AMERICAN LAWYER MEDIA INC - 10-K Annual Report

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

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FORM 10-K

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

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

COMMISSION FILE NUMBER: 333-50117

AMERICAN LAWYER MEDIA, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 13-3980414
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

345 PARK AVENUE SOUTH 10010
NEW YORK, NEW YORK (Zip Code)
(Address of principal executive offices)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 779-9200

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

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

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

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

Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date:

As of March 28, 2002, 100 shares of Common Stock, par value $.01 per share,
were outstanding, all of which were held by American Lawyer Media Holdings, Inc.

DOCUMENTS INCORPORATED BY REFERENCE

SEE EXHIBIT INDEX
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PART I

ITEM 1. BUSINESS

Unless the context otherwise requires: (i) "we," "us," "our" or "ALM"
refers to American Lawyer Media, Inc. and its subsidiaries; (ii) "Holdings'
refers to American Lawyer Media Holdings, Inc., which is our parent, and to
Holdings' predecessor, Cranberry Partners, LLC. References herein to our
estimated circulation include total paid and free circulation for all of our
periodicals. References herein to readership include estimated circulation plus
combined pass-along readership unadjusted for any overlap that exists among
readers of our various publications.

This report contains forward-looking statements. Such statements are based
upon the beliefs and assumptions of, and on information available to, our
management at the time such statements are made. The following are or may
constitute forward-looking statements within the meaning of The Private
Securities Litigation Reform Act of 1995: (i) statements preceded by, followed
by or that include the words "may," "will," "could," "should," "believe,"
"expect," "future," "potential," "anticipate," "intend," "plan," "estimate" or
"continue" or the negative or other variations thereof and (ii) statements
regarding matters that are not historical facts. Such forward-looking statements
are subject to various risks and uncertainties, including, without limitation,
(i) general economic conditions and developments in the legal services industry
or the publishing industry, (ii) product demand and pricing, (iii) the success
of new initiatives, (iv) increased competition with respect to services we
provide and for advertising and subscription revenue, and (v) sufficiency of
cash flow to fund our operations.

COMPANY OVERVIEW

We publish 24 periodicals, including several leading national periodicals
and regional publications serving five of the six largest state legal markets.
Our nationally-recognized periodicals include The American Lawyer, a monthly
magazine containing articles and features targeted to attorneys practicing in
large law firms, and The National Law Journal, the nation's largest selling
legal newspaper, which covers the law, lawyers and litigation. Our regional
publications are led by the New York Law Journal, a daily publication with one
of the largest paid circulations of regional legal newspapers in the United
States. In addition, we publish six other daily newspapers serving Atlanta,
Philadelphia, Northern California, Miami, Fort Lauderdale and Palm Beach, as
well as seven weekly regional newspapers serving New Jersey, Massachusetts,
Delaware, Texas, Washington, D.C., Connecticut and Pennsylvania.

In addition to the periodicals referred to above, we publish Corporate
Counsel, a leading magazine for corporate in-house attorneys, Law Technology
News and AmLaw Tech, two leading legal technology magazines, as well as IP
Worldwide, a leading specialty magazine focusing on intellectual property.

We also create and package information for attorneys and business
professionals. This business includes a portfolio of publications covering a
variety of specialized legal interests and practice areas, including 29
newsletters and over 150 treatises on topics of national and regional interest.
We also publish various directories used by legal professionals.

Under our LegalTech trademark, we are a leading producer of trade shows and
conferences relating to law practice technology. In addition, we organize and
sponsor numerous professional seminars that cover issues of current legal
interest.

Our litigation services division is dedicated to providing the legal
community with high-quality, timely news and information about litigation. It
includes The National Law Journal, the National Verdict Research and Report
System, which publishes a series of weekly and monthly verdict and settlement
newsletters, and the NLJ Expert Witness and Consultants Network, a group of nine
regional expert witness directories. The division also operates three web sites,
VerdictSearch.com, NLJExperts.com and NLJ.com, which provide users with access
to a vast database of verdict and settlement reports, the nation's premier
online expert witness directory and a variety of news and information resources.
The network's telephone research service fields more than 20,000 requests
annually for verdict, settlement and expert witness research.

1

We derive our revenues principally from advertising and subscriptions, with
additional revenues generated from ancillary products and services, which
include our newsletters, books, LegalTech and seminars division. For the twelve
months ended December 31, 2001, approximately 58% of our revenues were from
advertising, 16% were from subscriptions and 26% were from ancillary products
and services.

PRODUCT LINES

Periodicals. Our newspaper and magazine business publishes 24 national,
regional and local periodicals that serve legal and business professionals. Our
periodicals have a combined circulation of approximately 300,000. The
subscription renewal rate of our periodicals averages approximately 80%.

Newspapers. Our newspapers provide news, features, analysis and commentary
about the world of law and advocacy. Feature articles and stories covering the
local, state and federal courts and law firms are supplemented by reports and
analyses of cutting-edge legal issues. We are committed to providing high
quality and balanced coverage of our local markets. Most of our newspapers serve
as the newspaper of record for their respective legal markets. Lawyers look to
the newspapers for reports on local court rulings and opinions, as well as
information regarding local court dockets.

As of December 31, 2001, we published fifteen daily and weekly newspapers
including The National Law Journal, the leading national litigation newspaper in
the United States, and the New York Law Journal, which has one of the largest
paid circulations of any regional legal newspapers in the United States. In the
aggregate, our newspapers serve eleven state markets, including New York, New
Jersey, Pennsylvania, Delaware, Georgia, Florida, Texas, California,
Connecticut, and Massachusetts, and the District of Columbia covering
approximately 50% of all active attorneys in the United States. Each of our
regional newspapers has a significant presence in its respective market. Our
regional newspapers also publish a wide range of supplements on various practice
specialties. In addition, several of our regional newspapers publish local
editions of their papers.

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The following table sets forth information regarding our newspapers:

NEWSPAPERS

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(1) References in the table above to our total circulation include total paid
and free circulation.

(2) References in the table above to our estimated total readership include
total circulation plus combined pass-along readership unadjusted for any
overlap that exists among readers of our various publications.

(3) AmLaw Tech is distributed for free to subscribers of The American Lawyer.

(4) These magazines are distributed primarily free of charge. For these
publications, we assume only two readers per copy.

Newsletters. Our newsletter division publishes 29 monthly newsletters that
cover specialized legal practice areas. Circulation for our newsletters ranges
from approximately 125 to 1,250, with an average circulation of over 550. The
total number of paid subscribers for all newsletters was approximately 15,000 as
of December 31, 2001. The following table sets forth a list of our newsletters
as of December 31, 2001:

NEWSLETTERS

Accounting for Law Firms
The Bankruptcy Strategist
Business Crimes Bulletin
Commercial Leasing Law & Strategy
The Corporate Counselor
Employment Law Strategist
Entertainment Law & Finance
Environmental Compliance and Litigation
Strategy
Equipment Leasing
E-Commerce Law & Strategy
e Securities
Healthcare Fraud and Abuse
Insurance Coverage Law Bulletin
The Intellectual Property Law Strategist
The Internet Newsletter
IP Case Law Reporter
Law Firm Partnership & Benefits Report
LJN's Franchising Business & Law Alert
Legal Tech
Marketing for Lawyers
The Matrimonial Strategist
Medical Malpractice Law & Strategy
New York Employment Law & Practice
New York Family Law Monthly
New York Real Estate Law Reporter
Patent Strategy & Management
Pharmaceutical & Medical Device Laws
Bulletin
Product Liability Law & Strategy
Start-Up & Emerging Companies
Strategist

Books. We currently publish over 150 books on a broad array of legal
topics. These books generally focus on practical legal subjects that arise in
the daily professional lives of lawyers. Most of our treatises are updated once
or twice per year with inserts to keep the material current. We focus on
publishing treatises that cover particularly dynamic areas of law that lend
themselves to frequent supplementation.

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In 2001, we also began publishing softcover and hardcover trade books. As
of May 2002, there will be nine titles in this new line. These books focus on
general legal subjects and contain practical guidance for attorneys, business
professionals and business students that does not need to be updated regularly.
These books are distributed through us as well as through traditional
bookstores.

We usually develop the concept for a new book and then solicit an author to
write the text. However, in certain cases, we have received unsolicited
manuscripts which we have ultimately published. Authors who have written books
for us include prominent attorneys and judges such as Martin Lipton, Judge Jed
Rakoff, James Freund, Henry Miller and James Goodale. The following sets forth
our current offering of books:

BOOKS

State and Local Subjects

2000 Dallas County Bench Book (Texas)
2000 Harris County Bench Book (Texas)
2001-2002 Texas Criminal Codes and
Rules, Annotated
2002 Pennsylvania Tax Handbook
Better than Prison Food (Texas)
Duty to Defend: An Insurance Guide
(Texas)
Marketing and Maintaining a Family Law Mediation Practice (Texas)
Georgia Bench Book
Encyclopedia of New Jersey Causes of
Action
New Jersey Brownfields Law
New Jersey Business Litigation
New Jersey Employment Law
New Jersey Federal Civil Procedure
New Jersey Insurance Law
New Jersey Product Liability Law
New Jersey Foreclosure Law & Practice
New Jersey Forms of Civil Pleading
Employment Law for New Jersey
Businesses
2002 New Jersey Tax Handbook
Connecticut Labor & Employment Law,
2(nd) Edition
New York County Bench Book 2000
Insurance Bad Faith in Pennsylvania
Pennsylvania Court Rules
Pennsylvania District and County Reports
2001 Allegheny County Court Rules
2001 Bucks County Court Rules
2001 Chester County Court Rules
2001 Delaware County Court Rules
2001 Montgomery County Court Rules
2002 Orphan's Court Rules
2001 Philadelphia County Court Rules
2002 Westmoreland County Court Rules
2001 Lancaster/Berks Counties Court
Rules
Pennsylvania Legal Research Handbook
Paralegal Research in Pennsylvania
Res Ispa Jocular (California)

National Subjects

A Practical Guide to Equal Employment
Opportunity
A Practical Guide to the Occupational
Safety and Health Act
Acquisitions Under the Hart-Scott-Rodino
Antitrust Improvements Act
All About Cable
Alternative Dispute Resolution in the
Work Place
Anatomy of a Merger: Strategies and
Techniques for Negotiating Corporate Acquisitions
Antitrust Basics
Antitrust: An Economic Approach
Arbitration: Essential Concepts
Biz Dev 3.0: Changing Business As We
Know It
Business Immigration Law: Strategies for
Employing Foreign National
Business Separation Transactions: Spin-
Offs, Subsidiary IPOs and Tracking Stock
Changing the Situs of a Trust
Class Actions: The Law of 50 States
Communications Law and Practice
Computer Law: Drafting and Negotiating
Forms and Agreements
Consumer Financial Services
Corporate Internal Investigations
Corporate Privileges and Confidential
Information
Corporate Sentencing Guidelines:
Compliance and Mitigation

