PENTON MEDIA INC, S-1/A, 1998-08-03

PENTON MEDIA INC
S-1/A, 1998-08-03
PERIODICALS: PUBLISHING OR PUBLISHING & PRINTING

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 3, 1998

REGISTRATION NO. 333-56877
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- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 2

TO
FORM S-1
REGISTRATION STATEMENT
under
The Securities Act of 1933
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PENTON MEDIA, INC.
(Exact Name of Registrant as Specified in Its Charter)

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DELAWARE 36-2875386 2721
(State or Other Jurisdiction of (I.R.S. Employer (Primary Standard Industrial
Incorporation or Organization) Identification Number) Classification Code Number)
</TABLE>

1100 SUPERIOR AVENUE
CLEVELAND, OHIO 44114
TELEPHONE: (216) 696-7000
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)

PRESTON L. VICE, SENIOR VICE PRESIDENT
1100 SUPERIOR AVENUE
CLEVELAND, OHIO 44114
TELEPHONE: (216) 696-7000
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)

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

Copies to:

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<S> <C>
CHRISTOPHER M. KELLY BRIAN D. HOGAN
JONES, DAY, REAVIS & POGUE KIRKLAND & ELLIS
NORTH POINT, 901 LAKESIDE AVENUE 200 EAST RANDOLPH DRIVE
CLEVELAND, OHIO 44114 CHICAGO, ILLINOIS 60601
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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- --------------------------------------------------------------------------------
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED AUGUST 3, 1998

LOGO

PENTON MEDIA, INC.

COMMON STOCK
DISTRIBUTED TO STOCKHOLDERS OF PITTWAY CORPORATION

This Prospectus is being furnished in connection with the distribution (the
"Stock Distribution") to stockholders of Pittway Corporation, a Delaware
corporation ("Pittway"), of common stock, par value $.01 per share ("Common
Stock"), of Penton Media, Inc., a Delaware corporation formerly known as Penton
Publishing, Inc. ("Penton" or the "Company"). Penton is currently a wholly-owned
subsidiary of Pittway.

The shares of Common Stock will be distributed on the basis of one share of
Common Stock for each share of Pittway stock, without distinction between
classes, to holders of record of Pittway common stock and Pittway class A stock
at the close of business on July 31, 1998 (the "Record Date"). No consideration
will be paid by Pittway's stockholders for the Common Stock received in the
Stock Distribution.

There is not currently a public market for the Common Stock. The Common
Stock has been approved for listing on the New York Stock Exchange under the
symbol "PME," subject to official notice of issuance.

THE STOCK DISTRIBUTION IS CONDITIONED UPON THE CLOSING IMMEDIATELY
THEREAFTER OF THE ACQUISITION BY PENTON, IN EXCHANGE FOR COMMON STOCK, CASH AND
CERTAIN CONTINGENT RIGHTS, OF DONOHUE MEEHAN PUBLISHING COMPANY, AN ILLINOIS
CORPORATION ("DM PUBLISHING"). See "Introduction." The closing of the
acquisition is conditioned upon the satisfaction or waiver of various closing
conditions. See "DM Publishing Combination Agreement -- Closing Conditions." It
is anticipated that such closing and the Stock Distribution will occur on or
about August 7, 1998. Certificates representing the shares of Common Stock
distributed in the Stock Distribution will be mailed as soon as practicable
after the closing of the acquisition. After the Stock Distribution and the
acquisition of DM Publishing, 22,781,713 shares of Common Stock will be
outstanding.

RECIPIENTS OF COMMON STOCK IN THE STOCK DISTRIBUTION SHOULD NOTE THE
FACTORS DISCUSSED IN "RISK FACTORS" BEGINNING ON PAGE 21.

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

NO STOCKHOLDER APPROVAL OF THE STOCK DISTRIBUTION IS REQUIRED OR SOUGHT. PITTWAY
IS NOT ASKING YOU FOR A PROXY, AND YOU ARE REQUESTED NOT TO SEND PITTWAY A
PROXY. YOU ARE FURTHER REQUESTED NOT TO SURRENDER ANY PITTWAY COMMON STOCK OR
CLASS A STOCK CERTIFICATES.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

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

Questions relating to the Stock Distribution should be directed to James F.
Vondrak, Secretary of Pittway Corporation, 200 South Wacker Drive, Suite 700,
Chicago, Illinois 60606-5802 (telephone: (312) 831-1070). After the Stock
Distribution, stockholders of Penton with inquiries relating to the Stock
Distribution or their ownership of Common Stock should contact Preston L. Vice,
Secretary of Penton (telephone: (216) 696-7000).

The date of this Prospectus is August 4, 1998.

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TABLE OF CONTENTS

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PAGE
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SUMMARY OF CERTAIN INFORMATION............. 3
FORWARD-LOOKING STATEMENTS................. 7
RECENT DEVELOPMENTS........................ 7
INTRODUCTION............................... 8
The Company.............................. 8
The Stock Distribution................... 9
THE STOCK DISTRIBUTION..................... 10
Reasons for the Stock Distribution and
the DM Publishing Combination.......... 10
Manner of the Stock Distribution......... 10
Pittway Stock Held under or Issuable
pursuant to Pittway Employee Plans..... 11
Relationship between Penton and Pittway
after the Stock Distribution........... 12
Certain Federal Income Tax Aspects of the
Stock Distribution..................... 12
DM PUBLISHING COMBINATION AGREEMENT........ 13
Closing Consideration and Contingent
Rights................................. 13
Employment Agreements.................... 14
Representations and Warranties........... 14
Indemnification and Hold Harmless
Agreements............................. 15
Certain Tax Matters...................... 17
Expenses................................. 18
Registration Rights...................... 18
Closing Conditions....................... 18
RISK FACTORS............................... 21
Factors Affecting the Common Stock....... 21
Factors Relating to Taxation............. 22
Factors Relating to Operations........... 22
Effect on the Trading Prices of Pittway
Stock.................................. 24
CAPITALIZATION............................. 25
SELECTED HISTORICAL FINANCIAL
INFORMATION.............................. 26
UNAUDITED PRO FORMA COMBINED FINANCIAL
INFORMATION.............................. 27
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS............................... 32
Overview................................. 32
Results of Operations.................... 33
Foreign Currency......................... 37
Liquidity and Capital Resources.......... 37
Seasonality.............................. 38
Inflation................................ 38
Year 2000 Issue.......................... 38
Forward-Looking Statements............... 39
Changes in Accounting Standards.......... 39
BUSINESS................................... 40
Overview................................. 40
Industry................................. 41
Business Strategy........................ 43
</TABLE>

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PAGE
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Recent Acquisitions and Divestitures..... 44
Sources of Revenue....................... 45
Information Products and Services........ 46
Production and Distribution.............. 54
Promotion and Marketing.................. 55
Competition.............................. 55
Trademarks and Intellectual Property
Rights................................. 55
Customers................................ 56
Environmental Matters.................... 56
Employees................................ 56
Properties............................... 56
Litigation............................... 56
MANAGEMENT................................. 57
Board of Directors....................... 57
Committees of the Board of Directors..... 59
Executive Officers....................... 59
Significant Employees.................... 61
EXECUTIVE COMPENSATION..................... 64
Compensation Tables...................... 64
Penton Compensation Plans................ 65
Employment Agreements.................... 72
CERTAIN TRANSACTIONS....................... 72
STOCK OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND EXECUTIVE OFFICERS AND
DIRECTORS................................ 73
DESCRIPTION OF CAPITAL STOCK............... 76
Common Stock............................. 76
Preferred Stock.......................... 76
Listing and Trading of Common Stock...... 76
Dividends on Common Stock................ 76
Stock Distribution Agent, Transfer Agent
and Registrar.......................... 76
ANTI-TAKEOVER EFFECTS...................... 77
Business Combinations.................... 77
Classified Board of Directors............ 78
Number of Directors; Removal;
Vacancies.............................. 78
Stockholder Action; Special Meetings..... 78
Stockholder Proposals and Nominations.... 78
Amendment of Bylaws...................... 79
LIMITATIONS ON LIABILITY AND
INDEMNIFICATION OF OFFICERS AND
DIRECTORS................................ 80
Elimination of Liability in Certain
Circumstances.......................... 80
Indemnification and Insurance............ 80
1999 ANNUAL STOCKHOLDERS MEETING........... 80
LEGAL MATTERS.............................. 80
EXPERTS.................................... 81
AVAILABLE INFORMATION...................... 81
INDEX TO FINANCIAL STATEMENTS.............. F-1
</TABLE>

2
<PAGE> 4

SUMMARY OF CERTAIN INFORMATION

This summary is qualified by the more detailed information set forth
elsewhere in this Prospectus, which should be read in its entirety. When used
with reference to periods after the Stock Distribution (as defined below), the
terms "Penton" and the "Company" mean Penton Media, Inc. and its subsidiaries
after giving effect to the DM Publishing Combination (as defined below).
Penton's logo and certain of the titles and logos of Penton's publications and
media services referred to herein are trademarks of Penton. Each trade name,
trademark or service mark of any other company appearing in the Prospectus is
the property of its holder.

PENTON........................ Penton Media, Inc. ("Penton") is a Delaware
corporation formerly known as Penton
Publishing, Inc. Founded in 1892 by John
Augustus Penton, Penton is a leading business
media company. Penton's principal media
platforms, including magazines, trade shows and
conferences, and electronic media products,
provide proprietary information to business
users and integrated marketing solutions to
industry suppliers. Penton's publications,
trade shows and conferences, and electronic
media products currently serve the electronics,
design/engineering, manufacturing, supply
chain/aviation, mechanical
systems/construction, foodservice/hospitality,
government/compliance, and management markets,
and, upon completion of the DM Publishing
Combination, will also serve the convenience
store/baking market.

DM PUBLISHING COMBINATION..... Immediately following the Stock Distribution,
Penton will acquire Donohue Meehan Publishing
Company, an Illinois corporation ("DM
Publishing"), through a merger of DM Publishing
into D-M Acquisition Corp., an Illinois
corporation and a wholly-owned subsidiary of
Penton, in exchange for common stock, par value
$.01 per share ("Common Stock"), of Penton,
cash and contingent rights to receive
additional cash (and/or under certain
circumstances additional Common Stock) (the "DM
Publishing Combination"). At the closing of the
acquisition, Penton will enter into a two-year
employment agreement with each of DM
Publishing's two shareholders. See "DM
Publishing Combination Agreement."

Penton believes that the DM Publishing
Combination will benefit Penton and its
stockholders because, among other things, it
will strengthen Penton's position in publishing
for the foodservice industry. Penton also
expects to benefit from the addition to its
management of the two shareholders of DM
Publishing, who, combined, have over fifty
years of experience in publishing for that
industry.

MANAGEMENT.................... It is expected that all current senior
management of both Penton and DM Publishing,
who have extensive experience in the business
media industry, will remain with Penton after
the Stock Distribution and the DM Publishing
Combination. The current Chief Executive
Officer and the current President of Penton,
who will be serving immediately following the
Stock Distribution and the DM Publishing
Combination, have 24 and 21 years,
respectively, of experience in this industry.
The various operating unit heads of the major
Penton operations who will be serving
immediately following the Stock Distribution
and the DM Publishing Combination have, on
average, over 25 years of experience in this
industry.

For information regarding employment agreements
with certain senior management of Penton and DM
Publishing, see "DM
3
<PAGE> 5

Publishing Combination Agreement -- Employment
Agreements" and "Executive Compensation --
Employment Agreements."

STOCK DISTRIBUTION............ The distribution of Common Stock to
stockholders of Pittway.

DISTRIBUTING COMPANY.......... Pittway Corporation, a Delaware corporation
("Pittway").

VOTE REQUIRED................. A vote of Pittway's stockholders is not
required to approve the Stock Distribution
because (i) the Stock Distribution is a
dividend, which is within the sole discretion
of Pittway's Board of Directors to declare and
(ii) the Stock Distribution does not represent
a sale, lease, or exchange of all or
substantially all of Pittway's property and
assets under the Delaware General Corporation
Law.

STOCK DISTRIBUTION RATIO...... One share of Common Stock for each share of
Pittway common stock, and one share of Common
Stock for each share of Pittway class A stock,
held of record on the Record Date.

RECORD DATE................... Close of business on July 31, 1998.

STOCK DISTRIBUTION DATE....... Expected to be on or about August 7, 1998. On
the Stock Distribution Date, the Stock
Distribution Agent will begin distributing
Common Stock certificates to stockholders of
Pittway. Pittway stockholders will not be
required to make any payment or to take any
other action in connection with the Stock
Distribution. STOCKHOLDERS OF PITTWAY WILL
CONTINUE TO OWN THEIR PITTWAY COMMON STOCK AND
PITTWAY CLASS A STOCK AND ARE NOT REQUIRED TO,
AND SHOULD NOT, SURRENDER CERTIFICATES
REPRESENTING SUCH STOCK. See "The Stock
Distribution -- Manner of the Stock
Distribution."

STOCK DISTRIBUTION AGENT...... Harris Trust and Savings Bank
P.O. Box A-3504
Chicago, Illinois 60690-3504
(312) 461-5360

SHARES OUTSTANDING............ 21,240,075 shares of Common Stock (based on the
aggregate number of shares of common stock and
class A stock of Pittway outstanding on the
Record Date) will be distributed in the Stock
Distribution. As of the Record Date, there were
3,938,832 shares of Pittway common stock
outstanding and 17,301,243 shares of Pittway
class A stock outstanding.

1,541,638 shares of Common Stock will be
distributed in connection with the DM
Publishing Combination (excluding shares that
may be contingently issuable in the year 2000).
See "DM Publishing Combination Agreement --
Closing Consideration and Contingent Rights."

22,781,713 shares of Common Stock will be
outstanding immediately after the Stock
Distribution and the DM Publishing Combination.
At or about such time, certain debt convertible
into Common Stock and certain options to
purchase Common Stock will also be outstanding.
See "Capitalization."

CONDITION..................... THE STOCK DISTRIBUTION IS CONDITIONED UPON THE
CLOSING IMMEDIATELY THEREAFTER OF THE DM
PUBLISHING COMBINATION. SEE "INTRODUCTION." The
closing of the DM Publishing Combination is
conditioned upon the satisfaction or waiver of
various closing

4
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conditions. See "DM Publishing Combination
Agreement -- Closing Conditions."

RISK FACTORS.................. Stockholders should consider the factors
discussed under "Risk Factors." Some of the
significant risk factors include "Factors
Affecting the Common Stock -- Ownership by
Certain Significant Stockholders," "Factors
Relating to Taxation -- Tax Aspects of the
Stock Distribution," "Factors Relating to
Operations -- Dependence on and Cyclicality of
Advertising Revenue," "-- Acquisition Risks,"
and "-- Risks Associated with International
Operations."

TRADING MARKET................ The Common Stock has been approved for listing
on the New York Stock Exchange under the symbol
"PME," subject to official notice of issuance.
It is not anticipated that there will be "when
issued" trading of the Common Stock prior to
the Stock Distribution Date.

STOCK TICKER SYMBOL........... PME

TRANSFER AGENT AND
REGISTRAR..................... Harris Trust and Savings Bank
P.O. Box A-3504
Chicago, Illinois 60690-3504
(312) 461-5360

FEDERAL INCOME TAX
CONSEQUENCES.................. Pittway has received a ruling from the Internal
Revenue Service that the Stock Distribution
will be tax-free to Pittway and its
stockholders for federal income tax purposes.
See "The Stock Distribution -- Certain Federal
Income Tax Aspects of the Stock Distribution."

ANTI-TAKEOVER PROVISIONS...... Certain provisions of Delaware corporation law
and of Penton's certificate of incorporation
and bylaws may have the effect of discouraging
unsolicited takeover bids from third parties.
See "Anti-Takeover Effects."

PENTON DIVIDEND POLICY........ Penton expects to pay initial quarterly
dividends in an amount of $.03 per share. The
future payment of dividends will depend on
business decisions that will be made by the
Board of Directors from time to time based upon
the results of operations and financial
condition of Penton and such other business
considerations as the Board of Directors
considers relevant.

PRINCIPAL OFFICE OF PENTON.... 1100 Superior Avenue
Cleveland, Ohio 44114
(216) 696-7000

5
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SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION

The following table summarizes certain financial data with respect to
Penton. The historical income statement data for each of the three years in the
period ended December 31, 1997 and balance sheet data as of December 31, 1996
and 1997 have been derived from Penton's audited annual financial statements and
notes thereto, which appear elsewhere in this Prospectus. The historical data as
of or for the three months ended March 31, 1998 and 1997 have been derived from
unaudited financial statements appearing elsewhere herein which, in the opinion
of management, include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the results for the interim
periods. The unaudited pro forma data reflect adjustments to Penton's historical
data for the year ended December 31, 1997, and the three months ended March 31,
1998, to give effect to: (i) the acquisition of Independent Exhibitions Limited,
Equity Information Exchange Limited and Service Exhibitions Limited
(collectively referred to herein as "INDEX"), which was completed on December
12, 1997, as if such acquisition had occurred on January 1, 1997 and had been
included on the basis of its twelve months ended November 30, 1997, (ii) the DM
Publishing Combination as if such acquisition had occurred on January 1, 1997,
(iii) the issuance of Common Stock pursuant to the DM Publishing Combination as
if such issuance had occurred on January 1, 1997, and (iv) other adjustments
required to reflect the combined results of operations of Penton as a separate
public company. See "Unaudited Pro Forma Combined Financial Information."
Historical and pro forma results may not be indicative of the future performance
of Penton as a separate public company. The information set forth below should
be read in conjunction with the audited and unaudited Penton historical
consolidated financial information, the unaudited pro forma combined financial
information, and "Management's Discussion and Analysis of Financial Condition
and Results of Operations," included elsewhere in this Prospectus. Historical
dividends per share have not been presented because Penton was not a public
company during the periods presented.

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HISTORICAL PRO FORMA
------------------- ---------
PRO FORMA THREE MONTHS THREE
------------ MONTHS
HISTORICAL
---------------------------------------------------- ENDED
YEAR ENDED DECEMBER 31, YEAR ENDED MARCH 31, ENDED
---------------------------------------------------- DECEMBER 31, ------------------- MARCH 31,
1993 1994 1995 1996 1997 1997 1997 1998(A) 1998
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(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
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FOR THE PERIOD:
OPERATING RESULTS
Revenues.............. $149,991 $159,284 $179,900 $188,557 $204,931 $222,957 $ 48,666 $ 52,485 $ 54,589
Operating income
(b)................. 7,063 10,290 11,947 18,499 25,297 28,407 4,857 4,665 4,976
Income from continuing
operations.......... 3,920 6,062 8,625 10,956 14,874 14,923 2,718 2,340 2,379
Income from
discontinued
operations.......... (6) 51 (48) -- -- -- -- -- --
Cumulative effect of
changes in
accounting
principles.......... (190) -- -- -- -- -- -- -- --
Net income............ 3,724 6,113 8,577 10,956 14,874 14,923 2,718 2,340 2,379
Income from continuing
operations and net
income per share,
basic and diluted
(c)................. .18 .29 .40 .52 .70 .66 .13 .11 .10
CASH FLOWS AND OTHER
DATA
Cash flows
Operating........... $ 8,142 $ 5,329 $ 7,423 $ 20,507 $ 23,186 $ 24,987 $ 590 $ (1,018) $ (452)
Investing(d)........ (5,432) (5,026) (4,989) (4,722) (53,192) (53,192) (14,799) (1,128) (1,128)
Financing........... (2,650) (668) (1,697) (15,888) 30,854 29,517 13,916 1,459 4,672
Capital
expenditures(d)..... 6,151 7,593 4,989 4,822 5,450 5,646 759 1,128 1,128
Depreciation and
amortization........ 5,145 5,596 5,772 5,911 6,551 8,342 1,678 2,027 2,241
EBITDA(e)............. 12,208 15,886 17,719 24,410 31,848 36,749 6,535 6,692 7,217
AT END OF PERIOD:
Total assets of
continuing
operations............ $101,519 $105,901 $116,494 $108,799 $156,426 $178,440 $123,826 $159,094 $184,882
Investment in
discontinued
operations............ 4,818 5,241 -- -- -- -- -- -- --
Total assets............ 106,337 111,142 116,494 108,799 156,426 178,440 123,826 159,094 184,882
Goodwill and other
intangibles........... 22,954 22,784 21,916 21,940 71,822 103,361 36,837 71,673 102,399
Stockholder's equity.... 60,675 61,847 70,763 59,151 69,613 84,081 61,869 71,953 90,404
</TABLE>

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(a) Operating results for the period were negatively impacted by period costs of
trade shows acquired in December 1997 for which revenues will not be
recognized until the trade shows are held in future periods. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

(b) Revenues less operating expenses. See Consolidated Statement of Income
included in Penton's Consolidated Financial Statements.

(c) Historical earnings per share are based on 21,200,000 shares of Common Stock
outstanding. Pro forma earnings per share are based on 22,739,000 shares,
consisting of the historical shares outstanding increased by 1,539,000
shares issuable upon completion of the DM Publishing Combination, as if it
had occurred on March 31, 1998. The actual number of shares to be issued in
the Stock Distribution and the DM Publishing Combination differs slightly
from the amounts presented herein.

(d) Cash flows from investing activities include capital expenditures.

(e) Penton defines EBITDA as operating income before depreciation and
amortization. EBITDA is often used to analyze and compare companies on the
basis of operating performance and cash flow. However, EBITDA is not
adjusted for all non-cash expenses or for working capital, capital
expenditures and other investment requirements. EBITDA should not be
considered in isolation or as a substitute for measures of performance
prepared in accordance with generally accepted accounting principles. Not
all companies calculate EBITDA in the same manner, and EBITDA as presented
may not be comparable to similarly titled measures presented by other
companies.

6
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FORWARD-LOOKING STATEMENTS

This Prospectus contains statements that constitute forward-looking
statements in that they include statements regarding the intent, belief, or
current expectations of Penton, its directors or its officers primarily with
respect to the future operating performance of Penton. All statements other than
statements of historical facts included in this Prospectus are forward-looking
statements. Forward-looking statements are typically identified by the words
"believe," "expect," "anticipate," "intend," "estimate" and similar expressions.
Although such forward-looking statements (and the assumptions upon which they
are based) reflect Penton's current reasonable judgment regarding the direction
of its business, actual results will almost always vary, sometimes materially.
Penton undertakes no obligation to release publicly any revisions to any such
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated results. The information
contained in this Prospectus, including without limitation the information under
"Risk Factors" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations," identifies important factors that could affect
actual results, and Penton's forward-looking statements are expressly qualified
in their entirety by such factors.

RECENT DEVELOPMENTS

Penton's revenues for the three and six months ended June 30, 1998 were
$59.2 million and $111.7 million, respectively, compared to $54.1 million and
$102.7 million, respectively, for the comparable periods in 1997. Penton's
operating income for the three and six months ended June 30, 1998 was $6.9
million and $11.6 million, respectively, compared to $8.6 million and $13.4
million, respectively, for the comparable periods in 1997. Net income for the
three and six months ended June 30, 1998 was $3.7 million and $6.0 million,
respectively, equivalent to $0.17 per share and $0.28 per share, respectively,
based on 21,200,000 shares of Common Stock outstanding. Net income for the three
and six months ended June 30, 1997 was $4.9 million and $7.6 million,
respectively, or $0.23 per share and $0.36 per share, respectively, based on
21,200,000 shares of Common Stock outstanding.

The increase in revenues for the six months ended June 30, 1998 over the
comparable period in 1997 was primarily attributable to (i) an overall increase
in advertising revenues, which included the publication of Hydraulics and
Pneumatics' Fluid Power Handbook and Directory published every other year, and
an increase in advertising volume related to two new publications launched in
the first quarter of 1998, IW Growing Companies and Penton's Embedded Systems
Development, (ii) the inclusion for the first time of the operations of trade
shows acquired in December 1997 and (iii) an increase in revenues from external
customers of the Company's printing facility.

The decline in operating income and net income for the six months ended
June 30, 1998 over the comparable period in 1997 was due primarily to (i) an
increase in period costs related to trade shows acquired in December 1997
(indirect selling, general, and administrative costs are expensed as incurred
while the related revenues and direct show expenses are recognized when the
event is held), (ii) higher charges related to Pittway stock appreciation rights
held by Penton employees, and (iii) interest and amortization expenses related
to the trade shows acquired in December 1997.

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INTRODUCTION

THE COMPANY

Penton Media, Inc., a Delaware corporation formerly known as Penton
Publishing, Inc. ("Penton" or the "Company"), is a direct, wholly-owned
subsidiary of Pittway Corporation, a Delaware corporation ("Pittway"). Founded
in 1892 by John Augustus Penton, Penton is a leading business media company.
Penton's principal media platforms, including magazines, trade shows and
conferences, and electronic media products, provide proprietary information to
business users, and integrated marketing solutions to industry suppliers.
Penton's publications, trade shows and conferences, and electronic media
products serve the electronics, design/engineering, manufacturing, supply
chain/aviation, mechanical systems/construction, foodservice/hospitality,
government/compliance, and management markets, and, upon completion of the DM
Publishing Combination (as defined below), will also serve the convenience
store/baking market. Penton's diverse array of products provide
business-to-business marketers with the tools to communicate effectively with
their customers, and provide current information to the markets served. Penton
had total revenue of approximately $205 million in 1997.

Widely recognized as a publisher of high-quality business and trade
magazines, Penton has, in recent years, diversified its media platforms to
include trade shows and conferences, electronic media products (including Web
sites and CD-ROMs), custom publishing, research, databases, and information
product sales. Penton also owns a printing plant, Penton Press, which prints
nearly all of Penton's publications and approximately 50 outside publishers'
magazines, and a direct-mail and marketing services business, Curtin &
Pease/Peneco.

Penton is the fifth largest specialized business magazine publisher in the
United States, according to the American Business Press, the leading association
for the business publishing industry. Penton publishes 42 national business and
trade publications with a combined circulation of over 2.7 million subscribers
worldwide. Of the 21 Penton magazines that serve measured market segments
tracked by external reporting sources, 17 are ranked either first or second in
their markets. Some of Penton's leading magazine brands include Air Transport
World, American Machinist, Computer-Aided Engineering, Electronic Design,
IndustryWeek, Machine Design, Microwaves & RF, New Equipment Digest, and
Wireless Systems Design. Penton's magazines accounted for approximately 74% of
Penton's total revenue in 1997.

<TABLE>
<CAPTION>
ACQUIRED COMPANY DATE CONSIDERATION
---------------- ---- -------------
<S> <C> <C>
A/E/C SYSTEMS International January, 1997 $14.0 million and up to $3.25
("A/E/C") million in contingent consideration,
$655,000 of which has been paid
INDEX*, comprised of: December, 1997 UK L16.1 million cash, UK L1.5
Independent Exhibitions Limited million loan note, and up to UK L2.6
Equity Information Exchange million contingent consideration
Limited
Service Exhibitions Limited
Industrial Shows of America December, 1997 $5.0 million and up to $6.0 million
("ISOA").......................... in contingent consideration
</TABLE>

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

* Each trade show company comprising INDEX was under common control.

Penton's trade shows include the A/E/C SYSTEMS International Shows,
Computers for Contractors, Computers in Manufacturing, International Leisure
Industry Week, the North American Warehousing & Distribution Exposition &
Conference, and the Wireless Symposium & Exhibition. Conferences include the
America's Best Plants Series and the Global Leadership Forum. Trade shows and
conferences accounted for approximately 5% of Penton's total revenue in 1997. On
a pro forma basis, had INDEX and ISOA been acquired in January 1997, Penton's
trade show and conference revenue would have accounted for 12% of

8
<PAGE> 10

Penton's total revenue in 1997, and Penton would have sold approximately 1.4
million net square feet of exhibit space to over 5,500 exhibiting companies.

In addition to trade shows and conferences, electronic media products have
expanded Penton's service to its market segments. As business-to-business use of
the Internet has grown, Penton's product arrays have been expanded to include
World Wide Web sites that provide both information resources and market access
to advertisers. Electronic media products also include editorial content and
statistics, directories, and product selection information on CD-ROMs and
diskettes. In December of 1997, Penton signed a joint venture agreement with
Findlay Publishing of the United Kingdom to produce and market Design Selector
Global, a global database of component product information for mechanical,
electro-mechanical, and electronics engineers that will be accessible via the
Internet. Revenues from electronic media products accounted for less than 1% of
Penton's total revenue in 1997.

In addition to publications, trade shows and conferences, and electronic
media, Penton's business includes marketing and business development services
such as databases, direct-mail marketing, custom communications, and research
services. These services provide integrated market access to Penton's advertiser
customers by facilitating the flow of information between them and their
customers.

THE STOCK DISTRIBUTION

On the Stock Distribution Date (as hereinafter defined), Pittway will
distribute (the "Stock Distribution") 100% of the outstanding common stock, par
value $.01 per share, of Penton ("Common Stock"), on the basis of one share of
Common Stock for each share of Pittway common stock, of the par value of $1.00
per share ("Pittway Common Stock"), and one share of Common Stock for each share
of Pittway class A stock, of the par value of $1.00 per share ("Pittway Class A
Stock," and together with Pittway Common Stock, "Pittway Stock"), to the holders
of record of Pittway Stock as of the close of business on the Record Date (as
hereinafter defined). As discussed under "The Stock Distribution -- Reasons for
the Stock Distribution and the DM Publishing Combination," Pittway believes it
is in the best interests of Pittway and its stockholders to distribute the
Common Stock to Pittway's stockholders.

THE STOCK DISTRIBUTION IS CONDITIONED UPON THE CLOSING IMMEDIATELY
THEREAFTER OF THE ACQUISITION BY PENTON OF DONOHUE MEEHAN PUBLISHING COMPANY, AN
ILLINOIS CORPORATION ("DM PUBLISHING"), THROUGH THE MERGER OF DM PUBLISHING INTO
A WHOLLY-OWNED SUBSIDIARY OF PENTON ("COMBINATION SUBSIDIARY"). Such acquisition
is the subject of an agreement (the "DM Publishing Combination Agreement") among
Penton, Combination Subsidiary, Pittway, DM Publishing and William C. Donohue
and John J. Meehan, the stockholders of DM Publishing (the "DM Publishing
Shareholders"). See "DM Publishing Combination Agreement." DM Publishing
publishes three magazines in the convenience store/baking market. In connection
with the DM Publishing Combination, the DM Publishing Shareholders will receive
(i) 1,541,638 shares of Common Stock, constituting 6.767% of the Common Stock
outstanding immediately following the Stock Distribution and the DM Publishing
Combination, (ii) $7.0 million in cash, (iii) the right to receive up to $4.0
million of additional cash depending on the amount by which DM Publishing's
pre-tax income exceeds $4.0 million per year during 1998 and/or 1999 (see "DM
Publishing Combination Agreement -- Closing Consideration and Contingent
Rights -- Contingent Right Based on Earnings"), and (iv) the right to receive
additional cash (and/or, in certain circumstances, additional Common Stock)
equal to the excess, if any, of $29.0 million over the lower of the average
market values, during two reference periods in the year 2000, of the shares of
Common Stock issued to the DM Publishing Shareholders at the closing of the DM
Publishing Combination, subject to certain limitations with respect to any of
such shares sold prior to making such additional payment. The reference periods
are the 30 days following the date on which Penton publicly releases its
financial results for calendar year 1999 and the 30 days ending on the second
anniversary of the date of the DM Publishing Combination. See "DM Publishing
Combination Agreement -- Closing Considerations and Contingent
Rights -- Contingent Right Based on Market Value." At the closing of the DM
Publishing Combination, Penton will enter into two-year employment agreements
with the DM Publishing Shareholders pursuant to which Mr. Donohue will serve as
the President and Mr. Meehan will serve as the Executive Vice President of
Combination Subsidiary, which will be renamed Donohue Meehan Publishing Company.
See "DM Publishing Combination Agreement -- Employment Agreements." The DM
Publishing

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<PAGE> 11

Shareholders will also become members of Penton's Board of Directors (the
"Board"). The acquisition of DM Publishing is referred to herein as the "DM
Publishing Combination."

The closing of the DM Publishing Combination is conditioned upon the
satisfaction or waiver of various closing conditions. See "DM Publishing
Combination Agreement -- Closing Conditions." Certificates representing the
shares of Common Stock distributed in the Stock Distribution will be mailed as
soon as practicable after the closing of the DM Publishing Combination (the date
of distribution being referred to as the "Stock Distribution Date"). It is
anticipated that such closing and the Stock Distribution will occur on or about
August 7, 1998.

Commencing with the Stock Distribution Date, Penton will operate as a
separate public company. Penton's principal executive offices are located at
1100 Superior Avenue, Cleveland, Ohio 44114.

THE STOCK DISTRIBUTION

Prior to the Stock Distribution, Pittway will deliver to Harris Trust and
Savings Bank (the "Stock Distribution Agent"), for delivery to Pittway's
stockholders in the manner described below, 100% of the outstanding Common
Stock.

REASONS FOR THE STOCK DISTRIBUTION AND THE DM PUBLISHING COMBINATION

Pittway believes that it is in the best interests of Pittway and its
stockholders to distribute the Common Stock to Pittway's stockholders.

Penton's business media operations are functionally dissimilar from
Pittway's other businesses, the principal one of which is the manufacture and
distribution of alarm and other security products. As a separate public company,
Penton will be able to offer its employees incentives that are more directly
linked to the results of the business in which they work. In addition, as an
independent company, Penton will have complete access to its cash flows from
operations, as opposed to paying a substantial portion of such cash flow as
dividends to Pittway, and will be able independently to determine its capital
structure. Another advantage to the Stock Distribution is that Penton will not
have to compete with Pittway's other business units for resources and Penton's
Board will be able to concentrate on purely business media issues. Finally,
Penton believes that it will be better able to attract acquisition targets
because of its focused business and the ability to issue Common Stock as part of
the purchase price. For a discussion of the risks associated with being an
independent company, see "Risk Factors -- Factors Relating to Operations -- No
Operating History as an Independent Company."

The Stock Distribution also makes possible the DM Publishing Combination.
The DM Publishing Shareholders indicated early in the negotiations of the DM
Publishing Combination Agreement that a combination of DM Publishing with Penton
would not be acceptable unless Penton were separated from Pittway's other
businesses and operated as a separate public company. The DM Publishing
Combination should strengthen Penton's position in publishing for the
foodservice industry. Penton also expects to benefit from the addition of the DM
Publishing Shareholders to its management.

In approving the Stock Distribution, the Pittway Board of Directors did not
consider any anti-takeover effects with respect to Pittway. The Pittway Board
was aware of the anti-takeover effects with respect to Penton, as described
under "Anti-Takeover Effects."

MANNER OF THE STOCK DISTRIBUTION

On the Stock Distribution Date, Pittway will transfer to the Stock
Distribution Agent all shares of Common Stock then owned by Pittway with
instructions to distribute to each holder of record of Pittway Common Stock or
Pittway Class A Stock at the close of business on July 31, 1998 (the "Record
Date") one share of Common Stock for each share of Pittway Common Stock then
held and one share of Common Stock for each share of Pittway Class A Stock then
held, and to transfer to Penton all remaining shares of Common Stock held by the
Stock Distribution Agent after the Stock Distribution has been made.

As of the Record Date, there were 3,938,832 shares of Pittway Common Stock
outstanding held by approximately 411 holders of record and 17,301,243 shares of
Pittway Class A Stock outstanding held by

10
<PAGE> 12

approximately 860 holders of record. The Stock Distribution will not affect the
number of outstanding shares of Pittway Common Stock or Pittway Class A Stock or
any rights attached thereto.

Included among the shares of Pittway Class A Stock were 5,317 shares issued
in the December, 1989 merger of Pittway Corporation, a Pennsylvania corporation
("Pennsylvania Pittway"), into Pittway (which changed its name from Standard
Shares, Inc. to Pittway Corporation in connection with the merger) as to which
the certificates continue to be held by Harris Trust and Savings Bank, in its
capacity as the successor to the merger exchange agent, pending the surrender of
the corresponding Pennsylvania Pittway stock certificates by the holders of such
certificates. Pending such surrender (or disposition under applicable escheat
laws), Harris Trust and Savings Bank, in its capacity as the successor to the
merger exchange agent, will hold the Common Stock distributed in respect of such
shares (and any dividends and other distributions paid by Penton on such Common
Stock) for the accounts of such holders.

Holders of record of Pittway Common Stock and Pittway Class A Stock at the
close of business on the Record Date will be entitled to receive shares of
Common Stock without paying any consideration for them. HOLDERS OF PITTWAY
COMMON STOCK AND PITTWAY CLASS A STOCK WILL CONTINUE TO OWN THEIR SHARES OF
PITTWAY STOCK FOLLOWING THE STOCK DISTRIBUTION AND ARE NOT REQUIRED TO, AND
SHOULD NOT, SURRENDER THE CERTIFICATES REPRESENTING THEIR PITTWAY STOCK.

No rights of dissent or appraisal exist with regard to the Stock
Distribution under Delaware law.

A vote of Pittway's stockholders is not required to approve the Stock
Distribution because (i) the Stock Distribution is a dividend, which is within
the sole discretion of Pittway's Board of Directors to declare and (ii) the
Stock Distribution does not represent a sale, lease, or exchange of all or
substantially all of Pittway's property and assets under the Delaware General
Corporation Law.

Certificates representing shares of Common Stock will be mailed by the
Stock Distribution Agent to record holders of Pittway Stock commencing as soon
as practicable after the completion of the DM Publishing Combination. It is
anticipated that such mailing will commence on or about August 7, 1998.

PITTWAY STOCK HELD UNDER OR ISSUABLE PURSUANT TO PITTWAY EMPLOYEE PLANS

Common Stock distributed in respect of Pittway Stock held in the Pittway
Corporation Blue Chip Profit Sharing and Savings Plan (the "Pittway Profit
Sharing Plan") for the accounts of participants will be delivered to the trustee
of the Pittway Profit Sharing Plan for credit to the accounts of such
participants (but purchases of Common Stock for such accounts will not be
permitted). Shares of Common Stock or other stock credited to the accounts of
participants who are employees of Penton and its subsidiaries will subsequently
be transferred to their accounts under the Penton Media, Inc. Retirement Savings
Plan. Penton may in the future require the disposition of any stock other than
Common Stock held under such plan. Pittway may in the future require the
disposition of Common Stock held under the Pittway Profit Sharing Plan for the
accounts of the remaining participants.

Holders of options to purchase Pittway Stock that are outstanding under
Pittway's 1990 Stock Awards Plan, 1996 Director Stock Option Plan or 1998
Director Stock Option Plan will not receive upon any exercise subsequent to the
Record Date any shares of Common Stock. Instead, the numbers of shares of
Pittway Stock subject to, and the exercise prices of, such options will be
adjusted as provided in each respective plan. However, as described under
"Executive Compensation -- Employment Agreements," Thomas L. Kemp, Penton's
Chief Executive Officer, has the right under his employment agreement with
Penton to surrender to Pittway prior to the Stock Distribution his options to
purchase Pittway Stock which are outstanding under Pittway's 1990 Stock Awards
Plan and receive from Penton following the Stock Distribution options to
purchase Common Stock under Penton's Equity Incentive Plan (as defined below).

Holders of stock appreciation rights outstanding at the Record Date under
Pittway's 1990 Stock Awards Plan will not participate in the Stock Distribution.
Instead, such stock appreciation rights, which by their terms are exercisable
solely for cash, will be adjusted as provided in such plan.

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<PAGE> 13

RELATIONSHIP BETWEEN PENTON AND PITTWAY AFTER THE STOCK DISTRIBUTION

Subsequent to the Stock Distribution and the DM Publishing Combination,
Penton will operate as a separate public company. Pittway will have no
continuing relationship with Penton, other than as an arm's-length supplier of
up to a specified level of assistance in connection with Penton's preparation of
its tax returns for periods ending on or prior to December 31, 1998, and in
connection with Penton's other tax matters for such periods, if so requested by
Penton. However, the indemnification obligations of each to the other under the
DM Publishing Combination Agreement will remain in effect. See "DM Publishing
Combination Agreement -- Indemnification and Hold Harmless Agreements" and " --
Certain Tax Matters." Immediately following the Stock Distribution and the DM
Publishing Combination, two of Penton's 11 directors will also be members of
Pittway's Board of Directors. See "Management -- Board of Directors."

CERTAIN FEDERAL INCOME TAX ASPECTS OF THE STOCK DISTRIBUTION

Pittway has received a ruling from the Internal Revenue Service (the "IRS")
that for federal income tax purposes (i) Pittway will not recognize gain or loss
on the Stock Distribution, (ii) Pittway stockholders will not recognize gain or
loss (and no amount will otherwise be included in their income) on their receipt
of Penton Common Stock in the Stock Distribution, (iii) the basis of the Penton
Common Stock received by each holder of Pittway Stock will be determined by
allocating such holder's tax basis in such Pittway Stock immediately before the
Stock Distribution between such Pittway Stock and Penton Common Stock based on
the relative fair market values of each immediately after the Stock
Distribution, and (iv) the holding period of the Penton Common Stock received in
the Stock Distribution will include the holding period of the Pittway Stock on
which such Penton Common Stock was distributed, provided that such Pittway Stock
is held as a capital asset on the Stock Distribution Date. As soon as
practicable after trading in Penton Common Stock has commenced, Pittway intends
to make available to its stockholders information regarding allocation of the
basis between Penton Common Stock and Pittway Stock.

The ruling addresses only the generally applicable material federal income
tax consequences of the Stock Distribution. It does not address all federal
income tax consequences that may apply to particular stockholders nor any
foreign, state or local tax consequences. Pittway's stockholders are urged to
consult their own tax advisors regarding the particular tax consequences of
their receipt of Penton Common Stock in the Stock Distribution.

The federal income tax consequences described above could be affected by
events subsequent to the Stock Distribution. See "Risk Factors -- Factors
Relating to Taxation -- Tax Aspects of the Stock Distribution."

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<PAGE> 14

DM PUBLISHING COMBINATION AGREEMENT

The detailed terms of and conditions to the DM Publishing Combination are
contained in the Combination Agreement dated as of May 21, 1998 by and among
Penton, Combination Subsidiary, Pittway, DM Publishing, and the DM Publishing
Shareholders, which is filed as an exhibit to the Registration Statement of
which this Prospectus is a part. The following summary description of the
material terms of the DM Publishing Combination Agreement is qualified in its
entirety by, and made subject to, the more complete information set forth in the
DM Publishing Combination Agreement.

