<PAGE>   1
                                  United States

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

     (Mark One)

         /x/      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended
                  September 27, 1998

         / /      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934 For the transition period from
                  _______ to _______

                         Commission File Number: 1-10333

                            CENTRAL NEWSPAPERS, INC.
             (Exact name of registrant as specified in its charter)

             INDIANA                                            35-0220660
  (State or other jurisdiction                               (I.R.S. Employer
of incorporation or organization)                         Identification Number)

                 200 E. VAN BUREN STREET, PHOENIX, ARIZONA 85004
                     (Address of principal executive office)

                                 (602) 444-8000
                         (Registrant's telephone number)

Indicate by check mark whether the registrant has (1) 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 / /

The number of shares of each class of common stock outstanding as of November 2,
1998:

CLASS A COMMON STOCK                                                  18,707,924
CLASS B COMMON STOCK                                                  31,345,500
<PAGE>   2
                            Central Newspapers, Inc.

                               Index to Form 10-Q

       Part I -   FINANCIAL INFORMATION                                     Page

                  Item 1 - Financial Statements:

                           Consolidated Statement of Financial Position      3-4

                           Consolidated Statement of Income                    5

                           Consolidated Statement of Shareholders' Equity      6

                           Consolidated Statement of Cash Flows                7

                           Notes to Consolidated Financial Statements        8-9

                  Item 2 - Management's Discussion and Analysis of
                           Financial Condition and Results of Operations    9-13

       Part II -  OTHER INFORMATION

                  Item 6 - Exhibits and Reports on Form 8-K                14-20


                                      -2-
<PAGE>   3
                                     PART I.

Item 1. Financial Statements

                            CENTRAL NEWSPAPERS, INC.
                  Consolidated Statement of Financial Position

<TABLE>
<CAPTION>
                                                       September 27,   December 28,
ASSETS                                                     1998           1997
(In thousands)                                         (Unaudited)
                                                         --------       --------
<S>                                                    <C>             <C>     
CURRENT ASSETS:
     Cash and cash equivalents                           $ 32,049       $ 36,924
     Marketable securities                                 12,830         11,524
     Accounts receivable (net of allowances of
     $3,694 and $2,959)                                    80,932         89,707
     Inventories                                           11,640         10,320
     Deferred income tax benefits                           7,693          7,919
     Other current assets                                  13,020          5,712
                                                         --------       --------
              Total current assets                        158,164        162,106
                                                         --------       --------
PROPERTY, PLANT AND EQUIPMENT:
     Land                                                  18,985         18,616
     Buildings and improvements                           135,595        122,409
     Leasehold improvements                                   902          4,412
     Machinery and equipment                              397,499        383,626
     Construction in progress                              10,656          8,071
                                                         --------       --------
                                                          563,637        537,134
              Less accumulated depreciation               278,736        250,451
                                                         --------       --------
                                                          284,901        286,683
                                                         --------       --------
OTHER ASSETS:
     Land held for development                              3,166          3,116
     Goodwill and other intangibles                       126,016        122,729
     Investment in Affiliate                                9,558          8,321
     Other                                                 36,890         31,356
                                                         --------       --------
                                                          175,630        165,522
                                                         --------       --------
TOTAL ASSETS                                             $618,695       $614,311
                                                         ========       ========
</TABLE>

See accompanying notes to consolidated financial statements.


                                      -3-
<PAGE>   4
                            CENTRAL NEWSPAPERS, INC.
                  Consolidated Statement of Financial Position

<TABLE>
<CAPTION>
                                                                   September 27,    December 28,
LIABILITIES AND SHAREHOLDERS' EQUITY                                  1998             1997
(In thousands, except share data)                                  (Unaudited)
                                                                    ---------        ---------
<S>                                                                <C>              <C>      
CURRENT LIABILITIES:
     Accounts payable                                               $  20,366        $  19,672
     Short-term bank debt                                               5,000           10,000
     Accrued compensation                                              19,011           20,061
     Dividends payable                                                  5,881            5,613
     Accrued expenses and other liabilities                            18,525           16,825
     Federal and state income taxes                                                      1,578
     Deferred revenue                                                  32,077           23,618
                                                                    ---------        ---------
              Total current liabilities                               100,860           97,367
                                                                    ---------        ---------
DEFERRED INCOME TAXES                                                  25,374           26,882
                                                                    ---------        ---------
POSTRETIREMENT AND OTHER NONCURRENT LIABILITIES                        90,508           86,997
                                                                    ---------        ---------
MINORITY INTEREST IN SUBSIDIARIES                                       2,809            1,866
                                                                    ---------        ---------
REDEEMABLE PREFERRED STOCK ISSUED BY SUBSIDIARY                        18,920           18,920
                                                                    ---------        ---------
SHAREHOLDERS' EQUITY:
     Preferred stock--issuable in series:
     Authorized--25,000,000 shares
     Issued--none
     Class A common stock--without par value:
     Authorized--150,000,000 shares
     Issued and outstanding--21,314,058 and 22,017,626 shares          36,543           29,934
     Class B common stock--without par value:
     Authorized--130,000,000 shares
     Issued and outstanding--31,345,500 shares                             63               63
     Retained earnings                                                343,707          352,531
     Unamortized value of restricted stock                             (1,419)          (1,924)
     Unrealized gain on available-for-sale securities                   1,330            1,675
                                                                    ---------        ---------
                                                                      380,224          382,279
                                                                    ---------        ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                          $ 618,695        $ 614,311
                                                                    =========        =========
</TABLE>