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Cyber Law: Intellectual Property in the
Digital Millennium
Directors and Officers Liability: Preven-
tion, Insurance & Indemnification
Divorce, Separation and the Distribution
of Property
Doing Business on the Internet: Forms
and Analysis
Due Diligence in Business Transactions
E-Commerce Financial Products and
Services
Employee Benefits Law: ERISA and
Beyond
Environmental Enforcement: Civil and
Criminal
Environmental Law Lexicon
Environmental Regulation of Real
Property
Estate Planning
Executive Compensation
Executive Stock Options and Stock
Appreciation Rights
Federal Bank Holding Company Law
Federal Taxation of Intellectual Property
Transfers
Federal Tax Litigation
Federal Taxation of Real Estate
Federal Taxation of S Corporations
Federal Trade Commission: Law, Practice
and Procedure
Ferrara on Insider Trading and The Wall
Financial Institutions: Acquisitions and
Alliances
Franchising: Realities and Remedies
Franchising: Realities and Remedies
Forms Volume
Full Disclosure: The New Lawyers
Must-Read Career Guide
Fund Governance: Legal Duties of
Investment Company Directors
Game, Set, Match: Winning the
Negotiations Game
Going Private
Going Public in Good Times and Bad: A
Legal and Business Guide
Grand Jury Practice
Ground Leases and Land Acquisition
Contracts
Health Care Fraud: Enforcement and
Compliance
Healthcare Care Benefits Law
Hospital Liability
"I'd Rather Do It Myself": How to Set
Up Your Own Law Firm
Inside/Outside: How Businesses Buy Legal
Services
Insurance Coverage Disputes
Intellectual Property Law: Commercial,
Creative and Industrial Property
Intellectual Property Law: Damages and
Remedies
Intellectual Property Licensing: Forms and
Analysis
Internet and Online Law
Law Firm Accounting and Financial
Management
Law Firm Partnership Agreements
Lawyering: A Realistic Approach to Legal
Practice
Legal Research and Law Library
Management
Lender Liability and Banking Litigation
Licensing of Intellectual Property
Limited Liability Companies and Limited
Liability Partnerships
Marketing the Law Firm: Business
Development Techniques
Maximizing Law Firm Profitability:
Hiring, Training and Developing
Productive Lawyers
Merit Systems Protection Board: Rights
and Remedies
Modern Visual Evidence
Multimedia Law: Forms and Analysis
Negotiated Acquisitions of Companies,
Subsidiaries and Divisions
Negotiating and Drafting Office Leases
On Trial: Lessons from a Lifetime in the
Courtroom
Partnership and Joint Venture Agreements
Private Equity Funds: Business Structure
& Operations
Private Real Estate Syndications
Product Liability
Product Liability: Winning Strategies and
Techniques
Products Liability: Recreation and Sports
Equipment
Public Companies
Raoul Felder's Encyclopedia of
Matrimonial Clauses
Real Estate Financing
Reorganizations under Chapter 11 of the
Bankruptcy Code
Representing High-Tech Companies

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RICO: Civil and Criminal, Law and
Strategy
Savings Institutions: Mergers, Acquisitions
and Conversions
Securities Practice and Electronic
Technology
Securities Regulation: Liabilities and
Remedies
Securitizations: Legal and Regulatory
Issues
Sex Discrimination and Sexual
Harassment in the Work Place
Shareholder Derivative Litigation:
Besieging the Board
Shopping Center and Store Leases
Start-Up and Emerging Companies:
Planning, Financing and Operating the
Successful Business
State Antitrust Law
Structured Settlements and Periodic
Payment Judgements
Takeovers and Freezeouts
Tax Aspects of Divorce and Separation
The Contingent Workforce: Business and
Legal Strategies
The Law and Practice of Secured Transac-
tions: Working with Article 9
The Preparation and Trial of Medical
Malpractice Cases
Trade Secrets
Travel Law
Use of Statistics in Equal Employment
Opportunity Litigation
White Collar Crime: Business and
Regulatory Offenses
Winning Attorney's Fees from the U.S.
Government

Trade Shows and Seminars. Under the LegalTech tradename, we produce
conferences and exhibitions relating to law practice technology in New York, Los
Angeles, Chicago, New Orleans, San Francisco, Toronto, Canada, Birmingham,
England and London, England as well as an accountancy show in Birmingham,
England. The conferences are generally two-day events that include vendor
exhibits, a Continuing Legal Education ("CLE") conference program, and a variety
of workshops and focus sessions. Attendees typically include attorneys in
private practice, corporate counsel, law firm administrators, managing partners,
litigation support and information technology personnel, while exhibitors
include a variety of software, hardware, publishing and other technology product
related companies. We conduct a number of seminars for lawyers and other
professionals in related fields. Our seminars complement our other products and
services both by serving as powerful marketing vehicles for our existing books
and newsletters, and by generating ideas for new seminars, books and
newsletters. Seminars also introduce us to lawyers who may subsequently write
articles or books for us. The following table sets forth our seminars and trade
shows held in 2001:

SEMINARS

Civil Litigation -- A View From the
Bench and the Bar
Counseling Start-up and Emerging
Companies
Distribution and Dealer Termination
Failure to Diagnose Fetal Distress
General Counsel Conference
Joint Ventures and Strategic Alliances
Negotiating Contracts in the
Entertainment Industry
Negotiating Corporate Acquisitions
Negotiating the Modern Lease
Trial of an Obstetrical Malpractice Case
Representing Bio-Tech Clients
Representing High-Tech Companies

TRADE SHOWS

LegalTech New York (January and
September)
LegalTech Los Angeles
LegalTech Chicago
LegalTech Toronto
LegalTech London
LegalTech Southeast (New Orleans)
LegalTech San Francisco
Solicitors (Birmingham, England)
National Accountancy Show
(Birmingham, England)
LegalOpen

Litigation Services. The litigation services division is dedicated to
providing the legal community with high-quality, timely news and information
about litigation. The division includes The National Law Journal,

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the nation's premier weekly legal newspaper, the National Verdict Research and
Report System, which publishes a series of weekly and monthly verdict and
settlement newsletters, and the NLJ Expert Witness and Consultants Network, a
group of nine regional expert witness directories. The division also operates
three web sites, VerdictSearch.com, NLJExperts.com and NLJ.com, which provide
users with access to a vast database of verdict and settlement reports, the
nation's premier online expert witness directory and a variety of news and
information resources. The network's telephone research service fields more than
20,000 requests annually for verdict, settlement and expert witness research.
Among the division's publications, with varying frequencies and circulations
ranging from 500 to 30,000, are the following:

The National Law Journal
National Jury Verdict Reporter
New York Jury Verdict Reporter
New York Judicial Review of Damages
New York Medical Malpractice
New York Citator Series (Tort, Civil Motions, Matrimonial,
Criminal)
Texas Blue Sheet
Texas Medical Malpractice
California Jury Verdicts Weekly
O'Brien's Evaluator
Verdicts on Disk
Legal Expert Pages
California Jury Verdicts Weekly Semi-Annual Index
NLJ Directory of Expert Witnesses and Consultants (nine
regional editions)

PRINTING AND DISTRIBUTION

Layouts for our publications are prepared in-house, while our printing and
distribution activities are all outsourced.

COMPETITION

We compete for advertising and subscription revenues with publishers of
special-interest legal newspapers and magazines with similar editorial content.
However, in most of our markets, our newspaper is the only newspaper focused on
serving the legal community. We also compete for advertising revenues with other
national legal publications, as well as general-interest magazines and other
forms of media, including broadcast and cable television, radio, direct
marketing and electronic media. Factors that may affect competition for
advertisers include effective costs of such advertising compared to other forms
of media, and the size and characteristics of the readership of our
publications. We also face significant competition from other legal publishers
and legal service providers in all media.

INTELLECTUAL PROPERTY

We own a number of registered and unregistered trademarks for use in
connection with our business, including trademarks in the titles of our major
periodicals such as The American Lawyer, Corporate Counsel, The National Law
Journal and New York Law Journal. Provided that trademarks remain in continuous
use in connection with similar goods or services, their term can be perpetual,
subject, with respect to registered trademarks, to the timely renewal of such
registrations with the United States Patent and Trademark Office.

We approach copyright ownership with respect to our publications in the
same manner as is generally customary within the publishing industry.
Consequently, we own the copyright to all of our newspapers, magazines and
newsletters, as compilations, and also own the copyright to most of our books.
With respect to the specific articles in our publications, we generally obtain
the assignment of all rights, title and interest in original materials created
by our full-time journalists and editors as well as by paid and unpaid
contributors. For articles authored by outside contributors, we obtain either
all rights, title and interest in the article or the exclusive "first-time
publication" and non-exclusive republication rights. Judicial opinions, court
schedules

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and docketing information are provided to us directly by the courts, on a
non-exclusive basis, and are public information.

We license the content of certain of our publications and forms to third
parties, including West Group and Lexis/Nexis, on a non-exclusive basis, for
republication and dissemination on electronic databases marketed by the
licensees. The current licenses expire in February 2004 and March 2003,
respectively, and automatically renew, subject to either party's right to
terminate at the end of each subsequent term. In addition, we license our
content to Law.com, LLC (formerly Law.com, Inc.) ("Law.com"), an affiliate of
ours. We have entered into a five-year license agreement with Law.com which
terminates in 2004.

Some of our products, such as the Daily Decision Service and PICS, which
offer subscribers faxed copies on request of both published and unpublished
state and federal court opinions for New Jersey and Pennsylvania, respectively,
utilize the extensive databases of court decisions compiled by us. We also have
extensive subscriber and other customer databases which we believe would be
extremely difficult to replicate. We attempt to protect these databases and
lists as trade secrets by restricting access thereto and/or by the use of
non-disclosure agreements. There can be no assurance, however, that the means
taken to protect the confidentiality of these items will be sufficient, or that
others will not independently develop similar databases and customer lists.

EMPLOYEES AND LABOR RELATIONS

As of December 31, 2001, we employed approximately 783 full-time and
part-time employees, 15 of whom are subject to a single collective bargaining
agreement. Subject to the following, we believe that our relations with our
employees are satisfactory.

On May 21, 2001, based on the results of a secret-ballot election held on
May 11, 2001, the National Labor Relations Board certified New York
Typographical Union No. 6, CWA Local 14156, AFL-CIO (the "Union") as the
exclusive representative of a unit of certain of our editorial and advertising
production department employees at the New York Law Journal. We opposed the
certification on the ground that the unit for which it was issued was
inappropriate for purposes of collective bargaining, and we refused to recognize
and bargain with the Union in that unit, resulting in the filing of unfair labor
practice charges. On November 2, 2001, the NLRB reaffirmed the initial unit
determination and ordered us to bargain with the Union. Thereafter, in
settlement of the Union's refusal to bargain charge and other alleged unfair
labor practices, we and the Union agreed to certain modifications to the unit
and the NLRB subsequently amended the certification based on the parties'
agreement. Negotiations have started over the terms of a collective bargaining
agreement and are continuing. It cannot be said at this time whether or when we
and the Union will reach an agreement or what the terms of any agreement might
be.

SIGNIFICANT TRANSACTIONS

On January 31, 2001, we consummated the acquisition of substantially all of
the assets and certain of the liabilities of Haslam Publications ("Haslam"), the
leading publisher of jury verdict and settlement research data in California.

RECENT DEVELOPMENTS

Effective February 22, 2002, our revolving credit facility was amended to
modify the covenants relating to the total leverage ratio, interest coverage
ratio and fixed charge ratio for the remainder of the term of the line of
credit. In addition, the revolving credit facility was also amended to allow us
to receive equity securities in non-related entities as payment for advertising
services provided by us, within certain limits in any one fiscal year.

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ITEM 2. PROPERTIES

We operate from various locations throughout the United States. Our
corporate headquarters are based in New York. Information relating to our
corporate headquarters and other regional offices which are owned or leased is
set forth in the following table:

ITEM 3. LEGAL PROCEEDINGS

We are a party to various litigation matters incidental to the conduct of
our business. We do not believe that the outcome of any of the matters in which
we are currently involved will have a material adverse effect on our financial
condition or on the results of our operations.

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

None.

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MARKETS

We are a wholly-owned subsidiary of American Lawyer Media Holdings, Inc.
There is no public trading market for our common stock.

We have never paid any cash dividends on our common stock.

