.9 million, net of estimated sublease income. The
following sets forth additional detail concerning the principal components of
this charge:

- Personnel costs of $2.7 million (as restated) are associated with the
elimination of 85 positions. Approximately 91% of the positions
eliminated were in the United States, with most of the remaining
positions in the United Kingdom.

- The Company recorded office closure costs of $3.8 million primarily
related to the closure of one floor at the Company's corporate
headquarters and the partial closure of one additional facility. This
charge was offset by $2.3 million of estimated sublease income related
to these facilities.

- The charge for other exit costs of $0.7 million relates primarily to
equipment lease payments at closed office facilities, cancellation of
certain contracts and broker commissions.

110

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Activity and liability balances related to the 2003 (as restated)
restructuring plan at December 31, are as follows (in thousands):

SEVERANCE
AND OTHER FACILITY OTHER
PERSONNEL COSTS CLOSING COSTS EXIT COSTS TOTAL
--------------- ------------- ---------- -------

Charged to costs and expenses......... $ 2,736 $1,505 $ 661 $ 4,902
Adjustments........................... 35 (11) -- 24
Cash payments......................... (1,105) (500) (233) (1,838)
------- ------ ----- -------
Restructuring balance, 2003 (as
restated)........................... 1,666 994 428 3,088
Adjustments........................... 76 69 (9) 136
Cash payments......................... (1,742) (114) (241) (2,097)
------- ------ ----- -------
Restructuring balance, 2004........... $ -- $ 949 $ 178 $ 1,127
======= ====== ===== =======

The Company completed payments related to employee severance costs in 2004.
Other exit costs are expected to be paid through the first quarter of 2007, and
obligations for non-cancelable leases will be paid over their respective lease
terms, which expire at various dates through 2010.

2004 RESTRUCTURING PLAN

In order to continue management's efforts to control costs, the Company
implemented a number of additional expense reduction and restructuring
activities in 2004 totaling $5.2 million. The following sets forth additional
detail regarding the principal components of the charge:

- Personnel costs of $4.7 million are associated with the elimination of 68
positions. At December 31, 2004, 67 of those employees had left the
Company and cash payments of $4.0 million were made.

- Office closure costs of $0.1 million primarily relate to the closure of a
warehouse in Colorado.

- The charge for other exit costs of $0.4 million relates primarily to the
cancellation of an agreement with a former employee to provide trade show
and conference services to select Penton events.

Activity and liability balances related to the 2004 restructuring plan are
as follows (in thousands):

SEVERANCE
AND OTHER FACILITY OTHER
PERSONNEL COSTS CLOSING COSTS EXIT COSTS TOTAL
--------------- ------------- ---------- -------

Charged to costs and expenses......... $ 4,752 $51 $364 $ 5,167
Adjustments........................... 15 -- (27) (12)
Cash payments......................... (4,024) (1) (98) (4,123)
------- --- ---- -------
Restructuring balance, December 31,
2004................................ $ 743 $50 $239 $ 1,032
======= === ==== =======

The Company expects to complete severance payments by September 2005.
Furthermore, payments related to non-cancelable lease obligations and other exit
costs are expected to be completed by December 2005.

ESTIMATED FUTURE PAYMENTS AND SUBLEASE INCOME

At December 31, 2004, the Company had an accrued restructuring balance of
$8.7 million. The Company expects to make cash payments in 2005 of approximately
$3.3 million, composed of $0.7 million for employee separation costs, $2.2
million for lease obligations and $0.4 million for other contractual
obligations. The balance of severance and other exit costs will be paid through
2007, and the balance of facility costs,

111

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

primarily long-term leases, is expected to be paid through the end of the
respective lease terms, which extend through 2013.

As part of the Company's restructuring plan, management attempts to
sublease facilities that the Company no longer uses. Following is a schedule of
approximate future minimum lease payments estimated to be received for each of
the five succeeding years as of December 31, 2004 (in thousands):

ESTIMATED
LEASE
PAYMENTS
---------

2005........................................................ $ 667
2006........................................................ 517
2007........................................................ 509
2008........................................................ 509
2009........................................................ 408
------
$2,610
======

Restructuring charges by segment for the years ended December 31, 2004 and
2003 are as follows (in thousands):

RESTATED
--------
2004 2003
------ --------

Industry.................................................... $1,348 $1,467
Technology.................................................. 1,232 1,698
Lifestyle................................................... 3 258
Retail...................................................... 714 738
International............................................... 96 576
Corporate................................................... 2,765 120
------ ------
Total....................................................... $6,158 $4,857
====== ======

In addition to the restructuring charges outlined in the table above, other
items were included in restructuring and other charges in 2004 and 2003. They
include approximately $0.03 million and $0.8 million in 2004 and 2003,
respectively, related to legal fees written off associated with the Alidina,
suit which was settled in August 2004. In addition, included in restructuring
and other charges in 2003 are $0.6 million related to our 401(k) plan, for
employees who had rescissionary rights. In 2002, restructuring charges of $1.0
million were classified as part of discontinued operations.

NOTE 17 -- RELATED PARTY TRANSACTIONS

The Company has an Executive Loan Program, which allowed Penton to issue
shares of Company common stock at fair market value to six key executives, in
exchange for full recourse notes. At December 31, 2004 and 2003, the outstanding
loan balance under the Executive Loan Program was approximately $5.8 million and
$9.5 million, respectively. In 2004 and 2003, executive loans of $1.0 million
and $0.3 million were repaid, respectively. The loan balance, net of reserves,
is classified in the stockholders' deficit section of the consolidated balance
sheets as notes receivable from officers. See Note 12 -- Common Stock and Common
Stock Award Programs.

In 2004, five executives returned 445,981 shares to the Company to cover
taxes on deferred shares issued and by one executive to pay-down a portion of
his executive loan.

112

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In December 2003, the Company entered into an agreement with a former
employee to provide trade show and conference services to select Penton events
in 2004 and 2005. In 2004, the Company paid $0.4 million under this agreement.
Effective December 31, 2004, the Company cancelled the agreement, resulting in
approximately $0.2 million of cancellation fees to be paid in 2005. This amount
is included in restructuring and other charges in the consolidated statements of
operations as of December 31, 2004.

At December 31, 2003, Neue Medien owed PM Germany, a consolidated
subsidiary, $0.5 million. This amount is classified as notes receivable in the
consolidated balance sheets. Neue Median and Penton jointly own PM Germany. The
notes are due on demand and bear interest at the German Federal rate plus 3%, or
4.22% at December 31, 2003. As noted above, in December 2004, Penton sold 70% of
its interest in PM Germany to Neue Medien. See Note 3 -- Disposals.

In January 2003, the Company sold its PTS group assets to Cygnus
Expositions, a division of Cygnus Business Media, Inc., a Delaware corporation,
for $3.2 million. Cygnus Business Media, Inc. is owned by ABRY Mezzanine
Partners L.P., which holds a significant portion of our Series C Preferred stock
and has two members on the Company's Board of Directors.

NOTE 18 -- SEGMENT INFORMATION

Penton designates its operating segments based on how the chief operating
decision maker reviews the Company's performance. As the Company's new CEO, Mr.
Nussbaum, along with his executive team assess and manage the Company's
operations differently than the prior management team resulting in a change in
the Company's reportable segments effective in the third quarter of 2004. As a
result of this change in reportable segments, all prior periods were recast to
conform with the new segment format.

The Company's newly designated segments include: Industry, Technology,
Lifestyle, Retail and International. The results of these newly established
segments will, consistent with past practice, be regularly reviewed by the
Company's chief operating decision maker and the executive team to determine how
resources will be allocated to each segment and to assess the performance of
each segment. All five segments derive their revenues from publications, trade
shows and conferences, and online media products. The segments are generally
based on the market sectors they serve, except the International segment, which
is primarily based on the geographical markets it serves.

Content of each of our segment publications, trade shows and conferences,
and online media products is geared to customers in the following market sectors
and geographic markets (International):

INDUSTRY TECHNOLOGY
Manufacturing Business Technology
Design/Engineering Aviation
Mechanical Systems/Construction Enterprise Information Technology
Government/Compliance Electronics

LIFESTYLE RETAIL
Natural Products Food/Retail
Hospitality
INTERNATIONAL
United Kingdom

The executive management team evaluates performance of each segment based
on its revenues and adjusted segment EBITDA. As such, in the analysis that
follows, the Company uses adjusted segment EBITDA, which is defined as net
income (loss) before interest, taxes, depreciation and amortization, non-cash
compensation, impairment of assets, restructuring charges, executive separation
costs, provision for loan impairment, discontinued operations, general and
administrative costs, and other non-operating items. General and administrative
costs include functions such as finance, accounting, human resources and
information

113

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

systems, which cannot reasonably be allocated to each segment. Assets are not
allocated to segments and as such have not been presented.

Summary information by segment for the years ended December 31, 2004, 2003
and 2002, adjusted for discontinued operations, are as follows (in thousands):

ADJUSTED SEGMENT
REVENUES ADJUSTED SEGMENT EBITDA EBITDA MARGIN
------------------------------ --------------------------- ------------------
2004 2003 2002 2004 2003 2002 2004 2003 2002
-------- -------- -------- ------- ------- ------- ---- ---- ----
RESTATED RESTATED

Industry............. $ 74,729 $ 75,225 $ 82,224 $20,351 $18,928 $20,580 27.2% 25.2% 25.0%
Technology........... 62,443 61,743 81,882 12,258 8,876 4,359 19.6% 14.4% 5.3%
Lifestyle............ 36,223 31,756 30,256 14,141 11,571 10,528 39.0% 36.4% 34.8%
Retail............... 20,943 19,936 19,555 5,543 5,432 4,905 26.5% 27.2% 25.1%
International........ 18,325 17,317 21,018 117 697 436 0.6% 4.0% 2.1%
-------- -------- -------- ------- ------- -------
Total................ $212,663 $205,977 $234,935 $52,410 $45,504 $40,808 24.6% 22.1% 17.4%
======== ======== ======== ======= ======= =======

Segment revenues, all of which are realized from external customers, equal
Penton's consolidated revenues. Following is a reconciliation of Penton's total
adjusted segment EBITDA to consolidated net loss (in thousands):

YEARS ENDED DECEMBER 31,
-------------------------------
RESTATED
--------------------
2004 2003 2002
-------- -------- ---------

Total adjusted segment EBITDA....................... $ 52,410 $ 45,504 $ 40,808
General and administrative costs.................... (19,221) (20,255) (26,287)
Depreciation and amortization....................... (10,758) (13,808) (19,347)
Restructuring and other charges..................... (6,165) (5,895) (15,436)
Gain (loss) on sale of properties................... (1,033) -- (888)
Provision for loan impairment....................... (1,717) (7,600) --
Asset write-downs and impairments................... (39,651) (43,760) (223,424)
Executive separation costs.......................... (2,728) -- --
Non-cash compensation............................... (733) (1,373) (2,979)
Interest expense.................................... (38,010) (39,686) (38,193)
Interest income..................................... 278 523 768
Other, net.......................................... 86 (724) 1,092
-------- -------- ---------
Loss from continuing operations before income taxes
and cumulative effect of accounting change........ $(67,242) $(87,074) $(283,886)
======== ======== =========

114

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

ENTERPRISE-WIDE DISCLOSURES

Revenues by product are as follows for the years ended December 31, 2004,
2003 and 2002 (in thousands):

RESTATED
-------------------
2004 2003 2002
-------- -------- --------

Publishing........................................... $143,648 $147,888 $165,515
Trade shows and conferences.......................... 51,391 44,209 56,707
Online media......................................... 17,624 13,880 12,713
-------- -------- --------
$212,663 $205,977 $234,935
======== ======== ========

Domestic revenues of our products and services comprised $190.8 million,
$185.8 million and $209.2 million of total revenues for the years ended December
31, 2004, 2003 and 2002 (as restated), respectively. Foreign revenues totaled
$21.9 million, $20.2 million and $25.7 million of our revenues for the years
ended December 31, 2004, 2003 (as restated) and 2002, respectively, of which
$17.9 million, $16.3 million and $19.2 million, respectively, were from the
United Kingdom. No single customer accounted for 10% or more of sales during
2004, 2003 and 2002.

Property, plant and equipment at December 31, 2004, 2003 and 2002 included
$0.8 million, $1.5 million and $2.1 million, respectively, identified with
foreign operations with the remaining assets identified with domestic
operations. Property, plant and equipment identified with the United Kingdom
comprised $0.8 million, $1.4 million and $1.6 million, respectively, of these
foreign assets.

NOTE 19 -- SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES

Portions of the following transactions do not provide or use cash and,
accordingly, are not reflected in the consolidated statements of cash flows.

INVESTING ACTIVITIES

In 2004, the Company issued as common stock 24,611 shares under the MSPP
plan; 587,785 deferred shares; 266,250 performance shares and 17,000 shares
under our stock option plan. In addition, five executives returned a total of
157,271 shares to treasury stock to pay taxes related to deferred shares issued
and 135,000 shares to pay down a portion of an executive loan. Furthermore, net
proceeds from Mr. Nussbaum's $1.7 million signing bonus along with 288,710
shares of common stock, which were returned to the Company, were applied to Mr.
Nussbaum's outstanding loan balance. In 2004, the Company recorded amortization
of deemed dividends and accretion on preferred stock of $12.2 million.

