##### Table of Contents









UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549




---

FORM 10-K

(Mark One)

|    |                                                                 
|--- | ----------------------------------------------------------------
|[X] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES

EXCHANGE ACT OF 1934


For the fiscal year ended December 26, 1999

or



|      |                                                         
|----- | --------------------------------------------------------
|[   ] | 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
	(State or Other Jurisdiction
	of Incorporation or Organization)
	200 E. Van Buren Street, Phoenix, Arizona
	(Address of Principal Executive Offices) |  | 35-0220660
	(I.R.S. Employer Identification No.)
	85004
	Zip Code

(602) 444-1100

(Registrants Telephone Number, Including
Area Code)


Securities registered pursuant to Section 12(b) of the
Act:

|                                        |  |                                            
|--------------------------------------- |  | -------------------------------------------
|                                       
|                                       
|                                       
|                                       
|Class A Common Stock, Without Par Value |  | New York Stock Exchange                    
|(Title of Class)                        |  | (Name of Each Exchange on which Registered)

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.  [   ]

The aggregate market value of the voting stock held by
non-affiliates on March 14, 2000, based on the closing price
 for the Companys Class A Common Stock on the New York
 Stock Exchange on such date, and assuming the conversion of all
outstanding shares of Class B Common Stock into shares of
Class A Common Stock at a ratio of one-tenth (.10) of a
share of Class A Common Stock for each share of Class B
 Common Stock: approximately $914,763,000. For purposes of the
foregoing calculation only, required by Form 10-K, the
Registrant has included as shares owned by affiliates, the shares
 of Class A Common Stock and Class B Common Stock
beneficially owned by officers and directors of the Registrant
and by holders of 10% or more of either class. Such inclusion
shall not be construed as an admission that any such person is an
 affiliate for any other purpose.

Shares outstanding at March 14, 2000:





Documents Incorporated by Reference

Portions of our 1999 definitive Proxy Statement for our 2000
Annual Meeting of Shareholders (to be held May 16, 2000)
(incorporated in part III to the extent provided in
items 10, 11, 12 and 13).



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TABLE OF CONTENTS



|         |                                                                                                |  |  |  |  |  |  | 
|-------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|         | Item 2. Properties.                                                                           
|         | Item 3. Legal Proceedings.                                                                    
|         | Item 4. Submission of Matters to a Vote of Security Holders.                                  
|PART II 
|         | Item 5. Markets for Registrants Common Equity and Related Stockholder Matters.               
|         | Item 6. Selected Financial Data.                                                              
|         | Item 7. Managements Discussion and Analysis of Results of Operations and Financial Condition.
|         | Item 7A. Quantitative and Qualitative disclosures about market risk                           
|         | Item 8. Financial Statements and Supplemental Data.                                           
|         | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 
|PART III
|         | Item 10. Our Directors and Executive Officers.                                                
|         | Item 11. Executive Compensation.                                                              
|         | Item 12. Security Ownership of Certain Beneficial Owners and Management.                      
|         | Item 13. Certain Relationships and Related Transactions.                                      
|PART IV 
|         | Item 14. Exhibits, Financial Schedule and Reports on Form 8-K.                                



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TABLE OF CONTENTS

PART I

|          |  |                                                                                        |  |   
|--------- |  | -------------------------------------------------------------------------------------- |  | --
|         
|         
|         
|         
|Item 1.   |  | Business                                                                               |  | 2 
|         
|         
|         
|         
|Item 2.   |  | Properties                                                                             |  | 9 
|         
|         
|         
|         
|Item  3.  |  | Legal Proceedings                                                                      |  | 10
|         
|         
|         
|         
|Item  4.  |  | Submission of Matters to a Vote of Security Holders                                    |  | 10
|         
|         
|         
|         
|PART II  
|         
|         
|         
|         
|Item  5.  |  | Markets for Registrants Common Equity and Related
	Stockholder Matters                |  | 10
|         
|         
|         
|         
|Item  6.  |  | Selected Financial Data                                                                |  | 11
|         
|         
|         
|         
|Item  7.  |  | Managements Discussion and Analysis of Results of
	Operations and Financial Condition |  | 15
|         
|         
|         
|         
|Item  7A. |  | Quantitative and Qualitative Disclosures about Market Risk                             |  | 22
|         
|         
|         
|         
|Item  8.  |  | Financial Statements and Supplemental Data                                             |  | 22
|         
|         
|         
|         
|Item  9.  |  | Changes in and Disagreements with Accountants on Accounting and
	Financial Disclosure  |  | 42
|         
|         
|         
|         
|PART III 
|         
|         
|         
|         
|Item  10. |  | Our Directors and Executive Officers                                                   |  | 42
|         
|         
|         
|         
|Item  11. |  | Executive Compensation                                                                 |  | 42
|         
|         
|         
|         
|Item  12. |  | Security Ownership of Certain Beneficial Owners and Management                         |  | 42
|         
|         
|         
|         
|Item  13. |  | Certain Relationships and Related Transactions                                         |  | 42
|         
|         
|         
|         
|PART IV  
|         
|         
|         
|         
|Item  14. |  | Exhibits, Financial Schedule and Reports on Form 8-K                                   |  | 42

1



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##### Table of Contents



PART I

Item 1.  Business.

We are an Indiana corporation and were incorporated in 1934. We
publish the following newspapers, which had average circulation,
as set forth below for the fiscal year ended December 26,
1999:



| |   |                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Arizona Republic, average daily circulation of 465,073
	 and 586,177 Sunday;                                                                                                       
|
| |  | The Indianapolis Star, average daily circulation of
	266,794 and 371,712 Sunday;                                                                                                       
|
| |  | The Alexandria Daily Town Talk, serving central Louisiana,
	 average circulation of 35,673 daily and 42,749 Sunday;                                                                    
|
| |  | The Star Press, in Muncie, Indiana, average circulation of
	 34,144 daily and 37,551 Sunday;                                                                                           
|
| |  | The Vincennes Sun-Commercial, in Vincennes, Indiana,
	average circulation of 12,373 daily and 14,468 Sunday;                                                                           
|
| |  | The Daily Ledger, average daily circulation of 11,800; and                                                                                                                             
|
| |  | nine controlled circulation newspapers which are home-delivered
	and free to readers serving the northern and southern suburbs of
	Indianapolis, average weekly circulation of 107,800.

We also own:



| |   |                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------
| |  | Carantin & Co., a direct marketing services company;                                                                     
|
| |  | CNT Corp., a centralized shared services center that delivers
	technology services to internal and external customers;   
|
| |  | CNI Ventures, a company that manages our investment activities in
	 the Internet and technology sectors;                 
|
| |  | a 23.2% interest in BrassRing, Inc., a leading provider of
	recruiting services to businesses;                           
|
| |  | a 13.5% interest in Ponderay newsprint company, a partnership
	that owns a newsprint mill in the state of Washington; and
|
| |  | McCormick Graphics, a commercial printer.                                                                                

We seek to maintain our position as both the primary source of
news and information for our readers as well as the most
effective way for advertisers to reach their target markets. To
this end, we manage our newspapers with a commitment to the
highest standards of product quality and journalistic excellence.
 For example, The Arizona Republicwas the first major
daily newspaper in the country to have its pages fully composed
by computer generation, enabling us to deliver higher quality
products. Since 1990, our newspapers have won Pulitzer prizes for
 investigative reporting and political cartooning, as well as
numerous other awards from industry organizations such as the
American Association of Sunday and Feature Editors, the Society
for Newspaper Design and the National Press Photographers
Association, among others.

The following is a list of Internet addresses for CNI and its
subsidiaries:



| |   |                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------
| |  | Central Newspapers, Inc.: http://www.centralnews.com;                                                                                  
|
| |  | Phoenix Newspapers, which includes The Arizona Republic
	and The Arizona Business Gazette:
	http://www.azcentral.com;                  
|
| |  | Indianapolis Newspapers, which includes The Indianapolis Star: http://www.starnews.com;                                                
|
| |  | Alexandria Newspapers, which includes The Alexandria Daily
	Town Talk, McCormick Graphics and Press Works:
	http://www.thetowntalk.com;
|
| |  | Muncie Newspapers, which includes The Muncie Star Press
	and The Advertiser Group: http://www.thestarpress.com;                        

2



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##### Table of Contents



  Topics Newspapers, which includes The Daily
Ledger: http://www.topics.com; and



| |   |                                               
| | - | ----------------------------------------------
| |  | Carantin & Co., Inc.: http://www.carantin.com.

The Arizona Republic

In Phoenix, we currently publish The Arizona Republic,
together with The Arizona Business Gazette, a weekly
newspaper. We originally acquired a 30% interest in The
Arizona Republicand The Phoenix Gazettein 1946. We
have owned 100% of these newspapers since 1977. On
January 18, 1997, we stopped publishing The Phoenix
Gazette. We were able to convert approximately 85% of the
subscribers of The Phoenix Gazetteto The Arizona
Republic.

Circulation

Approximately 86% of the daily and 72% of the Sunday circulation
of The Arizona Republicwas home delivered as of
December 26, 1999, with the remainder being single copy
sales. The circulation level of The Arizona Republicis
seasonal due to the large number of part-year residents in the
Phoenix area. Typically, circulation for The Arizona Republicachieves its highest levels in February and March and
decreases during the late spring and summer months. During 1999,
the seasonal variation was approximately 98,774 daily and 99,932
Sunday. The following table shows the average paid daily
circulation for The Arizona Republicand The Phoenix
Gazette for the periods shown. The figures for fiscal years
ended 1996 and 1997 are based upon reports issued by the ABC, an
independent agency that audits the circulation of daily and
Sunday newspapers, and include circulation outside the Phoenix
metropolitan statistical area (MSA). The figures for
the fiscal year ended December 26, 1999 are based upon our
records. Net circulation revenue for the periods shown is based
upon our records.

|                                      |  |                   |         |              |  |              |         |  |  |   |         | 
|------------------------------------- |  | ----------------- | ------- | ------------ |  | ------------ | ------- |  |  | - | ------- | 
|                                      |  |                  
|                                      |  | Fiscal Year Ended
|                                      |  |                  
|                                      |  | December 28,      |         | December 27, |  | December 26,
|                                      |  | 1997(1)           |         | 1998         |  | 1999        
|                                      |  |                   |         |              |  |             
|The Arizona Republic(Sunday)          |  |                   | 583,068 |              |  |              | 585,890 |  |  |   | 586,177 | 
|                                     
|                                     
|                                     
|                                     
|The Arizona Republic(Daily)           |  |                   | 460,406 |              |  |              | 467,276 |  |  |   | 465,073 | 
|                                     
|                                     
|                                     
|                                     
|Net circulation revenue(in thousands) |  | $                 | 86,800  |              |  | $            | 90,170  |  |  | $ | 92,471  | 




|    |                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Combined daily circulation includes The Arizona Republic
	and The Phoenix Gazette, and net circulation revenue
	includes The Phoenix Gazette, through January  18,
	1997, the last day of its publication.

The home-delivered pricing structure for seven day subscriptions
is based on length of subscription. The home-delivered price for
The Arizona Republic(seven days) in the Phoenix MSA,
ranges from $3.55 per week for a fifty-two week subscription to
$3.85 per week for an eight-week subscription. There is also a
four-week direct bank debit option of $3.55 per week. The
home-delivered price for The Arizona Republic(six days)
is $2.50 per week for all subscription terms. A weekend package
comprising the Sunday paper and the Friday and Saturday edition
is offered at $3.00 per week. The single copy price of the
morning paper is $0.50 and $2.00 for the Sunday paper.

The Arizona Business Gazettecontains business news and
legal notices relating to the Phoenix metropolitan area. The
average paid circulation of The Arizona Business Gazette
was 10,561, 7,348 and 4,734 for 1997, 1998 and 1999,
respectively.

Advertising

The newspapers generate revenue from two primary types of
advertisements: run-of-paper, which are printed in
the body of the newspaper, and preprinted, which are
furnished by the advertiser and inserted into the newspaper. We
derive the majority of our advertising revenue for our Arizona
newspapers from run-of-paper advertisements. However, like other
major newspapers, The Arizona Republichas experienced an
increase in advertisers use of preprinted advertisements in
 recent years. Because preprinted advertisements

3



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##### Table of Contents





We also structure our advertising format to accommodate the
numerous communities that comprise the Phoenix metropolitan area.
 The Arizona Republicpublishes Community
sections that are inserted in up to twelve zoned editions on
certain days of the week. Zoned editions, which include news
stories and advertisements targeted to specific communities or
geographic areas, provide an important means of competing with
news coverage of local newspapers and thereby promote
circulation. Other part-run sections are also provided to
accommodate the needs of advertisers for more targeted
distribution.

The combined run-of-paper advertising linage for our Arizona
newspapers for the periods shown and the combined advertising
revenues of the newspapers for such periods are set forth in the
following table:

|                                                                        |  |                      |         |              |  |              |         |  |  |   |         | 
|----------------------------------------------------------------------- |  | -------------------- | ------- | ------------ |  | ------------ | ------- |  |  | - | ------- | 
|                                                                        |  |                     
|                                                                        |  | Fiscal Year Ended(1)
|                                                                        |  |                     
|                                                                        |  | December 28,         |         | December 27, |  | December 26,
|                                                                        |  | 1997                 |         | 1998         |  | 1999        
|                                                                        |  |                      |         |              |  |             
|Advertising linage  run-of-paper (in thousands of six
	column inches): |  |                      |         |              |  |              |         |  |  |   |         | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Full-run                                                                |  |                      | 2,829   |              |  |              | 2,904   |  |  |   | 3,032   | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Part-run                                                                |  |                      | 1,182   |              |  |              | 1,322   |  |  |   | 1,436   | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Weekly                                                                  |  |                      | 242     |              |  |              | 185     |  |  |   | 190     | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Net advertising revenue (in thousands)                                  |  | $                    | 333,583 |              |  | $            | 351,681 |  |  | $ | 375,322 | 




|    |                                                                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Linage statistics for 1997, 1998 and 1999 excludes linage of The Phoenix Gazette, which ceased publication in
	January 1997. Net advertising revenue includes The
	Phoenix Gazette.

Distribution

We distribute The Arizona Republicprimarily by home
delivery through a network of independent contractors. We have
implemented a centralized billing system that removes the
responsibility for billing and collection from the independent
contractors. Newspapers are distributed to the independent
contractor network by an outside company which has been under
contract for over forty years.

Production

The Arizona Republics editing and composing
functions are performed primarily at our facility in downtown
Phoenix. The Arizona Republic was the first major daily newspaper
 in the country to have its pages fully composed by computer
generation, enabling us to produce a higher quality product.
Electronic pagination allows entire pages of the newspaper to be
formatted at a computer terminal. Composed pages are
electronically transmitted from the newspapers downtown
facility to its two satellite production facilities.

The Arizona Republics two satellite production
facilities are located in Deer Valley, which is north of downtown
 Phoenix, and in Mesa, Arizona. The Deer Valley facility includes
 four offset presses and related production equipment, as well as
 circulation, advertising and editorial offices. This facility
began production during the first quarter of 1992, with full
operation commencing in the third quarter of 1992. The Mesa
facility began operation in 1982 and has been subsequently
expanded and upgraded. It has three offset presses and related
production equipment. We own an additional undeveloped site in
western Maricopa County for a possible satellite production
facility to meet future growth.

Indianapolis Newspapers

We formed Indianapolis Newspapers, a division of Indiana
Newspapers, Inc. (INI) in 1948, through which we
currently publish The Indianapolis Star. At the end of
1996, we owned 90.2% of the voting equity of

4



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##### Table of Contents



The Indianapolis News The Indianapolis Star


Circulation

Approximately 81% of the daily and 79% of the Sunday circulation
of The Indianapolis Star was home-delivered as of
December 26, 1999, with the remainder being single copy
sales.

The following table shows the average paid daily circulation for
The Indianapolis Star and The Indianapolis News for
 the last three fiscal years. The figures for 1997 and 1998 are
based upon reports issued by the ABC and include circulation
outside the Indianapolis metropolitan statistical area. The
figures for the fiscal year ended December 26, 1999 are
based upon our records. Net circulation revenue is based upon our
 records.

|                                       |  |                   |         |              |  |              |         |  |  |   |         | 
|-------------------------------------- |  | ----------------- | ------- | ------------ |  | ------------ | ------- |  |  | - | ------- | 
|                                       |  |                  
|                                       |  | Fiscal Year Ended
|                                       |  |                  
|                                       |  | December 28,      |         | December 27, |  | December 26,
|                                       |  | 1997              |         | 1998         |  | 1999(1)     
|                                       |  |                   |         |              |  |             
|The Indianapolis Star(Sunday)          |  |                   | 391,820 |              |  |              | 390,479 |  |  |   | 371,712 | 
|                                      
|                                      
|                                      
|                                      
|The Indianapolis Star(Daily)           |  |                   | 228,421 |              |  |              | 232,266 |  |  |   | 266,794 | 
|                                      
|                                      
|                                      
|                                      
|The Indianapolis News(Daily)           |  |                   | 41,165  |              |  |              | 35,719  |  |  |   |        | 
|                                      
|                                      
|                                      
|                                      
|Net circulation revenue (in thousands) |  | $                 | 46,444  |              |  | $            | 50,020  |  |  | $ | 50,567  | 




|    |                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Combined daily circulation includes The Indianapolis Star
	and The Indianapolis News, and net circulation revenue
	includes The Indianapolis News, through October 1,
	1999, the last day of publication.

The home-delivered price for The Indianapolis Star (seven
days) in the Indianapolis metropolitan statistical area ranges
from $3.60 to $3.80 per week based on the subscription term and
type. The single copy price is $0.50 for the daily paper. The
home-delivered price of the Sunday newspaper is $1.80, and the
single copy price is $1.75.

Advertising

As is the case for The Arizona Republic, The
Indianapolis Star derives the majority of its advertising
revenues from run-of-paper advertisements. The Indianapolis
Star has also experienced an increase in advertisers
use of preprinted advertisements in recent years. To encourage
use of run-of-paper advertisements, we structure our advertising
rates to provide more favorable rates to high volume and frequent
 run-of-paper advertisers. The combined run-of-paper advertising
linage for The Indianapolis Star for the past three fiscal
 years and the advertising revenue for such periods are set forth
 in the following table:

|                                                                        |  |                      |         |              |  |              |         |  |  |   |         | 
|----------------------------------------------------------------------- |  | -------------------- | ------- | ------------ |  | ------------ | ------- |  |  | - | ------- | 
|                                                                        |  |                     
|                                                                        |  | Fiscal Year Ended(1)
|                                                                        |  |                     
|                                                                        |  | December 28,         |         | December 27, |  | December 26,
|                                                                        |  | 1997                 |         | 1998         |  | 1999        
|                                                                        |  |                      |         |              |  |             
|Advertising linage  run-of-paper (in thousands of six
	column inches): |  |                      |         |              |  |              |         |  |  |   |         | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Full-run                                                                |  |                      | 2,087   |              |  |              | 2,117   |  |  |   | 2,259   | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Net advertising revenue (in thousands)                                  |  | $                    | 167,212 |              |  | $            | 170,946 |  |  | $ | 181,292 | 




|    |                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Linage statistics for 1997, 1998 and 1999 exclude linage of The Indianapolis News, which ceased publication in
	October 1999. Net advertising revenue includes The
	Indianapolis News.

Distribution

In 1997, our Indianapolis newspapers converted from a
carrier-based delivery system to an agency-based distribution
system for the Indianapolis metropolitan area and its eight
surrounding counties. We replaced approximately
1,350 carriers with 79 independent delivery agents, who
 are paid on a commission basis.

5



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##### Table of Contents



In 1998, we converted the home-delivered system in the State area
 of Indiana to an agency-based distribution system. We replaced
approximately 250 carriers with 14 delivery agents, who
 are paid on a commission basis. We believe the conversions have:



| |   |                                                        
| | - | -------------------------------------------------------
| |  | allowed for uniform pricing;                           
|
| |  | resulted in higher levels of customer satisfaction; and
|
| |  | helped facilitate the creation of customer databases.  

We have implemented a centralized billing system that removes the
 responsibility for billing and collection from the agents.

In October 1999, we outsourced the transportation function
of The Indianapolis Star to Penske Logistics, Inc. who
primarily provide for the transportation of newspapers from the
dock to the agents.

Production

All editorial and production functions are currently handled from
 our facility in downtown Indianapolis, which is equipped with
six offset presses and related production and distribution
equipment.

In September 1999, the Board of Directors approved a
$70.8 million press project for The Indianapolis Star
 . The new presses will be located in a facility adjacent to our
Pulliam Production Center. This plan will be executed over a
three year period beginning in fiscal 2000. The project is
expected to afford The Indianapolis Star the ability to
more than double its color advertising capacity, provide
increased flexibility in creating additional zoned editions, and
improve operating efficiency by reducing headcount.