ITEM 6. SELECTED FINANCIAL DATA

In August 1997, U.S. Equity Partners, L.P. and its affiliates and certain
other investors controlled or managed by WP Management Partners, LLC, an
indirect wholly-owned merchant banking subsidiary of Cypress Capital Assets, LP,
an independent investment partnership (formerly a subsidiary of Wasserstein
Perella Group, Inc., a subsidiary of Dresdner Kleinwort Wasserstein Group, Inc.)
(the "Investors"), through Holdings, acquired substantially all of the assets
and assumed certain of the liabilities related to American Lawyer Media, L.P.
(the "ALM Acquisition"), and, in December 1997, acquired all of the issued and
outstanding capital stock of National Law Publishing Company, Inc. (the "NLP
Acquisition"). The ALM Acquisition and the NLP Acquisition (collectively, the
"Acquisitions") have been accounted for using the purchase method of accounting.
The results of operations of American Lawyer Media, L.P. have been included in
our financial statements since August 1, 1997, the effective date of the ALM
Acquisition, and the results of operations of National Law Publishing Company
have been included in our financial statements since December 22, 1997, the
closing date of the NLP Acquisition. In connection with the ALM Acquisition, the
purchase price was $63.0 million and the excess of the purchase price over the
book value of net tangible assets acquired was $67.7 million. The aggregate
purchase price for the NLP Acquisition was $203.2 million, and the excess of the
purchase price over the book value of net tangible assets acquired was $257.6
million. The excess purchase price of both Acquisitions has been allocated to
the intangible assets and goodwill acquired by us based upon their respective
fair values as of the acquisition date.

The following tables present selected historical financial information (i)
for American Lawyer Media, L.P. and its subsidiaries ("Old ALM"), as of and for
the seven months ended July 31, 1997, (ii) for us, as of and for the five months
ended December 31, 1997 and the years ended December 31, 1998, 1999, 2000 and
2001, and (iii) for NLP, as of and for the period from January 1, 1997 through
December 21, 1997. All of our financial data were derived from financial
statements audited by Arthur Andersen LLP. Results of operations for the interim
periods presented are not necessarily indicative of the results of operations
for the full year. The selected financial information should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the historical financial statements and notes
thereto included elsewhere in this Form 10-K. See "Index to Financial
Statements."

11

AMERICAN LAWYER MEDIA, L.P.
AND AMERICAN LAWYER MEDIA, INC.

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS)

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(1) "EBITDA" is defined as income before interest, income taxes, depreciation
and amortization and other extraordinary gains and losses. EBITDA is not a
measure of performance under generally accepted accounting principles
("GAAP"). Items excluded from income in calculating EBITDA are significant
components in understanding and evaluating Old ALM's and our financial
performance. While EBITDA should not be considered in isolation or as a
substitute for net income, cash flows from operating activities and other
income or cash flow statement data prepared in accordance with GAAP or as a
measure of profitability or liquidity, management understands that EBITDA is
customarily used in evaluating publishing companies. The EBITDA measures
presented herein may not be comparable to similarly titled measures of other
companies.

12

NATIONAL LAW PUBLISHING COMPANY, INC.

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS)

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

(1) EBITDA is not a measure of performance under GAAP. Items excluded from
income in calculating EBITDA are significant components in understanding and
evaluating NLP's financial performance. While EBITDA should not be
considered in isolation or as a substitute for net income, cash flows from
operating activities and other income or cash flow statement data prepared
in accordance with GAAP or as a measure of profitability or liquidity,
management understands that EBITDA is customarily used in evaluating
publishing companies. The EBITDA measures presented herein may not be
comparable to similarly titled measures of other companies.

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

The following discussion should be read in conjunction with Selected
Financial Data and our audited historical consolidated financial statements,
including the notes thereto, included elsewhere in this Form 10-K.

OVERVIEW

In February 2000, we discontinued publication of four of our six weekly
newsletters. In July 2000, we discontinued publication of the remaining two
newsletters.

On March 28, 2000, we sold the business constituting The Daily Deal and
Corporate Control Alert (the "Business") to The Deal, L.L.C. (formerly TDD,
L.L.C.), a limited liability company (the "Purchaser"), owned by substantially
all of the same stockholders as Holdings, including U.S. Equity Partners, L.P.
and U.S. Equity Partners (Offshore), L.P. The consideration for the sale was
$7.5 million in cash and $2.5 million face amount of a membership interest in
the Purchaser (the "Preferred Membership Interest"). The Preferred Membership
Interest is included in other assets on the Balance Sheet. The Preferred
Membership Interest accrues at 12.25% compounded annually and is convertible
into 3.0% of the common equity of the Purchaser. In addition, the Purchaser paid
us $1.68 million, representing the aggregate amount of operating losses incurred
by us in connection with the operation of the Business for the month of March
2000.

On May 15, 2000, we consummated the acquisition of substantially all of the
assets and certain of the liabilities of Moran Publishing Company, Inc.
("Moran"), the leading publisher of jury verdict and settlement research data in
New York State.

On December 27, 2000, we consummated the acquisition of two regional trade
shows in the United Kingdom from Nationwide Exhibitions (UK) Ltd.
("Nationwide"). Under the agreement, we purchased rights and related assets for
Solicitors, The National Legal Office and Legal Services Exhibition and The
National Accountancy Exhibition.

On January 31, 2001, we consummated the acquisition of substantially all of
the assets and certain of the liabilities of Haslam Publications ("Haslam"), the
leading publisher of jury verdict and settlement research data in California.

During the second quarter and fourth quarter of 2001, upon the decision to
restructure certain of our operations, we accrued approximately $2.0 million of
restructuring charges. These charges primarily relate to severance arrangements
and have been included in operating income. As of December 31, 2001,
approximately $0.7 million, representing the unpaid charges, is included in
accrued expenses.

During the second quarter of 2001, we wrote-off certain available for sale
investments as the decline in value of these investments has been deemed to be
other than temporary. This write-down of $4.7 million has been included in other
(expense) income.

During the third quarter of 2001, we sold certain assets associated with
our printing facility in Florida. We recognized a net loss of approximately $0.8
million from the sale of these assets and other costs directly associated with
the transaction.

14

The following table presents the results of operations (in thousands) for
the years ended December 31, 1999, 2000 and 2001.

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

For the year ended December 31, 2001, the financial results include the
acquisitions of Nationwide in late December 2000 and Haslam in January 2001,
both since the date of acquisition.

Overview. Total revenues decreased $8.7 million, or 5.6%, from $154.5
million for the year ended December 31, 2000 to $145.8 million for the year
ended December 31, 2001. Total operating expenses decreased $6.5 million, or
4.1%, from $158.1 million for the year ended December 31, 2000 to $151.6 million
for the year ended December 31, 2001. As a result, the operating loss widened
$2.2 million from a loss of $3.6 million for the year ended December 31, 2000 to
a loss of $5.8 million for the year ended December 31, 2001. Earnings before
interest, income taxes, depreciation and amortization and other extraordinary
gains and losses ("EBITDA") decreased $0.7 million, or 2.8%, from $24.8 million
for the year ended December 31, 2000 to $24.1 million for the year ended
December 31, 2001.

Revenues. Total revenues decreased $8.7 million, or 5.6%, from $154.5
million for the year ended December 31, 2000 to $145.8 million for the year
ended December 31, 2001. Advertising revenues decreased $3.0 million, or 3.4%,
from $88.2 million for the year ended December 31, 2000 to $85.2 million for the
year ended December 31, 2001. The decline in advertising revenues primarily
resulted from a decrease in classified, legal notice and directory advertising.
Classified advertising was the largest contributor to this decline with a
decrease of $5.0 million, or 18.1%, which occurred across virtually all of our
publications. This decline primarily resulted from the economic downturn
experienced during 2001 as compared to the higher revenues realized during 2000.
Legal notice and directory advertising revenues also declined $0.5 million, or
2.3%, and $0.3 million, or 12.7%, respectively, for 2001 as compared to 2000.
Partially offsetting these declines was strong growth in law firm advertising
revenues, which grew $2.6 million, or 25.2%, from $10.2 million for the year
ended December 31, 2000 to $12.8 million for the year ended December 31, 2001.
Increased advertising pages and increased frequency in three publications
contributed $1.5 million of the growth, with the balance of the growth coming
from new publications started in 2001.

Subscription revenues decreased $0.2 million, or 0.7%, from $23.4 million
for the year ended December 31, 2000 to $23.2 million for the year ended
December 31, 2001. The decline in subscription revenues in

15

2001 resulted primarily from a slight decline in subscriptions for The National
Law Journal prior to its refocus as a litigation-focused publication.

Revenues from ancillary products and services decreased $5.5 million, or
12.8%, from $42.9 million for the year ended December 31, 2000 to $37.4 million
for the year ended December 31, 2001. A decline in revenues from ancillary
products and services resulted primarily from lower syndication revenues of $4.5
million recorded in 2001 as compared to 2000. This decrease was the result of an
amendment to our agreement with Law.com to exclusively develop and supply legal
content. In addition, printing revenues declined $1.5 million due to the sale of
our Florida printing operations in July 2001, custom publishing revenues
declined $1.0 million due to the closing of that division and seminar revenue
declined by $0.8 million due to a decline in attendance. These declines were
partially offset by revenue growth of $1.3 million, or 95.5%, in legal
information services revenues, book revenues of $0.9 million, or 8.3%, and
tradeshow revenues of $1.2 million, or 26.7%, for 2001 as compared to 2000.

Operating expenses. Total operating expenses declined $6.5 million, or
4.1%, from $158.1 million for the year ended December 31, 2000 to $151.6 million
for the year ended December 31, 2001. Lower operating expenses in 2001 were
primarily realized in editorial, production and distribution, and selling
expense categories. These decreases were partially offset by increased
depreciation and amortization expenses along with higher general and
administrative expenses. Included in general and administrative expenses for
2001 are pre-tax restructuring costs of $2.0 million, which relate to severance
arrangements from a workforce reduction and the realignment of various divisions
to capitalize on inherent synergies within our acquired businesses in 2000 and
2001. The decrease in operating expenses was partially offset by increased costs
related to new publications and acquisitions made during 2000 and 2001. In
addition, increased depreciation and amortization expenses resulted from
additional goodwill, intangibles and capital assets recorded during 2000 and
2001. The acquisitions commenced in 2000 and 2001 are fully reflected in the
results for the year ended December 31, 2001, while the results for the year
ended December 31, 2000 only reflect a small portion of those expenses.

Editorial expenses decreased $3.2 million, or 12.2%, from $26.2 million for
the year ended December 31, 2000 to $23.0 million for the year ended December
31, 2001. The decrease in editorial expenses primarily resulted from reduced
expenses of $2.6 million due to the sale of the Business along with the
discontinuation of the weekly newsletter division in 2000. In addition, lower
editorial expenses were recorded as a result of the reduction in syndication
revenues and our restructuring efforts during 2001. These declines were
partially offset by increased expenses from new publications started in 2000 and
2001.

Production and distribution expenses decreased $1.6 million, or 5.2%, from
$32.4 million for the year ended December 31, 2000 to $30.8 million for the year
ended December 31, 2001. Lower production and distribution expenses primarily
resulted from a decline in commercial printing expenses of $1.0 million due to
the sale of our Florida printing operations and from $0.8 million related to the
sale of the Business and the discontinuation of the weekly newsletter division.
Also contributing to this decline were lower costs resulting from the
discontinuation of the custom publishing division and other cost containment
efforts. These expenses were partially offset by higher costs from new
publications started and acquisitions made during 2000 and 2001.