In 2003, the Company issued as common stock 35,850 shares under the MSPP
plan; 372,916 deferred shares; 30,516 performance shares; and 30,249 shares
under our stock option plan. The Company also recorded amortization of deemed
dividends and accretion on preferred stock of $8.9 million.

In 2002, the Company issued as common stock 527,951 shares for contingent
consideration; 17,472 shares under the MSPP plan; 340,775 deferred shares; and
50,000 performance shares. In addition, three executives returned a total of
115,712 shares to the Company to pay down a portion of their executive loan
balances and to cover taxes for shares issued under the performance share plan.
The Company also recorded amortization of deemed dividend and accretion on
preferred stock of $46.4 million.

115

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 20 -- FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used by the Company in
estimating fair value of financial instruments as of December 31, 2004 and 2003:

CASH AND CASH EQUIVALENTS, RESTRICTED CASH, ACCOUNTS RECEIVABLE, NOTES
RECEIVABLE, ACCOUNTS PAYABLE AND ACCRUED EXPENSES

The carrying amounts reported in the consolidated balance sheets for cash
and cash equivalents, restricted cash, accounts and notes receivable, accounts
payable and accrued expenses approximated fair value because of their short
maturities.

SENIOR SECURED NOTES AND SENIOR SUBORDINATED NOTES

The fair values of the Secured Notes and Subordinated Notes are determined
by reference to quoted market prices. At December 31, 2004 and 2003, the
Company's Secured Notes had fair values of $157.5 million and $153.0 million,
respectively, and carrying amounts of $157.0 million and $156.9 million,
respectively. At December 31, 2004 and 2003, the Company's Subordinated Notes
had fair values of $115.5 million and $116.8 million, respectively, and carrying
amounts of $172.0 million and $171.7 million, respectively.

INVESTMENTS

In January 2002, Penton sold its remaining 11.8% ownership interest, or
2,973,383 shares, in Jupitermedia Corporation for approximately $5.8 million in
cash and recognized a gain of approximately $1.5 million, which is classified in
other net, in the consolidated statements of operations.

NOTE 21 -- QUARTERLY RESULTS (UNAUDITED)

Quarterly results of operations for the years ended December 31, 2004 and
2003 (see Note 2 -- Restatement) are shown below (in thousands, except per share
amounts):

QUARTER
----------------------------------------------
RESTATED
----------------------------------
FIRST SECOND THIRD FOURTH YEAR
-------- -------- --------- ------- --------

2004
Revenues.......................... $ 54,467 $ 50,936 $ 52,843 $54,417 $212,663
Operating income (loss)........... $ 4,703(a) $ (5,149)(b) $ (35,188)(e) $ 6,038(d) $(29,596)
Net loss.......................... $ (5,902) $(15,226) $ (44,396) $(1,667) $(67,191)
Amortization of deemed dividend
and accretion of preferred
stock........................... $ (5,193) $ (3,408) $ (1,772) $(1,817) $(12,190)
Net loss applicable to common
stockholders.................... $(11,095) $(18,634) $ (46,168) $(3,484) $(79,381)
Earnings per share (basic and
diluted):
Net loss from continuing
operations applicable to
common stockholders.......... $ (0.33) $ (0.55) $ (1.36) $ (0.10) $ (2.35)
Net loss applicable to common
stockholders................. $ (0.33) $ (0.55) $ (1.36) $ (0.10) $ (2.35)

116

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

QUARTER
----------------------------------
AS PREVIOUSLY REPORTED
----------------------------------
FIRST SECOND THIRD
-------- -------- ---------

2004
Revenues.............................................. $ 54,467 $ 50,936 $ 52,843
Operating income (loss)............................... $ 4,703(a) $ (5,149)(b) $ (35,376)(c)
Net loss.............................................. $ (5,207) $(14,531) $ (44,035)
Amortization of deemed dividend and accretion of
preferred stock..................................... $ (5,193) $ (3,408) $ (1,772)
Net income (loss) applicable to common stockholders... $(10,400) $(17,939) $ (45,807)
Earnings per share (basic and diluted):
Net loss from continuing operations applicable to
common stockholders.............................. $ (0.31) $ (0.53) $ (1.35)
Net income (loss) applicable to common
stockholders..................................... $ (0.31) $ (0.53) $ (1.35)

Earnings per share calculations for each of the quarters are based on the
weighted-average number of shares outstanding for each quarter. The sum of the
quarters may not necessarily be equal to the full-year earnings per share
amounts.

The increase in net loss, as restated, for the first, second and third
quarters of 2004 is due primarily to the additional income tax expense of $0.7
million, $0.7 million and $0.5 million, respectively, as a result of correcting
the Company's deferred taxes.
---------------

(a) Includes $0.9 million restructuring charge and $2.4 million of executive
separation costs.

(b) Includes $3.5 million restructuring charge and $1.7 million provision for
loan impairment.

(d) Includes $0.5 million restructuring charge and $0.9 million (as restated)
loss on sale of properties.

(e) Includes $1.3 million (as restated) restructuring charge and $39.7 million
related to impairment of assets.

117

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

QUARTER
------------------------------------------------
RESTATED
------------------------------------------------
FIRST SECOND THIRD FOURTH YEAR
-------- --------- --------- --------- ---------

2003
Revenues........................ $ 54,392 $ 50,183 $ 54,119 $ 47,283 $ 205,977
Operating income (loss)......... $ 4,760 $ (9,158)(f) $ (40,450)(g) $ (2,339)(h) $ (47,187)
Loss from continuing
operations.................... $(10,732) $ (19,136) $ (51,249) $ (12,752) $ (93,869)
Discontinued operations......... $ 866 $ (188) $ 99 $ (39) $ 738
Net loss........................ $ (9,866) $ (19,324) $ (51,150) $ (12,791) $ (93,131)
Amortization of deemed dividend
and accretion of preferred
stock......................... $ (767) $ (1,966) $ (2,352) $ (3,451) $ (8,536)
Net loss applicable to common
stockholders.................. $(10,633) $ (21,290) $ (53,502) $ (16,242) $(101,667)
Earnings per share (basic and
diluted):
Net loss from continuing
operations applicable to
common stockholders........ $ (0.36) $ (0.63) $ (1.60) $ (0.49) $ (3.07)
Net loss applicable to common
stockholders.................. $ (0.32) $ (0.64) $ (1.60) $ (0.49) $ (3.05)

QUARTER
--------------------------------------------
AS PREVIOUSLY REPORTED
--------------------------------------------
FIRST SECOND THIRD FOURTH YEAR
------- -------- -------- -------- --------

2003
Revenues............................. $54,392 $ 50,466 $ 54,119 $ 47,283 $206,260
Operating income (loss).............. $ 4,760 $ (8,875)(f) $(42,389)(i) $ (2,249)(j) $(48,753)
Loss from continuing operations...... $(5,969) $(18,158) $(52,493) $(11,967) $(88,587)
Discontinued operations.............. $ 866 $ (188) $ 99 $ (39) $ 738
Net loss............................. $(5,103) $(18,346) $(52,394) $(12,006) $(87,849)
Amortization of deemed dividend and
accretion of preferred stock....... $ (655) $ (1,860) $ (1,980) $ (4,391) $ (8,886)
Net loss applicable to common
stockholders....................... $(5,758) $(20,206) $(54,374) $(16,397) $(96,735)
Earnings per share (basic and
diluted):
Net loss from continuing operations
applicable to common
stockholders.................... $ (0.20) $ (0.60) $ (1.63) $ (0.49) $ (2.93)
Net loss applicable to common
stockholders....................... $ (0.17) $ (0.60) $ (1.63) $ (0.49) $ (2.91)

The increase in net loss, as restated, for the first, second, third and
fourth quarters of 2003 are due primarily to the additional income tax expense
of $4.8 million, $0.7 million, $0.7 million and $0.7 million, respectively, from
the impact of correcting the Company's deferred taxes. The fourth quarter net
loss, as

118

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

restated, also includes the impact of the $2.0 million minority interest
correction related to certain assets contributed in 2002 by our minority
interest partner when they were impaired in 2003.
---------------

(f) Includes $1.9 million restructuring charge and $7.6 million provision for
loan impairment.

(g) Includes $1.6 million (as restated) restructuring charge and $43.8 million
(as restated) related to impairment of assets.

(h) Includes $2.5 million (as restated) restructuring charge.

(i) Includes $1.5 million restructuring charge and $45.8 million related to
impairment of assets.

(j) Includes $2.4 million restructuring charge.

NOTE 22 -- GUARANTOR AND NON-GUARANTOR SUBSIDIARIES

The following schedules set forth condensed consolidating balance sheets as
of December 31, 2004 and 2003 (as restated) and condensed consolidating
statements of operations and condensed consolidating statements of cash flows
for the years ended December 31, 2004, 2003 (as restated) and 2002 (as
restated). In the following schedules, "Parent" refers to Penton Media, Inc.,
"Guarantor Subsidiaries" refers to Penton's wholly owned domestic subsidiaries
and "Non-guarantor Subsidiaries" refers to Penton's foreign subsidiaries.
"Eliminations" represent the adjustments necessary to (a) eliminate intercompany
transactions and (b) eliminate the investments in our subsidiaries. See Note
2 -- Restatement for additional details.

Effective December 31, 2004, several domestic subsidiaries were merged into
Penton Media, Inc. Prior period condensed consolidating financial information
has been adjusted to reflect these changes.

119

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

PENTON MEDIA, INC.
CONDENSED CONSOLIDATING BALANCE SHEETS
AS OF DECEMBER 31, 2004

GUARANTOR NON-GUARANTOR PENTON
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
--------- ------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)

ASSETS
Current assets:
Cash and cash equivalents.............. $ 5,991 $ 73 $ 1,597 $ -- $ 7,661
Restricted cash........................ 125 -- -- -- 125
Accounts receivable, net............... 22,033 4,248 4,290 -- 30,571
Inventories............................ 560 291 5 -- 856
Deferred tax asset..................... 273 3 -- -- 276
Prepayments, deposits and other........ 2,896 39 737 -- 3,672
--------- --------- -------- --------- ---------
31,878 4,654 6,629 -- 43,161
--------- --------- -------- --------- ---------
Property, plant and equipment, net..... 12,304 1,693 796 -- 14,793
Goodwill............................... 136,689 36,182 3,291 -- 176,162
Other intangibles, net................. 4,688 1,950 208 -- 6,846
Other non-current assets............... 6,168 208 36 -- 6,412
Investment in subsidiaries............. (221,148) -- -- 221,148 --
--------- --------- -------- --------- ---------
(61,299) 40,033 4,331 221,148 204,213
--------- --------- -------- --------- ---------
$ (29,421) $ 44,687 $ 10,960 $ 221,148 $ 247,374
========= ========= ======== ========= =========

LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
Current liabilities:
Accounts payable and accrued
expenses............................. $ 18,121 $ 1,724 $ 900 $ -- $ 20,745
Accrued compensation and benefits...... 4,961 902 17 -- 5,880
Unearned income........................ 16,337 2,760 4,177 -- 23,274
--------- --------- -------- --------- ---------
39,419 5,386 5,094 -- 49,899
--------- --------- -------- --------- ---------
Long-term liabilities and deferred
credits:
Senior secured notes, net of
discount............................. 80,094 76,953 -- -- 157,047
Senior subordinated notes, net of
discount............................. 87,729 84,288 -- -- 172,017
Net deferred pension credits........... 10,568 -- -- -- 10,568
Deferred tax liability................. 18,947 956 -- -- 19,903
Intercompany advances.................. (102,089) 61,420 40,669 -- --
Other non-current liabilities.......... 4,981 2,029 -- -- 7,010
--------- --------- -------- --------- ---------
100,230 225,646 40,669 -- 366,545
--------- --------- -------- --------- ---------
Mandatorily redeemable convertible
preferred stock........................ 67,162 -- -- -- 67,162
--------- --------- -------- --------- ---------
Series M preferred stock................. 4 -- -- -- 4
--------- --------- -------- --------- ---------
Stockholders' equity (deficit):
Common stock and capital in excess of
par value............................ 215,364 203,660 16,566 (220,226) 215,364
Retained earnings (deficit)............ (450,067) (389,963) (49,826) 439,789 (450,067)
Notes receivable....................... -- -- -- -- --
Accumulated other comprehensive loss... (1,533) (42) (1,543) 1,585 (1,533)
--------- --------- -------- --------- ---------
(236,236) (186,345) (34,803) 221,148 (236,236)
--------- --------- -------- --------- ---------
$ (29,421) $ 44,687 $ 10,960 $ 221,148 $ 247,374
========= ========= ======== ========= =========

120

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

PENTON MEDIA, INC.
CONDENSED CONSOLIDATING BALANCE SHEETS (AS RESTATED)
AS OF DECEMBER 31, 2003

GUARANTOR NON-GUARANTOR PENTON
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
--------- ------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)