Smaller Newspapers

In March 1996, we purchased 100% of the outstanding
common stock of McCormick & Company, Inc., now
Alexandria Newspapers, Inc., the parent company of The
Alexandria Daily Town Talk newspaper and McCormick Graphics,
Inc., a commercial printing subsidiary. The Alexandria Daily
Town Talk serves Rapides Parish in Central Louisiana and the
outlying areas within a 50 mile radius, with a population base of
 approximately 282,000. For the fiscal year ended
December 26, 1999, the average paid circulation of The
Alexandria Daily Town Talk was 35,673 daily and 42,749
Sunday.

We also publish The Star Press (mornings and Sundays) in
Muncie, Indiana  we formerly published two newspapers
in the Muncie market, The Muncie Star and The Muncie
Evening Press, but merged the two newspapers into The Star
 Press in May 1996 to improve product quality and cost
efficiency. The Star Press serves Muncie and east central
Indiana, which has a population base of just over 370,000. For
the fiscal year ended December 26, 1999, the average paid
circulation of The Star Press was 34,144 daily and 37,551
Sunday.

We publish The Daily Ledger (which for 1999 had an average
 daily circulation of 11,800) and nine controlled circulation
newspapers (which for 1999 had an average weekly circulation of
107,800) that serve the northern suburbs of Indianapolis, the
fastest growing area of metropolitan Indianapolis.

We publish The Vincennes Sun-Commercial, a daily newspaper
 that serves the city of Vincennes, Indiana, with a population of
 approximately 24,700. For the fiscal year ended
December 26, 1999, the average paid circulation of The
Vincennes Sun-Commercial was 12,373 (five days) and 14,468
Sunday.

The revenues earned by these smaller publications represented
approximately 6.0%, 6.0% and 6.1% in 1997, 1998 and 1999,
respectively, of our total revenues.

CNT Corp.

On December 28, 1998, we formed CNT Corp., a centralized
shared services center that delivers technology services to
internal and external customers. In 1999, we completed the
transition of services for several of our subsidiaries, including
 our two largest newspapers, to the center.

6



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##### Table of Contents



CNI Ventures, Inc.

In March 2000, we incorporated CNI Ventures, Inc. and contributed
 investments from CNI to the new subsidiary. CNI Ventures
will identify and invest in emerging technology businesses which
offer information products and services and will target companies
 that are developing new methods of communication and delivery
methods for news and information.

BrassRing, Inc.

In March 2000, we sold Career Services, Inc. by merging our
wholly-owned subsidiary into BrassRing, Inc., a venture of
Kaplan, Inc. (a wholly-owned subsidiary of The Washington Post
Company), Tribune Company, and the venture capital firm, Accel
Partners, for 23.2% of BrassRing, Inc. We believe this alliance
will:



| |   |                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | combine a group of online and offline assets that will reach
	employees at virtually every stage of their careers while
	offering employers solutions for managing their hiring efforts;
|
| |  | provide us with a stake in a fast growing business uniquely
	positioned in the business-to-business hiring management and
	recruitment industry; and                                    
|
| |  | provide employers with more options to meet the strong demand for
	 top information technology professionals.                                                                           

Homebuyers Fair

In October 1999, we sold our 80% interest in
Homebuyers Fair to Homestore.com, Inc. Our 80% interest was
 purchased in October 1997. Homebuyers Fair is a
Phoenix-based Internet company which provides services and
information for people who are moving and for corporations that
are relocating their employees. In September, 1998, we acquired
National School Reporting Services, Inc., a leading provider of
information about schools and school systems across the nation.

Carantin & Co., Inc.

In December, 1998, we acquired Carantin & Co., Inc., a
Phoenix-based company that provides direct mail and other direct
marketing support services to its clients. This acquisition will
enhance the direct marketing and database marketing capabilities
of CNI.

Classified Ventures

We own a 3% interest in Classified Ventures, an independent
company owned by a consortium of newspaper companies whose
mission is to be the preeminent online national classified
advertising service in the automotive, apartments and new homes
classified categories. Classified Ventures utilizes both national
 sales personnel and sales representatives from our newspapers to
 sell advertising and services. Investment in this business fits
with our strategy of new business development and protection of
our classified advertising business.

Raw Materials  Ponderay Newsprint Company

We consumed approximately 189,000 metric tons of newsprint in
fiscal year 1999 and expect that consumption will increase in
2000 due primarily to anticipated linage gains. We currently
obtain newsprint from a number of suppliers, both foreign and
domestic, under long-term contracts, standard in the industry,
which offer dependable sources of newsprint at current market
rates.

To provide us with an additional source of newsprint for a
portion of our needs, we joined with four other newspaper
publishing companies and a major newsprint manufacturer in
forming a general partnership, Ponderay Newsprint Company
(Ponderay), to own and operate a newsprint mill in
Usk, Washington. The

7



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##### Table of Contents





Competition

We face competition for advertising revenue from television,
radio, the Internet and direct mail programs, as well as
competition for advertising and circulation from suburban
neighborhood and national newspapers and other publications.
Competition for advertising is based upon:



| |   |                         
| | - | ------------------------
| |  | circulation levels;     
|
| |  | readership demographics;
|
| |  | advertising rates; and  
|
| |  | advertiser results.     

Competition for circulation is generally based upon:



| |   |                            
| | - | ---------------------------
| |  | content;                   
|
| |  | journalistic quality; and  
|
| |  | the price of the newspaper.

In Phoenix, several suburban newspapers owned by major media
corporations operate in cities that are part of the Phoenix
metropolitan area and compete with The Arizona Republic
for advertising and circulation. The most significant of these
competitors is Thomson Corporation, which owns five daily
newspapers in the East Valley region. These newspapers had a
combined paid daily circulation of 93,407, compared to 186,003
for The Arizona Republic in this region in 1998, the
period for which the latest ABC audit figures are available. In
1997, The Arizona Republic introduced four new
Community sections to maintain its position as the
leading source of news and information in this region. In
Indianapolis, our newspapers do not experience significant direct
 competition from suburban newspapers. In February 2000,
Thomson corporation announced its intention to sell its U.S.
newspapers, including the East Valley publications.

Employees  Labor

As of December 26, 1999, we had approximately
5,000 employees (including 1,117 part-time employees), 35%
of whom were covered by a total of 23 collective bargaining
agreements. Given the large number of collective bargaining
agreements, we are frequently involved in labor negotiations. As
of March 14, 2000, we were involved in ongoing negotiations
with respect to five different bargaining agreements, involving
approximately 413 employees engaged in various trades at our
 facilities. No assurance can be given as to the outcome of these
 negotiations or as to their impact on us. We have never had a
significant strike or work stoppage at our operations and we
consider our labor relationships with our employees to be
satisfactory.

8



---



##### Table of Contents



Our Executive Officers

Our executive officers are:

|                       |  |     |    |           |  |                                                                              
|---------------------- |  | --- | -- | --------- |  | -----------------------------------------------------------------------------
|Name                   |  | Age |    | Positions
|                       |  |     |    |          
|Louis A. Weil III      |  |     | 59 |           |  | Chairman, President, and Chief Executive Officer                             
|                      
|                      
|                      
|                      
|Thomas K. MacGillivray |  |     | 39 |           |  | Senior Vice President and Chief Financial Officer                            
|                      
|                      
|                      
|                      
|Eric S. Tooker         |  |     | 38 |           |  | Vice President, General Counsel, and Secretary                               
|                      
|                      
|                      
|                      
|Kevin J. Salcido       |  |     | 39 |           |  | Vice President of Human Resources                                            
|                      
|                      
|                      
|                      
|Bill Toner             |  |     | 56 |           |  | Vice President and Chief Information Officer                                 
|                      
|                      
|                      
|                      
|John F. Oppedahl       |  |     | 55 |           |  | President, Publisher and Chief Executive Officer of Phoenix
	Newspapers, Inc.
|                      
|                      
|                      
|                      
|Dale A. Duncan         |  |     | 45 |           |  | President, Publisher, and General Manager of Indianapolis
	Newspapers        

Louis A. Weil III has been Chairman of the Board of Directors
since December 31, 1998 and President and Chief Executive
Officer since January 1996. He served as Publisher and Chief
 Executive Officer of The Arizona Republic and The
Phoenix Gazette and Executive Vice President of Phoenix
Newspapers, Inc. between July 1991 and January 1996.
Mr. Weil served as Publisher of Time from May 1989 to
July 1991 and President and Publisher of The Detroit News
from May 1987 to May 1989. Mr. Weil serves as an
independent director of Prudentials Domestic Equity,
Domestic Fixed Income, Global Fixed Income and Municipal Bond
mutual funds. He has been a Director since 1991.

Thomas K. MacGillivray has been Senior Vice President since
September 1999 and Chief Financial Officer since
January 1996. He was Vice President from January 1996
to August 1999. Previously, he was Director of Investments
from April 1993 to December 1995. He was Vice President
 and Equity Portfolio Manager for Sovran Capital Management from
January 1989 until March 1993.

Eric S. Tooker has been Vice President since April 1997 and
General Counsel and Secretary since June 1996. From
November 1989 through May 1996, he was Associate
General Counsel at Conseco, Inc.

Kevin J. Salcido has been Vice President of Human Resources
since October 1999 and Corporate Director of Human Resources
since November 1996. He was Human Resources Manager for
Pepsi-Cola from October 1994 to November 1996.

Bill Toner has been Vice President and Chief Information Officer
since September 1999. He served as Chief Information Officer from
 January 1997 to August 1999. He held various positions with
Gannett from December 1975 to December 1996.

John F. Oppedahl has been President and Publisher and Chief
Executive Officer of Phoenix Newspapers, Inc. since
January 1996. Previously, he was Executive Editor of Phoenix
 Newspapers, Inc. from 1993 to January 1996 and Managing
Editor of The Arizona Republic from 1989 to 1993.

Dale A. Duncan has been Publisher since January 1999, and
President and General Manager of Indianapolis Newspapers since
January 1998. From 1995 until assuming his current
positions, Mr. Duncan was Vice President, ABC Publishing
Group, where he directed the operations of The Oakland Press,
Pontiac, MI; The Belleville News-Democrat, Illinois; and the
Times Leader, Wilkes-Barre, PA. Mr. Duncan also served as
President and Publisher of the Oakland Press from 1995 to 1997
and was President and Publisher of the Times Leader from 1986 to
1994.

Each executive officer will serve as such until his successor is
chosen and qualified. No family relationships exist among
executive officers.




Item 2.  Properties.

Our corporate headquarters is located at 200 East Van Buren
Street, Phoenix, Arizona, 85004. The general character, location
and approximate size of the principal physical properties we
owned at the end of

9



---



##### Table of Contents





|                                      |  |                  |         |        |  |  |         | 
|------------------------------------- |  | ---------------- | ------- | ------ |  |  | ------- | 
|                                      |  |                 
|                                      |  | Approximate Area
|                                      |  | in Square Feet  
|Printing plants, business and         |  |                 
|editorial offices and warehouse space |  | Owned            |         | Leased
|                                      |  |                  |         |       
|Gilbert, Arizona                      |  |                  | 36,450  |        |  |  |        | 
|                                     
|                                     
|                                     
|                                     
|Mesa, Arizona                         |  |                  | 160,815 |        |  |  | 21,000  | 
|                                     
|                                     
|                                     
|                                     
|Phoenix, Arizona                      |  |                  | 817,521 |        |  |  | 119,631 | 
|                                     
|                                     
|                                     
|                                     
|Scottsdale, Arizona                   |  |                  |        |        |  |  | 31,656  | 
|                                     
|                                     
|                                     
|                                     
|Santa Clara, California               |  |                  |        |        |  |  | 15,357  | 
|                                     
|                                     
|                                     
|                                     
|Glendale, Arizona                     |  |                  | 50,612  |        |  |  | 3,814   | 
|                                     
|                                     
|                                     
|                                     
|Fishers, Indiana                      |  |                  | 40,000  |        |  |  |        | 
|                                     
|                                     
|                                     
|                                     
|Greenwood, Indiana                    |  |                  |        |        |  |  | 2,160   | 
|                                     
|                                     
|                                     
|                                     
|Indianapolis, Indiana                 |  |                  | 740,622 |        |  |  | 103,150 | 
|                                     
|                                     
|                                     
|                                     
|Muncie, Indiana                       |  |                  | 67,658  |        |  |  |        | 
|                                     
|                                     
|                                     
|                                     
|Vincennes, Indiana                    |  |                  | 19,350  |        |  |  |        | 
|                                     
|                                     
|                                     
|                                     
|Alexandria, Louisiana                 |  |                  | 112,798 |        |  |  |        | 
|                                     
|                                     
|                                     
|                                     
|Surprise, Arizona                     |  |                  | 23,450  |        |  |  |        | 

We believe that our current facilities are adequate to meet our
present needs.




Item 3.  Legal Proceedings.

We become involved from time to time in various claims and
lawsuits in the ordinary course of our business that are
incidental to our business. These claims include libel and
invasion of privacy actions and involve from time to time various
 governmental and administrative proceedings. We believe that the
 outcome of any pending claims or proceedings will not have a
material adverse effect on us.




Item 4.  Submission of Matters to a Vote of
Security Holders.

No matters were submitted to a vote of shareholders during the
quarter ended December 26, 1999 through the solicitation of
proxies or otherwise.




PART II




Item 5.  Markets for Registrants Common
Equity and Related Stockholder Matters.

Since an initial public offering on September 21, 1989,
shares of Class A Common Stock have traded on the New York
Stock Exchange under the symbol ECP. No established
trading market currently exists for the Companys
Class B Common Stock. Shares of Class B Common Stock
are convertible into Class A Common Stock at a ratio of ten
B shares for one A share. As of March 14, 2000, there were
approximately 335 shareholders of record of Class A Common
Stock and 21 shareholders of record of Class B Common Stock.

10



---



##### Table of Contents



THE FOLLOWING TABLE SETS FORTH THE QUARTERLY DIVIDENDS DECLARED
PER SHARE OF CLASS A COMMON STOCK:

|            |  |         |       |         |  |   |        | 
|----------- |  | ------- | ----- | ------- |  | - | ------ | 
|            |  | Class A |       | Class B
|            |  |         |       |        
|1998        |  |         |       |         |  |   |        | 
|           
|           
|           
|           
|1st Quarter |  | $       | 0.105 |         |  | $ | 0.0105 | 
|           
|           
|           
|           
|2nd Quarter |  | $       | 0.105 |         |  | $ | 0.0105 | 
|           
|           
|           
|           
|3rd Quarter |  | $       | 0.120 |         |  | $ | 0.0120 | 
|           
|           
|           
|           
|4th Quarter |  | $       | 0.120 |         |  | $ | 0.0120 | 
|            |  | $       | 0.450 |         |  | $ | 0.0450 | 
|           
|           
|           
|           
|           
|1999        |  |         |       |         |  |   |        | 
|           
|           
|           
|           
|1st Quarter |  | $       | 0.120 |         |  | $ | 0.0120 | 
|           
|           
|           
|           
|2nd Quarter |  | $       | 0.120 |         |  | $ | 0.0120 | 
|           
|           
|           
|           
|3rd Quarter |  | $       | 0.130 |         |  | $ | 0.0130 | 
|           
|           
|           
|           
|4th Quarter |  | $       | 0.130 |         |  | $ | 0.0130 | 
|            |  | $       | 0.500 |         |  | $ | 0.0500 | 

THE FOLLOWING TABLE SETS FORTH THE QUARTERLY HIGH AND LOW SALES
PRICES OF THE CLASS A COMMON STOCK AS REPORTED ON THE NEW YORK
STOCK EXCHANGE:

|            |  |      |       |     |  |   |       | 
|----------- |  | ---- | ----- | --- |  | - | ----- | 
|            |  | High |       | Low
|            |  |      |       |    
|1998        |  |      |       |     |  |   |       | 
|           
|           
|           
|           
|1st Quarter |  | $    | 37.13 |     |  | $ | 31.03 | 
|           
|           
|           
|           
|2nd Quarter |  |      | 37.47 |     |  |   | 30.81 | 
|           
|           
|           
|           
|3rd Quarter |  |      | 35.06 |     |  |   | 28.50 | 
|           
|           
|           
|           
|4th Quarter |  |      | 35.78 |     |  |   | 27.41 | 
|           
|           
|           
|           
|           
|1999        |  |      |       |     |  |   |       | 
|           
|           
|           
|           
|1st Quarter |  | $    | 38.25 |     |  | $ | 30.38 | 
|           
|           
|           
|           
|2nd Quarter |  |      | 39.31 |     |  |   | 29.88 | 
|           
|           
|           
|           
|3rd Quarter |  |      | 45.63 |     |  |   | 38.00 | 
|           
|           
|           
|           
|4th Quarter |  |      | 45.69 |     |  |   | 36.63 | 




Item 6.  Selected Financial Data.

The following table sets forth selected financial information
regarding our financial position and operating results which has
been extracted from the financial statements. This information
should be read in conjunction with Item 7
Managements Discussion and Analysis of Financial
Condition and Results of Operations and Item 8
Financial Statements and Supplemental Data.

11



---



##### Table of Contents



TEN-YEAR FINANCIAL HIGHLIGHTS

Data excludes special charges(a)