See accompanying notes to consolidated financial statements.


                                      -4-
<PAGE>   5
                            CENTRAL NEWSPAPERS, INC.
                        Consolidated Statement of Income
                                   (Unaudited)

(In thousands, except per share data)

<TABLE>
<CAPTION>
                                                              13 Weeks Ended                  39 Weeks Ended
                                                   September 27,    September 28,    September 27,    September 28,
                                                            1998             1997             1998             1997
                                                       ---------        ---------        ---------        ---------
<S>                                                <C>              <C>              <C>              <C>      
OPERATING REVENUES:
     Advertising                                       $ 135,390        $ 129,431        $ 411,885        $ 395,790
     Circulation                                          36,537           35,642          112,376          106,545
     Other                                                 9,399            8,834           30,787           22,293
                                                       ---------        ---------        ---------        ---------
                                                         181,326          173,907          555,048          524,628
                                                       ---------        ---------        ---------        ---------
OPERATING EXPENSES:
     Compensation                                         60,580           59,068          181,787          177,434
     Newsprint and ink                                    25,341           25,390           84,100           76,846
     Other operating costs                                47,140           45,426          145,622          128,422
     Depreciation and amortization                        11,839           10,843           34,613           32,179
     Work force reduction cost                                              2,632               77            9,355
                                                       ---------        ---------        ---------        ---------
                                                         144,900          143,359          446,199          424,236
                                                       ---------        ---------        ---------        ---------
OPERATING INCOME                                          36,426           30,548          108,849          100,392

OTHER INCOME (principally investment income)                 843              813            3,581            3,364

OTHER EXPENSES                                              (322)            (623)            (773)          (1,613)
                                                       ---------        ---------        ---------        ---------
INCOME BEFORE INCOME TAXES                                36,947           30,738          111,657          102,143

PROVISION FOR INCOME TAXES                                15,315           12,752           46,231           42,304
                                                       ---------        ---------        ---------        ---------
INCOME BEFORE MINORITY INTEREST AND
     EQUITY IN AFFILIATE                                  21,632           17,986           65,426           59,839

MINORITY INTEREST IN SUBSIDIARIES                           (502)            (688)          (1,937)          (1,975)

EQUITY IN NET EARNINGS (LOSS) OF AFFILIATE                   327              180              803             (255)
                                                       ---------        ---------        ---------        ---------
NET INCOME                                             $  21,457        $  17,478        $  64,292        $  57,609
                                                       =========        =========        =========        =========
NET INCOME PER COMMON SHARE:
      Basic                                            $    0.87        $    0.69        $    2.57        $    2.22
      Diluted                                               0.85             0.67             2.49             2.16

DIVIDENDS DECLARED PER CLASS A COMMON SHARE            $    0.24        $    0.21        $    0.66        $    0.59

AVERAGE COMMON SHARES OUTSTANDING:
(combined Class A and equivalent Class B shares)
      Basic                                               24,745           25,229           25,061           25,918
      Diluted                                             25,384           26,070           25,771           26,635
</TABLE>

See accompanying notes to consolidated financial statements.


                                      -5-
<PAGE>   6
                            CENTRAL NEWSPAPERS, INC.
                 Consolidated Statement of Shareholders' Equity
                                   (Unaudited)

<TABLE>
<CAPTION>
(In thousands, except share data)                                                                                            
                                                                                                                             