ASSETS
Current assets:
Cash and cash equivalents................. $ 27,249 $ 23 $ 2,354 $ -- $ 29,626
Accounts receivable, net.................. 17,967 3,894 5,309 -- 27,170
Notes receivable.......................... -- -- 571 -- 571
Inventories............................... 613 256 6 -- 875
Deferred tax asset........................ 372 (119) -- -- 253
Prepayments, deposits and other........... 7,642 309 1,674 -- 9,625
--------- --------- -------- --------- ---------
53,843 4,363 9,914 -- 68,120
--------- --------- -------- --------- ---------
Property, plant and equipment, net........ 14,948 2,446 1,534 -- 18,928
Goodwill.................................. 148,035 65,009 1,367 -- 214,411
Other intangibles, net.................... 5,656 5,036 191 -- 10,883
Other non-current assets.................. 8,443 125 534 -- 9,102
Investment in subsidiaries................ (164,319) -- -- 164,319 --
--------- --------- -------- --------- ---------
12,763 72,616 3,626 164,319 253,324
--------- --------- -------- --------- ---------
$ 66,606 $ 76,979 $ 13,540 $ 164,319 $ 321,444
========= ========= ======== ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
Current liabilities:
Accounts payable and accrued expenses..... $ 22,243 $ 5,001 $ 1,905 $ -- $ 29,149
Accrued compensation and benefits......... 7,683 770 5 -- 8,458
Unearned income........................... 14,584 3,305 4,646 -- 22,535
--------- --------- -------- --------- ---------
44,510 9,076 6,556 -- 60,142
--------- --------- -------- --------- ---------
Long-term liabilities and deferred credits:
Senior secured notes, net of discount..... 80,027 76,888 -- -- 156,915
Senior subordinated notes, net of
discount................................ 87,566 84,132 -- -- 171,698
Net deferred pension credits.............. 11,040 -- -- -- 11,040
Deferred tax liability.................... 16,412 833 -- -- 17,245
Intercompany advances..................... (72,440) 39,704 32,736 -- --
Other non-current liabilities............. 4,807 2,251 2,212 -- 9,270
--------- --------- -------- --------- ---------
127,412 203,808 34,948 -- 366,168
--------- --------- -------- --------- ---------
Minority interest........................... -- -- 450 -- 450
--------- --------- -------- --------- ---------
Mandatorily redeemable convertible preferred
stock..................................... 54,972 -- -- -- 54,972
--------- --------- -------- --------- ---------
Redeemable common stock..................... 2 -- -- -- 2
--------- --------- -------- --------- ---------
Stockholders' equity (deficit):
Common stock and capital in excess of par
value................................... 226,687 204,210 16,614 (220,824) 226,687
Retained earnings (deficit)............... (382,876) (340,094) (42,867) 382,961 (382,876)
Notes receivable from officers, less
reserve of $7,600....................... (1,897) -- -- -- (1,897)
Accumulated other comprehensive loss...... (2,204) (21) (2,161) 2,182 (2,204)
--------- --------- -------- --------- ---------
(160,290) (135,905) (28,414) 164,319 (160,290)
--------- --------- -------- --------- ---------
$ 66,606 $ 76,979 $ 13,540 $ 164,319 $ 321,444
========= ========= ======== ========= =========

121

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

PENTON MEDIA, INC.
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2004

GUARANTOR NON-GUARANTOR PENTON
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)

REVENUES.......................... $159,289 $ 31,516 $21,858 $ -- $212,663
-------- -------- ------- ------- --------
OPERATING EXPENSES:
Editorial, production and
circulation.................. 68,911 15,669 9,120 -- 93,700
Selling, general and
administrative............... 54,079 22,390 12,766 -- 89,235
Impairment of assets............ 11,408 23,058 5,185 -- 39,651
Provision for loan impairment... 1,717 -- -- -- 1,717
Restructuring and other
charges...................... 5,070 1,095 -- -- 6,165
Gain on sold properties......... 1,033 -- -- -- 1,033
Depreciation and amortization... 7,827 2,057 874 -- 10,758
-------- -------- ------- ------- --------
150,045 64,269 27,945 -- 242,259
-------- -------- ------- ------- --------
OPERATING INCOME (LOSS)........... 9,244 (32,753) (6,087) -- (29,596)
-------- -------- ------- ------- --------
OTHER INCOME (EXPENSE):
Interest expense................ (20,637) (17,066) (307) -- (38,010)
Interest income................. 207 -- 71 -- 278
Equity in losses of
subsidiaries................. (56,829) -- -- 56,829 --
Other, net...................... 81 (41) 46 -- 86
-------- -------- ------- ------- --------
(77,178) (17,107) (190) 56,829 (37,646)
-------- -------- ------- ------- --------
LOSS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES............. (67,934) (49,860) (6,277) 56,829 (67,242)
Provision (benefit) for income
taxes........................... (743) 10 682 -- (51)
-------- -------- ------- ------- --------
NET LOSS.......................... $(67,191) $(49,870) $(6,959) $56,829 $(67,191)
======== ======== ======= ======= ========

122

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

PENTON MEDIA, INC.
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (AS RESTATED)
FOR THE YEAR ENDED DECEMBER 31, 2003

GUARANTOR NON-GUARANTOR PENTON
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)

REVENUES.......................... $150,651 $ 33,769 $21,557 $ -- $205,977
-------- -------- ------- ------- --------
OPERATING EXPENSES:
Editorial, production and
circulation.................. 67,586 16,632 8,399 -- 92,617
Selling, general and
administrative............... 53,822 22,818 12,844 -- 89,484
Impairment of assets............ 8,505 31,408 3,847 -- 43,760
Provision for loan impairment... 7,600 -- -- -- 7,600
Restructuring and other
charges...................... 3,927 1,254 714 -- 5,895
Depreciation and amortization... 9,018 3,132 1,658 -- 13,808
-------- -------- ------- ------- --------
150,458 75,244 27,462 -- 253,164
-------- -------- ------- ------- --------
OPERATING INCOME (LOSS)........... 193 (41,475) (5,905) -- (47,187)
-------- -------- ------- ------- --------
OTHER INCOME (EXPENSE):
Interest expense................ (20,385) (18,927) (374) -- (39,686)
Interest income................. 429 -- 94 -- 523
Equity in losses of
subsidiaries................. (66,706) -- -- 66,706 --
Other, net...................... (674) (58) 8 -- (724)
-------- -------- ------- ------- --------
(87,336) (18,985) (272) 66,706 (39,887)
-------- -------- ------- ------- --------
LOSS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES............. (87,143) (60,460) (6,177) 66,706 (87,074)
Provision (benefit) for income
taxes........................... 6,882 66 (153) -- 6,795
-------- -------- ------- ------- --------
LOSS FROM CONTINUING OPERATIONS... (94,025) (60,526) (6,024) 66,706 (93,869)
Income (loss) from discontinued
operations, net of taxes........ 894 9 (165) -- 738
-------- -------- ------- ------- --------
NET LOSS.......................... $(93,131) $(60,517) $(6,189) $66,706 $(93,131)
======== ======== ======= ======= ========

123

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

PENTON MEDIA, INC.
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (AS RESTATED)
FOR THE YEAR ENDED DECEMBER 31, 2002

GUARANTOR NON-GUARANTOR PENTON
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
--------- ------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)

REVENUES......................... $ 161,680 $ 48,856 $ 24,399 $ -- $ 234,935
--------- --------- -------- -------- ---------
OPERATING EXPENSES:
Editorial, production and
circulation................. 71,889 22,368 9,637 -- 103,894
Selling, general and
administrative.............. 62,709 41,957 14,833 -- 119,499
Impairment of assets........... 587 196,895 25,942 -- 223,424
Restructuring charges.......... 10,847 3,135 1,454 -- 15,436
Loss on sale of properties..... 114 774 -- -- 888
Depreciation and
amortization................ 9,336 8,256 1,755 -- 19,347
--------- --------- -------- -------- ---------
155,482 273,385 53,621 -- 482,488
--------- --------- -------- -------- ---------
OPERATING INCOME (LOSS).......... 6,198 (224,529) (29,222) -- (247,553)
--------- --------- -------- -------- ---------
OTHER INCOME (EXPENSE):
Interest expense............... (19,596) (18,195) (402) -- (38,193)
Interest income................ 753 9 6 -- 768
Equity in losses of
subsidiaries................ (291,086) -- -- 291,086 --
Other, net..................... (3,352) 1,358 3,086 -- 1,092
--------- --------- -------- -------- ---------
(313,281) (16,828) 2,690 291,086 (36,333)
--------- --------- -------- -------- ---------
LOSS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF ACCOUNTING
CHANGE......................... (307,083) (241,357) (26,532) 291,086 (283,886)
Provision (benefit) for income
taxes.......................... (13,381) (16,635) (353) -- (30,369)
--------- --------- -------- -------- ---------
LOSS FROM CONTINUING OPERATIONS
BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGE.............. (293,702) (224,722) (26,179) 291,086 (253,517)
--------- --------- -------- -------- ---------
Loss from discontinued
operations, net of taxes....... (2,696) -- (556) -- (3,252)
Cumulative effect of accounting
change, net of taxes........... (39,771) (34,501) (5,128) 39,700 (39,700)
--------- --------- -------- -------- ---------
NET LOSS......................... $(336,169) $(259,223) $(31,863) $330,786 $(296,469)
========= ========= ======== ======== =========

124

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

PENTON MEDIA, INC.
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2004

GUARANTOR NON-GUARANTOR PENTON
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)

CASH FLOWS PROVIDED BY (USED FOR)
OPERATING ACTIVITIES............ $(18,975) $ 39 $(1,528) $ -- $(20,464)
-------- ----- ------- ----- --------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures............ (1,982) (178) (157) -- (2,317)
Decrease in notes receivable.... -- 65 -- -- 65
Proceeds from sale of
properties................... -- -- 800 -- 800
-------- ----- ------- ----- --------
Net cash provided by (used for)
investing activities......... (1,982) (113) 643 -- (1,452)
-------- ----- ------- ----- --------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from note receivable,
net.......................... -- -- -- -- --
Increase in restricted cash..... (125) -- -- -- (125)
Payment of financing costs...... (10) -- -- -- (10)
Decrease in cash overdraft...... 102 -- 128 -- 230
-------- ----- ------- ----- --------
Net cash provided by (used for)
financing activities......... (33) -- 128 -- 95
-------- ----- ------- ----- --------
Effect of exchange rate changes on
cash............................ (144) -- -- -- (144)
-------- ----- ------- ----- --------
Net decrease in cash and cash
equivalents.................. (21,134) (74) (757) -- (21,965)
Cash and cash equivalents at
beginning of year............... 27,125 147 2,354 -- 29,626
-------- ----- ------- ----- --------
Cash and cash equivalents at end
of year......................... $ 5,991 $ 73 $ 1,597 $ -- $ 7,661
======== ===== ======= ===== ========

125

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

PENTON MEDIA, INC.
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (AS RESTATED)
FOR THE YEAR ENDED DECEMBER 31, 2003

GUARANTOR NON-GUARANTOR PENTON
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)

CASH FLOWS PROVIDED BY (USED FOR)
OPERATING ACTIVITIES.................. $26,989 $543 $ 183 $ -- $27,715
------- ---- ------ ----- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures.................. (2,340) (849) (105) -- (3,294)
Proceeds from note receivable, net.... -- -- 1,553 -- 1,553
Earnouts paid......................... -- (7) -- -- (7)
Proceeds from sale of Professional
Trade Shows group.................. 3,250 -- -- -- 3,250
------- ---- ------ ----- -------
Net cash provided by (used for)
investing activities............... 910 (856) 1,448 -- 1,502
------- ---- ------ ----- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of senior secured credit
facility........................... (4,500) -- -- -- (4,500)
Repayment of note payable............. -- -- (417) -- (417)
Decrease in restricted cash........... 241 -- 436 -- 677
Employee stock purchase plan
payments........................... (107) -- (6) -- (113)
Payment of financing costs............ (2,045) -- -- -- (2,045)
Proceeds from repayment of officers'
loans.............................. 250 -- -- -- 250
Decrease in book overdrafts........... 53 -- (436) -- (383)
------- ---- ------ ----- -------
Net cash provided by (used for)
financing activities............... (6,108) -- (423) -- (6,531)
------- ---- ------ ----- -------
Effect of exchange rate changes on
cash.................................. 169 -- -- -- 169
------- ---- ------ ----- -------
Net increase (decrease) in cash and
cash equivalents................... 21,960 (313) 1,208 -- 22,855
Cash and cash equivalents at beginning
of year............................... 5,165 460 1,146 -- 6,771
------- ---- ------ ----- -------
Cash and cash equivalents at end of
year.................................. $27,125 $147 $2,354 $ -- $29,626
======= ==== ====== ===== =======

126

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

PENTON MEDIA, INC.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (AS RESTATED)
FOR THE YEAR ENDED DECEMBER 31, 2002