|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|------------------------------------------------------------------------------------ |  | --------------------------------- | ---- | ------- |  | ------- | ---- | -------- |  | -------- | ----- | -------- |  | -------- | ---------- | -------- |  | -------- | ---------- | - |  | - | ---------- | - |  | - | ---------- | - |  | - | ---------- | - |  | - | ---------- | -
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |         
|                                                                                     |  | Growth Rates                      |      |         |  |         |      |          |  |          |       |          |  |         
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |         
|                                                                                     |  | Compounded                        |      |         |  | Annual  |      | Dec. 26  |  | Dec. 27  |       | Dec. 28  |  | Dec. 29  |            | Dec. 31  |  | Dec. 25 
|                                                                                     |  | 10-Year                           |      | 5-Year  |  | 1-Year  |      | 1999     |  | 1998     |       | 1997     |  | 1996     |            | 1995     |  | 1994    
|                                                                                     |  | 1989-99                           |      | 1994-99 |  | 1998-99 |      | 52 Weeks |  | 52 Weeks |       | 52 Weeks |  | 52 Weeks |            | 53 Weeks |  | 52 Weeks
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |         
|                                                                                     |  |                                  
|                                                                                     |  | (In thousands, except share data)
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Summary of Operations:                                                               |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Operating revenues                                                                   |  |                                   | 6.3  | %       |  |         | 9.1  | %        |  |          | 6.8   | %        |  | $        | 804,090    |          |  | $        | 752,690    |   |  | $ | 716,137    |   |  | $ | 620,315    |   |  | $ | 579,901    |   |  | $ | 519,702    |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Operating expenses                                                                   |  |                                   | 5.3  | %       |  |         | 7.6  | %        |  |          | 5.1   | %        |  |          | 629,570    |          |  |          | 598,738    |   |  |   | 565,101    |   |  |   | 514,890    |   |  |   | 490,682    |   |  |   | 436,908    |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Operating income                                                                     |  |                                   | 11.3 | %       |  |         | 16.1 | %        |  |          | 13.4  | %        |  |          | 174,520    |          |  |          | 153,952    |   |  |   | 151,036    |   |  |   | 105,425    |   |  |   | 89,219     |   |  |   | 82,794     |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Other income  net                                                                   |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          | (7,250     | )        |  |          | 428        |   |  |   | 2,152      |   |  |   | 4,009      |   |  |   | 8,154      |   |  |   | 4,965      |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Income before income taxes                                                           |  |                                   | 9.4  | %       |  |         | 13.8 | %        |  |          | 8.4   | %        |  | $        | 167,270    |          |  | $        | 154,380    |   |  | $ | 153,188    |   |  | $ | 109,434    |   |  | $ | 97,373     |   |  | $ | 87,759     |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Income before minority interest and equity in Affiliate                              |  |                                   | 9.5  | %       |  |         | 14.0 | %        |  |          | 10.7  | %        |  | $        | 100,362    |          |  | $        | 90,685     |   |  | $ | 90,281     |   |  | $ | 64,732     |   |  | $ | 57,977     |   |  | $ | 52,037     |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Income before cumulative effect of accounting change                                 |  |                                   | 9.8  | %       |  |         | 16.7 | %        |  |          | 10.0  | %        |  | $        | 98,287     |          |  | $        | 89,351     |   |  | $ | 87,384     |   |  | $ | 64,829     |   |  | $ | 55,978     |   |  | $ | 45,510     |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Cumulative effect of accounting change                                               |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Net income (loss)                                                                    |  |                                   | 9.8  | %       |  |         | 16.7 | %        |  |          | 10.0  | %        |  | $        | 98,287     |          |  | $        | 89,351     |   |  | $ | 87,384     |   |  | $ | 64,829     |   |  | $ | 55,978     |   |  | $ | 45,510     |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|CASH FLOW DATA(b)                                                                    |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Provided by operating activities(e)                                                  |  |                                   | 9.8  | %       |  |         | 29.5 | %        |  |          | 25.0  | %        |  | $        | 167,903    |          |  | $        | 138,045    |   |  | $ | 159,712    |   |  | $ | 125,310    |   |  | $ | 64,263     |   |  | $ | 46,086     |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Effect of trading securities                                                         |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          | (12,690    | )        |  |          | 1,454      |   |  |   | (11,631    | ) |  |   | (40,671    | ) |  |   | 17,630     |   |  |   | 45,682     |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Capital spending                                                                     |  |                                   | 1.2  | %       |  |         | 5.7  | %        |  |          | (16.8 | )%       |  |          | (30,731    | )        |  |          | (36,922    | ) |  |   | (25,135    | ) |  |   | (46,530    | ) |  |   | (58,676    | ) |  |   | (23,256    | )
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Operating free cash flow                                                             |  |                                   | 12.4 | %       |  |         | 12.7 | %        |  |          | 26.0  | %        |  | $        | 124,482    |          |  | $        | 102,577    |   |  | $ | 122,946    |   |  | $ | 38,109     |   |  | $ | 23,217     |   |  | $ | 68,512     |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Dividends paid                                                                       |  |                                   | 4.5  | %       |  |         | 8.2  | %        |  |          | (9.3  | )%       |  | $        | 19,747     |          |  | $        | 21,760     |   |  | $ | 20,111     |   |  | $ | 18,647     |   |  | $ | 15,724     |   |  | $ | 13,308     |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Earnings before interest, income taxes, depreciation and
	amortization (EBITDA)(c) |  |                                   | 11.7 | %       |  |         | 15.6 | %        |  |          | 13.2  | %        |  | $        | 225,690    |          |  | $        | 199,370    |   |  | $ | 193,058    |   |  | $ | 140,953    |   |  | $ | 117,706    |   |  | $ | 109,433    |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Class A Share Data and Other Share Information:                                      |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Basic income per share before cumulative effect of accounting
	changes               |  |                                   | 13.0 | %       |  |         | 23.5 | %        |  |          | 33.2  | %        |  | $        | 2.45       |          |  | $        | 1.84       |   |  | $ | 1.70       |   |  | $ | 1.22       |   |  | $ | 1.05       |   |  | $ | 0.85       |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Cumulative effect of accounting changes                                              |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Basic income (loss)  per share                                                       |  |                                   | 13.0 | %       |  |         | 23.5 | %        |  |          | 33.2  | %        |  | $        | 2.45       |          |  | $        | 1.84       |   |  | $ | 1.70       |   |  | $ | 1.22       |   |  | $ | 1.05       |   |  | $ | 0.85       |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Diluted income per share before cumulative effect of accounting
	changes             |  |                                   | 12.6 | %       |  |         | 22.8 | %        |  |          | 32.4  | %        |  | $        | 2.37       |          |  | $        | 1.79       |   |  | $ | 1.65       |   |  | $ | 1.20       |   |  | $ | 1.04       |   |  | $ | 0.85       |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Cumulative effect of accounting changes                                              |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Diluted income (loss) per share                                                      |  |                                   | 12.6 | %       |  |         | 22.8 | %        |  |          | 32.4  | %        |  | $        | 2.37       |          |  | $        | 1.79       |   |  | $ | 1.65       |   |  | $ | 1.20       |   |  | $ | 1.04       |   |  | $ | 0.85       |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Dividends declared                                                                   |  |                                   | 11.9 | %       |  |         | 14.0 | %        |  |          | 11.1  | %        |  | $        | 0.50       |          |  | $        | 0.45       |   |  | $ | 0.40       |   |  | $ | 0.36       |   |  | $ | 0.31       |   |  | $ | 0.26       |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Book value per share at year-end(f)                                                  |  |                                   | (2.1 | )%      |  |         | (8.4 | )%       |  |          | (53.7 | )%       |  | $        | 3.84       |          |  | $        | 3.52       |   |  | $ | 7.60       |   |  | $ | 7.34       |   |  | $ | 6.72       |   |  | $ | 6.00       |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Market price per share at
	year-end                                                  |  |                                   | 12.7 | %       |  |         | 22.6 | %        |  |          | 9.4   | %        |  | $        | 37.500     |          |  | $        | 34.281     |   |  | $ | 35.032     |   |  | $ | 21.438     |   |  | $ | 15.688     |   |  | $ | 13.563     |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Class A common equivalent shares at year-end                                         |  |                                   | (3.1 | )%      |  |         | (6.2 | )%       |  |          | (5.0  | )%       |  |          | 38,681,632 |          |  |          | 40,715,280 |   |  |   | 50,304,352 |   |  |   | 52,786,022 |   |  |   | 53,351,822 |   |  |   | 53,276,600 |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Average shares outstanding used to calculate basic income
	(loss) per
	share(c)      |  |                                   | (2.8 | )%      |  |         | (5.5 | )%       |  |          | (17.4 | )%       |  |          | 40,079,296 |          |  |          | 48,498,158 |   |  |   | 51,463,474 |   |  |   | 53,238,272 |   |  |   | 53,302,014 |   |  |   | 53,242,266 |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  
|Average shares outstanding used to calculate diluted income
	(loss) per
	share(c)    |  |                                   | (2.4 | )%      |  |         | (5.0 | )%       |  |          | (16.8 | )%       |  |          | 41,505,970 |          |  |          | 49,880,164 |   |  |   | 52,945,848 |   |  |   | 54,075,428 |   |  |   | 53,737,944 |   |  |   | 53,649,978 |  
|                                                                                     |  |                                   |      |         |  |         |      |          |  |          |       |          |  |          |            |          |  |          |            |   |  |   |            |   |  |   |            |   |  |   |            |   |  |   |            |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|------------------------------------------------------------------------------------ |  | --------------------------------- | ---------- | -------- |  | -------- | ---------- | -------- |  | - | ---------- | - |  | - | ---------- | -
|                                                                                     |  | Dec. 26                           |            | Dec. 27  |  | Dec. 29  |            | Dec. 30 
|                                                                                     |  | 1993                              |            | 1992     |  | 1991     |            | 1990    
|                                                                                     |  | 52 Weeks                          |            | 52 Weeks |  | 52 Weeks |            | 52 Weeks
|                                                                                     |  |                                   |            |          |  |          |            |         
|                                                                                     |  |                                  
|                                                                                     |  | (In thousands, except share data)
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Summary of Operations:                                                               |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Operating revenues                                                                   |  | $                                 | 466,567    |          |  | $        | 433,600    |          |  | $ | 420,351    |   |  | $ | 431,659    |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Operating expenses                                                                   |  |                                   | 399,454    |          |  |          | 378,365    |          |  |   | 369,328    |   |  |   | 376,812    |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Operating income                                                                     |  |                                   | 67,113     |          |  |          | 55,235     |          |  |   | 51,023     |   |  |   | 54,847     |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Other income  net                                                                   |  |                                   | 2,417      |          |  |          | 1,111      |          |  |   | 3,735      |   |  |   | 8,963      |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Income before income taxes                                                           |  | $                                 | 69,530     |          |  | $        | 56,346     |          |  | $ | 54,758     |   |  | $ | 63,810     |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Income before minority interest and equity in Affiliate                              |  | $                                 | 40,969     |          |  | $        | 33,401     |          |  | $ | 32,640     |   |  | $ | 37,127     |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Income before cumulative effect of accounting change                                 |  | $                                 | 33,006     |          |  | $        | 25,476     |          |  | $ | 27,858     |   |  | $ | 29,495     |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Cumulative effect of accounting change                                               |  |                                   |            |          |  |          | (34,212    | )        |  |   |            |   |  |   |            |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Net income (loss)                                                                    |  | $                                 | 33,006     |          |  |          | (8,736     | )        |  | $ | 27,858     |   |  | $ | 29,495     |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|CASH FLOW DATA(b)                                                                    |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Provided by operating activities(e)                                                  |  | $                                 | 74,610     |          |  | $        | 69,752     |          |  | $ | 57,742     |   |  | $ | 60,177     |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Effect of trading securities                                                         |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Capital spending                                                                     |  |                                   | (16,049    | )        |  |          | (26,175    | )        |  |   | (82,067    | ) |  |   | (50,178    | )
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Operating free cash flow                                                             |  | $                                 | 58,561     |          |  | $        | 43,577     |          |  | $ | (24,325    | ) |  | $ | 9,999      |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Dividends paid                                                                       |  | $                                 | 11,956     |          |  | $        | 10,870     |          |  | $ | 10,598     |   |  | $ | 10,267     |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Earnings before interest, income taxes, depreciation and
	amortization (EBITDA)(c) |  | $                                 | 92,923     |          |  | $        | 76,884     |          |  | $ | 68,357     |   |  | $ | 70,749     |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Class A Share Data and Other Share Information:                                      |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Basic income per share before cumulative effect of accounting
	changes               |  | $                                 | 0.62       |          |  | $        | 0.48       |          |  | $ | 0.53       |   |  | $ | 0.56       |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Cumulative effect of accounting changes                                              |  |                                   |            |          |  | $        | (0.65      | )        |  |   |            |   |  |   |            |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Basic income (loss)  per share                                                       |  | $                                 | 0.62       |          |  | $        | (0.16      | )        |  | $ | 0.53       |   |  | $ | 0.56       |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Diluted income per share before cumulative effect of accounting
	changes             |  | $                                 | 0.62       |          |  | $        | 0.48       |          |  | $ | 0.53       |   |  | $ | 0.56       |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Cumulative effect of accounting changes                                              |  |                                   |            |          |  | $        | (0.65      | )        |  |   |            |   |  |   |            |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Diluted income (loss) per share                                                      |  | $                                 | 0.62       |          |  | $        | (0.17      | )        |  | $ | 0.53       |   |  | $ | 0.56       |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Dividends declared                                                                   |  | $                                 | 0.23       |          |  | $        | 0.21       |          |  | $ | 0.20       |   |  | $ | 0.20       |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Book value per share at year-end(f)                                                  |  | $                                 | 5.47       |          |  | $        | 5.08       |          |  | $ | 5.49       |   |  | $ | 5.20       |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Market price per share at
	year-end                                                  |  | $                                 | 13.813     |          |  | $        | 11.125     |          |  | $ | 9.438      |   |  | $ | 8.438      |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Class A common equivalent shares at year-end                                         |  |                                   | 53,178,500 |          |  |          | 53,099,500 |          |  |   | 52,994,500 |   |  |   | 52,988,500 |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Average shares outstanding used to calculate basic income
	(loss) per
	share(c)      |  |                                   | 53,141,946 |          |  |          | 53,029,500 |          |  |   | 52,991,922 |   |  |   | 52,988,500 |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  
|Average shares outstanding used to calculate diluted income
	(loss) per
	share(c)    |  |                                   | 53,412,958 |          |  |          | 53,199,294 |          |  |   | 53,041,484 |   |  |   | 52,991,462 |  
|                                                                                     |  |                                   |            |          |  |          |            |          |  |   |            |   |  |   |            |  

12



---



##### Table of Contents



|                                                |  |                                   |       |         |  |         |       |          |  |          |       |          |  |          |         |          |  |          |         |   |  |   |         |   |  |   |         |   |  |   |         |   |  |   |         |  
|----------------------------------------------- |  | --------------------------------- | ----- | ------- |  | ------- | ----- | -------- |  | -------- | ----- | -------- |  | -------- | ------- | -------- |  | -------- | ------- | - |  | - | ------- | - |  | - | ------- | - |  | - | ------- | - |  | - | ------- | -
|                                                |  |                                   |       |         |  |         |       |          |  |          |       |          |  |         
|                                                |  | Growth Rates                      |       |         |  |         |       |          |  |          |       |          |  |         
|                                                |  |                                   |       |         |  |         |       |          |  |          |       |          |  |         
|                                                |  | Compounded                        |       |         |  | Annual  |       | Dec. 26  |  | Dec. 27  |       | Dec. 28  |  | Dec. 29  |         | Dec. 31  |  | Dec. 25 
|                                                |  | 10-Year                           |       | 5-Year  |  | 1-Year  |       | 1999     |  | 1998     |       | 1997     |  | 1996     |         | 1995     |  | 1994    
|                                                |  | 1989-99                           |       | 1994-99 |  | 1998-99 |       | 52 Weeks |  | 52 Weeks |       | 52 Weeks |  | 52 Weeks |         | 53 Weeks |  | 52 Weeks
|                                                |  |                                   |       |         |  |         |       |          |  |          |       |          |  |          |         |          |  |         
|                                                |  |                                  
|                                                |  | (In thousands, except share data)
|                                               
|                                               
|                                               
|                                               
|Balance Sheet Data:                             |  |                                   |       |         |  |         |       |          |  |          |       |          |  |          |         |          |  |          |         |   |  |   |         |   |  |   |         |   |  |   |         |   |  |   |         |  
|                                               
|                                               
|                                               
|                                               
|Total assets                                    |  |                                   | 6.2   | %       |  |         | 5.3   | %        |  |          | 3.0   | %        |  | $        | 648,266 |          |  | $        | 629,359 |   |  | $ | 614,311 |   |  | $ | 586,972 |   |  | $ | 547,204 |   |  | $ | 500,444 |  
|                                                |  |                                   |       |         |  |         |       |          |  |          |       |          |  |          |         |          |  |          |         |   |  |   |         |   |  |   |         |   |  |   |         |   |  |   |         |  
|Working capital                                 |  |                                   | (11.9 | )%      |  |         | (22.2 | )%       |  |          | 188.4 | %        |  |          | 37,823  |          |  |          | 13,113  |   |  |   | 64,739  |   |  |   | 92,323  |   |  |   | 137,818 |   |  |   | 132,907 |  
|                                                |  |                                   |       |         |  |         |       |          |  |          |       |          |  |          |         |          |  |          |         |   |  |   |         |   |  |   |         |   |  |   |         |   |  |   |         |  
|Long-term debt                                  |  |                                   | 53.9  | %       |  |         | 136.9 | %        |  |          | 0.0   | %        |  |          | 200,000 |          |  |          | 200,025 |   |  |   | 0       |   |  |   | 2,678   |   |  |   | 2,678   |   |  |   | 2,678   |  
|                                                |  |                                   |       |         |  |         |       |          |  |          |       |          |  |          |         |          |  |          |         |   |  |   |         |   |  |   |         |   |  |   |         |   |  |   |         |  
|Shareholders equity                            |  |                                   | (5.4  | )%      |  |         | (14.2 | )%       |  |          | 3.9   | %        |  |          | 148,701 |          |  |          | 143,163 |   |  |   | 382,279 |   |  |   | 387,550 |   |  |   | 358,741 |   |  |   | 319,762 |  
|                                                |  |                                   |       |         |  |         |       |          |  |          |       |          |  |          |         |          |  |          |         |   |  |   |         |   |  |   |         |   |  |   |         |   |  |   |         |  
|Ratios:                                         |  |                                   |       |         |  |         |       |          |  |          |       |          |  |          |         |          |  |          |         |   |  |   |         |   |  |   |         |   |  |   |         |   |  |   |         |  
|                                               
|                                               
|                                               
|                                               
|Return on average shareholders equity(d)       |  |                                   |       |         |  |         |       |          |  |          |       |          |  |          | 67.35   | %        |  |          | 34.01   | % |  |   | 22.70   | % |  |   | 17.37   | % |  |   | 16.50   | % |  |   | 14.91   | %
|                                                |  |                                   |       |         |  |         |       |          |  |          |       |          |  |          |         |          |  |          |         |   |  |   |         |   |  |   |         |   |  |   |         |   |  |   |         |  
|EBITDA as a percentage of operating revenues(b) |  |                                   |       |         |  |         |       |          |  |          |       |          |  |          | 28.07   | %        |  |          | 26.49   | % |  |   | 26.96   | % |  |   | 22.72   | % |  |   | 20.30   | % |  |   | 21.06   | %
|                                                |  |                                   |       |         |  |         |       |          |  |          |       |          |  |          |         |          |  |          |         |   |  |   |         |   |  |   |         |   |  |   |         |   |  |   |         |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                |  |                                   |         |          |  |          |         |          |  |   |         |   |  |   |         |  
|----------------------------------------------- |  | --------------------------------- | ------- | -------- |  | -------- | ------- | -------- |  | - | ------- | - |  | - | ------- | -
|                                                |  | Dec. 26                           |         | Dec. 27  |  | Dec. 29  |         | Dec. 30 
|                                                |  | 1993                              |         | 1992     |  | 1991     |         | 1990    
|                                                |  | 52 Weeks                          |         | 52 Weeks |  | 52 Weeks |         | 52 Weeks
|                                                |  |                                   |         |          |  |          |         |         
|                                                |  |                                  
|                                                |  | (In thousands, except share data)
|                                               
|                                               
|                                               
|                                               
|Balance Sheet Data:                             |  |                                   |         |          |  |          |         |          |  |   |         |   |  |   |         |  
|                                               
|                                               
|                                               
|                                               
|Total assets                                    |  | $                                 | 464,688 |          |  | $        | 432,872 |          |  | $ | 403,627 |   |  | $ | 383,758 |  
|                                                |  |                                   |         |          |  |          |         |          |  |   |         |   |  |   |         |  
|Working capital                                 |  |                                   | 127,999 |          |  |          | 90,488  |          |  |   | 70,217  |   |  |   | 122,710 |  
|                                                |  |                                   |         |          |  |          |         |          |  |   |         |   |  |   |         |  
|Long-term debt                                  |  |                                   | 2,678   |          |  |          | 2,678   |          |  |   | 2,678   |   |  |   | 2,678   |  
|                                                |  |                                   |         |          |  |          |         |          |  |   |         |   |  |   |         |  
|Shareholders equity                            |  |                                   | 290,693 |          |  |          | 269,997 |          |  |   | 290,982 |   |  |   | 275,623 |  
|                                                |  |                                   |         |          |  |          |         |          |  |   |         |   |  |   |         |  
|Ratios:                                         |  |                                   |         |          |  |          |         |          |  |   |         |   |  |   |         |  
|                                               
|                                               
|                                               
|                                               
|Return on average shareholders equity(d)       |  |                                   | 11.77   | %        |  |          | 9.08    | %        |  |   | 9.83    | % |  |   | 11.06   | %
|                                                |  |                                   |         |          |  |          |         |          |  |   |         |   |  |   |         |  
|EBITDA as a percentage of operating revenues(b) |  |                                   | 19.92   | %        |  |          | 17.73   | %        |  |   | 16.26   | % |  |   | 16.39   | %
|                                                |  |                                   |         |          |  |          |         |          |  |   |         |   |  |   |         |  

This data was compiled from the consolidated
financial statements of Central Newspapers, Inc. and
Subsidiaries. The consolidated financial statements and related
notes and discussions for the year ended December 26, 1999
should be read in order to obtain a better understanding of this
data.




|    |                                                                                                                                                                                                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Cash flows from investing and financing
	activities, which are not presented, are an integral part of
	total cash activities.                                                                                                                                                                                                                                         
|   
|(b) | EBITDA excludes the effects of non-operating
	income, the gain on sale of subsidiary and the costs associated
	with asset impairments and workforce reduction costs. The use of
	EBITDA should not be construed as an alternative measure of the
	Companys income or cash flows from operating activities
	since EBITDA excludes significant costs of doing business.
|   
|(c) | See Note 1 to the 1999 consolidated financial
	statements for discussion on computation of number of shares used
	 in computing earnings per share.                                                                                                                                                                                                                   
|   
|(d) | The return on average shareholders equity is
	 calculated using income before cumulative effect of accounting
	changes.                                                                                                                                                                                                                                              
|   
|(e) | Amounts for 1999, 1998, 1997, 1996, 1995 and 1994
	include the effects of trading securities on cash flows provided
	by operating activities.                                                                                                                                                                                                                         



|    |                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------
|(f) | Book value per share at year end is calculated
	using total shareholders equity divided by Class A
	Common equivalent shares.

13



---



##### Table of Contents



QUARTERLY FINANCIAL INFORMATION

The Companys business is to a certain extent seasonal, with
 peak revenue and profits generally occurring in the second and
fourth quarters of the year.