The DM Publishing Combination Agreement deals primarily with four subjects:
(i) Penton's acquisition of DM Publishing; (ii) Penton's post-acquisition
employment of the DM Publishing Shareholders; (iii) the respective
representations and warranties and indemnification obligations of Penton,
Pittway, and the DM Publishing Shareholders relating to the DM Publishing
Combination; and (iv) Penton's grant of registration rights to the DM Publishing
Shareholders.

CLOSING CONSIDERATION AND CONTINGENT RIGHTS

At the closing under the DM Publishing Combination Agreement, DM Publishing
will be merged into Combination Subsidiary, a wholly-owned subsidiary of Penton,
which will thereupon change its name to Donohue Meehan Publishing Company. In
the merger, the DM Publishing Shareholders will receive (i) 1,541,638 shares of
Common Stock, constituting 6.767% of the Common Stock outstanding immediately
following the Stock Distribution and the merger, (ii) cash in an amount equal to
$7.0 million, (iii) the right to receive additional cash in an amount up to a
maximum of $4.0 million if certain DM Publishing earnings levels are achieved
during 1998 and/or 1999, and (iv) the right to receive additional cash (and/or,
in certain circumstances, additional Common Stock) if the market price of the
Common Stock during either of two reference periods in the year 2000 is less
than a specified amount. Each of such contingent rights is described in greater
detail below.

Contingent Right Based on Earnings. In the event Surviving Corporation's
Pre-Tax Profits (the pre-tax profits of DM Publishing and its successor in the
merger, adjusted as provided in the DM Publishing Combination Agreement) for
1998 exceed $4.0 million, the DM Publishing Shareholders, in the aggregate, will
be entitled to receive from Penton in cash an amount equal to 4 times the excess
of such Pre-Tax Profits over $4.0 million. In the event Surviving Corporation's
Pre-Tax Profits for 1999 exceed $4.0 million, the DM Publishing Shareholders, in
the aggregate, will be entitled to receive from Penton in cash an amount equal
to (i) 5 times the excess of such Pre-Tax Profits over $4.0 million, less (ii)
the amount of any payment to which the DM Publishing Shareholders, in the
aggregate, became entitled with respect to 1998. However, the total amount of
such contingent cash payments may not exceed $4.0 million. In the event of the
termination, effective as of a date prior to December 31, 1999, of either DM
Publishing Shareholder's employment by Penton without "Cause" or by either DM
Publishing Shareholder for "Good Reason" (in each case, as defined in the
employment agreements referred to below under " -- Employment Agreements"), or
in the event of Penton's liquidation effective as of a date prior to December
31, 1999, if such effective date precedes December 31, 1998, the contingent cash
payment on account of Surviving Corporation's Pre-Tax Profits for each of 1998
and 1999 will be $2.0 million and if such effective date is on or subsequent to
December 31, 1998, the contingent cash payment on account of Surviving
Corporation's Pre-Tax Profits for 1999 will be the excess of $4.0 million over
the amount of the contingent cash payment, if any, on account of Surviving
Corporation's Pre-Tax Profits for 1998. Various actions by DM Publishing's
successor in the merger prior to the close of business on December 31, 1999
require the prior written consent of the DM Publishing Shareholders.

Contingent Right Based on Market Value. In the event that the Average
Market Price (as defined in the DM Publishing Combination Agreement) of the
Common Stock during the period of 30 days following the date on which Penton
publicly releases its financial results for calendar year 1999 or the Average
Market Price of the Common Stock during the period of 30 days ending on the
second anniversary of the date of the DM Publishing Combination is less than
$29.0 million divided by the number of shares of Common Stock issued to the DM
Publishing Shareholders at the closing of the DM Publishing Combination (the
"Guaranteed Average Market Price"), Penton must, on the 15th day after such
second anniversary, pay to each DM

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<PAGE> 15

Publishing Shareholder cash in an amount equal to (i) the excess of the
Guaranteed Average Market Price over the lower of such Average Market Prices
(such excess being referred to as the "Spread") multiplied by (ii) the number of
shares of Common Stock issued to such DM Publishing Shareholder at the closing
of the DM Publishing Combination (whether or not held by him at the time of
payment). However, the payment to be made with respect to any such share no
longer held by such DM Publishing Shareholder at the end of the day preceding
payment that has been sold by such DM Publishing Shareholder (or by any
transferee that acquired such share from such DM Publishing Shareholder in a
transaction not involving a sale) for a gross price equal to or exceeding the
Guaranteed Average Market Price less the Spread is limited to the excess of the
Guaranteed Average Market Price over such gross price (and thus, for example, no
payment is to be made with respect to any such share so sold for a gross price
equal to or exceeding the Guaranteed Average Market Price). If and to the extent
the total amount payable to any DM Publishing Shareholder, or to the DM
Publishing Shareholders in the aggregate, would, in the reasonable judgment of
the DM Publishing Shareholders or Penton, cause the DM Publishing Combination
not to constitute a "reorganization" within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), then, at the election of
either of the DM Publishing Shareholders or Penton, Penton will substitute for a
portion of such cash shares of Common Stock (valued at the Average Market Price
during the second reference period) to the extent necessary to avoid such result
(except that cash will be paid in lieu of fractional shares).

EMPLOYMENT AGREEMENTS

At the closing under the DM Combination Agreement, Penton will enter into a
two-year employment agreement with each of the DM Publishing Shareholders. Each
such employment agreement will provide for an annual salary of $250,000, the
right to receive a bonus at the end of the employment term of up to $114,000
dependent on Surviving Corporation's Pre-Tax Profits for 1998 and 1999 (or a
bonus in the amount of $114,000 in the event of a termination of employment or
liquidation that gives rise to the maximum $4.0 million of contingent cash
payments to the DM Publishing Shareholders based on earnings), and participation
in Penton's standard benefits package. Each employment agreement will include
non-competition, non-solicitation, and confidentiality obligations on the part
of the DM Publishing Shareholder which generally survive its termination.

REPRESENTATIONS AND WARRANTIES

Penton makes representations and warranties in the DM Publishing
Combination Agreement to the DM Publishing Shareholders with respect to, among
other things, (i) the organization and qualification of Penton and Combination
Subsidiary, (ii) the authority of Penton and Combination Subsidiary relative to
the DM Publishing Combination Agreement and the transaction contemplated
thereby, (iii) Penton's capitalization, (iv) Penton's subsidiaries and other
equity interests, (v) certain Penton financial statements, (vi) the absence of
undisclosed liabilities, (vii) the absence of material adverse changes since
December 31, 1997 with respect to Penton, (viii) pending litigation, (ix) the
absence of claims for brokerage commissions and similar compensation in
connection with the transaction contemplated by the DM Publishing Combination
Agreement, (x) employees and retiree welfare benefit liabilities, (xi)
compliance with laws, (xii) affiliate transactions, (xiii) the tax status of the
Stock Distribution and the absence of certain plans or intentions of Penton or
Combination Subsidiary relevant to the tax status of the DM Publishing
Combination, and (xiv) Penton's conduct of business prior to the DM Publishing
Combination. Many of such representations and warranties are qualified as being
to the knowledge of certain officers of Penton and are given subject to
identified and/or materiality exceptions.

The DM Publishing Shareholders jointly and severally make representations
and warranties in the DM Publishing Combination Agreement to Penton with respect
to, among other things, (i) the organization and qualification of DM Publishing,
(ii) the authority of the DM Publishing Shareholders and DM Publishing relative
to the DM Publishing Combination Agreement and the transaction contemplated
thereby, (iii) the investment purpose of each of the DM Publishing Shareholders
in acquiring the shares of Common Stock to be issued in the DM Publishing
Combination, (iv) DM Publishing's capitalization, (v) DM Publishing's
subsidiaries and other equity interests, (vi) title to and the sufficiency of DM
Publishing's assets, (vii) certain DM Publishing financial statements, (viii)
the absence of undisclosed liabilities, (ix) the absence of material

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<PAGE> 16

adverse changes since December 31, 1997 with respect to DM Publishing, (x)
pending litigation, (xi) the absence of claims for brokerage commissions and
similar compensation in connection with the transaction contemplated by the DM
Publishing Combination Agreement, (xii) employees and retiree welfare benefit
liabilities, (xiii) compliance with laws, (xiv) affiliate transactions, (xv) the
absence of certain actions or failures to act of the DM Publishing Shareholders
or DM Publishing relevant to the tax status of the DM Publishing Combination,
and (xvi) DM Publishing's conduct of business prior to the DM Publishing
Combination. Many of such representations and warranties are qualified as being
to the knowledge of the DM Publishing Shareholders after due inquiry of certain
other individuals and are given subject to identified and/or materiality
exceptions.

Pittway makes representations and warranties in the DM Publishing
Combination Agreement to Penton with respect to, among other things, (i)
Pittway's organization and qualification, (ii) Pittway's authority relative to
the DM Publishing Combination Agreement and the transaction contemplated
thereby, (iii) the absence of claims for brokerage commissions and similar
compensation in connection with the transaction contemplated by the DM
Publishing Combination Agreement, and (iv) affiliate transactions. Certain of
such representations and warranties are qualified as being to the knowledge of
certain officers of Pittway and are given subject to identified and/or
materiality exceptions.

INDEMNIFICATION AND HOLD HARMLESS AGREEMENTS

Penton Indemnification Provisions for Benefit of the DM Publishing
Shareholders. Penton agrees in the DM Publishing Combination Agreement to
indemnify, defend and hold harmless the DM Publishing Shareholders from and
against any adverse consequences asserted against or imposed upon or incurred by
either of them resulting from, relating to, or by reason of (i) any breach by
Penton of any of the representations and warranties made by Penton to the DM
Publishing Shareholders in the DM Publishing Combination Agreement or any
covenant of Penton or Combination Subsidiary in the DM Publishing Combination
Agreement or (ii) generally, any liability of any former subsidiary of Penton,
including any control group liability of Penton to the extent it is directly
attributable to any such former subsidiary.

DM Publishing Shareholder Indemnification Provisions for Benefit of Penton.
The DM Publishing Shareholders, jointly and severally, agree to indemnify,
defend and hold harmless Penton, Combination Subsidiary and their respective
directors, officers, employees and agents from and against any adverse
consequences asserted against or imposed upon or incurred by any of them
resulting from, relating to, or by reason of:

(i) any breach by the DM Publishing Shareholders of any of the
representations and warranties made by them to Penton in the DM Publishing
Combination Agreement or any covenant of any DM Publishing Shareholder or
DM Publishing in the DM Publishing Combination Agreement;

(ii) any liability of any current or former affiliate of DM
Publishing, including any control group liability of DM Publishing to the
extent it is directly attributable to any such affiliate; or

(iii) any untrue or alleged untrue statement of material fact
contained in any registration statement or filing made by Penton of the
kind described in Section 7.2(g) of the DM Publishing Combination
Agreement, or any amendment or supplement to any of the foregoing, or any
omission or alleged omission of a material fact required to be stated in
any of the foregoing or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or alleged
untrue statement or such omission or alleged omission relates to DM
Publishing or its affiliates or the DM Publishing Shareholders or their
respective affiliates.

Pittway Indemnification Provisions for Benefit of Penton. Pittway agrees to
indemnify, defend and hold harmless Penton and its subsidiaries and their
directors, officers, employees and agents from and against any adverse
consequences asserted against or imposed upon or incurred by any of them
resulting from, relating to, or by reason of:

(i) any breach by Pittway of any of the representations and warranties
made by Pittway to Penton in the DM Publishing Combination Agreement or any
covenant of Pittway in the DM Publishing Combination Agreement;

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(ii) subject to certain exceptions, any tax liabilities of the Pittway
affiliated tax group for periods (or portions thereof) ended at the time of
or prior to the Stock Distribution which are not directly attributable to
Penton or its then or former subsidiaries, and any control group liability
arising out of events occurring or circumstances existing prior to the
Stock Distribution which is not directly attributable to Penton or its then
or former subsidiaries; or

(iii) any tax imposed on Penton or its subsidiaries resulting from the
failure, as a result of the failure of Pittway to maintain control of
Penton until the Stock Distribution as described in Section 368(c) of the
Code or of actions taken after the Stock Distribution by Pittway or any
company which after the Stock Distribution is a subsidiary of Pittway, of
the Stock Distribution to qualify as a tax-free (to Pittway and the
stockholders of Pittway) distribution under Section 355 of the Code.

Notwithstanding the foregoing or any other provision of the DM Publishing
Combination Agreement, in no event is Pittway obligated to indemnify, defend or
hold harmless, or otherwise obligated, with respect to any adverse consequences
arising out of the condition or sufficiency of the assets or stock of Penton or
any of its subsidiaries or the existence of any security interests relating
thereto.

Penton Indemnification Provisions for Benefit of Pittway. Penton agrees to
indemnify, defend and hold harmless Pittway, its post-Stock Distribution
subsidiaries, its and their directors, officers, employees and agents, and any
person who or which because of a relationship to Pittway or one of its
subsidiaries at the time of or prior to the Stock Distribution would be liable
(jointly and severally or otherwise) with respect to liabilities of Pittway or
of any subsidiary of Pittway, from and against any adverse consequences asserted
against or imposed upon or incurred by any of them resulting from, relating to,
or by reason of:

(i) any liability arising out of the operations, acts, omissions or
status of Penton or any of its subsidiaries;

(ii) any breach by Penton of any covenant of Penton in the DM
Publishing Combination Agreement; or

(iii) any untrue or allegedly untrue statement of material fact
contained in any filing of Pittway of the kind described in Section 7.2(h)
of the DM Publishing Combination Agreement, or any amendment or supplement
to any of the foregoing, or any omission or alleged omission of a material
fact required to be stated in any of the foregoing or necessary to make the
statements therein not misleading, but only to the extent that such untrue
statement or alleged untrue statement or such omission or alleged omission
relates to Penton or any of its subsidiaries or their respective affiliates
(other than Pittway or any post-Stock Distribution Pittway subsidiary), or
to DM Publishing or an affiliate of DM Publishing, or to either DM
Publishing Shareholder or his affiliates, or is contained in any
information furnished in writing by Penton or a DM Publishing Shareholder
pursuant to Section 7.2(g) or (h) of the DM Publishing Combination
Agreement or is deemed approved by the DM Publishing Shareholders pursuant
to Section 7.2(i) of the DM Publishing Combination Agreement.

Notwithstanding the foregoing, in no event is Penton obligated to indemnify,
defend or hold harmless with respect to any adverse consequences from and
against which Pittway has agreed to indemnify, defend and hold harmless Penton
and its subsidiaries and its and their directors, officers, employees and agents
pursuant to Section 7.7(c) of the DM Publishing Combination Agreement or with
respect to any adverse consequences by reason of taxes which Pittway has agreed
to pay pursuant to the final sentence of Section 7.12(a) of the DM Publishing
Combination Agreement.

DM Publishing Shareholders Indemnification Provisions for Benefit of
Pittway. The DM Publishing Shareholders, jointly and severally, agree to
indemnify, defend and hold harmless Pittway and its directors, officers,
employees and agents from and against any adverse consequences asserted against
or imposed upon or incurred by any of them resulting from, relating to, or by
reason of any untrue or allegedly untrue statement of material fact contained in
any filing of Pittway of the kind described in Section 7.2(g) of the DM
Publishing Combination Agreement, or any amendment or supplement to any of the
foregoing, or any omission or alleged omission of a material fact required to be
stated in any of the foregoing or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or alleged untrue
statement or such omission or alleged omission relates to DM Publishing or an
affiliate of DM Publishing, or to either DM Publishing Shareholder or his
affiliates, and is contained in any information furnished in writing by a DM
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<PAGE> 18

Publishing Shareholder pursuant to Section 7.2(g) of the DM Publishing
Combination Agreement or is deemed approved by the DM Publishing Shareholders
pursuant to Section 7.2(i) of the DM Publishing Combination Agreement.

Limitations on Certain Indemnification Claims. The DM Publishing
Combination Agreement provides that claims against Penton or Pittway for
indemnification for adverse consequences arising out of a breach of a
representation or warranty cannot be made after the third anniversary of the
closing of the DM Publishing Combination. The DM Publishing Combination
Agreement provides that claims for indemnification against the DM Publishing
Shareholders for adverse consequences arising out of a breach of a
representation or warranty (other than those relating to taxes) cannot be made
after the 20th day after the second anniversary of the closing of the DM
Publishing Combination. In any event, Penton generally has no obligation to
indemnify the DM Publishing Shareholders from and against any adverse
consequences resulting from any breach by it of its representations and
warranties in the DM Publishing Combination Agreement until the DM Publishing
Shareholders have suffered aggregate adverse consequences by reason of all such
breaches as to which claims for indemnification have been timely made in excess
of $500,000 (at which point Penton is obligated to indemnify the DM Publishing
Shareholders from and against the adverse consequences exceeding $500,000
resulting from all such breaches; which indemnification obligation will be
discharged in full by Penton's payment to the DM Publishing Shareholders of an
amount equal to such excess adverse consequences). The DM Publishing
Shareholders generally have no obligation to indemnify Penton from and against
any adverse consequences resulting from any breach by the DM Publishing
Shareholders of the representations and warranties made by them in the DM
Publishing Combination Agreement until Penton has suffered aggregate adverse
consequences by reason of all such breaches as to which claims for
indemnification have been timely made in excess of $500,000 (at which point the
DM Publishing Shareholders are obligated to indemnify Penton from and against
the adverse consequences exceeding $500,000 resulting from all such breaches as
to which claims for indemnification have been timely made).

CERTAIN TAX MATTERS

Penton agrees in the DM Publishing Combination Agreement not to take
(directly or indirectly), and not to permit any of its subsidiaries to take
(directly or indirectly), any action (whether prior to, at the time of or after
the Stock Distribution) which would cause the Stock Distribution not to be tax
free to Pittway, its post-Stock Distribution subsidiaries and the stockholders
of Pittway under the provisions of Section 355 of the Code.

Subject to a contingent exception, each of the DM Publishing Shareholders
agrees not to take (directly or indirectly) or fail to take (directly or
indirectly) any action (whether prior to, at the time of or after the DM
Publishing Combination) and not to permit DM Publishing to take (directly or
indirectly) or fail to take (directly or indirectly) any action prior to such
time which would cause the DM Publishing Combination (i) to give rise to any tax
to DM Publishing or its successor or (ii) not to constitute a "reorganization"
under Section 368(a) of the Code.

Subject to stated exceptions, Penton agrees that after the consummation of
the Stock Distribution it will not take (directly or indirectly) any action that
would cause the DM Publishing Combination (i) to give rise to any tax to Penton,
DM Publishing's successor or the DM Publishing Shareholders or (ii) not to
constitute a "reorganization" under Section 368(a) of the Code.

Penton agrees that after the Stock Distribution it will not take (directly
or indirectly), or permit any of its subsidiaries to take (directly or
indirectly), any action that would increase the tax liability of any of the
companies included in the Pittway affiliated group for any period ending at or
prior to or including the consummation of the Stock Distribution.

The DM Publishing Shareholders agree that after the time of the DM
Publishing Combination they will not take (directly or indirectly) any action
that would increase the tax liability of DM Publishing for any period ending at
or prior to such time.

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EXPENSES

The DM Publishing Combination Agreement provides that, subject to certain
exceptions described below under " -- Closing Conditions," the DM Publishing
Shareholders, jointly and severally, will bear the costs and expenses (including
legal fees and expenses) incurred by DM Publishing or the DM Publishing
Shareholders in connection with the transaction contemplated by the DM
Publishing Combination Agreement, Pittway will bear its costs and expenses
(including legal fees and expenses) incurred in connection with the DM
Publishing Combination Agreement and the transaction contemplated thereby and
Penton will bear its costs and expenses (including legal fees and expenses)
incurred in connection with the DM Publishing Combination Agreement and the
transaction contemplated thereby; except that Penton will also bear the costs
and expenses of the audit of the DM Publishing financial statements required for
the registration statement of which this Prospectus is a part.

REGISTRATION RIGHTS

In the DM Publishing Combination Agreement, Penton grants to the DM
Publishing Shareholders certain rights with respect to registration under the
Securities Act of 1933, as amended ("the Securities Act"), of the shares of
Common Stock issued to them at the closing of the DM Publishing Combination (and
any additional shares that may be issued in respect thereof in stock splits,
stock combinations or the like). Generally, the DM Publishing Shareholders have
the right to demand one registration (which must be of at least 25% of the
shares of Common Stock issued to them at the closing of the DM Publishing
Combination) at any time during the 60 days immediately following the second
anniversary of the Stock Distribution. In addition, whenever Penton proposes to
register Common Stock under the Securities Act (other than on Form S-8 or S-4 or
any similar or successor forms) within the 30 months following the consummation
of the DM Publishing Combination, Penton is required, subject to certain
limitations, to include in such registration all shares of Common Stock issued
to the DM Publishing Shareholders at the closing of the DM Publishing
Combination (and any additional shares that may be issued in respect thereof in
stock splits, stock combinations or the like) that the DM Publishing
Shareholders request to include therein. Penton has agreed to pay all
registration expenses incurred by Penton (but not by the DM Publishing
Shareholders) in connection with any such registration.

In connection with registrations of Common Stock pursuant to such
registration rights, Penton has agreed, subject to certain limitations, to
indemnify the DM Publishing Shareholders participating therein against certain
liabilities, including liabilities under the Securities Act, or to make
provision for contribution to an indemnified party if such indemnification is
unavailable; and the DM Publishing Shareholders who participate in any such
registrations have agreed, subject to certain limitations, to indemnify Penton
against certain of such liabilities and to make provision for such contribution.

CLOSING CONDITIONS

Conditions to Obligations of Penton, Combination Subsidiary, DM Publishing,
and DM Publishing Shareholders. The obligations of Penton, Combination
Subsidiary, DM Publishing, and the DM Publishing Shareholders to effect the DM
Publishing Combination are subject to satisfaction of the following conditions:
(i) consummation of the Stock Distribution at or prior to the closing of the DM
Publishing Combination, (ii) expiration of all applicable waiting periods under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (iii)
completion of all governmental actions required to be taken, (iv) there being no
threatened, instituted, or pending material action or proceeding before any
court or governmental authority regarding the transaction, (v) there being no
action taken or statute or rule proposed that is reasonably likely to result in
a material action or proceeding before any court or governmental authority
regarding the transaction, (vi) consummation by Penton of credit arrangements
sufficient to enable it to repay at the time of the Stock Distribution its then
outstanding indebtedness to Pittway and provide for sufficient working capital,
(vii) there being no suspension or limitation on prices for trading Common Stock
on the New York Stock Exchange ("NYSE") or any action by any governmental
authority which would limit or adversely affect the extension of credit to
Penton, (viii) registration of the Common Stock under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), (ix) if necessary, registration of
the Common Stock to be issued to the DM Publishing Shareholders under all
applicable United States state securities or blue sky laws, (x) the

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<PAGE> 20

effectiveness of a registration statement under the Securities Act, (xi)
approval for listing on the NYSE of the Common Stock to be issued pursuant to
the Stock Distribution and DM Publishing Combination Agreement, (xii) no receipt
by Pittway of a letter from the IRS that the Revenue Ruling has been withdrawn,
(xiii) receipt by Pittway and Penton of each consent and approval necessary in
order that the DM Publishing Combination Agreement does not constitute a breach
or violation of any material contracts, (xiv) receipt by DM Publishing of each
consent and approval necessary in order that the DM Publishing Combination
Agreement does not constitute a breach or violation of any material contracts,
(xv) except for the directors who will be serving on both Penton's and Pittway's
boards, resignation of Pittway's directors, officers, and employees from each
office and directorship held at Penton, (xvi) execution of employment agreements
between both Messrs. Donohue and Meehan and Penton, and (xvii) no termination by
any party to the DM Publishing Combination Agreement.

Additional Conditions to Obligations of DM Publishing and the DM Publishing
Shareholders. The obligations of DM Publishing and the DM Publishing
Shareholders are further subject to the following conditions: (i) the
representations and warranties of Penton are true and correct in all material
respects and satisfaction by each of Pittway, Penton, and Combination Subsidiary
of each covenant in all material respects, (ii) no discovery by the DM
Publishing Shareholders of any undisclosed matters or adverse changes of Penton,
which individually or in the aggregate, is materially adverse to the value of
Penton, (iii) Penton will have furnished the DM Publishing Shareholders a
certificate in which Penton certifies that an appropriate inquiry has been made
of Penton's executive officers regarding representations and warranties and
performance of covenants, (iv) Penton will have furnished to the DM Publishing
Shareholders certified copies of resolutions regarding the DM Publishing
Combination Agreement, (v) amendment by Penton of its Certificate of
Incorporation and By-Laws as provided in the DM Publishing Combination
Agreement, and (vi) the receipt by DM Publishing Shareholders of an opinion from
Penton's counsel regarding certain matters.

Additional Conditions to the Obligations of Penton and Combination
Subsidiary. The obligations of Penton and Combination Subsidiary to effect the
Stock Distribution and transactions under the DM Publishing Combination
Agreement are further subject to the following conditions: (i) the
representations and warranties of DM Publishing Shareholders and Pittway are
true and correct in all material respects and performance and compliance by DM
Publishing, the DM Publishing Shareholders, and Pittway with each covenant in
all material respects, (ii) no discovery by Penton of any undisclosed matter or
adverse change, which individually or in the aggregate, is materially adverse to
the value of DM Publishing, (iii) the DM Publishing Shareholders will have
furnished Penton a certificate in which they certify that an appropriate inquiry
has been made of DM Publishing's executive officers regarding representations
and warranties and the performance of covenants, (iv) the DM Publishing
Shareholders will have furnished to Penton certified copies of resolutions
regarding the DM Publishing Combination Agreement, (v) Pittway will have
furnished Penton a certificate in which they certify that an appropriate inquiry
has been made of Pittway's executive officers regarding representations and
warranties and the performance of covenants, (vi) Pittway will have furnished to
Penton certified copies of resolutions regarding the DM Publishing Combination
Agreement, (vii) receipt by Penton of an opinion from the DM Publishing
Shareholder's and DM Publishing's counsel regarding certain matters, (viii)
receipt by Penton of an opinion from Pittway's counsel regarding certain
matters, and (ix) DM Publishing's cash and cash equivalents are in an amount
sufficient to enable the Combination Subsidiary to pay its liabilities.

Additional Conditions to the Obligation of Pittway. The obligation of
Pittway to effect the Stock Distribution is further subject to the following
conditions: (i) performance by Penton, Combination Subsidiary, DM Publishing,
and the DM Publishing Shareholders of each obligation and agreement in all
material respects and compliance with each covenant to be performed pursuant to
the DM Publishing Combination Agreement, (ii) Penton will have furnished to
Pittway a certificate which certifies that an appropriate inquiry has been made
of Penton's and Combination Subsidiary's executive officers regarding the
performance of covenants, (iii) the DM Publishing Shareholders will have
furnished to Pittway a certificate which certifies that an appropriate inquiry
has been made of DM Publishing's executive officers regarding the performance of
covenants, (iv) Penton will have furnished to Pittway certified copies of
resolutions regarding

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<PAGE> 21

the DM Publishing Combination Agreement, (v) receipt by Pittway of an opinion
from Penton's counsel regarding certain matters, (vi) receipt by Pittway of an
opinion from the DM Publishing's and DM Publishing's counsel regarding certain
matters, (vii) resignation of Messrs. Kemp and Ramella as an officer of Pittway,
(viii) release by Messrs. Kemp and Ramella of Pittway from all obligations under
their respective employment agreements with Penton, including the supplemental
executive retirement plans provided therein, and (ix) repayment by Penton of its
indebtedness to Pittway outstanding immediately prior to the Stock Distribution.

In the event the DM Publishing Combination fails to close, depending on the
cause of such failure, Pittway may be required to reimburse the DM Publishing
Shareholders, or the DM Publishing Shareholders may be required to reimburse
Pittway, Penton, and Combination Subsidiary, for their legal and other costs and
expenses incurred in connection with the DM Publishing Combination Agreement and
other resulting damages (including, in certain instances in which Pittway is
required to reimburse, at least $250,000 of such other damages).

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RISK FACTORS

FACTORS AFFECTING THE COMMON STOCK

No Prior Public Market; Possible Volatility of Stock Price. The Common
Stock has been approved for listing on the NYSE under the symbol "PME," subject
to official notice of issuance. However, there is no established public trading
market for the Common Stock, and there can be no assurance as to the prices at
which the Common Stock will trade after the Stock Distribution. Until an orderly
market develops (which will depend in part upon the extent to which holders of
Pittway Stock conclude that they wish to hold the Common Stock received in the
Stock Distribution), prices at which the Common Stock trades may fluctuate
significantly. Trading prices will be influenced by many factors, including the
depth and liquidity of the market for the Common Stock, quarterly variations in
operating results, announcements of new publications, acquisitions or
technological innovations by Penton or its competitors, Penton's dividend
policy, the possibility of future sales of Common Stock by Penton or its
significant stockholders, the operating and stock price performance of other
companies that investors may deem comparable to Penton, changes in financial
estimates by securities analysts, investor perception of Penton and the
prospects for its businesses, and general economic and stock market conditions.

Certain Anti-Takeover Effects. Certain provisions of Delaware corporation
law and of Penton's Restated Certificate of Incorporation and Amended and
Restated Bylaws may inhibit changes in control of Penton not approved by the
Board and may have the effect of depriving stockholders of an opportunity to
receive a premium over the prevailing market price of the Common Stock in the
event of an attempted hostile takeover. These provisions include: (i) a
classified Board, (ii) a prohibition on stockholder action through written
consents, (iii) a requirement that special meetings of stockholders be called
only by the Board, (iv) advance notice requirements for stockholder proposals
and nominations, and (v) "blank check" preferred stock. See "Anti-Takeover
Effects." The existence of these provisions may adversely affect the
marketability and market price of the Common Stock. See also "-- Factors
Relating to Taxation -- Covenants and Indemnities."

Ownership by Certain Significant Stockholders. It is projected that
immediately following the Stock Distribution and the issuance of Common Stock at
the closing of the DM Publishing Combination, members of the Harris family will
own in the aggregate approximately 24.05% of the Common Stock, each of the DM
Publishing Shareholders will own approximately 3.38% of the Common Stock, Mario
J. Gabelli and entities controlled directly or indirectly by Mr. Gabelli will
own in the aggregate approximately 11.82% of the Common Stock and Janus Capital
Corporation will own approximately 8.31% of the Common Stock. See "Stock
Ownership of Certain Beneficial Owners and Executive Officers and Directors." At
that time, certain members of the Harris family and each of the DM Publishing
Shareholders also will serve on the Board for terms that do not expire until
2000 or later. See "Management -- Board of Directors." The concentration of
voting power among these stockholders may inhibit changes in control of Penton
and may adversely affect the liquidity of the market for Common Stock.

Shares Eligible for Future Sale. After consummation of the Stock
Distribution and the DM Publishing Combination, 22,781,713 shares of Common
Stock will be outstanding, substantially all of which held by persons other than
"affiliates" of Penton will be freely tradeable.

The shares of Common Stock held by "affiliates" of Penton, including the DM
Publishing Shareholders, will not be tradeable in the absence of registration
under the Securities Act or an exemption therefrom, including the exemption
contained in Rule 144 under the Securities Act. Sales of the Common Stock issued
to the DM Publishing Shareholders in connection with the DM Publishing
Combination could be effected pursuant to Rule 144 after the first anniversary
of the consummation of the DM Publishing Combination or pursuant to the
registration rights granted to the DM Publishing Shareholders under the DM
Publishing Combination Agreement. See "DM Publishing Combination
Agreement -- Registration Rights."

After consummation of the Stock Distribution, Common Stock will be issuable
if certain outstanding debt of Penton is converted into Common Stock. In
particular, notes issued in connection with the December 1997 acquisition of
INDEX may be converted, in certain circumstances, into up to UK L3.7 million
worth of Common Stock at fair market value. See "Capitalization."

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In addition, 2.6 million shares of Common Stock will be available for
awards under the Equity Incentive Plan and the Director Option Plan (as defined
below) after the Stock Distribution. See "Capitalization." It is anticipated
that shares issued pursuant to the Equity Incentive Plan and the Director Option
Plan will be freely transferable, except that transfers by directors and
executive officers of Penton will be subject to volume limitations under Rule
144.

No prediction can be made as to the effect, if any, that future sales of
shares, or the availability of shares for future sale, will have on the market
price of the Common Stock prevailing from time to time. Sales of substantial
amounts of Common Stock (including shares issued upon the exercise of stock
options), or the perception that such sales could occur, could adversely affect
prevailing market prices for the Common Stock. If such sales reduce the market
price of the Common Stock, Penton's ability to raise additional capital in the
equity markets could be adversely affected.

FACTORS RELATING TO TAXATION

Tax Aspects of the Stock Distribution. Pittway has received a favorable
ruling with respect to the Stock Distribution from the IRS. Actions or events
subsequent to the Stock Distribution by Penton or Pittway should not, in and of
themselves, render the Stock Distribution taxable, but under certain
circumstances could cause the IRS to review the circumstances as of the Stock
Distribution Date. If the IRS ruling were invalidated as a result of such
review, the receipt of Common Stock in the Stock Distribution could become
taxable to the recipients as a dividend and/or a corporate level gain could be
recognized by Pittway, based on the amount by which the fair market value of the
Common Stock distributed in the Stock Distribution, excluding the value of DM
Publishing, exceeds Pittway's basis in its Penton capital stock.

Covenants and Indemnities. Penton has agreed not to take (directly or
indirectly), and not to permit any of its subsidiaries to take (directly or
indirectly), any action (whether prior to, at the time of or after the Stock
Distribution) which would cause the Stock Distribution not to be tax free to
Pittway, its post-Stock Distribution subsidiaries and the stockholders of
Pittway under the provisions of Section 355 of the Code and to indemnify Pittway
for any adverse consequences suffered by it as a result of the breach of such
obligation by Penton. See "DM Publishing Combination
Agreement -- Indemnification and Hold Harmless Agreements" and "-- Certain Tax
Matters." These agreements may inhibit changes in control of Penton for a period
of time after the Stock Distribution.

FACTORS RELATING TO OPERATIONS

No Operating History as an Independent Company. Penton does not have an
operating history as an independent public company. The operations of Penton
have been conducted under separate management, but with strategic direction and
financial and administrative service support from Pittway corporate management
and financial support from Pittway. Following the Stock Distribution, Penton may
purchase from Pittway, at an arm's-length price, up to a specified level of
assistance in connection with tax-related matters for periods ending on or prior
to December 31, 1998. Penton's management will also have the benefit of advice
from its Board that, immediately following the Stock Distribution, will include
two directors who are also directors of Pittway. After the Stock Distribution
Date, however, Penton will, for the first time, be operating as a separate
public company without financial support from Pittway and will incur the
additional expense associated with being a public company and will maintain its
own lines of credit, banking relationships, and administrative functions. While
Penton has been profitable as part of Pittway, there can be no assurance that
its profits will continue at the same level as a stand-alone company.

Dependence on and Cyclicality of Advertising Revenue. Penton's principal
source of revenue is advertising. For the year ended December 31, 1997,
approximately 76% of Penton's revenues came from advertising. Penton's
advertising revenues, as well as those of business magazines in general, are
dependent upon general economic cycles. Historically, advertising revenues
increase during economic recoveries, and decrease during both general economic
downturns and regional economic recessions. Despite the strength of the current
economy, however, business publishers are experiencing increasing pressure on
advertising rates. In the event of a general economic downturn or a recession in
the United States, Penton's advertisers may reduce their advertising budgets or
intensify their attempts to negotiate lower advertising rates. Any material

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decline in advertising revenue would have a material adverse effect on Penton's
business, financial condition, and results of operations.

Competition. Penton's print publications compete with those of a number of
publishers, some of whom have greater financial resources that may enhance their
ability to compete in the business magazine publishing market. Overall
competitive factors include the market's perception of the niche served by the
magazine, readers' preference for the publication's content, editorial quality,
quantity and quality of circulation, reader response to advertisers' products
and services, the effectiveness of sales teams, customer service, and
advertising rates. Penton also faces broad competition for audiences from other
business media and trade show management companies that organize trade shows and
conferences, and from both traditional publishing companies and newly emerging
content providers in the online segment of its business.

Acquisition Risks. An important part of Penton's business strategy is the
acquisition of other business media. See "Business -- Business Strategy." The
success of Penton's acquisition strategy will depend upon Penton's ability to
complete acquisitions and integrate and manage acquired businesses, realize
economies of scale and control costs. Acquisitions involve risks, including
difficulties in integrating acquired operations, diversion of management
resources and unanticipated problems and liabilities. Although management has
successfully integrated the operations of businesses acquired in the past, there
can be no assurance that Penton will be able to implement its acquisition
strategy successfully.

Depending upon the circumstances, Penton may fund a particular acquisition
through the issuance of Common Stock, with cash flow from operations, or with
borrowed funds. Acquisitions may result in potentially dilutive issuances of
equity securities, increased depreciation and amortization expense, increased
interest expense, increased financial leverage, or decreased operating income,
any of which could have a material adverse effect on Penton's operating results.
There can be no assurance that Penton will be able to complete acquisitions on
terms favorable to it or that Penton's existing financial resources, including
cash flow from operations, will be sufficient to fund such acquisitions. If
Penton does not have sufficient cash resources available to fund acquisitions,
its growth could be limited unless it is able to obtain additional capital
through subsequent debt or equity financings. There can be no assurance that
Penton will be able to obtain such financings or that, if available, such
financings will be on terms acceptable to Penton.

New Product Risks. Penton's success has depended in part upon its ability
to monitor rapidly changing market trends and to adapt its publications and
services to meet the evolving information needs of existing and emerging target
audiences. Penton's future success will depend in part on its ability to
continue offering new publications and services that successfully gain market
acceptance by addressing the needs of specific audience groups within Penton's
target markets. The process of internally researching and developing, launching,
gaining acceptance, and establishing profitability for a new publication or
service, or assimilating and marketing an acquired publication or service, is
inherently risky and costly. New publications and services generally incur
initial significant operating losses. There can be no assurance that Penton's
efforts to introduce new or assimilate acquired publications or services will be
successful or profitable. In addition, Penton has invested in, and intends to
continue to invest in, the development of certain Internet services, which are
currently generating losses. The Internet is still in the early stages of
development as a commercial medium, and there can be no assurance that these
services will be successful or profitable. Costs related to the development of
new publications and services are expensed as incurred and, accordingly,
Penton's profitability from year to year may be adversely affected by the number
and timing of new product launches.

Consolidation of Principal Vendors. Penton's principal vendors are paper
suppliers. The paper industry is currently experiencing consolidation among its
principal participants. Such consolidation may result in: (i) decreased
competition, which may lead to increased prices, interruptions, and delays in
services provided by such vendors and (ii) greater dependence on certain
vendors. Such factors could adversely affect Penton's results of operations.

Risks Associated with Trade Shows and Conferences. Obtaining desirable
dates and venues for trade show and conference events has become increasingly
competitive as the trade show industry has grown. Penton generally reserves
venues and dates; however, as is consistent with industry practice, it does not
pay for such reservations. Reservations are not binding until a contract is
signed between a facility operator and

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Penton, and contracts generally hold venues and dates for only one year. Should
Penton lose dates and venue for an event, the profitability and future success
of that event could be affected. In addition, circumstances beyond the control
of Penton, such as natural disasters, labor strikes, and transportation
shutdowns, could present financial risk to Penton's trade shows and conferences
and to Penton's results of operations.

Risks Associated with International Operations. Penton recently acquired
its first operations outside the United States. A component of Penton's growth
strategy is further expansion into international markets. Penton has limited
experience in developing localized versions of its publications and services and
in marketing and distributing them internationally. In addition, there are
certain risks inherent in doing business in international markets, such as the
uncertainty of product acceptance by different cultures, the risks of divergent
business expectations or cultural incompatibility inherent in establishing joint
ventures with foreign partners, difficulties in staffing and managing
multinational operations, currency fluctuations, state-imposed restrictions on
the repatriation of funds, and potentially adverse tax consequences. There can
be no assurance that one or more of such factors will not have a material
adverse effect on Penton's future international operations and, consequently, on
Penton's results of operations.

Effect of Increases in Paper and Postage Costs. Paper is a significant
expense of Penton relating to its print products and direct-mail solicitations,
accounting for approximately 8% of total operating expenses in 1997. While paper
prices have increased by an average of less than 1% annually since 1989, paper
prices have been volatile over the past several years. They began to rise in
1994, rose significantly in 1995, dropped in 1996 and, to a lesser extent, 1997.
Penton does not use forward contracts and all of its paper supply contracts
provide for price adjustments on a quarterly basis to reflect then-prevailing
market prices. As a result, significant increases in paper prices may have an
adverse effect on Penton's future results of operations.

Postage for magazine distribution and direct-mail solicitations is also a
significant expense for Penton, which uses the United States Postal Service for
domestic distribution of all of its products and marketing materials. Postage
accounted for approximately 8% of total operating expenses in 1997. Postage
costs increase periodically and can be expected to increase in the future. The
United States Postal Service has announced an average increase of 4.6% for
periodical class rates, effective in January 1999.

No assurance can be given that Penton can recoup paper or postage cost
increases by passing them through to its advertisers and, accordingly, such cost
increases could have a material adverse effect on Penton's results of
operations.

EFFECT ON THE TRADING PRICES OF PITTWAY STOCK

After the Stock Distribution, Pittway Stock will continue to be listed for
trading on the NYSE. Following the Stock Distribution, the trading prices of
Pittway Stock are expected to be lower than the trading prices of Pittway Stock
prior to the Stock Distribution. After the Stock Distribution, the aggregate
trading prices of a share of Pittway Stock and a share of Common Stock may be
less than, equal to or greater than the trading price of a share of Pittway
Stock prior to the Stock Distribution.

24
<PAGE> 26

CAPITALIZATION

The following table sets forth, as of March 31, 1998, the historical
short-term borrowings and capitalization of Penton and DM Publishing and the pro
forma short-term borrowings and capitalization of Penton after giving effect to
the DM Publishing Combination as if it occurred at March 31, 1998. This table
should be read in conjunction with the Penton Consolidated Financial Statements
and the Notes thereto, the DM Publishing Financial Statements and the Notes
thereto, and the Unaudited Pro Forma Combined Financial Information, included
elsewhere in this Prospectus.