GUARANTOR NON-GUARANTOR PENTON
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
--------- ------------ ------------- ------------ ------------
(DOLLARS IN THOUSANDS)

CASH FLOWS PROVIDED BY (USED FOR)
OPERATING ACTIVITIES........... $ 57,359 $(80,004) $ 6,060 $ -- $ (16,585)
--------- -------- ------- ------ ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures........... (3,163) (157) (535) -- (3,855)
Acquisitions, including
earnouts paid, net of cash
acquired.................... (687) (48) (4,792) -- (5,527)
Increases in note receivable... -- -- (29) -- (29)
Proceeds from sale of
Jupitermedia Corporation
stock....................... -- 5,801 -- -- 5,801
Net proceeds from sale of
properties.................. 751 188 12 -- 951
--------- -------- ------- ------ ---------
Net cash provided by (used for)
investing activities........ (3,099) 5,784 (5,344) -- (2,659)
--------- -------- ------- ------ ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from issuance of
mandatorily redeemable
convertible preferred
stock....................... 46,123 -- -- -- 46,123
Proceeds from senior secured
notes....................... 79,926 76,791 -- -- 156,717
Repurchase of senior
subordinated notes.......... (4,271) (4,104) -- -- (8,375)
Proceeds from senior secured
credit facility............. 6,000 -- -- -- 6,000
Repayment of senior secured
credit facility............. (182,087) -- -- -- (182,087)
Payment of note payable........ -- -- (2,804) -- (2,804)
Increase in restricted cash.... (241) -- (436) -- (677)
Payment of financing costs..... (9,814) -- -- -- (9,814)
Employee stock purchase plan
payments.................... (424) -- (10) -- (434)
Proceeds from repayment of
officers' loans............. 703 -- -- -- 703
Increase in cash overdraft..... 607 -- -- -- 607
--------- -------- ------- ------ ---------
Net cash provided by (used for)
financing activities........ (63,478) 72,687 (3,250) -- 5,959
--------- -------- ------- ------ ---------
Effect of exchange rate changes
on cash........................ (135) -- -- -- (135)
--------- -------- ------- ------ ---------
Net decrease in cash and cash
equivalents................. (9,353) (1,533) (2,534) -- (13,420)
Cash and cash equivalents at
beginning of year.............. 14,518 1,993 3,680 -- 20,191
--------- -------- ------- ------ ---------
Cash and cash equivalents at end
of year........................ $ 5,165 $ 460 $ 1,146 $ -- $ 6,771
========= ======== ======= ====== =========

127

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 23 -- SUBSEQUENT EVENTS

In February 2005, the Company replaced its printing agreement with R.R.
Donnelley dated December 1999 with a new seven-year agreement. The new agreement
expires on December 31, 2011 unless the a minimum revenue commitment to R.R.
Donnelley of $42.0 million is not reached at which time the agreement would
extend until the commitment is reached. The Company also agreed to consolidate
certain magazines under the new agreement when their current contract with other
vendors expired. In exchange, the Company will receive certain credits in 2005
and pricing reductions in 2006 through 2011. In addition the current purchase
commitments of $7.2 million and $6.8 million in 2005 and 2006 were eliminated.

In the first quarter of 2005, the Company issued 614,706 deferred shares to
three executives, including 514,706 to a former executive. In addition, the
Company issued 69,775 shares in the first quarter of 2005 under the Company's
Management Stock Purchase Plan.

In February 2005, the Company repurchased $5.5 million par value of its
10 3/8% senior subordinated notes for a total of $3.9 million, including $0.1
million of accrued interest, using excess cash on hand. The notes were purchased
in the open market and were trading at 69% of their par value at the time of
purchase. The repurchase resulted in a gain of approximately $1.6 million and
will reduce our annual interest charges by nearly $0.6 million.

On March 30, 2005, the Company received an extension until May 15, 2005
under Section 6.3(b) of our Loan and Security agreement, which required the
Company to deliver its annual audited financial statements to the Lender Group
within 90 days of our fiscal year, that ended on December 31, 2004.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We maintain disclosure and controls and procedures (as defined in Exchange
Act Rules 13a -- 15(e) and 15d -- 15(e)) that are designed to ensure that
information required to be disclosed in reports that we file or submit under the
Securities Exchange Act of 1934 is recorded, processed, summarized, and reported
within the time periods specified in the Securities and Exchange Commission's
rules and forms, and that such information is accumulated and communicated to
our management, including our Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding the required
disclosure.

As of December 31, 2004, an evaluation was performed under the supervision
and with the participation of the Company's management, including the CEO and
CFO, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures. As further discussed below, based on that
evaluation, the Company's management, including the CEO and CFO, concluded that
the Company's disclosure controls and procedures were not effective as of
December 31, 2004.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

Other than the material weakness discussed below, during the Company's
fourth fiscal quarter, there were no changes in internal control over financial
reporting (as defined in Exchange Act Rules 13a -- 15(f) and

128

PENTON MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

15(d) -- 15(f)) that have materially affected or are reasonably likely to
materially affect the Company's internal control over financial reporting.

Following a comprehensive review of the Company's deferred tax assets and
deferred tax liabilities, we determined that certain deferred tax liabilities
had been incorrectly offset against its deferred tax assets. Under Statement of
Financial Accounting Standard 109, "Accounting for Income Taxes" ("SFAS 109")
taxable temporary differences related to indefinite-lived intangible assets or
tax-deductible goodwill (for which reversal cannot be anticipated) should not
have been offset by the Company against deductible temporary differences for
other indefinite-lived intangible assets or tax-deductible goodwill when
scheduling reversals of temporary differences.

The Company evaluated the materiality of the correction on its consolidated
financial statements using the guidelines of Staff Accounting Bulletin No. 99,
"Materiality" and concluded that the cumulative effects of the corrections were
material to its annual consolidated financial statements for 2004, 2003 and 2002
and the related quarterly consolidated financial statements for such periods. As
a result, the Company concluded that it will restate its previously issued
consolidated financial statements to recognize the impact of the correction. See
Note 2 -- Restatement, in the notes to the consolidated financial statements
included under Item 8 within this Annual Report on Form 10-K.

A material weakness is a condition in which the design or operation of one
or more of the internal control components does not reduce to a relatively low
level the risk that misstatements caused by error or fraud in amounts that would
be material in relation to the financial statements being audited may occur and
not be detected within a timely period by employees in the normal course of
performing their assigned functions. The Company concluded that the matter
discussed above represents a material weakness in our disclosure controls and
procedures and internal control over financial reporting.

We have taken steps to remediate this material weakness by adding
additional levels of tax review and requiring all personnel who have
responsibilities for the Company's income taxes to attend an annual SFAS 109
review course.

ITEM 9B. OTHER INFORMATION

Not applicable.

129

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

BOARD OF DIRECTORS

Directors Continuing in Office Until 2005:

DIRECTOR
NAME SINCE AGE PRINCIPAL OCCUPATION AND DIRECTORSHIPS
---- -------- --- --------------------------------------

R. Douglas Greene(A)(C)(N)............ 1999 55 Director and Chief Executive Officer
of New Hope Group, LLC (management and
development company operating media,
entertainment and real estate
properties) since May 1999. Chairman
and Chief Executive Officer of New
Hope Communications Inc. from February
1981 to May 1999.
David B. Nussbaum..................... 2004 47 Chief Executive Officer of Penton
since June 2004, Executive Vice
President of Penton and President of
the Technology and Lifestyle Media
division of Penton since September
2002, Executive Vice President of
Penton and President of the Technology
Media division of Penton from
September 1998 until August 2002.
President of Internet World Media,
Inc. (a trade show business and
publishing company and a subsidiary of
Penton) since December 1998.
Royce Yudkoff(C)(N)................... 2004 49 Non-Executive Chairman of the Board of
Penton since June 2004. Managing
Partner of ABRY Partners, LLC
(media-focused private equity
investment firm) since 1989. Director
of Nexstar Broadcasting Group, Talent
Partners, Musak Holdings, LLC and
Non-Executive Chairman of USA
Mobility, Inc.

130

Directors Continuing in Office Until 2006:

DIRECTOR
NAME SINCE AGE PRINCIPAL OCCUPATION AND DIRECTORSHIPS
---- -------- --- --------------------------------------

Vincent D. Kelly(A)................... 2003 45 Director, President and Chief
Executive Officer of USA Mobility,
Inc. (provider of paging and advanced
wireless data and messaging services)
since November 2004. President and
Chief Executive Officer of Metrocall
Holdings, Inc. (provider of paging and
advanced wireless data and messaging
services) from February 2003 to
November 2004 and director from May
2003 to November 2004. Chief Operating
Officer of Metrocall, Inc. from May
2002 to February 2003. Chief Financial
Officer, Treasurer and Executive Vice
President of Metrocall, Inc. from
prior to 1998 to February 2003.
Metrocall, Inc. filed a voluntary
petition for reorganization under the
U.S. bankruptcy laws in June 2002 and
successfully emerged from bankruptcy
in October 2002. Director of GTES, LLC
(privately-held, majority-owned
subsidiary of USA Mobility, Inc.)
since March 2004.
Perry A. Sook(I)...................... 2003 47 Chairman of the Board, President and
Chief Executive Officer of Nexstar
Broadcasting Group, Inc. (television
broadcasting company) since 1996.
Director of the Television Bureau of
Advertising and the Ohio University
Foundation.

Directors Continuing in Office Until 2007:

DIRECTOR
NAME SINCE AGE PRINCIPAL OCCUPATION AND DIRECTORSHIPS
---- -------- --- --------------------------------------

Peni A. Garber(I)(N).................. 2002 42 Partner of ABRY Partners, LLC (media-
focused private equity investment
firm) since October 2000. Co-Head of
ABRY Mezzanine Partners, L.P.
(investment holding company) since
2001. Director of Muzak Holdings, LLC
(provider of business music
programming) since March 1999.
Hannah C. Craven(A)(C)(I)............. 2002 39 Managing Director of Sandler Capital
Management (investment holding
company) since 1997. Director of
Millbrook Press since 1997.

---------------

(A) Member of Audit Review Committee

(I) Member of Investment Committee

(N) Member of Nominating and Governance Committee

131

AGREEMENTS REGARDING BOARD REPRESENTATION

The holders of the preferred stock were initially entitled to appoint three
members to our Board of Directors. Pursuant to the agreement by which Penton
sold its preferred stock and related warrants to a group of investors led by
ABRY Mezzanine Partners, L.P., Mr. Daniel Budde (formerly of ABRY Partners, LLC)
and Mmes. Craven and Garber were appointed by the Board of Directors of Penton
to serve as directors of Penton. At the 2003 annual meeting of stockholders, Mr.
Budde and Mmes. Craven and Garber were elected to the Board of Directors by the
preferred stockholders to serve a three-year term expiring in 2007. Mr. Budde
resigned from the Board on June 11, 2004 and was replaced by Mr. Royce Yudkoff
of ABRY Partners, LLC.

At such time as the holders of convertible preferred stock cease to hold
shares of preferred stock having an aggregate liquidation preference of at least
$25 million, they will lose the right to appoint the director for one of these
three Board seats.

Upon the occurrence of the following events, the holders of a majority of
the preferred stock may nominate two additional members to our Board of
Directors and, if such triggering events have not been cured or waived prior to
the end of the next succeeding quarter, may appoint one less than a minimum
majority of our Board of Directors:

- failure to comply with certain specified covenants and obligations
contained in the convertible preferred stock certificate of
designations or purchase agreement and such failure is not cured
within 90 days;

- any representation or warranty in the convertible preferred stock
purchase agreement is proven to be false or incorrect in any material
respect; and

- any default that results in the acceleration of indebtedness, where
the principal amount of such indebtedness, when added to the principal
amount of all other indebtedness then in default, exceeds $5 million
or final judgments for the payment of money aggregating more than $1
million (net of insurance proceeds) are entered against the Company
and are not discharged, dismissed, or stayed pending appeal within 90
days after entry.

As of April 1, 2003, the holders of preferred stock were entitled to two
additional seats on the Board of Directors as a result of Penton's leverage
ratio, as determined in accordance with the terms of the preferred stock
purchase agreement, exceeding 7.5 to 1.0. In accordance with agreements entered
into at the time of the private placement, Messrs. John Meehan and David
Nussbaum resigned as directors. The Board of Directors appointed Messrs. Kelly
and Sook to fill the vacancies and serve until the annual meeting.

Upon the occurrence of the following events, the holders of a majority of
the preferred stock may appoint one less than a minimum majority of our Board of
Directors:

- failure to pay the liquidation preference or any cash dividends, to
the extent declared, when due; and

- failure to comply with certain specified covenants and obligations
contained in the preferred stock certificate of designations or
purchase agreement.

Upon the occurrence of the following event, the holders of a majority of
the preferred stock may appoint a minimum majority of our Board of Directors:

- Penton initiates or consents to proceedings under any applicable
bankruptcy, insolvency, composition, or other similar laws or make a
conveyance or assignment for the benefit of our creditors generally,
or any holders of any lien takes possession of, or a receiver,
administrator, or other similar officer is appointed for all or
substantially all of our properties, assets or revenues and is not
discharged within 90 days.