                                                                 Class A                      Class B                        
                                                               Common Stock                Common Stock          Retained    
                                                           Shares        Amount         Shares        Amount     Earnings    
                                                         -----------   -----------   -----------   -----------  -----------  
<S>                                                      <C>           <C>           <C>           <C>          <C>          
BALANCE AT DECEMBER 30, 1996                              23,237,711   $    24,259    31,553,000   $        63  $   363,365  
     Net income (39 weeks)                                                                                           57,609
     Dividends declared:
      Class A common stock                                                                                          (13,243)
      Class B common stock                                                                                           (1,853)
     Exercise of stock options                               139,281         4,707
     Repurchase of Class A common stock                   (1,332,267)       (1,475)                                 (65,319)
     Repurchase of Class B common stock                                                  (17,500)                       (99)
     Issuance of restricted stock                              7,500           419                                           
     Amortization of restricted stock                                                                                        
     Common stock conversion                                  19,000                    (190,000)
     Change in net unrealized gain on
      available-for-sale securities                                                                                          
                                                         -----------   -----------   -----------   -----------  -----------  
BALANCE AT SEPTEMBER 28, 1997                             22,071,225   $    27,910    31,345,500   $        63  $   340,460  
     Net income (13 weeks)                                                                                           23,886
     Dividends declared:
      Class A common stock                                                                                           (4,623)
      Class B common stock                                                                                             (659)
     Exercise of stock options, net                           35,151         1,437
     Repurchase of Class A common stock                     (100,000)         (125)                                  (6,533)
     Repurchase of Class B common stock
     Issuance of restricted stock,
      net of cancellations                                    11,250           712                                           
     Amortization of restricted stock                                                                                        
     Common stock conversion
     Change in net unrealized gain on
      available-for-sale securities                                                                                          
                                                         -----------   -----------   -----------   -----------  -----------  
BALANCE AT DECEMBER 28, 1997                              22,017,626   $    29,934    31,345,500   $        63  $   352,531  
     Net income (39 weeks)                                                                                           64,292
     Dividends declared:
      Class A common stock                                                                                          (14,409)
      Class B common stock                                                                                           (2,069)
     Exercise of stock options                               188,912         7,742
     Repurchase of Class A common stock                     (897,730)       (1,477)                                 (56,638)
     Issuance of restricted stock                              5,250           344                                           
     Amortization of restricted stock                                                                                        
     Change in net unrealized gain on
      available-for-sale securities                                                                                          
                                                         -----------   -----------   -----------   -----------  -----------  
BALANCE AT SEPTEMBER 27, 1998                             21,314,058   $    36,543    31,345,500   $        63  $   343,707  
                                                         ===========   ===========   ===========   ===========  ===========  
</TABLE>

<TABLE>
<CAPTION>
(In thousands, except share data)                                       Unrealized
                                                         Unamortized       Gain on
                                                            Value of    Available-
                                                          Restricted      for-Sale
                                                               Stock    Securities
                                                         -----------   -----------
<S>                                                      <C>           <C>        
BALANCE AT DECEMBER 30, 1996                             ($    1,627)  $     1,490
     Net income (39 weeks)                               
     Dividends declared:
      Class A common stock                                
      Class B common stock                                
     Exercise of stock options                           
     Repurchase of Class A common stock                  
     Repurchase of Class B common stock                  
     Issuance of restricted stock                               (419)
     Amortization of restricted stock                            636
     Common stock conversion                             
     Change in net unrealized gain on
      available-for-sale securities                                            300
                                                         -----------   -----------
BALANCE AT SEPTEMBER 28, 1997                            ($    1,410)  $     1,790
     Net income (13 weeks)                               
     Dividends declared:
      Class A common stock                                
      Class B common stock                                
     Exercise of stock options, net                      
     Repurchase of Class A common stock                  
     Repurchase of Class B common stock
     Issuance of restricted stock, net of cancellations         (712)
     Amortization of restricted stock                            198
     Common stock conversion
     Change in net unrealized gain on
      available-for-sale securities                                           (115)
                                                         -----------   -----------
BALANCE AT DECEMBER 28, 1997                             ($    1,924)  $     1,675
     Net income (39 weeks)                               
     Dividends declared:
      Class A common stock                                
      Class B common stock                                
     Exercise of stock options                           
     Repurchase of Class A common stock                  
     Issuance of restricted stock                               (344)
     Amortization of restricted stock                            849
     Change in net unrealized gain on
      available-for-sale securities                                           (345)
                                                         -----------   -----------
BALANCE AT SEPTEMBER 27, 1998                            ($    1,419)  $     1,330
                                                         ===========   ===========
</TABLE>

See accompanying notes to consolidated financial statements.