<TABLE>
<CAPTION>
COMBINED
PRO FORMA PENTON
PENTON DM PUBLISHING ADJUSTMENTS(a) PRO FORMA
------- ------------- -------------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
SHORT-TERM NOTES PAYABLE..................... $34,648 $ 90 $ 7,000 $41,738
======= ===== ======= =======
LONG-TERM CAPITAL LEASE OBLIGATIONS.......... $ -- $ 101 $ -- $ 101
EQUITY:
Preferred Stock 2,000,000 shares
authorized; none issued................. -- -- -- --
Common Stock, par value $.01 per share;
60,000,000 shares authorized; 21,200,000
shares issued and outstanding (pro
forma -- 22,739,000 shares (b))......... 212 60 (45) 227
Capital in excess of par value............. 29,630 -- 26,143 55,773
Retained earnings.......................... 42,111 (505) (7,202) 34,404
------- ----- ------- -------
Total equity....................... 71,953 (445) 18,896 90,404
------- ----- ------- -------
TOTAL LONG-TERM DEBT AND EQUITY.............. $71,953 $(344) $18,896 $90,505
======= ===== ======= =======
</TABLE>

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

(a) See Unaudited Pro Forma Combined Balance Sheet and the notes thereto.

(b) Excludes (i) shares of Common Stock that may be issued pursuant to certain
convertible notes issued in connection with the INDEX acquisition, (ii) 2.5
million shares of Common Stock reserved for issuance under the Equity
Incentive Plan, including shares issuable to Thomas L. Kemp, Penton's Chief
Executive Officer, pursuant to his employment agreement and a related waiver
with Penton, (iii) 100,000 shares of Common Stock reserved for issuance
under the Director Option Plan, and (iv) shares that may become issuable to
the DM Publishing Shareholders subsequent to the completion of the DM
Publishing Combination. See "DM Publishing Combination Agreement -- Closing
Consideration and Contingent Rights," "Risk Factors -- Factors Affecting
Common Stock -- Shares Eligible for Future Sale," "Management -- Board of
Directors" and "Executive Compensation -- Equity Incentive Plan" and
"-- Employment Agreements." Options with respect to 633,400 shares of Common
Stock under the Equity Incentive Plan and 69,000 shares of Common Stock
under the Director Option Plan have been awarded, subject to completion of
the Stock Distribution, as of the eighth trading day following the Stock
Distribution Date at an exercise price per share equal to the average
closing price of the Common Stock for the five trading day period ending
such day and Deferred Shares under the Equity Incentive Plan have been
awarded, subject to completion of the Stock Distribution, in lieu of certain
bonuses otherwise payable in cash in 1998. See "Executive
Compensation -- Employment Agreements."

25
<PAGE> 27

SELECTED HISTORICAL FINANCIAL INFORMATION

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------------------------------------- -------------------
1993 1994 1995 1996 1997 1997 1998(a)
--------- -------- -------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING RESULTS
Revenues.................... $149,991 $159,284 $179,900 $188,557 $204,931 $ 48,666 $ 52,485
Operating income (b)........ 7,063 10,290 11,947 18,499 25,297 4,857 4,665
Income from continuing
operations................ 3,920 6,062 8,625 10,956 14,874 2,718 2,340
Income from discontinued
operations................ (6) 51 (48) -- -- -- --
Cumulative effect of changes
in accounting
principles................ (190) -- -- -- -- -- --
Net income.................. 3,724 6,113 8,577 10,956 14,874 2,718 2,340
Income from continuing
operations and net income
per share, basic and
diluted (21,200,000 shares
outstanding).............. .18 .29 .40 .52 .70 .13 .11
CASH FLOWS AND OTHER DATA
Cash Flows
Operating................. $ 8,142 $ 5,329 $ 7,423 $ 20,507 $ 23,186 $ 590 $ (1,018)
Investing (c)............. (5,432) (5,026) (4,989) (4,722) (53,192) (14,799) (1,128)
Financing................. (2,650) (668) (1,697) (15,888) 30,854 13,916 1,459
Capital expenditures (c).... 6,151 7,593 4,989 4,822 5,450 759 1,128
Depreciation and
amortization.............. 5,145 5,596 5,772 5,911 6,551 1,678 2,027
EBITDA (d).................. 12,208 15,886 17,719 24,410 31,848 6,535 6,692
AT END OF PERIOD
Total assets of continuing
operations................ $101,519 $105,901 $116,494 $108,799 $156,426 $123,836 $159,094
Investment in discontinued
operations................ 4,818 5,241 -- -- -- -- --
Total assets................ 106,337 111,142 116,494 108,799 156,426 123,836 159,094
Goodwill and other
intangibles............... 22,954 22,784 21,916 21,940 71,822 36,837 71,673
Stockholder's equity........ 60,675 61,847 70,763 59,151 69,613 61,869 71,953
</TABLE>

(b) Revenues less operating expenses. See Consolidated Statement of Income
included in Penton's Consolidated Financial Statements.

(d) Penton defines EBITDA as operating income before depreciation and
amortization. EBITDA is often used to analyze and compare companies on the
basis of operating performance and cash flow. However, EBITDA is not
adjusted for all non-cash expenses or for working capital, capital
expenditures and other investment requirements. EBITDA should not be
considered in isolation or as a substitute for measures of performance
prepared in accordance with generally accepted accounting principles. Not
all companies calculate EBITDA in the same manner, and EBITDA as presented
may not be comparable to similarly titled measures presented by other
companies.

26
<PAGE> 28

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

The following Unaudited Pro Forma Combined Statements of Income reflect
adjustments to Penton's historical Consolidated Statements of Income for the
year ended December 31, 1997, and the three months ended March 31, 1998, to give
effect to: (i) the acquisition of INDEX, which was completed on December 12,
1997, as if such acquisition had occurred on January 1, 1997 and had been
included on the basis of its twelve months ended November 30, 1997, (ii) the DM
Publishing Combination as if such acquisition had occurred on January 1, 1997,
(iii) the issuance of Common Stock pursuant to the DM Publishing Combination as
if such issuance had occurred on January 1, 1997, and (iv) other adjustments
required to reflect the combined results of operations of Penton as a separate
public company.

The following Unaudited Pro Forma Combined Balance Sheet as of March 31,
1998, presents the financial position of Penton assuming that the DM Publishing
Combination had been completed as of that date.

The acquisition of ISOA in December 1997 and the disposition of one
publication during 1997 have not been reflected in the Unaudited Pro Forma
Combined Financial Information as the impact of both transactions is immaterial
to such information.

The adjustments required to reflect the transactions are set forth in the
"Pro Forma Adjustments" column.

The unaudited pro forma combined financial information should be read in
conjunction with the historical Consolidated Financial Statements of Penton and
the historical Financial Statements of INDEX and of DM Publishing, included
elsewhere in this Prospectus. All purchase price allocations for the INDEX
acquisition and the DM Publishing Combination, treated as purchase transactions,
are preliminary in nature and are subject to change within the twelve months
following each acquisition based on refinements as actual data becomes
available. The pro forma information presented is for informational purposes
only and may not necessarily reflect future results of operations or financial
position or what the results of operations or financial position would have been
had the INDEX acquisition, the Stock Distribution, and the DM Publishing
Combination actually taken place at the beginning of the periods or as of the
dates specified.

27
<PAGE> 29

PENTON MEDIA, INC.

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1998

<TABLE>
<CAPTION>
COMBINED
PENTON DM PUBLISHING PRO FORMA PENTON
HISTORICAL HISTORICAL ADJUSTMENTS PRO FORMA
---------- ------------- ----------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
REVENUES..................................... $52,485 $2,104 $ -- $54,589
------- ------ ----- -------
OPERATING EXPENSES:
Editorial, production and circulation...... 23,322 666 -- 23,988
Selling, general and administrative........ 22,471 613 300(c) 23,384
Depreciation and amortization.............. 2,027 17 197(b) 2,241
------- ------ ----- -------
47,820 1,296 497 49,613
------- ------ ----- -------
OPERATING INCOME............................. 4,665 808 (497) 4,976
------- ------ ----- -------
OTHER INCOME (EXPENSE):
Interest expense........................... (662) (5) (114)(b) (781)
Miscellaneous, net......................... 3 10 -- 13
------- ------ ----- -------
(659) 5 (114) (768)
------- ------ ----- -------
INCOME BEFORE INCOME TAXES................... 4,006 813 (611) 4,208
------- ------ ----- -------
INCOME TAXES:
Current.................................... 1,687 -- (45)(b) 1,832
190(c)
Deferred................................... (21) -- 18(c) (3)
------- ------ ----- -------
1,666 -- 163 1,829
------- ------ ----- -------
NET INCOME................................... $ 2,340 $ 813 $(774) $ 2,379
======= ====== ===== =======
NET INCOME PER SHARE (22,739,000 SHARES
OUTSTANDING)(e)............................ $ .10
=======
</TABLE>

See Unaudited Pro Forma Combined Financial Information and accompanying Notes to
Unaudited Pro Forma Combined Financial Information.
28
<PAGE> 30

PENTON MEDIA, INC.

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
COMBINED
PENTON COMBINED
PENTON INDEX PRO FORMA AND DM PUBLISHING PRO FORMA PENTON
HISTORICAL HISTORICAL ADJUSTMENTS INDEX HISTORICAL ADJUSTMENTS PRO FORMA
---------- ---------- ----------- --------- ------------- ----------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES..................... $204,931 $8,668 $ -- $213,599 $9,358 $ -- $222,957
-------- ------ ------- -------- ------ ------- --------
OPERATING EXPENSES:
Editorial, production and
circulation.............. 94,560 3,455 -- 98,015 2,826 -- 100,841
Selling, general and
administrative........... 78,523 4,971 (103) (c) 81,354 2,894 1,200 (c) 85,367
(2,037) (c) (81) (c)
Depreciation and
amortization............. 6,551 26 902 (b) 7,479 75 788 (b) 8,342
-------- ------ ------- -------- ------ ------- --------
179,634 8,452 (1,238) 186,848 5,795 1,907 194,550
-------- ------ ------- -------- ------ ------- --------
OPERATING INCOME............. 25,297 216 1,238 26,751 3,563 (1,907) 28,407
-------- ------ ------- -------- ------ ------- --------
OTHER INCOME (EXPENSE):
Interest expense........... (841) -- (2,249) (b) (3,090) (21) (455) (b) (3,566)
Gain on sale of
publication.............. 1,040 -- -- 1,040 -- 1,040
Miscellaneous, net......... 10 44 -- 54 75 -- 129
-------- ------ ------- -------- ------ ------- --------
209 44 (2,249) (1,996) 54 (455) (2,397)
-------- ------ ------- -------- ------ ------- --------
INCOME BEFORE INCOME TAXES... 25,506 260 (1,011) 24,755 3,617 (2,362) 26,010
-------- ------ ------- -------- ------ ------- --------
INCOME TAXES:
Current.................... 9,754 72 (1,718) (c) 8,910 34 (179) (b) 9,628
802 (c) 863 (c)
Deferred................... 878 (23) 491 (c) 1,346 2 111 (c) 1,459
-------- ------ ------- -------- ------ ------- --------
10,632 49 (425) 10,256 36 795 11,087
-------- ------ ------- -------- ------ ------- --------
NET INCOME................... $ 14,874 $ 211 $ (586) $ 14,499 $3,581 $(3,157) $ 14,923
======== ====== ======= ======== ====== ======= ========
NET INCOME PER SHARE
(22,739,000 SHARES
OUTSTANDING)(e)............ $ .66
========
</TABLE>

See Unaudited Pro Forma Combined Financial Information and accompanying Notes to
Unaudited Pro Forma Combined Financial Information.
29
<PAGE> 31

PENTON MEDIA, INC.

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

MARCH 31, 1998

<TABLE>
<CAPTION>
COMBINED
PENTON DM PUBLISHING PRO FORMA PENTON
HISTORICAL HISTORICAL ADJUSTMENTS PRO FORMA
----------- ------------- ----------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
ASSETS

CURRENT ASSETS:
Cash................................................ $ 1,732 $1,147 $ 3,173 (d) $ 6,052
Accounts and notes receivable, less allowance for
doubtful accounts of $2,481....................... 32,112 1,360 -- 33,472
Inventories......................................... 3,660 -- -- 3,660
Deferred tax assets................................. 2,995 -- -- 2,995
Prepayments, deposits and other..................... 5,077 77 -- 5,154
---------- ------ ------- --------
45,576 2,584 3,173 51,333
---------- ------ ------- --------
PROPERTY, PLANT AND EQUIPMENT, AT COST:
Buildings........................................... 6,168 -- -- 6,168
Machinery and equipment............................. 61,623 535 -- 62,158
---------- ------ ------- --------
67,791 535 -- 68,326
Less: accumulated depreciation...................... 41,341 329 -- 41,670
---------- ------ ------- --------
26,450 206 -- 26,656
Land................................................ 426 -- -- 426
---------- ------ ------- --------
26,876 206 -- 27,082
---------- ------ ------- --------
OTHER ASSETS:
Goodwill, less accumulated amortization of $6,863... 65,371 -- 30,726 (a) 96,097
Other intangibles, less accumulated amortization of
$5,443............................................ 6,302 -- -- 6,302
Deferred tax assets................................. 3,951 (23) -- 3,928
Due from parent company............................. 10,880 -- (10,880) (d) --
Miscellaneous....................................... 138 2 -- 140
---------- ------ ------- --------
86,642 (21) 19,846 106,467
---------- ------ ------- --------
$ 159,094 $2,769 $23,019 $184,882
========== ====== ======= ========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Notes payable....................................... $ 34,648 $ 90 $ 7,000 (a) $ 41,738
Accounts payable.................................... 8,691 28 -- 8,719
Accrued compensation and benefits................... 7,352 68 -- 7,420
Other accrued expenses.............................. 7,988 -- -- 7,988
Unearned income..................................... 7,929 50 -- 7,979
---------- ------ ------- --------
66,608 236 7,000 73,844
---------- ------ ------- --------
LONG-TERM LIABILITIES AND DEFERRED CREDITS:
Net deferred pension credits........................ 19,592 -- -- 19,592
Other............................................... 941 2,978 (2,877) (a) 1,042
---------- ------ ------- --------
20,533 2,978 (2,877) 20,634
---------- ------ ------- --------
STOCKHOLDER'S EQUITY:
Common stock........................................ 212 60 (45) (a) 227
Capital in excess of par value...................... 29,630 -- 26,143 (a) 55,773
Retained earnings................................... 42,111 (505) 505 (a) 34,404
(7,707) (d)
---------- ------ ------- --------
71,953 (445) 18,896 90,404
---------- ------ ------- --------
$ 159,094 $2,769 $23,019 $184,882
========== ====== ======= ========
</TABLE>

See Unaudited Pro Forma Combined Financial Information and accompanying Notes to
Unaudited Pro Forma Combined Financial Information.
30
<PAGE> 32

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

(a) To record the DM Publishing Combination, including the issuance of 1,539,000
shares of Common Stock and $7.0 million of notes payable. Solely for the
purpose of determining the amount of intangible assets for this pro forma
presentation, a market value of $17 per share of Common Stock was assumed.
The assumed price per share of Common Stock was based on the expected market
value per share immediately after the Stock Distribution is consummated.
Such market value was estimated through discussions with investment bankers
and through observations of price/earnings multiples of other public media
companies. Based on such assumed value, intangible assets, consisting
preliminarily of goodwill and trade names, amounted to $31.539 million. The
amount of $2.877 million was deducted from other long-term liabilities to
reflect the fact that neither the Company nor DM Publishing will be required
to satisfy the deferred compensation liability recorded by DM Publishing.
Rather, this liability is being satisfied directly by the DM Publishing
Shareholders.

DM Publishing's accumulated deficit of $505,000 at March 31, 1998 has been
eliminated in accordance with the purchase method of accounting.

(b) To reflect interest and amortization expense with respect to the debt and
intangible assets resulting from the acquisition of INDEX and the DM
Publishing Combination.

(c) To eliminate fees paid to former owners of INDEX in 1997 ($2.037 million)
and deferred compensation provisions under terminated DM Publishing
agreements ($81,000 in 1997; none in 1998), to record incremental general
and administrative costs of Penton as a separate public company ($1.2
million in 1997 and $300,000 in 1998), to adjust income taxes for these
expenses, and to provide income taxes for DM Publishing as if it were a
wholly-owned subsidiary of Penton rather than a Subchapter S corporation.

(d) To reflect cash required to be provided by Pittway to Penton at the time of
the Stock Distribution, pursuant to the DM Publishing Combination Agreement
as if it had occurred on March 31, 1998, and a non-cash dividend from Penton
to Pittway equal to the balance of "Due from parent company."

(e) Net income per share is calculated using 22,739,000 shares, consisting of
21,200,000 shares of Common Stock outstanding and 1,539,000 shares issuable
upon completion of the DM Publishing Combination, as if it had occurred on
March 31, 1998.

31
<PAGE> 33

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Set forth below is a discussion and analysis by Penton management of the
financial condition and results of operations of Penton. Such discussion and
analysis should be read in conjunction with the financial statements and the
notes thereto included elsewhere in this Prospectus.

OVERVIEW

Penton operates in three business segments: media services, printing, and
direct-mail marketing. The segments are based on Penton's internal organization
and are managed separately due to inherent differences in the nature of these
businesses.

The media services segment serves specific industries and broad markets
with integrated product offerings including trade magazines, trade shows and
conferences, directories, electronic media products (including Web sites and
CD-ROMs), custom publishing, research, databases, and information products.
Penton's publications, trade shows and conferences, and electronic media
products serve the electronics, design/engineering, manufacturing, supply
chain/aviation, mechanical systems/construction, foodservice/hospitality,
government/compliance, and management markets, and, upon completion of the DM
Publishing Combination, will also serve the convenience store/baking market.
Revenues of this segment are generated primarily from advertising, which
accounted for 76% of total revenue in 1997, 78% in 1996, and 77% in 1995. No
single advertiser comprised more than 1.4% of Penton's advertising revenue
during 1997. Penton's top 10 advertisers accounted for only 5% of total revenue
and its top 100 customers accounted for less than 18% of total revenues in 1997.
Trade show and conference revenues represented 5% of total revenues in 1997, 3%
in 1996, and 2% in 1995. The printing segment prints magazines, catalogs,
brochures, and direct-mail pieces for the media services segment and outside
commercial customers. The direct-mail marketing segment serves primarily the
pharmaceutical and business services markets with the ability to design,
produce, print, and mail direct-mail marketing campaigns. Penton management is
currently considering strategic alternatives for its direct-mail marketing
segment.

The DM Publishing Combination Agreement was signed on May 21, 1998.

In 1997, Penton acquired three trade show companies -- INDEX, ISOA, and
A/E/C, -- for a combined purchase price of $48.7 million, plus contingent
payments of up to $12.9 million based on future earnings. The INDEX contingent
consideration is comprised of two groups of contingent loan notes. First, the
Contingent Convertible Loan Notes grant the holders the excess of INDEX's
aggregate net turnover (as defined therein) over UK (POUND)5.3 million for each
of the years 1998 and 1999, up to a maximum UK (POUND)2.2 million. The second
group is the Senior Executive Contingent Loan Notes, which grant the holder an
amount equal to 40% of INDEX's operating profits over UK (POUND)1.75 million for
each of the years 1998 and 1999, up to a maximum of UK (POUND)400,000. The ISOA
contingent payment, if earned, is equal to 5.5 times the earnings before
interest, taxes, depreciation, and amortization ("EBITDA"), as defined therein,
over $1.0 million for each of the years 1998 and 1999, plus 6 times the EBITDA
over $1.0 million in 2000. The ISOA contingent payments are limited to $6.0
million. The A/E/C contingent consideration, if earned, is equal to 130% of the
EBITDA of A/E/C over $1.5 million for each of the years 1997, 1998, and 1999.
The total A/E/C contingent payment is limited to $3.25 million, of which
$655,000 was earned for the year 1997. The acquisitions were accounted for using
the purchase method of accounting and, accordingly, the results of the acquired
companies are included in Penton's Consolidated Statement of Income since their
respective dates of acquisition. Penton believes that these companies will
significantly expand the trade show and conference offerings of Penton's media
services segment. Also, in 1997, Penton sold Modern Office Technology magazine
for $1.0 million in cash.

In 1995, Penton sold Progressive Architecture magazine for $1.0 million in
cash and exchanged its Millimeter magazine, plus $0.9 million in cash, for EE
Product News magazine ("EEPN").

32
<PAGE> 34

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THE THREE MONTHS ENDED MARCH 31,
1997 (UNAUDITED)

Revenues

Total revenues, after elimination of inter-segment sales, increased $3.8
million, or 8%, from $48.7 million to $52.5 million.

Media services revenues increased $3.0 million, or 7%, to $46.6 million.
Advertising revenues from Penton's publishing operations accounted for
approximately $1.5 million of the increase, primarily as a result of the
publication of Hydraulics and Pneumatics' Fluid Power Handbook and Directory,
which is published every other year. Trade show and conference revenues
increased $1.5 million. The increase was due to the strong performance of the
Wireless Symposium & Exhibition/Portable by Design Show and inclusion for the
first time of the operations of the Service Management Europe Show acquired in
December 1997 as part of INDEX.

Printing revenues increased $0.5 million, or 5%, bringing total revenue to
$9.7 million, due principally to the increase of revenues from external
customers.

Direct-mail marketing revenues increased $0.2 million, or 7%, to $2.9
million. The increase was primarily in the related printing operations,
resulting from increased volume from outside customers.

Cost of Production

Penton's total cost of production, after elimination of inter-segment
charges, grew to $23.3 million compared to $22.2 million, representing an
increase of $1.1 million, or 5%.

Media services production costs grew approximately 2%, due to the
publication of the biannual Fluid Power Handbook and Directory, which was not
published in 1997, and the addition of the Service Management Europe Show
acquired in 1997 as part of INDEX.

Cost of production for the printing segment increased approximately $0.4
million due to volume-related growth of outside business.

Direct-mail marketing cost of production increased only 3%, compared to the
7% increase in revenue, due in part to productivity improvements.

Selling, General, and Administrative

Total selling, general, and administrative expenses grew $2.6 million, or
13%, to $22.5 million.

Media services selling, general, and administrative expenses increased
approximately $2.6 million, or 14%. The increase was due to (i) sales volume
growth, (ii) added costs to support two new publications launched in the first
quarter, IW Growing Companies and Penton's Embedded Systems Development, (iii)
costs related to the biannual Fluid Power Handbook and Directory, (iv) expenses
of the Service Management Europe Show held in March 1998 for the first time
under Penton's ownership, and (v) period costs of the newly-acquired trade shows
for which revenues will not be recognized until the trade shows are held in
future periods.

Selling, general, and administrative expenses of the printing segment were
relatively flat.

Direct-mail marketing selling, general, and administrative costs increased
7%, due primarily to an increase in selling costs resulting from the growth in
revenues of its printing operations.

Depreciation and Amortization

Depreciation and amortization increased $0.3 million to $2.0 million. The
higher expense was primarily the result of the amortization of intangible assets
associated with trade shows acquired in December 1997.

Operating Income

Overall, the Company's operating income decreased $0.2 million, or 4%, to
$4.7 million from $4.9 million.

33
<PAGE> 35

Media services operating income decreased $0.3 million, or 7%. The 1998
first quarter was negatively impacted by the added period costs of trade shows
acquired in 1997, start-up costs associated with the two magazine launches, and
higher amortization expense as noted above.

Operating income of the printing segment increased $0.1 million, due to
volume-related growth in outside customer sales.

The direct-mail marketing operations recorded an operating loss of $0.2
million compared to an operating loss of $0.3 million. The improvement was
largely due to the increase in revenue of this segment's printing operations.

Interest Expense

Interest expense increased $0.5 million, due to additional borrowings to
finance the trade shows acquired in December 1997.

YEAR ENDED DECEMBER 31, 1997 COMPARED TO THE YEAR ENDED DECEMBER 31, 1996

Revenues

Total revenues, after elimination of inter-segment sales, increased $16.3
million, or 9%, from $188.6 million to $204.9 million.

Media services revenues increased $14.5 million, or 9%, to a total of
$181.1 million. Revenues from publishing operations accounted for $9.1 million
of the improvement, due primarily to increased advertising revenues. Advertising
revenues grew 7%, resulting from a 2% growth in page volume and an overall
improvement of 4% in yield per page. In addition, Penton benefited from the
introduction of four publications launched during 1997. Trade show and
conference revenues increased $5.4 million or 100% to $10.8 million due to the
inclusion of a full year of operations of the A/E/C trade shows, acquired in
January 1997.

Revenues from the printing segment increased $1.1 million, or 3%, to $39.0
million. The increase in this segment was principally due to the addition of
several new third party customers, which accounted for a 19% increase in outside
revenue. The media services segment continued to be the printing segment's
principal customer, accounting for $28.6 million of its revenue compared to
$29.0 million.

Direct-mail marketing revenues increased $0.2 million, or 1%, due to a
strong performance from its related printing operation, which experienced a 25%
or $1.8 million increase in revenue from outside customers, and the continued
growth of this segment's advertising agency business. However, the increases
were offset by a decline in revenues of the direct marketing medical group. This
group's revenues declined for the second year in a row as customers continued to
shift their focus from direct marketing of pharmaceutical programs to broader
consumer-oriented mass media advertising. In 1996, management undertook a number
of initiatives to reposition and redirect its business and launched an
advertising agency group to offset the revenue decline of its direct marketing
medical group. The advertising agency group experienced a 39% or $0.4 million
increase in revenue during 1997.

Operating Expense

Operating expenses for Penton, after elimination of inter-segment charges,
increased $9.5 million, or 6%, from $170.1 million to $179.6 million.

Cost of Production

Media services cost of production increased $1.5 million, or 2%, to $80.4
million, due primarily to additional costs related to the inclusion of a full
year's operations of A/E/C, new product launches during the year, and
volume-related growth. These increases were partially offset by savings
resulting from productivity improvements and lower paper costs. As a result, the
ratio of production costs to revenues improved 3%.

Printing costs of production increased $0.6 million, or 2%, to $3.5
million, which was primarily attributable to the increase in volume of outside
sales.

Direct-mail marketing cost of production increased $0.4 million, or 5%, to
$9.3 million. The increase was primarily attributable to the growth of printing
and advertising agency group sales volume offset by a reduction

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in costs attributable to lower sales volume of the direct marketing medical
group. In addition, overall costs were negatively impacted by the expensing of
development costs associated with a physicians retraining program launched in
1996.

Selling, General, and Administrative Expense

Selling, general, and administrative costs of media services increased $5.3
million, or 8%. The increase was due principally to an increase in selling costs
resulting from the growth in revenues, inclusion of a full year's operations of
the A/E/C trade shows, and additions of staff to support new product launches.

Selling, general, and administrative expenses of the printing segment
increased $0.2 million, or 11%, primarily from selling costs associated with the
increase in sales volume.

Direct-mail marketing selling, general, and administrative costs increased
$0.4 million as a result of increased selling costs associated with higher sales
volume and an expanded number of customer presentations and related promotion
costs.

Depreciation and Amortization

Depreciation and amortization expense increased $0.6 million to $6.5
million. The higher expense was primarily the result of capital equipment
additions and increased amortization of intangible assets associated with the
A/E/C trade show, acquired in January 1997.

Operating Income

Overall, Penton's operating income increased $6.8 million, or 37%, to $25.3
million compared to $18.5 million. Operating income as a percentage of revenue
increased to 12% from 10%, reflecting the benefits achieved from increased
revenue, favorable shifts in product mix including the addition of the A/E/C
trade shows, and improved productivity.

Media services operating income increased $7.2 million, or 41%, to $24.9
million. In 1995, the Company implemented a number of programs to improve
productivity, reduce costs, and streamline operations. These efforts continued
in 1996 and into 1997, resulting in operating savings. When combined with the
favorable impact of revenue growth, productivity improvement and reduced paper
costs, operating income improved from 11% of total media services revenue to
14%.

Operating income from the printing segment improved 21% to $1.5 million.
The increase was primarily due to sales volume increases coupled with the
benefits of reduced paper costs.

Direct-mail marketing operating losses increased $0.6 million to $1.1
million from $0.5 million, which was due principally to the decrease in revenue
of the direct marketing medical group and the expensing of development costs
associated with a physicians retraining program.

Other Income (Expense)

In 1997, other income (expense) included a $1.0 million gain on the sale of
Modern Office Technology magazine offset by $0.8 million of interest expense
incurred as a result of borrowings used to finance acquisitions.

Effective Tax Rates

The effective tax rates were 41.7% and 40.7% in 1997 and 1996,
respectively. An analysis of Penton's effective tax rate appears in Note 7 to
Penton's Consolidated Financial Statements.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO THE YEAR ENDED DECEMBER 31, 1995

Revenue

Total revenues, after elimination of inter-segment sales, increased $8.7
million, or 5%, from $179.9 million to $188.6 million.

Media services revenues increased $8.3 million, or 5%, to a total of $166.6
million. Revenues from publishing operations accounted for $6.6 million of the
improvement and were primarily attributable to

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increased advertising revenue. This increase was offset by a reduction in
revenue of approximately $4.2 million due to the sale of Progressive
Architecture magazine in December 1995. Advertising revenue grew $8.3 million,
or 6%, due to a 2% gain in advertising pages and a 4% increase in yield per
page. In addition, 1996 included the revenue from Penton's biannual directory,
Hydraulics and Pneumatics' Fluid Power Handbook and Directory, which was not
published in 1995. Trade show and conference revenues increased $1.7 million, or
46%, due to the overall growth of Penton's existing trade show and conference
business as well as the introduction of the HVAC Comfortech Show.

Revenues from the printing segment increased $1.3 million, or 4%, to $37.9
million, primarily from increased demand from the media services segment.
Outside commercial sales were even.

Direct-mail marketing revenues increased $0.5 million, or 4%, to $13.2
million from $12.7 million. In 1996, the Company launched its agency media group
business, which generated revenues of approximately $1.1 million. This increase
was offset by a reduction in revenue of the direct marketing medical group of
approximately $0.6 million. Penton introduced a physician's retraining program
during 1996 which generated approximately $0.3 million in revenue from course
offerings.

Operating Expenses

Operating expenses of Penton, after elimination of inter-segment charges,
increased $2.1 million, or 1%, from $168.0 million to $170.1 million.

Cost of Production

Media services cost of production decreased $0.8 million, or 1%, to $79.0
million. The publishing operation's costs decreased $1.5 million offset by an
increase in trade show and conference production costs of $0.7 million. The
reduction of $1.5 million was due to the elimination of approximately $3.3
million of costs related to Progressive Architecture magazine, which was sold in
December 1995, partially offset by other publishing cost increases of $2.0
million in 1996, primarily attributable to sales volume increases. The increase
in trade show and conference related production costs of $0.7 million was due to
the introduction of a new event in 1996 as well as to an overall improvement of
other trade show and conference revenue.

Cost of production of the printing segment increased $1.4 million, due to
increased sales volume net of the impact of significantly lower scrap paper
sales because of softening paper costs.

Direct-mail marketing cost of production increased $1.1 million, or 15%, to
$8.9 million, principally attributable to one-time charges relating to
development costs of a newly-created physicians retraining program and also
attributable to increased volume.

Selling, General, and Administrative

Selling, general, and administrative costs increased $3.2 million, or 5%.
The increase was generally due to greater selling-related costs resulting from
higher sales activity for the year, additional staff relating to new product
launches, and a general increase in the overall cost of doing business, offset
by the elimination of costs associated with Progressive Architecture magazine,
sold in December 1995.

Depreciation and Amortization

Total depreciation and amortization expense increased $0.1 million due to
capital equipment additions.

Operating Income

Total operating income increased $6.6 million, or 55%, to $18.5 million
compared to $11.9 million, primarily as the result of increased revenue and
improved productivity.

Operating income from media services increased $8.3 million, or 88%, to
$17.7 million from $9.4 million. The improvement was attributable to overall
revenue growth, improved product mix of publications and trade show operations,
as well as the full year's benefit of productivity improvement programs
implemented in 1995.

Operating income from the printing segment declined $0.2 million due in
large part to a significant reduction in scrap paper sales.

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Direct-mail marketing operating income declined $1.5 million resulting in
an operating loss of $0.5 million compared to an operating profit of $1.0
million. This decrease was directly related to the decrease in revenue of the
direct marketing medical group, which had historically enjoyed higher margins
compared to those of the advertising agency. Operating income was further
adversely impacted by development costs associated with the start up of a
physicians retraining program. In addition, the related printing operation's
operating income decreased due to lower pass-through demand for printing
services from the direct marketing medical group.

Other Income (Expense)

Other income (expense) decreased $3.1 million. Other income (expense) in
1995 included a $1.7 million gain from the sale of Progressive Architecture
magazine and a $1.4 million gain from an insurance settlement resulting from a
municipal water main break that flooded a substantial portion of Penton's
Cleveland headquarters. Even though part of the operation was disrupted, Penton
was able to resume operations quickly with no material loss of business.

Effective Tax Rates

The effective tax rates were 40.7% and 42.8% in 1996 and 1995,
respectively. An analysis of Penton's effective tax rate appears in Note 7 to
Penton's Consolidated Financial Statements.

FOREIGN CURRENCY

Penton translates the results of its foreign operations into United States
dollars according to Statement of Financial Accounting Standards No. 52, Foreign
Currency Translation. Assets and liabilities of Penton's foreign entities are
translated using the current exchange rate at the balance sheet date. Capital
accounts are translated at historical exchange rates. Net sales and expenses of
Penton's foreign entities are translated using weighted average exchange rates
which approximate the exchange rates at the transaction dates. There were no
significant transaction gains or losses during 1997 or the three months ended
March 31, 1998.

LIQUIDITY AND CAPITAL RESOURCES

Historically, Penton has generated positive cash flow from operations and
has utilized the majority of such cash flows to invest in capital assets,
finance acquisitions, reduce debt, and pay dividends to Pittway.

Penton's cash flow from (used in) operating activities was $(1.0) million,
$0.6 million, $23.2 million, $20.5 million and $7.4 million for the three months
ended March 31, 1998 and 1997 and years 1997, 1996, and 1995, respectively.

In the first quarter of 1998, Penton used cash in continuing operations,
primarily attributable to the timing of cash flows as Penton added fixed
administration and direct show expenses for its acquired trade show companies
only partially offset by related advance deposits. In each of the prior years,
cash flow from operating activities was primarily derived from earnings before
depreciation and amortization. Increases in accounts payable in 1996 and 1997 as
well as decreases in accounts receivable, inventories, and deposits in 1997
contributed to such cash flow.

For each of the years 1997, 1996, and 1995, Penton's investment activities
affecting cash flow consisted of capital expenditures and the net assets of
businesses acquired, offset by net proceeds from the sale of certain
publications. In the first three months of 1998, and in the years 1997, 1996,
and 1995, capital expenditures were $1.1 million, $5.5 million, $4.8 million,
and $5.0 million, respectively. Also, in 1997, Penton acquired the net assets of
three trade show companies for a combined purchase price of $48.7 million,
offset by the proceeds from the sale of Modern Office Technology magazine for
$1.0 million. In 1996, Penton's investment activities include the exchange of
Millimeter magazine, plus $0.9 million in cash, for EEPN magazine and the sale
of Progressive Architecture magazine for $1.0 million in cash.

In 1997, Penton incurred total short-term debt of $48.3 million to finance
the acquisitions of the three trade show companies, of which $14.0 million was
repaid during 1997.

The majority of Penton's operating cash requirements have historically been
funded by operations and by Pittway. Penton's management anticipates that the
primary source of funds to fulfill such needs in the future

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will be internally generated cash from operations and borrowings where
necessary. Penton's investments by and advances to Pittway include net after-tax
cash generated by (or used in) the operations of Penton of approximately $3.5
million in 1997, $15.9 million in 1996, and $1.7 million in 1995. Historically,
Penton has neither earned nor been charged interest on these funds.

Penton's management anticipates additional cash expenditures as a result of
being a separate public company. Such expenditures could include, but may not be
limited to, the payment of dividends, financing costs of new debt, and
administrative costs.

Penton has signed a commitment letter with First Union National Bank to
establish an unsecured, committed, revolving line of credit for $75.0 million
(the "Revolving Credit Facility"). The Revolving Credit Facility will be used to
replace existing notes payable and to meet short-term cash needs. Approximately
$32.7 million will remain available after replacing the existing notes payable
and paying the cash portion of the consideration to be paid to the DM Publishing
Shareholders. The Revolving Credit Facility will contain customary
representations, warranties and conditions, as well as covenants customary for
facilities of this type. It is a condition to the Stock Distribution and the DM
Publishing Combination that such a line be available.

Penton's management anticipates that Penton's long-term financing needs
will be met with internally generated cash flows and financing arrangements with
lenders, if necessary.

Penton may, in the future, require additional credit facilities or
issuances of corporate debt or equity securities in connection with acquisitions
or otherwise. Any debt incurred or issued by Penton may be secured or unsecured,
have a fixed or variable rate of interest, and be subject to such terms as
management deems prudent. In addition, Penton's future operating performance and
ability to meet its financial obligations will be subject to future economic
conditions and to financial, business, and other factors, many of which will be
beyond Penton's control.

SEASONALITY

Historically, Penton has not experienced significant seasonality in its
business. Nevertheless, in 1997, Penton experienced a greater growth in the
second quarter when compared with the other three quarters of the year due
primarily to the inclusion of the A/E/C trade show held in June 1997. Due to the
addition of the ISOA and INDEX trade shows at the end of 1997, Penton
anticipates a greater growth of revenue in the second and fourth quarters
because the significant portion of the trade show and conference revenues will
be generated in the second and fourth quarters of the year.

INFLATION

Generally, while the impact of inflation on Penton's overall results of
operations has not been significant in recent years, paper prices have
fluctuated over the last few years. Paper prices began to rise in 1994,
increased significantly in 1995, dropped significantly in 1996 and, to a lesser
extent, in 1997. It is expected that paper prices will increase in 1998.
Management continually monitors the impact of inflation on its operations and
attempts to mitigate the impact through productivity and technological
improvements, cost containment programs, and by increasing selling prices over
time as allowed by market conditions. Nevertheless, there can be no assurances
that Penton can recoup cost increases by passing them on to its customers.

YEAR 2000 ISSUE

Penton continues to assess the extent of its risks related to processing
year 2000 information. All software applications that may be unable to interpret
the year 2000 have been identified and Penton has already commenced work to
modify or replace those applications. Penton believes that all necessary work to
make its systems year 2000 compliant will be completed on time. In addition, the
estimated costs to modify or replace its applications are not considered
material to Penton and should not involve a significant amount of Penton's
internal resources.

Penton is in the process of working with its vendors regarding their
progress in identifying and addressing issues related to the year 2000. Penton
is in the process of obtaining commitments from all major vendors on whose
software Penton may be dependent that they have plans in place to be compliant
before processing of

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information related to year 2000 would be required. Although no assurance can be
given that all of these third-party systems will be year 2000 compliant, Penton
believes that the risk is not significant.

FORWARD-LOOKING STATEMENTS

"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and other sections of this Prospectus contain forward-looking
statements which are subject to various risks and uncertainties. Actual results
could differ materially from those discussed herein. Important factors that
could cause or contribute to such differences include those discussed under
"Risk Factors" as well as those discussed elsewhere in this Prospectus.

CHANGES IN ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board (the "FASB") issued
Statement No. 133, "Accounting for Derivatives Instruments and Hedging
Activities" ("SFAS 133"). This statement establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives), and for
hedging activities. SFAS 133 requires that an entity recognize all derivatives
as either assets or liabilities in the statement of financial position and
measure those instruments at fair value. SFAS 133 is required to be adopted by
Penton in the third quarter of 1999. Adoption of this statement is not expected
to have a material impact on Penton as Penton currently has no derivative
instruments.

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BUSINESS

For purposes of the following discussion, the business of Penton includes
the business of DM Publishing, unless otherwise expressly indicated.

OVERVIEW

Founded in 1892 by John Augustus Penton, Penton is a leading business media
company. Penton's principal media platforms, including magazines, trade shows
and conferences, and electronic media products, provide proprietary information
to business users, and integrated marketing solutions to industry suppliers.
Penton's publications, trade shows and conferences, and electronic media
products serve the electronics, design/engineering, manufacturing, supply
chain/aviation, mechanical systems/construction, foodservice/hospitality,
government/compliance, and management markets, and, upon completion of the DM
Publishing Combination, will also serve the convenience store/baking market.
Penton's diverse array of products provides business-to-business marketers with
the tools to communicate effectively with their customers, and provides current
information to the markets served. Penton had total revenue of approximately
$205 million in 1997.

Penton has aggressively expanded its presence in the trade show and
conference business in recent years, and currently operates 63 trade shows and
conference events. Penton acquired three trade show companies in 1997: A/E/C was
acquired in January and INDEX and ISOA were acquired in December. Penton's trade
shows include the A/E/C SYSTEMS International Shows, Computers for Contractors,
Computers in Manufacturing, International Leisure Industry Week, the North
American Warehousing & Distribution Exposition & Conference, and the Wireless
Symposium & Exhibition. Conferences include the America's Best Plants Series and
the Global Leadership Forum. Trade shows and conferences accounted for
approximately 5% of Penton's total revenue in 1997. On a pro forma basis, had
INDEX and ISOA been acquired in January 1997, Penton's trade show and conference
revenue would have accounted for 12% of Penton's total revenue in 1997, and
Penton would have sold approximately 1.4 million net square feet of exhibit
space to over 5,500 exhibiting companies.

In addition to publications, trade shows and conferences, and electronic
media, Penton's business includes marketing and business development services
such as databases, direct-mail marketing, custom

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communications, and research services. These services provide integrated market
access to Penton's advertiser customers by facilitating the flow of information
between them and their customers.

INDUSTRY

Economic Trends

The robust United States economy has favorably affected the business media
industry in recent years. As companies grow, they use advertising in print
publications, exhibits at trade shows and conferences, and electronic media to
communicate with their customers and potential customers.

Global economic trends also influence business media. As United States
companies penetrate international markets, they seek communications partners
that can help them sell their products and services. In addition, professionals
and managers in international markets have an increasing need for business
information. As a result, business media companies are producing international
editions of their titles, launching trade shows in international venues, and
designing their electronic media products to serve global audiences.