On March 19, 2008, the holders of a majority of the preferred stock then
outstanding, if they meet the threshold described in the following paragraph,
will be entitled to appoint one less than a minimum majority of

132

our Board of Directors, subject to the right to appoint a minimum majority of
our Board of Directors as described in the immediately preceding paragraph.

At such time as the holders of preferred stock cease to hold shares of
convertible preferred stock having an aggregate liquidation preference of at
least $10 million and such holders' beneficial ownership of our preferred stock
and common stock constitutes less than 5% of the aggregate voting power of our
voting securities, the holders of preferred stock will no longer have the right
to have any member on our Board of Directors.

The Company has also granted the holders of the preferred stock the right
to have representatives attend meetings of the Board of Directors until such
time as they no longer own any preferred stock, warrants or shares of common
stock issued upon conversion of the preferred stock and exercise of the
warrants.

EXECUTIVE OFFICERS

All officers of Penton are elected each year by the Board of Directors at
its annual organization meeting. In addition to Mr. Nussbaum, information with
respect to whom is set forth above, the executive officers of Penton include the
following:

Darrell C. Denny, 46, President of the Lifestyle Media and IT Media Groups
of Penton since September 2002, Executive Vice President of Penton and President
of the Lifestyle Media division of Penton from October 2000 to September 2002.
Executive Vice President/Group President and Operating Chair from August 1998 to
September 2000 of Miller Freeman, Inc. (business magazine publisher and
exhibition manager).

Preston L. Vice, 57, Chief Financial Officer of Penton since February 2003,
Interim Chief Financial Officer of Penton from May 2002 until February 2003,
Senior Vice President and Secretary of Penton since July 1998.

AUDIT REVIEW COMMITTEE FINANCIAL EXPERT

The Board of Directors has determined that Mr. Vince Kelly, Chairman of the
Audit Review Committee, qualifies as an "audit committee financial expert" and
possesses "accounting or related financial management expertise" within the
meaning of all applicable laws and regulations. In addition, the Board has
determined that all members of the Audit Review Committee are financially
literate and independent within the meaning of the applicable SEC rules and
regulations.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based solely on a review of reports of ownership, reports of changes of
ownership and written representations under Section 16(a) of the Securities
Exchange Act of 1934, which were furnished to Penton during or with respect to
2004 by persons who were, at any time during 2004, directors or officers of
Penton or beneficial owners of more than 10% of the outstanding shares of common
stock, no such person failed to file on a timely basis any report required by
such section during 2004.

CODE OF ETHICS

The Company has a Code of Business Conduct, which is applicable to all
employees of the Company, including the principal executive officer and the
principal financial officer. The Code of Business Conduct is available on the
Company's Web site (www.penton.com) and will be provided upon request at no
charge. The Company intends to post amendments to or waivers from its Code of
Business Conduct (to the extent applicable to the Company's chief executive
officer or principal financial officer) at this location on its Web site, and
such amendments to or waivers from the Code will be disclosed in the next
periodic report required to be filed with the Securities and Exchange
Commission.

133

ITEM 11. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth compensation information for the Chief
Executive Officer of Penton (Mr. Kemp served as Chief Executive Officer until
June of 2004; Mr. Nussbaum served as Chief Executive Officer for the remainder
of 2004) and for each of Penton's two most highly compensated other executive
officers during 2004 who were serving at the end of 2004.

LONG-TERM COMPENSATION
AWARDS
-------------------------
RESTRICTED SECURITIES
ANNUAL COMPENSATION STOCK UNDERLYING ALL OTHER
----------------------- AWARD(S) OPTIONS COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($)(2) (#) SATION ($)
--------------------------- ---- ---------- ---------- ---------- ---------- -----------

Thomas L. Kemp.............. 2004 355,000 -- 463,235 -- 5,028(3)
Chief Executive Officer(4) 2003 600,000 150,000 66,600 100,000 9,725
2002 577,500(1) 50,000 1,653,774 -- 3,739
David B. Nussbaum........... 2004 417,500 1,759,027 151,500 70,000 3,534(3)
Chief Executive Officer(5) 2003 410,000 50,364 22,200 50,000 2,696
2002 410,000 30,000 436,043 -- 2,966
Darrell C. Denny............ 2004 333,125 205,256 26,250 25,000 6,416(3)
President, Lifestyle Media 2003 325,000 81,560 3,922 25,000 5,172
and IT Media Groups 2002 312,813(1) 92,350 108,698 -- 5,089
Preston L. Vice............. 2004 225,000 109,163 69,375 30,000 1,323(3)
Chief Financial Officer and 2003 225,000 16,765 13,305 -- 1,851
Secretary 2002 192,500(1) 27,000 373,718 -- 1,310

---------------

(1) Each of Messrs. Kemp, Denny and Vice voluntarily agreed to a 5% reduction to
his 2002 base salary compared to his 2001 base salary, which reduction was
effective from April 1, 2002 until December 31, 2002.

(2) Includes Deferred Shares issued in 2002, 2003 and 2004 and Series M
Preferred Stock awarded to Messrs. Nussbaum, Denny and Vice in 2004.

Deferred shares awarded: Mr. Kemp, 211,480; Mr. Nussbaum, 55,760; Mr. Denny,
13,900; and Mr. Vice, 47,790, shares awarded in 2002; Mr. Kemp, 180,000; Mr.
Nussbaum, 60,000; Mr. Denny, 10,600; and Mr. Vice 35,960, shares awarded in
2003; and Mr. Kemp, 514,706; Mr. Nussbaum, 135,000; Mr. Denny, 25,000; and
Mr. Vice, 75,000, shares awarded in 2004, each having a one-year deferral
period in the case of Messrs. Nussbaum, Denny and Vice; provided, however,
that each such award of deferred shares will become nonforfeitable with
respect to 25% of the award on each three-month anniversary of the date of
grant and in the case of Mr. Kemp having a deferral period of six months.
Deferral periods are subject to acceleration in the event of death,
permanent disability, retirement upon reaching age 65, termination without
cause, termination for good reason or upon a change of control of Penton.
These numbers are based on the value of Penton's common stock as of the date
of grant. As of December 31, 2004, the value of the deferred shares awarded
in 2002 was $19,033 to Mr. Kemp; $5,018 to Mr. Nussbaum; $1,251 to Mr.
Denny; and $4,301 to Mr. Vice. As of December 31, 2004, the value of the
deferred shares awarded in 2003 was $16,200 to Mr. Kemp; $5,400 to Mr.
Nussbaum; $954 to Mr. Denny; and $3,236 to Mr. Vice. As of December 31,
2004, the value of the deferred shares awarded in 2004 was $46,324 to Mr.
Kemp; $12,150 to Mr. Nussbaum; $2,250 to Mr. Denny; and $6,750 to Mr. Vice.
The deferred shares do not provide for dividend equivalents or voting
rights.

Series M Preferred Stock awarded: Mr. Nussbaum, 30,000; Mr. Denny, 3,750;
and Mr. Vice 1,875 shares awarded in 2004. On September 13, 2004, the
Company filed a Certificate of Designations for a new series of preferred
stock, $0.01 par value (the "Series M Preferred Stock") with the Secretary
of State for the State of Delaware. The Board of Directors of the Company
created the Series M Preferred Stock for issuance to certain officers of the
Company as a long-term incentive plan to incentivize management by giving
them an equity stake in the performance of the Company. The Series M
Preferred Stock is

134

limited to 150,000 shares, of which 60,375 shares were issued on September
13, 2004. Among other rights and provisions, the Series M Preferred Stock
provides that the holder of each share will receive a cash distribution upon
any liquidation, dissolution, winding-up or change of control of the
Company. The amount of such distribution is first a percentage of what the
holders of Series C Preferred Stock and second a percentage of what the
holders of the Company's common stock would receive upon such liquidation,
dissolution, winding-up or change of control.

(3) For term life and long-term disability insurance provided by Penton during
the year.

(4) Mr. Kemp resigned from the Company effective June 30, 2004. See "Separation
Agreement with Mr. Kemp" below.

(5) Mr. Nussbaum has served as the Chief Executive Officer since June 18, 2004.

STOCK OPTION GRANTS DURING YEAR

The following table sets forth information with respect to stock options
granted during 2004 to executive officers named in the Summary Compensation
Table.

OPTION GRANTS IN LAST FISCAL YEAR

POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
-------------------------------------------------------- ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS EXERCISE OR APPRECIATION FOR
UNDERLYING GRANTED TO BASE OPTION TERM(1)
OPTIONS EMPLOYEES IN PRICE EXPIRATION --------------------
NAME GRANTED (#)(2) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
---- -------------- ------------ ----------- ---------- -------- ---------

Thomas L. Kemp........... -- -- -- -- --
David B. Nussbaum........ 70,000 14.8 $0.90 2/3/14 $39,900 $100,100
Darrell C. Denny......... 25,000 5.3 $0.90 2/3/14 $14,250 $ 35,750
Preston L. Vice.......... 30,000 6.3 $0.90 2/3/14 $17,100 $ 42,900

---------------

(1) The assumed annual rates of appreciation in the price of common stock are in
accordance with rules of the Securities and Exchange Commission and are not
predictions of future market prices of the common stock nor of the actual
values the named executive officers will realize. In order for such annual
rates of appreciation to be realized over the 10-year term of the options,
the market price of the common stock would have to increase to $1.47/share
(5%) or $2.33/share (10%) during that term. In such event, and assuming
corresponding annual rates of increase for the market price of common stock,
the market value of all currently outstanding shares of common stock would
have increased by approximately $50,697,172 (5%) or $80,356,742 (10%) during
that 10-year term.

(2) Consists of non-qualified options to purchase common stock granted under the
Equity Incentive Plan at an exercise price equal to the closing price of the
common stock on the date of grant, February 3, 2004. Each option becomes
fully exercisable on the third anniversary of the date of grant, subject to
full or partial acceleration in the event of earlier termination of
employment (full acceleration if earlier termination is on account of death,
permanent disability, retirement upon or after reaching age 65 or upon a
change of control of Penton; partial acceleration in increments of 33 1/3%
each year commencing one year after the date of grant if termination is for
any other reason other than for "cause").

135

OPTION EXERCISES AND YEAR-END VALUES

The following table sets forth information with respect to exercises of
options during 2004 by the executive officers named in the Summary Compensation
Table and the values of unexercised options held by them as of December 31,
2004.

AGGREGATED OPTION EXERCISES IN 2004 AND YEAR-END OPTION VALUES

NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED ON OPTIONS AT YEAR-END (#) AT YEAR-END ($)
EXERCISE VALUE --------------------------- ---------------------------
NAME (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------ ----------- ------------- ----------- -------------

Thomas L. Kemp......... -- -- 100,000 -- -- --
David B. Nussbaum...... -- -- 133,500 120,000 -- --
Darrell C. Denny....... -- -- 55,000 50,000 -- --
Preston L. Vice........ -- -- 45,000 30,000 -- --

BOARD COMPENSATION

Compensation of non-employee directors consists of an annual retainer of
$20,000, plus $3,000 for each Board meeting attended in person, $1,000 for each
Board meeting attended by telephone and $1,000 for each Board committee meeting
attended, except that only $500 is paid for attending a committee meeting held
on the same day as a Board meeting. The Chairman of the Audit Review Committee
is paid an additional $5,000 per year. Ms. Craven, Ms. Garber and Mr. Yudkoff
and employee directors are not compensated by the Company for serving as
directors.

Each director of Penton will be reimbursed by Penton for out-of-pocket
expenses incurred in attending Board and Board committee meetings.

Penton has adopted the Penton Media, Inc. 1998 Director Stock Option Plan
(as Amended and Restated Effective as of March 15, 2001) for non-employee
directors. The plan was approved by the stockholders at the 1999 annual meeting,
and an increase in the number of shares of common stock authorized under the
plan was approved by stockholders at the 2001 annual meeting. Pursuant to the
plan, and subject to certain limitations contained in it, the Board may grant
non-qualified options to purchase common stock, at an exercise price not less
than fair market value on the date of grant, to directors of Penton who at the
time of grant are not employees of Penton or any of its subsidiaries. In
addition, the Board may authorize the grant of restricted stock or deferred
shares to non-employee directors under the plan. The plan also provides that the
Board may permit non-employee directors to elect to receive non-qualified
options, restricted stock or deferred shares in lieu of all or a portion of such
non-employee director's compensation otherwise payable in cash.

EMPLOYMENT AGREEMENT WITH MR. KEMP

During his service as Chief Executive Officer of Penton from January 1,
2004 through June 30, 2004, Mr. Kemp had an employment agreement with Penton.

Mr. Kemp's agreement provided for participation in Penton's Supplemental
Executive Retirement Plan. Effective December 31, 2003, the Supplemental
Executive Retirement Plan was frozen and all participants ceased to accrue
benefits under the plan on such date. The agreement also provided for
supplementary life insurance in an amount equal to one and one-half times Mr.
Kemp's salary and supplementary long-term disability coverage that provided for
a maximum monthly benefit (when combined with Penton's base long-term disability
plan) of $18,333 per month.