Selling expenses decreased $3.9 million, or 12.0%, from $32.3 million for
the year ended December 31, 2000 to $28.4 million for the year ended December
31, 2001. The decrease was primarily attributable to lower selling expenses of
$1.4 million due to the sale of the Business along with the discontinuation of
the weekly newsletter division in 2000, which primarily reduced display
advertising, circulation and telemarketing expenses. In addition, lower selling
expenses of $1.0 million were incurred which related to the decline in
advertising revenues during 2001. Also contributing to this decline were lower
expenses related to circulation, general marketing and telemarketing throughout
our publications.

General and administrative expenses increased $0.7 million, or 2.0%, from
$38.8 million for the year ended December 31, 2000 to $39.5 million for the year
ended December 31, 2001. The increase in general and administrative expenses for
2001 resulted primarily from a $2.0 million pre-tax restructuring charge, higher
benefits costs and legal and other professional fees. Partially offsetting these
increases were savings of

16

$1.9 million due to the sale of the Business and the discontinuation of the
weekly newsletter division in 2000 and from other savings which resulted from
our cost containment efforts during 2001.

Depreciation and amortization expenses increased $1.5 million, or 5.2%,
from $28.4 million for the year ended December 31, 2000 to $29.9 million for the
year ended December 31, 2001. Depreciation expenses increased $0.7 million for
2001 compared to 2000. In addition, amortization expenses on goodwill and
intangible assets increased $0.8 million during this same period. Higher
depreciation expenses for 2001 resulted from additional capital improvements on
our leased properties and capital expenditures incurred in database development
for our jury verdict and expert witness businesses, as well as enhancements to
existing systems and equipment modernization. The increase in amortization
expenses of goodwill and intangibles resulted from goodwill and intangible
assets recognized as a result of the acquisitions of Nationwide in late 2000,
Haslam in January 2001 and the full-year impact of the Moran acquisition in
2000.

Operating loss. As a result of the above factors, the operating loss
widened $2.2 million, from a $3.6 million loss for the year ended December 31,
2000 to a $5.8 million loss for the year ended December 31, 2001. In addition,
EBITDA decreased $0.7 million, or 2.8%, from $24.8 million for the year ended
December 31, 2000 to $24.1 million for the year ended December 31, 2001.

The decline in EBITDA primarily resulted from lower advertising revenues,
content licensing and royalty fees, lower printing revenues resulting from the
sale of our Florida printing operations and revenue declines from the
discontinuance of our custom publication division, partially offset by increased
book, tradeshow and legal information services revenues. Also offsetting the
decline in EBITDA are lower editorial, production and selling expenses incurred
2001 over 2000, partially offset by a $2.0 million pre-tax restructuring charge
recorded in 2001.

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

For the year ended December 31, 2000, the financial results include the
acquisition of Moran in May 2000 since the date of acquisition.

Overview. Total revenues increased $22.0 million, or 16.6%, from $132.5
million for the year ended December 31, 1999 to $154.5 million for the year
ended December 31, 2000. Total operating expenses increased $14.9 million, or
10.4%, from $143.2 million for the year ended December 31, 1999 to $158.1
million for the year ended December 31, 2000. As a result, the operating loss
decreased $7.1 million from a loss of $10.7 million for the year ended December
31, 1999 to a loss of $3.6 million for the year ended December 31, 2000 and
EBITDA increased $8.2 million, or 49.4%, from $16.6 million for the year ended
December 31, 1999 to $24.8 million for the year ended December 31, 2000. The
growth in revenue and EBITDA resulted from strong classified and display
advertising revenues generated from several of our periodicals, growth in the
LegalTech tradeshow division and sales of new books and book updates in our book
division and increased content licensing and royalty fees from Law.com. Also
contributing to EBITDA growth during 2000 was the elimination of operating
losses as a result of the sale of our Internet business to Law.com in 1999, the
sale of the Business to The Deal, L.L.C. and the discontinuation of our weekly
newsletters.

Revenues. Advertising revenues increased $12.3 million, or 16.3%, from
$75.9 million for the year ended December 31, 1999 to $88.2 million for the year
ended December 31, 2000. All categories of advertising grew during 2000 with the
greatest growth being reflected in display and classified advertising. These two
categories contributed $9.2 million, or 74.8%, of the advertising growth during
2000. Law firm, legal and directory advertising contributed to the remaining
growth. Advertising revenues in our core publications grew $10.6 million, or
14.0%, during 2000, while new publication launches and product extensions within
our core publications accounted for an increase in advertising revenue of $1.9
million in 2000.

Subscription revenues decreased $0.2 million, from $23.6 million for the
year ended December 31, 1999 to $23.4 million for the year ended December 31,
2000. The decline in subscription revenues in 2000 resulted primarily from
slight declines in our national publications which were partially offset by
stronger activity in the regional publications.

Revenues from ancillary products and services increased $11.1 million, or
34.9%, from $31.8 million for the year ended December 31, 1999 to $42.9 million
for the year ended December 31, 2000. Increased revenues primarily resulted from
increased content licensing fees of $5.6 million, growth of $1.0 million in
sales of new

17

books and book updates, increased revenues from our LegalTech division and
seminars division of $0.9 million, and increased revenues from the acquisitions
of Moran in 2000 and Blue Sheet in late 1999 of $1.9 million. In addition, the
custom publishing division, which commenced in 2000, accounted for $1.1 million
of revenues with no like revenue generated in 1999. Increases in this category
during 2000 were partially offset by lower information service revenues, due to
the sale of our Internet business in 1999 along with lower printing revenue.

Revenues from Internet services totaled $1.2 million for the year ended
December 31, 1999 with no like revenues recorded for the year ended December 31,
2000. The decrease is attributable to the sale of our Internet business during
the third quarter of 1999.

Operating expenses. Total operating expenses increased $14.9 million, or
10.4%, from $143.2 million for the year ended December 31, 1999 to $158.1
million for the year ended December 31, 2000. Of this amount, operating expenses
for our new projects commenced in 2000 accounted for $10.9 million of the
increase. The projects, i.e., the international and database publishing
initiatives, commenced in 2000 and are fully reflected in the full year results
while the results for 1999 had no like expense. The remaining increase in
operating expenses in 2000 over 1999 resulted primarily from higher core
business unit costs of $8.5 million, partially offset by lower costs in 2000
resulting from the sale of the Business to The Deal, L.L.C. and the
discontinuation of the weekly newsletters. Within operating expenses, higher
costs were realized in editorial and production, selling, general and
administrative and depreciation and amortization expenses. The increased
expenses were partially offset by the elimination of operating expense related
to Internet services resulting from the sale of our Internet business during the
third quarter of 1999.

Editorial expenses increased $3.3 million, or 14.2%, from $22.9 million for
the year ended December 31, 1999 to $26.2 million for the year ended December
31, 2000. Editorial expenses for new projects commenced in 2000 increased $3.6
million, while editorial expenses in the core business units increased $0.6
million. Partially offsetting these increases were lower editorial costs
resulting from the sale of the Business to The Deal, L.L.C. The net increase
during 2000 primarily resulted from increased art costs of $0.6 million with the
balance of the increase being attributable to contributing editors, salaries and
benefits primarily for new projects commenced in 2000.

Production and distribution expenses increased $2.6 million, or 8.8%, from
$29.8 million for the year ended December 31, 1999 to $32.4 million for the year
ended December 31, 2000. Higher costs resulted from increased production and
distribution expenses of $1.8 million in core business units and $1.8 million in
new projects commenced in 2000. This was partially offset by lower costs
resulting from the sale of the Business to The Deal, L.L.C. in 2000 and by the
elimination of production and distribution costs resulting from the sale of our
Internet business during the third quarter of 1999. Higher costs primarily
resulted from increased material and printing related costs along with increased
trade show and seminar costs resulting from business growth. In addition,
expenses related to new projects commenced in 2000 were realized with no like
expense recorded in 1999.

Selling expenses increased $4.5 million, or 16.2%, from $27.8 million for
the year ended December 31, 1999 to $32.3 million for the year ended December
31, 2000. Selling expenses for new projects commenced in 2000 accounted for $1.8
million of the increase, while selling expenses in the core business units also
increased $5.4 million. This was partially offset by lower costs of $2.7
million, resulting from the sale of the Business to The Deal, L.L.C. and the
completion of the discontinuation of the weekly newsletters in 2000.

General and administrative expenses increased $6.8 million, or 21.1%, from
$32.0 million for the year ended December 31, 1999 to $38.8 million for the year
ended December 31, 2000. General and administrative expenses for new projects
commenced in 2000 accounted for $3.5 million of the increase, while expenses in
the core business units also increased $3.5 million. The total increase
primarily resulted from increased staffing levels, higher rent, other
facilities-related costs and legal and other professional costs, resulting from
our growth and expansion into new markets.

18

Internet services expenses totaled $3.3 million for the year ended December
31, 1999 with no like expense recorded for the year ended December 31, 2000. The
elimination of Internet services expenses resulted from the sale of our Internet
business to Law.com during the third quarter of 1999.

Depreciation and amortization expenses increased $1.1 million, or 4.1%,
from $27.3 million for the year ended December 31, 1999 to $28.4 million for the
year ended December 31, 2000. Depreciation expenses increased $1.3 million for
the year ending December 31, 2000 over the same period in 1999. Partially
offsetting this increase was lower goodwill and intangible asset amortization
expenses recorded during 2000 primarily for the partial transfer of goodwill as
part of the sale of our Internet business to Law.com. Higher depreciation
expense during 2000 resulted from the large capital expenditures incurred during
1999 for the upgrade and purchase of new computer equipment and systems, for
capitalized improvements and furnishings in existing and new facilities to
support the 1999 new initiatives along with 2000 capital expenditures for
completing the installation of the advertising, editorial and billing systems,
investments in database capabilities to drive future growth and minor
renovations in the corporate offices.

Operating loss. As a result of the above factors, the operating loss
narrowed $7.1 million from a $10.7 million loss for the year ended December 31,
1999 to a $3.6 million loss for the year ended December 31, 2000. In addition,
EBITDA increased $8.2 million, or 49.4%, from $16.6 million for the year ended
December 31, 1999 to $24.8 million for the year ended December 31, 2000.

LIQUIDITY AND CAPITAL RESOURCES

Capital expenditures. Capital expenditures totaled $3.3 million for the
year ended December 31, 2001. Database development, computer system enhancements
and hardware upgrades totaled $2.6 million with the balance used for leasehold
improvements, including furniture and equipment in the New York and regional
offices. During 2001, we continued to focus our capital resources on the
development of our information service database and to strengthen our systems
infrastructure. In addition, renovations were started on our owned building in
Georgia.

Net cash provided by operating activities. Net cash provided by operating
activities was $2.7 million for the year ended December 31, 2001, which
primarily reflects depreciation and amortization of $29.9 million, the
write-down of private equity securities of $4.7 million, a decrease of accounts
receivable of $3.5 million, an increase in current and non-current liabilities
of $0.7 million, non-cash interest of $0.9 million and the loss of $0.8 million
from the sale of the Florida printing operations. Partially offsetting this
increase is a net loss of $17.9 million, a decrease in deferred tax benefit of
$11.9, a decrease in deferred income of $4.3 million, a decrease in accounts
payable of $3.0 million and a decrease in accrued expense payable of $0.6
million.

Net cash used in investing activities. Net cash used in investing
activities was $8.9 million for the year ended December 31, 2001, primarily
resulting from the purchase of a business totaling $5.9 million and capital
expenditures of $3.3 million. This cash outflow was partly offset by cash
received from the sale of the Florida printing operations of $0.3 million.

Net cash provided by financing activities. Net cash provided by financing
activities totaled $6.4 million for the year ended December 31, 2001, which
reflects a net drawdown of $6.5 million under the Revolving Credit Facility
(described below).