                                      -6-
<PAGE>   7
                            CENTRAL NEWSPAPERS, INC.
                      Consolidated Statement of Cash Flows
                                   (Unaudited)

(In thousands)

<TABLE>
<CAPTION>
                                                                                 39 Weeks Ended
                                                                      September 27,    September 28,
                                                                               1998             1997
                                                                          ---------        ---------
<S>                                                                   <C>              <C>      
OPERATING ACTIVITIES:
     Net income                                                           $  64,292        $  57,609
     Items which did not use (provide) cash:
     Depreciation and amortization                                           34,561           32,179
     Postretirement and pension benefits                                      2,645            5,098
     Loss (gain) on disposition of assets                                       131              (74)
     Minority interest in earnings of subsidiaries                            1,937            1,975
     Equity loss (earnings) in Affiliate                                       (803)             255
     Deferred income taxes                                                     (637)           1,412
     Amortization of restricted stock awards                                    849              636
     Other                                                                     (516)             370
     Net proceeds from (purchases of) trading securities                     (1,578)           2,160
     Net change in other current assets and liabilities                      12,508           10,548
                                                                          ---------        ---------
              Net cash provided by operating activities                     113,389          112,168
                                                                          ---------        ---------
INVESTING ACTIVITIES:
     Purchases of property, plant and equipment - net                       (30,916)         (18,144)
     Net proceeds from (purchases of) available-for-sale securities          (3,143)          11,409
     Acquisitions                                                            (5,839)         (33,219)
     Other                                                                   (1,244)          (6,027)
                                                                          ---------        ---------
              Net cash used by investing activities                         (41,142)         (45,981)
                                                                          ---------        ---------
FINANCING ACTIVITIES:
     Cash dividends paid                                                    (16,478)         (14,818)
     Dividends paid to minority interest                                     (1,324)          (1,159)
     Proceeds from exercise of stock options                                  4,200            2,685
     Borrowings of short-term debt                                            5,000           34,400
     Repayments of short-term debt                                          (10,405)            (800)
     Repurchase of common stock                                             (58,115)         (66,893)
                                                                          ---------        ---------
              Net cash used by financing activities                         (77,122)         (46,585)
                                                                          ---------        ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                             (4,875)          19,602

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                               36,924           36,149
                                                                          ---------        ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                  $  32,049        $  55,751
                                                                          =========        =========
SUPPLEMENTAL CASH FLOW INFORMATION:
     Issuance by subsidiary of redeemable preferred stock
      in exchange for Class A common stock of subsidiary                                   $  18,920
     Income taxes paid                                                    $  49,880           51,324
     Interest paid                                                              277              748
</TABLE>

See accompanying notes to consolidated financial statements.


                                      -7-
<PAGE>   8
                            CENTRAL NEWSPAPERS, INC.
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

1. Central Newspapers, Inc. and its subsidiaries (the "Company") are primarily
engaged in the publishing and distribution of newspapers. Revenues are
principally derived from advertising and newspaper sales in the Phoenix, Arizona
and Indianapolis, Indiana metropolitan areas. The Company also has an 80%
interest in the Westech group of companies which are predominately in the jobs
fair business and a 13.5% interest in Ponderay Newsprint Company ("Affiliate"),
a partnership formed to own a newsprint mill in the State of Washington.

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 revenues and expenses
as of and for the period ending with the financial reporting date. Actual
results could differ from those estimates.

2. The accompanying unaudited consolidated financial statements do not include
all of the information and disclosures which are normally included in Form 10-K
and the annual report to shareholders. These financial statements should be read
in conjunction with the Company's audited consolidated financial statements and
related notes for the year ended December 28, 1997. The accompanying
consolidated financial statements have been prepared in accordance with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The consolidated
statement of financial position at December 28, 1997, presented herein, has been
derived from audited financial statements. In the opinion of the Company's
management, the unaudited consolidated financial statements reflect all
adjustments which are necessary to present fairly, in all material respects, the
Company's financial position, results of operations and cash flows for the
interim periods presented. All adjustments are of a normal recurring nature.
Such statements are not necessarily indicative of the results to be expected for
the full year.

3. The Company's fiscal year ends on the last Sunday of the calendar year. The
years ending December 27, 1998 and December 28, 1997 each comprise 52 weeks.

4. Net income per common share is computed using the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share," which
requires companies to present basic earnings per share ("EPS") and diluted EPS.
The Company adopted this new standard in the fourth quarter of 1997 and has
restated EPS for all prior periods disclosed in the financial statements. Basic
EPS is computed based upon the weighted average number of common shares
outstanding in each year. The Class B common stock is included in the
computation as if converted to Class A common stock at a ratio of 10 shares of
Class B common stock to one share of Class A common stock. Diluted EPS includes
the effect of dilutive stock options granted under the Company's Amended and
Restated Stock Compensation Plan.

5. During 1997 the Company reduced its work force in response to circulation
distribution changes, technological changes and the closure of the Phoenix
afternoon newspaper. Certain employees were offered retirement benefits through
a non-qualified supplemental retirement plan. This work force reduction resulted
in an after tax charge of $5.5 million, or $.21 per diluted share for the nine
months ended September 28, 1997.

6. In December, 1997, the Board of Directors authorized the repurchase of up to
$100.0 million of the Company's Class A common stock. The shares may be
purchased within the subsequent three years on the open market or in privately
negotiated transactions. The Company has repurchased a total of 897,730 shares
under this authorization through September 27, 1998.