In addition, the agreement provided for additional supplementary life and
long-term disability insurance coverage that would provide benefits, in the
event of Mr. Kemp's covered death or disability, in the amount of $4,000,000,
payable in a single lump sum.

136

The employment agreement for Mr. Kemp provided for a payment to him in an
amount equal to the total of all income taxes imposed on him as a result of (a)
the provision of the life insurance and the long-term disability coverage, (b)
imputed income to him with respect to the Senior Executive Loan Program and (c)
such payment. The employment agreement for Mr. Kemp also provided for a payment
to him in an amount equal to the total of all income taxes imposed on him as a
result of (a)(i) the issuance to him of the deferred shares granted to him on
April 23, 2002, on an accelerated basis following a change of control, his death
or permanent disability, a termination without cause, a termination by him for
good reason or involuntary retirement or (ii) any other issuance of the deferred
shares if a change of control occurred prior to the payment in full of amounts
due under the Senior Executive Loan Program and (b) such payment.

The employment agreement for Mr. Kemp further entitled him to receive a
payment in the event that the excise tax under Section 4999 of the Internal
Revenue Code applied to the issuance of the deferred shares or the payment
described in the preceding paragraph and the sum of (a) the value of the
deferred shares (reduced by such excise tax) plus (b) the value of the shares
purchased by him pursuant to the Senior Executive Loan Program plus (c) the
proceeds of any life insurance or long-term disability coverage ((a), (b) and
(c), the "Loan Payments") was less than the amount due and owing under the
Senior Executive Loan Program at the time of the change of control (the "Change
of Control Loan Balance"). In that event, the payment referred to in the
preceding sentence would have been in an amount equal to the sum of (x) the
lesser of (1) the difference between the Change of Control Loan Balance and the
Loan Payments or (2) 20% of the sum of the value of the deferred shares at the
time of the change of control plus such payment plus (y) an amount, such that
after payment of all taxes (including any excise tax under Code Section 4999)
imposed on such payment, Mr. Kemp retained an amount equal to the Code Section
4999 excise tax imposed upon such payment.

The agreement also provided that in the event that Mr. Kemp's employment
was terminated by Penton (other than for "cause" (as defined in the agreement)
or by reason of his death, disability or retirement) or by him for "good reason"
(as defined in the agreement), Mr. Kemp would have been entitled to receive
certain severance benefits.

Upon the occurrence of the events described in the preceding paragraph, Mr.
Kemp would have been entitled to receive (a) any accrued but unpaid salary and
expense reimbursement and (b) his salary (as in effect at the time of
termination or, if higher, as in effect as of the most recent extension of the
employment period) for a period of three years following the date of his
termination of employment. In addition, in the event that the employment of Mr.
Kemp was terminated by Penton other than for cause or by Mr. Kemp for good
reason within the two-year period following a "change of control," he would have
been entitled to receive a payment (payable, at his option, in a lump sum) equal
to (i) Mr. Kemp's target bonus for the year in which the termination occurred
or, if higher, his target bonus for the preceding year or the year in which the
change of control occurred and (ii) if his employment was terminated after July
1 of the then-current year, a pro-rated portion of his target bonus for the year
in which the termination occurred or, if higher, a pro-rated portion of his
target bonus for the preceding year or the year in which the change of control
occurred. Mr. Kemp would also have been entitled to the continuation of certain
additional benefits (e.g., medical insurance).

Payments and benefits under the employment agreement were subject to
reduction in order to avoid the application of the excise tax on "excess
parachute payments" under the Internal Revenue Code, but only if the reduction
would increase the net after-tax amount received by him.

The agreement included non-competition, non-solicitation and
confidentiality obligations on the part of Mr. Kemp, which survived its
termination.

SEPARATION AGREEMENT WITH MR. KEMP

On March 24, 2004, the Company announced that Mr. Kemp would be leaving the
Company. Mr. Kemp's employment was terminated effective June 30, 2004, and on
July 1, 2004, Mr. Kemp and the Company signed a Separation Agreement and General
Release agreement. Mr. Kemp's separation agreement

137

provides for the following: (1) a lump-sum payment of approximately $2.3
million, of which $0.8 million has been placed in escrow, (included in this
payment is severance of approximately $1.8 million per Mr. Kemp's employment
agreement; $0.3 million related to performance units granted on May 22, 2003;
and $0.2 million related to the settlement of Mr. Kemp's accrued supplemental
executive retirement plan obligation); (2) the accelerated vesting of 100,000
stock options granted to Mr. Kemp prior to his termination making them
immediately exercisable; (3) the immediate vesting of 125,000 performance shares
in accordance with the terms of his performance share agreement dated February
5, 2002; (4) the immediate vesting of restricted stock units granted to Mr. Kemp
under Penton's Management Stock Purchase Plan; (5) continued participation for
Mr. Kemp and his eligible dependents in Penton's group health plan for 18 months
after his termination; (6) Penton will use its reasonable best efforts to
maintain term life insurance and long-term disability coverage for Mr. Kemp's
benefit until the date that he has no outstanding balance under the Executive
Loan Program in an amount equal to at least the total amount Mr. Kemp would be
required to remit under applicable tax laws if an amount equal to the remaining
outstanding balance due under the note were paid to Mr. Kemp and the payment was
treated as compensation paid to an employee; and (7) each year, Penton will make
a payment to Mr. Kemp in an amount equal to the total of all income taxes
imposed on Mr. Kemp as a result of (a) the provision of the life insurance and
long-term disability coverage and (b) such payment.

EMPLOYMENT AGREEMENTS WITH MESSRS. NUSSBAUM, VICE AND DENNY

The Compensation Committee approved initial employment agreements with each
of Messrs. Nussbaum, Vice and Denny in 1998, 1999 and 2000, respectively. Each
of these employment agreements was amended on December 11, 2001, and Mr.
Nussbaum's employment agreement was further amended on June 23, 2004. The
agreements are for terms currently expiring June 23, 2006, in the case of Mr.
Nussbaum; August 24, 2006, in the case of Mr. Vice; and October 15, 2006, in the
case of Mr. Denny; and renew automatically for an additional year on each
anniversary of the effective date of the agreement (or until age 65, if earlier)
unless either party thereto elects otherwise, but may be terminated by the
executive with 120 days notice.

The agreements for Messrs. Vice and Denny provide for participation in
Penton's Supplemental Executive Retirement Plan. Effective December 31, 2003,
the Supplemental Executive Retirement Plan was frozen and all participants
ceased to accrue benefits under the plan on such date. The agreements also
provide for supplementary life insurance in an amount equal to one and one-half
times each executive's salary in the case of Mr. Denny and one times the
executive's salary in the case of Messrs. Nussbaum and Vice and supplementary
long-term disability coverage that provides for a maximum monthly benefit (when
combined with Penton's base long-term disability plan) of $18,333 per month for
Messrs. Nussbaum and Denny and $10,000 per month in the case of Mr. Vice.

In addition, the agreements provide for additional supplementary life and
long-term disability insurance coverage for Messrs. Vice and Denny that would
provide benefits, in the event of the executive's covered death or disability,
in the amount of $900,000 for Mr. Vice; and $270,000 for Mr. Denny, each payable
in a single lump sum. In the event the life or long-term disability insurance
coverage described in the preceding sentence cannot be procured or maintained,
Penton will pay the benefit from its own funds.

138

The employment agreements for Messrs. Vice and Denny provide for a payment
to each executive in an amount equal to the total of all income taxes imposed on
the executive as a result of (a) the provision of the life insurance and the
long-term disability coverage, (b) imputed income to the executive with respect
to the Senior Executive Loan Program and (c) such payment.

The employment agreements for Messrs. Vice and Denny also provide for a
payment to each executive in an amount equal to the total of all income taxes
imposed on the executive as a result of (a)(i) the issuance to the executive of
the deferred shares granted to the executive on April 23, 2002, on an
accelerated basis following a change of control, the executive's death or
permanent disability, a termination without cause, a termination by the
executive for "good reason" (as defined in the agreements and as described
below) or involuntary retirement or (ii) any other issuance of the deferred
shares if a change of control occurs prior to the payment in full of amounts due
under the Senior Executive Loan Program and (b) such payment.

The employment agreements for Messrs. Vice and Denny further entitle the
executive to receive a payment in the event that the excise tax under Section
4999 of the Internal Revenue Code applies to the issuance of the deferred shares
or the payment described in the preceding paragraph and the sum of (a) the value
of the deferred shares (reduced by such excise tax) plus (b) the value of the
shares purchased by the executive pursuant to the Senior Executive Loan Program
plus (c) the proceeds of any life insurance or long-term disability coverage
((a), (b) and (c), the "Loan Payments") is less than the amount due and owing
under the Senior Executive Loan Program at the time of the change of control
(the "Change of Control Loan Balance"). In that event, the payment referred to
in the preceding sentence will be in an amount equal to the sum of (x) the
lesser of (1) the difference between the Change of Control Loan Balance and the
Loan Payments or (2) 20% of the sum of the value of the deferred shares at the
time of the change of control plus such payment, plus (y) an amount, such that
after payment of all taxes (including any excise tax under Code Section 4999)
imposed on such payment, the executives retain an amount equal to the Code
Section 4999 excise tax imposed upon such payment.

The agreements also provide that in the event the executive's employment is
terminated by Penton (other than for "cause" (as defined in the agreements) or
by reason of his death, disability or retirement) or by the executive for good
reason, the executive will be entitled to receive certain severance benefits.

In the case of Mr. Nussbaum, he is entitled to receive (a) any accrued but
unpaid salary and expense reimbursement; (b) his salary (as in effect at the
time of termination or, if higher, as in effect as of the most recent extension
of the employment period) for a period of 12 months after termination of
employment; and (c) a lump sum payment equal to his target bonus.

In the case of Messrs. Vice and Denny, each such executive is entitled to
receive (a) any accrued but unpaid salary and expense reimbursement and (b) his
salary (as in effect at the time of termination or, if higher, as in effect as
of the most recent extension of the employment period) for a period of two years
following the date of his termination of employment. In addition, in the event
that the employment of Messrs. Vice or Denny is terminated by Penton other than
for cause or by the executive for good reason within the two-year period
following a "change of control," each such executive will be entitled to receive
a payment (payable, at the executive's option, in a lump sum) equal to his
target bonus for the year in which the termination occurs or, if higher, the
executive's target bonus for the preceding year or the year in which the change
of control occurs. All executives party to such agreements are also entitled to
the continuation of certain additional benefits (e.g., medical insurance).

Payments and benefits under the employment agreements are subject to
reduction in order to avoid the application of the excise tax on "excess
parachute payments" under the Internal Revenue Code, but only if the reduction
would increase the net after-tax amount received by the executive.

The transactions that are deemed to result in a change of control for the
purposes of these agreements include: (a) any person (with certain exceptions as
described in the agreements) becoming the beneficial owner of 40% or more of the
voting stock of Penton; (b) individuals who, as of the date of the agreements,
constitute the Board of Directors (the "Incumbent Board") cease for any reason
(other than death or disability) to constitute at least a majority of the Board
of Directors (provided that any individual who

139

becomes a director subsequent to the date of the agreements whose appointment or
election is approved by a majority of the Incumbent Board is considered to be a
member of the Incumbent Board); (c) a merger or consolidation with, or sale of
all of or substantially all of Penton's assets to another entity, as a result of
which less than a majority of the voting shares of the surviving entity are
owned by former stockholders of Penton; and (d) approval by the stockholders of
Penton of a complete liquidation or dissolution of Penton. "Good reason" for
termination of employment by the executive includes reduction in salary, the
failure by Penton to extend the executive's employment under the agreement or a
breach by Penton of the terms of the agreement and, in the case of Mr. Nussbaum,
a change of control.

Each agreement includes non-competition, non-solicitation and
confidentiality obligations on the part of the executive, which survive its
termination.

PLANS AND ARRANGEMENTS

Retirement Plan

Participants in the Penton Media, Inc. Retirement Plan consist of a
majority of the full-time employees of Penton and its subsidiaries in the United
States, including the executive officers. The plan is fully paid for by Penton,
and employees become fully vested after five years of service. The annual
benefit payable to an employee under the plan upon retirement, computed as a
straight life annuity amount, equals the sum of the separate amounts the
employee accrues for each of his years of service under the plan. Such separate
amounts are determined as follows: for each year through 1988, 1.2% of such
year's compensation up to the Social Security wage base for such year and 1.85%
(2.0% for years after 1986) of such year's compensation above such wage base;
for each year after 1988 through the year in which the employee reaches 35 years
of service, 1.2% of such year's "covered compensation" and 1.85% of such year's
compensation above such "covered compensation;" and for each year thereafter,
1.2% of such year's compensation. Years of service and compensation with Pittway
Corporation prior to Penton's spinoff from Pittway in August of 1998 are taken
into account under the plan. The employee's compensation under the plan for any
year includes all salary (before any election under Pittway's or Penton's salary
reduction plan or cafeteria plan), commissions and overtime pay and, beginning
in 1989, bonuses, subject to such year's limit applicable to tax-qualified
retirement plans ($160,000 for 1999, $170,000 for 2000 and 2001, and $200,000
each year thereafter). The employee's "covered compensation" under the plan for
any year is generally the average, computed as of such year, of the Social
Security wage bases for each of the 35 years preceding the employee's Social
Security retirement age, assuming that such year's Social Security wage base
will not change in the future. Normal retirement age under the plan is age 65,
and reduced benefits are available as early as age 55. Benefits are not subject
to reduction for Social Security benefits or other offset amounts.