Working capital. We traditionally have favorable cash flow characteristics
resulting from our high level of advance payments by subscribers, low working
capital investment, low capital expenditure needs, predictable cost structure
and high margins. Because cash receipts associated with subscriptions are
received toward the beginning of a subscription cycle, our periodicals business
requires minimal investment in working capital.

During 2001, we incurred losses from pre-tax restructuring charges of $2.0
million, purchased a business for $5.9 million and recorded declines in deferred
income. In addition, we made an additional capital investment in our systems and
facilities of $3.3 million. These factors combined to produce reduced cash flow
for 2001.

19

Liquidity. Our principal sources of funds are anticipated to be cash flows
from operating activities, which may be supplemented by borrowings under the
Revolving Credit Facility (described below). We believe that these funds will be
sufficient to meet our current financial obligations, including the payment of
interest on the $175,000,000 of 9.75% senior notes and on the outstanding
balance under our Revolving Credit Facility, working capital, capital
expenditures and other obligations. No assurance can be given, however, that
this will be the case. Our future operating performance and ability to service
or refinance the Notes (defined below) and to repay, extend or refinance any
credit agreements to which we are a party will be subject to future economic
conditions and to financial, business and other factors, many of which are
beyond our control.

MATERIAL FINANCINGS

We have borrowed funds to finance our operations through the transactions
described below.

Revolving Credit Facility. On March 25, 1998, we entered into a $40
million, five-year senior secured revolving credit facility (the "Revolving
Credit Facility") with a group of banks to be available for working capital and
general corporate purposes, including acquisitions and capital expenditures.

The Revolving Credit Facility is guaranteed by Holdings and by all of our
existing and future subsidiaries. In addition, the Revolving Credit Facility is
secured by a first priority security interest in substantially all of our
properties and assets and our existing and future domestic subsidiaries,
including a pledge of all of the stock of such subsidiaries, and a pledge by
Holdings of all of our stock. The Revolving Credit Facility contains customary
covenants commensurate with the size of the Revolving Credit Facility that
restrict our ability and our subsidiaries' ability to take certain actions.

On April 14, 1998, Holdings contributed an aggregate of $15 million to our
equity capital. The proceeds of the equity contribution were used to fund
acquisitions and to provide capital for internal growth. Effective March 29,
1999, Holdings and we amended the Revolving Credit Facility (inter alia) to
limit our ability to borrow in excess of $20 million under the Revolving Credit
Facility until certain ratios are achieved, modify certain of the covenants and
modify the interest calculation mechanism. Effective July 20, 1999, the
Revolving Credit Facility was further amended to provide for the sale of our
Internet business to Law.com and to modify certain debt covenants. Effective
March 28, 2000, the Revolving Credit Facility was further amended to modify
certain of the covenants, permit the sale of the Business and to increase the
revolver limit described above from $20 million to $22.5 million. On January 10,
2001, the Revolving Credit Facility was further amended to modify certain of the
covenants and to increase the borrowing limit described above from $22.5 million
to $29 million upon the consummation of the Haslam acquisition. This amendment
(inter alia) also limited our ability to consummate additional acquisitions
until certain ratios are achieved.

Effective August 10, 2001, the Revolving Credit Facility was amended to
permanently reduce the aggregate revolving commitment to $29.0 million and to
clarify certain sections as well as to waive compliance with certain of the
covenants at June 30, 2001. Effective October 15, 2001, we received a waiver of
compliance with certain of the covenants at September 30, 2001 and at December
31, 2001. Effective February 22, 2002, the Revolving Credit Facility was further
amended to modify the covenants relating to the total leverage ratio, interest
coverage ratio and fixed charge ratio for the remainder of the term of the line
of credit. In addition, the Revolving Credit Facility was also amended to allow
us to receive equity securities in non-related entities as payment for
advertising services provided by us, within certain limits in any one fiscal
year.

Senior Notes Financing. In December 1997, we issued $175,000,000 aggregate
principal amount of 9.75% Senior Notes due 2007 (the "Notes"). The Notes are
unsecured general obligations and are fully and unconditionally guaranteed on a
joint and several and senior unsecured basis, by us and each of our existing and
future subsidiaries. The subsidiary guarantors comprise all of our direct and
indirect subsidiaries and each of the subsidiary guarantors is a wholly-owned
subsidiary of us. Separate financial statements of, and other disclosures
concerning the subsidiary guarantors are not included herein because of the
subsidiary guarantors' full and unconditional guarantee of the Notes and
management has determined that separate financial statements and other
disclosures concerning the subsidiary guarantors are not material and would not
provide any additional meaningful disclosure. There are currently no contractual
or regulatory restrictions limiting the ability of the subsidiary guarantors to
make distributions to us. The Notes may be redeemed at any time by us,
20

in whole or in part, at various redemption prices that include accrued and
unpaid interest. The Notes contain certain covenants that, among other things,
limit the incurrence of additional indebtedness by us and our subsidiaries, the
payment of dividends and other restricted payments by us and our subsidiaries,
asset sales, transactions with affiliates, the incurrence of liens, and mergers
and consolidations. Assuming there is no redemption of the Notes prior to
maturity, the entire principal will be payable on December 15, 2007.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We and Holdings have entered into a Revolving Credit Facility. Each
revolving loan bears interest on the outstanding principal amount from the
borrowing date until it becomes due at a rate per annum equal to the "Base Rate"
or the Eurodollar rate plus the "Applicable Margin". The Applicable Margin
varies depending on our total leverage ratio. As of March 28, 2002, the
Applicable Margin was 2.5% for Base Rate loans and 3.5% for Eurodollar rate
loans. The Base Rate is the higher of the Bank of America publicly announced
"Reference Rate" or the Federal Funds rate plus 0.5%. The amount outstanding
under the Revolving Credit Facility was $27.0 million at December 31, 2001. The
blended interest rate at December 31, 2001 was 5.5%. A 10% increase in the
average rate during 2001 would have increased our net loss to approximately
$18.1 million.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Index to Financial Statements and Exhibits, which appears on Page F-1
hereof.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

21

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES OF THE REGISTRANT

The following table sets forth certain information regarding each of the
executive officers and directors of us and Holdings as of March 29, 2002.

Each Director is elected annually and serves until the next annual meeting
of stockholders or until his or her successor is duly elected and qualified. The
Independent Directors are each compensated $20,000 per year for their service as
Directors and receive reimbursement of expenses incurred from their attendance
at Board of Directors meetings.

The Board has established an executive committee (the "Executive
Committee") consisting of three members, currently Bruce Wasserstein, George
Majoros and Anup Bagaria. The Executive Committee has been delegated the
authority to approve (i) the acquisition and divestiture by us or our affiliates
of all or a portion of one or more business entities for a price of up to $25
million, (ii) the appointment of our senior officers and the senior officers of
our affiliates and termination of such employment, (iii) the preparation and
approval of short-term and long-term budgets and (iv) other material
policy-level decisions to the extent permitted by the Delaware General
Corporation Law.

EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES OF THE COMPANY AND HOLDINGS

Bruce Wasserstein has served as Chairman of the Board of Directors of us
and Holdings since both our and its founding in December 1997. He is Chief
Executive Officer of Lazard LLC, and Chairman of Wasserstein & Co., LP, the
private merchant bank that owns Holdings. Previously, he was Executive Chairman
of Dresdner Kleinwort Wasserstein, Chairman, Chief Executive Officer and founder
of Wasserstein Perella Group, Inc. ("WPG"), Chairman of the Board of Directors
of Maybelline, Inc. and a Director of Collins & Aikman Corp. Before establishing
WPG, Mr. Wasserstein was Co-Head of Investment Banking at The First Boston
Corporation and a Managing Director and Member of its Management Committee.
Prior to joining First Boston in 1977, Mr. Wasserstein was an attorney at
Cravath, Swaine & Moore in New York City. Mr. Wasserstein graduated with honors
from the University of Michigan in 1967. In 1971 he graduated from Harvard
Business School as a Baker Scholar with high distinction, and earned a J.D., cum
laude, from Harvard Law School. In 1972, he was a Knox Traveling Fellow at
Cambridge University. Mr. Wasserstein is a member of the Council on Foreign
Relations. He has served as a member of the SEC's Advisory Committee on Tender
Offers, and as a member of the Visiting Committees of Harvard Law School, the
University of

22

Michigan and Columbia Journalism School. Mr. Wasserstein is also on the boards
of numerous private companies.

William L. Pollak has served as President, Chief Executive Officer and
Director of us and Holdings since March 1998. Before joining us, Mr. Pollak
spent 16 years at The New York Times, where he held a variety of positions, most
recently as Executive Vice President, Circulation.

Anup Bagaria has served as a Vice President and Director of us and Holdings
since both our and its founding in December 1997. He is a Managing Director of
Wasserstein & Co., LP. He graduated from the Massachusetts Institute of
Technology. Mr. Bagaria also serves on the board of various private companies.

Michael J. Biondi has served as a Director of us and Holdings since both
our and its founding in December 1997. He is Chairman and Co-Chief Executive
Officer of Dresdner Kleinwort Wasserstein, North and South America. Previously,
Mr. Biondi was Chairman and Chief Executive Officer of Wasserstein Perella &
Co., Inc. Mr. Biondi holds M.B.A. and J.D. degrees from the Wharton School and
the University of Pennsylvania Law School, respectively. Prior to joining
Wasserstein Perella & Co., Mr. Biondi was a member of the First Boston Mergers &
Acquisitions Group, and practiced law at Skadden, Arps, Slate, Meagher & Flom
LLP.

Robert C. Clark has served as a Director of us and Holdings since our and
its founding in December 1997. He has been Dean of the Harvard Law School since
1989 and is the Royall Professor of Law. Mr. Clark is a trustee of Teachers'
Insurance Annuity Association (TIAA). He is currently a Director of Collins &
Aikman Corp.

Donald G. Drapkin has served as a Director of us and Holdings since our and
its founding in December 1997. He has been a Director and Vice Chairman of
MacAndrews & Forbes Holdings Inc. and various of its affiliates since 1987.
Prior to joining MacAndrews & Forbes, Mr. Drapkin was a partner in the law firm
of Skadden, Arps, Slate, Meagher & Flom LLP for more than five years. Mr.
Drapkin also is a Director of the following corporations which file reports
pursuant to the Securities Exchange Act of 1934: Anthracite Capital, Inc.,
BlackRock Asset Investors, The Molson Companies Limited, Panavision, Inc.,
Playboy.com. Inc., Playboy Enterprises, Inc., Revlon Consumer Products
Corporation, Revlon, Inc. and The Warnaco Group, Inc.

James A. Finkelstein has served as a Director of us and Holdings since our
and its founding in December 1997. He has been President of News Communications,
Inc. since mid-2001. Prior to that, Mr. Finkelstein served as President and
Chief Executive Officer of NLP and its predecessor companies beginning in 1974.
He joined the New York Law Publishing Company in 1970. He was the former
publisher of the New York Law Journal and the founder and publisher of The
National Law Journal. He currently serves on the Faculty of Arts and Sciences
Board of Overseers at New York University.

George L. Majoros, Jr. has served as a Director of us and Holdings since
June 5, 2000. He has been President and Chief Operating Officer of Wasserstein &
Co., LP since its inception in January 2001. Prior thereto, he was a Managing
Director of Wasserstein Perella & Co., Inc. and the Chief Operating Officer of
its Merchant Banking Group. He joined Wasserstein Perella & Co., Inc. in early
1993 after practicing law with Jones Day Reavis & Pogue since September 1986.
Mr. Majoros also serves on the board of directors of numerous private companies.