Performance

The business media industry has benefited from these trends. According to
the 1997 Veronis Suhler & Associates Communications Industry Forecast,
business-to-business communications was the fifth fastest growing segment of the
overall communications industry for the period 1991 to 1996, growing at a
compound annual growth rate ("CAGR") of 7.4% during that period. Total spending
in business-to-business media was $16.5 billion in 1997, up from $15.2 billion
in 1996, according to this report. The report forecasts a 7.0% CAGR for business
magazines from 1997 to 2001, inclusive, and a 10.4% CAGR for trade shows and
exhibitions over the same period.

The business-to-business media industry in the United States currently
includes about 1,500 trade magazine publishing companies that publish more than
5,000 titles. In addition, this industry produces approximately 3,900 trade
shows that are operated by integrated media companies, independent show
operators and, increasingly, financial owners, and an additional 2,100
association-owned shows.

Despite an active merger and acquisition market over the past few years,
business media remains a fragmented industry with a wide array of owners.
Furthermore, there is significant organic growth of new products, such as trade
magazines, trade shows, conferences, and online services, as new markets and
technologies develop. With relatively little capital required to launch new
products, business media embrace entrepreneurial organic growth.

Advertising revenues on Internet Web sites totaled $906.0 million in 1997,
according to the Internet Advertising Bureau. Jupiter Communications forecasts
Web site advertising will grow to a volume of $1.9 billion in 1998, $3.0 billion
in 1999, and $4.36 billion in 2000.

The demand for objective, current information and analysis on topics that
are relevant in the market sectors served by business-to-business publications
has increased significantly in recent years. Marketers' need to communicate with
their customers, through advertising designed to increase sales and build brand
loyalty, has increased commensurately. Business-to-business, market-focused
media provide communications channels that connect marketers with a targeted
group of customers.

Print Publications

Publishers of controlled circulation titles, including Penton, have evolved
into broadly integrated media companies in response to major trends: (i)
marketers are increasingly pursuing integrated marketing strategies, i.e., the
use of a variety of tools for communicating with targeted business audiences;
(ii) end-users, whose professional roles are more demanding, are seeking more
information to meet their specific professional needs, as well as a variety of
effective channels for receiving information; and (iii) digital technology
continues to make rapid advances, which have fed the development of the Internet
and the creation and use of CD-ROMs and other products.

In general, magazine publishers generate the majority of their revenues
from the sale of advertising. Penton's advertising revenues, as well as those of
business magazines in general, are dependent upon general economic cycles.
Historically, advertising revenues increase during economic recoveries, and
decrease during
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both general economic downturns and regional economic recessions. Despite the
strength of the current economy, however, business publishers are experiencing
increasing pressure on advertising rates. In the event of a general economic
downturn or a recession in the United States, Penton's advertisers may reduce
their advertising budgets or intensify their attempts to negotiate lower
advertising rates. As compared to general-interest magazines, however, Penton
believes that its advertising revenues are relatively resistant to changes in
general economic conditions due to the diversity of markets served, its
reputation for high-quality, special-interest editorial content, and the fact
that many advertisers market products that are directly related to the editorial
content of the magazines in which they advertise.

In recent years, magazine publishers have sought to diversify their
revenues and expand the influence of their existing brands by developing new
revenue streams in addition to advertising. In general, magazine publishers have
sought to expand the use of their magazines' editorial content into different
media. The integrated portfolios of business-to-business media companies include
print products such as magazines and newsletters, which offer readers the
convenience of portable information while offering advertisers targeted
audiences; trade shows and conferences, which facilitate face-to-face
interaction between sellers and buyers that often results in product orders; and
electronic media, including World Wide Web sites, CD-ROMs, and customized
Internet-based information delivery services, which offer interaction with
market experts, content depth and timeliness, and the potential for making
purchases electronically. In 1997, Penton derived approximately 7% of its
revenue from its various ancillary products and services, which include
databases, electronic products, paid subscriptions, reprints, custom publishing,
and research. Penton believes its portfolio of magazines provides opportunities
to develop ancillary revenues due to the targeted nature of the magazines'
editorial content.

Trade Shows

A trade show can be described as a face-to-face version of a print
publication. Trade show attendees, like readers of print publications, receive
product information and content in the form of exhibits, conferences, and other
ancillary forums. Producers of trade shows and conferences generate revenue from
exhibit space sales, advertising, sponsorships, and conference and general
attendance fees. Trade shows and conferences allow sellers to make face-to-face
sales presentations to significant numbers of qualified buyers in a short period
of time. Trade show attendees include manufacturers and developers, sales and
distribution personnel, and large-volume end-users. Industry leaders have
consistently used trade shows to introduce new products to purchasers in the
markets they serve.

Trade shows have become an increasingly important element of overall
marketing strategy for vendors in many markets. Companies consider trade shows
one of the most effective media for generating and closing sales, second only to
direct selling. Exhibit space revenues from trade shows were approximately $4.8
billion in 1997, a 14% increase over 1996, according to Tradeshow Week ("TSW")
magazine research. In 1997, exhibit square footage rose 7%, the number of
exhibiting firms increased 5% and attendance increased 6% over 1996, according
to TSW.

Electronic Media

The proliferation of Web sites and the growing number of users combine to
make the Internet an increasingly significant advertising and brand-building
vehicle. The Internet enables marketers to deliver targeted messages because it
provides the ability to track user behavior and offers the potential for
permitting online transactions. The advertising-based business model for online
services, which is similar to those of both print and television media, involves
the payment of advertising fees to Internet content providers. These fees are
based on the demographics and purchasing habits of the audience and on the
quantity and positioning of advertisements delivered. Web sites provide a forum
where sellers can deliver product information and advertising to a targeted
customer base. Penton expects that the Internet market, like the publications
market, will continue to grow as a platform for product advertising.

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BUSINESS STRATEGY

Penton's business strategy is to grow revenues, cash flow, profitability,
and margins by being the preferred provider of integrated media services in
selected market segments. Major components of this strategy include:

- Focusing on Core Market Segments

Penton's primary strategy is to be the preferred information provider in
selected market segments by producing broad and diverse arrays of media
properties that provide integrated marketing solutions to the vendors in such
market segments. In pursuing this strategy, Penton has (i) launched or purchased
trade shows and conferences that fit strategically with, and add value to, its
magazines, (ii) added electronic media products and services to meet the
expanding information needs of its readers and information users, (iii) made
acquisitions in selected markets to strengthen its competitive position, and
(iv) disposed of magazines that were not market leaders. Penton intends to build
the strength of its core portfolio of leading information brands by enhancing
the quality of their editorial content and Penton's marketing services, and
extending its existing brands into other media. In 1997, Penton complemented its
core publications in the design/engineering market, the wireless segment of the
electronics market, and the manufacturing management market by acquiring or
expanding existing trade shows and expanding online content and Web sites.
Management believes that maintaining or achieving a leading position as a
provider of diverse integrated media services in these and other markets served
will enhance its competitive position and profitability.

- Diversifying Revenue Streams

As with most business-to-business publishing companies, Penton historically
derived nearly all of its revenues from advertising in its publications.
Penton's focus on controlled circulation business-to-business magazines limited
the opportunity to capture the increasing communications budgets its advertisers
were allocating towards marketing and promotion vehicles such as trade shows,
direct-mail, customized company magazines, and electronic media. Consequently,
Penton shifted its strategy to focus on enhancing its revenues from other
sources. Penton believes that significant opportunities exist to diversify
revenues by leveraging the editorial content and the nationally-recognized brand
names of its existing publications through trade shows and conferences,
licensing arrangements, strategic joint ventures, circulation list rentals,
affinity group marketing, and electronic media. For example, Penton's current
business relationships include (i) an agreement between Electronic Design
("ED"), a Penton publication, and CCI Asia-Pacific Ltd., a leading Hong
Kong-based business publishing company, to produce a Chinese edition of ED and
(ii) an agreement between Air Transport World ("ATW"), a Penton publication, and
CCI Asia-Pacific Ltd. to produce a Chinese edition of ATW. Penton believes that
increasing the percentage of revenue generated by trade shows and conferences,
which characteristically produce higher margins and are less vulnerable to
economic cycles than advertising, is a viable means to increasing profitability
and margins.

- Increasing Positions in Growth Markets

Penton continues to monitor trends both in the markets it currently serves
and in emerging markets in order to identify new audiences for
business-to-business information. When Penton identifies appropriate growth
opportunities, it intends to launch or acquire publications and other media
products that are attractive to advertisers, readers, and other information
users. Penton has established an emerging technology initiative to identify
media opportunities in emerging technology markets at an early stage through
either acquisition or launch.

- Leveraging Administrative Services and Reducing Costs

Management believes it can leverage its administrative and overhead
services to enhance the profitability of acquired businesses and new launches.
In addition, management continues to identify cost reduction opportunities,
including (i) using technology to re-engineer processes, including circulation,
production, and graphics; (ii) outsourcing functions in which Penton is not
cost-effective; (iii) increasing productivity; (iv) centralizing certain
departments; and (v) decentralizing functions that are more cost-effectively
conducted at the operating group level. Management believes that effective
implementation of such measures enhances Penton's competitive position and its
overall profitability.

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<PAGE> 45

- Completing Strategic Acquisitions

Penton regularly evaluates potential acquisitions to expand and strengthen
its activities in selected markets. Penton believes that the acquisition of
other media businesses complements its existing services and improves its
competitive position with current and potential customers. Consistent with this
strategy, Penton acquired three trade show businesses in 1997 and has entered
into the DM Publishing Combination Agreement. The primary focus of Penton's
acquisition strategy is to strengthen current market positions and to add value
to the acquired business through existing market knowledge and core
competencies. Acquisitions of business media properties that would provide
Penton with a premier position in new attractive markets are also part of
Penton's acquisition strategy. Penton currently has no binding agreement or
arrangement relating to the acquisition of businesses or assets, other than the
DM Publishing Combination Agreement.

- Expanding Market Positions Globally

Penton intends to leverage its established brands in key overseas markets,
focusing on those markets whose size and growth potential will support its
strategy of developing broad and diverse media arrays. Management intends to
further expand internationally through overseas launches of proven United States
properties, joint ventures and licensing arrangements with local operating
partners, and selective acquisitions. Two acquisitions completed in 1997 provide
Penton with opportunities to expand internationally. INDEX, a United
Kingdom-based producer of trade shows for the information technology,
manufacturing, and leisure markets, provides Penton with a platform for
expanding its existing successful United States shows in the United Kingdom and
on the European continent. ISOA, which is experienced in producing trade shows
in Latin America, offers opportunities for international expansion in the
emerging Mexican and Latin American markets, particularly in the
heating/ventilating/air conditioning market, in which Penton already publishes
successful magazines and produces a trade show. Penton also has a cooperative
agreement with a leading Hong Kong-based business publishing company, CCI-Asia
Pacific Ltd., to provide Chinese-language editions of Electronic Design and Air
Transport World.

- Developing Electronic Media Products and Competencies

Penton intends to combine its Internet presence, which currently includes
31 Web sites, and its growing expertise in creating CD-ROMs with its broad
experience in developing high-quality editorial content in order to expand its
existing audiences of information users, to continue to develop new audiences,
and to develop new sources of advertising revenue. Penton believes that the
large existing audience for its electronic media products, combined with its
publishing experience, gives it a competitive advantage in identifying,
acquiring, and developing new electronic media products and services. In
December of 1997, Penton signed a joint venture agreement with Findlay
Publishing of the United Kingdom to produce and market Design Selector Global, a
global database of component product information for mechanical,
electro-mechanical and electronics engineers that is accessible in both CD-ROM
and Internet formats.

RECENT ACQUISITIONS AND DIVESTITURES

Penton acquired three trade show companies in 1997. A/E/C produces
conference and trade show events for computer and high-tech solutions in the
architectural, engineering, and construction industries. ISOA produces 24
industrial trade shows in the United States and Latin America that focus on the
machine tool, plant maintenance, supply chain, and heating/ventilating/air
conditioning markets. INDEX is an owner and producer of eight trade shows
serving the computer, manufacturing, and leisure markets in the United Kingdom.

Immediately following and as a condition to the Stock Distribution, Penton
will acquire DM Publishing. DM Publishing publishes three magazines in the
baking and convenience store markets: Modern Baking, Baking Management, and
Convenience Store Decisions. It also produces a number of related special
editions and directory and show issues serving the baking and convenience store
markets. See "DM Publishing Combination Agreement."

Penton's strategy to focus on core market segments led to three
dispositions in the 1990s. In 1995, Penton sold Progressive Architecture
magazine, which was a stand-alone title for Penton in the market it served. Also
in 1995, Penton exchanged its Millimeter magazine, which was a market leader but
a standalone in serving the

44
<PAGE> 46

motion picture, television, and video production industry, for EEPN magazine, a
property that strengthened Penton's portfolio in the electronic engineering
market. In 1997, Penton sold Modern Office Technology magazine because the
market served did not fit Penton's strategic plans.

SOURCES OF REVENUE

A significant amount of Penton's revenues is derived from advertising
sales, with lesser amounts derived from sources such as trade shows and
conferences, ancillary products and services, printing, and direct-mail
marketing. The following table sets forth the sources and amounts of Penton's
revenue for the three fiscal years ended December 31, 1997 (dollars in
millions):

<TABLE>
<CAPTION>
SOURCE 1997 1996 1995
------ ------ ------ ------
<S> <C> <C> <C>
Advertising............................................ $156.0 $146.4 $138.1
Trade Shows and Conferences............................ 10.8 5.4 3.7
Ancillary Products & Services.......................... 14.4 14.9 16.5
Penton Press........................................... 10.5 8.9 8.9
Direct-Mail Marketing.................................. 13.2 13.0 12.7
------ ------ ------
$204.9 $188.6 $179.9
====== ====== ======
</TABLE>

Advertising Sales

Advertising revenues from Penton's publications accounted for approximately
76% of Penton's total revenues in 1997. Penton markets advertising space in each
of its publications by assuring advertisers that they will reach a valuable,
qualified audience of professionals and managers who are known to have an
interest in purchasing products or services in the market segment covered.
Penton's targeted publications enable advertisers to reach their customers and
potential customers cost effectively. Advertising rates are based on the size of
the circulation within the targeted market segment as well as on competitive
factors. Penton's publications compete for advertising on the basis of the
market's perception of the niche served by the magazine, readers' preference for
the publication's content, editorial quality, quantity and quality of
circulation, reader response to advertisers' products and services, the
effectiveness of sales teams, customer service, and advertising rates.

Each of Penton's publications has its own advertising sales team and rate
structure, although advertisers may qualify for discounts based on spending
patterns across multiple Penton publications. Because Penton provides a single
source for advertisers to reach several market segments, Penton enables
advertisers to be more cost efficient in their advertising purchases.

Trade Shows and Conferences

Revenues from Penton's trade shows and conferences accounted for
approximately 5% of Penton's total revenues in 1997. Trade shows generate income
primarily from the fees exhibitors pay to rent booth space, which must be paid
in full before the events open. Registration fees for attendance at conference
sessions generate additional revenue. Trade shows and conferences generally
produce higher profit margins than print products and, unlike advertising
revenue, revenues generated by trade shows historically have been relatively
stable in economic downturns. Penton believes that revenues from trade shows and
conferences will continue to increase as a percentage of total revenues.

Ancillary Products and Services

Revenues from ancillary products and services, which include databases,
electronic products, paid subscriptions, reprints, custom publishing, and
research, accounted for approximately 7% of Penton's total revenues in 1997.
With the growth of electronic publishing, Penton believes there will be
increased opportunities to market editorial content from Penton's publications
in different formats, and to develop additional content for such formats. Penton
has established 31 Web sites and expects to establish several more in the
future. In addition, Penton offers several of its market-focused product and
service directories on CD-

45
<PAGE> 47

ROM and diskette. Penton believes that electronic media offer opportunities to
generate additional revenues through increased advertising, sponsorship sales,
and access fees paid by users.

Penton Press

Revenues from Penton Press accounted for approximately 5% of Penton's total
revenues in 1997 after intercompany eliminations. Penton Press not only prints
nearly all of Penton's magazines, but also prints approximately 50 titles of
other publishers.

Direct-Mail Marketing

Revenues from Curtin & Pease/Peneco, Penton's direct-mail marketing
subsidiary, accounted for approximately 6% of Penton's total revenues in 1997,
of which 3% related to its direct-mail marketing operation and 3% to its related
printing business, Feather Fine. Penton plans to reduce the significance of its
direct-mail marketing and related printing operations as a revenue source.
Penton management is currently considering strategic alternatives for Curtin &
Pease/Peneco and Feather Fine.

INFORMATION PRODUCTS AND SERVICES

Publications

Magazines. Penton is the fifth largest specialized business magazine
publisher in the United States, according to the American Business Press, the
leading association for the business publishing industry. Penton publishes 42
national business and trade publications with a combined circulation of over 2.7
million subscribers worldwide. Of the 21 Penton magazines that serve measured
market segments tracked by external reporting sources, 17 are ranked either
first or second in their respective markets. Efficiencies of centralized
circulation, fulfillment, and other back office services enable new titles to be
spun off from existing titles, or acquired and integrated. Penton's publications
serve the specialized, professional information needs of subscribers who work in
specific segments of markets including design/engineering, electronics,
manufacturing, supply chain/aviation, mechanical systems/construction,
foodservice/hospitality, government/compliance, and management markets, and,
upon completion of the DM Publishing Combination, will also serve the
convenience store/baking market. Penton's magazines are controlled-circulation,
business-to-business trade publications that are distributed free of charge to
qualified subscribers in targeted market segments. These publications generate
revenues predominantly from the sale of advertising space. In 1997, advertising
revenues from all of Penton's magazines accounted for 74% of Penton's total
revenues.

In a controlled-circulation publication, circulation is limited to
qualified subscribers who have verified their responsibility for certain
specific job functions, such as purchasing influence or purchasing authority in
the market served by the publication. The publisher selects these recipients
based on defined qualifying characteristics, thereby enabling advertisers to
reach those individuals most likely to be interested in purchasing the products
advertised. Penton surveys subscribers to its controlled-circulation
publications annually to verify their continued qualification. Circulation
information for the majority of Penton's publications is audited each year by
BPA International, a nationally recognized auditor of magazines. These audits
verify that Penton has accurately identified the number and job responsibilities
of qualified subscribers and that those subscribers are in fact eligible to
receive the relevant publication under the standards that Penton has
established.

Editorial content is written by in-house editorial staff and freelance
authors, well-known in the market segments that their magazines serve. Penton
believes that its publications have established reputations for authoritative
and reliable journalism among their readers and within the market segments they
serve. Each Penton publication has its own editorial staff, including editors,
designers, and production personnel. To preserve the editorial integrity of each
publication's news reporting and analysis, Penton seeks to maintain strict
separation between the editorial and sales staffs of each publication. Penton
believes that its reputation for objective, fair, and credible editorial content
contributes significantly to its success.

Penton's editorial staffs meet frequently with readers of their
publications to maintain a current understanding of the information needs and
interests of those readers and thereby serve them more effectively. Penton
devotes considerable resources to the study of trends in its readership
communities and strives to make its publications the best-read and most widely
used among its target audiences. Many of Penton's editors and
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<PAGE> 48

contributors are recognized as experts in their field and are regularly
contacted by the general press to comment on developments and trends in their
respective markets.

The following is a list of Penton's current magazines broken down by the
market sectors they serve:

<TABLE>
<CAPTION>
FIRST ISSUE ANNUAL
TITLE PUBLISHED CIRCULATION FREQUENCY SUBSCRIBER AUDIENCE
----- ----------- ----------- --------- -------------------
<S> <C> <C> <C> <C>
DESIGN/ENGINEERING
- -------------------------------------

A/E/C SYSTEMS The Magazine of
Computer Solutions................. 1992 30,000 6 architects, engineers and
construction executives
Computer-Aided Engineering........... 1982 55,000 12 technical managers in
manufacturing, product design,
engineering analysis
Hydraulics & Pneumatics.............. 1948 50,100 12 engineers of fluid-power
machinery and equipment
Machine Design....................... 1929 180,000 23 OEM, process and consulting
industry design engineers
Mechanical Solutions................. 1997 60,000 4 users of Autodesk Mechanical
Desktop(R) software
PT Design............................ 1959 57,000 12 motion systems design and
manufacturing engineers
PT Motion Systems Distributor........ 1987 12,000 6 motion systems distributors

ELECTRONICS
- -------------------------------------

EE Product News...................... 1941 112,000 12 OEM electronics design engineers

Communications Products.............. 1996 35,000 6 communications systems design
engineers
Electronic Design.................... 1952 165,000 26 OEM electronics engineers and
engineering managers
Electronic Design China.............. 1994 21,000 12 OEM electronics engineers and
engineering managers in China
Microwaves & RF...................... 1962 57,000 12 radio frequency and microwave
systems engineers and engineering
managers
Wireless Systems Design.............. 1994 50,000 12 wireless systems engineers and
engineering managers
Penton's Embedded Systems
Development........................ 1998 50,000 12 engineers and engineering
managers who develop
microprocessor and
microcontroller-based and
real-time systems
FOODSERVICE/HOSPITALITY
- -------------------------------------

Food Management...................... 1972 50,100 12 foodservice directors and
managers in noncommercial market
Restaurant Hospitality............... 1919 122,250 12 commercial foodservice operators

Lodging Hospitality.................. 1949 50,400 12 lodging industry development,
operations, marketing managers
CONVENIENCE STORE/BAKING
- -------------------------------------

Modern Baking*....................... 1987 27,300 12 in-store, retail and foodservice
bakers

Convenience Store Decisions*......... 1990 41,700 12 convenience store and petroleum
marketer chain management
Baking Management*................... 1997 9,050 12 management of large volume bakers
</TABLE>

47
<PAGE> 49

<TABLE>
<CAPTION>
FIRST ISSUE ANNUAL
TITLE PUBLISHED CIRCULATION FREQUENCY SUBSCRIBER AUDIENCE
----- ----------- ----------- --------- -------------------
<S> <C> <C> <C> <C>
GOVERNMENT/COMPLIANCE
- -------------------------------------

Occupational Hazards................. 1938 65,000 12 managers of total risk control
programs, industrial safety
Government Product News.............. 1962 85,000 12 government purchasers and
specifiers

Government PROcurement............... 1993 14,000 4 public-sector purchasing
professionals

MANAGEMENT
- -------------------------------------

IndustryWeek......................... 1882 240,000 23 executives of global
manufacturing enterprises
IW Growing Companies................. 1998 210,000 8 management of growing
manufacturing enterprises with
fewer than 500 employees
MANUFACTURING
- -------------------------------------

American Machinist................... 1877 80,000 12 managers and engineers in durable
goods, metal products industries
Gases & Welding Distributor.......... 1957 5,000 6 distributors of welding supplies,
industrial and medical gases
Forging.............................. 1990 5,000 5 managers and engineers in various
types of forge shops
Foundry Management & Technology...... 1892 19,500 12 foundry industry managers,
engineers and research
professionals
New Equipment Digest................. 1936 207,000 12 administrative, production, plant
operations, maintenance,
engineering design purchasers
throughout industry
Welding Design & Fabrication......... 1931 40,000 12 designers and engineers in
welding and fabricating plants
33 Metalproducing.................... 1963 19,100 12 managers, engineers in
metalproducing industries
Used Equipment Directory............. 1949 75,000 12 manufacturing plants that use
industrial equipment
MECHANICAL SYSTEMS/CONSTRUCTION
- --------------------------------------------------

Contracting Business................. 1944 52,000 12 heating, ventilating, air
conditioning and refrigerating
commercial and industrial
contractors
Heating/Piping/Air Conditioning...... 1929 53,000 12 HVAC mechanical systems engineers
Energy & Environmental Management.... 1995 28,500 4 building owners and facility
managers

SUPPLY CHAIN/AVIATION
- -------------------------------------

Air Transport World.................. 1964 40,100 12 airline industry management
Air Transport World China............ 1995 15,000 4 airline industry management in
China
Material Handling Engineering........ 1945 95,000 13 managers and engineers
responsible for material handling
Material Handling Business........... 1995 11,000 4 material handling distributors
and sales managers
Shipping & Receiving................. 1995 25,000 6 shipping managers of small
companies
Transportation & Distribution........ 1960 71,000 12 supply chain company management
</TABLE>

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

* To be acquired as part of the DM Publishing Combination.

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<PAGE> 50

Directories and Buyer's Guides. Penton also publishes 28 directories and
buyer's guides, which are trusted, heavily-used sources of buying information
for industry decision makers. Some of the more well-known of these publications,
and the market sectors they serve, include:

<TABLE>
<CAPTION>
TITLE MARKET SECTOR
----- -------------
<S> <C>
Fluid Power Handbook & Directory Design/Engineering
Electronic Design's VMEbus Product Directory Electronics
Microwaves & RF Product Data Directory Electronics
Annual Buyers Handbook* Foodservice/Hospitality
Sales Trend Handbook* Foodservice/Hospitality
Lodging Hospitality Almanac Foodservice/Hospitality
Casting Design & Application Reference Manufacturing
Handbook
The Secondary Market Guide Manufacturing
</TABLE>

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

* To be acquired as part of the DM Publishing Combination.

Most of the business directories Penton publishes have no competition, and
where competition does exist, Penton's publication is usually the market leader.
Competition, where present, is based on price and quality of data. Management
believes that the comprehensiveness and quality of its data and the specialized
focus of its directory publications have prevented others from launching
competing publications or competing effectively.

Other Publications. Other Penton publications include: Restaurant Show
Daily and Equipment Show Daily, tabloid-format news publications that are the
restaurant industry's primary source of daily show news, company updates and
new-product information at major industry trade shows; and show guides to the
annual Retailer's Bakery Convention/Exhibition, the baking industry's largest
event, and the National Association of Convenience Stores Show, that industry's
largest event. The latter two guides are to be acquired as part of the DM
Publishing Combination. In addition, Penton publishes Design Mart, which
presents information about new products and technology to small and medium-sized
original equipment manufacturers, and NC Shop Owner, which provides information
to small and medium-sized metalworking manufacturing businesses.

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<PAGE> 51

Trade Shows and Conferences

With the December 1997 acquisitions of INDEX and ISOA, Penton produces 63
trade shows and conferences in 10 market sectors. On a pro forma basis, had
INDEX and ISOA been acquired in January 1997, Penton's trade show and conference
revenue would have accounted for 12% of Penton's total revenue in 1997, and
Penton would have sold approximately 1.4 million net square feet of exhibit
space to over 5,500 exhibiting companies. In addition to these events, Penton
maintains licensing agreements for five trade shows.

The following is a list of Penton's trade shows and conferences broken down
by the market sectors they serve:

DESIGN/ENGINEERING

A/E/C SYSTEMS '98
A/E/C SYSTEMS Fall
A/E/C SYSTEMS Japan*
A/E/C SYSTEMS Mexico*
A/E/C SYSTEMS SMAU '98 (Milan, Italy)*
A/E/C SYSTEMS SMAUCADD (Milan, Italy)*
A/E/C SYSTEMS Singapore*
Build USA
Build USA Fall
Computer-Aided Engineering's 3D and Parametric Design Conference
Computers for Contractors '98
Computers in Manufacturing
EDM/PDM Expo
Computer-Aided Engineering's Managing Product Design Automation
Conference
Hydraulics & Pneumatics Show
International Manufacturing & Engineering Technology (IMET) Congress
M/CAD Expo
M/TECH '98
Motion Control and Sensors Show
PT Design Show

ELECTRONICS

Wireless Symposium & Exhibition, Portable by Design -- Spring
Wireless Symposium & Exhibition, Portable by Design -- Fall

FOODSERVICE/HOSPITALITY

LaBevEx**
The Vision Forum

GOVERNMENT/COMPLIANCE

Champions of Safety Conference

INFORMATION TECHNOLOGY

Service Management Europe Show

LEISURE

Fitness, Health & Sport '98
International Leisure Industry Week
Leisure Hospitality '98
Parks & Attractions '98
SALTEX Show***

MANAGEMENT

IndustryWeek's America's Best Plants Conference -- Chicago
IndustryWeek's America's Best Plants Conference -- Dallas
IndustryWeek's America's Best Plants Conference -- Norfolk
IndustryWeek's America's Best Plants Conference -- St. Louis
IndustryWeek's Best Practices from America's Best Plants Conference
IndustryWeek's Competing at the Speed of Light Conference
IndustryWeek's Global Leadership Forum
IndustryWeek's Managing for Innovation Conference

50
<PAGE> 52

MANUFACTURING

Central Pennsylvania Industrial Show
East Tennessee Industrial & Machine Tool Show
Fluid Management Conference
Georgia Industrial & Machine Tool Show
Industrial Equipment & Maintenance (IEM) Expo
Kentucky Industrial & Machine Tool Show
Metal Components Expo
Nevada Facilities Expo
Northern Alabama Industrial & Machine Tool Show
Northern Virginia Industrial & Facilities Maintenance Show
Oklahoma Industrial & Manufacturing Technology Expo
Pacific Coast Industrial & Machine Tool Show
Piedmont Industrial & Construction Show
Pre-Owned Production Equipment
(PPE) Show
Reno Industrial & Machine Tool Show
Tennessee Industrial & Machine Tool Show
Tidewater/Hampton Roads Industrial & Manufacturing Technology Show
Tooling Show
Tri-Cities Industrial Show
Tulsa Industrial & Machine Tool Show
USA/Mexico Industrial Expo
Virginia Industrial Show
Western Pennsylvania Industrial Show & Manufacturing Technology Expo

MECHANICAL SYSTEMS/CONSTRUCTION

Construction Maryland Show
HVAC Comfortech Show
AHR/Mexico Show**

SUPPLY CHAIN

Mastering the Supply Chain: Best Practices in Logistics Conference
Mid-South Industrial, Material Handling & Distribution Expo
North American Warehousing & Distribution Exposition & Conference
(NAWDEC)

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

* Licensed Penton event

** Joint venture

*** Produced under management contract

Attendees at Penton's trade shows and conferences are professionals and
managers from the markets Penton serves, including manufacturers, distributors,
dealers, retailers, value-added and other resellers, and large corporate
end-users. Most events include an extensive conference program, which provides a
forum for the exchange and dissemination of information germane to the
particular event's focus. In addition, most events have one or more "keynote"
sessions with speakers who are known for their market knowledge and expertise.

Trade show exhibitors pay a set price per square foot of booth space,
regardless of the exhibit hall they select or the location or size of their
booth within a given hall. Typically, a majority of each trade show's exhibitors
commit to booth space during that year's show for the next year's show. In 1997,
exhibitor space fees accounted for 53% of Penton's total trade show and
conference revenue. Penton also gains revenue from attendee fees at trade shows
and conferences. In 1997, registration fees accounted for 29%, and show
directory advertising sponsorship packages and information products accounted
for 18%, of Penton's trade show and conference revenues.

Penton's trade show and conference advertising revenue is derived
principally from five products, some combination of which is part of each event:
(i) a daily news publication distributed during the show; (ii) the program
exhibits guide; (iii) the preview, a news publication published and distributed
to pre-registrants and certain prior year attendees in advance of the show; (iv)
advertising billboards, banners, and sponsorship fees for specific show events
or specific areas of the exhibit hall; and (v) ancillary exhibitor logo products
that are sold to exhibitors to increase booth traffic and name recognition.

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<PAGE> 53

Electronic Media

Online Services. Penton has expanded onto the Internet by making many of its
publications, as well as other information services, available through its World
Wide Web sites. Penton's corporate Web site, launched in September 1995,
furnishes market information about all its magazines and corporate services,
enables readers to subscribe online, and provides links with its magazine home
pages that provide market-focused services to readers and advertisers. In
December of 1997, Penton entered into a joint venture agreement with Findlay
Publications of the United Kingdom to develop Design Selector Global, a
Web-based product that will enable design engineers who specify mechanical,
electro-mechanical and electronic components and materials to conduct
sophisticated searches for product and product distribution information. Findlay
Publications owns the global product classification system that supports Design
Selector Global, and has responsibility for the system's technology development.
Penton is responsible for content development and marketing of a United States
edition of the product.

Penton currently maintains the following Web sites:

<TABLE>
<CAPTION>
WEB SITE ADDRESS
WEB SITE RELATED BUSINESS(ES) (WWW.-)
-------- -------------------- ----------------
<S> <C> <C>
Penton Media, Inc. Penton Corporate Web site penton.com
Penton Research Services Penton Research Services pentonresearch.com
DESIGN/ENGINEERING
A/E/C SYSTEMS International A/E/C SYSTEMS Division aecsystems.com
A/E/C SYSTEMS The Magazine of A/E/C SYSTEMS The Magazine of Computer penton.com/cae/aec
Computer Solutions Solutions
CAEnet Computer-Aided Engineering penton.com/cae
Penton's Design, Engineering & 15 Penton Design/Engineering and pdem.net
Manufacturing Network Manufacturing magazines
Fluid Power Web Hydraulics & Pneumatics fpweb.com
Machine Design Online Machine Design penton.com/md
MCADexpo MCADexpo mcadexpo.com
Mechanical Solutions Mechanical Solutions penton.com/cae/mechanical
solutions
PT Design Online PT Design ptdesign.com
IMET Congress International Manufacturing & imetcongress.com
Engineering (IMET) Congress
M/TECH Show M/TECH Show mtechexpo.com
ELECTRONICS
The Circuit Board Microwaves & RF penton.com/mwrf
EEPN Online EE Product News eepn.com
Electronic Design Online Electronic Design elecdesign.com
Wireless Engineering Center Wireless Systems Design penton.com/wsd
Wireless Symposium & Exhibition Wireless Symposium & Exhibition wirelessportable.com
Portable by Design
HOSPITALITY
LH Online Lodging Hospitality lhonline.com
GOVERNMENT/COMPLIANCE
OH Interactive Occupational Hazards penton.com/oh
</TABLE>

52
<PAGE> 54

<TABLE>
<CAPTION>
WEB SITE ADDRESS
WEB SITE RELATED BUSINESS(ES) (WWW.-)
-------- -------------------- ----------------
<S> <C> <C>
MANAGEMENT
The Interactive Management IndustryWeek industryweek.com
Resource
The Management Resource for Small IW Growing Companies iwgc.com
Manufacturers
MANUFACTURING
American Machinist Online American Machinist penton.com/am
Computers in Manufacturing Computers in Manufacturing cimshow.co.uk
Forging Online Forging penton.com/forging
Industrial Shows of America ISOA Division isoa.com
New Equipment Digest Innovation On New Equipment Digest newequipment.com
Line
Used Equipment Network Used Equipment Directory buyused.com

MECHANICAL SYSTEMS/
CONSTRUCTION
Contracting Business Interactive Contracting Business penton.com/cb
Energy & Environmental Management Energy & Environmental Management e-e-m.com
Online
HPAC Interactive Heating/Piping/Air Conditioning penton.com/hpac

SUPPLY CHAIN/AVIATION
ATWOnline Air Transport World atwonline.com
MHESource Material Handling Engineering mhesource.com
North American Warehousing & NAWDEC nawdec.com
Distribution Exposition &
Conference
</TABLE>

CD-ROMs and Diskettes. Penton also offers a number of its directories and
magazines on CD-ROM and floppy disk, including: HPAC Info-Disk, which features
Heating/Piping/Air Conditioning's annual directory issue; Lodging Hospitality's
'98 Almanac CD-ROM, a directory of manufacturers, products & services, and
articles from the past year of Lodging Hospitality; Fluid Power Handbook &
Directory CD-ROM, a directory of manufacturers, products, trade names, and
information on fluid power technology; CAE/AEC Compendium CD-ROM, a compendium
of the CAE and A/E/C Directories plus a CAD/CAM Planning Guide; The Inventory of
Manufacturing Equipment, which highlights survey results from American Machinist
magazine; Metalcasting Plant Census on Disk, which features Foundry Management &
Technology's on-going census of the foundry industry; ATW Statistics on
Diskette, which provides information on world airline operating and financial
performance and is available through Air Transport World; and IW's Census of
Manufacturers, an IndustryWeek-Price Waterhouse research study that provides
manufacturers' best practices and metrics, with an interactive CD-ROM allowing
manufacturing executives to measure their performance against data from the
research.

Market Access & Business Development Services

Penton generates additional revenues through a variety of marketing
services, including database rentals and research and consulting services.
Penton offers these services to advertisers to help them to reach their
customers through media in addition to print.

Specialized Advertising Services

Penton forwards reader inquiries, which provide high quality sales leads,
to its advertisers. In addition, classified and recruitment advertising sections
in Penton publications provide a cost-efficient, effective

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<PAGE> 55

medium for reaching prospects who are ready to buy specialized products and
services and qualified professionals seeking career opportunities.

Direct Marketing & Fulfillment

Penton uses information from its subscription lists and other available
databases to compile detailed mailing lists for rental by marketers who want to
promote their products and services through direct-mail programs. Penton has the
ability to customize its mailing list databases so that a list renter may select
specific business or demographic criteria. Penton also matches advertisers'
customer files against its subscriber databases in order to compile additional
data regarding such customers, including job function, purchase involvement, and
company size. Because its databases provide such highly targeted data, Penton
believes that they are particularly attractive to its mailing list renters.
Penton also provides copy writing, graphics, and research services for creating
direct-mail marketing programs.

Custom Communications/Promotion

Penton Custom Publishing produces a full range of communications services
for both print and electronic media, CD-ROM, and the Internet, including
newsletters, magazines, catalogs, directories, education and training materials,
and other support materials. Penton provides complete turnkey project management
as well as more limited assistance with individual aspects of a project. Penton
also markets custom reprints of advertisements, magazine articles, or special
magazine supplements that advertisers use as direct-mail pieces, sales and
training aids, product announcements, or trade show handouts. In addition,
content from Penton magazines can be licensed for use on Web sites. For example,
reviews of products and services enhance a manufacturer's and/or advertiser's
Web site when presented as unbiased industry coverage.

Research

Penton Research Services offers a full range of primary and secondary
research services. Primary research, which may be requested by an advertiser or
an industry association, develops original statistics and analysis based on a
variety of research methodologies that may include interviews, surveys, and
focus groups. Secondary research makes use of existing research developed by
other organizations, collating it to answer a specific research need.

Printing

Penton Press occupies a 138,000-square-foot company-owned facility in
Berea, Ohio, has 250 employees, and prints 51 Penton publications and
approximately 50 non-Penton titles. Total copies printed exceeded 64 million in
1997. Services provided include complete electronic and conventional pre-press
service, heatset web offset and multi-color sheetfed printing, and post-press
finishing and binding services that include sheet cutting, folding, insert
tipping, saddle-wire and perfect binding, in-line and off-line mailing, and
polybagging.

Direct-Mail Marketing

Curtin & Pease/Peneco, Penton's direct-mail marketing subsidiary, provides
direct marketing services and advertising/promotion services primarily to the
pharmaceutical, healthcare, and business services markets. Curtin & Pease/Peneco
and its printing division, Feather Fine, accounted for approximately 6% of
Penton's total revenue in 1997. Penton management is currently considering
strategic alternatives for Curtin & Pease/Peneco and Feather Fine.

PRODUCTION AND DISTRIBUTION

Penton prints nearly all of its own magazines and approximately 50 outside
titles. If additional printing capacity is needed, Penton believes that outside
printing services are readily available at competitive prices.

The principal raw material used in Penton's print publications is paper.
Penton believes that the existing arrangements providing for the supply of paper
are adequate and that, in any event, alternative sources are available. Paper
costs accounted for approximately 8% of Penton's total operating costs in 1997.
Paper prices are affected by a variety of factors, including demand, capacity,
pulp supply, and general economic conditions.

54
<PAGE> 56

Paper prices have been volatile over the past several years. Penton's costs for
paper, relative to revenues, can vary from year to year due to the level of its
paper demands.

All of Penton's publications are delivered by the United States Postal
Service within the continental United States. Postage costs also represent a
significant expense for Penton, accounting for approximately 8% of Penton's
total operating costs and expenses in 1997. In an attempt to contain postal
costs, Penton takes advantage of various postal discounts. Penton uses
Yellowstone International Corporation to distribute certain of its publications
internationally.

See "Risk Factors -- Effect of Increases in Paper and Postage Costs."

PROMOTION AND MARKETING

Penton uses a variety of promotional activities, including advertising,
direct-mail, public relations, media relations, trade shows, and Internet
marketing, to increase the awareness of and business support for its magazines,
trade shows, electronic media products, and service businesses. These
promotional activities also take place at the corporate level to build the image
of Penton. Penton is implementing a formal corporate identity program to build
greater understanding of its broadened business scope and to create stronger
awareness of the Penton brand among all stakeholder audiences.

COMPETITION

Penton competes with a wide range of companies that provide similar
products and services. Although such competition is significant and is likely to
increase in the future, Penton believes its diverse array of products and
services allows it to compete effectively in the markets it serves.

Competition in the publishing segment of Penton's business generally is at
the market sector level, with each publication having one to three direct
competitors. Competitors range in description from major, international,
multi-title publishing houses with significant resources, which may give them a
competitive advantage, to small, entrepreneurial businesses with relatively
modest financial resources.

Overall competitive factors include the market's perception of the niche
served by the magazine, readers' preference for the publication's content,
editorial quality, quantity and quality of circulation, reader response to
advertisers' products and services, the effectiveness of sales teams, customer
service, and advertising rates. Penton believes its products effectively compete
on the basis of these factors. Penton's principal sales advantages include
relevant editorial content and innovative marketing. Penton believes that its
competitive position also benefits from improvements in productivity and from
cost control programs. Penton places great emphasis on providing quality
products and services to its customers.

While Penton faces competition in the overall trade show and conference
arena, in few cases do Penton events compete directly with other events. Trade
show and conference events generally are differentiated by their market
position, geographic location/venue, and seasonality. Penton believes its events
compete effectively in each of these areas, and that the organizational
efficiency and high quality of conference content are competitive advantages
which draw exhibitor and attendee support.

The Internet media business is highly competitive. An increasing number of
companies are developing online content and services for delivery on the World
Wide Web in order to compete both for audiences and for the advertising dollars
that are currently being directed to the Internet.

TRADEMARKS AND INTELLECTUAL PROPERTY RIGHTS

Penton has developed strong brand awareness for its principal publications,
trade shows, and other products and services. Penton regards its copyrights,
trademarks, service marks, and similar intellectual property as critical to its
success and relies upon copyright and trademark laws, as well as confidentiality
agreements with its employees and others, to protect its rights. Penton pursues
the registration of its material trademarks in the United States and, depending
upon use, in certain other countries. Effective trademark and copyright
protection may not be available in every country in which Penton's publications
and services are available.