Effective December 31, 2003, the plan was frozen and participants in the
plan ceased to accrue benefits under the plan as of such date. Estimated annual
benefits payable under the plan upon retirement at normal retirement age for the
following persons (assuming 1999 compensation at $160,000, 2000 and 2001
compensation at $170,000 and 2002 and 2003 compensation at $200,000) are $19,621
for Mr. Kemp; $14,229 for Mr. Nussbaum; $6,369 for Mr. Denny and $52,342 for Mr.
Vice.

Supplemental Executive Retirement Plan

Messrs. Kemp, Denny, Nussbaum and Vice participate in Penton's Supplemental
Executive Retirement Plan, which is not tax-qualified. The annual benefit
payable to a participant under the plan at age 65, computed as a straight life
annuity amount, equals the sum of the separate amounts the participant accrues
for each of his years of service after September 3, 1996, for Mr. Kemp;
September 8, 1998, for Mr. Nussbaum; October 16, 2000, for Mr. Denny; and
February 15, 1974, for Mr. Vice. Years of service and compensation with Pittway
are taken into account. The separate amount for each such year is 1.85% of that
portion of the participant's salary and annual discretionary cash bonus, if any,
for such year (before any election under Pittway's or Penton's salary reduction
plan, and including any portion of such bonus taken in the form of Deferred
Shares Awards) in excess of the limit applicable that year to the compensation
that may be taken into account under tax-qualified retirement plans ($160,000 in
1999, $170,000 in 2000 and 2001 and $200,000

140

in 2002 and 2003) but less than $500,000. Benefits are not subject to reduction
for Social Security benefits or other offset amounts. Accrued benefits are
subject to forfeiture in certain events. Effective December 31, 2003, the plan
was frozen and participants in the plan ceased to accrue benefits under the plan
as of such date. Estimated annual benefits payable under the plan upon
retirement at age 65 for the following persons are $27,300 for Mr. Nussbaum;
$10,564 for Mr. Denny and $11,421 for Mr. Vice.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

None of the individuals who served as members of the Compensation Committee
of the Board of Directors in 2004 was or has been an officer or employee of
Penton or engaged in transactions with Penton (other than in his capacity as
director).

None of Penton's executive officers serves as a director or member of the
compensation committee of another entity, one of whose executive officers serves
as a member of the Compensation Committee or a director of Penton.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information with respect to the beneficial
ownership of Penton's common stock and preferred stock as of March 31, 2005 by
(a) the persons known by Penton to be the beneficial owners of more than 5% of
the outstanding shares of common stock, (b) each director, and nominee for
director, of Penton, (c) each of the executive officers of Penton listed in the
Summary Compensation Table, and (d) all directors, nominees and executive
officers of Penton as a group. The information set forth in the table as to
directors, nominees and executive officers is based upon information furnished
to Penton by them in connection with the preparation of this Proxy Statement.
Except where otherwise indicated, the mailing address of each of the
stockholders named in the table is: c/o Penton Media, Inc., 1300 East Ninth
Street, Cleveland, Ohio 44114-1503.

PERCENT OF
OUTSTANDING SHARES
NUMBER OF SHARES OF OF COMMON
NAME COMMON STOCK(1) STOCK(2)
---- ------------------- ------------------

ABRY Mezzanine Partners, L.P.(3)......................... 5,923,845(4)(5) 14.66%
c/o ABRY Partners, LLC
111 Huntington Avenue, 30th Floor
Boston, Massachusetts 02199
ABACUS Fund Partners, LP................................. 986,343(5)(6) 2.78%
ABACUS Fund, Ltd.
c/o Paradigm Ltd.
P. O. Box 2834
Hamilton, HMLX
Bermuda
Mario J. Gabelli, et al.(7).............................. 4,770,434 13.83%
One Corporate Center
Rye, New York 10580
R. Douglas Greene(8)..................................... 2,505,416(9) 7.26%
c/o New Hope Group LLC
600 Linden Ave.
Boulder, Colorado 80304
Sandler Capital Management(10)........................... 2,961,509(5)(11) 7.91%
711 Fifth Avenue, 15th Floor
New York, New York 10022
Hannah C. Craven(12)..................................... 2,961,509 7.91%
Darrell C. Denny......................................... 137,203(13) *
Peni A. Garber(14)....................................... 5,923,845 14.66%

141

PERCENT OF
OUTSTANDING SHARES
NUMBER OF SHARES OF OF COMMON
NAME COMMON STOCK(1) STOCK(2)
---- ------------------- ------------------

Vincent D. Kelly......................................... -- *
David B. Nussbaum........................................ 156,992(15) *
Perry A. Sook............................................ -- *
Preston L. Vice.......................................... 246,488(16) *
Royce Yudkoff(14)........................................ 5,923,845 14.66%
All Directors and Executive Officers as a Group (9
persons)............................................... 11,931,453(17) 27.35%

---------------

* Less than one percent

(1) Except as otherwise indicated below, beneficial ownership means the sole
power to vote and dispose of shares.

(2) Calculated using 34,487,872 the number of shares of common stock
outstanding as of March 31, 2005. This number excludes the number of shares
of common stock (a) into which the outstanding Series C preferred stock is
convertible, (b) for which the outstanding warrants are exercisable and (c)
for which any options to purchase common stock held by directors and
executive officers are exercisable.

(3) The information as to ABRY Mezzanine Partners, L.P. ("ABRY") and entities
controlled directly or indirectly by ABRY is derived in part from Schedule
13D, as filed with the Securities and Exchange Commission on March 28,
2002, statements required to be filed by ABRY pursuant to Section 16(a) of
the Exchange Act, and information furnished to Penton separately by ABRY.

(4) ABRY does not currently own any shares of common stock. This number
represents the number of shares of common stock ABRY would be entitled to
receive upon conversion of its preferred stock and exercise of its warrants
to purchase common stock. ABRY and its affiliated entities currently own
30,000 shares of preferred stock convertible, as of March 31, 2005, into
approximately 4,963,845 shares of common stock and warrants to purchase an
aggregate of 960,000 shares of common stock.

(5) This number reflects the total number of shares of common stock such holder
is entitled to receive upon conversion of its preferred stock and exercise
of the related warrants. The number of shares into which a share of
preferred stock is convertible is calculated by dividing its current
liquidation preference by the conversion price of $7.61. The liquidation
preference is the sum of the liquidation value of the preferred stock,
currently $1,000, plus any accrued dividends. Currently, dividends compound
and accrue daily. Consequently, the number of shares into which the
preferred stock is convertible increases daily. So long as any of Penton's
10 3/8% senior subordinated notes due 2011 and 11 7/8% senior secured notes
due 2007 remain outstanding, the number of shares of common stock that each
of ABRY and its affiliated entities, ABACUS Fund Partners, LP, ABACUS Fund,
Ltd. and Sandler Capital Management and its affiliated entities are
entitled to receive pursuant to the conversion of their preferred stock and
exercise of the warrants is limited by the terms of the Certificate of
Designations governing the preferred stock and warrant agreements,
respectively, to prevent any holder or group of holders of preferred stock
or warrants from becoming the beneficial owner of more than 35% of the
aggregate votes of the outstanding capital stock of Penton entitled to vote
in the election of directors. Currently, no holder of preferred stock is
limited by this provision.

(6) ABACUS Fund Partners, LP and ABACUS Fund, Ltd. do not currently own any
shares of common stock. This number represents the number of shares of
common stock they would be entitled to receive upon conversion of their
preferred stock and exercise of their warrants to purchase common stock.
They currently own 5,000 shares of preferred stock convertible, as of March
31, 2005, into approximately 826,343 shares of common stock and warrants to
purchase an aggregate of 160,000 shares of common stock.

(7) The information as to Mario J. Gabelli and entities controlled directly or
indirectly by Mr. Gabelli is derived from Schedule 13D/A, as filed with the
Securities and Exchange Commission on January 27, 2005, and statements
required to be filed by Mr. Gabelli and entities controlled directly or
indirectly by

142

Mr. Gabelli pursuant to Section 16(a) of the Exchange Act. Such statement
discloses that (a) Mr. Gabelli is the chief investment officer for each of
the entities signing such statements and is deemed to have beneficial
ownership of the shares beneficially owned by all such entities, (b) Mr.
Gabelli and such entities do not admit that they constitute a group within
the meaning of Section 13(d) of the Exchange Act and the rules and
regulations thereunder, and (c) with respect to Penton common stock, Mr.
Gabelli and such entities have the sole power to vote and dispose of all
the shares of which they are beneficial owners, unless the aggregate voting
interest of all such entities exceeds 25% of Penton's total voting interest
or other special circumstances exist, in which case the proxy voting
committees of certain of such entities would have the sole power to vote
certain shares of Penton common stock except 93,383 shares of Penton's
common stock as to which they have no voting power.

(8) The information as to Mr. Greene is derived in part from Schedule 13D, as
filed with the Securities and Exchange Commission on June 21, 1999,
statements required to be filed by Mr. Greene pursuant to Section 16(a) of
the Exchange Act, and information furnished to Penton separately by Mr.
Greene. Mr. Greene has indirect beneficial ownership of the common stock
under Rule 13d-3 of the Securities Exchange Act of 1934 through New Hope
Group, LLC, a Colorado corporation and Greene Investments LLC, a Colorado
corporation. Mr. Greene is the chief executive officer, sole director and
sole shareholder of both New Hope Group, LLC and Greene Investments LLC.
Mr. Greene is a director of Penton.

(9) Includes 11,166 shares subject to options currently exercisable or
exercisable within 60 days of March 31, 2005.

(10) The information as to Sandler Capital Management and entities controlled
directly or indirectly by Sandler is derived in part from Schedule 13D, as
filed with the Securities and Exchange Commission on March 28, 2002, and
information furnished to Penton separately by Sandler.

(11) Sandler does not currently own any shares of common stock. This number
represents the number of shares of common stock Sandler would be entitled
to receive upon conversion of its preferred stock and exercise of its
warrants to purchase common stock. Sandler and its affiliated entities
currently own 15,000 shares of preferred stock convertible, as of March 31,
2005, into approximately 2,481,510 shares of common stock and warrants to
purchase an aggregate of 480,000 shares of common stock.

(12) Ms. Craven may be deemed to beneficially own the stock beneficially owned
by Sandler and its affiliated entities because of her relationship with
Sandler and its affiliated entities and because she was appointed to
Penton's Board of Directors at the request of Sandler. Ms. Craven disclaims
any beneficial ownership of the shares of stock owned by Sandler and its
affiliates.

(13) Includes 55,000 shares subject to options currently exercisable or
exercisable within 60 days of March 31, 2005.

(14) Ms. Garber and Mr. Yudkoff may be deemed to beneficially own the stock
beneficially owned by ABRY and its affiliated entities because of their
relationship with ABRY and its affiliated entities and because they were
appointed to Penton's Board of Directors at the request of ABRY. Ms. Garber
and Mr. Yudkoff disclaim any beneficial ownership of the shares of stock
owned by ABRY and its affiliates.

(15) Includes 133,500 shares subject to options currently exercisable or
exercisable within 60 days of March 31, 2005.

(16) Includes 45,000 shares subject to options currently exercisable or
exercisable within 60 days of March 31, 2005.

(17) Includes the 5,923,845 shares of common stock that may be deemed to be
beneficially owned by Ms. Garber and Mr. Yudkoff, the 2,961,509 shares of
common stock that may be deemed to be beneficially owned by Ms. Craven and
244,666 shares subject to options currently held by directors and executive
officers exercisable or exercisable within 60 days of March 31, 2005.

143

EQUITY COMPENSATION PLAN INFORMATION

The Company currently maintains the Penton Media, Inc. 1998 Equity and
Performance Incentive Plan (as Amended and Restated Effective as of March 15,
2001) (the "Incentive Plan"), the Penton Media, Inc. 1998 Director Stock Option
Plan (as Amended and Restated Effective as of March 15, 2001) (the "Director
Plan"), the Penton Media, Inc. Management Stock Purchase Plan (as Amended and
Restated Effective as of January 1, 2000) (the "Management Stock Purchase Plan")
and the Penton Media, Inc. Employee Stock Purchase Plan (the "Employee Stock
Purchase Plan"), pursuant to which it has made equity available to eligible
persons.

The following table summarizes information about these plans as of December
31, 2004. All outstanding awards relate to our common stock.