Andrew G. T. Moore, II has served as a Director of us and Holdings since
our and its founding in December 1997. He is a Managing Director of Dresdner
Kleinwort Wasserstein, formerly Wasserstein Perella & Co., and is a former
Justice of the Delaware Supreme Court. Justice Moore served on the Delaware
Supreme Court for 12 years until 1994, when he joined Wasserstein Perella & Co.
Justice Moore has served as the Lehmann Distinguished Visiting Professor of Law
at Washington University in St. Louis. He has also served as an adjunct
professor of law at the Georgetown University Law Center, University of Iowa
College of Law and Widener University School of Law, where he taught seminars in
advanced corporation law. He also teaches comparative principles of
international corporation law at the Tulane University Institute of European
Legal Studies in Paris, and has been a guest lecturer at various law schools and
national corporate law programs in the United States, Canada and Europe.
23

Jack Berkowitz has served as Vice President, Strategic Planning of us and
Holdings since January 1999. Prior to joining us, Mr. Berkowitz served as a
consultant to us during 1998. Mr. Berkowitz is a 25-year veteran of the
publishing industry. As a consultant, in addition to us, his client roster has
included Cowles Business Media, Hearst Magazines, Time Inc., The Rockefeller
Associates, Associated Newspapers and Adweek. Mr. Berkowitz had previously
served as Executive Vice President of the Village Voice, President and Publisher
of NewsInc. and President of The Nation.

Joseph Calve has served as Vice President, Litigation Services of us and
Holdings since July 2001. Prior to that, he was Director of Business Development
of us and Holdings since January 2000 and Editor and Publisher of Texas Lawyer
from May 1995.

Sara Diamond has served as Vice President, Book and Newsletter Publishing
of us and Holdings since September 2000. Prior to that she was Publisher of Law
Journal Press, our book division, which she joined in 1992. Prior to joining us,
Ms. Diamond served in a variety of positions at Matthew Bender & Company.

Allison C. Hoffman has served as Vice President, General Counsel of us and
Holdings since August 2001. Prior to that she was Assistant General Counsel of
us and Holdings since June 1999. Prior to joining us, Ms. Hoffman was an
associate in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP.

Stephen C. Jacobs has served as Vice President, Chief Financial Officer and
Secretary of us and Holdings since August 2001. Prior to that he was Vice
President, General Counsel and Secretary of us and Holdings since May 1998.
Prior to joining us, Mr. Jacobs was Assistant General Counsel, Global
Transactions for American International Group, Inc.

Eric F. Lundberg has served as Vice President of Finance of us and Holdings
since August 2001. Prior to that he was the Publisher of Texas Lawyer, and prior
to that held a number of financial positions with us, most recently as Corporate
Controller and Director of Financial Planning since November 1995.

Kevin Vermeulen has served as Vice President, Group Publisher of us and
Holdings since May 1999, and served as Vice President, National Advertising from
1998 -- 1999. Prior to that he was a Vice President of Sales for NLP, which he
joined in October 1992.

24

ITEM 11. EXECUTIVE COMPENSATION

The following Summary Compensation Table includes individual compensation
information for the Chief Executive Officer and certain other executive officers
of us and Holdings for the year ended December 31, 2001 (collectively, the
"Named Executive Officers") for services rendered in all capacities to us and
Holdings during the year ended December 31, 2001. All numbers relating to option
grants relate to options to purchase our shares.

SUMMARY COMPENSATION TABLE

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

(1) Represents payments made by us to Mr. Pollak pursuant to the terms of his
employment agreement to reimburse him for the value of options forfeited
upon his resignation from his former employer.

(2) Mr. Dillehay's employment with us commenced in September 1999.

(3) Represents commissions earned by Mr. Vermeulen pursuant to the terms of his
employment agreement.

25

The following table includes information regarding option grants in 2001 to
the Named Executive Officers.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

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

* As of December 31, 2001, each of the outstanding options was out-of-the-money
and therefore, the potential realizable value was less than zero.

+ Each of these options is exercisable for a share of Holdings common stock.

EMPLOYMENT AGREEMENTS

William Pollak, President and Chief Executive Officer, has entered into an
employment agreement with us for a five-year term effective March 9, 1998. The
employment agreement provides for an annual salary of $400,000 subject to
increases of 5% annually during the term. In addition, the employment agreement
provides for bonuses of $400,000 after the first year of the term and between
50% and 150% of the base salary, as determined by the Board of Directors, in
each of the remaining years of the term. Under the employment agreement, if the
executive's employment is terminated by us without cause or by the executive
with good reason, the executive will be entitled to severance equal to the
amount of the executive's salary and bonus accrued but unpaid through the
termination date and one year's salary, commencing on the termination date,
together with any accrued but unpaid bonus. Mr. Pollak is also entitled to
payments for options granted to him and forfeited upon his resignation from his
prior employer.

We have also entered into employment agreements with each of our executive
officers providing for varying bonuses, severance provisions and termination
rights.

26

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

All of our outstanding shares are beneficially owned by Holdings. The
following table sets forth certain information regarding beneficial ownership of
Holdings as of December 31, 2001 by (i) each person (or group of affiliate
persons) known by us to be the beneficial owner of more than 5% of the
outstanding Common Stock of Holdings, (ii) each Director, Director nominee, and
our Chief Executive Officer and President and (iii) all of our directors and
executive officers as a group.

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

(1) Includes approximately 2.9% of the issued and outstanding Common Stock held
by a co-investor of U.S. Equity Partners, L.P. ("USEP") which has granted WP
Management Partners, L.L.C. ("WPMP"), the general partner of USEP, an
irrevocable proxy to vote such shares of common stock. WPMP shares voting
and dispositive power with respect to the shares held by USEP. See footnote
(4).

(2) WPMP shares voting and dispositive power with respect to the shares held by
U.S. Equity Partners (Offshore), L.P. See footnote (4).

(3) ALM Employee Partners, L.L.C. is managed by WP Plan Management Partners,
Inc., an indirect wholly-owned subsidiary of Dresdner Kleinwort Wasserstein
Group, Inc., and shares voting and dispositive power with respect to the
shares held by ALM Employee Partners, L.L.C. See footnote (4).

(4) Does not include: 569,960 shares as to which WPMP shares voting and
dispositive power with USEP; 144,110 shares as to which WPMP shares voting
and dispositive power with U.S. Equity Partners (Offshore), L.P.; and 72,490
shares as to which WP Plan Management Partners, Inc. shares voting and
dispositive power with ALM Employee Partners, L.L.C.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We are a wholly-owned subsidiary of Holdings. A majority of Holdings'
equity securities are held by USEP and its affiliates. USEP is a Delaware
limited partnership investment fund of which WPMP is the general partner. WPMP
is controlled by Wasserstein & Co., LP. WPMP is entitled to receive a monitoring
fee in an amount not to exceed $1.0 million in respect of any year.

We may engage in transactions with our affiliates, including entities owned
or controlled by certain of our principal shareholders. We believe that such
transactions will be no more favorable to us than similar transactions with
non-affiliates.

In connection with the sale of the our Internet business to Law.com, we
entered into an exclusive content (subject to certain exceptions) five-year
license with Law.com granting Law.com the right to publish in electronic or
digital format all of our content. We believe that, at the time the license
agreement was entered into, this transaction was effected on arms-length terms
and conditions.

27

PART IV

ITEM 14. FINANCIAL STATEMENT SCHEDULES, REPORTS ON FORM 8-K AND EXHIBITS

(a) Financial Statement Schedule

Schedule II -- Valuation and Qualifying Accounts. All other schedules
have been omitted as the schedules are either not applicable, or the
information has been otherwise provided in the Financial Statements.

(b) Reports on Form 8-K

None

(c) Exhibits

The exhibits listed on the Exhibit Index following the signature page
hereof are filed herewith in response to this Item.

28

AMERICAN LAWYER MEDIA, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

F-1

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of American Lawyer Media, Inc.:

We have audited the accompanying consolidated balance sheets of American
Lawyer Media, Inc. (a Delaware corporation) and subsidiaries as of December 31,
2001 and 2000 and the related consolidated statements of operations, changes in
stockholder's equity and cash flows for each of the three years in the period
ended December 31, 2001. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of American
Lawyer Media, Inc. and subsidiaries as of December 31, 2001 and 2000 and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States.

As explained in Note 3 to the consolidated financial statements, effective
January 1, 2001, the Company adopted Statement of Financial Accounting Standards
("SFAS") No. 133 "Accounting for Derivative Investments and Hedging Activities"
as amended by SFAS No. 138.

Our audit was made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The schedule listed in the
index of consolidated financial statements is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic consolidated financial statements. This schedule has been subjected to
the auditing procedures applied in the audit of the basic consolidated financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.

ARTHUR ANDERSEN LLP

New York, New York
March 8, 2002

F-2

AMERICAN LAWYER MEDIA, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
AT DECEMBER 31, 2001 AND 2000
(IN THOUSANDS, EXCEPT SHARE DATA)

The accompanying notes to the consolidated financial statements are an integral
part of these statements.
F-3

AMERICAN LAWYER MEDIA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
(IN THOUSANDS)

The accompanying notes to the consolidated financial statements are an integral
part of these statements.
F-4

AMERICAN LAWYER MEDIA, INC. AND SUBSIDIARIES

STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
(IN THOUSANDS, EXCEPT SHARE DATA)

The accompanying notes to the consolidated financial statements are an integral
part of these statements.
F-5

AMERICAN LAWYER MEDIA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
(IN THOUSANDS)

The accompanying notes to the consolidated financial statements are an integral
part of these statements.
F-6

AMERICAN LAWYER MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2001, 2000, AND 1999

1. ORGANIZATION AND OPERATIONS

American Lawyer Media, Inc. and subsidiaries ("we," "us," "our" or "ALM")
is a wholly-owned subsidiary of American Lawyer Media Holdings, Inc. (formerly
Cranberry Partners, LLC ("Cranberry")) ("Holdings"). We publish legal
publications, including The American Lawyer, New York Law Journal, The National
Law Journal and Corporate Counsel. Our operations are based in New York with
regional offices in ten states, the District of Columbia and London, England.

Effective July 31, 1997, Holdings acquired substantially all of the assets
and liabilities of American Lawyer Media, L.P. ("Old ALM") for $63,000,000 ("ALM
Acquisition"). In December 1997, we acquired all of the outstanding capital
stock of National Law Publishing Company, Inc. ("Old NLP") for approximately
$203 million (the "NLP Acquisition"). Subsequently, all the acquired assets and
liabilities of Old ALM and Old NLP were combined to form new subsidiaries
currently owned by us.

On July 21, 1999, we transferred all of our and our subsidiaries' Internet
and electronic commerce business to a wholly-owned subsidiary named Professional
On Line, Inc. ("POL"). On July 24, 1999, POL was recapitalized by creating a
class of 12.25% preferred stock, par value $0.01 (the "POL Preferred Stock"), in
addition to the class of common stock, par value $0.01 per share, previously
authorized (the "POL Common Stock"). On July 27, 1999, we sold all of the issued
and outstanding POL Common Stock to Law.com, LLC (formerly Law.com, Inc.)
("Law.com") for $1 million in cash and we retained all of the issued and
outstanding POL Preferred Stock. In December 1999, Law.com redeemed all of the
POL Preferred Stock for $3.75 million plus accrued dividends. Law.com maintains
a web destination for legal information and e-services. Under a licensing
agreement, we continue to provide content for Law.com. Law.com is owned by
substantially the same investors that own Holdings, including Wasserstein & Co.,
LP, U.S. Equity Partners, L.P. and U.S. Equity Partners (Offshore), L.P.