55
<PAGE> 57

Penton may be subject to claims of alleged infringement by it or its
licensees of trademarks and other intellectual property rights of third parties
from time to time in the ordinary course of business. Penton does not believe
there are any such legal proceedings or claims that are likely to have,
individually or in the aggregate, a material adverse effect on Penton's
business, financial condition, or results of operations.

CUSTOMERS

Penton is not overly dependent upon a single customer or a few customers.
Penton has more than 5,000 advertising customers, and the top ten customers in
1997 accounted for only 5% of its total revenue. Penton's top 100 customers
accounted for less than 18% of total revenue in 1997. The Company's customers
include some of the world's largest and most dynamic companies. Penton's top ten
advertiser customers in 1997 were: Hewlett Packard, AT&T, Texas Instruments,
Compaq Computer, Scientific Components, Motorola, IBM, Siemens, Burr-Brown, and
CNF Transportation.

ENVIRONMENTAL MATTERS

Penton anticipates that compliance with various laws and regulations
relating to protection of the environment will not have a material effect on its
capital expenditures, earnings, or competitive position.

EMPLOYEES

On April 30, 1998, there were approximately 1,390 persons employed by
Penton, primarily located in the United States. None of Penton's employees is
represented by a labor union, and Penton considers its relations with its
employees to be good.

PROPERTIES

Penton's principal properties and their general characteristics are as
follows:

<TABLE>
<CAPTION>
APPROXIMATE
LOCATION PRINCIPAL USE LEASE EXPIRATION SQUARE FEET
-------- ------------- ---------------- -----------
<S> <C> <C> <C>
Cleveland, Ohio General Offices 2000 186,000
Cleveland, Ohio Warehousing 2001 28,000
Berea, Ohio Printing/Warehousing Owned 138,000
New York, New York Sales Offices 2000 10,000
Dunedin, Florida General Offices 2000 13,000
Safety Harbor, Florida Warehousing 1999 18,000
Tampa, Florida Printing 2000 15,000
Tampa, Florida General Offices/ Warehousing 1999 19,000
Hasbrouck Heights, New Jersey General Offices 2001 25,000
</TABLE>

Other properties include 13 sales and/or editorial offices under leases
expiring through 2013 located in major cities throughout the United States and
in the United Kingdom. Penton believes its facilities are adequate for its
present needs.

LITIGATION

Penton is not a party to any legal proceedings other than ordinary routine
litigation incidental to its business. No legal proceedings to which Penton is a
party are material to its business or financial condition.

56
<PAGE> 58

MANAGEMENT

BOARD OF DIRECTORS

The following discussion sets forth information concerning the individuals
who, pursuant to the provisions of the DM Publishing Combination Agreement, will
be serving on the Board immediately after the Stock Distribution and the DM
Publishing Combination. Such directors will be divided into three classes.
Stockholders will elect approximately 1/3 of the directors at each annual
meeting, beginning with the 1999 annual meeting.

<TABLE>
<CAPTION>
AGE AND TERM OF
NAME DIRECTORSHIP INFORMATION
---- --------------- -----------
<S> <C> <C>
William J. Friend Term as Director Mr. Friend has served as a Director of Penton
Expires 1999. since June 1998. Assistant to the
Age -- 34. President/Strategic Planning Manager of Pittway
Corporation (manufacturer and distributor of
alarm and other security products) since August
1996. National Sales Manager, Xetron (division
of Pittway) (April 1994 to July 1996) and
Engineering Product Manager, System Sensor
(division of Pittway) (August 1992 to March
1994).
Don E. Schultz Term as Director Mr. Schultz has served as a Director of Penton
Expires 1999. since June 1998. President of Agora, Inc.
Age -- 64. (integrated marketing communications consulting
firm). Professor of Integrated Marketing
Communications at the Medill School of Jour-
nalism, Northwestern University. Senior Partner,
Targetbase Marketing International and the
Targetbase Institute.
Richard B. Swank Term as Director Mr. Swank has served as a Director of Penton
Expires 1999. since June 1998. Retired. Chairman and Chief
Age -- 67. Executive Officer of Advanstar Communications,
Inc. (magazine, publishing, exhibition and
marketing services enterprise) from April 1990
to December 1994 and Director until May 1996.
Non-executive Chairman and Director, The Dialog
Corp. (U.S.A.) (an online information and data
provider) from November 1997 to present.
William C. Donohue Term as Director Mr. Donohue will become a Director of Penton
Expires 2000. upon completion of the DM Publishing
Age -- 54. Combination. President of Donohue Meehan
Publishing Company (a business publishing
company) since January 1987.
Joan W. Harris Term as Director Ms. Harris has served as a Director of Penton
Expires 2000. since June 1998. President of the Harris
Age -- 67. Foundation (a private charitable foundation)
since January 1993. President of the Chicago
Music and Dance Theater. Former Commissioner for
Cultural Affairs for the City of Chicago. Past
chairperson of the Illinois Arts Alliance and
former director of National Public Radio
(1990-1997).
John J. Meehan Term as Director Mr. Meehan will become a Director of Penton upon
Expires 2000. completion of the DM Publishing Combination.
Age -- 50. Executive Vice President of Donohue Meehan
Publishing Company (a business publishing
company) since January 1987.
Daniel J. Ramella Term as Director Mr. Ramella has served as a Director of Penton
Expires 2000. since July 1990. President and Chief Operating
Age -- 46. Officer of Penton (since 1990).
</TABLE>

57
<PAGE> 59

<TABLE>
<CAPTION>
AGE AND TERM OF
NAME DIRECTORSHIP INFORMATION
---- --------------- -----------
<S> <C> <C>
Anthony Downs Term as Director Mr. Downs has served as a Director of Penton
Expires 2001. since June 1998. Senior Fellow (since 1977) of
Age -- 67. Brookings Institution (non-profit social policy
research center); Consultant (since 1977).
Director, Pittway Corporation (manufacturer and
distributor of alarm and other security prod-
ucts), Bedford Property Investors, Inc. (real
estate investment trust), Essex Property Trust,
Inc. (real estate investment trust), General
Growth Properties, Inc. (real estate investment
trust), Massachusetts Mutual Life Insurance
Corporation (insurance company), and National
Partnership Foundation (low-income housing
operator).
King Harris Term as Director Mr. Harris has served as a Director of Penton
Expires 2001. since May 1987 and as the non-executive Chairman
Age -- 55. of the Board since May 1998. President, Chief
Executive Officer and Director of Pittway
Corporation (manufacturer and distributor of
alarm and other security products) since 1987.
Non-executive Chairman of the Board and
Director, Aptar Group, Inc. (specialty packaging
components manufacturer) and Director, Cylink
Corporation (commercial data encryption
company).
Thomas L. Kemp Term as Director Mr. Kemp has served as a Director of Penton
Expires 2001. since September 1996. Chief Executive Officer of
Age -- 47. Penton (since September 1996); Chairman of the
Board of Penton from September 1996 to May 1998;
President and Chief Operating Officer from
January 1996 to August 1996, Executive Vice
President from 1994 to 1996, and Senior Vice
President, Business and Special Interest
division, from 1992 to 1994, of Miller Freeman,
Inc. (business magazine publisher and exhibition
manager).
Edward J. Schwartz Term as Director Mr. Schwartz has served as a Director of Penton
Expires 2001. since June 1998. Vice President of Pittway
Age -- 57. Corporation (manufacturer and distributor of
alarm and other security products) since 1989.
</TABLE>

Joan W. Harris is the aunt of King Harris. Mr. Harris is the uncle of
William J. Friend. Pursuant to the DM Publishing Combination Agreement, Messrs.
Donohue and Meehan are to be elected to serve as directors of Penton until
Penton's 2000 annual meeting.

Employees of Penton do not receive any additional compensation for serving
as members of the Board or any of its committees. Compensation of non-employee
directors consists of an annual retainer of $15,000, plus a fee of $2,000 for
each Board meeting attended in person and $500 for any teleconference Board
meeting that may be held. In addition, non-employee directors receive $500 for
each committee meeting, but only $250 for each committee meeting attended on the
same day as a Board meeting. The Chairman of each of the Audit and Compensation
Committees receives an additional $2,000 per year. In lieu of the above fees,
the non-executive Chairman of the Board receives an annual retainer of $50,000
per year.

Each director of Penton will be reimbursed by Penton for out-of-pocket
expenses incurred in attending Board and Board committee meetings (including
those occurring prior to the Stock Distribution Date).

Penton has adopted the Penton Media, Inc. 1998 Director Stock Option Plan
(the "Director Option Plan") for non-employee directors. Pursuant to the
Director Option 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. Each non-employee director has been awarded, subject to completion
of the Stock Distribution, 8,000 options, which will vest at the rate of 2,000
per year, and Edward Schwartz has been awarded, subject to completion of the
Stock Distribution, an additional 13,000 fully-vested options. See
"Capitalization."

58
<PAGE> 60

COMMITTEES OF THE BOARD OF DIRECTORS

Executive Committee. The Executive Committee consists of Mr. Harris as
Chairman and Messrs. Kemp, Ramella, and Schwartz. When the Board is not in
session, the Executive Committee may exercise all the powers and authority of
the Board except as limited by law and Penton's Amended and Restated Certificate
of Incorporation.

Audit Committee. The Audit Committee consists of Mr. Schwartz as Chairman
and Anthony Downs and Don Schultz. The Audit Committee will review, as it deems
appropriate, and approve internal accounting and financial controls for Penton
and auditing practices and procedures to be employed in the preparation and
review of Penton's financial statements. The Audit Committee will make
recommendations to the full Board concerning the engagement of independent
public accountants to audit Penton's annual financial statements and will
arrange with such accountants the scope of the audit to be undertaken by such
accountants.

Compensation Committee. The Compensation Committee consists of Richard
Swank as Chairman and Ms. Harris, Mr. Downs, and Mr. Harris. The Compensation
Committee will review and determine the compensation of executive officers,
review and make recommendations to the Board with respect to salaries, bonuses,
and deferred compensation of other officers and executives, compensation of
directors and management succession, and make such determinations and perform
such other duties as are expressly delegated to it pursuant to the terms of any
employee benefit plan of Penton.

Investment Committee. The Investment Committee consists of Mr. Schwartz as
Chairman and Messrs. Friend and Swank. The Investment Committee will provide
objectives and guidelines for the investment of funds held in trust under the
various Penton pension plans, act as the investment committee for purposes of
any 401(k) plans, and review the performance of investment managers charged with
investing Penton pension plan funds.

Nominating Committee. The Nominating Committee consists of Ms. Harris as
Chairwoman and Messrs. Harris and Schultz. The Nominating Committee, as it deems
appropriate, will make recommendations to the full Board with respect to the
size and composition of the Board and its committees and with respect to
nominees for election as directors. The Nominating Committee will consider
suggestions regarding candidates for election to the Board submitted by
stockholders in writing to Penton's Secretary.

EXECUTIVE OFFICERS

It is expected that all senior management of both Penton and DM Publishing,
who have extensive experience in the business media industry, will remain with
Penton after the Stock Distribution and the DM Publishing Combination. Messrs.
Kemp and Ramella, who will serve as the Chief Executive Officer and the
President of Penton, respectively, immediately following the Stock Distribution
and the DM Publishing Combination, have 24 and 21 years, respectively, of
experience in the industry. The various operating unit heads of the major Penton
operations who will be serving immediately following the Stock Distribution and
the DM Publishing Combination have, on average, over 25 years of such experience
in the industry.

59
<PAGE> 61

Information concerning the persons who will serve as the executive officers of
Penton immediately following the Stock Distribution and the DM Publishing
Combination is as follows:

<TABLE>
<CAPTION>
NAME TITLE AND AGE BUSINESS EXPERIENCE
---- ------------- -------------------
<S> <C> <C>
Thomas L. Kemp Chief Executive Mr. Kemp has been Penton's Chief Executive
Officer. Officer since 1996. Mr. Kemp's publishing career
Age -- 47. spans more than 24 years. He spent 22 years with
San Francisco-based Miller Freeman, Inc., and
was Miller Freeman's President and Chief
Operating Officer in 1996, when he left the
company to join Penton. From 1994 to 1996, Mr.
Kemp was Miller Freeman's Executive Vice
President and Chief Operating Officer. He also
held a series of executive, publishing
management, and sales positions with Miller
Freeman subsequent to joining the company in
1974. Mr. Kemp is a Director and Treasurer of
Business Publications Audit International and a
member of the organization's Executive
Committee. He is a Director of the Business
Press Educational Foundation, and a former
Director of American Business Press and the
Association of Medical Publishers. Mr. Kemp is a
frequent speaker at media industry conferences
and events.

Daniel J. Ramella President and Chief Mr. Ramella has served as Penton's President and
Operating Officer. Chief Operating Officer since 1990, and has
Age -- 46. worked for Penton for more than 21 years. Mr.
Ramella was Senior Vice President, Publishing
from 1989 to 1990, and Vice President,
Foodservice Group from 1987 to 1989. He was
publisher of Restaurant Hospitality magazine
from 1985 to 1987. Mr. Ramella held management
positions with Production Engineering magazine
between 1977 and 1985. Before joining Penton in
1977, he was a Senior Audit Manager for Arthur
Andersen & Co. He is a Director, Secretary, and
Executive Committee Member of American Business
Press and has served as a Director of the
Business Press Educational Foundation. He is a
former Director, Treasurer, and Executive
Committee member of Business Publications Audit
International.

Joseph G. NeCastro Chief Financial Before joining Penton in June 1998, Mr. NeCastro
Officer and Treasurer. spent 5 years with Reader's Digest Association,
Age -- 41. Inc. He was Vice President, Finance for Reader's
Digest USA from 1995 until 1998, Corporate
Controller in 1994 and 1995, and held other
corporate financial management positions with
the company in 1993 and 1994. Mr. NeCastro was
Vice President and Treasurer for U.S. News &
World Report between 1990 and 1993, and Director
of Finance from 1987 to 1990. He held senior
business development and finance positions with
MCI Communications Corporation between 1983 and
1987 before moving into the publishing industry.
</TABLE>

60
<PAGE> 62

<TABLE>
<CAPTION>
NAME TITLE AND AGE BUSINESS EXPERIENCE
---- ------------- -------------------
<S> <C> <C>
James D. Atherton Group President. Mr. Atherton is Group President of the
Age -- 62. Mechanical Systems/Construction, Electronics,
Government/ Compliance, Management, Supply
Chain/Aviation, and Industrial Shows of America
Groups. He has worked in business-to-business
publishing at Penton for 45 years. Mr. Atherton
was Group President of Penton's Inside Sales and
Electronics Groups from 1991 to 1995, and
President of the Electronics Group in 1991. From
1989 to 1991, he was Senior Vice President of
Publishing, and from 1984 to 1989, he was
Publishing Vice President of New Equipment
Digest (NED) and Material Handling Engineering
magazines. From 1981 to 1984, he was Vice
President of NED, and from 1975 to 1981, he was
NED's Publisher.

James A. Zaremba Group President. Mr. Zaremba is Group President of the Design/
Age -- 58. Engineering, Foodservice/Hospitality,
Manufacturing, and Independent Exhibitions Ltd.
Groups and A/E/C Systems. He has spent most of
his 30-year business-to-business publishing
career with Penton. From 1993 to 1995, he was
Group President of the Design/Engineering and
Custom Communications Groups, and from 1991 to
1993, he was Group President of the
Design/Engineering Group. He was Group Vice
President of the Design/Engineering Group from
1989 to 1991. From 1988 to 1989, he was
Publisher of Machine Design magazine, and from
1983 to 1988, he was Publisher of PT Design
magazine.

Preston L. Vice Senior Vice President, Mr. Vice has been Senior Vice President of
Publishing Services. Publishing Services since 1989. Mr. Vice has 19
Age -- 50. years of business-to- business publishing
experience and 28 years of accounting and
finance experience. He was Penton's Vice
President of Finance from 1982 to 1989, and
Director of Finance from 1979 to 1982. Mr. Vice
transferred to Penton from Pittway Corporation
in 1979. Previous to his tenure at Pittway he
was with Coopers & Lybrand.

Charles T. Griesemer Vice President/ Mr. Griesemer has been Vice President/Controller
Controller. of Penton since July 1998. Prior to this, he was
Age -- 46. Penton's Vice President of Finance since he
joined Penton in 1989. In the preceding 16
years, he held finance positions at the Thermos
Company, Anchor Swan Corporation Inc., Pittway
Corporation, and Coopers & Lybrand.
</TABLE>

Penton's executive officers will hold office until their successors are
appointed and qualified or until their earlier removal or resignation. However,
Messrs. Kemp and Ramella have rights to hold their respective offices pursuant
to and for the terms of their respective employment agreements referred to below
under "Executive Compensation -- Employment Agreements."

SIGNIFICANT EMPLOYEES

Other persons who will be significant employees of Penton immediately
following the Stock Distribution and the DM Publishing Combination and their
positions, ages, and prior business experience are as follows:

<TABLE>
<CAPTION>
NAME TITLE AND AGE BUSINESS EXPERIENCE
---- ------------- -------------------
<S> <C> <C>
William C. Donohue President, Donohue Mr. Donohue started his 25-year business
Meehan Publishing publishing career in 1973 selling advertising
Company. for Woodall Publishing. He was vice president
Age -- 54. and group publisher of Gorman Publishing's
Bakery Production & Marketing and Prepared Foods
magazines from 1976 to 1986 before forming
Donohue Meehan Publishing Company in 1987.
</TABLE>

61
<PAGE> 63

<TABLE>
<CAPTION>
NAME TITLE AND AGE BUSINESS EXPERIENCE
---- ------------- -------------------
<S> <C> <C>
John J. Meehan Executive Vice Mr. Meehan started his 26-year career in
President, Donohue business-to- business publishing at the former
Meehan Publishing Chilton Publishing, where he held marketing and
Company. sales management positions with the company's
Age -- 50. electronics publications from 1972 to 1977. From
1977 to 1986, he was Publisher of Gorman
Publishing's Bakery Production & Marketing and
Prepared Foods magazines. He was Group
Publishing Director for Thompson Publishing in
New York from 1986 to 1987 before forming
Donohue Meehan Publishing Company in 1987.

Russell S. Carson Vice President & Group Mr. Carson has been Vice President & Group
Publisher, New Publisher of Penton's New Equipment Digest Group
Equipment Digest since 1998. Mr. Carson has spent 33 years in
Group. business-to-business publishing. Mr. Carson was
Age -- 60. Publisher of New Equipment Digest from 1989 to
1998, Publishing Director from 1986 to 1989, and
was National Sales Manager from 1980 to 1986. He
also worked on PT Design in several capacities.

Andrew C. DeSarle Vice President, An- Mr. DeSarle's 25 years in business-to-business
cillary Product Sales and consumer publishing include roles as Vice
& Marketing. President of Special Advertising at Argus Inc.,
Age -- 48. a division of Intertec Publishing, from 1994 to
1996, and General Manager & Publisher for United
Newspapers' Want Ad Press Automotive and Want Ad
Press General Merchandise magazines, from 1991
to 1994. Mr. DeSarle's publishing career also
includes service at CMP Publications, Lebhar
Friedman Inc., Cue magazine, and Ziff-Davis
Publishing. He joined Penton in 1996.

Joseph M. DiFranco Vice President & Group Mr. DiFranco has worked in business-to-business
Publisher, publishing for 25 years. Mr. DiFranco was Group
Design/Engineering, Publisher of Machine Design ("MD") and American
Metals & Manufacturing Machinist ("AM") magazines from 1993 to 1998,
Groups. Publisher of MD from 1990 to 1993, and Publisher
Age -- 53. of AM from 1987 to 1990. He was Publisher of
Huebcor Publishing's Tooling & Production and
Metlfax magazines from 1982 to 1987. He also
held positions at the former Chilton Publishing
and at Eaton Corporation. He joined Penton in
1987.

John G. French Vice President & Group Mr. French has been Electronic Design magazine's
Publisher of Publisher since 1995. Mr. French has worked in
Electronic Design high technology publishing for 18 years. Between
Group. 1989 and 1995, he was Publisher of Microwaves &
Age -- 42. RF magazine, Publisher of the former Electronics
magazine, and National Accounts Manager of
Electronic Design. Mr. French held positions
with VNU Business Publications, CMP Pub-
lishing, Pennwell Publishing, and CW
Communications prior to joining Penton in 1989.

Robert S. Martin Vice President/ Mr. Martin was Plant Superintendent from 1975 to
General Manager, 1981, and Pre-Press Manager from 1968 to 1975.
Penton Press He has worked in the printing industry for 39
Division. years.
Age -- 61.
</TABLE>

62
<PAGE> 64

<TABLE>
<CAPTION>
NAME TITLE AND AGE BUSINESS EXPERIENCE
---- ------------- -------------------
<S> <C> <C>
Susan J. Grimm Vice President, Ms. Grimm has 18 years experience in
Publishing Systems & business-to- business publishing. Ms. Grimm was
Support Vice President of Systems from 1988 to 1991,
Services. Vice President of Data Processing from 1987 to
Age -- 53. 1988, and Director of Data Processing from 1983
to 1987. She was Manager of Systems Development
from 1982 to 1983, and started with Penton as a
Systems Planning Analyst in 1980. Ms. Grimm
worked for Ernst & Young before joining Penton.

Katherine P. Torgerson Vice President, Human Ms. Torgerson was Director of Executive
Resources & Executive Administration from 1997 to 1998, and Executive
Administration. Assistant to the Chairman and the President from
Age -- 50. 1994 to 1997. Over more than 16 years with
Penton, Ms. Torgerson has held roles in
editorial, production, marketing and promotion,
business management, corporate communications,
and executive administration.

Andrew Dedman Managing Director, Mr. Dedman has held his post with INDEX since he
Independent helped found the company in 1984. He worked for
Exhibitions Ltd. Clapp and Poliak UK (acquired by Cahners
Age -- 46. Publishing in 1983) as Group Show Director and
in sales from 1975 to 1984. Mr. Dedman has 23
years experience in trade show management.

Susan J. Donahue President, Ms. Donahue is also Vice President of Industrial
Industrial Shows Shows of America International. She has 18 years
of America. experience in the trade show management
Age -- 42. business. Ms. Donahue was ISOA's Vice President
from 1985 to 1992, and a Sales Representative
from 1980 to 1985. She joined the firm in 1980.

Charles E. Cross III President, Indus- Mr. Cross is also Vice President of ISOA. Mr.
trial Shows of America Cross has 13 years of trade show management
International. experience. From 1990 to 1992, he was Vice
Age -- 41. President of ISOA and ISOA International. He was
ISOA's Sales Manager/Show Manager from 1985 to
1990.

Robert F. Wilson President & CEO, Mr. Wilson has served as President and Chief
Curtin & Pease/ Executive Officer of Curtin & Pease/Peneco since
Peneco. 1990. Mr. Wilson was the subsidiary's President
Age -- 56. from 1987 to 1990, and Executive Vice President
from 1983 to 1986. He has 38 years of experience
in the direct-mail business.

Stephen A. Sind Vice President of Mr. Sind has 25 years of exhibition industry
Trade Show experience. From 1995 to 1998, he served as
Development President and CEO of the Center of Exhibition
Age -- 54. Industry Research ("CEIR"). Prior to joining
CEIR, Mr. Sind spent 15 years with Reed
Exhibition Companies ("REC"), a division of Reed
Elsevier. He was REC's Senior Vice President of
Corporate Planning from 1989 to 1995, Senior
Vice President of International Sales from 1988
to 1989, and Senior Vice President, Asia/Pacific
from 1983 to 1987. He worked with the U.S.
Department of Commerce, the Bureau of East West
Trade, and the U.S. Embassy in Moscow before
joining REC in 1981.
</TABLE>

63
<PAGE> 65

EXECUTIVE COMPENSATION

COMPENSATION TABLES

The following table sets forth, for 1997, certain information about the
compensation paid to the Chief Executive Officer and each of the four other most
highly compensated executive officers of the Company serving at the end of 1997
(collectively, the "Named Executive Officers"). The table contains additional
information for previous years for Messrs. Kemp and Ramella, which information
previously was required to be provided by Pittway in response to a Securities
and Exchange Commission (the "Commission") filing requirement.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL -----------------------
COMPENSATION AWARDS(1)
------------------- -----------------------
RESTRICTED SECURITIES
STOCK UNDERLYING ALL OTHER
SALARY BONUS AWARD(S) OPTIONS/ COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) SAR'S(#) ($)
- ---------------------------------------- ---- -------- ----- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Thomas L. Kemp 1997 $400,000 $291,000 $ 0 10,000 $4,322(2)
Chief Executive Officer 1996 133,336 200,000 0 4,000 175
Daniel J. Ramella 1997 330,000 241,000 0 7,000 4,481(3)
President and Chief Operating Officer 1996 315,000 150,000 100,000 7,000 4,330
1995 300,000 115,000 100,000 10,500 3,012
James W. Zaremba 1997 210,000 181,510 0 2,000 5,362(4)
Group President
James D. Atherton 1997 210,000 169,880 0 2,000 5,498(5)
Group President
Jerome C. Neff(6) 1997 177,000 105,880 0 0 6,592(7)
Group President
</TABLE>

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

(1) The amounts and numbers listed represent awards under the Pittway
Corporation 1990 Stock Awards Plan.

(2) Consists of $3,800 annual matching Pittway contributions during the year to
Pittway's salary reduction plan and $522 for term life insurance provided by
Pittway during the year.

(3) Consists of $3,959 annual matching Pittway contributions during the year to
Pittway's salary reduction plan and $522 for term life insurance provided by
Pittway during the year.

(4) Consists of $4,012 annual matching Pittway contributions during the year to
Pittway's salary reduction plan and $1,350 for term life insurance provided
by Pittway during the year.

(5) Consists of $3,392 annual matching Pittway contributions during the year to
Pittway's salary reduction plan and $2,106 for term life insurance provided
by Pittway during the year.

(6) Mr. Neff retired on April 30, 1998.

(7) Consists of $3,392 annual matching Pittway contributions during the year to
Pittway's salary reduction plan and $3,200 for term life insurance provided
by Pittway during the year.

The following table contains information concerning options granted to the
Chief Executive Officer and the Named Executive Officers under the Pittway
Corporation 1990 Stock Awards Plan during 1997.

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<PAGE> 66

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES
NUMBER OF PERCENT OF OF STOCK
SECURITIES TOTAL OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM(1)
OPTIONS EMPLOYEES BASE PRICE EXPIRATION --------------------
NAME GRANTED(#) IN FISCAL YEAR(%) ($/SH) DATE 5% 10%
---- ---------- ----------------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Thomas L. Kemp 10,000 3.7 $55.00 3/19/2007 $345,892 $876,558
Daniel J. Ramella 7,000 2.6 55.00 3/19/2007 242,124 613,591
James W. Zaremba 2,000 .74 55.00 3/19/2007 69,178 175,312
James D. Atherton 2,000 .74 55.00 3/19/2007 69,178 175,312
Jerome C. Neff 0 N/A N/A N/A N/A N/A
</TABLE>

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

(1) The value, if any, one may realize upon the exercise of a stock option
depends on the excess of the then current market value per share over the
exercise price per share. There is no assurance that the values to be
realized upon exercise of the stock options listed above will be at or near
the amounts shown.

The following table sets forth information with respect to exercises of
options and stock appreciation rights ("SARs") under the Pittway Corporation
1990 Stock Awards Plan during 1997 by the Named Executive Officers and the
values of unexercised options and SARs under the Pittway Corporation 1990 Stock
Awards Plan held by them as of December 31, 1997.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS/SARS AT IN-THE-MONEY OPTIONS
ON VALUE FISCAL YEAR END(#)(1) AT FISCAL YEAR END ($)
EXERCISE REALIZED ---------------------------- ----------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas L. Kemp 0 $ 0 0 14,000 $ 0 $236,750
Daniel J. Ramella 0 0 16,098 24,500 845,816 704,813
James W. Zaremba 4,500 163,256 0 8,900 0 271,613
James D. Atherton 6,000 216,850 0 11,200 0 352,400
Jerome C. Neff 0 0 0 4,600 0 161,575
</TABLE>

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

(1) Prior to and in conjunction with the Stock Distribution, the exercisability
of one-third of Mr. Kemp's Pittway options and of all unexercisable Pittway
options for Messrs. Ramella, Zaremba, and Atherton has been accelerated and
all such options have been exercised. The exercisability of Mr. Neff's
Pittway options were accelerated upon his retirement on April 30, 1998.

PENTON COMPENSATION PLANS

Penton has adopted the Penton Media, Inc. 1998 Equity and Performance
Incentive Plan (the "Equity Incentive Plan"), the Penton Media, Inc. 1998
Director Stock Option Plan (the "Director Option Plan"), the Penton Media, Inc.
Retirement Savings Plan (the "Salary Reduction Plan"), the Penton Media, Inc.
Retirement Plan (the "Pension Plan"), and the Penton Media, Inc. Supplemental
Executive Retirement Plan (the "SERP"). The following summaries of the Equity
Incentive Plan, the Director Option Plan, the Salary Reduction Plan, the Pension
Plan, and the SERP are qualified by reference to the provisions of the actual
plans, copies of which have been filed with the Commission as exhibits to the
Registration Statement of which this Prospectus is a part.

EQUITY INCENTIVE PLAN

The Equity Incentive Plan permits the granting of stock options and other
awards to officers and other key employees of Penton. Stock options may be
either incentive stock options within the meaning of Section 422 of the Code
("Incentive Stock Options") or other options.

65
<PAGE> 67

The purpose of the Equity Incentive Plan is to promote the long-term
financial interests of Penton and its affiliates by attracting and retaining
officers and other key employees and to provide to such persons incentives and
rewards for superior performance.

Plan Summary

General. Under the Equity Incentive Plan, the Compensation Committee is
authorized to make awards of options to purchase shares of Common Stock ("Option
Rights"), awards of Tandem Appreciation Rights and/or Free-Standing Appreciation
Rights ("Appreciation Rights"), awards of restricted shares ("Restricted
Shares"), awards of deferred shares ("Deferred Shares"), and awards of
performance shares ("Performance Shares") and performance units ("Performance
Units"). The terms applicable to awards of the various types, including those
terms that may be established by the Compensation Committee when making or
administering particular awards, are set forth in detail in the Equity Incentive
Plan.

Shares Available Under the Equity Incentive Plan. Subject to adjustment as
provided in the Equity Incentive Plan, the number of shares of Common Stock that
may be issued or transferred (i) upon the exercise of Option Rights or
Appreciation Rights, (ii) as Restricted Shares, (iii) as Deferred Shares, (iv)
in payment of Performance Shares or Performance Units that have been earned, or
(v) in payment of dividend equivalents paid with respect to awards made under
the Equity Incentive Plan may not exceed 2,500,000 in the aggregate. Such shares
of Common Stock may be shares of original issuance, treasury shares or a
combination of both. Upon the payment of any option price by the transfer to
Penton of shares of Common Stock or upon satisfaction of any withholding amount
by means of transfer or relinquishment of shares of Common Stock, only the net
number of shares of Common Stock actually issued or transferred by Penton will
be deemed to have been issued or transferred under the Equity Incentive Plan.

Eligibility. Officers and other key employees of Penton and its
subsidiaries may be selected by the Compensation Committee to receive benefits
under the Equity Incentive Plan. The Compensation Committee may also make awards
under the Equity Incentive Plan to a person who has agreed to commence serving
in any such capacity within 90 days of the date of grant.

Option Rights. The Compensation Committee may grant Option Rights, which
entitle the optionee to purchase a specified number of shares of Common Stock at
a price not less than 100% of the Market Value per Share (as defined in the
Equity Incentive Plan) on the date of grant for Incentive Stock Options and not
less than the greater of 85% of the Market Value per Share on the date of grant
or the par value of a share of Common Stock for all other Option Rights. The
option price is payable in cash, by the transfer to Penton of nonforfeitable
unrestricted shares of Common Stock owned by the optionee having a value at the
time of exercise equal to the option price, by any other legal consideration the
Compensation Committee may deem appropriate, or by a combination of such payment
methods. Any grant may provide for deferred payment of the option price from the
proceeds of sale through a bank or broker of some or all of the shares of Common
Stock to which the exercise relates. Any grant may provide for the automatic
grant of additional Option Rights to an optionee upon the exercise of Option
Rights using shares of Common Stock as payment.

Option Rights granted under the Equity Incentive Plan may be Option Rights
that are intended to qualify as Incentive Stock Options, Option Rights that are
not intended to so qualify, or combinations thereof. The Compensation Committee
may, at or after the date of grant of any Option Rights (other than Incentive
Stock Options), provide for the payment of dividend equivalents to the optionee
in cash or additional shares of Common Stock on a current, deferred, or
contingent basis or may provide that such equivalents be credited against the
option price. The Compensation Committee may condition the exercise of Option
Rights on the achievement of Management Objectives (as defined in the Equity
Incentive Plan).

No Option Right may be exercised more than ten years from the date of
grant. Each grant must specify the period of continuous employment with Penton
or any subsidiary that is necessary before the Option Rights will become
exercisable and may provide for the earlier exercise of such Option Rights in
the event of a Change of Control (as defined below) of Penton. Successive grants
may be made to the same optionee whether or not Option Rights previously granted
remain unexercised. The exercise of an Option Right cancels, on a
share-for-share basis, any Tandem Appreciation Right.

66
<PAGE> 68

Appreciation Rights. Appreciation Rights provide participants an
alternative means of realizing the benefits of Option Rights. A Tandem
Appreciation Right is a right to receive from Penton up to 100 percent of the
spread between the option price and the current value of the shares of Common
Stock underlying the option. The amount is determined by the Compensation
Committee and the right is exercisable only when the related Option Right is
also exercisable, the spread is positive and the recipient surrenders the
related Option Right for cancellation. A Free-Standing Appreciation Right is the
right to receive from Penton up to 100% of the spread at the time of exercise.
When computing the spread for a Free-Standing Appreciation Right, the base price
must be equal to or greater than the market value of the underlying shares of
Common Stock on the date of grant. Successive grants may be made to the same
recipient even if that individual already has unexercised Free-Standing
Appreciation Rights. No Free-Standing Appreciation Right may be exercised more
than ten years from the date of grant.

Any grant of Appreciation Rights may specify any or all of the following:
(i) that the amount payable on exercise of an Appreciation Right may be paid by
Penton in cash, in shares of Common Stock or in any combination thereof, and the
right to elect among those alternatives may be given to the participant or
retained by the Compensation Committee, (ii) a maximum amount payable on
exercise, (iii) waiting periods before exercise, (iv) permissible exercise dates
or periods, (v) whether the Appreciation Right may be exercised only on or after
a Change of Control of Penton, (vi) whether dividend equivalents may be paid in
cash or in shares of Common Stock, and (vii) Management Objectives that must be
achieved as a condition to exercise such rights.

Restricted Shares. An award of Restricted Shares involves the immediate
transfer by Penton to a participant of ownership of a specific number of shares
of Common Stock in consideration of the performance of services. The participant
is entitled immediately to voting, dividend, and other ownership rights in such
shares, but the Compensation Committee may require that any dividends be
automatically deferred and reinvested in additional Restricted Shares. The
transfer may be made without additional consideration or in consideration of a
payment by the participant that is less than current market value, as the
Compensation Committee may determine. The Compensation Committee may condition
the award on the achievement of Management Objectives.

Restricted Shares must be subject to a "substantial risk of forfeiture"
within the meaning of Section 83 of the Code for a period of not less than three
years as determined by the Compensation Committee. An example would be a
provision that the Restricted Shares would be forfeited if the participant
ceased to serve Penton as an officer or key employee during a specified period
of years. In order to enforce these forfeiture provisions, the transferability
of Restricted Shares will be prohibited or restricted in a manner and to the
extent prescribed by the Compensation Committee for the period during which the
forfeiture provisions are to continue. The Compensation Committee may provide
for a shorter period during which the forfeiture provisions are to apply in the
event of a Change of Control of Penton.

Deferred Shares. An award of Deferred Shares constitutes an agreement by
Penton to deliver shares of Common Stock to the participant in the future in
consideration of the performance of services, but subject to the fulfillment of
such conditions during the deferral period as the Compensation Committee may
specify. During the deferral period, the participant has no right to transfer
any rights under his or her award, has no rights of ownership in the Deferred
Shares and no right to vote them, but the Compensation Committee may, at or
after the date of grant, authorize the payment of dividend equivalents on such
shares on a current, deferred, or contingent basis, either in cash or additional
shares of Common Stock. Awards of Deferred Shares may be made without additional
consideration or in consideration of a payment by the participant that is less
than the market value per share at the date of grant.

Deferred Shares must be subject to a deferral period, as determined by the
Compensation Committee at the date of grant, except that the Compensation
Committee may provide for the earlier termination of such period in the event of
a Change of Control of Penton.

Performance Shares and Performance Units. A Performance Share is the
equivalent of one share of Common Stock and a Performance Unit is the equivalent
of $1.00. The number of Performance Shares or Performance Units is specified by
the Compensation Committee and may be adjusted to reflect changes in

67
<PAGE> 69

compensation or other factors (unless the adjustment for certain participants
would cause an award to lose its Section 162(m) exemption).

A recipient must meet one or more Management Objectives within a specified
performance period. Such performance period may be subject to earlier
termination in the event of a Change of Control of Penton. A minimum level of
acceptable achievement may also be established by the Compensation Committee. If
by the end of the performance period the participant has achieved the specified
Management Objectives, he or she will be deemed to have fully earned the
Performance Shares or Performance Units. If the participant has not achieved the
Management Objectives, but has attained or exceeded the predetermined minimum,
he or she will be deemed to have partly earned the Performance Shares and/or
Performance Units (the amount earned to be determined in accordance with a
formula to be determined by the Compensation Committee).

To the extent earned, the Performance Shares and/or Performance Units will
be paid to the participant at the time and in the manner determined by the
Compensation Committee in cash, shares of Common Stock or in any combination
thereof (the Compensation Committee may give either the participant or the
Compensation Committee the right to choose the form of payment). Dividend
equivalents on Performance Shares may be paid in cash or additional shares of
Common Stock on a current, deferred, or contingent basis. The Compensation
Committee may specify a maximum amount payable under any grant of Performance
Shares or Performance Units.

Change of Control. "Change of Control" in the Equity Incentive Plan is
defined as any of the following:

(a) Penton is merged or consolidated or reorganized into or with another
corporation or other legal person, and as a result of such merger,
consolidation, or reorganization less than a majority of the combined voting
power of the then-outstanding securities of such corporation or person
immediately after such transaction are held in the aggregate by the holders of
securities entitled to vote generally in the election of Penton's directors (the
"Directors") immediately prior to such transaction;

(b) Penton sells or otherwise transfers all or substantially all of its
assets to any other corporation or other legal person, and less than a majority
of the combined voting power of the then-outstanding securities of such
corporation or person immediately after such sale or transfer is held in the
aggregate by the holders of shares of Common Stock immediately prior to such
sale or transfer;

(c) There is a report filed on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report), each as promulgated pursuant to the
Exchange Act, disclosing that any person (as the term "person" is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the
beneficial owner (as the term "beneficial owner" is defined under Rule 13d-3 or
any successor rule or regulation promulgated under the Exchange Act) of
securities representing 20% or more of the Voting Power (as the term is defined
in the Equity Incentive Plan);

(d) Penton files a report or proxy statement with the Commission pursuant
to the Exchange Act disclosing in response to Form 8-K or Schedule 14A (or any
successor schedule, form or report or item therein) that a Change of Control of
Penton has or may have occurred or will or may occur in the future pursuant to
any then-existing contract or transaction; or

(e) If during any period of two consecutive years, individuals who at the
beginning of any such period constitute the Directors cease for any reason to
constitute at least a majority thereof, unless the election, or the nomination
for election by Penton's stockholders, of each Director first elected during
such period was approved by a vote of at least two-thirds of the Directors then
still in office who were Directors at the beginning of any such period.

Notwithstanding the foregoing provisions, a "Change of Control" shall not
be deemed to have occurred for purposes of the Equity Incentive Plan (i) solely
because (A) Penton; (B) a Subsidiary; (C) the Harris Group; or (D) any
Penton-sponsored employee stock ownership plan or other employee benefit plan of
Penton either files or becomes obligated to file a report or proxy statement
under or in response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A
(or any successor schedule, form or report or item therein) under the Exchange
Act, disclosing beneficial ownership by it of shares, whether in excess of 20%
of the Voting Power or otherwise, or because Penton reports that a Change of
Control of Penton has or may have

68
<PAGE> 70

occurred or will or may occur in the future by reason of such beneficial
ownership or (ii) solely because of a Change of Control of any subsidiary of
Penton. For purposes of the preceding sentence, the "Harris Group" shall mean
Messrs. Irving B. Harris, Neison Harris, King Harris, William W. Harris, and
Sidney Barrows, and their respective spouses, descendants and spouses of
descendants, trustees of trusts established for the benefit of such persons
(acting in their capacity as trustees of such trusts) and executors of estates
of such persons (acting in their capacity as executors of such estates), and
each person of which any of the foregoing owns (i) more than fifty percent (50%)
of the voting stock or other voting interests and (ii) stock or other interests
representing more than fifty percent (50%) of the total value of the stock or
other interests of such person. For purposes of the preceding sentence, the term
"spouses" includes widows and widowers until first remarried.

Administration and Amendments. The Equity Incentive Plan is administered
by a committee of the Board (or subcommittee thereof) consisting of not less
than two Directors, initially the Compensation Committee. The members of the
Committee shall be "Non-Employee Directors" within the meaning of Rule 16b-3
under the Exchange Act and "outside directors" within the meaning of Section
162(m) of the Code.

The Compensation Committee may, with the concurrence of the affected
optionee, cancel any agreement evidencing Option Rights or any other award
granted under the Equity Incentive Plan. In the event of such cancellation, the
Compensation Committee may authorize the granting of new Option Rights or other
such awards under the Equity Incentive plan (which may or may not cover the same
number of shares of Common Stock that had been the subject of the prior award)
in such manner, at such option price and subject to such other terms, conditions
and discretions as would have been applicable under the Equity Incentive Plan
had the canceled Option Rights or other awards not been granted.

The Compensation Committee's interpretation of the Equity Incentive Plan
and related agreements and documents is final and conclusive. The Equity
Incentive Plan may be amended from time to time by the Compensation Committee.
However, any amendment which must be approved by the stockholders of Penton in
order to comply with applicable law or the rules of any national securities
exchange upon which the shares of Common Stock are traded or quoted will not be
effective unless and until such approval has been obtained in compliance with
such applicable law or rules. Presentation of the Equity Incentive Plan or any
amendment thereof for stockholder approval is not to be construed to limit
Penton's authority to offer similar or dissimilar benefits through plans that
are not subject to stockholder approval.