7. At the annual meeting of Shareholders of the Company on May 15, 1998, the
shareholders approved an increase in the number of authorized shares of Class A
common stock from 75,000,000 to 150,000,000 shares and Class B common stock from
50,000,000 to 130,000,000 shares.

8. On October 23, 1998, pursuant to a September 21, 1998 agreement, the Company
purchased 2,500,000 shares of its Class A common stock from the Nina Mason
Pulliam Charitable Trust at $60 per share plus interest from September 16, 1998,
for total consideration of $150.8 million. The Company has an exclusive option
for a period of one year to purchase up to 1.5 million shares of Class A common
stock or equivalents held by the Trust


                                      -8-
<PAGE>   9
at $67 per share. The Company may only elect to exercise the option if the
average trading price per share is at least $67 for five consecutive trading
days during the one year option period. In such an event, the exercise must be
made within five business days or the option will expire. In order to finance
the transaction, the Company is in the process of closing a $300 million
revolving credit facility arranged by First Chicago Capital Markets, Inc., a
subsidiary of Bank One Corporation. The credit facility is expected to close
prior to November 15, 1998. In the interim, a short-term $150 million bridge
loan has been obtained. The bridge loan will mature and be repaid on the date
the credit facility closes.

9. Certain prior year amounts in the financial statements have been reclassified
to conform with the current year presentation.

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

GENERAL

The Company's principal line of business is newspaper publishing. Revenues are
derived primarily from advertising and newspaper sales in the Phoenix, Arizona
and Indianapolis, Indiana metropolitan areas. The Company also has an 80%
interest in the Westech group of companies, which is predominantly in the jobs
fair business and a 13.5% interest in Ponderay Newsprint Company, a partnership
formed to own a newsprint mill in the State of Washington. The analysis of the
third quarter and nine month period ended September 27, 1998 compared with
comparable 1997 periods should be read in conjunction with the fiscal 1997
consolidated financial statements and the accompanying notes to the consolidated
financial statements.

The Company's business tends to be somewhat seasonal, with peak revenues and
profits generally occurring in the second and fourth quarters of each year.

THIRD QUARTER AND NINE MONTH PERIOD ENDED SEPTEMBER 27, 1998 COMPARED WITH 1997

QUARTERLY RESULTS OF OPERATIONS

Third quarter and year-to-date diluted earnings per share for 1998 were $.85 and
$2.49 for increases of 26.9% and 15.3%, respectively, over the corresponding
1997 periods. The effects of work force reduction costs ("special charges")
negatively impacted earnings in the third quarter and first nine months of 1997
and, to a much lesser extent the second quarter of 1998. Excluding special
charges, diluted earnings per share would have been $.85 for the third quarter
of 1998 and $2.50 for the 1998 nine month period, which represented increases of
16.4% and 5.5%, respectively, versus comparable 1997 amounts.

Operating income for the third quarter and the nine months of 1998 was $36.4
million and $108.8 million, respectively, which represented increases of 19.2%
and 8.4%, respectively over comparable 1997 periods. Excluding special charges,
operating income increased 9.8% for the third quarter and decreased 0.7% for the
nine month period, compared to 1997 periods.

Net income for the third quarter of 1998 was $21.5 million, up 22.8% from the
same period of 1997. For the nine month period, net income for 1998 was $64.3
million, up 11.6% over the prior year. Excluding special charges, net income
increased 13.2% for the third quarter and 1.9% for the nine month period,
compared to 1997 periods. EBITDA (operating earnings before depreciation,
amortization and special charges) for the comparable periods was $48.3 million
for the third quarter of 1998 and $143.5 million year-to-date, representing
increases of 9.8% and 1.1%, respectively, versus comparable 1997 periods.

OPERATING REVENUES

The Company's third quarter and nine month revenues rose to $181.3 million and
$555.0 million for increases of 4.3% and 5.8%, respectively, when compared with
the same 1997 periods.

Total advertising revenue for the three and nine month periods ended September
27, 1998 were $135.4 million and $411.9 million for increases of 4.6% and 4.1%,
respectively over comparable 1997 periods. The increases


                                      -9-
<PAGE>   10
in advertising revenues for the third quarter of 1998 resulted from gains in
retail, national, and classified in Phoenix and Indianapolis. In both markets,
the most significant increases were due to gains in the classified recruitment
category.

Circulation revenues for the third quarter and year-to-date periods increased to
$36.5 million and $112.4 million, respectively, for increases of 2.5% and 5.5%
when compared to 1997. The third quarter increase is primarily due to a March
1998 increase in the home delivered price of the Phoenix paper. The year-to-date
increase related to a distribution system change in Indianapolis which resulted
in a revenue increase of $4.3 million, Phoenix circulation growth, and the home
delivered price increase in Phoenix.