OPERATING RESULTS FOR THE LAST THREE YEARS:

|                             |         |                                   |         |         |  |         |         |         |  |       |         |      |  |   |         |      |  |   |         |      | 
|---------------------------- | ------- | --------------------------------- | ------- | ------- |  | ------- | ------- | ------- |  | ----- | ------- | ---- |  | - | ------- | ---- |  | - | ------- | ---- | 
|                             |         | 1st                               |         | 2nd     |  | 3rd     |         | 4th     |  |      
|                             |         | Quarter                           |         | Quarter |  | Quarter |         | Quarter |  | Total
|                             |         |                                   |         |         |  |         |         |         |  |      
|                             |         |                                  
|                             |         | (in thousands, except share data)
|1999 (52 weeks)              |         |                                   |         |         |  |         |         |         |  |       |         |      |  |   |         |      |  |   |         |     
|                            
|                            
|                            
|                            
|Operating revenues           |         | $                                 | 193,035 |         |  | $       | 202,128 |         |  | $     | 195,115 |      |  | $ | 213,812 |      |  | $ | 804,090 |     
|                            
|                            
|                            
|                            
|Operating expenses           |         |                                   | 156,941 |         |  |         | 157,832 |         |  |       | 155,935 |      |  |   | 129,936 |      |  |   | 600,644 |     
|                            
|                            
|                            
|                            
|Operating income             |         |                                   | 36,094  |         |  |         | 44,296  |         |  |       | 39,180  |      |  |   | 83,876  |      |  |   | 203,446 |     
|                            
|                            
|                            
|                            
|Other income  net           |         |                                   | (1,904  | )       |  |         | (1,656  | )       |  |       | (2,489  | )    |  |   | (1,201  | )    |  |   | (7,250  | )   
|                            
|                            
|                            
|                            
|Provision for income taxes   |         |                                   | 13,715  |         |  |         | 16,922  |         |  |       | 14,708  |      |  |   | 33,133  |      |  |   | 78,478  |     
|                            
|                            
|                            
|                            
|Minority interest            |         |                                   | (486    | )       |  |         | (443    | )       |  |       | (319    | )    |  |   | (271    | )    |  |   | (1,519  | )   
|                            
|                            
|                            
|                            
|Equity in Affiliate  net    |         |                                   | 107     |         |  |         | (182    | )       |  |       | (226    | )    |  |   | (255    | )    |  |   | (556    | )   
|                             |         |                                   |         |         |  |         |         |         |  |       |         |      |  |   |         |      |  |   |         |     
|Net income                   |         | $                                 | 20,096  |         |  | $       | 25,093  |         |  | $     | 21,438  |      |  | $ | 49,016  |      |  | $ | 115,643 |     
|                             |         |                                   |         |         |  |         |         |         |  |       |         |      |  |   |         |      |  |   |         |     
|Net income per common share: |         |                                   |         |         |  |         |         |         |  |       |         |      |  |   |         |      |  |   |         |     
|                            
|                            
|                            
|                            
|                             | Basic   |                                   |         | 0.49    |  |         |         | 0.61    |  |       |         | 0.54 |  |   |         | 1.25 |  |   |         | 2.89 | 
|                            
|                            
|                            
|                            
|                             | Diluted |                                   |         | 0.48    |  |         |         | 0.60    |  |       |         | 0.52 |  |   |         | 1.19 |  |   |         | 2.79 | 
|1998 (52 weeks)              |         |                                   |         |         |  |         |         |         |  |       |         |      |  |   |         |      |  |   |         |     
|                            
|                            
|                            
|                            
|Operating revenues           |         | $                                 | 185,104 |         |  | $       | 188,618 |         |  | $     | 181,326 |      |  | $ | 197,642 |      |  | $ | 752,690 |     
|                            
|                            
|                            
|                            
|Operating expenses           |         |                                   | 150,566 |         |  |         | 150,733 |         |  |       | 144,900 |      |  |   | 153,918 |      |  |   | 600,117 |     
|                            
|                            
|                            
|                            
|Operating income             |         |                                   | 34,538  |         |  |         | 37,885  |         |  |       | 36,426  |      |  |   | 43,724  |      |  |   | 152,573 |     
|                            
|                            
|                            
|                            
|Other income  net           |         |                                   | 857     |         |  |         | 1,430   |         |  |       | 521     |      |  |   | (2,380  | )    |  |   | 428     |     
|                            
|                            
|                            
|                            
|Provision for income taxes   |         |                                   | (14,656 | )       |  |         | (16,260 | )       |  |       | (15,315 | )    |  |   | (16,894 | )    |  |   | (63,125 | )   
|                            
|                            
|                            
|                            
|Minority interest            |         |                                   | (315    | )       |  |         | (1,120  | )       |  |       | (502    | )    |  |   | (389    | )    |  |   | (2,326  | )   
|                            
|                            
|                            
|                            
|Equity in Affiliate  net    |         |                                   | 154     |         |  |         | 322     |         |  |       | 327     |      |  |   | 189     |      |  |   | 992     |     
|                             |         |                                   |         |         |  |         |         |         |  |       |         |      |  |   |         |      |  |   |         |     
|Net income                   |         | $                                 | 20,578  |         |  | $       | 22,257  |         |  | $     | 21,457  |      |  | $ | 24,250  |      |  | $ | 88,542  |     
|                             |         |                                   |         |         |  |         |         |         |  |       |         |      |  |   |         |      |  |   |         |     
|Net income per common share: |         |                                   |         |         |  |         |         |         |  |       |         |      |  |   |         |      |  |   |         |     
|                            
|                            
|                            
|                            
|                             | Basic   |                                   |         | 0.41    |  |         |         | 0.44    |  |       |         | 0.44 |  |   |         | 0.54 |  |   |         | 1.83 | 
|                            
|                            
|                            
|                            
|                             | Diluted |                                   |         | 0.40    |  |         |         | 0.43    |  |       |         | 0.43 |  |   |         | 0.52 |  |   |         | 1.78 | 
|1997 (52 weeks)              |         |                                   |         |         |  |         |         |         |  |       |         |      |  |   |         |      |  |   |         |     
|                            
|                            
|                            
|                            
|Operating revenues           |         | $                                 | 170,968 |         |  | $       | 179,753 |         |  | $     | 173,907 |      |  | $ | 191,509 |      |  | $ | 716,137 |     
|                            
|                            
|                            
|                            
|Operating expenses           |         |                                   | 139,960 |         |  |         | 140,917 |         |  |       | 143,359 |      |  |   | 150,864 |      |  |   | 575,100 |     
|                            
|                            
|                            
|                            
|Operating income             |         |                                   | 31,008  |         |  |         | 38,836  |         |  |       | 30,548  |      |  |   | 40,645  |      |  |   | 141,037 |     
|                            
|                            
|                            
|                            
|Other income  net           |         |                                   | 1,092   |         |  |         | 469     |         |  |       | 190     |      |  |   | 401     |      |  |   | 2,152   |     
|                            
|                            
|                            
|                            
|Provision for income taxes   |         |                                   | (13,534 | )       |  |         | (16,018 | )       |  |       | (12,752 | )    |  |   | (16,493 | )    |  |   | (58,797 | )   
|                            
|                            
|                            
|                            
|Minority interest            |         |                                   | (543    | )       |  |         | (744    | )       |  |       | (688    | )    |  |   | (591    | )    |  |   | (2,566  | )   
|                            
|                            
|                            
|                            
|Equity in Affiliate  net    |         |                                   | (285    | )       |  |         | (150    | )       |  |       | 180     |      |  |   | (76     | )    |  |   | (331    | )   
|                             |         |                                   |         |         |  |         |         |         |  |       |         |      |  |   |         |      |  |   |         |     
|Net income                   |         | $                                 | 17,738  |         |  | $       | 22,393  |         |  | $     | 17,478  |      |  | $ | 23,886  |      |  | $ | 81,495  |     
|                             |         |                                   |         |         |  |         |         |         |  |       |         |      |  |   |         |      |  |   |         |     
|Net income per common share: |         |                                   |         |         |  |         |         |         |  |       |         |      |  |   |         |      |  |   |         |     
|                            
|                            
|                            
|                            
|                             | Basic   |                                   |         | 0.34    |  |         |         | 0.43    |  |       |         | 0.35 |  |   |         | 0.46 |  |   |         | 1.58 | 
|                            
|                            
|                            
|                            
|                             | Diluted |                                   |         | 0.33    |  |         |         | 0.42    |  |       |         | 0.34 |  |   |         | 0.45 |  |   |         | 1.54 | 

14



---



##### Table of Contents






Item 7.  Managements Discussion and
Analysis of Results of Operations and Financial Condition.

Forward-Looking Statements

The information below and elsewhere in this document contains
forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995. From time to time, we may provide
forward-looking statements relating to such matters as
anticipated financial performance, business prospects, and
similar matters. We may identify these forward-looking statements
 by the use of words such as anticipate,
believe, expect, plan,
foresee, or derivations thereof. You are cautioned
not to place undue reliance on these forward-looking statements.
We assume no obligation to update any forward-looking statements.
 A variety of factors could cause our actual results to differ
materially from the expectations expressed in the forward-looking
 statements, including the following:



| |   |                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | declines in circulation due to changing reader preferences and/or
	 new forms of information dissemination, such as the Internet;                                                                                                                     
|
| |  | economic weakness in geographic markets;                                                                                                                                                                                                              
|
| |  | weakness in advertising categories due to factors including
	retail consolidations, declines in the advertising budgets of
	major customers, and increased competition from print and
	non-print products and new competitors emerging in our markets;
|
| |  | the negative impact of issues related to labor agreements;                                                                                                                                                                                            
|
| |  | unexpected fluctuations in the price of newsprint;                                                                                                                                                                                                    
|
| |  | an increase in distribution and/or production costs over
	anticipated levels; and                                                                                                                                                                     
|
| |  | an increase in actual interest rates over expected rates.                                                                                                                                                                                             

GENERAL

Our principal line of business is newspaper publishing. We derive
 revenues primarily from advertising and newspaper sales in the
Phoenix, Arizona and Indianapolis, Indiana metropolitan areas. We
 also currently own:



| |   |                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------
| |  | a 23.2% interest in BrassRing, Inc., a leading provider of
	recruiting services to businesses;                           
|
| |  | a 13.5% interest in Ponderay newsprint company, a partnership
	that owns a newsprint mill in the State of Washington; and
|
| |  | a 100% interest in Carantin & Co. Inc., which provides direct
	 marketing support services to its clients.               

You should read the following information with our fiscal 1999
consolidated financial statements, including the accompanying
notes.

Our business tends to be seasonal, with peak revenues and profits
 generally occurring in the second and fourth quarters of each
year. The results for 1999, 1998, and 1997 reflect these seasonal
 patterns.

RECENT EVENTS

Career Services, Inc.

In February 1997, the Company acquired 80% of Career
Services, Inc., the Santa Clara, California based Westech group
of companies for $34.8 million. The transaction was recorded
using purchase accounting. The group includes Westech ExpoCorp.,
which organizes job fairs for the high-technology industry, High
Technology Careers, which publishes High Technology Careers
Magazine, incpad by Westech, an internet-based resume posting and
 research service, and JobsAmerica, which organizes job fairs for
 service industry positions. The transaction generated $32.4
million of goodwill which is being amortized on a straight line
basis over 15 years. In June 1997, Westech acquired the
 assets of Target Career Fairs, a Boston-based company that
organizes job fairs for the high-technology industry in the
eastern portion of the U.S., including the cities of Boston,
Raleigh, Orlando, Philadelphia and St. Louis.

15



---



##### Table of Contents



On April 30, 1999, the Company purchased the remaining 20%
of Career Services, Inc. for approximately $13.7 million from the
 minority shareholders. On March 10, 2000, the Company sold
Career Services, Inc. by merging our wholly owned subsidiary into
 BrassRing, Inc., a venture of Kaplan, Inc. (a wholly-owned
subsidiary of The Washington Post company), Tribune company, and
venture capital firm, Accel Partners, for 23.2% of BrassRing,
Inc. which will be accounted for using the equity method. The
pretax gain on the sale was approximately $33.0 million.

Homebuyers Fair, Inc.

In October 1997, the Company acquired an 80% interest in
Homebuyers Fair, Inc. which provides internet-based
services and information for people who are moving and
corporations that are relocating employees. In
September 1998, Homebuyers Fair acquired 100% of
National School Reporting Services, Inc. which provides
internet-based information related to schools across the nation.
On October 31, 1999, the Company completed the sale of our
interest in Homebuyers Fair, Inc., its subsidiary National
School Reporting Services, Inc. and FAS Hotline to Homestore.com,
 Inc. The net proceeds from the sale were $51.9 million,
consisting of $23.5 million in cash, $33.7 million in notes
receivable, $7.7 million in notes payable and 50,000 shares of
Homestore.com, Inc. stock, valued at $2.4 million based on quoted
 market prices at closing. The pretax gain on the sale of $32.7
million has been recorded in the consolidated statement of income
 for the year ended December 26, 1999. Subsequent to year
end, the notes plus accrued interest were repaid in full.

Stock repurchases and related transactions

In May 1997, the Company repurchased and retired an
aggregate of 2,354,734 shares of Class A common stock from
three non-profit organizations at a total cost of $58.6 million.
In June 1997, the Company completed a registered secondary
offering of 4,709,466 shares of Class A common stock priced
at $32.0625 per share.

In December 1997, the Board of Directors authorized
repurchases of up to $100.0 million of our 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 repurchased and retired a total of 2,274,660 shares
under this authorization through December 26, 1999 at a
total cost of approximately $75.1 million. In March 2000, this
authorization was completed. This authorization replaced the
March 19, 1996, repurchase program under which the Company
repurchased 1,490,000 shares of Class A common stock at a
cost of approximately $33.2 million.

On October 23, 1998, pursuant to a September 21, 1998
agreement, the Company repurchased and retired 5,000,000 shares
of Class A common stock from the Nina Mason Pulliam
Charitable Trust at $30 per share (plus interest from
September 16, 1998) for a total consideration of $150.8
million. In addition, in November 1998, the Company
repurchased and retired 3,000,000 shares of its Class A
common stock, pursuant to the exercise of an option from the
Charitable Trust, at $33.50 per share for a total consideration
of $100.5 million. These repurchases were financed with a $300
million revolving credit facility arranged by First Chicago
Capital Markets, Inc. (a subsidiary of Bank One Corporation), and
 syndicated to a group of banks. This $300 million revolving
credit facility, which closed on November 10, 1998 consists
of a $200 million five-year and a $100 million 365-day revolving
credit facility which expire in November 2003 and 1999,
respectively. In 1999, the 365-day facility was renewed with an
expiration date of November 2000. The credit facility may be
 used for general corporate purposes, including the repurchase of
 common stock. Under the credit facility, the Company can choose
among loans with interest rates based on either an Alternative
Base Rate (fixed rate), an Adjusted LIBOR (floating rate), or a
Competitive Bid (a floating rate loan based on bids solicited
from the lenders) as those terms are defined in the credit
agreement. The Company must maintain compliance with certain
covenants under the terms of the credit facility.

In April 1999, the Company completed a registered secondary
offering of 2,673,699 shares of Class A common stock priced
at $30.50 per share. The shares were sold by the Nina Mason
Pulliam Charitable Trust. To complete the sale, a total of
1,777,560 shares of Class B common stock were converted to
177,756 shares of Class A Common Stock. No new shares were
issued in this transaction and the Company did not receive any
proceeds from the sale.

16



---



##### Table of Contents



On August 12, 1999, the Board of Directors approved the
repurchase and retirement of 2,200,000 shares of Class A
common stock from the Eugene S. Pulliam Revocable Trust for a
total consideration of approximately $90.2 million. This
repurchase was financed through additional borrowings of $90.0
million from the $300 million revolving credit facility
established in 1998.

In March 2000, the Board of Directors authorized repurchases
 of up to $100.0 million of our Class A common stock. The
shares may be purchased within the subsequent three years on the
open market or in privately negotiated transactions.

Indianapolis Newspapers, a division of
Indiana Newspapers, Inc.

In January 1997, the Company acquired the remaining 9.8% of
Indianapolis Newspapers, Inc. (INI) common stock that
 it did not already own. This transaction was accomplished by
issuing to the minority shareholders an aggregate of 1,892 shares
 of newly created, non-voting, INI preferred stock, with an
aggregate stated value of $18,920,000 in exchange for the shares
of INI common stock owned by them. The preferred stock provides
for aggregate annual dividends of $1,324,000 on a cumulative
basis, is callable in five years by INI, and is redeemable at any
 time by the shareholders of INI at the stated value plus accrued
 but unpaid dividends. The total acquisition consideration of
$18,920,000 was accounted for using the purchase method of
accounting. This transaction resulted in goodwill of $8,468,000,
which is being amortized over its remaining life, and a reduction
 of the minority interest of $9,244,000.

On September 14, 1999, the Board of Directors approved a
$70.8 million press project for The Indianapolis Star
which will be located in a facility adjacent to our Pulliam
Production Center. This plan will be executed over a three year
period beginning in fiscal 2000. The project is expected to
afford The Indianapolis Starthe ability to more than
double its color advertising capacity. It will also provide
increased flexibility in creating additional zoned editions of
The Indianapolis Star. The plan will result in the
elimination of approximately 88 production and transportation
positions. Within five years, we expect this project to generate
estimated annual cash savings of approximately $7.2 million.

On October 1, 1999, we ceased publication of our afternoon
newspaper, The Indianapolis News, and realigned the news
gathering structure of our morning newspaper, The Indianapolis
 Star. In October 1999, we outsourced the transportation
 function for The Indianapolis Star. These changes
resulted in recording a one-time pretax charge to earnings of
$3.5 million in 1999 and are expected to result in annual pretax
savings of approximately $4.0 million. A substantial portion of
the savings will be derived from elimination of 85 positions as a
 result of these actions.

RESULTS OF OPERATIONS

We achieved our sixth consecutive year of record revenues and
profits in 1999. The following table summarizes our operating
income, net income, and earnings per share for 1999, 1998, and
1997:

|                 |  |                                  |       |                                |  |      |       |      |  |      |       |      |  |   |       |  |  |   |       |  |  |   |       | 
|---------------- |  | -------------------------------- | ----- | ------------------------------ |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | - | ----- |  |  | - | ----- |  |  | - | ----- | 
|                 |  |                                  |       |                                |  |      |       |     
|                 |  |                                  |       | Excluding Special Charges     
|                 |  | Fiscal Year Ended(1)             |       | And gain on sale of subsidiary
|                 |  |                                  |       |                               
|                 |  | 1999                             |       | 1998                           |  | 1997 |       | 1999 |  | 1998 |       | 1997
|                 |  |                                  |       |                                |  |      |       |      |  |      |       |     
|                 |  |                                 
|                 |  | (In millions, except share data)
|                
|                
|                
|                
|Operating Income |  | $                                | 203.4 |                                |  | $    | 152.6 |      |  | $    | 141.0 |      |  | $ | 174.5 |  |  | $ | 154.0 |  |  | $ | 151.0 | 
|                
|                
|                
|                
|Net Income       |  |                                  | 115.6 |                                |  |      | 88.5  |      |  |      | 81.5  |      |  |   | 98.3  |  |  |   | 89.4  |  |  |   | 87.4  | 
|                
|                
|                
|                
|Basic EPS        |  | $                                | 2.89  |                                |  | $    | 1.83  |      |  | $    | 1.58  |      |  | $ | 2.45  |  |  | $ | 1.84  |  |  | $ | 1.70  | 
|                
|                
|                
|                
|Diluted EPS      |  |                                  | 2.79  |                                |  |      | 1.78  |      |  |      | 1.54  |      |  |   | 2.37  |  |  |   | 1.79  |  |  |   | 1.65  | 




|    |                                                                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | All three years included work force reduction and/or asset
	impairment costs (special charges) of $3.8 million,
	$1.4 million and $10.0 million for 1999, 1998 and 1997,
	respectively that decreased earnings and 1999 included a gain on
	sale of a subsidiary of $32.8 million.