On March 28, 2000, we sold the business constituting The Daily Deal and
Corporate Control Alert (the "Business") to The Deal, L.L.C. (formerly TDD,
L.L.C.), a limited liability company (the "Purchaser"), owned by substantially
all of the same stockholders as Holdings. The consideration for the sale was
$7.5 million in cash and $2.5 million face amount of a membership interest in
the Purchaser with a preferred return (the "Preferred Membership Interest"). In
addition, the Purchaser paid us $1.68 million in cash, representing the
aggregate amount of operating losses incurred by us in connection with the
operation of the Business for the month of March 2000. We recorded a gain of
approximately $6,738,000 as a component of additional paid-in-capital as the
Business was a related party under common control. The Preferred Membership
Interest accrues at 12.25% compounded annually, is convertible into 3.0% of the
common equity of the Purchaser, has anti-dilution protection for dividends in
the form of additional equity interests, combinations, splits and
reclassifications and has anti-dilution protection up to the first $25.0 million
of equity capital, including the Preferred Membership Interest issued by the
Purchaser. Due to the nature of the transaction, we fully reserved against the
Preferred Membership Interest from inception to the dividend date in Other
Assets on the Balance Sheet.

2. ACQUISITIONS

On November 22, 1999, effective December 1, 1999, we consummated the
acquisition of all of the assets, properties and rights of Houston Trial
Reports, Inc. and Blue Sheet Publications, Inc. (collectively, "Blue Sheet").
Blue Sheet publishes regional and statewide publications which serve the legal
community and provides legal research through in-house and on-line facilities.

On May 15, 2000, we consummated the acquisition of substantially all of the
assets and certain of the liabilities of Moran Publishing Company, Inc.
("Moran"). Moran is the leading publisher of jury verdict and settlement
research data in New York State.

F-7

AMERICAN LAWYER MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2. ACQUISITIONS -- (CONTINUED)

On December 27, 2000, we consummated the acquisition of rights and related
assets of two leading regional trade shows in the United Kingdom from Nationwide
Exhibitions (UK) Ltd. ("Nationwide"). Under the agreement, we purchased rights
and related assets for Solicitors, The National Legal Office and Legal Services
Exhibition and The National Accountancy Exhibition.

On January 31, 2001, we consummated the acquisition of substantially all of
the assets and certain of the liabilities of Haslam Publications ("Haslam"), the
leading publisher of jury verdict and settlement research data in California.

The acquisition price of Moran and the two trade shows from Nationwide in
2000 totaled approximately $6.5 million and the price for Haslam totaled
approximately $6.8 million.

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

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include our accounts and the accounts
of our wholly-owned subsidiaries. Intercompany transactions and balances have
been eliminated in consolidation.

USE OF ESTIMATES

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

CONCENTRATIONS OF CREDIT RISK

Our financial instruments that are exposed to concentration of credit risk
consist primarily of trade accounts receivable. Concentrations of credit risk
with respect to trade accounts receivable are, except for amounts due from legal
advertising agents ("Legal Ad Agents"), generally limited due to the large
number of customers comprising our customer base. Such Legal Ad Agents do not
have significant liquid net worth and, as a result, we are exposed to a certain
level of credit concentration risk in this area, for which we believe we have
adequately provided.

REVENUE RECOGNITION

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

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

Ancillary products and services revenues consist principally of newsletter
subscriptions, sales of professional books, seminar and trade show income,
income from a daily fax service of court decisions and income from electronic
products. Book revenues are recognized upon shipment and are reflected net of
estimated

F-8

AMERICAN LAWYER MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

returns. Newsletter revenues are recognized on the same basis as subscription
revenues. Seminar and trade show revenues are recognized when the seminar or
trade show is held. Daily fax service revenue is recognized upon fulfillment of
orders.

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

The Securities and Exchange Commission issued Staff Accounting Bulletin
("SAB") No. 101 "Revenue Recognition in Financial Statements," which
reemphasizes existing guidance related to revenue recognition, including
criteria specified in the Financial Accounting Standards Board's conceptual
framework on timing of revenue recognition, and presentation and disclosure of
revenue in the financial statements. SAB No. 101 was effective for the 2000
fourth quarter. The implementation of SAB No. 101 did not have a material impact
on our results of operations, cash flow or financial position.

DEFERRED SUBSCRIPTION INCOME AND SUBSCRIPTION RECEIVABLE

Deferred subscription income results from advance payments or orders for
subscriptions received from subscribers and is amortized on a straight-line
basis over the life of the subscription as issues are served. Subscription
receivable of $1,997,400 and $2,631,500 at December 31, 2001 and 2000,
respectively, are included in accounts receivable in the accompanying
consolidated balance sheet.

ADVERTISING AND PROMOTION COSTS

Advertising and promotion costs totaled approximately $6.5 million, $7.9
million and $11.0 million for the years ended December 31, 2001, 2000 and 1999,
respectively. These costs are expensed as the related advertisement or campaign
is released.

CASH AND CASH EQUIVALENTS

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

INVENTORIES

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

ACCOUNTING FOR LONG-LIVED ASSETS

In accordance with Statement of Financial Accounting Standards ("SFAS") No.
121 "Accounting for the Impairment of Long-Lived Assets to be Disposed of," we
periodically review long-lived assets and certain identifiable intangibles for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be fully recoverable. Impairment of
long-lived assets exists if, at a minimum, the future expected cash flows
(undiscounted and without interest charges) from an entity's operations are less
than the carrying value of these assets. We do not believe that any such
impairment has occurred.

F-9

AMERICAN LAWYER MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

PROPERTY, PLANT AND EQUIPMENT

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

Buildings................................................... 25 years
Furniture, machinery and equipment.......................... 5-9 years
Computer equipment and software............................. 3-6 years

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

GOODWILL

Goodwill represents the excess of purchase price over the fair value of net
assets acquired. It is stated at cost less accumulated amortization and is
amortized on a straight-line basis over an average fifteen-year useful life.

INTANGIBLE ASSETS

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

DEFERRED FINANCING COSTS

Deferred financing costs are amortized over the life of the related debt
using the straight-line method.

SALES OF SUBSIDIARY STOCK

We have elected to treat gains and losses on the sales of subsidiary stock
as equity transactions. Therefore, the sale of Law.com has been reflected this
way in the accompanying consolidated financial statements.

RECLASSIFICATIONS

Certain amounts have been reclassified to conform with the current year
presentation.

ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133 "Accounting for
Derivative Instruments and Hedging Activities." In June 2000, the FASB issued
SFAS No. 138 "Accounting for Certain Derivative Instruments and Hedging
Activities", which amended SFAS No. 133. These statements establish accounting
and reporting standards requiring that every derivative instrument (including
certain derivative instruments embedded in other contracts) be recorded in the
balance sheet as either an asset or a liability measured at its fair value. SFAS
No. 133 requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting for qualified hedges allows a derivative's gains and losses to offset
related results on the hedged item in the income statement and requires that a
company must formally document, designate and assess the effectiveness of
transactions to obtain hedge accounting. We adopted these standards in the first
quarter of 2001.

F-10

AMERICAN LAWYER MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

We utilize an interest rate swap agreement to convert our fixed rate
interest on our $175.0 million Notes debt to a variable rate. At December 31,
2001, we had an interest rate swap outstanding with a notional amount of $175.0
million and a fair market value of $766,900. The swap agreement will terminate
on March 31, 2003. The fair market value of our interest rate swap is based upon
the amount that we could have settled with our counterparties to terminate the
swap outstanding at December 31, 2001. Gains and losses in the fair market value
of the interest rate swap are reported in earnings as a component of interest
expense, net.

NEW ACCOUNTING PRONOUNCEMENTS

On June 30, 2001, the FASB issued SFAS No. 141, "Business Combinations" and
SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires all
business combinations initiated after June 30, 2001 to be accounted for using
the purchase method of accounting and eliminates the pooling method of
accounting. With adoption of SFAS No. 142, effective January 1, 2002, goodwill
will no longer be subject to amortization over its estimated useful life.
However, goodwill will be subject to at least an annual assessment for
impairment and more frequently if circumstances indicate a possible impairment.
Companies must perform a fair-value-based goodwill impairment test. In addition,
under SFAS No. 142, an acquired intangible asset should be separately recognized
if the benefit of the intangible is obtained through contractual or other legal
rights, or if the intangible asset can be sold, transferred, licensed, rented,
or exchanged. Intangible assets will be amortized over their useful lives. We
are assessing the impact of SFAS No. 142 and we are evaluating whether or not we
will incur an impairment charge in accordance with the adoption of this
statement.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." This statement supersedes SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets." This statement also
supersedes the accounting and reporting provisions of Accounting Principles
Board ("APB") Opinion 30, "Reporting the Results of Operations -- Reporting the
Effects of Disposal of a segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions," relating to the disposal of a
segment of a business. SFAS No. 121 did not address the accounting for a segment
of a business accounted for as a discontinued operation under APB Opinion 30 and
therefore two accounting models existed for long-lived assets to be disposed of.
SFAS No. 144 established one accounting model for long-lived assets (including
those accounted for as a discontinued operation) to be disposed of by sale and
resolved certain implementation issues related to SFAS No. 121. SFAS No. 144
will be effective for fiscal years beginning after December 15, 2001. We will
adopt SFAS No. 144 in the first quarter of 2002 and are currently assessing the
impact on our results of operations and financial position.

INCOME TAXES

Income taxes are recognized during the year in which transactions enter
into the determination of financial statement income. Deferred taxes are
provided for temporary differences between amounts of assets and liabilities for
financial reporting purposes and such amounts as measured pursuant to the tax
laws.

4. OTHER (EXPENSE) INCOME

During the second quarter of 2001, we wrote-off certain available for sale
investments as the decline in value of these investments has been deemed to be
other than temporary. This write-down of $4.7 million has been included in other
(expense) income.

During the third quarter of 2001, we sold certain assets associated with
our printing facility in Florida. We recognized a net loss of approximately $0.8
million from the sale of these assets and other costs directly associated with
the transaction.

F-11

AMERICAN LAWYER MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. RESTRUCTURING CHARGE

During the second quarter and fourth quarter of 2001, upon the decision to
restructure certain of our operations, we accrued approximately $2.0 million of
restructuring charges. These charges primarily relate to severance arrangements
and have been included in operating income. As of December 31, 2001,
approximately $0.7 million, representing the unpaid charges, is included in
accrued expenses.

6. INCOME TAXES

We file a consolidated federal income tax return with our parent company,
American Lawyer Media Holdings, Inc. We account for income taxes under the
liability method pursuant to SFAS No. 109 "Accounting for Income Taxes."
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The temporary differences
primarily relate to amortization of identified intangibles related to the NLP
Acquisition, accelerated depreciation, allowance for doubtful accounts, certain
accrued liabilities and reserves not currently deductible for tax purposes and
net operating loss carryforwards.

The reconciliation between the income tax benefit and the amount computed
by applying the statutory federal income tax rate to loss before income taxes is
as follows (in thousands):

We had a net deferred tax liability of $21,441 and $33,327 at December 31,
2001 and 2000, respectively.

The deferred income tax liabilities primarily relate to the identified
intangibles from the NLP Acquisition, which were recorded at the acquisition
date. The liability was calculated on the identified intangibles from the NLP
Acquisition using our effective tax rate.

At December 31, 1999, we recorded a valuation allowance against our net
deferred tax assets consisting primarily of net operating losses. The valuation
allowance was provided as management was uncertain as to the realizability of
these deferred tax assets. At the close of 2001 and 2000, we expect to utilize
the deferred tax assets, and so have reversed the valuation allowance. Certain
other adjustments were made to more accurately reflect deferred tax items with
respect to nondeductible intangibles. As of December 31, 2001, we have net tax
operating loss carryforwards of $15,809,000 that expire in 2015-2021.