Other revenues for the third quarter and year-to-date were $9.4 million and
$30.8 million, for increases of 6.4% and 38.1%, respectively over comparable
1997 periods. The increases for the third quarter of 1998 were due to gains in
online and direct marketing programs. The year-to-date increase related to
increased job fairs, online, direct marketing, and specialty publications.

The following is a summary of major market linage and circulation statistics for
the third quarter and nine month periods:

(In thousands, except circulation)

<TABLE>
<CAPTION>
                                                   Third Quarter               %                 Year-to-date                %
                                                1998           1997         Change           1998            1997          Change
                                             ----------     ----------     ----------      ----------     ----------     ----------
<S>                                          <C>            <C>            <C>             <C>            <C>            <C>
Full Run Linage in six column inches:(1)
  Retail                                          657.9          603.9            8.9         1,950.5        1,875.2            4.0
  National                                        113.3          114.5           (1.1)          333.4          333.8           (0.1)
  Classified                                      801.2          787.1            1.8         2,378.2        2,365.0            0.6
                                             ----------     ----------     ----------      ----------     ----------     ----------
Total                                           1,572.4        1,505.5            4.4         4,662.1        4,574.0            1.9
                                             ==========     ==========     ==========      ==========     ==========     ==========

Full Run Linage by Major Markets:
  Phoenix (1)                                     690.3          679.8            1.5         2,133.2        2,075.7            2.8
  Indianapolis                                    882.1          825.7            6.8         2,528.9        2,498.3            1.2
                                             ----------     ----------     ----------      ----------     ----------     ----------
Total                                           1,572.4        1,505.5            4.4         4,661.9        4,574.0            1.9
                                             ==========     ==========     ==========      ==========     ==========     ==========

Net Advertising Revenue                      $  135,390     $  129,431            4.6      $  411,885     $  395,790            4.1

Combined Average Daily Circulation:
  Phoenix                                       424,978        433,862           (2.1)        466,793        456,183            2.3
  Indianapolis                                  259,023        260,153           (0.4)        270,221        268,421            0.7
Sunday Circulation:
  Phoenix                                       545,360        552,142           (1.2)        582,596        579,331            0.6
  Indianapolis                                  390,449        391,894           (0.4)        390,911        392,955           (0.5)
</TABLE>

(1)      For comparability, linage statistics for the 13 weeks and 39 weeks
         ended September 28, 1997 excluded linage of The Phoenix Gazette, which
         ceased publication in January, 1997.

OPERATING EXPENSES

Compensation costs, which include fringe benefits, increased 2.6% to $60.6
million in the third quarter and 2.5% to $181.8 million for the nine month
period. The year-over-year headcount decreased 2.7% due primarily to the closure
of The Phoenix Gazette and the impact of a conversion from a carrier-based
distribution arrangement to an agency-based distribution work force in
Indianapolis. These benefits were offset by increased employee benefits,
commissions and merit increases.

Newsprint and ink expense for 1998 decreased 0.2% to $25.3 million in the third
quarter and increased 9.4% to $84.1 million for the nine month period. The
decrease in newsprint expense for the third quarter was primarily due to a
volume decrease of 1.7% related to reduced circulation in Phoenix and cost
reduction measures. The year-to-date increase is primarily due to higher
newsprint prices during 1998 and a volume increase of 3.4% for the nine month
period over comparable 1997 periods. This volume increase was related to
increased


                                      -10-
<PAGE>   11
advertising linage and circulation gains. The Company anticipates that newsprint
expense comparisons may show modest increases during the fourth quarter of 1998.

Other operating costs rose 3.8% to $47.1 million for the third quarter and 13.4%
to $145.6 million for the nine month period. Significant items contributing to
these increases in the third quarter versus the same 1997 period included
outside printing costs from new publications and inserts, distribution costs
related to increased data marketing volume and increased job fair costs. The
year-to-date increase included costs related to the circulation delivery system
changes in Indianapolis (which did not contribute to the third quarter cost but
increased year-to-date expense by $6.3 million), costs associated with outside
printing of inserts and special publications, promotional/marketing programs in
both major markets, increased Arizona Republic delivery costs, and expenses
related to the job fair business.

Depreciation and amortization expense for the third quarter and the year-to-date
was $11.8 million and $34.6 million, compared with $10.8 million and $32.2
million in 1997. The expense increases were primarily a result of information
technology projects in Phoenix and pagination and remodeling projects in
Indianapolis.

The Company recorded work force reduction costs of $2.6 million in the third
quarter of 1997 and $9.4 million for the nine months ended September 28, 1997.
Of this amount, approximately $4.2 million resulted from closure of The Phoenix
Gazette where approximately 85 positions were eliminated. The balance of the
charge related to the composing room work force reduction of 30 individuals in
the third quarter and the conversion from the carrier-based work force to an
agent based circulation arrangement, both in Indianapolis.