17



---



##### Table of Contents



Net income in 1999 (excluding special charges) increased $8.9
million, or 10.0% over 1998 primarily due to:



| |   |                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------
| |  | a 6.5% increase in advertising revenue;                                                                                             
|
| |  | other revenue growth of 29.4% from increased online, direct
	marketing, specialty publication and commercial printing revenue;
	 and
|
| |  | a 13.9% decrease in our average newsprint cost per ton.                                                                             

OPERATING REVENUE

Our major sources of operating revenue are derived principally
from advertising and newspaper copy sales. Advertising currently
accounts for about 75% of our consolidated revenue. Circulation
revenue from the sale of newspaper copies accounts for
approximately 19% of our consolidated revenue. The remaining 6%
of our consolidated revenue is derived from other revenue sources
 such as online, direct marketing, commercial printing, job fair
revenue and special publications. The following table summarizes
our operating revenue for the 1999, 1998, and 1997 fiscal years:

|                        |  |                   |       |           |  |           |       |          |  |          |       |  |  |  |      |  |  |  |      | 
|----------------------- |  | ----------------- | ----- | --------- |  | --------- | ----- | -------- |  | -------- | ----- |  |  |  | ---- |  |  |  | ---- | 
|                        |  |                   |       |           |  |          
|                        |  | Fiscal Year Ended |       |           |  |          
|                        |  |                   |       | 1999-1998 |  | 1998-1997
|                        |  | 1999              |       | 1998      |  | 1997      |       | % change |  | % change
|                        |  |                   |       |           |  |           |       |          |  |         
|                        |  |                   |       |           |  |          
|                        |  | (In millions)     |       |           |  |          
|                       
|                       
|                       
|                       
|Advertising             |  | $                 | 599.1 |           |  | $         | 562.4 |          |  | $        | 541.3 |  |  |  | 6.5  |  |  |  | 3.9  | 
|                       
|                       
|                       
|                       
|Circulation             |  |                   | 153.5 |           |  |           | 150.4 |          |  |          | 143.1 |  |  |  | 2.1  |  |  |  | 5.1  | 
|                       
|                       
|                       
|                       
|Other                   |  |                   | 51.5  |           |  |           | 39.8  |          |  |          | 31.7  |  |  |  | 29.4 |  |  |  | 25.6 | 
|                        |  |                   |       |           |  |           |       |          |  |          |       |  |  |  |      |  |  |  |      | 
|Total Operating Revenue |  | $                 | 804.1 |           |  | $         | 752.6 |          |  | $        | 716.1 |  |  |  | 6.8  |  |  |  | 5.1  | 
|                        |  |                   |       |           |  |           |       |          |  |          |       |  |  |  |      |  |  |  |      | 

Gains in advertising revenue primarily resulted from increases in
 advertising linage (column inches of printed material that has
appeared in the newspaper) and rate. Advertising rates were
adjusted at varying times throughout the year and in varying
amounts based on local market conditions for each type of
advertising category. Our major market linage was as follows:

|                 |  |                         |         |           |  |           |         |          |  |          |         |  |  |  |      |  |  |  |     | 
|---------------- |  | ----------------------- | ------- | --------- |  | --------- | ------- | -------- |  | -------- | ------- |  |  |  | ---- |  |  |  | --- | 
|                 |  |                         |         |           |  |          
|                 |  | Full run linage         |         |           |  |          
|                 |  | in six column inches(1) |         |           |  |          
|                 |  |                         |         | 1999-1998 |  | 1998-1997
|                 |  | 1999                    |         | 1998      |  | 1997      |         | % change |  | % change
|                 |  |                         |         |           |  |           |         |          |  |         
|                 |  |                         |         |           |  |          
|                 |  | (In thousands)          |         |           |  |          
|                
|                
|                
|                
|By Category:     |  |                         |         |           |  |           |         |          |  |          |         |  |  |  |      |  |  |  |     | 
|                
|                
|                
|                
|Retail           |  |                         | 2,199.0 |           |  |           | 2,141.9 |          |  |          | 2,112.5 |  |  |  | 2.7  |  |  |  | 1.4 | 
|                
|                
|                
|                
|National         |  |                         | 466.7   |           |  |           | 394.2   |          |  |          | 377.3   |  |  |  | 18.4 |  |  |  | 4.5 | 
|                
|                
|                
|                
|Classified       |  |                         | 2,844.4 |           |  |           | 2,683.6 |          |  |          | 2,628.2 |  |  |  | 6.0  |  |  |  | 2.1 | 
|                 |  |                         |         |           |  |           |         |          |  |          |         |  |  |  |      |  |  |  |     | 
|Total            |  |                         | 5,510.1 |           |  |           | 5,219.7 |          |  |          | 5,118.0 |  |  |  | 5.6  |  |  |  | 2.0 | 
|                 |  |                         |         |           |  |           |         |          |  |          |         |  |  |  |      |  |  |  |     | 
|By Major Market: |  |                         |         |           |  |           |         |          |  |          |         |  |  |  |      |  |  |  |     | 
|                
|                
|                
|                
|Phoenix          |  |                         | 3,219.7 |           |  |           | 3,076.8 |          |  |          | 2,994.6 |  |  |  | 4.6  |  |  |  | 2.7 | 
|                
|                
|                
|                
|Indianapolis     |  |                         | 2,290.4 |           |  |           | 2,142.9 |          |  |          | 2,123.4 |  |  |  | 6.9  |  |  |  | 0.9 | 
|                 |  |                         |         |           |  |           |         |          |  |          |         |  |  |  |      |  |  |  |     | 
|Total            |  |                         | 5,510.1 |           |  |           | 5,219.7 |          |  |          | 5,118.0 |  |  |  | 5.6  |  |  |  | 2.0 | 
|                 |  |                         |         |           |  |           |         |          |  |          |         |  |  |  |      |  |  |  |     | 




|    |                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | For comparability, linage statistics for 1999, 1998, and 1997
	exclude linage of The Phoenix Gazette, which ceased
	publication in January 1997 and linage of The
	Indianapolis Newswhich ceased publication on October 1,
	 1999.

Advertising revenue in 1999 increased by $36.7 million, or 6.5%,
from 1998 on a 5.6% increase in full-run run-of-paper
(ROP) linage. Advertising revenue in 1998 increased
3.9% from 1997 on a 2.0% increase in full-run ROP linage. The
1999 advertising revenue increase primarily resulted from gains
in recruitment, real estate and auto classified categories in
Phoenix and retail categories in Indianapolis. National
advertising was

18



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##### Table of Contents





Circulation revenue for 1999, 1998, and 1997 was $153.5 million,
$150.4 million and $143.1 million, respectively, for increases of
 2.1% for the 1999 period and 5.1% for the 1998 period. A
circulation distribution system change in Indianapolis, which
began in 1997 resulted in a revenue increase of $1.7 million in
1999, $4.3 million in 1998 and $10.7 million in 1997. An
April 1999 increase in the home-delivered price of The
Arizona Republicalso contributed to the revenue gain in 1999
 and 1998. Closure of The Indianapolis Newsin
October 1999 did not have a significant impact on total
revenues because approximately 84% of The Indianapolis Newssubscribers converted to The Indianapolis Star. The
closure of The Phoenix Gazettein January 1997 did
not have a significant impact on total revenues because The
Arizona Republicgains in daily circulation were greater than
 Gazette losses. The combined average daily and Sunday
circulation for Phoenix and Indianapolis were:

|                                    |  |                   |         |           |  |           |         |          |  |          |         |  |  |  |      |   |  |  |      |  
|----------------------------------- |  | ----------------- | ------- | --------- |  | --------- | ------- | -------- |  | -------- | ------- |  |  |  | ---- | - |  |  | ---- | -
|                                    |  |                   |         |           |  |          
|                                    |  | Fiscal Year Ended |         |           |  |          
|                                    |  |                   |         | 1999-1998 |  | 1998-1997
|                                    |  | 1999              |         | 1998      |  | 1997      |         | % change |  | % change
|                                    |  |                   |         |           |  |           |         |          |  |         
|                                    |  |                   |         |           |  |          
|                                    |  | (In millions)     |         |           |  |          
|                                   
|                                   
|                                   
|                                   
|COMBINED AVERAGE DAILY CIRCULATION: |  |                   |         |           |  |           |         |          |  |          |         | 
|                                   
|                                   
|                                   
|                                   
|Phoenix                             |  |                   | 465,073 |           |  |           | 467,276 |          |  |          | 460,184 |  |  |  | (0.5 | ) |  |  | 1.5  |  
|                                   
|                                   
|                                   
|                                   
|Indianapolis                        |  |                   | 266,794 |           |  |           | 267,985 |          |  |          | 271,712 |  |  |  | (0.4 | ) |  |  | (1.4 | )
|                                   
|                                   
|                                   
|                                   
|                                   
|SUNDAY AVERAGE CIRCULATION:         |  |                   |         |           |  |           |         |          |  |          |         |  |  |  |      |  
|                                   
|                                   
|                                   
|                                   
|Phoenix                             |  |                   | 586,177 |           |  |           | 585,890 |          |  |          | 583,288 |  |  |  | 0.0  |   |  |  | 0.4  |  
|                                   
|                                   
|                                   
|                                   
|Indianapolis                        |  |                   | 371,712 |           |  |           | 390,479 |          |  |          | 391,727 |  |  |  | (4.8 | ) |  |  | (0.3 | )

Other revenue increased $11.7 million in 1999, or 29.4%, due to
revenue gains from online, direct marketing, specialty
publications and commercial printing revenue. Other revenue
increased $8.2 million in 1998, or 25.8%, due to revenue gains
from online, direct marketing, job fairs and specialty
publications.

OPERATING EXPENSES

Total operating expenses of $600.6 million, $600.1 million and
$575.1 million for years 1999, 1998 and 1997, respectively,
included special charges of $3.8 million, $1.4 million and $10.0
million for years 1999, 1998 and 1997, respectively and a gain on
 sale of subsidiary of $32.7 million in 1999. Our operating
expenses fall into four main categories. Compensation expense,
which includes fringe benefits, currently accounts for about 41%
of our total operating costs excluding special charges. Newsprint
 and ink accounts for about 16% and other operating costs about
35% of total costs. Depreciation and amortization account for the
 remainder, which is about 8%. The following table summarizes our
 costs (excluding special charges) for the 1999, 1998, and 1997
fiscal years:

|                                        |  |                   |       |           |  |           |       |          |  |          |       |  |  |  |       |   |  |  |      | 
|--------------------------------------- |  | ----------------- | ----- | --------- |  | --------- | ----- | -------- |  | -------- | ----- |  |  |  | ----- | - |  |  | ---- | 
|                                        |  |                   |       |           |  |          
|                                        |  | Fiscal Year Ended |       |           |  |          
|                                        |  |                   |       | 1999-1998 |  | 1998-1997
|                                        |  | 1999              |       | 1998      |  | 1997      |       | % change |  | % change
|                                        |  |                   |       |           |  |           |       |          |  |         
|                                        |  |                   |       |           |  |          
|                                        |  | (In millions)     |       |           |  |          
|                                       
|                                       
|                                       
|                                       
|Compensation                            |  | $                 | 258.7 |           |  | $         | 243.6 |          |  | $        | 239.8 |  |  |  | 6.2   |   |  |  | 1.6  | 
|                                       
|                                       
|                                       
|                                       
|Newsprint and Ink                       |  |                   | 101.5 |           |  |           | 112.9 |          |  |          | 105.5 |  |  |  | (10.1 | ) |  |  | 7.0  | 
|                                       
|                                       
|                                       
|                                       
|Other Operating Costs                   |  |                   | 218.2 |           |  |           | 196.8 |          |  |          | 177.8 |  |  |  | 10.9  |   |  |  | 10.7 | 
|                                       
|                                       
|                                       
|                                       
|Depreciation and Amortization           |  |                   | 51.2  |           |  |           | 45.4  |          |  |          | 42.0  |  |  |  | 12.8  |   |  |  | 8.1  | 
|                                        |  |                   |       |           |  |           |       |          |  |          |       |  |  |  |       |   |  |  |      | 
|Total Costs (excluding special charges) |  | $                 | 629.6 |           |  | $         | 598.7 |          |  | $        | 565.1 |  |  |  | 5.2   |   |  |  | 5.9  | 
|                                        |  |                   |       |           |  |           |       |          |  |          |       |  |  |  |       |   |  |  |      | 

Compensation costs, which include payroll and fringe benefits,
increased 6.2% to $258.7 million in 1999 and 1.6% to $243.6
million in 1998. Headcount for 1999 compared with 1998 decreased
2.2% primarily due to the closure of The Indianapolis Newsand outsourcing of the transportation function for The
Indianapolis Starin the fourth quarter of 1999. Increases in
 compensation costs in 1999 primarily resulted from performance
based bonuses, merit increases and volume related commission
increases. Headcount for 1998 compared with 1997 decreased
approximately 2.1% primarily because the Indianapolis circulation
 distribution system

19



---



##### Table of Contents





Newsprint and ink expense decreased 10.1% to $101.5 million in
1999 and increased 7.0% to $112.9 million in 1998. The 1999
decrease in newsprint expense was primarily due to a 13.9%
decrease in the cost per ton of newsprint consumed offset by a
volume increase of 3.8%. The increase in newsprint consumption in
 1999 primarily resulted from higher advertising linage in both
markets and product enhancements in Indianapolis. The 1998
increase in newsprint expense was due to a 1.5% increase in
newsprint consumption and a 5.6% increase in the average cost per
 ton of newsprint consumed. Increases in newsprint consumption in
 1998 primarily resulted from higher advertising linage in both
major markets and product enhancements in Indianapolis.

Other operating costs for 1999, 1998, and 1997 were $218.2
million, $196.8 million and $177.8 million, respectively,
representing a 1999 increase of 10.9% and a 1998 increase of
10.7%. Major items contributing to the 1999 increase included:



| |   |                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------
| |  | Costs associated with new direct marketing projects and online
	services;                                          
|
| |  | Software maintenance costs related to new systems; and                                                             
|
| |  | Distribution costs related to the conversion to circulation
	agents in the state distribution area of Indianapolis.

Major items contributing to the 1998 increase included:



| |   |                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------
| |  | a change in the circulation delivery system in Indianapolis which
	 began in 1997 and increased 1998 expense by $6.3 million;
|
| |  | costs associated with outside printing of inserts and special
	publications;                                                 
|
| |  | promotional/marketing programs in both major markets;                                                                        
|
| |  | higher Arizona Republic delivery costs;                                                                                      
|
| |  | increased bad debt expenses; and                                                                                             
|
| |  | expenses related to the job fair business.                                                                                   

Depreciation and amortization expense was $51.2 million, $45.4
million and $42.0 million for 1999, 1998, and 1997, respectively.
 The 1999 increase was primarily a result of new information
technology projects in Phoenix and Indianapolis. The 1998
increase was primarily due to information technology projects in
Phoenix and pagination and remodeling projects in Indianapolis.

We recorded work force reduction costs in all three years. In
1999, we incurred $3.8 million in work force reduction costs in
Indianapolis. Closure of the Indianapolis News resulted in $1.2
million in costs and the elimination of 18 positions. Outsourcing
 of the Indianapolis transportation department cost $2.3 million
and eliminated 67 positions. Outsourcing of the Indianapolis
maintenance garage cost $0.3 million and eliminated 7 positions.
In 1998, $0.8 million in costs primarily related to
transportation and state circulation work force reductions of 20
individuals in Indianapolis were recorded. In 1997, $10.0 million
 in work force reduction costs were recorded. Approximately $4.2
million of these costs resulted from the closure of The
Phoenix Gazettewhere approximately 85 positions were
eliminated. The balance of the costs related to composing room
and transportation work force reductions of 40 individuals and
the conversion from the carrier-based work force to an
agent-based circulation arrangement, both in Indianapolis.

NON-OPERATING ITEMS

Other non-operating income (primarily investment income) was $8.1
 million, $4.5 million and $4.3 million for 1999, 1998, and 1997,
 respectively. This income is primarily interest on available
investable cash, gains from sales of investments and income from
limited partnerships. Other non-operating expenses

20



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##### Table of Contents





Income tax expense for 1999, 1998 and 1997 was $78.5 million,
$63.1 million and $58.8 million, respectively, reflecting
effective tax rates of 40.0%, 41.3% and 41.1%, respectively. The
rate decrease was largely a result of operational changes.

EQUITY IN AFFILIATE

Our investment in Ponderay is accounted for using the equity
method, which reflects our share of Ponderays net income or
 loss. Ponderays operating results include interest expense
 on its long-term debt. Equity income (loss) from Affiliate, net
of tax, was $(.6) million, $1.0 million and $(.3) million in
1999, 1998 and 1997, respectively. These changes were mostly
attributable to fluctuations in newsprint prices realized by
Ponderay over the respective periods. For further discussion see
Note 9 to the 1999 Consolidated Financial Statements.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities is our primary source
of liquidity. Net cash provided by operating activities,
excluding the effects of net proceeds from (or purchases of)
trading securities for 1999, 1998, and 1997 was $172.6 million,
$138.7 million and $142.2 million, respectively. The increase in
1999 was attributed to higher net income, exclusive of gain on
sale of subsidiary, and an increase in working capital. Increases
 in 1998 and 1997 were primarily attributable to increases in net
 income and/or changes in working capital.

The principal uses of cash in 1999 were the repurchase of
Class A Common Stock, which included 2.2 million shares from
 the Eugene S. Pulliam Revocable Trust, acquisitions, repayment
of debt, capital expenditures and the payment of dividends. The
principal uses of cash in 1998 and 1997 were the repurchase of
Class A Common Stock, capital expenditures, acquisitions and
 payment of dividends. As of December 26, 1999, our
available cash and cash equivalents and investments totaled $32.0
 million, down $5.4 million from the end of 1998. Working capital
 for the same period was $37.8 million, up $24.7 million from
$13.1 million at December 27, 1998.

Total capital expenditures for 1999 were $30.7 million compared
with $36.9 million for the comparable 1998 period. We plan
approximately $54.5 million of capital expenditures in 2000 of
which $23.8 million is earmarked for The Indianapolis Star
 press project. As of December 26, 1999, we had no
significant formal commitments related to future capital
expenditures.

See Recent Events above for information regarding
Common Stock purchases and acquisitions.

The Board of Directors declared dividends of $0.50 per share on
the Class A Common Stock and $0.05 on the Class B
Common Stock during 1999. Total Class A and B dividends paid
 during 1999 were $19.7 million.

We have demonstrated a consistent ability to generate net cash
flow from operations. Management believes that existing cash and
investments, net cash flows from operations and currently
available bank credit resources are sufficient to enable us to
maintain our current level of operations. We expect financing for
 future investing opportunities to come from a combination of
existing cash, new debt facilities, and/or the use of equity.

INFLATION AND CHANGING PRICES

Over the past several years, the impact of inflation on our
operations has become less significant because of lower overall
inflation rates. However, we and the newspaper industry as a
whole have experienced wide fluctuations in newsprint pricing.
Variations in newsprint pricing can have a significant impact on
earnings for

21



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##### Table of Contents





YEAR 2000

We began preparation for the Year 2000 date transition in 1998.
In connection with this effort, we completed an inventory of all
mission critical systems with Year 2000 implications, assessed
the readiness of those systems, and replaced, retired or upgraded
 those systems that were not Year 2000 ready. The discovery phase
 of our program was complete in 1998 and all desktop systems,
application software, and servers were updated to a compliant
level 1998. We also completed the remediation and testing phase
for all embedded computer chip systems in 1998. In 1999, we
requested letters of compliance from each of our vendors and
installed upgrades and patches to systems that were not
compliant.

During the Year 2000 date transition, we did not experience any
failure of mission critical systems nor have we experienced any
significant problem with regard to third party suppliers. We do
not anticipate any material adverse effect to our business in the
 future as a result of Year 2000 related problems. Total costs
associated with our Year 2000 project were funded with operating
cash flow and approximated $8.5 million, of which approximately
$6.5 million was incurred in 1998 and $2.0 million in 1999.

OUTLOOK FOR 2000

Looking ahead, we foresee continued growth in advertising revenue
 in 2000, with likely increases in the low to mid-single digits.
We anticipate paid circulation to be even with or down slightly
from 1999, with circulation revenues likely to increase in the
low single digits. We expect the cost of newsprint to increase in
 2000 and non-newsprint operating expenses to increase at a rate
equal to or less than our expected revenue growth. The
combination of higher revenues and tight controls over
non-newsprint expenses should provide for increased operating
income compared with 1999. Our sale of Career Services, Inc.,
through a merger with BrassRing, Inc., will not have a material
impact on cash flow but will reduce EPS by approximately $.50 on
an annualized basis. As a result of this transaction, we expect
diluted earnings per share to decrease in 2000. We plan to use
our substantial free cash flow to reduce our debt while
continuing to consider additional share repurchases and other
investment opportunities in 2000.




Item 7A.  Quantitative and Qualitative
disclosures about market risk

Interest Rate Risk

The Companys exposure to market risk for changes in
interest rates relates primarily to our debt obligation.
Item 8, Financial Statements and Supplemental
Data, Note 10 to the consolidated financial statements
 includes information relating to our short-term borrowings and
long-term debt. A fluctuation of the interest rate by 10% would
change the Companys interest expense associated with
borrowings by approximately $1.3 million.




Item 8.  Financial Statements and
Supplemental Data.

MANAGEMENTS RESPONSIBILITY FOR FINANCIAL STATEMENTS

The Companys management is responsible for the preparation
and content of the consolidated financial statements and other
financial information in this Annual Report. The financial
statements have been prepared in conformity with generally
accepted accounting principles and include some amounts that are
necessarily based on managements estimates and judgments.

The Companys management maintains an accounting system and
related internal controls designed to provide reasonable
assurance that there is proper authorization and accounting for
all transactions, that financial records are reliable for
preparing financial statements and that assets are safeguarded
against loss or unauthorized use. This system is supported by
written policies and guidelines and the selection and training of
 qualified personnel.

22



---



##### Table of Contents



PricewaterhouseCoopers LLP, independent accountants, has been
appointed by the Board of Directors, to conduct an independent
audit and to express an opinion as to the fairness of the
presentation of the consolidated financial statements of Central
Newspapers, Inc. Their report appears below.