The Compensation Committee may require participants, or permit participants
to elect, to defer issuance of shares or the settlement of cash awards and may
provide for payment of interest or dividend equivalents on the deferred amounts.
The Compensation Committee may also condition any award on the surrender or
deferral by a participant of his or her right to receive a cash bonus or other
compensation.

Termination. No grant under the Equity Incentive Plan may be made more
than 10 years after the Equity Incentive Plan is approved by the stockholders,
but all grants made on or before the 10th anniversary will continue in effect
after that date subject the terms of those grants and the Equity Incentive Plan.

Plan Benefits

Owing to the discretion to be exercised by the Committee in administering
the Equity Incentive Plan, it is not possible to determine in advance how the
several types of awards authorized under the Equity Incentive Plan will be
allocated among eligible participants. However, employees have been awarded
options and Deferred Shares in connection with, and subject to completion of,
the Stock Distribution. See "Capitalization."

DIRECTOR OPTION PLAN

The Director Option Plan permits the granting of stock options to directors
of Penton who at the time of the grant are not employees of Penton
("Non-Employee Directors"). The purpose of the Director Option Plan is to
promote the long-term financial interests of Penton by (i) providing an
incentive for Non-Employee Directors to maximize the long-term value of Common
Stock and otherwise act in the best interest of Penton's stockholders, (ii)
providing Non-Employee Directors with the opportunity to acquire a greater stake
in the future of Penton through stock ownership, and (iii) attracting and
retaining highly qualified Non-Employee Directors.

69
<PAGE> 71

Plan Summary

The Director Option Plan permits the granting of stock options that are
non-qualified options for purposes of the Code.

Administration. The Director Option Plan is administered by the Board.
Subject to certain limitations, the Director Option Plan empowers the Board,
among other things: to award options to directors in such forms and amounts as
it determines; to interpret the Director Option Plan; to adopt, amend and
rescind guidelines, rules and regulations relating to the Director Option Plan;
and to make all determinations deemed necessary or advisable for the Director
Option Plan's administration.

Shares Subject to the Director Option Plan; Adjustment. The maximum number
of shares of Common Stock which may be issued pursuant to the Director Option
Plan is 100,000 shares. If options expire unexercised or are canceled,
terminated or forfeited in any manner without the issuance of shares, such
shares are again available under the Director Option Plan. Shares issued
pursuant to the Director Option Plan may be authorized and unissued shares,
treasury shares or a combination thereof.

The maximum number of shares subject to the Director Option Plan, and the
shares and option prices under outstanding options, are subject to adjustment in
the event of certain Organic Changes (as defined in the Director Option Plan)
and/or to prevent dilution or enlargement of option rights.

Required Option Provisions. The option price may not be less than 100% of
the fair market value of the shares of Common Stock on the date of grant or less
than the par value of such shares of Common Stock. The term of an option cannot
exceed ten years from the date of grant. Although options generally may be
exercised at such time or times as the Board determines at or subsequent to
grant, options may only be exercised during "window periods" following the dates
of release for publication of Penton's quarter or annual summary statements of
sales and earnings and generally may not be exercised during the six months
subsequent to grant. In the event a Non-Employee Director ceases to be a member
of the Board for any reason, each option previously granted to such Non-Employee
Director will cease to be exercisable on the fifth anniversary of the date of
termination or, if earlier, on its scheduled date of expiration. The option
price may be paid, to the extent permitted by the Board, in cash using shares of
Common Stock already owned by the optionee valued at its market price on the
date of exercise. The Board may permit the participant to elect to pay the
option price by authorizing a third party to sell the shares acquired upon
exercise (or a sufficient portion thereof) and remit to Penton sale proceeds
sufficient to pay the option price and any withholding or other tax resulting
from exercise. Options will not be transferable except by will or the laws of
descent and distribution, and during a participant's lifetime will be
exercisable only by the participant or his or her legal representative. For
purposes of the Director Option Plan, the market value of the shares of Common
Stock on any date will be its closing price on that date (or, if that date is
not a trading date for such stock, on the next preceding trading date for such
stock) on the NYSE Composite Transactions list, as subsequently reported in The
Wall Street Journal.

Withholding. The Board has the power to withhold, or require a participant
to remit to Penton, an amount sufficient to cover any withholding and other
taxes due with respect to the participant's exercise of an option. If so
permitted by the Board, a participant may elect to satisfy such taxes by having
shares issuable under the Director Option Plan withheld or by delivering other
shares to Penton.

Termination and Amendment. The Board may terminate the Director Option
Plan at any time, and may from time to time amend the Director Option Plan and
any option outstanding thereunder; provided that no such action shall adversely
affect any outstanding option without the consent of the participant who holds
it. No such amendment to the Director Option Plan may be made without
stockholder approval to the extent such approval is required by law, regulation
or the rules of any exchange upon which the shares of Common Stock are listed.

Plan Benefits

Owing to the discretion to be exercised by the Board in administering the
Director Option Plan, it is not possible to determine in advance how options
will be awarded to directors under the Director Option Plan. However, in
connection with, and subject to completion of, the Stock Distribution, each
Non-Employee Director has been awarded 8,000 options, which will vest at the
rate of 2,000 per year, and Mr. Schwartz has been awarded an additional 13,000
fully-vested options. See "Management -- Board of Directors."

70
<PAGE> 72

EMPLOYEE RETIREMENT AND SAVINGS PLANS

The Salary Reduction Plan, the Pension Plan, and the SERP are similar to
plans currently maintained by Pittway and its subsidiaries. Assets attributable
to employees of Penton's operating units will be transferred from the
corresponding Pittway plans and credit will be given to such employees under
Penton's plans for periods during which they were employed by Pittway, its
predecessors and their subsidiaries.

Salary Reduction Plan

Substantially all employees of Penton's United States operations will be
eligible to participate in the Salary Reduction Plan. Under the Plan, eligible
employees may elect to have a portion of their "earnings" (total cash
compensation less certain items) contributed to the Plan by their employers and
their employers will match such contributions with specified percentages
thereof. The percentages may vary between certain groups of covered employees
and will be determined from time to time by their employers. For 1997, such
matching percentages under the similar Pittway plan ranged from .5% to 3% of
eligible covered employees' "earnings." Contributions and matches will be
invested in one or more investment funds selected by the employee from among
those available under the Plan. Penton anticipates that such funds may
eventually include a fund which invests solely in Common Stock. Salary reduction
contributions and employer matching contributions will vest immediately. Vested
contributions (after any earnings or losses from the investment thereof) will be
distributed in a lump sum following termination of employment but account
balances may, under certain circumstances and subject to certain conditions, be
withdrawn or borrowed earlier.

Retirement Plans

The Pension 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 Pension 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 Pension Plan plus certain increases put into
effect prior to 1998. 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 thirty-five 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 will be taken into account under
the Pension Plan, upon the completion of a transfer of assets and liabilities
attributable to Penton employees from the Pittway retirement plan to the Pension
Plan. The employee's compensation under the Pension 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 1998 and, currently, for each year thereafter). The
employee's "covered compensation" under the Pension Plan for any year is
generally the average, computed such year, of the Social Security wage bases for
each of the thirty-five 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 Pension 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. Estimated
annual benefits payable under the Pension Plan upon retirement at normal
retirement age for the following persons (assuming 1998 and future compensation
at the $160,000 limit currently applicable, that covered compensation remains
constant and the completion of the transfer of assets and liabilities from the
Pittway retirement plan to the Pension Plan; but without regard to the formula
limitation on annual benefits imposed on tax-qualified retirement plans,
currently $130,000) are: Mr. Kemp, $60,024; Mr. Ramella, $87,921; Mr. Zaremba,
$60,176; Mr. Atherton, $47,885; and Mr. Neff, $51,234.

SERP

Messrs. Kemp and Ramella 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 and January 1, 1996,
respectively. 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
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<PAGE> 73

election under Pittway's or Penton's salary reduction plan, and including any
portion of such bonus taken in the form of performance shares awards) in excess
of $150,000 (or any higher limit applicable that year to tax-qualified
retirement plans) but less than $300,000. Benefits are not subject to reduction
for Social Security benefits or other offset amounts. Accrued benefits are
subject to forfeiture in certain events. Estimated annual benefits payable under
the plan upon retirement at age 65 (assuming 1998 and future annual salary and
discretionary cash bonus of not less than $300,000 for each of them and that the
$160,000 limit applicable in 1998 remains constant) are: Mr. Kemp, $53,280 and
Mr. Ramella, $52,232.

EMPLOYMENT AGREEMENTS

Employment agreements between Penton and each of Messrs. Kemp and Ramella
provide for minimum annual salaries of $400,000 and $330,000, respectively,
supplementary insurance coverage and participation in Penton's supplemental
executive retirement plan. Mr. Kemp's agreement also provides for the payment of
accrued but unvested pension plan and salary reduction plan benefits in the
event of termination of employment prior to full vesting. The agreements are for
terms currently expiring September 2, 1999 and December 31, 2000, respectively.
Each agreement renews automatically at the end of each contract year for an
additional year (or until age 65, if earlier) unless either party thereto elects
otherwise, but may be terminated by the executive officer on specified advance
notice (with forfeiture of supplemental retirement benefits). Each agreement
includes non-competition, non-solicitation and confidentiality obligations on
the part of the executive officer which survive its termination.

Under the terms of his employment agreement, Mr. Kemp is entitled to
surrender to Pittway for cancellation immediately prior to the Stock
Distribution all non-qualified options under the Pittway 1990 Stock Awards Plan
held by him and to receive from Penton at the close of business on the Stock
Distribution Date non-qualified options under the Equity Incentive Plan having
an exercise price equal to the then fair market value of the Common Stock and
having exercisability provisions corresponding to and an aggregate value equal
to that of the surrendered Pittway options. Mr. Kemp has exercised one-third of
his options prior to the date hereof and intends to surrender his remaining
options under the Pittway 1990 Stock Awards Plan for a number of options under
the Equity Incentive Plan equal to the value of the options surrendered. In
addition, Mr. Kemp's employment agreement provides that he is to receive, at the
close of business on the Stock Distribution Date, a non-qualified option under
the Equity Incentive Plan having an exercise price equal to the then fair market
value of the Common Stock and a value of $400,000. Mr. Kemp has waived this
right in consideration for receiving, in connection with, and subject to
completion of, the Stock Distribution, an option to purchase 60,000 shares of
Common Stock at an exercise price per share equal to the average closing price
of the Common Stock for the five trading day period ending on the eighth trading
day after the Stock Distribution.

In lieu of portions of bonuses otherwise payable in cash in 1998, Messrs.
Kemp and Ramella have been awarded, subject to completion of the Stock
Distribution, Deferred Shares under the Equity Incentive Plan having three-year
deferral periods worth $60,000 and $50,000, respectively.

CERTAIN TRANSACTIONS

Each of the DM Publishing Shareholders, as such, has certain contingent
rights to additional cash (and/or, under certain circumstances, additional
shares of Common Stock) and registration rights and indemnification rights from
Penton pursuant to the DM Publishing Combination Agreement. See "DM Publishing
Combination Agreement -- Closing Considerations and Contingent Rights."

DM Publishing leases equipment from Donohue Meehan Equipment Leasing, an
Illinois partnership, which is owned by the DM Publishing Shareholders. The
total balances on these leases as of December 31, 1997, was $270,928. Penton
believes that the lease terms are no less favorable to DM Publishing than those
obtainable in an arm's-length transaction with an independent third party. See
DM Publishing's Financial Statements.

Immediately following the Stock Distribution Date, two of the 11 persons
who are directors of Penton will also be directors of Pittway, and Penton and
Pittway will have certain limited ongoing relationships after the Stock
Distribution. See "The Stock Distribution -- Relationship between Penton and
Pittway after the Stock Distribution" and Penton's Consolidated Financial
Statements.

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<PAGE> 74

STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth information concerning the Common Stock
projected to be beneficially owned immediately after the Stock Distribution and
the issuance of shares of Common Stock at the closing of the DM Publishing
Combination by (a) persons projected by Penton to be the beneficial owners of
more than 5% of the outstanding shares of Common Stock, (b) each of the
directors of Penton, (c) each of the Named Executive Officers of Penton and (d)
all directors and executive officers of Penton as a group. The projections are
based upon the numbers of shares of Pittway Stock held on the Record Date (to
the extent known to Pittway), as adjusted to reflect the Stock Distribution and
the shares of Common Stock to be issued at the closing of the DM Publishing
Combination. See "The Stock Distribution -- Manner of the Stock Distribution."
Except where otherwise indicated, the mailing address of each of the
stockholders named in the table is: c/o Penton Media, Inc., 1100 Superior
Avenue, Cleveland, Ohio 44114.

<TABLE>
<CAPTION>
PERCENTAGE OF
PROJECTED PROJECTED
NAME NUMBER OF SHARES(1) TOTAL SHARES(2)
---- ------------------- ---------------
<S> <C> <C>
William Harris Investors, Inc.(3)(4)........................ 3,079,774 13.52%
2 North LaSalle Street
Suite 400
Chicago, Illinois 60602
Mario J. Gabelli, et al(5).................................. 2,694,718 11.83
One Corporate Center
Rye, New York 10580
Janus Capital Corporation(6)................................ 1,893,611 8.31
100 Fillmore Street, Suite 300
Denver, Colorado 80206
Irving B. Harris(3)(7)...................................... 3,079,774 13.52
2 North LaSalle Street
Suite 400
Chicago, Illinois 60602
Current Harris Group(3)..................................... 5,479,130 24.05
Joan W. Harris(3)(8)........................................ 3,000 *
King Harris(3)(9)(10)....................................... 1,298,732 5.70
William J. Friend(3)(10)(11)................................ 71,723 *
Edward J. Schwartz(12)...................................... 10,047 *
Anthony Downs............................................... 10,839 *
Thomas L. Kemp(10).......................................... 5,072 *
Daniel J. Ramella(10)(13)................................... 58,944 *
William C. Donohue.......................................... 770,819 3.38
John J. Meehan.............................................. 770,819 3.38
Richard B. Swank............................................ 0 *
Don E. Schultz.............................................. 0 *
James W. Zaremba............................................ 9,254 *
James D. Atherton........................................... 0 *
Jerome C. Neff(10)(14)...................................... 20,297 *
All Directors and Executive Officers........................ 3,019,532 13.25
as a Group (16 persons)(10)(15)
</TABLE>

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<PAGE> 75

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

* 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 22,781,713 shares as the total projected outstanding
shares.

(3) The information as to the Current Harris Group (as defined below), Irving B.
Harris, Joan W. Harris, King Harris, and William J. Friend is derived in
part from statements with respect to Pittway Stock, as amended January 15,
1990, filed with the Commission pursuant to Section 13(d) of the Exchange
Act and statements with respect to Pittway Stock, as amended November 15,
1991, filed with the Commission pursuant to such Section. Such statements
were filed on behalf of such named persons as well as those other persons
and entities who are currently members of the "Harris Group" beneficially
owning, directly or indirectly, shares of Pittway Stock (the "Current Harris
Group"). Such statements disclose that, because of the relationships among
members of the Current Harris Group, such persons may be deemed to be a
group within the meaning of Section 13(d) of the Exchange Act and the rules
and regulations thereunder. The "Harris Group" means Messrs. Irving B.
Harris, Neison Harris, King Harris, William W. Harris, and Sidney Barrows,
and their respective spouses, descendants and spouses of descendants,
trustees of trusts established for the benefit of such persons, and
executors of estates of such persons. Joan W. Harris is the spouse of Irving
B. Harris and the aunt of King Harris. King Harris is the uncle of William
J. Friend. The aggregate number of outstanding shares which may be deemed to
be beneficially owned by the Current Harris Group includes all the shares
shown in this table for William Harris Investors, Inc. ("WHI"), Irving B.
Harris, Joan W. Harris, King Harris, and William J. Friend. The total
excludes duplication of shares within such group.

(4) The information as to WHI is derived in part from two statements with
respect to Pittway Stock, as amended February 12, 1998, filed with the
Commission pursuant to Section 13(g) of the Exchange Act. Such statements,
together with advice furnished to Penton separately by WHI, disclose that
(i) WHI, an investment adviser registered under the Investment Advisers Act
of 1940, holds all its shares of Pittway Stock on behalf, and in terminable
discretionary accounts, of Joan W. Harris and certain other members of the
Harris Group, (ii) WHI shares voting power with such persons, and has sole
dispositive power, with respect to all such shares, (iii) Irving B. Harris
and his children are the sole voting stockholders of WHI, and (iv) Irving B.
Harris is the Chairman of WHI.

(5) The information as to Mario J. Gabelli and entities controlled directly or
indirectly by Mr. Gabelli is derived from statements with respect to Pittway
Stock, as amended November 3, 1997 and July 10, 1998, filed with the
Commission pursuant to Section 13(d) of the Exchange Act. Such statements
disclose that (i) Mr. Gabelli is the chief investment officer for most of
the entities signing such statements and is deemed to have beneficial
ownership of the shares beneficially owned by all such entities, (ii) 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 (iii) with respect to Pittway 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 Pittway'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 of
426,700 shares of Pittway Common Stock and 374,500 shares of Pittway Class A
Stock -- equivalent in total to 801,200 shares of Common Stock) except 6,450
shares of Pittway Common Stock and 42,733 shares of Pittway Class A
Stock -- equivalent in total to 49,183 shares of Common Stock -- as to which
they have no voting power.

(6) The information as to Janus Capital Corporation ("Janus") is derived from a
statement with respect to Pittway Stock, as amended March 10, 1998, filed
with the Commission pursuant to Section 13(g) of the Exchange Act. Such
statement discloses that (i) Thomas H. Bailey is President and Chairman of
the Board of Janus, owns approximately 12.2% of Janus and may be deemed to
exercise control over Janus, (ii) Janus is deemed to have beneficial
ownership of all its shares of Pittway Stock, (iii) Janus and Mr. Bailey
share voting and dispositive power with respect to such shares, (iv) all
such shares are held by managed portfolios to which Janus is an investment
advisor or sub-advisor, and (v) Mr. Bailey disclaims beneficial ownership of
such shares.

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<PAGE> 76

(7) Consists of the shares to be held by WHI (of which Irving B. Harris is a
controlling stockholder), certain of which are held by WHI for the account
of Mr. Harris or would otherwise be deemed beneficially owned by him without
regard to WHI. As set forth in note (4), the voting power of the shares held
by WHI is shared by WHI with the respective persons for whose account they
are held and WHI has sole dispositive power with respect to such shares.

(8) Consists of 3,000 shares to be held by WHI for the account of Joan W.
Harris. As set forth in note (4), the voting power of the shares held by WHI
is shared by WHI with the respective persons for whose account they are held
and WHI has sole dispositive power with respective to such shares.

(9) Mr. King Harris will share the power to vote and dispose of 1,216,072 of
such shares.

(10) Includes shares to be issued in the Stock Distribution with respect to
shares of Pittway Class A Stock beneficially owned as of March 31, 1998,
through participation in the Pittway Profit Sharing Plan. See "Stock
Distribution -- Manner of the Stock Distribution" and " -- Pittway Stock
Held under or Issuable pursuant to Pittway Employee Plans."

(11) Mr. Friend will share the power to vote and dispose of 70,826 of such
shares.

(12) Mr. Schwartz will share the power to vote and dispose of 4,903 such shares.

(13) Mr. Ramella will share power to vote and dispose of 58,944 of such shares.

(14) Mr. Neff retired on April 30, 1998.

(15) Includes 1,206,761 shares as to which voting power will be shared other
than with directors and officers of Penton.

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<PAGE> 77

DESCRIPTION OF CAPITAL STOCK

The Restated Certificate of Incorporation (the "Certificate of
Incorporation") of Penton provides among other things that its authorized
capital stock consists of 60 million shares of Common Stock and 2 million shares
of Preferred Stock, par value $.01 per share ("Preferred Stock").

COMMON STOCK

Penton is authorized to issue up to 60 million shares of Common Stock
without stockholder approval (except as may be required by applicable stock
exchange regulations). Holders of Common Stock have one vote for each share and
share ratably in all dividends, subject to the rights of the Preferred Stock
holders, if any. All of the shares of Common Stock to be distributed in the
Stock Distribution will be fully paid and non-assessable. Following the Stock
Distribution and the issuance of shares at the closing of the DM Publishing
Combination, there will be 22,781,713 shares of Common Stock outstanding. At
that time, Penton will be committed to issue certain options and deferred share
awards under its Equity Incentive Plan and will have outstanding certain debt
obligations convertible into Common Stock. See "Capitalization."

PREFERRED STOCK

Penton is authorized to issue up to 2 million shares of Preferred Stock
without stockholder approval, unless such approval is required by the NYSE. The
NYSE requires stockholder approval prior to the issuance of securities as a
prerequisite to listing when (i) the securities are convertible into Common
Stock with a voting power equal to or in excess of 20% of the voting power
outstanding before such issuance or (ii) the issuance of the securities will
result in a change of control. The Board may provide for the issuance of shares
of Preferred Stock or provide for the issuance of shares of Preferred Stock in
one or more series, establish from time to time the number of shares to be
included in each such series and fix the designations, voting powers, rights and
qualifications, limitations, or restrictions of the shares of Preferred Stock of
each such series.

LISTING AND TRADING OF COMMON STOCK

The Common Stock has been approved for listing on the NYSE under the symbol
"PME," subject to official notice of issuance. Prior to the date hereof, there
has been no trading market for the Common Stock. In view of the contingent
nature of the Stock Distribution, trading is not expected to commence until the
Stock Distribution Date. See "Introduction." Penton is unable to predict the
extent of the market for the Common Stock or the prices at which the shares will
trade.

Shares of Common Stock distributed in the Stock Distribution will be freely
transferable, except for shares received by persons who may be deemed to be
"affiliates" of Penton under the Securities Act and shares received with respect
to shares of Pittway Stock that are "restricted stock" for purposes of
Securities Act Rule 144. Persons who may be deemed to be affiliates of Penton
after the Stock Distribution generally include individuals or entities that
control, are controlled by, or are under common control with Penton and may
include certain officers and directors of Penton as well as principal
stockholders of Penton. Persons who are affiliates of Penton will be permitted
to sell their shares of Common Stock distributed in the Stock Distribution only
pursuant to an effective registration statement under the Securities Act or an
exemption from the registration requirements of the Securities Act (such as Rule
144).

DIVIDENDS ON COMMON STOCK

The dividend policy of Penton will be determined by the Board. It is
expected that Penton will pay initial quarterly dividends in an amount of $.03
per share. The future payment of dividends will depend on business decisions
that will be made by the Board from time to time based upon the results of
operations and financial condition of Penton and such other business
considerations as the Board considers relevant.

STOCK DISTRIBUTION AGENT, TRANSFER AGENT AND REGISTRAR

Harris Trust and Savings Bank will act as the Stock Distribution Agent for
the Stock Distribution, and will act as the Transfer Agent and Registrar for the
Common Stock after the Stock Distribution is completed.

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<PAGE> 78

ANTI-TAKEOVER EFFECTS

Penton's Certificate of Incorporation contains several provisions that may
make the acquisition of control of Penton by means of a tender offer, open
market purchase, proxy fight, or otherwise more difficult. Penton's Amended and
Restated Bylaws (the "Bylaws") also contain provisions that could have an
anti-takeover effect.

These provisions of the Certificate of Incorporation and the Bylaws are
designed to encourage persons seeking to acquire control of Penton to negotiate
the terms with the Board. Penton believes that, as a general rule, the interest
of Penton's stockholders would be served best if any change in control results
from negotiations with the Board based upon careful consideration of the
proposed terms, such as the price to be paid to stockholders, the form of
consideration to be paid and the anticipated tax effects of the transaction.

However, the provisions could have the effect of discouraging a prospective
acquirer from making a tender offer or otherwise attempting to obtain control of
Penton. To the extent that these provisions discourage takeover attempts, they
could deprive stockholders of opportunities to realize takeover premiums for
their shares. Moreover, these provisions could discourage accumulations of large
blocks of Common Stock, thus depriving stockholders of any advantages which
large accumulations of stock might provide.

Set forth below is a summary of the relevant provisions of the Certificate
of Incorporation and the Bylaws and certain applicable sections of the General
Corporation Law of the State of Delaware (the "DGCL"). Such summary does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, all of the provisions of the Certificate of Incorporation and the
Bylaws. Copies of the Certificate of Incorporation and the Bylaws are filed as
exhibits to the Registration Statement of which this Prospectus is a part.

BUSINESS COMBINATIONS

Penton is governed by Section 203 of the DGCL. Section 203, subject to
certain exceptions, prohibits a Delaware corporation from engaging in any
business combination with any interested stockholder for a period of three years
following the time that such stockholder became an interested stockholder,
unless: (i) prior to such time, the board of directors of the corporation
approved either the business combination or the transaction which resulted in
the stockholder becoming an interested stockholder; (ii) upon consummation of
the transaction that resulted in the stockholder becoming an interested
stockholder, the interested stockholder owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction commenced, excluding
for purposes of determining the number of shares outstanding those owned (x) by
persons who are directors and also officers and (y) by employee stock plans in
which employee participants do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or exchange
offer; or (iii) at or subsequent to such time, the business combination is
approved by the board of directors and authorized at an annual or special
meeting of stockholders, and not by written consent, by the affirmative vote of
at least 66 2/3% of the outstanding voting stock which is not owned by the
interested stockholder. The application of Section 203 may limit the ability of
stockholders to approve a transaction that they may deem to be in their best
interests.

In general, Section 203 defines "business combination" to include: (i) any
merger or consolidation involving the corporation and the interested
stockholder; (ii) any sale, lease, exchange, mortgage, pledge, transfer, or
other disposition of 10% or more of the assets of the corporation to or with the
interested stockholder; (iii) subject to certain exceptions, any transaction
which results in the issuance or transfer by the corporation of any stock of the
corporation to the interested stockholder; (iv) any transaction involving the
corporation which has the effect of increasing the proportionate share of the
stock of any class or series of the corporation beneficially owned by the
interested stockholder; or (v) the receipt by the interested stockholder of the
benefit of any loans, advances, guarantees, pledges or other financial benefits
provided by or through the corporation. In general, Section 203 defines an
"interested stockholder" as any entity or person beneficially owning 15% or more
of the outstanding voting stock of the corporation or any entity or person
associated with, affiliated with or controlling or controlled by such entity or
person.

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CLASSIFIED BOARD OF DIRECTORS

The Certificate of Incorporation provides for the Board to be divided into
three classes of directors, as nearly equal in number as possible, serving
staggered terms. Approximately 1/3 of the Board is to be elected each year. See
"Management -- Board of Directors." Under Section 141 of the DGCL, directors
serving on a classified board can only be removed for cause. The provision for a
classified board may be amended, altered or repealed only upon the affirmative
vote of the holder of 66 2/3% of the outstanding shares of Penton's voting
stock.

The provision for a classified board could prevent a party who acquires
control of a majority of the outstanding voting stock from obtaining control of
the Board until the second annual stockholders meeting following the date the
acquirer obtains the controlling stock interest. The classified board provision
could have the effect of discouraging a potential acquirer from making a tender
offer or otherwise attempting to obtain control of Penton and could increase the
likelihood that incumbent directors will retain their positions.

Penton believes that a classified board will help to assure the continuity
and stability of the Board and Penton's business strategies and policies as
determined by the Board, because a majority of the directors will eventually
have prior experience as directors of Penton.

The classified board provision should also help to ensure that the Board,
if confronted with an unsolicited proposal from a third party that has acquired
a block of the voting stock of Penton, will have sufficient time to review the
proposal and appropriate alternatives and to seek the best available result for
all stockholders.

NUMBER OF DIRECTORS; REMOVAL; VACANCIES

The Certificate of Incorporation and the Bylaws provide that the number of
directors shall be set by resolution of the Board adopted by the affirmative
vote of a majority of the Board; provided that under no circumstance will the
number of directors exceed 13.

Pursuant to the Certificate of Incorporation, each director will serve
until his or her successor is duly elected and qualified, unless he or she
resigns, dies, becomes disqualified, or is removed. The Certificate of
Incorporation also provides that, subject to the rights of the holders of any
series of Preferred Stock, directors may be removed at any time, but only for
cause.

The Certificate of Incorporation further provides that generally vacancies
or newly created directorships in the Board may only be filled by a resolution
approved by a majority of the Board and any director so chosen will hold office
until the next election of the class for which such director was chosen.

The provisions regarding the maximum size of the Board may not be amended,
altered, changed or repealed in any respect without the affirmative vote of
66 2/3% of the outstanding voting stock of Penton, prevent stockholders from
creating additional directorships.

STOCKHOLDER ACTION; SPECIAL MEETINGS

The Certificate of Incorporation provides that stockholder action can be
taken only at an annual or special meeting of stockholders and cannot be taken
by written consent in lieu of a meeting. The Certificate of Incorporation and
the Bylaws provide that, except as otherwise required by law, special meetings
of the stockholders can only be called pursuant to a resolution adopted by a
majority of the Board. Stockholders are not permitted to call a special meeting
or to require the Board to call a special meeting. Such provisions may not be
amended, altered, changed or repealed in any respect without the affirmative
vote of 66 2/3% of the outstanding voting stock of Penton.

STOCKHOLDER PROPOSALS AND NOMINATIONS

The Bylaws establish an advance notice procedure for stockholder proposals
to be brought before an annual or special meeting of stockholders of Penton,
including proposed nominations of persons for election to the Board.
Stockholders at an annual or special meeting may only consider proposals or
nominations brought before the meeting by Penton, by or at the direction of the
Board or by a stockholder who was a stockholder of record on the record date for
the meeting, who is entitled to vote at the meeting and who has given to
Penton's Secretary timely written notice, in proper form, of the stockholder's
intention to bring that business before the

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<PAGE> 80

meeting. Such provisions may not be amended, altered, changed or repealed in any
respect without the affirmative vote of 66 2/3% of the outstanding voting stock
of Penton.

To be timely, notice by stockholders of nominations or proposals to be
brought before the 1999 annual meeting of stockholders, or before any special
meeting of stockholders, must be delivered to the Secretary of Penton not
earlier than the 90th day prior to such meeting and not later than the 60th day
prior to such meeting or the 10th day following the day on which public
announcement of the date of such meeting is first made. Notice by stockholders
of nominations or proposals to be brought before any subsequent annual meeting
must be received by the Secretary not less than 60 days nor more than 90 days
prior to the first anniversary of the preceding year's annual meeting of
stockholders or if the date of the annual meeting is more than 30 days prior to
or more than 60 days after the preceding anniversary date, notice by the
stockholder will be timely if received not earlier than the 90th day prior to
such annual meeting and not later than the close of business on the later of (i)
the 60th day prior to such annual meeting or (ii) the 10th day following public
announcement of such meeting.

Each notice by stockholders must set forth (i) the name and address of the
stockholder who intends to make the nomination or proposal and of any beneficial
owner on whose behalf the nomination or proposal is made and (ii) the class and
number of shares of Common Stock that are owned beneficially and of record by
such stockholder and beneficial owner, if any. In the case of a stockholder
proposal, the notice must also set forth a brief description of the business
desired to be brought before the meeting, the reasons for conducting such
business at the meeting and any material interest of such stockholder or
beneficial owner, if any, in that proposed business. In the case of nomination
of any person for election as a director, the notice must also set forth any
information regarding the nominee proposed by the stockholder that would be
required to be included in a proxy statement filed pursuant to the proxy rules
of the Commission and the consent, if so required, of the nominee to be named in
a proxy statement as a candidate for election and to serve as a director of
Penton if elected.

Although the Bylaws do not give the Board the power to approve or
disapprove stockholder nominations of candidates or proposals regarding other
business to be conducted at a special or annual meeting, the Bylaws may have the
effect of precluding the conduct of certain business at a meeting if the proper
procedures are not followed or may discourage or defer a potential acquirer from
conducting a solicitation of proxies to elect its own slate of directors or
otherwise attempting to obtain control of Penton.

AMENDMENT OF BYLAWS

The Bylaws may be amended, altered or repealed by the affirmative vote of
the holders of at least 66 2/3% of the voting power of the then outstanding
shares of Penton's voting stock or by the affirmative vote of a majority of the
Board. The percentage required for a vote by stockholders may make it more
difficult to change the Bylaws for the purpose of gaining control over Penton.

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<PAGE> 81

LIMITATIONS ON LIABILITY AND INDEMNIFICATION OF
OFFICERS AND DIRECTORS

ELIMINATION OF LIABILITY IN CERTAIN CIRCUMSTANCES

The Certificate of Incorporation provides that, to the fullest extent
permitted by the DGCL as the same exists or may hereafter be amended, no
director of Penton shall be liable to it or its stockholders for monetary
damages for breach of fiduciary duty as a director. Any repeal or modification
of this provision will not adversely affect any right or protection of a
director of Penton existing at the time of such repeal or modification.

INDEMNIFICATION AND INSURANCE

Section 145 of the DGCL contains provisions permitting (and, in some
situations, requiring) Delaware corporations such as Penton to provide
indemnification to their officers and directors for losses and litigation
expense incurred in connection with, among other things, their service to the
corporation in those capacities. The Certificate of Incorporation contains
provisions requiring indemnification by Penton of its directors, officers, and
employees to the fullest extent permitted by law. Among other things, these
provisions provide that Penton is required to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
or investigative (including any action by or in the right of Penton) (a
"Proceeding") by reason of the fact that such person is or was a director,
officer, or employee of Penton, or is or was serving at the request of Penton as
a director, officer, or employee of another corporation, partnership, joint
venture, trust, or other enterprise (including service with respect to any
employee benefit plan) against expenses (including attorneys' fees), judgments,
fines, ERISA excise taxes, penalties, and amounts paid in settlement actually
and reasonably incurred by such person in connection with such Proceeding to the
fullest extent permitted by the DGCL, as the same exists or may be amended (but,
in the case of any such amendment, only to the extent that such amendment
permits Penton to provide broader indemnification rights than such law permitted
Penton to provide prior to such amendment). These provisions also provide for
the advance payment of fees and expenses reasonably incurred by the director,
officer, or employee in defense of any such Proceeding, subject to reimbursement
by the director, officer, or employee if it is ultimately determined that such
director, officer, or employee is not entitled to be indemnified by Penton.
Penton anticipates that it will enter into agreements with its directors
providing contractually for indemnification consistent with the Certificate of
Incorporation and Bylaws. In addition, the Certificate of Incorporation
authorizes Penton to purchase insurance for its directors, officers, and
employees insuring them against certain risks as to which Penton may be unable
lawfully to indemnify them. Penton intends to obtain this insurance coverage for
its directors, officers, and employees as well as insurance coverage to
reimburse Penton for potential costs of its corporate indemnification of
directors, officers, and employees. In connection with any liabilities resulting
from filing the Registration Statement, of which this Prospectus forms a part,
Penton has agreed to indemnify Messrs. Donohue and Meehan to the same extent as
the Board members.

1999 ANNUAL STOCKHOLDERS MEETING

On June 1, 1998, Pittway, which was then and is currently the sole
stockholder of Penton, elected the current members of the Board (and elected
each of the DM Publishing Shareholders as members of the Board contingent upon
the Stock Distribution and the DM Publishing Combination). The first annual
meeting of Penton's stockholders after the Stock Distribution is expected to be
in May 1999.

Penton's Bylaws establish an advance notice procedure for stockholder
proposals to be brought before annual meetings, including proposed nominations
of persons for election to the Board. See "Anti-Takeover Effects -- Stockholder
Proposals and Nominations."

LEGAL MATTERS

The validity of the Common Stock to be distributed in the Stock
Distribution will be passed upon by Jones, Day, Reavis & Pogue, Cleveland, Ohio,
counsel for Penton.

80
<PAGE> 82

EXPERTS

The financial statements of Penton as of December 31, 1997 and 1996 and for
each of the three years in the period ended December 31, 1997 included in this
Prospectus have been so included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

The financial statements of DM Publishing as of December 31, 1997 and for
the year then ended included in this Prospectus have been so included in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.

The financial statements of INDEX as of November 30, 1997 and for the
twelve months then ended included in this Prospectus have been so included in
reliance on the reports of Horwath Clark Whitehill, chartered accountants, given
on the authority of said firm as experts in auditing and accounting.

AVAILABLE INFORMATION

Penton has filed with the Commission a Registration Statement on Form S-1
(the "Registration Statement") under the Securities Act with respect to the
Common Stock. This Prospectus does not contain all of the information set forth
in the Registration Statement and the exhibits and schedules thereto. For
further information, reference is made to the Registration Statement, including
the exhibits and schedules thereto. Following the Stock Distribution, Penton
will be subject to the reporting requirements of the Exchange Act and, in
accordance therewith, will file reports, proxy statements and other information
with the Commission. Copies of the Registration Statement (including the
exhibits and schedules thereto) can be, and copies of the reports, proxy
statements and other information filed by Penton with the Commission following
the Stock Distribution can in the future be, inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the Commission's regional offices at
7 World Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. After being filed,
copies of such material can be obtained at prescribed rates from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549. Following the Stock Distribution, such materials and other information
concerning Penton will also be filed electronically with the Commission and will
be accessible via the World Wide Web at http://www.sec.gov. Following the
listing of Common Stock on the NYSE, Penton will be required to file with the
exchange copies of such reports, proxy statements and other information which
then can be inspected at the offices of such exchange at 20 Broad Street, New
York, New York 10005. See "Description of Capital Stock -- Listing and Trading
of Common Stock."

81
<PAGE> 83

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C>
PENTON MEDIA, INC.
Report of Independent Accountants...................... F-3
Consolidated Statement of Income for the three months
ended March 31, 1998 and 1997 and the years ended
December 31, 1997, 1996 and 1995...................... F-4
Consolidated Balance Sheet at March 31, 1998 and
December 31, 1997 and 1996............................ F-5
Consolidated Statement of Cash Flows for the three
months ended March 31, 1998 and 1997 and the years
ended December 31, 1997, 1996 and 1995................ F-6
Consolidated Statement of Stockholder's Equity for the
three months ended March 31, 1998 and the years ended
December 31, 1997, 1996 and 1995...................... F-7
Summary of Accounting Policies......................... F-8
Notes to Consolidated Financial Statements............. F-10

DONOHUE MEEHAN PUBLISHING COMPANY
Report of Independent Accountants...................... F-17
Statement of Income and Accumulated Deficit for the
three months ended March 31, 1998 and the year ended
December 31, 1997..................................... F-18
Balance Sheet at March 31, 1998 and December 31,
1997.................................................. F-19
Statement of Cash Flows for the three months ended
March 31, 1998 and the year ended December 31, 1997... F-20
Notes to Financial Statements.......................... F-21

INDEPENDENT EXHIBITIONS LIMITED
Director's Report for the twelve months ended November
30, 1997.............................................. F-23
Statement of Director's Responsibilities............... F-24
Report of the Auditors................................. F-25
Profit and Loss Account for the twelve months ended
November 30, 1997..................................... F-26
Balance Sheet at November 30, 1997..................... F-27
Notes to the Financial Statements...................... F-28

SERVICE EXHIBITIONS LIMITED
Director's Report for the twelve months ended November
30, 1997.............................................. F-33
Statement of Director's Responsibilities............... F-34
Report of the Auditors................................. F-35
Profit and Loss Account for the twelve months ended
November 30, 1997..................................... F-36
Balance Sheet at November 30, 1997..................... F-37
Notes to the Financial Statements...................... F-38
</TABLE>

F-1
<PAGE> 84

<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C>
EQUITY INFORMATION EXCHANGE LIMITED
Director's Report for the twelve months ended November
30, 1997.............................................. F-41
Statement of Director's Responsibilities............... F-42
Report of the Auditors................................. F-43
Profit and Loss Account for the twelve months ended
November 30, 1997..................................... F-44
Balance Sheet at November 30, 1997..................... F-45
Notes to the Financial Statements...................... F-46
</TABLE>

F-2
<PAGE> 85

REPORT OF INDEPENDENT ACCOUNTANTS

TO THE BOARD OF DIRECTORS AND STOCKHOLDER OF PENTON MEDIA, INC.

In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income, of cash flows and of stockholder's equity
present fairly, in all material respects, the financial position of Penton
Media, Inc. (formerly Penton Publishing, Inc., and a wholly-owned subsidiary of
Pittway Corporation) and its subsidiaries at December 31, 1997 and 1996, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1997, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of
Penton Media Inc.'s management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
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 the opinion expressed above.

/s/ Price Waterhouse LLP
Cleveland, Ohio
June 8, 1998

F-3
<PAGE> 86

PENTON MEDIA, INC.

CONSOLIDATED STATEMENT OF INCOME

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
(UNAUDITED) YEARS ENDED DECEMBER 31,
------------------- ------------------------------
1998 1997 1997 1996 1995
-------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
REVENUES.................................... $52,485 $48,666 $204,931 $188,557 $179,900
------- ------- -------- -------- --------
OPERATING EXPENSES:
Editorial, production and circulation..... 23,322 22,212 94,560 91,581 92,859
Selling, general and administrative....... 22,471 19,919 78,523 72,566 69,322
Depreciation and amortization............. 2,027 1,678 6,551 5,911 5,772
------- ------- -------- -------- --------
47,820 43,809 179,634 170,058 167,953
------- ------- -------- -------- --------
Operating income............................ 4,665 4,857 25,297 18,499 11,947
------- ------- -------- -------- --------
OTHER INCOME (EXPENSE):
Interest expense.......................... (662) (208) (841) (34) (85)
Gain on sale of publications.............. -- -- 1,040 -- 1,700
Gain on insurance settlement.............. -- -- -- -- 1,431
Miscellaneous, net........................ 3 3 10 17 83
------- ------- -------- -------- --------
(659) (205) 209 (17) 3,129
------- ------- -------- -------- --------
Income from continuing operations before
income taxes.............................. 4,006 4,652 25,506 18,482 15,076
------- ------- -------- -------- --------
INCOME TAXES:
Current................................... 1,687 1,761 9,754 6,733 5,702
Deferred.................................. (21) 173 878 793 749
------- ------- -------- -------- --------
1,666 1,934 10,632 7,526 6,451
------- ------- -------- -------- --------
Income from continuing operations........... 2,340 2,718 14,874 10,956 8,625
------- ------- -------- -------- --------
Loss from discontinued operations, net of
income tax credit of $30.................. -- -- -- -- (48)
------- ------- -------- -------- --------
NET INCOME.................................. $ 2,340 $ 2,718 $ 14,874 $ 10,956 $ 8,577
======= ======= ======== ======== ========
INCOME FROM CONTINUING OPERATIONS AND NET
INCOME PER SHARE BASIC AND DILUTED
(21,200,000 SHARES OUTSTANDING)........... $ .11 $ .13 $ .70 $ .52 $ .40
</TABLE>

See Summary of Accounting Policies and Notes to Consolidated Financial
Statements.
F-4
<PAGE> 87

PENTON MEDIA, INC.

CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
DECEMBER 31,
MARCH 31, 1998 -------------------------
(UNAUDITED) 1997 1996
--------------- --------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash...................................................... $ 1,732 $ 2,419 $ 1,571
Accounts and notes receivable, less allowance for doubtful
accounts of $2,368 in 1998, $2,406 in 1997 and $2,069 in
1996.................................................... 32,112 29,363 30,985
Inventories............................................... 3,660 2,429 3,360
Deferred tax assets....................................... 2,995 2,851 2,608
Prepayments, deposits and other........................... 5,077 3,886 3,318
-------- -------- --------
45,576 40,948 41,842
-------- -------- --------
PROPERTY, PLANT AND EQUIPMENT, AT COST:
Buildings................................................. 6,168 6,168 6,163
Machinery and equipment................................... 61,623 60,493 54,938
-------- -------- --------
67,791 66,661 61,101
Less: accumulated depreciation............................ 41,341 39,845 34,809
-------- -------- --------
26,450 26,816 26,292
-------- -------- --------
Land...................................................... 426 426 426
-------- -------- --------
26,876 27,242 26,718
-------- -------- --------
OTHER ASSETS:
Goodwill, less accumulated amortization of $6,666 in 1998,
$6,192 in 1997 and $5,134 in 1996....................... 65,371 65,460 19,735
Other intangibles, less accumulated amortization of $5,443
in 1998, $5,382 in 1997 and $5,177 in 1996.............. 6,302 6,362 2,205
Deferred tax assets....................................... 3,951 4,067 5,102
Due from parent company................................... 10,880 12,212 13,136
Miscellaneous............................................. 138 135 61
-------- -------- --------
86,642 88,236 40,239
-------- -------- --------
$159,094 $156,426 $108,799
======== ======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Notes payable............................................. $ 34,648 $ 34,170 $ --
Accounts payable.......................................... 8,691 9,427 7,405
Accrued compensation and benefits......................... 7,352 9,081 8,833
Other accrued expenses.................................... 7,988 8,383 7,703
Unearned income, principally trade show and conference
deposits................................................ 7,929 5,203 3,538
-------- -------- --------
66,608 66,264 27,479
-------- -------- --------
LONG-TERM LIABILITIES AND DEFERRED CREDITS:
Net deferred pension credits.............................. 19,592 19,592 21,092
Other..................................................... 941 957 1,077
-------- -------- --------
20,533 20,549 22,169
-------- -------- --------
STOCKHOLDER'S EQUITY:
Preferred stock, 2,000,000 shares authorized; none
issued..................................................
Common stock, $.01 par value, 60,000,000 shares
authorized; 21,200,000 shares issued and outstanding.... 212 212 212
Capital in excess of par value............................ 29,630 29,630 29,630
Retained earnings......................................... 42,111 39,771 29,309
-------- -------- --------
71,953 69,613 59,151
-------- -------- --------
$159,094 $156,426 $108,799
======== ======== ========
</TABLE>

See Summary of Accounting Policies and Notes to Consolidated Financial
Statements.
F-5
<PAGE> 88

PENTON MEDIA, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
(UNAUDITED) YEARS ENDED DECEMBER 31,
------------------ -----------------------------
1998 1997 1997 1996 1995
------- -------- -------- -------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM CONTINUING OPERATING
ACTIVITIES:
Income from continuing operations........... $ 2,340 $ 2,718 $ 14,874 $ 10,956 $ 8,625
Adjustments to reconcile income from
continuing operations to net cash
provided by operating activities:
Depreciation and amortization............ 2,027 1,678 6,551 5,911 5,772
Deferred income taxes.................... (21) 173 878 793 749
Retirement and deferred compensation
plans.................................. -- (500) (2,000) (2,032) (1,198)
Provision for losses on accounts
receivable............................. 168 217 662 948 870
Gain on sale of publications............. -- -- (1,040) -- (1,700)
Gain on insurance settlement............. -- -- -- -- (1,431)
Change in assets and liabilities,
excluding effects from acquisitions and
dispositions:
(Increase) decrease in accounts and
notes receivable.................... (2,915) (1,032) 1,261 (2,313) (3,991)
(Increase) decrease in inventories..... (1,231) 214 931 37 210
(Increase) decrease in prepayments and
deposits............................ (1,176) (211) 630 94 1,024
(Decrease) increase in accounts payable
and accrued expenses................ (2,872) (1,838) 1,584 5,952 (1,246)
Increase (decrease) in unearned
income.............................. 2,696 (781) (552) 687 (563)
Other changes, net....................... (34) (48) (593) (526) 302
------- -------- -------- -------- -------
Net cash (used) provided by continuing
operations.................................. (1,018) 590 23,186 20,507 7,423
------- -------- -------- -------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures........................ (1,128) (759) (5,450) (4,822) (4,989)
Net assets of businesses acquired, net of
cash..................................... -- (14,040) (48,733) (900) --
Proceeds from sale of publications.......... -- -- 991 1,000 --
------- -------- -------- -------- -------
Net cash used by investing activities......... (1,128) (14,799) (53,192) (4,722) (4,989)
------- -------- -------- -------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in notes payable................... 114 14,000 48,342 -- --
Repayments of notes payable................. -- -- (14,000) -- --
Dividends to parent company................. -- -- (4,412) (22,567) (1,278)
Advances from (to) parent company........... 1,345 (84) 924 6,679 (419)
------- -------- -------- -------- -------
Net cash provided (used) by financing
activities.................................. 1,459 13,916 30,854 (15,888) (1,697)
------- -------- -------- -------- -------
NET (DECREASE) INCREASE IN CASH............... (687) (293) 848 (103) 737
CASH AT BEGINNING OF PERIOD................... 2,419 1,571 1,571 1,674 937
------- -------- -------- -------- -------
CASH AT END OF PERIOD......................... $ 1,732 $ 1,278 $ 2,419 $ 1,571 $ 1,674
======= ======== ======== ======== =======
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid............................... $ 841 $ 35 $ 35
Income taxes paid........................... $ 10,759 $ 8,823 $ 6,033
</TABLE>

See Summary of Accounting Policies and Notes to Consolidated Financial
Statements.
F-6
<PAGE> 89

PENTON MEDIA, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1998 AND
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
---------------------------------------------
CAPITAL IN
COMMON STOCK EXCESS OF
------------------- PAR RETAINED
SHARES PAR VALUE VALUE EARNINGS
------ --------- ---------- --------
(SHARES AND DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
BALANCE -- DECEMBER 31, 1994...................... 21,200 $212 $29,630 $33,621
Net income...................................... 8,577
Dividends....................................... (1,278)
------ ---- ------- -------
BALANCE -- DECEMBER 31, 1995...................... 21,200 212 29,630 40,920
------ ---- ------- -------
Net income...................................... 10,956
Dividends....................................... (22,567)
------ ---- ------- -------
BALANCE -- DECEMBER 31, 1996...................... 21,200 212 29,630 29,309
------ ---- ------- -------
Net income...................................... 14,874
Dividends....................................... (4,412)
------ ---- ------- -------
BALANCE -- DECEMBER 31, 1997...................... 21,200 212 29,630 39,771
------ ---- ------- -------
Net income (unaudited) 2,340
------ ---- ------- -------
BALANCE -- MARCH 31, 1998 (UNAUDITED)............. 21,200 $212 $29,630 $42,111
====== ==== ======= =======
</TABLE>

See Summary of Accounting Policies and Notes to Consolidated Financial
Statements.
F-7
<PAGE> 90

SUMMARY OF ACCOUNTING POLICIES

(Dollars in thousands, except per share data)

BASIS OF PRESENTATION

The consolidated financial statements include the accounts of Penton Media,
Inc. (formerly known as Penton Publishing, Inc.) and its subsidiaries ("Penton"
or the "Company"). The Company, a wholly owned subsidiary of Pittway Corporation
("Pittway" or "Parent Company"), produces national business magazines and
related products, trade shows and conferences domestically and in the United
Kingdom, and direct mail marketing programs. The common stock of the Company is
expected to be distributed by Pittway to its stockholders ("Stock Distribution")
in connection with the pending acquisition described in Note 1.

The accompanying financial statements for 1995 reflect two former
subsidiaries, Pittway Real Estate, Inc. ("PREI"), a real estate development
company, and Penton Learning Systems, Inc. ("PLS"), a seminar business, as
discontinued operations. The stock of PREI was distributed to Pittway in
November 1995. The stock of PLS was sold to its 49% minority shareholders in
July 1995 at book value.

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

INTERIM FINANCIAL STATEMENTS

The accompanying unaudited interim consolidated financial statements have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Accordingly, certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been omitted.

In the opinion of management, the interim consolidated financial statements
reflect all adjustments necessary for a fair presentation of the interim
periods. The results of operations for the interim periods are not necessarily
indicative of the results of operations to be expected for the full year.

INVENTORIES

Inventories are stated at the lower of cost or market. Costs included in
inventories are raw materials, direct labor and manufacturing overhead. Cost of
substantially all of the paper and ink stock is determined by using the last-in,
first-out (LIFO) method, while the remaining inventories are valued primarily
using the average cost method.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are recorded at cost and are depreciated over
the estimated useful lives of the assets using the straight-line method for
financial reporting purposes. The useful lives are 3 to 15 years for machinery
and equipment and up to 40 years for buildings. Leasehold improvements are
amortized over the shorter of the lease term or the remaining useful life of the
related assets. Maintenance and repairs are charged to expense as incurred;
renewals and improvements which extend the life of the asset are capitalized.
Depreciation expense amounted to $5,288, $5,023 and $4,748 in 1997, 1996 and
1995, respectively.

INTANGIBLE ASSETS

Goodwill and other intangible assets, which primarily consist of exhibitor
lists, customer mailing lists, trademarks and trade names, are capitalized and
amortized over their estimated useful lives of up to 40 years. The carrying
value of goodwill and other intangible assets is periodically reviewed by the
Company and impairment is recognized when the projected, undiscounted net pretax
cashflows derived from such intangible assets are less than their carrying
value.

F-8
<PAGE> 91
SUMMARY OF ACCOUNTING POLICIES

(Dollars in thousands, except per share data)

STOCKHOLDER'S EQUITY

Pursuant to the Combination Agreement (See Note 1), the Company amended its
Certificate of Incorporation on June 4, 1998, to authorize capital stock
consisting of 60 million shares of Common Stock, par value $.01 per share, and 2
million shares of Preferred Stock, par value $.01 per share. Immediately
thereafter, the Company issued 21,200,000 shares of Common Stock in replacement
of the 100 shares of $1 par value stock previously outstanding. An amount of
$212 has been transferred from Capital in excess of par value to Common Stock.
The financial statements and related notes have been restated to reflect this
recapitalization retroactively.

REVENUE RECOGNITION

Advertising revenues from the Company's trade magazines are recognized in
the month the publications are mailed. Revenues from trade shows and conferences
are recognized in the month the events are held. Licensing revenues are
recognized on a straight-line basis over the term of the license agreement.

ADVERTISING AND PROMOTION EXPENSES

Advertising and promotion costs are primarily expensed as incurred. These
costs amounted to $8,420, $9,330 and $9,954 in 1997, 1996 and 1995,
respectively.

INCOME TAXES

For 1997 and in prior years, the results of the Company were included in
Pittway's consolidated U.S. federal income tax returns. The provision for income
taxes included in the consolidated statements of income represents an allocated
share of Pittway's tax expense. The allocated share approximates the tax expense
that would have been incurred on a separate return basis. The liability for
income taxes currently payable is recorded by Pittway. Deferred income tax
assets and liabilities are recorded by the Company at the current statutory tax
rate.

Pursuant to the Combination Agreement, the Company is required to indemnify
Pittway for any additional federal, state, local and foreign income tax
liabilities with respect to all periods prior to and including the date of the
Stock Distribution. All consolidated federal income tax returns of Pittway have
been audited by the Internal Revenue Service through 1992.

TRANSLATION OF FOREIGN CURRENCIES

The functional currency of the Company's foreign operations acquired in
December 1997 is the 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 transaction gains or
losses in 1997.

NET INCOME PER SHARE

Net income per share reflects net income divided by the historical number
of shares outstanding, as restated.

F-9
<PAGE> 92

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

NOTE 1 -- PENDING ACQUISITION AND SPIN-OFF FROM PITTWAY

The Company has entered into an agreement (the "Combination Agreement") to
acquire Donohue Meehan Publishing Company ("DM Publishing") for $7 million in
cash, 6.767% of the Company's stock to be outstanding immediately after the
acquisition and up to an additional $4 million in cash based on DM Publishing's
pre-tax income for the years 1998 and 1999. The Company also has agreed to make
a contingent cash payment to the extent, if any, that the shares issued in the
acquisition have an average aggregate market value of less than $29 million
during either of two 30-day periods in the year 2000. The contingent payment is
subject to certain limitations as to any of such shares sold prior to the
payment. A portion of the contingent payment may be made with Common Stock
rather than cash under certain conditions.

Pittway intends to distribute 100% of the Company's Common Stock on a share
for share basis to holders of Pittway stock. The distribution to Pittway
stockholders is contingent upon the closing immediately thereafter of the
aforementioned acquisition by Penton of DM Publishing.

NOTE 2 -- RELATIONSHIP AND TRANSACTIONS WITH PITTWAY

The Combination Agreement provides for Pittway to assist Penton in
preparing its tax returns for 1998 and to assist in other tax matters for fees
to be negotiated.

Included in the consolidated statement of income is an allocation of
corporate expenses related to services provided for the Company by Pittway. This
allocation was based on an estimate of the incremental corporate expenses
related to the Company's operations for the periods presented and, in the
opinion of management, has been made on a reasonable basis. However, the
allocation is not necessarily indicative of the level of expenses which might
have been incurred had the Company been a separate company. The aggregate
allocated costs totaled $386, $314 and $310 for the years ended 1997, 1996 and
1995, respectively. The Company's employees also participate in Pittway's
pension plan (see Note 9). Certain of the Company's employees participate in
Pittway's 1990 Stock Awards Plan, for which Pittway has allocated costs to the
Company totaling $1,041, $1,122 and $1,456 in 1997, 1996 and 1995, respectively.

Other transactions between the Company and Pittway, consisting principally
of taxes and other reimbursable expenses paid by Pittway, have been reflected in
the historical financial statements as though on a stand-alone basis, except
that no interest income or expense has been allocated on intercompany balances.

Pittway utilizes a centralized cash management system. Under this system,
cash generated by Penton in excess of its cash requirements (including cash
requirements for Penton's income taxes and other reimbursable expenses paid by
Pittway) is transferred to Pittway and reflected as "Due from parent company" in
the balance sheet. This account is reduced by dividends declared by the Company.
As provided in the DM Publishing Combination Agreement, cash totaling the
aggregate amount of outstanding checks and trade show deposits, net of deferred
costs incurred with respect to trade shows, will be retained by Penton with any
excess cash distributed to Pittway. If cash balances are less than this amount,
Pittway will remit the difference to Penton. A final dividend will be declared
to Pittway to settle the "Due from parent company" account.

NOTE 3 -- ACQUISITIONS AND DISPOSITIONS

During 1997, the Company acquired one foreign and two domestic trade show
companies for $45,602 cash and $2,476 of notes payable to the sellers. The
acquisitions also include future contingent payments up to $13,542 tied to
future earnings of the acquired companies through the year 2000, of which $655
was earned in 1997. The excess of the aggregate purchase price over the fair
market value of net assets acquired of $46,531, excluding $4,218 of other
intangibles amortizable over 15 years, is being amortized over 40 years. In 1997
the Company also sold one publication for $991 cash, and the assumption of
certain liabilities.

During 1995, the Company sold a publication for $1,000 cash, received in
January 1996, and the assumption of $1,339 of deferred subscription revenues.

F-10
<PAGE> 93
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

All the aforementioned acquisitions were accounted for as purchase
transactions. These operations have been included in the consolidated financial
statements from their respective dates of acquisition or to the dates of
disposition.

The following unaudited pro forma information presents the combined results
of operations of the Company and the acquired businesses, as if the acquisitions
had occurred at the beginning of each of the years ended 1997 and 1996 and the
quarterly period ended March 31, 1997, respectively: Net sales -- $220,936,
$208,191 and $49,652; net income -$15,183, $11,317 and $1,894. The pro forma
amounts give effect to certain adjustments, including the amortization of
intangibles, foreign currency translation, increased interest expense and income
tax effects. This pro forma information does not necessarily reflect the results
of operations as they would have been if the businesses had constituted a single
entity during such periods and is not necessarily indicative of results which
may be obtained in the future.

NOTE 4 -- GAIN ON INSURANCE SETTLEMENT

In 1995 the Company recorded a $1,431 pretax gain in connection with an
insurance settlement resulting from a municipal water main which broke in
January of 1995 and flooded a substantial portion of the Company's Cleveland
headquarters. The gain primarily results from replacement of equipment at
current market value in excess of net book value of damaged assets. The total
proceeds from the insurance settlement, which included reimbursement for other
expenses incurred, were received over a two-year period.

NOTE 5 -- INVENTORIES

The LIFO reserve balances of $613, $462 and $368 at March 31,1998
(unaudited) and December 31, 1997 and 1996, respectively, represent the excess
of current replacement cost over the LIFO value of inventory which consists
principally of raw materials.

NOTE 6 -- NOTES PAYABLE

The Company's short-term notes payable at December 31, 1997 include $29,170
of foreign indebtedness, denominated in British pounds and bearing interest at
8.1%, and $5,000 of domestic indebtedness at 6%. Pittway has guaranteed $26,694
of the foreign debt, which the Company is required to refinance without the
guarantee prior to the Stock Distribution. The foreign debt includes $2,476 due
in December 1998 which the holder may convert into Common Stock at fair market
value. The domestic note is an allocated portion of Pittway's notes payable
representing cash required for an acquisition completed in December 1997. There
are no compensating balance or commitment fee requirements associated with these
short-term borrowings.

NOTE 7 -- FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of accounts and notes receivable, accounts payable,
accrued expenses and notes payable approximates fair value because of the short
maturity of these instruments.

F-11
<PAGE> 94
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 8 -- INCOME TAXES

The provision for income taxes consists of:

<TABLE>
<CAPTION>
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Current -
Federal........................................... $ 8,124 $ 5,541 $ 4,795
State and local................................... 1,630 1,192 907
------- ------- -------
9,754 6,733 5,702
------- ------- -------
Deferred -
Federal........................................... 851 711 672
State and local................................... 98 82 77
Foreign........................................... (71) -- --
------- ------- -------
878 793 749
------- ------- -------
$10,632 $ 7,526 $ 6,451
======= ======= =======
</TABLE>

The difference between the actual income tax provision and the tax
provision computed by applying the statutory federal income tax rate of 35% to
income before income taxes is as follows:

<TABLE>
<CAPTION>
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Income tax at statutory rate........................ $ 8,927 $ 6,469 $ 5,277
Tax effect of -
State income taxes, net of federal benefit........ 1,123 818 649
Nondeductible expenses............................ 582 513 525
Other items, net.................................. -- (274) --
------- ------- -------
Actual income tax provision......................... $10,632 $ 7,526 $ 6,451
======= ======= =======
Effective income tax rate........................... 41.7% 40.7% 42.8%
======= ======= =======
</TABLE>

The components of deferred tax assets and liabilities at December 31, 1997
and 1996 are comprised of the following:

<TABLE>
<CAPTION>
1997 1996
------- -------
<S> <C> <C>
Deferred tax assets -
Deferred pension credits............................. $ 7,651 $ 8,231
Accrued vacation..................................... 1,159 1,025
Bad debts............................................ 805 808
Deferred compensation................................ -- 311
Other................................................ 1,107 1,128
------- -------
Total deferred tax assets......................... 10,722 11,503
------- -------
Deferred tax liabilities -
Depreciation......................................... (3,640) (3,793)
Other................................................ (164) --
------- -------
Total deferred tax liabilities.................... (3,804) (3,793)
------- -------
Net deferred tax asset................................. $ 6,918 $ 7,710
======= =======
</TABLE>

These balances are allocated between "Current assets" and "Other assets" in
the accompanying balance sheet.

F-12
<PAGE> 95
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 9 -- RETIREMENT PLAN

The Company participates in Pittway's noncontributory salaried retirement
plan (the "Plan") covering substantially all current and former domestic
employees. Benefits are based on years of service and annual compensation as
defined by the Plan. Prior to 1995, Pittway allocated net pension plan income
credits to the Company based upon the assets of a previously separate Company
plan, which was merged into the Pittway plan in 1991. At the time the plans were
merged, the amount of the Company's plan assets exceeded its projected benefit
obligation and, by 1995, such excess ("Funding Excess") had increased and had
become substantially disproportionate to the Funding Excess for the remainder of
the Pittway plan. As a result, for the years 1995 through 1997 Pittway limited
the allocation of net pension income credits to the Company to $1,500 per year.

As provided in the Combination Agreement, Pittway has agreed to transfer
$45,000 of its plan assets ("Allocated Assets"), including approximately $10,461
of Funding Excess, as of December 31, 1997 to a new plan to be adopted by the
Company after the Stock Distribution. From December 31, 1997 to the actual
transfer date, the Allocated Assets will be increased or decreased by a pro rata
share of the return on Pittway plan assets and decreased by the amount of
benefit payments made to retired Company employees. The amount of Allocated
Assets was determined by Pittway as the estimated proportion of total Pittway
plan assets that would result in the elimination of the Funding Excess for the
Company in the same future year as such elimination for the remainder of the
Pittway plan based on historical rates of service cost increases and return on
plan assets.

The "Net deferred pension credits" in the Consolidated Balance Sheet at
December 31, 1997 include deferred investment gains of $29,500 which Pittway
allocated to the Company on a basis consistent with the above-mentioned
limitation on previous net pension plan income credits.

The components of net pension income for the Company's portion of the Plan
consist of:

<TABLE>
<CAPTION>
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Service cost........................................ $ 1,767 $ 1,672 $ 1,588
Interest cost....................................... 2,226 2,173 2,110
Amortization of unrecognized transition asset....... (841) (841) (841)
Amortization of prior service cost.................. 357 357 357
Recognized net investment earnings and actuarial
gains............................................. (5,009) (4,861) (4,714)
------- ------- -------
Net pension income.................................. $(1,500) $(1,500) $(1,500)
======= ======= =======
</TABLE>

F-13
<PAGE> 96
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The reconciliation of the funded status of the Company's portion of the
Plan follows:

<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Change in Benefit Obligation -
Projected benefit obligation at January 1.......... $ 32,150 $ 31,460
Service cost....................................... 1,767 1,672
Interest cost...................................... 2,226 2,173
Actuarial loss..................................... 669 1,115
Benefits paid...................................... (2,273) (4,270)
-------- --------
Projected benefit obligation at December 31........ $ 34,539 $ 32,150
======== ========
Fair value of Allocated Assets at December 31........ $ 45,000 $ 40,762
======== ========
Funded Status of the Company's portion of the Plan -
Funding Excess..................................... $ 10,461 $ 8,612
Unrecognized net gain.............................. (29,500) (28,667)
Unrecognized prior service cost.................... 1,969 2,326
Unamortized transition net asset................... (2,522) (3,363)
-------- --------
Net deferred pension credits....................... $(19,592) $(21,092)
======== ========
Assumptions as of December 31 -
Discount rate...................................... 7% 7%
Expected return on plan assets..................... 7% 7%
Rate of compensation increase...................... 5% 5%
</TABLE>

NOTE 10 -- LEASE COMMITMENTS

The Company leases certain office space and equipment under noncancelable
operating leases expiring at various dates through the year 2003. Some of the
leases contain renewal options and certain equipment leases include options to
purchase during or at the end of the lease term. Minimum annual rental
commitments under all noncancelable leases for the next five years beginning
with 1998 are $6,994, $6,532, $5,865, $580, $381 and an aggregate of $105
thereafter. Total rent expense (including taxes, insurance and maintenance when
included in the rent) amounted to $6,575, $6,329 and $6,644 in 1997, 1996 and
1995, respectively.

NOTE 11 -- CONTINGENCIES

The Company in the normal course of business 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 the Company's financial statements, management is
unable to estimate the magnitude of financial impact of claims and lawsuits
which may be filed in the future.

NOTE 12 -- SEGMENT INFORMATION

The Company has three reportable segments: media services, printing and
direct-mail marketing. The segments are based on the Company's internal
organization and are managed separately due to inherent differences in the
nature of these business. Within the media services segment, operating segments
serving differing industries were combined due to the similarity of their
economic characteristics and other factors.

The media services segment serves specific industries and broad markets
with integrated product offerings including trade magazines, trade shows and
conferences, directories, name lists and a variety of other products and
services. Revenues of this segment are generated primarily from magazine
advertising. The printing segment prints magazines, catalogs, brochures and
direct-mail pieces for the media services segment and outside commercial
customers. The direct-mail marketing segment serves primarily the pharmaceutical
and business services markets with the ability to design, produce, print and
mail direct mail-marketing campaigns.

F-14
<PAGE> 97
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Inter-segment revenues are made at approximate arm's-length prices. The
Company evaluates performance based on operating income. Segment assets are
those assets that are specifically identified with the reportable segments in
which operations are conducted. Non-current assets at December 31, 1997 include
$29,968 identified with operations in the United Kingdom, substantially all of
which are intangible assets, with the remaining assets identified with domestic
operations. Non-current assets at December 31, 1996 and 1995 are domestic.
Export sales were not material and no single customer accounted for ten percent
of sales.

<TABLE>
<CAPTION>
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------- ------------------------------
1998 1997 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Total segment revenues:
Media Services............................ $46,630 $43,582 $181,109 $166,631 $158,314
Printing.................................. 9,694 9,183 39,092 37,933 36,637
Direct-Mail Marketing..................... 2,866 2,667 13,370 13,173 12,668
------- ------- -------- -------- --------
59,190 55,432 233,571 217,737 207,619
Less Inter-segment revenues:
Printing.................................. 6,705 6,751 28,566 29,064 27,719
Direct-Mail Marketing..................... -- 15 74 116 --
------- ------- -------- -------- --------
$52,485 $48,666 $204,931 $188,557 $179,900
======= ======= ======== ======== ========
Operating Income:
Media Services............................ $ 4,495 $ 4,829 $ 24,854 $ 17,681 $ 9,428
Printing.................................. 416 292 1,534 1,270 1,512
Direct-Mail Marketing..................... (246) (264) (1,091) (452) 1,007
------- ------- -------- -------- --------
$ 4,665 $ 4,857 $ 25,297 $ 18,499 $ 11,947
======= ======= ======== ======== ========
Depreciation and Amortization:
Media Services............................ $ 3,903 $ 3,335 $ 3,302
Printing.................................. 2,229 2,145 2,085
Direct-Mail Marketing..................... 419 431 385
-------- -------- --------
$ 6,551 $ 5,911 $ 5,772
======== ======== ========
Total assets:
Media Services............................ $130,123 $ 79,652 $ 87,871
Printing.................................. 17,823 18,681 19,735
Direct-Mail Marketing..................... 8,480 10,466 8,888
-------- -------- --------
$156,426 $108,799 $116,494
======== ======== ========
Capital expenditures:
Media Services............................ $ 3,741 $ 3,339 $ 2,986
Printing.................................. 1,406 948 876
Direct-Mail Marketing..................... 303 535 1,127
-------- -------- --------
$ 5,450 $ 4,822 $ 4,989
======== ======== ========
</TABLE>

F-15
<PAGE> 98
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 13 -- QUARTERLY RESULTS (UNAUDITED)

Quarterly results of operations for the years ended December 31, 1997 and
1996 are shown below:

<TABLE>
<CAPTION>
1997 QUARTERS
---------------------------------------- TOTAL
FIRST SECOND THIRD FOURTH FOR YEAR
------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Revenues.............................. $48,666 $54,054 $50,729 $51,482 $204,931
Operating Income...................... 4,857 8,545 5,708 6,187 25,297
Net Income............................ 2,718 4,875 3,218 4,063(a) 14,874
Basic and diluted net income per
share............................... .13 .23 .15 .19 .70
</TABLE>

<TABLE>
<CAPTION>
1996 QUARTERS
---------------------------------------- TOTAL
FIRST SECOND THIRD FOURTH FOR YEAR
------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Revenues.............................. $45,233 $48,382 $46,437 $48,505 $188,557
Operating Income...................... 3,256 6,022 3,508 5,713 18,499
Net Income............................ 1,928 3,568 2,075 3,385 10,956
Basic and diluted net income per
share............................... .09 .17 .10 .16 .52
</TABLE>

(a) Includes $634 after-tax gain, or $.03 per share (basic and diluted), on sale
of a magazine.

F-16
<PAGE> 99

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders of
Donohue Meehan Publishing Company

In our opinion, the accompanying balance sheet and the related statements of
income and accumulated deficit and of cash flows present fairly, in all material
respects, the financial position of Donohue Meehan Publishing Company at
December 31, 1997, and the results of its operations and its cash flows for the
year in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these statements in accordance with
generally accepted auditing standards which 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 audit provides a reasonable basis for the opinion expressed
above.

/s/ Price Waterhouse LLP
Cleveland, Ohio
April 3, 1998, except for Note 7 which
is dated as of May 21, 1998

F-17
<PAGE> 100

DONOHUE MEEHAN PUBLISHING COMPANY

STATEMENTS OF INCOME AND ACCUMULATED DEFICIT

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
-------------- -----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
REVENUES.................................................... $2,104 $ 9,358
------ -------
OPERATING EXPENSES:
Editorial, production and circulation..................... 666 2,826
Selling................................................... 455 2,146
General and administrative................................ 158 748
Depreciation.............................................. 17 75
------ -------
1,296 5,795
------ -------
Operating income............................................ 808 3,563
OTHER INCOME (EXPENSE):
Interest expense.......................................... (5) (21)
Interest income........................................... 10 75
------ -------
5 54
------ -------
Income before taxes......................................... 813 3,617
Provision for state income taxes (Note 1)................... -- 36
------ -------
NET INCOME.................................................. 813 3,581
Shareholder distributions................................... -- (3,617)
Accumulated deficit at beginning of period.................. (1,318) (1,282)
------ -------
Accumulated deficit at end of period........................ ($ 505) ($1,318)
====== =======
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-18
<PAGE> 101

DONOHUE MEEHAN PUBLISHING COMPANY

BALANCE SHEET

<TABLE>
<CAPTION>
MARCH 31,
1998 DECEMBER 31
(UNAUDITED) 1997
----------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash...................................................... $1,147 $ 19
Accounts receivable, less allowance for doubtful accounts
of $113 in 1998 and 1997............................... 1,360 1,898
Prepaid expenses.......................................... 77 46
------ -------
2,584 1,963
PROPERTY, PLANT AND EQUIPMENT:
Furniture and equipment................................... 404 404
Automobiles............................................... 131 131
Accumulated depreciation.................................. (329) (312)
------ -------
206 223
------ -------
Other assets................................................ 2 2
------ -------
$2,792 $ 2,188
====== =======
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable.......................................... $ 28 $ 92
Accrued expenses.......................................... 50 54
Lease obligations, current portion........................ 90 90
Retirement plan payable................................... 68 194
Deferred income tax....................................... 23 23
------ -------
259 453
------ -------
LONG-TERM LIABILITIES
Lease obligations......................................... 101 116
Deferred compensation..................................... 2,877 2,877
------ -------
2,978 2,993
------ -------
3,237 3,446
------ -------
SHAREHOLDER'S EQUITY (DEFICIT):
Common stock -- 700 shares Series A issued and
outstanding, no par value.............................. 60 60
Accumulated deficit....................................... (505) (1,318)
------ -------
(445) (1,258)
------ -------
$2,792 $ 2,188
====== =======
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-19
<PAGE> 102

DONOHUE MEEHAN PUBLISHING COMPANY

STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS
ENDED YEAR ENDED
MARCH 31, DECEMBER 31,
1998 1997
(UNAUDITED)- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................ $ 813 $ 3,581
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization.......................... 17 75
Deferred income tax provision.......................... -- 2
Deferred compensation.................................. -- 81
Changes in assets and liabilities:
Decrease (increase) in accounts receivable............. 538 (182)
(Increase) decrease in prepaid expenses................ (31) 11
(Decrease) increase in accounts payable................ (64) 11
(Decrease) increase in accrued expenses................ (4) 8
(Decrease) increase in retirement plan payable......... (126) 30
------ -------
Net cash provided by operating activities................. 1,143 3,617
CASH FLOWS FROM FINANCING ACTIVITIES:
Lease payments............................................ (15) (58)
Distributions made to shareholders........................ -- (3,617)
------ -------
Net cash used by financing activities..................... (15) (3,675)
------ -------
NET INCREASE (DECREASE) IN CASH............................. 1,128 (58)
CASH AT BEGINNING OF YEAR................................... 19 77
------ -------
CASH AT END OF YEAR......................................... $1,147 $ 19
====== =======
Supplemental cash flow information:
State income taxes paid................................... $ -- $ 34
====== =======
Interest.................................................. $ 5 $ 20
====== =======
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-20
<PAGE> 103

DONOHUE MEEHAN PUBLISHING COMPANY

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

(DOLLARS IN THOUSANDS)
NOTE 1 -- NATURE OF BUSINESS:

Donohue Meehan Publishing Company ("the Company") is a publisher of
magazines in the retail baking market (Modern Baking and Baking Management) and
in the convenience store industry (Convenience Store). The Company's principal
revenues are derived from magazine advertising. The Company has offices located
in Chicago, Illinois and Philadelphia, Pennsylvania.

The Company was incorporated on January 5, 1987 and elected "S" Corporation
tax status. Accordingly, the Company is not liable for federal income taxes. The
state of Illinois imposes a replacement income tax on "S" Corporations. The
state of Pennsylvania accepts the "S" Corporation status for corporations and
does not impose a corporate income tax, however, Pennsylvania does impose a
Capital Stock Foreign Franchise Tax.

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

USE OF ESTIMATES

The preparation of financial statements in accordance with generally
accepted accounting principles requires the use of estimates by management
regarding the reported amounts of assets and liabilities as well as the revenues
and expenses recognized during the reporting period. Actual results could differ
from these estimates.

CASH

The Company considers all short-term securities purchased with an original
maturity of three months or less to be cash equivalents.

REVENUE RECOGNITION

Revenues from advertising are recognized as earned during the period when
the corresponding issue containing the advertisements is mailed.

PLANT PROPERTY AND EQUIPMENT

Furniture and equipment are recorded at cost and are depreciated over the
estimated useful lives of the assets principally using accelerated methods.
Leased property meeting certain criteria is capitalized and the present value of
the related lease payment is recorded as a liability. Depreciation for these
assets is computed over the lease term using the straight-line method. Lease
terms are 3 years for equipment and 5 years for automobiles.

STATE INCOME TAXES

The company records state income taxes in accordance with Statement of
Financial Accounting Standards (SFAS) No. 109 "Accounting for Income Taxes."
This standard requires the recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that have been recognized in
the Company's financial statements or tax returns.

The state income tax provision consisted of the following:

<TABLE>
<S> <C>
Current..................................................... $34
Deferred.................................................... 2
---
$36
===
</TABLE>

The year-end deferred income tax liability consists of the difference
between accrual basis profits and cash basis profits recorded at the effective
state income tax rate.

F-21
<PAGE> 104
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 3 -- RETIREMENT PLAN:

In 1988 the company established a profit sharing plan for its eligible
employees in order to provide for their future retirement. The amount of the
Company's contribution to the Plan is determined annually by the Company's Board
of Directors.

The Board of Directors declared a $194 plan contribution for 1997 to be
paid in 1998. This amount has been recorded as a liability at December 31, 1997.

NOTE 4 -- RELATED PARTY TRANSACTIONS:

The Company leases various computers, automobiles and office equipment
under capital leases from Donohue-Meehan Equipment Leasing, an Illinois
partnership under common ownership with the Company.

Capitalized leases at December 31, 1997, consisted of computers and office
equipment ($185) and automobiles ($131).

During 1997, $78 was paid pursuant to these leases. Additionally, the
Company acquired in non-cash transactions, $173 of assets by capital lease in
1997. Future minimum annual lease payments under capital leases are as follows:

<TABLE>
<S> <C>
1998........................................................ $ 90
1999........................................................ 74
2000........................................................ 50
2001........................................................ 37
2002........................................................ 20
----
271
Less interest expense....................................... 65
----
Present value of minimum lease payments..................... $206
====
</TABLE>

NOTE 5 -- OPERATING LEASES:

Future minimum annual rental payments under the noncancelable operating
leases for office facilities are as follows: 1998 -- $66; 1999 -- $67;
2000 -- $67; and 2001 -- $25.

NOTE 6 -- DEFERRED COMPENSATION:

The Company has entered into certain agreements with key employees in which
the Company is obligated to pay the employees a specified amount upon death or
disability of the employer or upon sale of the Company. The compensation is
based on specified percentages as set forth in each employee's deferred
compensation agreement applied against the fair market value of the Company and
results in a charge to results of operations of $81 in 1997.

NOTE 7 -- SUBSEQUENT EVENT:

On May 21, 1998, the Company and its shareholders entered into an Agreement
whereby, upon the spin-off of Penton Media, Inc. ("Penton") (formerly Penton
Publishing, Inc.) from Pittway Corporation, the Company will be merged into a
wholly-owned subsidiary of Penton.

Upon completion of the merger, the Company's shareholders will receive (i)
common stock of Penton immediately following the spin-off from Pittway and the
merger, (ii) cash, (iii) the right to receive additional cash if certain
profitability levels are achieved during 1998 and/or 1999, and (iv) the right to
receive additional cash (or, in certain circumstances, additional common stock
of Penton) if the market price of Penton's common stock during either of two
reference periods in the year 2000 is less than a specified amount.

F-22
<PAGE> 105

INDEPENDENT EXHIBITIONS LIMITED

DIRECTOR'S REPORT

FOR THE TWELVE MONTHS ENDED 30 NOVEMBER 1997

The directors present their report together with the financial statements
for the twelve months ended 30 November 1997.

PRINCIPAL ACTIVITY

The principal activity of the company continues to be the organisation of
exhibitions and conferences.

BUSINESS REVIEW AND FUTURE DEVELOPMENTS

The business of the company has continued to develop in the light of
prevailing trading conditions and the position at 30 November 1997 is reflected
in the company's financial statements for the twelve months then ended. The
present intention is to continue the existing development of the company.

In December 1997, the company's entire issued share capital was acquired by
Penton Media Limited. Penton Media Limited has confirmed that it will provide
such financial support as is necessary to allow the company to trade and to meet
its liabilities as they fall due.

RESULTS

The results for the twelve month period are set out in the Profit and Loss
Account on page F-26. The director recommends the payment of a dividend of
L117,531.

DIRECTORS AND THEIR INTEREST IN THE COMPANY

The director who served during the period was RJ Findlay. The director has
an interest in the share capital of the company at the beginning and end of the
period, through his interest in the shares of Findlay Publications Holdings
Limited. His interest in that company's share capital is disclosed in its
financial statements.

RJ Findlay resigned as a director of the company on 12 December 1997.

The following were appointed Directors of the company on 12 December 1997.

DJ Ramella
TL Kemp
PL Vice
A Dedman

By Order of the Board

/s/ J. Wood
Company Secretary

F-23
<PAGE> 106

INDEPENDENT EXHIBITIONS LIMITED

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

It is the purpose of this statement to distinguish the directors'
responsibilities for the financial statements from those of the auditors, as
stated in their report.

The directors have prepared financial statements which give a true and fair
view of the company's state of affairs at 30 November 1997 and of its profit or
loss for the twelve month period. In preparing those financial statements the
directors have been required to:

- select suitable accounting policies and then apply them consistently;

- make judgements and estimates that are reasonable and prudent;

- state whether applicable accounting standards have been followed, subject
to any material departures disclosed and explained in the financial
statements;

- prepare the financial statements on the going concern basis unless it is
inappropriate to assume that the company will continue in business.

The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company. The directors are also responsible for safeguarding the assets of the
company and hence for taking reasonable steps for the prevention and detection
of fraud or other irregularities.

F-24
<PAGE> 107

REPORT OF THE AUDITORS

TO THE DIRECTORS OF
INDEPENDENT EXHIBITIONS LIMITED

We have audited the financial statements for the twelve months ended 30
November 1997 on pages F-26 to F-32 which have been prepared under the
accounting policies set out on page F-28.

RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS

As described on page F-24 the company's directors are responsible for the
preparation of financial statements. It is our responsibility to form an
independent opinion, based on our audit, on those financial statements and to
report our opinion to you.

BASIS OF OPINION

We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the financial statements. It
also includes an assessment of the significant estimates and judgements made by
the director in the preparation of the financial statements, and of whether the
accounting policies are appropriate to the company's circumstances, consistently
applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of the information in the financial statements.

UNQUALIFIED OPINION

In our opinion, the financial statements give a true and fair view of the
state of the company's affairs at 30 November 1997 and of its profit for the
twelve months then ended.

/s/ Horwath Clark Whitehill
Chartered Accountants
and Registered Auditors

June 10, 1998
London, England

F-25
<PAGE> 108

INDEPENDENT EXHIBITIONS LIMITED

PROFIT AND LOSS ACCOUNT

FOR THE TWELVE MONTHS ENDED 30 NOVEMBER 1997

<TABLE>
<CAPTION>
1997
NOTES L
----- ---------
<S> <C> <C>
TURNOVER.................................................... 1(ii) 2,607,480
Cost of Sales............................................... 1,076,330
---------
GROSS PROFIT................................................ 1,531,150
Administrative expenses..................................... 1,497,617
---------
OPERATING PROFIT............................................ 33,533
Interest receivable and similar income...................... 26,869
---------
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION............... 2 60,402
Tax on profit on ordinary activities........................ 4 15,517
---------
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION................ 44,885
Dividends................................................... (117,531)
---------
RETAINED LOSS FOR THE PERIOD................................ (72,646)
Profit and loss account brought forward..................... 18,014
---------
PROFIT AND LOSS ACCOUNT CARRIED FORWARD..................... (54,632)
=========
</TABLE>

The profit and loss account contains all the gains and losses recognised in
the twelve months and is the only movement in shareholders' funds.