NON-OPERATING ITEMS AND EQUITY IN AFFILIATE

Other non-operating income (primarily investment income) increased 3.7% in the
third quarter and 6.5% year-to-date primarily due to an increase in investable
cash. Other non-operating expenses decreased in the third quarter and
year-to-date due to a reduction in interest expense from 1997.

Equity in Affiliate recorded gains in the third quarter and the nine month
period due to an increase in newsprint selling prices being realized by Ponderay
Newsprint Company.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary source of liquidity is net cash provided by operating
activities. Net cash provided by operating activities for the first nine months
of 1998 and 1997 was $113.4 million and $112.2 million, respectively. The
principal uses of cash in the first nine months of 1998 were the repurchase of
Class A common stock, capital expenditures, the payment of dividends, and
repayment of the $10 million short-term bank line of credit. The corresponding
1997 period included the $33.2 million paid for the acquisition of an 80%
interest in the Westech group of companies and $66.9 million paid to repurchase
the Company's common stock. At the end of the nine month period, the Company's
available cash and short-term investments totaled $44.9 million, a decrease of
$3.6 million from the balance at the end of 1997. Working capital (exclusive of
cash) for the same period decreased $7.6 million to $30.3 million.

Total capital expenditures for the nine months of 1998 were $30.9 million
compared to $18.1 million for the comparable 1997 period. The Company plans
approximately $34 million of capital expenditures in 1998. As of September 27,
1998, there were no significant formal commitments related to future capital
expenditures.

In December 1997, the Company announced that its Board of Directors had
authorized the repurchase of up to $100 million of its Class A common stock on
the open market or in privately negotiated transactions over a three year time
period. During the nine months ended September 27, 1998, the Company repurchased
897,730 shares at a total cost of $58.1 million.

The Company has arranged two unsecured, uncommitted credit facilities which can
provide up to $80 million in short-term financing for general corporate
purposes. At September 27, 1998, the Company had $5 million outstanding under
such facilities.


                                      -11-
<PAGE>   12
On October 23, 1998, pursuant to a September 21, 1998 agreement, the Company
purchased 2,500,000 shares of its Class A common stock from the Nina Mason
Pulliam Charitable Trust at $60 per share plus interest from September 16, 1998,
for total consideration of $150.8 million. The Company has an exclusive option
for a period of one year to purchase up to 1.5 million shares of Class A common
stock or equivalents held by the Trust at $67 per share. The Company may only
elect to exercise the option if the average trading price per share is at least
$67 for five consecutive trading days during the one year option period. In such
an event, the exercise must be made within five business days or the option will
expire. In order to finance the transaction, the Company is in the process of
closing a $300 million revolving credit facility arranged by First Chicago
Capital Markets, Inc., a subsidiary of Bank One Corporation. The credit facility
is expected to close prior to November 15, 1998. In the interim, a short-term
$150 million bridge loan has been obtained. The bridge loan will mature and be
repaid on the date the credit facility closes.

At the Board of Directors meeting of the Company, on September 8, 1998, the
board approved a 14% increase in its cash dividend to a new annual rate of $0.96
per share on its Class A common stock and $0.96 on its Class B common stock.
Dividends of $0.24 per share on the Class A common stock and $0.24 on the Class
B common stock were declared during the quarter and paid October 9, 1998. Total
Class A and B dividends paid during the nine month period of 1998 were $16.5
million.

The Company has demonstrated a consistent ability to generate net cash flow from
operations. Management believes that existing cash and investments, net cash
flows from operations and available bank credit resources are sufficient to
enable the Company to maintain its current level of operations. Financing for
future investing opportunities is expected to come from a combination of
existing cash, new and existing debt facilities and/or the use of equity.

YEAR 2000 UPDATE

State of Readiness

The Central Newspapers, Inc. Year 2000 project is on schedule to meet its
objectives. The Company has developed a comprehensive program to identify,
evaluate, test, upgrade or replace each of its computer and non-computer based
systems in connection with Year 2000 readiness. The Company has devoted
significant resources to the program including the development of a Year 2000
project team which reports to senior management on a regular basis and the
construction of a test environment dedicated to the Year 2000 testing process.
The Chief Information Officer reports progress at every regularly scheduled
Board of Directors meeting.

The Company has been actively implementing new systems and technology since 1995
for reasons unrelated to the year 2000, and these actions have resulted in a
number of major information technology systems becoming year 2000 compliant.