EQUITY COMPENSATION PLAN INFORMATION

NUMBER OF SECURITIES
REMAINING AVAILABLE FOR
NUMBER OF SECURITIES TO BE WEIGHTED-AVERAGE FUTURE ISSUANCE UNDER EQUITY
ISSUED UPON EXERCISE OF EXERCISE PRICE OF OUTSTANDING COMPENSATION PLANS
OUTSTANDING OPTIONS, OPTIONS, WARRANTS AND (EXCLUDING SECURITIES
WARRANTS AND RIGHTS RIGHTS REFLECTED IN COLUMN (A))
PLAN CATEGORY (A) (B) (C)
------------- -------------------------- ----------------------------- ----------------------------

Equity compensation
plans approved by
security holders...... 1,432,675(1) $5.85 2,290,613(2)
Equity compensation
plans not approved by
security holders...... -- -- --
--------- ----- ---------
Total................... 1,432,675 $5.85 2,290,613

---------------

(1) Includes 1,748,280 and 163,000 shares to be issued upon the exercise of
outstanding options under the Incentive Plan and Director Plan,
respectively.

(2) Includes 1,833,674 shares available for issuance under the Incentive Plan,
79,000 shares available for issuance under the Director Plan, no shares
available for issuance under the Employee Stock Purchase Plan and 89,925
shares available for issuance under the Management Stock Purchase Plan.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In 2000, Penton adopted the Senior Executive Loan Program pursuant to which
certain executives purchased common stock from the Company in exchange for a
promissory note. The maximum amount of indebtedness that was outstanding under
this loan program since January 1, 2004 was $3,985,635 for Mr. Kemp; $1,062,623
for Mr. Nussbaum; $895,902 for Mr. Vice; and $264,958 for Mr. Denny. In the case
of Messrs. Kemp, Vice and Denny, these amounts also represent the outstanding
balances as of March 31, 2005. Mr. Nussbaum repaid the outstanding balance of
his promissory note in June 2004.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth the aggregate fees paid to
PricewaterhouseCoopers LLP for audit services rendered in connection with the
consolidated financial statements and reports for 2004 and 2003 and for other

144

services rendered during 2004 and 2003 on behalf of the Company and its
subsidiaries, as well as all out-of-pocket costs incurred in connection with
these services (in thousands):

2004 2003
---- ----

Audit fees.................................................. $751 $433
Audit related fees.......................................... 171 209
Tax fees.................................................... 51 81
All other fees.............................................. -- 216
---- ----
Total..................................................... $973 $939
==== ====

AUDIT FEES

Consists of fees billed for professional services rendered for the audit of
the Company's year-end consolidated financial statements and the reviews of
interim financial statements in the Company's Form 10-Q reports.

AUDIT-RELATED FEES

Consists of fees billed for services related to employee benefit plan
audits and consultations concerning financial accounting and reporting
standards.

TAX FEES

Tax fees represent fees for tax compliance, tax consulting and tax
planning.

ALL OTHER FEES

Consists of fees for a process improvement project completed in 2004 and
for other miscellaneous services not reported above.

AUDIT PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT SERVICES OF INDEPENDENT
AUDITORS

The Audit Committee pre-approves all audit and permissible non-audit
services provided by PricewaterhouseCoopers LLP. These services may include
audit services, audit-related services, tax services and other services.

145

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this Report.

1. FINANCIAL STATEMENTS

The following documents are filed as part of this Report:

Report of Independent Registered Public Accounting Firm.

Consolidated Balance Sheets at December 31, 2004 and 2003.

Consolidated Statements of Operations for the Years Ended December 31,
2004, 2003 and 2002.

Consolidated Statements of Cash Flows for the Years Ended December 31,
2004, 2003 and 2002.

Consolidated Statements of Stockholders' Equity (Deficit) and of
Comprehensive Loss for the Years Ended December 31, 2004, 2003 and 2002.

Notes to Consolidated Financial Statements.

2. FINANCIAL STATEMENT SCHEDULE

The following financial statement schedule of Penton Media, Inc. is filed
as part of this Report and should be read in conjunction with the Consolidated
Financial Statements of Penton Media, Inc. See Note 2 -- Restatement in the
notes to consolidated financial statements included herein.

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002

BALANCE AT BALANCE AT
BEGINNING CHARGES TO END OF
OF YEAR EXPENSE DEDUCTIONS YEAR
---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)

Future Income Tax Benefits -- Valuation Allowance:
2004 -- Valuation allowance........................ $72,129 $33,878 $ -- $106,007
2003 -- Valuation allowance (as restated).......... $46,366 $25,763 $ -- $ 72,129
2002 -- Valuation allowance (as restated).......... $ 1,779 $46,117 $(1,530) $ 46,366

Financial statement schedules not listed above have been omitted because
required information is not present or is not present in amounts sufficient to
require submission of the schedule or because the information required is
included in the consolidated financial statements or notes thereto.

3. EXHIBITS

3.1 Restated Certificate of Incorporation (filed as Exhibit 3.1
to the Company's Form 10-Q on August 14, 2002, and
incorporated herein by reference).
3.2 Certificate of Designations, Preferences and Rights of
Series M Preferred Stock of Penton Media, Inc. (filed as
Exhibit 3.1 to the Company's Form 8-K on September 13, 2004,
and incorporated herein by reference).
3.3 Certificate of Designations, Preferences and Rights of
Series C Convertible Preferred Stock of Penton Media, Inc.
(filed as Exhibit 3.1 to the Company's Form 8-K on September
13, 2004, and incorporated herein by reference).
3.4 Amended and Restated Bylaws (filed as Exhibit 3.3 to the
Company's Form 10-Q on August 14, 2002, and incorporated
herein by reference).
4.1 Indenture, dated as of March 28, 2002, by and among Penton
Media, Inc., the Subsidiary Guarantors named therein and
U.S. Bank National Association, as Trustee (filed as Exhibit
4.1 to the Company's Form S-4 on June 26, 2002, and
incorporated herein by reference).

146

4.2 Pledge and Security Agreement, dated as of March 28, 2002,
by and among Penton Media, Inc., the Subsidiary Guarantors
named therein and U.S. Bank National Association, as Trustee
(filed as Exhibit 4.3 to the Company's Form S-4 on June 26,
2002, and incorporated herein by reference).
4.3 Intercreditor Agreement, dated as of March 28, 2002, by and
between U.S. Bank National Association and The Bank of New
York (filed as Exhibit 4.4 to the Company's Form S-4 on June
26, 2002, and incorporated herein by reference).
4.4 Form of Warrants to purchase common stock of Penton Media,
Inc. (filed as Exhibit 4.1 to the Company's Form 8-K on
March 19, 2002, and incorporated herein by reference).
4.5 Indenture, dated as of June 28, 2001, between Penton Media,
Inc., as issuer, the Subsidiary Guarantors named herein, and
The Bank of New York, as Trustee, including the form of the
Company's 10.375% Senior Subordinated Notes due June 15,
2011 attached as Exhibit A thereto (filed as Exhibit 4.1 to
the Company's Form 10-Q on August 14, 2001, and incorporated
herein by reference).
10.1 Amended and Restated Series B Convertible Preferred Stock
and Warrant Purchase Agreement, dated as of March 18, 2002,
among Penton Media, Inc. and the Investors named therein,
(filed as Exhibit 10.1 to the Company's Form 8-K on March
19, 2002, and incorporated herein by reference).
10.2 Amendment No. 1 to the Amended and Restated Series B
Convertible Preferred Stock and Warrant Purchase Agreement
(filed as Exhibit 10.3 to the Company's Form S-3/A on June
4, 2002, and incorporated herein by reference).
10.3 Registration Rights Agreement (filed as Exhibit 10.2 to the
Company's Form 8-K on March 19, 2002, and incorporated
herein by reference).
10.4 Loan and Security Agreement by and among Penton Media, Inc.,
as borrower, and the Lenders that are signatories thereto,
as the Lenders, and Wells Fargo Foothill, Inc., as the
arranger and administrative agent (filed as Exhibit 10.1 to
the Company's Form 8-K on August 15, 2003, and incorporated
herein by reference).

MANAGEMENT CONTRACTS AND COMPENSATORY PLANS
10.5 Penton Media, Inc. Retirement Savings Plan (filed as Exhibit
4.3 to the Company's Form S-8 on August 27, 1998, and
incorporated herein by reference).
10.6 Penton Media, Inc. Management Stock Purchase Plan (filed as
Exhibit 4.3 to the Company's Form S-8 on March 21, 2000, and
incorporated herein by reference).
10.7 Penton Media, Inc. Amended and Restated 1998 Director Stock
Option Plan (filed as Exhibit 10.4 to the Company's Form
10-Q on August 14, 2001, and incorporated herein by
reference).
10.8 Penton Media, Inc. Amended and Restated 1998 Equity and
Performance Incentive Plan (filed as Exhibit 10.5 to the
Company's Form 10-Q on August 14, 2001, and incorporated
herein by reference).
10.9 Penton Media, Inc. Retirement Plan (filed as Exhibit 10.9 to
the Company's Registration Statement No. 333-56877, and
incorporated herein by reference).
10.10 Penton Media, Inc. Senior Executive Bonus Plan (filed as
Exhibit 10.8 to the Company's Form 10-K on March 30, 2000,
and incorporated herein by reference).
10.11 Penton Media, Inc. Supplemental Executive Retirement Plan
(as Amended and Restated Effective as of January 1, 2000)
(filed as Exhibit 10.9 to the Company's Form 10-K on March
30, 2000, and incorporated herein by reference).
10.12 Amended and Restated Employment Agreement, dated June 23,
2004, between Penton Media, Inc. and David B. Nussbaum
(filed as Exhibit 10.3 to the Company's Form 10-Q on August
16, 2004, and incorporated herein by reference).
10.13 Employment Agreement, dated July 16, 1998, between Penton
Media, Inc. and David Nussbaum (filed as Exhibit 10.4 to the
Company's Form 10-Q on November 16, 1998, and incorporated
herein by reference).
10.14 Amendment to the Employment Agreement, dated December 11,
2001, between Penton Media, Inc. and David B. Nussbaum
(filed as Exhibit 10.12 to the Company's Form 10-K on March
21, 2002, and incorporated herein by reference).

147

10.15 Separation Agreement and General Release, dated July 1,
2004, between Penton Media, Inc. and Thomas L. Kemp (filed
as Exhibit 10.1 to the Company's Form 10-Q on August 16,
2004, and incorporated herein by reference).
10.16 Employment Agreement, dated August 24, 1999, between Penton
Media, Inc. and Preston L. Vice (filed as Exhibit 10.17 to
the Company's Form 10-K on March 30, 2000, and incorporated
herein by reference).
10.17 Amendment to the Employment Agreement, dated December 11,
2001, between Penton Media, Inc. and Preston L. Vice, (filed
as Exhibit 10.17 to the Company's Form 10-K on March 21,
2002, and incorporated herein by reference).
10.18 Employment Agreement, dated October 15, 2000, between Penton
Media, Inc. and Darrell C. Denny (filed as Exhibit 10.18 to
the Company's Form 10-K on March 30, 2000, and incorporated
herein by reference).
10.19 Amendment to the Employment Agreement, dated December 11,
2001, between Penton Media, Inc. and Darrell C. Denny (filed
as Exhibit 10.18 to the Company's Form 10-K on March 21,
2002, and incorporated herein by reference).
21 Subsidiaries of Penton Media, Inc.
23 Consent of Independent Registered Public Accounting Firm,
PricewaterhouseCoopers LLP.
24 Powers of Attorneys.
31.1 Principal executive officer's certification pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Principal financial officer's certification pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
32 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Exhibits

See subsection (a)(3) above.

Not applicable.

148

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES AND
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.

PENTON MEDIA, INC.

By: /s/ PRESTON L. VICE
------------------------------------
Name: Preston L. Vice
Title: Chief Financial Officer

Dated: April 15, 2005

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES INDICATED ON APRIL 15, 2005.

SIGNATURE TITLE
--------- -----

/s/ DAVID B. NUSSBAUM Chief Executive Officer, President and Director
------------------------------------------------ (Principal Executive Officer)
David B. Nussbaum

/s/ PRESTON L. VICE Chief Financial Officer and Secretary (Principal
------------------------------------------------ Financial and Accounting Officer)
Preston L. Vice

/s/ * Director
------------------------------------------------
Hannah C. Craven

/s/ * Director
------------------------------------------------
Peni A. Garber

/s/ * Director
------------------------------------------------
R. Douglas Greene

/s/ * Director
------------------------------------------------
Vincent D. Kelly

/s/ * Director
------------------------------------------------
Perry A. Sook

/s/ * Director
------------------------------------------------
Royce Yudkoff

---------------

* The undersigned, by signing his name hereto, does sign and execute this Annual
Report on Form 10-K pursuant to a Power of Attorney executed on behalf of the
above named officers and directors of Penton Media, Inc. and files herewith as
Exhibit 24 on behalf of Penton Media, Inc. and each such person.

April 15, 2005

By: /s/ PRESTON L. VICE
----------------------------------
Preston L. Vice
Attorney-in-Fact

149