The notes to the financial statements form part of these financial statements.
F-26
<PAGE> 109

INDEPENDENT EXHIBITIONS LIMITED

BALANCE SHEET

30 NOVEMBER 1997

<TABLE>
<CAPTION>
1997
NOTES L L
----- --------- -------
<S> <C> <C> <C>
FIXED ASSETS
Tangible assets............................................. 5 44,628
CURRENT ASSETS
Debtors..................................................... 6 1,242,951
Cash at bank................................................ 2,056,046
---------
3,298,997
CREDITORS: amounts falling due within one year.............. 7 3,361,454
---------
NET CURRENT LIABILITIES..................................... (62,457)
-------
TOTAL ASSETS LESS CURRENT LIABILITIES....................... (17,829)
PROVISIONS FOR LIABILITIES AND CHARGES...................... 8 34,363
-------
NET LIABILITIES............................................. (52,192)
=======
FINANCED BY:
CAPITAL AND RESERVES
Called up share capital..................................... 9 105
Share premium............................................... 2,335
Profit and loss account..................................... (54,632)
-------
SHAREHOLDERS' DEFICIT....................................... (52,192)
-------
</TABLE>

Approved by the Board on
June 10, 1998
and signed on its behalf:

/s/ A. Dedman -- Director

The notes to the financial statements form part of these financial statements.
F-27
<PAGE> 110

INDEPENDENT EXHIBITIONS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE TWELVE MONTHS ENDED 30 NOVEMBER 1997

1. ACCOUNTING POLICIES

(i) BASIS OF ACCOUNTING

The financial statements have been prepared under the historical cost
convention and in accordance with applicable accounting standards.

(ii) TURNOVER

Turnover represents the invoiced value of services supplied and is
stated net of value added tax. The turnover is attributable to the
principal activity of the company of organising exhibitions and
conferences.

(iii)DEFERRED TAXATION

Deferred taxation is accounted for using the liability method on all
material timing differences to the extent that it is probable that
liabilities or assets will crystallise.

(iv) FIXED ASSETS AND DEPRECIATION

Fixed assets are included at cost. Depreciation is provided on all
tangible fixed assets to write off the cost over their expected life by
equal annual instalments.

The rates applied are:

Fixtures and fittings - 10% to 50%
Motorcars - 25%

(v) PENSION COSTS

The costs of providing pensions for employees are charged in the profit
and loss account in accordance with the recommendations of qualified
actuaries. Any funding surpluses or deficits that may arise from time to
time are amortised over the average remaining working life of employees.

2. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION

<TABLE>
<CAPTION>
1997
L
------
<S> <C>
This is stated after charging:
Auditors' remuneration.................................... 5,250
Depreciation.............................................. 16,074
------
</TABLE>

F-28
<PAGE> 111
INDEPENDENT EXHIBITIONS LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE TWELVE MONTHS ENDED 30 NOVEMBER 1997

3. STAFF COSTS

<TABLE>
<CAPTION>
1997
L
-------
<S> <C>
Wages and salaries.......................................... 477,650
Social security costs....................................... 41,666
Other pension costs......................................... 21,730
-------
541,046
=======
NO.
The average number of employees during the year was......... 14
=======
</TABLE>

4. TAX ON PROFIT ON ORDINARY ACTIVITIES

<TABLE>
<CAPTION>
1997
L
------
<S> <C>
Corporation tax based on profits for the year at 23.5%
(1996: 24%)............................................... 22,750
Under/(over) provision in previous years.................... 67
Deferred taxation........................................... (7,300)
------
15,517
======
</TABLE>

5. FIXED ASSETS

<TABLE>
<CAPTION>
FIXTURES
AND
FITTINGS
L
--------
<S> <C>
COST
At 1 December 1996........................................ 71,273
ADDITIONS................................................. 14,525
------
AT 30 NOVEMBER 1997......................................... 85,798
------
DEPRECIATION
At 1 December 1996........................................ 25,096
CHARGE FOR THE YEAR....................................... 16,074
------
AT 30 NOVEMBER 1997......................................... 41,170
------
NET BOOK VALUE
AT 30 NOVEMBER 1997......................................... 44,628
------
</TABLE>

6. DEBTORS

<TABLE>
<CAPTION>
1997
L
---------
<S> <C>
Trade debtors............................................... 836,084
Other debtors............................................... 345,316
Prepayments and accrued income.............................. 61,551
---------
1,242,951
=========
</TABLE>

F-29
<PAGE> 112
INDEPENDENT EXHIBITIONS LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE TWELVE MONTHS ENDED 30 NOVEMBER 1997

7. CREDITORS

Amounts falling due within one year:

<TABLE>
<CAPTION>
1997
L
---------
<S> <C>
Trade creditors........................................ 956,982
Corporation tax........................................ 59,998
Other taxes and social security........................ 42,046
Other creditors........................................ 2,106,166
Proposed dividend...................................... 117,531
Accruals and deferred income........................... 78,731
---------
3,361,454
=========
</TABLE>

8. PROVISIONS FOR LIABILITIES AND CHARGES

<TABLE>
<S> <C>
Pension provision........................................... 49,113
Less deferred tax........................................... (14,750)
---------
34,363
=========
A) DEFERRED TAXATION
At 1 December 1996................................ (7,450)
Movement in provision............................. (7,300)
---------
(14,750)
=========
</TABLE>

Full recognition has been made in respect of the company's deferred
taxation asset which consists of timing differences arising from:

<TABLE>
<CAPTION>
1997
L
---------
<S> <C>
Capital allowances................................ 1,300
Tax relief on pension provision................... (16,050)
---------
(14,750)
=========
</TABLE>

b) PENSION PROVISION

Employees of the company are eligible for membership of the Findlay
Publications Pension and Death Benefit Scheme. The scheme is a defined
benefit pension scheme, the assets of which are held in a separate
trustee administered fund. The total pension costs to all participating
companies are assessed on the advice of qualified actuaries using the
attained age method. The latest actuarial assessment of the scheme was
at 1 March 1996.

The significant actuarial assumptions used in the assessment were that
future investment return would be 9% per annum and future salary and
wage increases would average 8% per annum. At the date of the latest
actuarial assessment the actuarial value of the assets in the scheme was
sufficient to cover 117% of the benefits that had accrued to members,
after allowing for expected future increases in earnings.

The surplus funding of the scheme has enabled participating companies,
in accordance with the advice from the actuary, to make reduced
contributions which results in the creation of the pension provision in
compliance with Statement of Standard Accounting Practice No. 24.

F-30
<PAGE> 113
INDEPENDENT EXHIBITIONS LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE TWELVE MONTHS ENDED 30 NOVEMBER 1997

Following the sale of the company in December 1997, new pension
arrangements are to be put in place and the actuary has been requested
to calculate the value of members benefits to be transferred into a new
pension arrangement.

9. SHARE CAPITAL

<TABLE>
<CAPTION>
1997
L
-----
<S> <C>
Authorised
10,000 Ordinary shares of 10p each.......................... 1,000
-----
Allotted, called up and fully paid
1,052 Ordinary shares of 10p each........................... 105
-----
</TABLE>

10. RELATED PARTY TRANSACTIONS

At 30 November 1997, the following companies are deemed to be related
parties by virtue of the beneficial interest held in their share capital by the
director and/or key management of the company:

Findlay Publications Limited
Richard Copley-Smith Limited
Service Exhibitions Limited*
Equity Information Exchange Limited*

* The company acts as agent for these related parties.

During the twelve month period the following amounts were paid to related
parties for services detailed:

<TABLE>
<CAPTION>
L
-------
<S> <C> <C>
Findlay Publications Limited -Management 61,000
charges.............
-Circulation 28,000
charges.............
-Consultancy 316,720
charges.............
Richard Copley-Smith Limited -Consultancy 316,720
charges.............
</TABLE>

As at 30 November 1997, the following amounts were outstanding with related
parties:

<TABLE>
<S> <C> <C>
Creditors - Findlay Publications Limited........... 160,797
Creditors - Equity Information Exchange Limited.... 635,325
Creditors - Service Exhibitions Limited............ 623,682
</TABLE>

11. SUMMARY OF DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES.

a) DIVIDENDS

In accordance with UK GAAP the profit and loss account for the twelve
months to 30 November 1997 has been charged with the dividend proposed
for the period. Under US GAAP dividends are charged to retained reserves
only when declared.

b) DEFERRED TAXATION

Deferred corporation tax has, in accordance with UK GAAP, been provided
under the liability method to the extent that it is probable that a
liability will crystallise in the foreseeable future. Under US GAAP the
liability method is required by FAS109, however full provision is
required for all differences. In the financial statements for the twelve
months to 30 November 1997 this does not give rise to a difference as
full provision has been made for all timing differences.

F-31
<PAGE> 114
INDEPENDENT EXHIBITIONS LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE TWELVE MONTHS ENDED 30 NOVEMBER 1997

c) PENSION COSTS

Pension costs have been assessed in accordance with the advice of an
independent actuary and are based on the actuarial valuation of the
scheme as at 1 March 1996 and have been accounted for in accordance with
UK SSAP24. This surplus that has arisen in the scheme is being released
over the remaining service lives of employees.

Under US GAAP pension costs are accounted for in accordance with FAS87
which recommends the use of the projected unit credit method for
calculating the cost to an accounting period.

A full valuation and recalculation of the pension costs under US GAAP
has not been prepared. However, the difference in cost charged to the
profit and loss account for the twelve months to 30 November 1997 is not
considered to be material.

F-32
<PAGE> 115

SERVICE EXHIBITIONS LIMITED

DIRECTOR'S REPORT

FOR THE TWELVE MONTHS ENDED 30 NOVEMBER 1997

The directors present their report together with the financial statements
for the twelve months ended 30 November 1997.

PRINCIPAL ACTIVITY

The principal activity of the company continues to be the organisation of
exhibitions and conferences for those involved in the service management
profession.

BUSINESS REVIEW AND FUTURE DEVELOPMENTS

The business of the company has continued to develop the business in the
light of prevailing trading conditions and the position at 30 November 1997 is
reflected in the company's accounts for the twelve months then ended. The
present intention is to continue the development of the existing business of the
company.

In December 1997 the company's entire issued share capital was acquired by
Penton Media Limited. Penton Media Limited has confirmed that it will provide
such financial support as is necessary to allow the company to continue to trade
and meet its liabilities as they fall due.

RESULTS

The results for the twelve month period are set out in the Profit and Loss
Account on page F-36. The director recommends the payment of a final dividend of
L82,448.

DIRECTORS AND THEIR INTEREST IN THE COMPANY

The director who served during the period was RJ Findlay. His interest in
the share capital of the company was 450 L1 ordinary shares throughout the
period.

RJ Findlay resigned as a director on 12 December 1997.

The following were appointed directors on 12 December 1997.

DJ Ramella
TL Kemp
PL Vice
A Dedman

By Order of the Board

/s/ J. Wood
Company Secretary

F-33
<PAGE> 116

SERVICE EXHIBITIONS LIMITED

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

It is the purpose of this statement to distinguish the director's
responsibilities for the financial statement from those of the auditors, as
stated in their report.

The directors have prepared financial statements which give a true and fair
view of the company's state of affairs at 30 November 1997 and of its profit or
loss for the twelve month period. In preparing the financial statements the
directors have been required to:

- select suitable accounting policies and then apply them consistently;

- make judgements and estimates that are reasonable and prudent;

- state whether applicable accounting standards have been followed, subject
to any material departures disclosed and explained in the financial
statements;

- prepare the financial statements on the going concern basis unless it is
inappropriate to assume that the company will continue in business.

F-34
<PAGE> 117

REPORT OF THE AUDITORS
TO THE DIRECTORS OF
SERVICE EXHIBITIONS LIMITED

We have audited the financial statements on pages F-36 to F-40 which have
been prepared under the accounting policies set out on page F-38.

RESPECTIVE RESPONSIBILITIES OF DIRECTOR AND AUDITORS

As described on page F-34 the company's director is responsible for the
preparation of financial statements. It is our responsibility to form an
independent opinion, based on our audit, on those financial statements and to
report our opinion to you.

BASIS OF OPINION

UNQUALIFIED OPINION

In our opinion, the financial statements give a true and fair view of the
state of the company's affairs at 30 November 1997 and of its profit for the
twelve months then ended.

/s/ Horwath Clark Whitehill
Chartered Accountants
and Registered Auditors
June 10, 1998
London, England

F-35
<PAGE> 118

SERVICE EXHIBITIONS LIMITED

PROFIT AND LOSS ACCOUNT

FOR THE TWELVE MONTHS ENDED 30 NOVEMBER 1997

<TABLE>
<CAPTION>
1997
NOTES L
----- ---------
<S> <C> <C>
TURNOVER.................................................... 1(ii) 531,433
Cost of Sales............................................... 181,664
---------
GROSS PROFIT................................................ 349,769
Administrative expenses..................................... 296,106
---------
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION............... 2 53,663
Tax on profit on ordinary activities........................ 4 12,955
---------
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION................ 40,708
Dividends................................................... (82,448)
---------
RETAINED LOSS FOR THE PERIOD................................ (41,740)
Profit and loss account brought forward..................... 18,077
---------
PROFIT AND LOSS ACCOUNT CARRIED FORWARD..................... (23,663)
=========
</TABLE>

The profit and loss account contains all the gains and losses recognised in
the twelve months and is the only movement in shareholders' funds.

The notes to the financial statements form part of these financial statements.
F-36
<PAGE> 119

SERVICE EXHIBITIONS LIMITED

BALANCE SHEET

30 NOVEMBER 1997

<TABLE>
<CAPTION>
1997
NOTES L
----- -------
<S> <C> <C>
CURRENT ASSETS
Debtors..................................................... 5 667,971
CREDITORS: amounts falling due within one year.............. 6 690,634
-------
NET LIABILITIES............................................. (22,663)
=======
CAPITAL AND RESERVES
Called up share capital..................................... 7 1,000
Profit and loss account..................................... (23,663)
-------
SHAREHOLDERS' DEFICIT....................................... (22,663)
=======
</TABLE>

Approved by the Board
on June 10, 1998,
and signed on its behalf:

/s/ A. Dedman -- Director

The notes to the financial statements form part of these financial statements.
F-37
<PAGE> 120

SERVICE EXHIBITIONS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE TWELVE MONTHS ENDED 30 NOVEMBER 1997

1. ACCOUNTING POLICIES

(I) BASIS OF ACCOUNTING

The financial statements have been prepared under the historical cost
convention and in accordance with applicable accounting standards.

(II) TURNOVER

Turnover represents the amount invoiced to customers for attendance at
exhibitions and conferences, and is stated net of value added tax.

(III) DEFERRED TAXATION

Deferred taxation is accounted for using the liability method on all
material timing differences to the extent that it is probable that liabilities
or assets will crystallise.

<TABLE>
<CAPTION>
1997
L
------
<S> <C>
2. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
This is stated after charging:
Auditors' remuneration...................................... 2,500
------

3. STAFF COSTS
Wages and salaries.......................................... 45,070
Social security costs....................................... 4,380
------
49,450
======
</TABLE>

<TABLE>
<CAPTION>
NO.
------
<S> <C>
The average number of employees during the year was......... 3
------
</TABLE>

F-38
<PAGE> 121
SERVICE EXHIBITIONS LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE TWELVE MONTHS ENDED 30 NOVEMBER 1997

<TABLE>
<CAPTION>
1997
L
------
<S> <C>
4. TAX ON PROFIT ON ORDINARY ACTIVITIES
Corporation tax based on profits for the year at 23.5%
(1996: 24%)............................................... 13,000
Over provision in respect of previous years................. (45)
------
12,955
======
</TABLE>

<TABLE>
<CAPTION>
1997
L
-------
<S> <C>
5. DEBTORS
Other debtors............................................... 663,295
Prepayments and accrued income.............................. 4,676
-------
667,971
=======

6. CREDITORS
Amounts falling due within one year:
Corporation tax............................................. 31,068
Other taxes and social security costs....................... 4,440
Other creditors............................................. 87,133
Proposed dividends.......................................... 82,448
Accruals and deferred income................................ 485,545
-------
690,634
=======

7. SHARE CAPITAL
Authorised
Ordinary shares of L1 each.................................. 1,000
-------
Allotted, called up and fully paid
Ordinary shares of L1 each.................................. 1,000
=======
</TABLE>

8. RELATED PARTY TRANSACTIONS

At 30 November 1997, the following companies are deemed to be related
parties by virtue of the beneficial interest held in their share capital by the
director and/or key management of the company:

Findlay Publications Investments Limited
Findlay Publications Limited
Richard Copley-Smith Limited
Independent Exhibitions Limited*
- ---------------
* Independent Exhibitions Limited acts as agent for the company.

F-39
<PAGE> 122
SERVICE EXHIBITIONS LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE TWELVE MONTHS ENDED 30 NOVEMBER 1997

During the year the following amounts were paid to related parties for
services detailed:

<TABLE>
<CAPTION>
L
-------
<S> <C>
Findlay Publications Limited -- Management charges..... 10,301
Findlay Publications Investments Limited -- Consultancy
charges............................................... 67,500
Richard Copley-Smith Limited -- Consultancy charges.... 67,500
As at 30 November 1997, the following amounts were
outstanding with related parties:
Debtors -- Independent Exhibitions Limited............. 623,682
</TABLE>

9. SUMMARY OF DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES

(A) DIVIDENDS

(B) DEFERRED TAXATION

Deferred corporation tax has in accordance with UK GAAP been provided
under the liability method to the extent that it is probably that a
liability will crystallise in the foreseeable future. Under US GAAP the
liability method is required by FAS109, however full provision is
required for all differences. In the financial statements for the twelve
months to 30 November 1997 this does not give rise to a difference as
full provision has been made for all timing differences.

F-40
<PAGE> 123

EQUITY INFORMATION EXCHANGE LIMITED

DIRECTORS' REPORT

FOR THE TWELVE MONTHS ENDED 30 NOVEMBER 1997

The directors have pleasure in presenting their report and the financial
statements for the twelve months ended 30 November 1997.

PRINCIPAL ACTIVITY

The principal activity of the company continues to be the organisation of
exhibitions.

BUSINESS REVIEW AND FUTURE DEVELOPMENTS

The directors have continued to develop the business in the light of
prevailing trading conditions and the position at 30 November 1997 is reflected
in the company's accounts for the year then ended. The present intention is to
continue the development of the existing business of the company.

In December 1997 the company's entire issued share capital was acquired by
Penton Media Limited. Penton Media Limited has confirmed that it will provide
such financial support as is necessary to allow the company to trade and to meet
its liabilities as they fall due.

RESULTS AND DIVIDENDS

The results for the twelve month period are set out in the profit and loss
account on page F-44. The directors recommend the payment of a dividend of
L153,295.

DIRECTORS AND THEIR INTERESTS IN THE COMPANY

The directors who served during the period and their interests in the share
capital of the Company were as follows:

<TABLE>
<CAPTION>
L1 ORDINARY SHARES
-----------------------------------
30 NOVEMBER 1997 30 NOVEMBER 1996
---------------- ----------------
<S> <C> <C>
RS Copley-Smith............................................. 222 222
RJ Findlay.................................................. 435 435
</TABLE>

RS Copley-Smith and RJ Findlay resigned as directors on 12 December 1997.

The following were appointed directors on 12 December 1997.

DJ Ramella
TL Kemp
PL Vice
A Dedman

By Order of the Board

/s/ J. Wood
Company Secretary

F-41
<PAGE> 124

EQUITY INFORMATION EXCHANGE LIMITED

STATEMENT OF DIRECTORS' RESPONSIBILITIES

It is the purpose of this statement to distinguish the directors'
responsibilities for the financial statements from those of the auditors, as
stated in their report.

The directors have prepared financial statements which give a true and fair
view of the company's state of affairs at 30 November 1997 and of its profit or
loss for the twelve month period. In preparing the financial statements the
directors have been required to:

- select suitable accounting policies and then apply them consistently;

- make judgements and estimates that are reasonable and prudent;

- state whether applicable accounting standards have been followed, subject
to any material departures disclosed and explained in the financial
statements;

- prepare the financial statements on the going concern basis unless it is
inappropriate to assume that the company will continue in business.

F-42
<PAGE> 125

REPORT OF THE AUDITORS

TO THE DIRECTORS OF
EQUITY INFORMATION EXCHANGE LIMITED

We have audited the financial statements for the twelve months ended 30
November 1997 on pages F-44 to F-49 which have been prepared under the
accounting policies set out on page F-46.

RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS

As described on page F-42 the company's directors are responsible for the
preparation of financial statements. It is our responsibility to form an
independent opinion, based on our audit, on those financial statements and to
report our opinion to you.

BASIS OF OPINION

We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the financial statements. It
also includes an assessment of the significant estimates and judgements made by
the directors in the preparation of the financial statements, and of whether the
accounting policies are appropriate to the company's circumstances, consistently
applied and adequately disclosed.

UNQUALIFIED OPINION

In our opinion, the financial statements give a true and fair view of the
state of the company's affairs at 30 November 1997 and of its profit for the
twelve months then ended.

/s/ Horwath Clark Whitehill
Chartered Accountants
and Registered Auditors

June 10, 1998
London, England

F-43
<PAGE> 126

EQUITY INFORMATION EXCHANGE LIMITED

PROFIT AND LOSS ACCOUNT

FOR THE TWELVE MONTHS ENDED 30 NOVEMBER 1997

<TABLE>
<CAPTION>
1997
NOTES L
----- ---------
<S> <C> <C>
TURNOVER.................................................... 1(ii) 2,159,136
Cost of Sales............................................... 854,272
---------
GROSS PROFIT................................................ 1,304,864
Administrative expenses..................................... 1,260,533
---------
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION............... 2 44,331
Tax on profit on ordinary activities........................ 4 901
---------
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION................ 43,430
Dividends................................................... (153,295)
---------
RETAINED PROFIT FOR THE PERIOD.............................. (109,865)
Profit and loss account brought forward..................... 239
---------
PROFIT AND LOSS ACCOUNT CARRIED FORWARD..................... (109,626)
=========
</TABLE>

The profit and loss account contains all the gains and losses recognised in
the twelve months and is the only movement in shareholders' funds.

The notes form part of these financial statements.
F-44
<PAGE> 127

EQUITY INFORMATION EXCHANGE LIMITED

BALANCE SHEET

30 NOVEMBER 1997

<TABLE>
<CAPTION>
1997
NOTES L
----- --------
<S> <C> <C>
CURRENT ASSETS
Debtors..................................................... 5 691,608
CREDITORS: amounts falling due within one year.............. 6 780,003
--------
NET CURRENT LIABILITIES..................................... (88,395)
PROVISIONS FOR LIABILITIES AND CHARGES...................... 7 19,581
--------
NET LIABILITIES............................................. (107,976)
========
CAPITAL AND RESERVES
Called up share capital..................................... 8 1,026
Share premium............................................... 624
Profit and loss account..................................... (109,626)
--------
SHAREHOLDERS' DEFICIT....................................... (107,976)
--------
</TABLE>

Approved by the Board on
June 10, 1998
and signed on its behalf:

/s/ A. Dedman - Director

The notes to the financial statements form part of these financial statements.
F-45
<PAGE> 128

EQUITY INFORMATION EXCHANGE LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE TWELVE MONTHS ENDED 30 NOVEMBER 1997

1. ACCOUNTING POLICIES

(I) BASIS OF ACCOUNTING

The financial statements have been prepared under the historical cost
convention and in accordance with applicable accounting standards.

(II) TURNOVER

Turnover represents the invoiced value of services supplied and is stated
net of value added tax. The turnover is attributable to one activity, the
principal activity of the company.

(III) DEFERRED TAXATION

Deferred taxation is accounted for using the liability method on all
material timing differences to the extent that it is probable that liabilities
or assets will crystallise.

(IV) PENSION COSTS

The costs of providing pensions for employees are charged in the profit and
loss account in accordance with the recommendations of qualified actuaries. Any
funding surpluses or deficits that may arise from time to time are amortised
over the average remaining working life of employees.

2. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION

<TABLE>
<CAPTION>
1997
L
-------
<S> <C>
This is stated after charging:
Auditors' remuneration...................................... 4,300
</TABLE>

3. STAFF COSTS

<TABLE>

<S> <C>
Wages and salaries.......................................... 195,803
Social security costs....................................... 17,277
Other pension costs......................................... --
-------
213,080
=======

NO.
The average number of employees in the year was............. 7
=======
</TABLE>

4. TAX ON PROFIT ON ORDINARY ACTIVITIES

<TABLE>
<CAPTION>
1997
L
-------
<S> <C>
Corporation tax based on profits for the year at 23.5%
(1996: 24%)............................................... 13,000
Overprovision in respect of previous years.................. (7,999)
Deferred taxation........................................... (4,100)
-------
901
=======
</TABLE>

F-46
<PAGE> 129
EQUITY INFORMATION EXCHANGE LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE TWELVE MONTHS ENDED 30 NOVEMBER 1997

5. DEBTORS

<TABLE>
<S> <C>
Other debtors............................................... 674,267
Prepayments and accrued income.............................. 17,341
-------
691,608
=======
</TABLE>

6. CREDITORS
Amounts falling due within one year:

<TABLE>
<S> <C>
Other creditors............................................. 263,880
Corporation tax............................................. 42,749
Other taxes and social security costs....................... 32,505
Proposed dividend........................................... 153,295
Accruals and deferred income................................ 287,574
-------
780,003
=======
</TABLE>

7. PROVISIONS FOR LIABILITIES AND CHARGES

<TABLE>
<S> <C>
Pension provision........................................... 29,081
Less deferred tax........................................... (9,500)
-------
19,581
-------

(a) DEFERRED TAXATION
At 1 December 1996.......................................... (5,400)
Movement in provision....................................... (4,100)
-------
At 30 November 1997......................................... (9,500)
=======
</TABLE>

Full recognition has been made in respect of the company's deferred taxation
asset which consists entirely of timing differences arising from the tax
relief on the pension provision.

(b) PENSION PROVISION

F-47
<PAGE> 130
EQUITY INFORMATION EXCHANGE LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE TWELVE MONTHS ENDED 30 NOVEMBER 1997

8. SHARE CAPITAL

<TABLE>
<CAPTION>
1997
L
-------
<S> <C>
Authorised
Ordinary shares of L1 each.................................. 100,000
-------
Allotted, called up and fully paid
Ordinary shares of L1 each................................ 1,026
=======
</TABLE>

9. RELATED PARTY TRANSACTIONS

The following companies are deemed to be related parties by virtue of the
beneficial interest held in their share capital by the director and/or key
management of the company:

Findlay Publications Investments Limited
Findlay Publications Limited
Richard Copley-Smith Limited
Service Exhibitions Limited
Independent Exhibitions Limited*

-----------------------
* Independent Exhibitions Limited acts as agent for the company.

During the twelve month period the following amounts were paid to related
parties for services detailed:

<TABLE>
<CAPTION>
L
-------
<S> <C>
Findlay Publications Limited -- Management charges........ 76,500
-- Circulation charges.... 21,370
Findlay Publications Investments Limited -- Consultancy
charges................................................ 233,187
Richard Copley-Smith Limited -- Consultancy charges....... 233,187

As at 30 November 1997, the following amounts were
outstanding with related parties:
Debtors -- Independent Exhibitions Limited................ 635,325
</TABLE>

10. SUMMARY OF DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES

a) DIVIDENDS

b) DEFERRED TAXATION

F-48
<PAGE> 131
EQUITY INFORMATION EXCHANGE LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE TWELVE MONTHS ENDED 30 NOVEMBER 1997

differences. In the financial statements for the twelve months to 30
November 1997 this does not give rise to a difference as full provision
has been made for all timing differences.

C) PENSION COSTS

Under US GAAP pension costs are accounted for in accordance with FAS87
which recommends the use of the projected unit credit method for
calculating the cost to an accounting period.

F-49
<PAGE> 132

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

NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION
NOT CONTAINED IN THIS PROSPECTUS, AND ANY INFORMATION OR REPRESENTATION NOT
CONTAINED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY PENTON OR
BY PITTWAY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES NOR DOES IT CONSTITUTE AN OFFER
TO ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER WOULD BE UNLAWFUL. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR THE STOCK DISTRIBUTION SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF PENTON SINCE THE DATE HEREOF.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary of Certain Information............. 3
Forward-Looking Statements................. 7
Recent Developments........................ 7
Introduction............................... 8
The Stock Distribution..................... 10
DM Publishing Combination Agreement........ 13
Risk Factors............................... 21
Capitalization............................. 25
Selected Historical Financial
Information.............................. 26
Unaudited Pro Forma Combined Financial
Information.............................. 27
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................... 32
Business................................... 40
Management................................. 57
Executive Compensation..................... 64
Certain Transactions....................... 72
Stock Ownership of Certain Beneficial
Owners and Executive Officers and
Directors................................ 73
Description of Capital Stock............... 76
Anti-Takeover Effects...................... 77
Limitations on Liability and
Indemnification of Officers and
Directors................................ 80
1999 Annual Stockholders Meeting........... 80
Legal Matters.............................. 80
Experts.................................... 81
Available Information...................... 81
Index to Financial Statements.............. F-1
</TABLE>

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

UNTIL AUGUST 29, 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN COMMON STOCK, WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.

- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
PENTON MEDIA, INC.

PENTON MEDIA, INC. LOGO
COMMON STOCK
DISTRIBUTED TO STOCKHOLDERS
OF PITTWAY CORPORATION
---------------------------

PROSPECTUS
---------------------------

AUGUST 4, 1998

- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 133

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Set forth below is an estimate (except for the Commission registration fee)
of the fees and expenses payable by the Registrant in connection with the
issuance and distribution in the Stock Distribution of Common Stock:

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee....... $ 21,226
NYSE Original Listing Fee................................. 150,000
Printing and engraving costs.............................. 170,000
Legal fees and expenses................................... 235,000
Accountants fees and expenses............................. 95,000
Blue Sky fees and expenses................................ 5,000
Investment Banking fees and expenses...................... 500,000
Insurance premium......................................... 200,000
Miscellaneous............................................. 23,774
----------
Total............................................. $1,400,000
==========
</TABLE>

- ---------------
* To be filed by amendment

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

ELIMINATION OF LIABILITY IN CERTAIN CIRCUMSTANCES

INDEMNIFICATION AND INSURANCE

Section 145 of the DGCL contains provisions permitting (and, in some
situations, requiring) Delaware corporations such as Penton to provide
indemnification to their officers and directors for losses and litigation
expense incurred in connection with, among other things, their service to the
corporation in those capacities. The Certificate of Incorporation contains
provisions requiring indemnification by Penton of its directors, officers, and
employees to the fullest extent permitted by law. Among other things, these
provisions provide that Penton is required to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
or investigative (including any action by or in the right of Penton) (a
"Proceeding") by reason of the fact that such person is or was a director,
officer, or employee of Penton, or is or was serving at the request of Penton as
a director, officer or employee of another corporation, partnership, joint
venture, trust, or other enterprise (including service with respect to any
employee benefit plan) against expenses (including attorneys' fees), judgments,
fines, ERISA excise taxes, penalties, and amounts paid in settlement actually
and reasonably incurred by such person in connection with such Proceeding to the
fullest extent permitted by the DGCL, as the same exists or may be amended (but,
in the case of any such amendment, only to the extent that such amendment
permits Penton to provide broader indemnification rights than such law permitted
Penton to provide prior to such amendment). These provisions also provide for
the advance payment of fees and expenses reasonably incurred by the director,
officer, or employee in defense of any such Proceeding, subject to reimbursement
by the director, officer, or employee if it is ultimately determined that such
director, officer, or employee is not entitled to be indemnified by Penton.
Penton anticipates that it will enter into agreements with its directors
providing contractually for indemnification consistent with the Certificate of
Incorporation

II-1
<PAGE> 134

and Bylaws. In addition, the Certificate of Incorporation authorizes Penton to
purchase insurance for its directors, officers, and employees insuring them
against certain risks as to which Penton may be unable lawfully to indemnify
them. Penton intends to obtain this insurance coverage for its directors,
officers and employees as well as insurance coverage to reimburse Penton for
potential costs of its corporate indemnification of directors, officers and
employees. In connection with any liabilities resulting from filing this
Registration Statement, Penton has agreed to indemnify Messrs. Donohue and
Meehan to the same extent as the Board members.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

On December 12, 1997, Penton Media Limited, a United Kingdom subsidiary of
the Registrant, acquired the outstanding stock of Independent Exhibitions
Limited and two affiliates under common control with it, all United Kingdom
corporations, from their stockholders for UK L16,505,637, UK L1,500,000
convertible loan note and UK L2,200,000 of contingent convertible loan notes.
The Registrant agreed that any or all of the principal of each of such notes
could be exchanged for Penton common stock (at its average market price during
the 30 trading days immediately following notice of exercise of the exchange
right) if at the time of exchange such common stock were listed and admitted to
trading on the New York Stock Exchange or on any other principal securities
exchange in the United States or were quoted in the over-the-counter market as
reported by NASDAQ. In agreeing to such exchange rights, the Registrant relied
upon the exemption from registration provided by Regulation S under the
Securities Act.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

II-2
<PAGE> 135

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- ------------------------------------------------------------
<C> <S>
21.1* Subsidiaries of Penton Media, Inc.
23.1** Consent of PricewaterhouseCoopers LLP with respect to the
Consolidated Financial Statements of Penton Media, Inc.
23.2** Consent of PricewaterhouseCoopers LLP with respect to the
Financial Statements of Donohue Meehan Publishing Company
23.3** Consent of Horwath Clark Whitehill with respect to the
Financial Statements of Independent Exhibitions Limited,
Service Exhibitions Limited and Equity Information Exchange
Limited
23.4** Consent of Jones, Day, Reavis & Pogue (included in Exhibit
5.1)
24.1* Powers of Attorney
27.1*** Financial Data Schedule
99.1* Consent of William C. Donohue to be a Director of Penton
Media, Inc.
99.2* Consent of John J. Meehan to be a Director of Penton Media,
Inc.
</TABLE>

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

* Filed on June 15, 1998.

** Filed herewith.

*** Filed on July 23, 1998

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 14 above or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

II-3
<PAGE> 136

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Cleveland, Ohio, on the 3rd day of August, 1998.

PENTON MEDIA, INC.

By /s/ PRESTON L. VICE
---------------------------------------

Preston L. Vice, Senior Vice President

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment to the Registration Statement has been signed on August 3, 1998
by the following persons in the capacities indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>

* Chief Executive Officer and Director
- -------------------------------------------- (Principal Executive Officer)
Thomas L. Kemp

/s/ JOSEPH NECASTRO Chief Financial Officer
- -------------------------------------------- (Principal Financial Officer)
Joseph NeCastro

* Vice President/Controller
- -------------------------------------------- (Controller or Principal Accounting Officer)
Charles T. Griesemer

* Director
- --------------------------------------------
Anthony Downs

* Director
- --------------------------------------------
William J. Friend

* Director
- --------------------------------------------
Joan W. Harris

* Director
- --------------------------------------------
King Harris

* Director
- --------------------------------------------
Daniel J. Ramella

* Director
- --------------------------------------------
Edward J. Schwartz

Director
- --------------------------------------------
Don E. Schultz

* Director
- --------------------------------------------
Richard B. Swank
</TABLE>

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

* Preston L. Vice, by signing his name hereto, does hereby execute this
Amendment to the Registration Statement on behalf of the directors and
officers of the Registrant indicated above by asterisks, pursuant to powers of
attorney duly executed by such directors and officers.

By: /s/ PRESTON L. VICE

---------------------------------------
Preston L. Vice
Attorney-in-Fact

II-4
<PAGE> 137

PENTON MEDIA, INC.

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

<TABLE>
<CAPTION>
ADDITIONS
---------------------
BALANCE AT CHARGE TO DEDUCTIONS BALANCE
BEGINNING COSTS AND FROM AT END OF
OF PERIOD EXPENSES OTHER(A) RESERVE(B) PERIOD
---------- --------- -------- ---------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>

1997
Allowance for doubtful accounts........ $2,069 $662 $344 $669 $2,406
1996
Allowance for doubtful accounts........ $1,997 $948 $876 $2,069
1995
Allowance for doubtful accounts........ $1,993 $870 $866 $1,997
</TABLE>

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

(A) Valuation allowance of company acquired during the year.

(B) Write-off of accounts considered uncollectible, net of recoveries.

S-1
<PAGE> 138

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- ------------------------------------------------------------
<C> <S>
2.1* Combination Agreement, dated May 21, 1998, by and among
Penton Media, Inc., DM Acquisition Corp., Pittway
Corporation, Donohue Meehan Publishing Company, William C.
Donohue, and John J. Meehan. The Registrant agrees to
furnish supplementally a copy of any omitted schedule to the
Commission upon request.
3.1* Restated Certificate of Incorporation
3.2* Amended and Restated Bylaws
5.1** Opinion of Jones, Day, Reavis & Pogue regarding legality
8.1* Internal Revenue Service Revenue Ruling
10.1* Credit Facility dated December 12, 1997, between Penton
Media Ltd. and Bank of America
10.2(a)* Employment Agreement, dated July 25, 1996, between the
Registrant and Thomas L. Kemp
10.2(b)*** Waiver and Release, dated July 21, 1998, between the
Registrant and Thomas L. Kemp
10.3* Employment Agreement, dated January 1, 1997, between the
Registrant and Daniel J. Ramella
10.4* Form of Employment Agreement between the Registrant and
William C. Donohue
10.5* Form of Employment Agreement between the Registrant and John
J. Meehan
10.6*** Penton Media, Inc. 1998 Equity and Performance Incentive
Plan
10.7*** Penton Media, Inc. 1998 Director Stock Option Plan
10.8*** Penton Media, Inc. Retirement Savings Plan
10.9*** Penton Media, Inc. Retirement Plan
10.10*** Penton Media, Inc. Supplemental Executive Retirement Plan
21.1* Subsidiaries of Penton Media, Inc.
23.1** Consent of PricewaterhouseCoopers LLP with respect to the
Consolidated Financial Statements of Penton Media, Inc.
23.2** Consent of PricewaterhouseCoopers LLP with respect to the
Consolidated Financial Statements of Donohue Meehan
Publishing Company
23.3** Consent of Horwath Clark Whitehill with respect to the
Financial Statements of Independent Exhibitions Limited,
Service Exhibitions Limited and Equity Information Exchange
Limited
23.4** Consent of Jones, Day, Reavis & Pogue (included in Exhibit
5.1)
24.1* Powers of Attorney
27.1*** Financial Data Schedule
99.1* Consent of William C. Donohue to be a Director of Penton
Media, Inc.
99.2* Consent of John J. Meehan to be a Director of Penton Media,
Inc.
</TABLE>

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

* Filed on June 15, 1998.

** Filed herewith.

*** Filed on July 23, 1998.

<PAGE> 1
Exhibit 5.1

JONES, DAY, REAVIS & POGUE
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114

August 3, 1998

Penton Media, Inc.
1100 Superior Avenue
Cleveland, Ohio 44114

Re: Registration of 21,240,075 shares of Common Stock, par value
$0.01 per share, of Penton Media, Inc. owned by Pittway
Corporation
------------------------------------------------------------

Ladies and Gentlemen:

We have acted as counsel for Penton Media, Inc., a Delaware corporation
(the "Company"), in connection with the Combination Agreement, dated as of May
21, 1998 (the "Combination Agreement"), by and among the Company, D-M
Acquisition Corp., an Illinois corporation, Pittway Corporation, a Delaware
corporation ("Pittway"), Donohue Meehan Publishing Company, an Illinois
corporation, William C. Donohue, and John J. Meehan, which provides, among other
things, for the distribution of the shares of common stock, par value $0.01 per
share ("Common Stock"), of the Company owned by Pittway to the holders of
Pittway's outstanding capital stock (the "Spinoff"). In connection with the
Spinoff, the Company has filed with the Securities and Exchange Commission,
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), a
Registration Statement on Form S-1 (the "Registration Statement") relating to
shares of Common Stock to be issued in connection with the Spinoff. Currently,
Pittway owns 21,200,000 shares of Common Stock (the "Current Common Stock"),
and, prior to the Spinoff, Penton will distribute an additional 40,075 shares
of Common stock to Pittway (the "Additional Common Stock").

We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion, and based thereon we are of the
opinion that (i) the Current Common Stock has been duly authorized and is
validly issued, fully paid, and nonassessable and (ii) when issued pursuant to
a duly adopted resolution of the Board of Directors of the Company, the
Additional Common Stock will be duly authorized, validly issued, fully paid,
and nonassessable.

We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement filed by you to effect the registration of Common Stock
under the Securities Act and to the reference to us under the caption "Legal
Matters" in the prospectus constituting a part of such Registration Statement.

Very truly yours,

/s/ JONES, DAY, REAVIS & POGUE

<PAGE> 1
Exhibit 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement No. 333-56877 on Form S-1 of our report dated June 8,
1998, relating to the financial statements of Penton Media, Inc., which appears
in such Prospectus. We also consent to the application of such report to the
Financial Statement Schedule for the three years ended December 31, 1997 listed
under Item 16(b) of this Registration Statement No. 333-56877 when such schedule
is read in conjunction with the financial statements referred to in our report.
The audits referred to in such report also included this schedule. We also
consent to the reference to us under the heading "Experts" in such Prospectus.

/s/ PricewaterhouseCoopers
Cleveland, Ohio
August 3, 1998

<PAGE> 1

Exhibit 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement No. 333-56877 on Form S-1 of our report dated April 3,
1998, except for Note 7 which is dated as of May 21, 1998, relating to the
financial statements of Donohue Meehan Publishing Company, which appears in such
Prospectus. We also consent to the reference to us under the heading "Experts"
in such Prospectus.

/s/ PricewaterhouseCoopers
Cleveland, Ohio
August 3, 1998

<PAGE> 1

Exhibit 23.3

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement No. 333-56877 on Form S-1 of our reports dated June 10,
1998, relating to the financial statements for the twelve months ending 30th
November 1997 of Independent Exhibitions Limited, Service Exhibitions Limited
and Equity Information Exchange Limited, respectively, which appears in such
Prospectus. We also consent to the reference to us under the heading "Experts"
in such Prospectus.

/s/ Horwath Clark Whitehill
London, England
August 3, 1998