The Audit Committee of our Board of Directors is comprised of
four outside directors. The Audit Committee meets periodically
with management and the independent accountants to discuss
accounting, financial reporting, auditing and internal control
matters. The Audit Committee reviews the Companys financial
 reports and accounting practices to confirm they are appropriate
 in the circumstances. The independent accountants have direct
and private access to the Audit Committee.

|                                                                    |  |                                                                          
|------------------------------------------------------------------- |  | -------------------------------------------------------------------------
|Louis A. Weil III
	Chairman, President and Chief Executive
	Officer |  | Thomas K. MacGillivray
	Senior Vice President and Chief Financial Officer

23



---



##### Table of Contents



REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders



In our opinion, the accompanying consolidated statement of
financial position and the related consolidated statements of
income, of shareholders equity and comprehensive income and
 of cash flows present fairly, in all material respects, the
financial position of Central Newspapers, Inc. and its
subsidiaries at December 26, 1999 and December 27,
1998, and the results of their operations and their cash flows
for each of the three years in the period ended December 26,
 1999 in conformity with accounting principles generally accepted
 in the United States. These financial statements are the
responsibility of the Companys management; our
responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally
accepted in the United States, which require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant
estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for the opinion expressed above.

PricewaterhouseCoopers LLP





24



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##### Table of Contents



CENTRAL NEWSPAPERS, INC.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

|                               |                                                              |                               |         |              |         |   |         |         |         | 
|------------------------------ | ------------------------------------------------------------ | ----------------------------- | ------- | ------------ | ------- | - | ------- | ------- | ------- | 
|                               |                                                              | December 26,                  |         | December 27,
|                               |                                                              | 1999                          |         | 1998        
|                               |                                                              |                               |         |             
|                               |                                                              |                              
|                               |                                                              | (In Thousands)               
|                              
|                              
|                              
|                              
|ASSETS                         |                                                              |                               |         |              |         |   |         |        
|                              
|                              
|                              
|                              
|CURRENT ASSETS:                |                                                              |                               |         |              |         |   |         |        
|                              
|                              
|                              
|                              
|                               | Cash and cash equivalents                                    |                               | $       | 27,643       |         |   | $       | 24,774  |        
|                              
|                              
|                              
|                              
|                               | Marketable securities                                        |                               |         | 4,396        |         |   |         | 12,636  |        
|                              
|                              
|                              
|                              
|                               | Accounts receivable (net of allowances of $3,305 and $2,602) |                               |         | 100,221      |         |   |         | 90,858  |        
|                              
|                              
|                              
|                              
|                               | Notes receivable                                             |                               |         | 34,341       |         |   |         |         |        
|                              
|                              
|                              
|                              
|                               | Inventories                                                  |                               |         | 11,396       |         |   |         | 11,841  |        
|                              
|                              
|                              
|                              
|                               | Deferred income taxes                                        |                               |         | 6,533        |         |   |         | 8,430   |        
|                              
|                              
|                              
|                              
|                               | Other current assets                                         |                               |         | 7,215        |         |   |         | 11,253  |        
|                               |                                                              |                               |         |              |         |   |         |        
|                               | Total current assets                                         |                               |         | 191,745      |         |   |         | 159,792 |        
|                               |                                                              |                               |         |              |         |   |         |        
|PROPERTY, PLANT AND EQUIPMENT: |                                                              |                               |         |              |         |   |         |        
|                              
|                              
|                              
|                              
|                               | Land                                                         |                               |         | 18,898       |         |   |         | 18,985  |        
|                              
|                              
|                              
|                              
|                               | Buildings and improvements                                   |                               |         | 136,951      |         |   |         | 135,725 |        
|                              
|                              
|                              
|                              
|                               | Leasehold improvements                                       |                               |         | 1,636        |         |   |         | 687     |        
|                              
|                              
|                              
|                              
|                               | Machinery and equipment                                      |                               |         | 427,668      |         |   |         | 407,211 |        
|                              
|                              
|                              
|                              
|                               | Construction in progress                                     |                               |         | 3,270        |         |   |         | 8,237   |        
|                               |                                                              |                               |         |              |         |   |         |        
|                               |                                                              |                               | 588,423 |              |         |   | 570,845 |        
|                              
|                              
|                              
|                              
|                               |                                                              | Less accumulated depreciation |         |              | 322,838 |   |         |         | 287,136 | 
|                               |                                                              |                               |         |              |         |   |         |        
|                               |                                                              |                               | 265,585 |              |         |   | 283,709 |        
|                               |                                                              |                               |         |              |         |   |         |        
|OTHER ASSETS:                  |                                                              |                               |         |              |         |   |         |        
|                              
|                              
|                              
|                              
|                               | Land held for development                                    |                               |         | 5,229        |         |   |         | 5,229   |        
|                              
|                              
|                              
|                              
|                               | Goodwill and other intangibles                               |                               |         | 120,207      |         |   |         | 127,349 |        
|                              
|                              
|                              
|                              
|                               | Investment in Affiliate                                      |                               |         | 9,802        |         |   |         | 9,848   |        
|                              
|                              
|                              
|                              
|                               | Other                                                        |                               |         | 55,698       |         |   |         | 43,432  |        
|                               |                                                              |                               |         |              |         |   |         |        
|                               |                                                              |                               | 190,936 |              |         |   | 185,858 |        
|                               |                                                              |                               |         |              |         |   |         |        
|TOTAL ASSETS                   |                                                              | $                             | 648,266 |              |         | $ | 629,359 |        
|                               |                                                              |                               |         |              |         |   |         |        

See accompanying notes to consolidated financial statements.

25



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##### Table of Contents



CENTRAL NEWSPAPERS, INC.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

|                                                |                                           |                                                            |         |              |         |   |         |         |         | 
|----------------------------------------------- | ----------------------------------------- | ---------------------------------------------------------- | ------- | ------------ | ------- | - | ------- | ------- | ------- | 
|                                                |                                           | December 26,                                               |         | December 27,
|                                                |                                           | 1999                                                       |         | 1998        
|                                                |                                           |                                                            |         |             
|                                                |                                           |                                                           
|                                                |                                           | (In thousands,                                            
|                                                |                                           | except share data)                                        
|                                               
|                                               
|                                               
|                                               
|LIABILITIES AND SHAREHOLDERS EQUITY            |                                           |                                                            |         |              |         |   |         |        
|                                               
|                                               
|                                               
|                                               
|CURRENT LIABILITIES:                            |                                           |                                                            |         |              |         |   |         |        
|                                               
|                                               
|                                               
|                                               
|                                                | Accounts payable                          |                                                            | $       | 32,421       |         |   | $       | 23,088  |        
|                                               
|                                               
|                                               
|                                               
|                                                | Short-term bank debt and notes payable    |                                                            |         | 27,789       |         |   |         | 52,072  |        
|                                               
|                                               
|                                               
|                                               
|                                                | Accrued compensation                      |                                                            |         | 27,281       |         |   |         | 19,305  |        
|                                               
|                                               
|                                               
|                                               
|                                                | Dividends payable                         |                                                            |         | 5,360        |         |   |         | 5,217   |        
|                                               
|                                               
|                                               
|                                               
|                                                | Accrued expenses and other liabilities    |                                                            |         | 16,649       |         |   |         | 18,208  |        
|                                               
|                                               
|                                               
|                                               
|                                                | Federal and state income taxes            |                                                            |         | 12,803       |         |   |         | 0       |        
|                                               
|                                               
|                                               
|                                               
|                                                | Deferred revenue                          |                                                            |         | 31,619       |         |   |         | 28,789  |        
|                                                |                                           |                                                            |         |              |         |   |         |        
|                                                |                                           | Total current liabilities                                  |         |              | 153,922 |   |         |         | 146,679 | 
|                                                |                                           |                                                            |         |              |         |   |         |        
|DEFERRED INCOME TAXES                           |                                           |                                                            | 29,626  |              |         |   | 24,354  |        
|                                                |                                           |                                                            |         |              |         |   |         |        
|LONG-TERM DEBT                                  |                                           |                                                            | 200,000 |              |         |   | 200,025 |        
|                                                |                                           |                                                            |         |              |         |   |         |        
|POSTRETIREMENT AND OTHER NONCURRENT LIABILITIES |                                           |                                                            | 97,097  |              |         |   | 93,350  |        
|                                                |                                           |                                                            |         |              |         |   |         |        
|MINORITY INTEREST IN SUBSIDIARIES               |                                           |                                                            |         |              |         |   | 2,868   |        
|                                                |                                           |                                                            |         |              |         |   |         |        
|REDEEMABLE PREFERRED STOCK ISSUED BY SUBSIDIARY |                                           |                                                            | 18,920  |              |         |   | 18,920  |        
|                                                |                                           |                                                            |         |              |         |   |         |        
|COMMITMENTS AND CONTINGENCIES (Note 13)         |                                           |                                                            |         |              |         |   |         |        
|                                                |                                           |                                                            |         |              |         |   |         |        
|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  33,146,031 and 34,446,180
	shares |         |              | 38,953  |   |         |         | 30,937  | 
|                                               
|                                               
|                                               
|                                               
|                                                | Class B common stock  without par value: |                                                            |         |              |         |   |         |         |        
|                                                |                                           | Authorized  130,000,000 shares                            |         |              |         |   |         |         |         | 
|                                               
|                                               
|                                               
|                                               
|                                                |                                           | Issued and outstanding  55,356,010 and 62,691,000
	shares |         |              | 55      |   |         |         | 63      | 
|                                               
|                                               
|                                               
|                                               
|                                                | Retained earnings                         |                                                            |         | 110,250      |         |   |         | 112,104 |        
|                                               
|                                               
|                                               
|                                               
|                                                | Unamortized value of restricted stock     |                                                            |         | (3,018       | )       |   |         | (1,407  | )      
|                                               
|                                               
|                                               
|                                               
|                                                | Accumulated other comprehensive income    |                                                            |         | 2,461        |         |   |         | 1,466   |        
|                                                |                                           |                                                            |         |              |         |   |         |        
|                                                |                                           |                                                            | 148,701 |              |         |   | 143,163 |        
|                                                |                                           |                                                            |         |              |         |   |         |        
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY      |                                           | $                                                          | 648,266 |              |         | $ | 629,359 |        
|                                                |                                           |                                                            |         |              |         |   |         |        

See accompanying notes to consolidated financial statements.

26



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##### Table of Contents



CENTRAL NEWSPAPERS, INC.

CONSOLIDATED STATEMENT OF INCOME

|                                                                                     |                               |                                       |         |              |   |              |         |         |  |   |         |         | 
|------------------------------------------------------------------------------------ | ----------------------------- | ------------------------------------- | ------- | ------------ | - | ------------ | ------- | ------- |  | - | ------- | ------- | 
|                                                                                     |                               | December 26,                          |         | December 27, |   | December 28,
|                                                                                     |                               | 1999                                  |         | 1998         |   | 1997        
|                                                                                     |                               |                                       |         |              |   |             
|                                                                                     |                               |                                      
|                                                                                     |                               | (In thousands, except per share data)
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|OPERATING REVENUES:                                                                  |                               |                                       |         |              |   |              |         |         |  |   |         |        
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Advertising                   |                                       | $       | 599,087      |   |              | $       | 562,408 |  |   | $       | 541,311 | 
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Circulation                   |                                       |         | 153,451      |   |              |         | 150,446 |  |   |         | 143,153 | 
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Other                         |                                       |         | 51,552       |   |              |         | 39,836  |  |   |         | 31,673  | 
|                                                                                     |                               |                                       |         |              |   |              |         |         |  |   |         |        
|                                                                                     |                               |                                       | 804,090 |              |   |              | 752,690 |         |  |   | 716,137 |        
|                                                                                     |                               |                                       |         |              |   |              |         |         |  |   |         |        
|OPERATING EXPENSES:                                                                  |                               |                                       |         |              |   |              |         |         |  |   |         |        
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Compensation                  |                                       |         | 258,644      |   |              |         | 243,637 |  |   |         | 239,783 | 
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Newsprint and ink             |                                       |         | 101,542      |   |              |         | 112,937 |  |   |         | 105,467 | 
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Other operating costs         |                                       |         | 218,214      |   |              |         | 196,746 |  |   |         | 177,829 | 
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Depreciation and amortization |                                       |         | 51,170       |   |              |         | 45,418  |  |   |         | 42,022  | 
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Work force reduction cost     |                                       |         | 3,792        |   |              |         | 854     |  |   |         | 9,999   | 
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Asset impairment cost         |                                       |         |              |   |              |         | 525     |  |   |         |         | 
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Gain on sale of subsidiary    |                                       |         | (32,718      | ) |              |         |         |  |   |         |         | 
|                                                                                     |                               |                                       |         |              |   |              |         |         |  |   |         |        
|                                                                                     |                               |                                       | 600,644 |              |   |              | 600,117 |         |  |   | 575,100 |        
|                                                                                     |                               |                                       |         |              |   |              |         |         |  |   |         |        
|OPERATING INCOME                                                                     |                               |                                       | 203,446 |              |   |              | 152,573 |         |  |   | 141,037 |        
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|OTHER INCOME (principally investment income)                                         |                               |                                       | 8,062   |              |   |              | 4,545   |         |  |   | 4,318   |        
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|OTHER EXPENSES (principally interest expense)                                        |                               |                                       | (15,312 | )            |   |              | (4,117  | )       |  |   | (2,166  | )      
|                                                                                     |                               |                                       |         |              |   |              |         |         |  |   |         |        
|INCOME BEFORE INCOME TAXES                                                           |                               |                                       | 196,196 |              |   |              | 153,001 |         |  |   | 143,189 |        
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|PROVISION FOR INCOME TAXES                                                           |                               |                                       | 78,478  |              |   |              | 63,125  |         |  |   | 58,797  |        
|                                                                                     |                               |                                       |         |              |   |              |         |         |  |   |         |        
|INCOME BEFORE MINORITY INTEREST AND EQUITY IN AFFILIATE                              |                               |                                       | 117,718 |              |   |              | 89,876  |         |  |   | 84,392  |        
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|MINORITY INTEREST IN SUBSIDIARIES                                                    |                               |                                       | (1,519  | )            |   |              | (2,326  | )       |  |   | (2,566  | )      
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|EQUITY IN NET EARNINGS (LOSS) OF AFFILIATE                                           |                               |                                       | (556    | )            |   |              | 992     |         |  |   | (331    | )      
|                                                                                     |                               |                                       |         |              |   |              |         |         |  |   |         |        
|NET INCOME                                                                           |                               | $                                     | 115,643 |              |   | $            | 88,542  |         |  | $ | 81,495  |        
|                                                                                     |                               |                                       |         |              |   |              |         |         |  |   |         |        
|NET INCOME PER COMMON SHARE:                                                         |                               |                                       |         |              |   |              |         |         |  |   |         |        
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Basic                         |                                       | $       | 2.89         |   |              | $       | 1.83    |  |   | $       | 1.58    | 
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Diluted                       |                                       |         | 2.79         |   |              |         | 1.78    |  |   |         | 1.54    | 
|AVERAGE COMMON SHARES OUTSTANDING:
	(combined Class A and equivalent Class B shares) |                               |                                       |         |              |   |              |         |         |  |   |         |        
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Basic                         |                                       |         | 40,079       |   |              |         | 48,498  |  |   |         | 51,464  | 
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     | Diluted                       |                                       |         | 41,506       |   |              |         | 49,880  |  |   |         | 52,946  | 

See accompanying notes to consolidated financial statements.

27



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##### Table of Contents



CENTRAL NEWSPAPERS, INC.

CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY AND
COMPREHENSIVE INCOME

|                             |                                                                             |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       |      |   |   |         |          |         |  
|---------------------------- | --------------------------------------------------------------------------- | -------------------- | ---------- | ------------ | - | -------- | ------ | ----------- | - | ------------- | ---------- | ---------- | - | ------ | -- | ----- | - | - | ------- | -------- | ------- | - | ------ | ------ | - | - | ----- | ---- | - | - | ------- | -------- | ------- | -
|                             |                                                                             |                      |            |              |   |          |        |             |   |               |            |           
|                             |                                                                             | Common Stock         |            | Common Stock |   |          |        | Unamortized |   | Accumulated   |            |           
|                             |                                                                             | Class A              |            | Class B      |   |          |        | Value of    |   | Other         |            |           
|                             |                                                                             |                      |            |              |   | Retained |        | Restricted  |   | Comprehensive |            |           
|                             |                                                                             | Shares               |            | Amount       |   | Shares   |        | Amount      |   | Earnings      |            | Stock      |   | Income |    | Total
|                             |                                                                             |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |      
|BALANCE AT DECEMBER 29, 1996 |                                                                             |                      | 46,475,422 |              |   | $        | 24,259 |             |   |               | 63,106,000 |            |   | $      | 63 |       |   | $ | 363,365 |          |         | $ | (1,627 | )      |   | $ | 1,490 |      |   | $ | 387,550 |         
|                            
|                            
|                            
|                            
|                             | Net income (52 weeks)                                                       |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         | 81,495   |         |   |        |        |   |   |       |      |   |   |         | 81,495   |        
|                            
|                            
|                            
|                            
|                             | Change in net unrealized gain on available-for-sale securities,
	net of tax |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       | 185  |   |   |         | 185      |        
|                             |                                                                             |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       |      |   |   |         |         
|                             | Comprehensive Income                                                        |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       |      |   |   | $       | 81,680   |        
|                             |                                                                             |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       |      |   |   |         |         
|                             | Dividends declared:                                                         |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       |      |   |   |         |          |        
|                            
|                            
|                            
|                            
|                             |                                                                             | Class A common stock |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          | (17,866 | ) |        |        |   |   |       |      |   |   |         |          | (17,866 | )
|                            
|                            
|                            
|                            
|                             |                                                                             | Class B common stock |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          | (2,512  | ) |        |        |   |   |       |      |   |   |         |          | (2,512  | )
|                            
|                            
|                            
|                            
|                             | Exercise of stock options                                                   |                      |            | 348,864      |   |          |        | 6,144       |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       |      |   |   |         | 6,144    |        
|                            
|                            
|                            
|                            
|                             | Repurchase of Class A common stock                                          |                      |            | (2,864,534   | ) |          |        | (1,600      | ) |               |            |            |   |        |    |       |   |   |         | (71,852  | )       |   |        |        |   |   |       |      |   |   |         | (73,452  | )      
|                            
|                            
|                            
|                            
|                             | Repurchase of Class B common stock                                          |                      |            |              |   |          |        |             |   |               |            | (35,000    | ) |        |    |       |   |   |         | (99      | )       |   |        |        |   |   |       |      |   |   |         | (99      | )      
|                            
|                            
|                            
|                            
|                             | Issuance of restricted stock, net of cancellations                          |                      |            | 37,500       |   |          |        | 1,131       |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        | (1,131 | ) |   |       |      |   |   |         |          |        
|                            
|                            
|                            
|                            
|                             | Amortization of restricted stock                                            |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        | 834    |   |   |       |      |   |   |         | 834      |        
|                            
|                            
|                            
|                            
|                             | Common stock conversion                                                     |                      |            | 38,000       |   |          |        |             |   |               |            | (380,000   | ) |        |    |       |   |   |         |          |         |   |        |        |   |   |       |      |   |   |         |          |        
|                             |                                                                             |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       |      |   |   |         |         
|BALANCE AT DECEMBER 28, 1997 |                                                                             |                      | 44,035,252 |              |   |          | 29,934 |             |   |               | 62,691,000 |            |   |        | 63 |       |   |   | 352,531 |          |         |   | (1,924 | )      |   |   | 1,675 |      |   |   | 382,279 |         
|                            
|                            
|                            
|                            
|                             | Net income (52 weeks)                                                       |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         | 88,542   |         |   |        |        |   |   |       |      |   |   |         | 88,542   |        
|                            
|                            
|                            
|                            
|                             | Change in net unrealized gain on available-for-sale securities,
	net of tax |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       | (209 | ) |   |         | (209     | )      
|                             |                                                                             |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       |      |   |   |         |         
|                             | Comprehensive Income                                                        |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       |      |   |   | $       | 88,333   |        
|                             |                                                                             |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       |      |   |   |         |         
|                             | Dividends declared:                                                         |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       |      |   |   |         |          |        
|                            
|                            
|                            
|                            
|                             |                                                                             | Class A common stock |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          | (18,543 | ) |        |        |   |   |       |      |   |   |         |          | (18,543 | )
|                            
|                            
|                            
|                            
|                             |                                                                             | Class B common stock |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          | (2,821  | ) |        |        |   |   |       |      |   |   |         |          | (2,821  | )
|                            
|                            
|                            
|                            
|                             | Exercise of stock options                                                   |                      |            | 431,088      |   |          |        | 8,913       |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       |      |   |   |         | 8,913    |        
|                            
|                            
|                            
|                            
|                             | Repurchase of Class A common stock                                          |                      |            | (10,039,660  | ) |          |        | (8,552      | ) |               |            |            |   |        |    |       |   |   |         | (307,605 | )       |   |        |        |   |   |       |      |   |   |         | (316,157 | )      
|                            
|                            
|                            
|                            
|                             | Issuance of restricted stock, net of cancellations                          |                      |            | 19,500       |   |          |        | 642         |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        | (642   | ) |   |       |      |   |   |         |          |        
|                            
|                            
|                            
|                            
|                             | Amortization of restricted stock                                            |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        | 1,159  |   |   |       |      |   |   |         | 1,159    |        
|                             |                                                                             |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       |      |   |   |         |         
|BALANCE AT DECEMBER 27, 1998 |                                                                             |                      | 34,446,180 |              |   |          | 30,937 |             |   |               | 62,691,000 |            |   |        | 63 |       |   |   | 112,104 |          |         |   | (1,407 | )      |   |   | 1,466 |      |   |   | 143,163 |         
|                            
|                            
|                            
|                            
|                             | Net income (52 weeks)                                                       |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         | 115,643  |         |   |        |        |   |   |       |      |   |   |         | 115,643  |        
|                            
|                            
|                            
|                            
|                             | Change in net unrealized gain on available-for-sale securities,
	net of tax |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       | 995  |   |   |         | 995      |        
|                             |                                                                             |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       |      |   |   |         |         
|                             | Comprehensive Income                                                        |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       |      |   |   | $       | 116,638  |        
|                             |                                                                             |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       |      |   |   |         |         
|                             | Dividends declared:                                                         |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       |      |   |   |         |          |        
|                            
|                            
|                            
|                            
|                             |                                                                             | Class A common stock |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          | (17,034 | ) |        |        |   |   |       |      |   |   |         |          | (17,034 | )
|                            
|                            
|                            
|                            
|                             |                                                                             | Class B common stock |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          | (2,856  | ) |        |        |   |   |       |      |   |   |         |          | (2,856  | )
|                            
|                            
|                            
|                            
|                             | Exercise of stock options                                                   |                      |            | 317,102      |   |          |        | 7,141       |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       |      |   |   |         | 7,141    |        
|                            
|                            
|                            
|                            
|                             | Repurchase of Class A common stock                                          |                      |            | (2,435,000   | ) |          |        | (2,217      | ) |               |            |            |   |        |    |       |   |   |         | (97,607  | )       |   |        |        |   |   |       |      |   |   |         | (99,824  | )      
|                            
|                            
|                            
|                            
|                             | Common stock conversion                                                     |                      |            | 733,499      |   |          |        | 8           |   |               |            | (7,334,990 | ) |        |    | (8    | ) |   |         |          |         |   |        |        |   |   |       |      |   |   |         |          |        
|                            
|                            
|                            
|                            
|                             | Issuance of restricted stock, net of cancellations                          |                      |            | 84,250       |   |          |        | 3,084       |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        | (3,084 | ) |   |       |      |   |   |         |          |        
|                            
|                            
|                            
|                            
|                             | Amortization of restricted stock                                            |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        | 1,473  |   |   |       |      |   |   |         | 1,473    |        
|                             |                                                                             |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       |      |   |   |         |         
|BALANCE AT DECEMBER 26, 1999 |                                                                             |                      | 33,146,031 |              |   | $        | 38,953 |             |   |               | 55,356,010 |            |   | $      | 55 |       |   | $ | 110,250 |          |         | $ | (3,018 | )      |   | $ | 2,461 |      |   | $ | 148,701 |         
|                             |                                                                             |                      |            |              |   |          |        |             |   |               |            |            |   |        |    |       |   |   |         |          |         |   |        |        |   |   |       |      |   |   |         |         