The Company has completed its discovery phase of the program and has performed
several review audits to ensure that all susceptible systems have been
identified, including client server, desktop and all other systems with embedded
computer chips. All desktop systems, application software and servers have been
updated to a compliant level and all database modules are in the process of
being upgraded. All other susceptible systems are in the remediation and testing
phase and the Company anticipates that testing will have been completed or
initiated for all significant systems by the end of 1998.

The Company has requested letters of compliance from each of its vendors and,
wherever possible, works with its vendors in determining an appropriate testing
and compliance process. This process is scheduled for completion by year-end
1998. During early 1999, the Company anticipates using a third party auditor to
review the project. In addition, certain employees have attended a number of
Year 2000 training programs and outside consultants have been hired where
necessary.


                                      -12-
<PAGE>   13
Costs

Total costs associated with the Year 2000 project are estimated at approximately
$8.5 million, of which approximately $6.5 million will be incurred through
fiscal 1998 with the remainder incurred during 1999.

Risks

Despite the efforts described above, the Company could potentially experience a
disruption in its operations as a result of potential non-compliance of certain
vendors, financial institutions, governmental agencies or other third-parties or
external systems. Such disruptions could potentially affect various aspects of
business operations including, but not limited to, the timeliness and content of
certain newspapers or online products. At this time, the Company is unable to
determine whether the consequences of any year 2000 non-compliance would have a
material impact on the Company's results of operations, liquidity or financial
condition.

Contingency Plans

In an effort to minimize any disruption, the Company is in the process of
creating a comprehensive contingency plan to address potential Year 2000
scenarios. Such plans include maintaining an inventory of critical supplies such
as newsprint, ink and other consumables for at least a 30-45 day production
cycle as well as creating a smaller product designed to maximize advertising
content.

OUTLOOK FOR THE REMAINDER OF 1998

The Company foresees continued growth in advertising revenues for the remainder
of 1998, but at a rate slightly less than that experienced during the first nine
months of 1998. Circulation revenue is also expected to increase modestly in the
fourth quarter of 1998 when compared with the similar period in 1997 due to
projected circulation gains and subscription price increases in Phoenix.
Non-newsprint operating expenses are expected to increase at a rate comparable
with revenue growth. The cost of newsprint, the second largest expense item, is
expected to increase in the fourth quarter of 1998. Nonetheless, the Company
still expects earnings per share to increase for the full year 1998.

FORWARD-LOOKING STATEMENTS

This document contains material that is forward-looking in nature. From time to
time, the Company may provide forward-looking statements relating to such
matters as anticipated financial performance, business prospects and similar
matters. All forward-looking statements are based upon information available to
the Company at the time they are made and the Company assumes no obligation to
update any forward-looking statements. The Company notes that a variety of
factors could cause the Company's actual results to differ materially from the
expectations expressed in the forward-looking statements. The risks and
uncertainties that may affect the operations, performance and results of the
Company's business include, but are not limited to:

*        economic weakness in the Company's geographic markets

*        weakness in retail, national and/or classified advertising revenue due
         to factors including retail consolidation, declines in the advertising
         budgets of major customers and increased competition from print and
         non-print products

*        declines in circulation due to changing reader preferences and/or new
         forms of information dissemination

*        fluctuations in the price of newsprint

*        an increase in distribution and/or production costs over anticipated
         levels

*        the negative impact of issues related to labor agreements

*        new competitors emerging in our markets

*        an unexpected rise in interest rates affecting the company's borrowing
         costs


                                      -13-
<PAGE>   14
                                     PART II

                            CENTRAL NEWSPAPERS, INC.

Item 1. Legal Proceedings -- None

Item 2. Changes in Securities -- None

Item 3. Default Upon Senior Securities -- None

Item 4. Submission of Matters to a Vote of Security Holders -- None

Item 5. Other Information -- None

Item 6. Exhibits and Reports on Form 8-K

         a) Exhibits

                  Exhibit 10 - a) Stock Purchase Agreement with the Nina Mason
                                  Pulliam Charitable Trust.
                               b) Standstill and Option Agreement with the Nina
                                  Mason Pulliam Charitable Trust.

                  Exhibit 15 - Letter from PricewaterhouseCoopers LLP with
                               respect to unaudited interim financial
                               information.

                  Exhibit 27 - Selected financial data.

         b) The Company filed a report on Form 8-K on October 9, 1998 related to
            the purchase of 2,500,000 shares of its Class A common stock from
            the Nina Mason Pulliam Charitable Trust.

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

                            CENTRAL NEWSPAPERS, INC.

Dated: November 2, 1998     By: /s/ Louis A. Weil, III
                                ------------------------------------------------
                                Louis A. Weil, III
                                President and Chief Executive Officer

                            By: /s/ Thomas K. MacGillivray
                                ------------------------------------------------
                                Thomas K. MacGillivray
                                Vice President and Chief Financial Officer


                                      -14-