F-12

AMERICAN LAWYER MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. PROPERTY, PLANT AND EQUIPMENT

Property, plant, equipment and accumulated depreciation and amortization
consisted of the following at December 31 (in thousands):

Depreciation expense charged to operations totaled $5,462,000, $4,756,000 and
$3,501,000 for the years ended December 31, 2001, 2000 and 1999 respectively.

8. INTANGIBLE ASSETS

Intangible assets consisted of the following at December 31 (in thousands):

Amortization expense charged to operations totaled $11,832,000, $11,717,000 and
$11,810,000 for the years ended December 31, 2001, 2000 and 1999 respectively.

9. OTHER CURRENT ASSETS

Other current assets consisted of the following at December 31 (in
thousands):

Other assets include minority equity investments we hold in various private
companies.

F-13

AMERICAN LAWYER MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. RELATED PARTY TRANSACTIONS

The stockholders of Holdings, Law.com and The Deal, L.L.C. share
substantially all the same stockholders. We believe that the transactions
referred to in Note 1 were effected on arms-length terms and conditions. See
Note 1 -- Organization and Operations for a discussion of related party
transactions.

In 1999, fees of $260,000, related to the sale of POL to Law.com, were paid
to Wasserstein & Co., LP ("Wasserstein") and in 2000 and 2001, no fees were paid
to Wasserstein.

Included in other current assets on the accompanying consolidated balance
sheets is a net receivable due from Holdings of $655,700 and $757,800 at
December 31, 2001 and 2000, respectively, resulting from various affiliate
transactions.

11. COMMITMENTS AND CONTINGENCIES

Rent expense, including payments of real estate taxes, insurance and other
expenses required under certain leases, amounted to approximately $4,742,000,
$4,611,000 and $3,685,000 for the years ended December 31, 2001, 2000 and 1999
respectively. This amount includes the monthly rent payments for corporate
headquarters discussed below.

At December 31, 2001, minimum rental commitments under noncancellable
leases were as follows (in thousands):

Certain of the leases provide for free rent periods as well as rent
escalations. The rental commitments above represent actual rental payments to be
made. The financial statements reflect rent expense and rental income on a
straight-line basis over the terms of the leases. Approximately $3,109,000 and
$3,273,000, representing accrued pro rata future payments, net of receipts, is
included in other noncurrent liabilities in the accompanying balance sheets as
of December 31, 2001 and 2000, respectively.

We have employment agreements with certain of our officers and key
employees, for terms ranging up to 5 years with annual compensation aggregating
approximately $4.7 million.

We are involved in a number of legal proceedings which arose in the
ordinary course of business. In the opinion of management, the ultimate outcome
of these contingencies is not expected to have a material adverse effect on our
financial position or results of operations.

We have letters of credit outstanding totaling approximately $1,121,000 for
security deposits on our corporate office space as of December 31, 2001 and
2000.

12. EMPLOYEE BENEFITS

We have a 401(k) salary deferral plan (the "ALM Plan"). Participation in
the ALM plan is available to substantially all employees. The ALM Plan provides
for employer matching of employees' contributions, as

F-14

AMERICAN LAWYER MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

12. EMPLOYEE BENEFITS -- (CONTINUED)

defined, except that the employee match has been suspended as of January 1,
2002. Our contributions to the ALM Plan for the years ended December 31, 2001,
2000, and 1999 were $1,024,000, $555,900, and $606,979, respectively. In
addition, approximately fifteen of our employees are covered by certain defined
contribution retirement plans sponsored by the Typographical Union. We made
contributions to these retirement plans of $451,000, $310,700 and $266,200, for
the years ended December 31, 2001, 2000 and 1999 respectively.

We also sponsor the New York Law Journal Union Employee Pension Plan
established by The New York Law Publishing Company. This plan is a defined
benefit plan for our union employees. We made contributions to this retirement
plan of $9,828, $11,467, and $11,059 relating to the plan for the years ended
December 31, 2001, 2000 and 1999 respectively.

We also sponsored a defined benefit plan covering substantially all ALM,
LLC and Counsel Connect, LLC employees (a Delaware limited liability company).
This plan was frozen effective December 31, 1997, resulting in an insignificant
curtailment gain.

Pension benefits for 2001, 2000, and 1999 for the ALM Plan consist of the
following (in thousands):

F-15

AMERICAN LAWYER MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

12. EMPLOYEE BENEFITS -- (CONTINUED)

In determining the actuarial present value of the projected benefit
obligation as of December 31, 2001, 2000, and 1999, the discount rate was 7.00%,
7.00% and 6.75%, respectively, and the expected long-term rate of return on
assets was 9.00% as of December 31, 2001, 2000, and 1999.

We also sponsored an Excess Benefit Pension Plan providing a benefit to
highly compensated employees in excess of the benefits provided by the tax
qualified defined benefit plan. The plan is an unfunded, non-qualified deferred
compensation plan. This plan was frozen as of December 31, 1997.

We sponsor a comprehensive medical and dental insurance plan, which is
available to substantially all employees.

13. LONG-TERM DEBT

On December 22, 1997, we issued $175,000,000 aggregate principal amount of
9.75% senior notes (the "Notes") due December 15, 2007. The Notes accrue
interest at 9.75% which is payable in cash semi-annually on June 15 and December
15 of each year. The Notes are unsecured general senior obligations and are
fully and unconditionally guaranteed, on a joint and several and senior
unsecured basis, by each of our existing and future subsidiaries. Separate
financial statements of, and other disclosures concerning, the guarantors are
not included herein because of the guarantors' full and unconditional guarantee
of the Notes and our determination that separate financial statements and other
disclosures concerning the guarantors are not material and would not provide any
additional meaningful disclosure. The Notes may be redeemed at any time by us,
in whole or in part, at various redemption prices that include accrued and
unpaid interest. The Notes contain certain covenants that, among other things,
limit the incurrence of additional indebtedness by us and our subsidiaries, the
payment of dividends and other restricted payments by us and our subsidiaries,
asset sales, transactions with affiliates, the incurrence of liens, and mergers
and consolidations. Financing costs, totaling $7,236,000, were capitalized and
are being amortized over the term of the Notes. Amortization of deferred
financing costs is recorded as interest expense. Assuming there is no redemption
of the Notes prior to maturity, the entire principal will be payable on December
15, 2007.

On March 25, 1998, Holdings and we signed a credit agreement with various
banks that had a combined revolving commitment in the initial principal amount
of $40,000,000 (the "Revolving Credit Facility"). Financial costs associated
with the Revolving Credit Facility have been capitalized and are being amortized
over the term of the agreement. The Revolving Credit Facility is guaranteed by
Holdings and by all subsidiaries of ours. In addition, the Revolving Credit
Facility is secured by a first priority security interest in substantially all
of the properties and assets of us and our domestic subsidiaries, including a
pledge of all of the stock of such subsidiaries, and a pledge by Holdings of all
of the stock of us. The Revolving Credit Facility bears interest at a
fluctuating rate determined by reference to (i) the Base Rate plus a margin
ranging from .25% to 1.5%, or (ii) the Eurodollar rate plus a margin ranging
from 1.25% to 2.5% as the case may be. The Applicable Margin is based on the
Company's total consolidated leverage ratio. The Base Rate equals the higher of
(a) the rate of interest publicly announced from time to time by Bank of America
as its reference rate, or (b) the Federal funds rate plus .5%. The Eurodollar
rate is based on (i) the interest rate per annum at which deposits in U.S.
Dollars are offered by Bank of America's applicable lending office to major
banks in the offshore market account in an aggregate principal amount
approximately equal to the amount of the loan made to us and (ii) the maximum
reserve percentage in effect under regulations issued from time to time by the
Federal Reserve Board. We are also required to pay customary fees with respect
to the Revolving Credit Facility, including an up-front arrangement fee, annual
administrative agency fees and commitment fees on the unused portion of the
Revolving Credit Facility. The Revolving Credit Facility includes both
affirmative and negative covenants that include meeting certain financial
ratios. Assuming there is no repayment of the Revolving Credit Facility prior to
term, the entire amount will be payable on March 31, 2003.

F-16

AMERICAN LAWYER MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. LONG-TERM DEBT -- (CONTINUED)

Effective March 29, 1999, Holdings and we amended the Revolving Credit
Facility, limiting our ability to borrow in excess of $20,000,000 under the
Revolving Credit Facility until certain ratios are achieved. This amendment also
adjusted certain covenants contained in the original Revolving Credit Facility.

Effective July 20, 1999, the Revolving Credit Facility was further amended
to provide for the sale of our Internet business to Law.com (see Note
1 -- Organization and Operations) and to modify certain debt covenants.
Effective March 28, 2000, the Revolving Credit Facility was further amended to
modify certain of the covenants, permit the sale of the Business to The Deal,
L.L.C. and to increase the revolver limit described above from $20 million to
$22.5 million.

Effective January 10, 2001, the Revolving Credit Facility was further
amended to modify certain of the covenants, to permit the Haslam acquisition and
to increase the borrowing limit described above from $22.5 million to $29.0
million.

Effective August 10, 2001, the Revolving Credit Facility was amended to
permanently reduce the aggregate revolving commitment to $29.0 million and to
clarify certain sections as well as to waive compliance with certain of the
covenants at June 30, 2001.

Effective October 15, 2001, we received a waiver of compliance with certain
of the covenants at September 30, 2001 and at December 31, 2001.

Subsequent to December 31, 2001, the Revolving Credit Facility was further
amended (see Note 16 -- Subsequent Events).

At December 31, 2001, the borrowings were $27,000,000, of which $2,000,000
was available in accordance with the August 10, 2001 Revolving Credit Facility
Amendment. The available balance under the unused commitment is reduced by any
letters of credit outstanding, which totaled $1,121,000 at December 31, 2001.
The interest rates on the total outstanding balance at December 31, 2001 range
between 5.2% and 5.8%. A 10% increase in the average rate in the Revolving
Credit Facility during 2001 would have increased our net loss to approximately
$18.1 million.

14. FAIR VALUE OF FINANCIAL INSTRUMENTS

Our financial instruments consist of cash and cash equivalents, accounts
receivable, accounts payable, accrued expenses, and notes payable. We believe
that the carrying amount for these accounts approximates fair value due to the
near maturity of such financial instruments or the interest rates on these
instruments are comparable to market rates. The estimated fair value of the
Notes was $128,127,500 at December 31, 2001 based upon the current market
exchange.

F-17

AMERICAN LAWYER MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

15. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

16. SUBSEQUENT EVENTS

Effective February 22, 2002, the Revolving Credit Facility was further
amended to modify certain of the covenants and waive compliance with the
covenant relating to the total leverage ratio and interest coverage ratio for
the remainder of the term of the line of credit. In addition, the Revolving
Credit Facility was also amended to allow us to receive equity securities in
other non-related entities as payment for advertising services provided by us,
within certain limits in any one fiscal year.

F-18

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

AMERICAN LAWYER MEDIA, INC.

By: /s/ WILLIAM L. POLLAK
------------------------------------
William L. Pollak
President and Chief Executive
Officer

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints William
L. Pollak and Anup Bagaria and each of them, his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign any or all amendments to this report, and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their, his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons in the capacities and on
the date indicated.

SCHEDULE II

AMERICAN LAWYER MEDIA, INC.

VALUATION AND QUALIFYING ACCOUNTS

For the Twelve Months Ended December 31, 1999, 2000 and 2001 (dollars in
thousands):

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

(1) Represents reversals of the allowance account and write-offs of accounts
receivable, net of recoveries.

EXHIBIT INDEX

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

* Exhibits are incorporated by reference from ALM's previous filings with the
Securities and Exchange Commission.

+ Confidential treatment has been granted for certain portions of this document.