See accompanying notes to consolidated financial statements.

28



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##### Table of Contents



CENTRAL NEWSPAPERS, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

|                                                 |                                                                                                          |                                                     |                                           |              |         |              |         |          |        |         |        |         |        |         |  
|------------------------------------------------ | -------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | ----------------------------------------- | ------------ | ------- | ------------ | ------- | -------- | ------ | ------- | ------ | ------- | ------ | ------- | -
|                                                 |                                                                                                          | December 26,                                        |                                           | December 27, |         | December 28,
|                                                 |                                                                                                          | 1999                                                |                                           | 1998         |         | 1997        
|                                                 |                                                                                                          |                                                     |                                           |              |         |             
|                                                 |                                                                                                          |                                                    
|                                                 |                                                                                                          | (In thousands)                                     
|                                                
|                                                
|                                                
|                                                
|OPERATING ACTIVITIES:                            |                                                                                                          |                                                     |                                           |              |         |              |         |          |        |         |        |        
|                                                
|                                                
|                                                
|                                                
|                                                 | Net income                                                                                               |                                                     | $                                         | 115,643      |         |              | $       | 88,542   |        |         | $      | 81,495  |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Items which did not use (provide) cash:                                                                  |                                                     |                                           |              |         |              |         |          |        |         |        |         |       
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                          | Depreciation and amortization                       |                                           |              | 51,170  |              |         |          | 45,418 |         |        |         | 42,022 |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                          | Postretirement and pension benefits                 |                                           |              | 6,385   |              |         |          | (589   | )       |        |         | 6,593  |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                          | Loss (gain) on disposition of assets                |                                           |              | (1,742  | )            |         |          | 119    |         |        |         | 96     |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                          | Minority interest in earnings of subsidiaries       |                                           |              | 1,519   |              |         |          | 2,326  |         |        |         | 2,566  |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                          | Equity loss (earnings) in Affiliate                 |                                           |              | 556     |              |         |          | (992   | )       |        |         | 331    |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                          | Deferred income taxes                               |                                           |              | 5,946   |              |         |          | (2,323 | )       |        |         | (583   | )      
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                          | Amortization of restricted stock awards             |                                           |              | 1,473   |              |         |          | 1,159  |         |        |         | 834    |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                          | Gain on sale of subsidiary                          |                                           |              | (32,718 | )            |         |          |        |         |        |         |        |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                          | Other                                               |                                           |              | (1,611  | )            |         |          | 264    |         |        |         | 1,465  |        
|                                                
|                                                
|                                                
|                                                
|                                                 | Change in current assets and liabilities:                                                                |                                                     |                                           |              |         |              |         |          |        |         |        |         |       
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                          | Net proceeds from (purchases of) trading securities |                                           |              | 12,690  |              |         |          | (1,454 | )       |        |         | 11,631 |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                          | Accounts receivable                                 |                                           |              | (8,809  | )            |         |          | 9,331  |         |        |         | 2,985  |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                          | Inventories                                         |                                           |              | 445     |              |         |          | (1,521 | )       |        |         | (1,409 | )      
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                          | Other current assets                                |                                           |              | 152     |              |         |          | (6,116 | )       |        |         | (1,826 | )      
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                          | Accounts payable                                    |                                           |              | 12,110  |              |         |          | (2,142 | )       |        |         | 1,606  |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                          | Accrued compensation                                |                                           |              | 7,976   |              |         |          | (756   | )       |        |         | 2,935  |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                          | Accrued expenses and other liabilities              |                                           |              | (1,559  | )            |         |          | 3,668  |         |        |         | 949    |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                          | Federal and state income taxes                      |                                           |              | 12,803  |              |         |          | (543   | )       |        |         | (1,905 | )      
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                          | Deferred revenue                                    |                                           |              | 2,830   |              |         |          | 1,759  |         |        |         | 4,038  |        
|                                                 |                                                                                                          |                                                     |                                           |              |         |              |         |          |        |         |        |        
|                                                 |                                                                                                          |                                                     | Net cash provided by operating activities |              |         | 185,259      |         |          |        | 137,236 |        |         |        | 153,823 |  
|                                                 |                                                                                                          |                                                     |                                           |              |         |              |         |          |        |         |        |        
|INVESTING ACTIVITIES:                            |                                                                                                          |                                                     |                                           |              |         |              |         |          |        |         |        |        
|                                                
|                                                
|                                                
|                                                
|                                                 | Purchases of property, plant and equipment                                                               |                                                     |                                           | (30,731      | )       |              |         | (34,809  | )      |         |        | (25,135 | )     
|                                                
|                                                
|                                                
|                                                
|                                                 | Purchase of land held for development                                                                    |                                                     |                                           |              |         |              |         | (2,113   | )      |         |        |         |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Proceeds from disposition of assets                                                                      |                                                     |                                           | 7,797        |         |              |         | 177      |        |         |        | 407     |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Proceeds from available for sale securities                                                              |                                                     |                                           | 2,710        |         |              |         | 283      |        |         |        | 2,057   |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Proceeds from sale of subsidiary                                                                         |                                                     |                                           | 23,500       |         |              |         |          |        |         |        |         |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Purchase of cost basis investments                                                                       |                                                     |                                           | (16,253      | )       |              |         | (6,724   | )      |         |        | (2,211  | )     
|                                                
|                                                
|                                                
|                                                
|                                                 | Acquisitions                                                                                             |                                                     |                                           | (17,681      | )       |              |         | (9,244   | )      |         |        | (44,219 | )     
|                                                
|                                                
|                                                
|                                                
|                                                 | Other                                                                                                    |                                                     |                                           | (1,829       | )       |              |         | (2,208   | )      |         |        | (1,605  | )     
|                                                 |                                                                                                          |                                                     |                                           |              |         |              |         |          |        |         |        |        
|                                                 |                                                                                                          |                                                     | Net cash used in investing activities     |              |         | (32,487      | )       |          |        | (54,638 | )      |         |        | (70,706 | )
|                                                 |                                                                                                          |                                                     |                                           |              |         |              |         |          |        |         |        |        
|FINANCING ACTIVITIES:                            |                                                                                                          |                                                     |                                           |              |         |              |         |          |        |         |        |        
|                                                
|                                                
|                                                
|                                                
|                                                 | Cash dividends paid                                                                                      |                                                     |                                           | (19,747      | )       |              |         | (21,760  | )      |         |        | (20,111 | )     
|                                                
|                                                
|                                                
|                                                
|                                                 | Dividends paid to minority interest                                                                      |                                                     |                                           | (2,722       | )       |              |         | (1,324   | )      |         |        | (1,159  | )     
|                                                
|                                                
|                                                
|                                                
|                                                 | Proceeds from exercise of stock options                                                                  |                                                     |                                           | 4,463        |         |              |         | 5,171    |        |         |        | 3,279   |       
|                                                
|                                                
|                                                
|                                                
|                                                 | (Repayments) borrowings of short-term debt                                                               |                                                     |                                           | (32,073      | )       |              |         | 42,000   |        |         |        | 10,000  |       
|                                                
|                                                
|                                                
|                                                
|                                                 | (Repayments) borrowings of long-term debt                                                                |                                                     |                                           |              |         |              |         | 197,322  |        |         |        | (800    | )     
|                                                
|                                                
|                                                
|                                                
|                                                 | Repurchase of common stock                                                                               |                                                     |                                           | (99,824      | )       |              |         | (316,157 | )      |         |        | (73,551 | )     
|                                                 |                                                                                                          |                                                     |                                           |              |         |              |         |          |        |         |        |        
|                                                 |                                                                                                          |                                                     | Net cash used in financing activities     |              |         | (149,903     | )       |          |        | (94,748 | )      |         |        | (82,342 | )
|                                                 |                                                                                                          |                                                     |                                           |              |         |              |         |          |        |         |        |        
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |                                                                                                          |                                                     | 2,869                                     |              |         |              | (12,150 | )        |        |         | 775    |        
|                                                
|                                                
|                                                
|                                                
|CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR     |                                                                                                          |                                                     | 24,774                                    |              |         |              | 36,924  |          |        |         | 36,149 |        
|                                                 |                                                                                                          |                                                     |                                           |              |         |              |         |          |        |         |        |        
|CASH AND CASH EQUIVALENTS, END OF YEAR           |                                                                                                          | $                                                   | 27,643                                    |              |         | $            | 24,774  |          |        | $       | 36,924 |        
|                                                 |                                                                                                          |                                                     |                                           |              |         |              |         |          |        |         |        |        
|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                                                                                        |                                                     | $                                         | 55,799       |         |              | $       | 63,965   |        |         |        | 62,172  |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Interest paid                                                                                            |                                                     |                                           | 15,249       |         |              |         | 1,717    |        |         |        | 1,706   |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Notes receivable                                                                                         |                                                     |                                           | 33,770       |         |              |         |          |        |         |        |         |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Notes payable                                                                                            |                                                     |                                           | 7,770        |         |              |         |          |        |         |        |         |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Common stock received on sale of subsidiary                                                              |                                                     |                                           | 2,400        |         |              |         |          |        |         |        |         |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Issuance of restricted stock                                                                             |                                                     |                                           | 3,084        |         |              |         | 642      |        |         |        | 1,131   |       

See accompanying notes to consolidated financial statements.

29



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##### Table of Contents



CENTRAL NEWSPAPERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1  Nature of Operations and Significant Accounting
Policies

Nature of Operations  Central Newspapers and
its subsidiaries (the Company) is a media and
information company. Through its flagship newspapers, The
Arizona Republic and The Indianapolis Star, the
Company publishes the only major dailies in the greater Phoenix
metropolitan area and central Indiana. The Company owns and
operates several smaller newspapers as well as other related
media and information businesses. The Company also owns 13.5%
interest in Ponderay Newsprint Company (Affiliate), a
 partnership formed to own a newsprint mill in the State of
Washington.

Fiscal Year  The Company reports on a fiscal
year, ending the last Sunday of the calendar year. Results for
1999, 1998 and 1997 are for the 52 weeks ended December 26,
December 27 and December 28, respectively.

Principles of Consolidation  The consolidated
financial statements include the accounts of the Company and all
wholly-owned and majority-owned subsidiaries. Investments in
companies in which the Company exercises significant influence
are accounted for using the equity method. All significant
intercompany accounts and transactions have been eliminated.

Revenue Recognition  Advertising revenue is
recognized when the advertisement appears in the newspaper.
Deferred subscription revenue, which primarily represents amounts
 received from customers in advance of newspaper delivery, is
included in revenue over the subscription term.

Cash Equivalents  The Company considers highly
liquid investments with a maturity of three months or less when
purchased to be cash equivalents.

Marketable Securities  Management determines
the classification of its investments in debt and equity
securities at the time of purchase. Securities, primarily equity,
 classified as available-for-sale are carried at fair value
totaling $6,600,000 and $2,558,000 at December 26, 1999 and
December 27, 1998, respectively, with unrealized gains and
losses, net of taxes, reported as a separate component of
shareholders equity and realized gains and losses, net of
taxes, reported in earnings (see Note 3). The amortized cost of
available-for-sale securities was $2,534,000 and $114,000 at
December 26, 1999 and December 27, 1998, respectively.
Securities classified as trading securities, represented
primarily by debt securities and preferred stock, are carried at
fair value, totaling $12,133,000 at December 27, 1998, with
gains and losses of $147,000, $658,000 and $762,000 in 1999, 1998
 and 1997, respectively, net of taxes reported in earnings. The
cost of securities sold is based on the specific identification
method. Marketable debt securities and preferred stock are
classified as current assets. Certain available-for-sale equity
securities are classified as noncurrent assets.

Concentrations of Credit Risk  Financial
instruments which potentially subject the Company to
concentrations of credit risk consist primarily of cash
equivalents, trade accounts receivable and investments in
marketable securities. The Company places its temporary cash with
 financial institutions and limits the amount of credit exposure
to any one financial institution. Accounts receivable are with
customers located primarily in the immediate geographical area of
 each city of publication. The Company reviews a customers
credit history before extending credit and establishes an
allowance for doubtful accounts based on factors surrounding the
credit risk of specific customers, historic trends and other
information. The Company, by policy, limits the type and amount
of its investments in marketable securities.

Inventories  Newsprint is valued at the lower
of cost or market on the last-in, first-out (LIFO) method.
Other inventories are valued at the lower of cost or market using
 the first-in, first-out (FIFO) and moving average methods
which approximates FIFO.

Property, Plant and Equipment  Property, plant
and equipment are carried at cost less accumulated depreciation.
Depreciation is computed using primarily the straight-line method
 based on the estimated useful lives of the assets. The principal
 estimated useful lives range from three to 15 years for
machinery and equipment and 10 to 40 years for buildings and
 leasehold improvements. Capital amounts include expendi-

30



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##### Table of Contents



CENTRAL NEWSPAPERS, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

tures which materially extend the useful lives of existing
property, plant and equipment. Expenditures for repairs and
maintenance which do not materially extend the useful lives of
the related assets are charged to expense as incurred.
Depreciation expense for 1999, 1998 and 1997 was $44,746,000,
$40,039,000 and $37,348,000, respectively.

Investment in Affiliate  The Company uses the
equity method of accounting for its 13.5% partnership interest in
 Ponderay Newsprint Company as the Company has an implied ability
 to exercise significant influence over this entity.

Goodwill and Other Intangibles  Goodwill
acquired before 1970 is not being amortized. Goodwill and other
intangibles acquired after 1970 are being amortized on a
straight-line basis over periods of 15 to 40 years.
Amortization expense amounted to $6,425,000 in 1999, $5,379,000
in 1998 and $4,674,000 in 1997. Accumulated amortization was
$18,016,000 and $11,184,000 at the end of 1999 and 1998,
respectively.

Impairment of long-lived Assets  The Company
reviews the carrying value of property, plant and equipment and
goodwill and other intangibles for impairment whenever events or
changes in circumstances indicate that the carrying value may not
 be recoverable. If the undiscounted expected future cash flows
from use of the asset are less than its carrying value, an
impairment loss would be recognized. In 1998, the Company
recognized asset impairment costs of $0.5 million representing
the cost of exiting buildings in Muncie, Indiana, including site
demolition and asset write-offs.

Income Taxes  The Company provides for the
determination of deferred tax liabilities and assets at the end
of each period based on the difference between the financial
statement and tax bases of assets and liabilities using tax rates
 expected to be in effect when taxes are actually paid or
recovered. The Company files a consolidated federal income tax
return with its wholly and majority-owned subsidiaries.

Net Income Per Common Share  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 ten shares of Class B common
stock to one share of Class A common stock.

Diluted EPS includes the effect of stock options granted under
the Companys Amended and Restated Stock Compensation Plan,
calculated using the treasury stock method.

On December 8, 1998, the Board of Directors declared a
two-for-one split of the Class A and Class B common
stock which was distributed on January 8, 1999 to
shareholders of record as of the close of business on
December 18, 1998. All shares and per share amounts
presented herein, have been retroactively restated to reflect the
 impact of the split.

Stock Compensation  The Company measures
compensation cost related to employee stock options using the
intrinsic value method of accounting prescribed by Accounting
Principles Board (APB) Opinion No. 25,
Accounting for Stock Issued to Employees, and has included the
proforma disclosures as required by Statements of Financial
Accounting Standards (SFAS) No. 123, Accounting
for Stock-Based Compensation (Note 12).

Comprehensive Income  SFAS 130,
Reporting Comprehensive Income, was adopted during
the first quarter of 1999. The standard establishes guidelines
for the reporting and display of comprehensive income and its
components in financial statements. Comprehensive income includes
 unrealized gains and losses on equity securities classified as
available-for-sale and included as a component of
shareholders equity.

Fair Value of Financial Instruments  The
carrying amount of the Companys cash and cash equivalents,
receivables, short-term debt, accounts payable and accrued
expenses approximates fair value because of the short maturity of
 those instruments. Cost basis investments totaling $32.3 million
 and $18.9 million at December 26, 1999 and
December 27, 1998, respectively, are reflected at their
carrying value and

31



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##### Table of Contents



CENTRAL NEWSPAPERS, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

approximates quoted market prices for similar securities. The
fair value of the Companys long-term debt approximates its
carrying value as the stated interest rate approximates current
market rates.

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 period. Actual results could
differ from those estimates.

Reclassifications  Certain amounts in the
financial statements have been reclassified to conform to the
1999 presentation.

2  Basic and Diluted Earnings Per Share

The following is a reconciliation of the numerators and
denominators of the basic and diluted EPS computations as
required by SFAS No. 128, Earnings Per Share (in
 thousands, except per share data):

|                                  |  |      |         |      |  |      |        |  |  |   |        | 
|--------------------------------- |  | ---- | ------- | ---- |  | ---- | ------ |  |  | - | ------ | 
|                                  |  | 1999 |         | 1998 |  | 1997
|                                  |  |      |         |      |  |     
|Basic EPS Computation:            |  |      |         |      |  |      |        |  |  |   |        | 
|                                 
|                                 
|                                 
|                                 
|Numerator (Net income)            |  | $    | 115,643 |      |  | $    | 88,542 |  |  | $ | 81,495 | 
|                                 
|                                 
|                                 
|                                 
|Denominator:                      |  |      |         |      |  |      |        |  |  |   |        | 
|                                 
|                                 
|                                 
|                                 
|Average Common Shares Outstanding |  |      | 40,079  |      |  |      | 48,498 |  |  |   | 51,464 | 
|                                 
|                                 
|                                 
|                                 
|Basic EPS                         |  | $    | 2.89    |      |  | $    | 1.83   |  |  | $ | 1.58   | 
|                                 
|                                 
|                                 
|                                 
|Diluted EPS Computation:          |  |      |         |      |  |      |        |  |  |   |        | 
|                                 
|                                 
|                                 
|                                 
|Numerator (Net income)            |  | $    | 115,643 |      |  | $    | 88,542 |  |  | $ | 81,495 | 
|                                 
|                                 
|                                 
|                                 
|Denominator:                      |  |      |         |      |  |      |        |  |  |   |        | 
|                                 
|                                 
|                                 
|                                 
|Average Common Shares Outstanding |  |      | 40,079  |      |  |      | 48,498 |  |  |   | 51,464 | 
|                                 
|                                 
|                                 
|                                 
|Stock Options                     |  |      | 1,427   |      |  |      | 1,382  |  |  |   | 1,482  | 
|                                  |  |      |         |      |  |      |        |  |  |   |        | 
|TOTAL                             |  |      | 41,506  |      |  |      | 49,880 |  |  |   | 52,946 | 
|                                  |  |      |         |      |  |      |        |  |  |   |        | 
|Diluted EPS                       |  | $    | 2.79    |      |  | $    | 1.78   |  |  | $ | 1.54   | 

3  Comprehensive Income

The following table presents the components of other
comprehensive income for 1999, 1998 and 1997 as shown in the
consolidated statement of shareholders equity and
comprehensive income (in thousands):

|                                                                                                                                  |  |      |       |      |  |      |      |   |  |   |     | 
|--------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ----- | ---- |  | ---- | ---- | - |  | - | --- | 
|                                                                                                                                  |  | 1999 |       | 1998 |  | 1997
|                                                                                                                                  |  |      |       |      |  |     
|Unrealized gains on securities available for sale:                                                                                |  |      |       |      |  |      |      |   |  |   |     | 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|Change in unrealized gains, net of taxes of $1,001 in 1999, $91
	in 1998 and $322 in 1997                                         |  | $    | 1,546 |      |  | $    | 122  |   |  | $ | 483 | 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|Less: reclassification adjustment for gains realized in net
	income, net of taxes of $374 in 1999, $231 in 1998 and $200 in
	1997 |  |      | 551   |      |  |      | 331  |   |  |   | 298 | 
|                                                                                                                                  |  |      |       |      |  |      |      |   |  |   |     | 
|                                                                                                                                  |  | $    | 995   |      |  | $    | (209 | ) |  | $ | 185 | 
|                                                                                                                                  |  |      |       |      |  |      |      |   |  |   |     | 

4  Acquisitions, Redeemable Preferred Stock And
Stock Repurchases

Career Services, Inc.

In February 1997, the Company acquired 80% of Career
Services, Inc., the Santa Clara, California based Westech group
of companies for $34.8 million. The transaction was recorded
using purchase accounting. The group includes Westech ExpoCorp.,
which organizes job fairs for the high-technology industry, High

32



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CENTRAL NEWSPAPERS, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

Technology Careers, which publishes High Technology Careers
Magazine, incpad by Westech, an internet-based resume posting and
 research service, and JobsAmerica, which organizes job fairs for
 service industry positions. The transaction generated $32.4
million of goodwill which is being amortized on a straight line
basis over 15 years. In June 1997, Westech acquired the
 assets of Target Career Fairs, a Boston-based company that
organizes job fairs for the high-technology industry in the
eastern portion of the U.S., including the cities of Boston,
Raleigh, Orlando, Philadelphia and St. Louis.

On April 30, 1999, the Company purchased the remaining 20%
of Career Services, Inc. for approximately $13.7 million from the
 minority shareholders. Subsequent to year end, the Company
announced its intention to sell Career Services, Inc. by merging
its wholly-owned subsidiary into BrassRing, Inc., a venture of
Kaplan, Inc. (a wholly-owned subsidiary of The Washington Post
company), Tribune company, and venture capital firm, Accel
Partners, for 23.2% of BrassRing, Inc. which will be accounted
for using the equity method.

Homebuyers Fair, Inc.

In October 1997, the Company acquired an 80% interest in
Homebuyers Fair, Inc. which provides internet-based
services and information for people who are moving and
corporations that are relocating employees. In
September 1998, Homebuyers Fair acquired 100% of
National School Reporting Services, Inc. which provides
internet-based information related to schools across the nation.
On October 31, 1999, the Company completed the sale of our
interest in Homebuyers Fair, Inc., its subsidiary National
School Reporting Services, Inc. and FAS Hotline to Homestore.com,
 Inc. The net proceeds from the sale were $51.9 million,
consisting of $23.5 million in cash, $33.7 million in notes
receivable, $7.7 million in notes payable and 50,000 shares of
Homestore.com, Inc. stock, valued at $2.4 million based on quoted
 market prices at closing. The pretax gain on the sale of $32.7
million has been recorded in the accompanying consolidated
statement of income for the year ended December 26, 1999.
Subsequent to year end, the notes receivable and notes payable
plus accrued interest were repaid in full.

Stock repurchases and related transactions

In May 1997, the Company repurchased and retired an
aggregate of 2,354,734 shares of Class A common stock from
three non-profit organizations at a total cost of $58.6 million.
In June 1997, the Company completed a registered secondary
offering of 4,709,466 shares of Class A common stock priced
at $32.0625 per share.

In December 1997, the Board of Directors authorized
repurchases of up to $100.0 million of our 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 and retired a total of 2,274,660
shares under this authorization through December 26, 1999 at
 a total cost of approximately $75.1 million. This authorization
replaces the March 19, 1996, repurchase program under which
the Company repurchased 1,490,000 shares of Class A common
stock at a cost of approximately $33.2 million.

On October 23, 1998, pursuant to a September 21, 1998
agreement, the Company repurchased and retired 5,000,000 shares
of Class A common stock from the Nina Mason Pulliam
Charitable Trust at $30 per share (plus interest from
September 16, 1998) for a total consideration of $150.8
million. In addition, in November 1998, the Company
repurchased and retired 3,000,000 shares of its Class A
common stock, pursuant to the exercise of an option from the
Charitable Trust, at $33.50 per share for a total consideration
of $100.5 million. These repurchases were financed with a $300
million revolving credit facility arranged by First Chicago
Capital Markets, Inc. (a subsidiary of Bank One Corporation), and
 syndicated to a group of banks. This $300 million revolving
credit facility, which closed on November 10, 1998 consists
of a $200 million five-year and a $100 million 365-day revolving
credit facility which expire in November 2003 and 1999,
respectively. In 1999, the 365-day facility was renewed with an
expiration date of November 2000. The credit facility may be
 used for general corporate purposes, including the repurchase of
 common stock. Under the

33



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##### Table of Contents



CENTRAL NEWSPAPERS, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

credit facility, the Company can choose among loans with interest
 rates based on either an Alternative Base Rate (fixed rate), an
Adjusted LIBOR (floating rate), or a Competitive Bid (a floating
rate loan based on bids solicited from the lenders) as those
terms are defined in the credit agreement. The Company must
maintain compliance with certain covenants under the terms of the
 credit facility.

In April 1999, the Company completed a registered secondary
offering of 2,673,699 shares of Class A common stock priced
at $30.50 per share. The shares were sold by the Nina Mason
Pulliam Charitable Trust. To complete the sale, a total of
1,777,560 shares of Class B common stock were converted to
177,756 shares of Class A Common Stock. No new shares were
issued in this transaction and The Company did not receive any
proceeds from the sale.

On August 12, 1999, the Board of Directors approved the
repurchase and retirement of 2,200,000 shares of Class A
common stock from the Eugene S. Pulliam Revocable Trust for
a total consideration of approximately $90.2 million. This
repurchase was financed through additional borrowings of $90.0
million from the $300 million revolving credit facility
established in 1998.

Indianapolis Newspapers, a division of
Indiana Newspapers, Inc.

In January 1997, the Company acquired the remaining 9.8% of
Indianapolis Newspapers, Inc. (INI) common stock that
 it did not already own. This transaction was accomplished by
issuing to the minority shareholders an aggregate of 1,892 shares
 of newly created, non-voting, INI preferred stock, with an
aggregate stated value of $18,920,000 in exchange for the shares
of INI common stock owned by them. The preferred stock provides
for aggregate annual dividends of $1,324,000 on a cumulative
basis, is callable in five years by INI, and is redeemable at any
 time by the shareholders of INI at the stated value plus accrued
 but unpaid dividends. The total acquisition consideration of
$18,920,000 was accounted for using the purchase method of
accounting. This transaction resulted in goodwill of $8,468,000,
which is being amortized over its remaining life, and a reduction
 of the minority interest of $9,244,000.

5  Employee Benefit Plans and Postretirement
Obligations

The Company has defined benefit plans to provide pension benefits
 to all employees who have met certain eligibility requirements.
Benefits are based primarily on length of service, wages earned,
age and the amount of optional employee contributions. The
Companys policy is to fund at least the minimum amount
required by ERISA. Assets of the plans consist primarily of
stocks, bonds and short-term investments.

The Company sponsors postretirement medical and life insurance
plans which are available to most of its employees. In order to
be eligible for these plans, employees must retire from the
Company and have been covered under an active plan. The level of
benefits provided depends on the year of retirement and years of
service. The plans are contributory with periodic adjustments in
the amount of contributions by retirees. The Companys
policy is to fund these benefits as claims and premiums are paid.

34



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##### Table of Contents



CENTRAL NEWSPAPERS, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

The Companys pension benefits and other postretirement
benefits consisted of (in thousands):

|                                               |  |                  |          |                      |  |      |         |      |  |   |         |   |  |   |         |  
|---------------------------------------------- |  | ---------------- | -------- | -------------------- |  | ---- | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                               |  |                  |          |                      |  |     
|                                               |  |                  |          | Other Postretirement
|                                               |  | Pension Benefits |          | Benefits            
|                                               |  |                  |          |                     
|                                               |  | 1999             |          | 1998                 |  | 1999 |         | 1998
|                                               |  |                  |          |                      |  |      |         |     
|Change in Benefit Obligation:                  |  |                  |          |                      |  |      |         |      |  |   |         |   |  |   |         |  
|                                              
|                                              
|                                              
|                                              
|Net benefit obligation at beginning of year    |  | $                | 258,378  |                      |  | $    | 234,556 |      |  | $ | 87,084  |   |  | $ | 87,630  |  
|                                              
|                                              
|                                              
|                                              
|Service cost                                   |  |                  | 8,073    |                      |  |      | 6,918   |      |  |   | 3,712   |   |  |   | 3,056   |  
|                                              
|                                              
|                                              
|                                              
|Interest cost                                  |  |                  | 17,374   |                      |  |      | 16,983  |      |  |   | 6,350   |   |  |   | 5,738   |  
|                                              
|                                              
|                                              
|                                              
|Plan participants contributions               |  |                  | 345      |                      |  |      | 426     |      |  |   | 916     |   |  |   | 727     |  
|                                              
|                                              
|                                              
|                                              
|Plan amendments                                |  |                  |          |                      |  |      |         |      |  |   |         |   |  |   | (1,213  | )
|                                              
|                                              
|                                              
|                                              
|Actuarial (gain) loss                          |  |                  | (32,314  | )                    |  |      | 15,668  |      |  |   | (4,752  | ) |  |   | (3,345  | )
|                                              
|                                              
|                                              
|                                              
|Gross benefits paid                            |  |                  | (17,002  | )                    |  |      | (16,173 | )    |  |   | (6,373  | ) |  |   | (5,509  | )
|                                               |  |                  |          |                      |  |      |         |      |  |   |         |   |  |   |         |  
|Net benefit obligation at end of year          |  | $                | 234,854  |                      |  | $    | 258,378 |      |  | $ | 86,937  |   |  | $ | 87,084  |  
|                                               |  |                  |          |                      |  |      |         |      |  |   |         |   |  |   |         |  
|Change in Plan Assets:                         |  |                  |          |                      |  |      |         |      |  |   |         |   |  |   |         |  
|                                              
|                                              
|                                              
|                                              
|Fair value of plan assets at beginning of year |  | $                | 315,060  |                      |  | $    | 279,735 |      |  |   |         |   |  |   |         |  
|                                              
|                                              
|                                              
|                                              
|Actual return on plan assets                   |  |                  | 49,155   |                      |  |      | 44,033  |      |  |   |         |   |  |   |         |  
|                                              
|                                              
|                                              
|                                              
|Employer contributions                         |  |                  | 6        |                      |  |      | 7,039   |      |  | $ | 5,457   |   |  | $ | 4,782   |  
|                                              
|                                              
|                                              
|                                              
|Plan participants contributions               |  |                  | 345      |                      |  |      | 426     |      |  |   | 916     |   |  |   | 727     |  
|                                              
|                                              
|                                              
|                                              
|Gross benefits paid                            |  |                  | (17,002  | )                    |  |      | (16,173 | )    |  |   | (6,373  | ) |  |   | (5,509  | )
|                                               |  |                  |          |                      |  |      |         |      |  |   |         |   |  |   |         |  
|Fair value of plan assets at end of year       |  | $                | 347,564  |                      |  | $    | 315,060 |      |  | $ |        |   |  | $ |        |  
|                                               |  |                  |          |                      |  |      |         |      |  |   |         |   |  |   |         |  
|Funded status at end of year                   |  | $                | 112,710  |                      |  | $    | 56,682  |      |  | $ | (86,937 | ) |  | $ | (87,084 | )
|                                              
|                                              
|                                              
|                                              
|Unrecognized net actuarial gain                |  |                  | (106,082 | )                    |  |      | (47,465 | )    |  |   | (7,242  | ) |  |   | (1,903  | )
|                                              
|                                              
|                                              
|                                              
|Unrecognized prior service cost                |  |                  | 1,904    |                      |  |      | 2,348   |      |  |   | (1,447  | ) |  |   | (1,867  | )
|                                              
|                                              
|                                              
|                                              
|Unrecognized net transition asset              |  |                  | (2,415   | )                    |  |      | (3,698  | )    |  |   |         |   |  |   |         |  
|                                               |  |                  |          |                      |  |      |         |      |  |   |         |   |  |   |         |  
|Net amount recognized at end of year           |  | $                | 6,117    |                      |  | $    | 7,867   |      |  | $ | (95,626 | ) |  | $ | (90,854 | )
|                                               |  |                  |          |                      |  |      |         |      |  |   |         |   |  |   |         |  

|                                         |  |                  |      |                               |  |      |      |      |  |      |      |      |  |  |      |   |  |  |      |   |  |  |      |  
|---------------------------------------- |  | ---------------- | ---- | ----------------------------- |  | ---- | ---- | ---- |  | ---- | ---- | ---- |  |  | ---- | - |  |  | ---- | - |  |  | ---- | -
|                                         |  |                  |      |                              
|                                         |  | Pension Benefits |      | Other Postretirement Benefits
|                                         |  |                  |      |                              
|                                         |  | 1999             |      | 1998                          |  | 1997 |      | 1999 |  | 1998 |      | 1997
|                                         |  |                  |      |                               |  |      |      |      |  |      |      |     
|Weighted-average assumptions December 31 |  |                  |      |                               |  |      |      |      |  |      |      |      |  |  |      |   |  |  |      |   |  |  |      |  
|                                        
|                                        
|                                        
|                                        
|Discount rate                            |  |                  | 7.75 | %                             |  |      | 6.75 | %    |  |      | 7.25 | %    |  |  | 7.75 | % |  |  | 6.75 | % |  |  | 7.25 | %
|                                        
|                                        
|                                        
|                                        
|Expected return on plan assets           |  |                  | 9.00 | %                             |  |      | 9.00 | %    |  |      | 9.00 | %    |  |  | N/A  |   |  |  | N/A  |   |  |  | N/A  |  
|                                        
|                                        
|                                        
|                                        
|Rate of compensation increase            |  |                  | 4.00 | %                             |  |      | 4.00 | %    |  |      | 4.00 | %    |  |  | 4.00 | % |  |  | 4.00 | % |  |  | 4.00 | %

For measurement purposes, a 6 percent annual rate of
increase in the per capita cost of covered health care benefits
was assumed for 1999. The rate was assumed to decrease gradually
to 5 percent for 2000 and remain at that level thereafter.

35



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##### Table of Contents



CENTRAL NEWSPAPERS, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

|                                         |                       |   |         |        |   |   |         |        |   |   |         |        |   |   |       |      |   |   |       |      |   |   |       |        |  
|---------------------------------------- | --------------------- | - | ------- | ------ | - | - | ------- | ------ | - | - | ------- | ------ | - | - | ----- | ---- | - | - | ----- | ---- | - | - | ----- | ------ | -
|                                        
|                                        
|                                        
|                                        
|Components of net periodic benefit cost: |                       |   |         |        |   |   |         |        |   |   |         |        |   |   |       |      |   |   |       |      |   |   |       |       
|                                        
|                                        
|                                        
|                                        
|Service cost                             |                       | $ | 8,073   |        |   | $ | 6,918   |        |   | $ | 6,572   |        |   | $ | 3,712 |      |   | $ | 3,056 |      |   | $ | 3,185 |       
|                                        
|                                        
|                                        
|                                        
|Interest cost                            |                       |   | 17,374  |        |   |   | 16,983  |        |   |   | 16,437  |        |   |   | 6,350 |      |   |   | 5,738 |      |   |   | 6,092 |       
|                                        
|                                        
|                                        
|                                        
|Expected return on assets                |                       |   | (22,858 | )      |   |   | (20,447 | )      |   |   | (18,587 | )      |   |   |       |      |   |   |       |      |   |   |       |       
|                                        
|                                        
|                                        
|                                        
|Amortization of:                         |                       |   |         |        |   |   |         |        |   |   |         |        |   |   |       |      |   |   |       |      |   |   |       |       
|                                        
|                                        
|                                        
|                                        
|                                         | Transition asset      |   |         | (1,283 | ) |   |         | (1,283 | ) |   |         | (1,283 | ) |   |       |      |   |   |       |      |   |   |       |        |  
|                                        
|                                        
|                                        
|                                        
|                                         | Prior service cost    |   |         | 444    |   |   |         | 444    |   |   |         | 444    |   |   |       | (420 | ) |   |       | (478 | ) |   |       | (1,947 | )
|                                        
|                                        
|                                        
|                                        
|                                         | Actuarial (gain) loss |   |         | (1     | ) |   |         | (12    | ) |   |         | (10    | ) |   |       | 49   |   |   |       | (169 | ) |   |       | 38     |  
|                                         |                       |   |         |        |   |   |         |        |   |   |         |        |   |   |       |      |   |   |       |      |   |   |       |       
|Total net periodic benefit cost          |                       | $ | 1,749   |        |   | $ | 2,603   |        |   | $ | 3,573   |        |   | $ | 9,691 |      |   | $ | 8,147 |      |   | $ | 7,368 |       
|                                         |                       |   |         |        |   |   |         |        |   |   |         |        |   |   |       |      |   |   |       |      |   |   |       |       

Other postretirement benefits include medical benefits for
retirees and their spouses, retiree life insurance, and executive
 life insurance. Phoenix Newspapers, Inc. also provides dental
and vision benefits for retirees and their spouses.

The Company has a wage deferral plan qualified under
Section 401(k) of the Internal Revenue Code that covers all
eligible employees. Company matching contributions to this plan
were $4,662,000, $4,488,000 and $4,517,000 for 1999, 1998 and
1997, respectively.

Assumed health care cost trend rates have a significant effect on
 the amounts reported for the health care plans. A
one-percentage-point change in assumed health care cost trend
rates would have the following effects (in thousands):

|                                                        |  |                |       |                |  |   |        |  
|------------------------------------------------------- |  | -------------- | ----- | -------------- |  | - | ------ | -
|                                                        |  | One Percentage |       | One Percentage
|                                                        |  | Point Increase |       | Point Decrease
|                                                        |  |                |       |               
|Effect on total of service and interest cost components |  | $              | 1,430 |                |  | $ | (1,164 | )
|                                                       
|                                                       
|                                                       
|                                                       
|Effect on postretirement benefit obligation             |  | $              | 9,405 |                |  | $ | (7,910 | )

6  Work Force Reduction

The Company has reduced its work force in response to closure of
The Indianapolis News and The Phoenix Gazette,
changes in distribution methods in Indianapolis, economic
conditions, increasing costs and changes in technology. Early
retirement incentive programs contributed to the staff
reductions. Employees were offered early retirement benefits
through a non-qualified supplemental retirement plan and those
terminated due to job eliminations received severance payments.
Work force reduction costs include retirement benefits, severance
 payments, carrier conversion incentives, agency signing bonuses
and professional support. Work force reduction costs were
$3,792,200, $854,000 and $9,999,000 for 1999, 1998 and 1997,
respectively.

36



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##### Table of Contents



CENTRAL NEWSPAPERS, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

7  Income Taxes

The provision for income taxes, exclusive of tax effects from
equity in earnings of Affiliate, consisted of:

|                           |  |                |        |      |  |      |        |   |  |   |        |  
|-------------------------- |  | -------------- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|                           |  | 1999           |        | 1998 |  | 1997
|                           |  |                |        |      |  |     
|                           |  |               
|                           |  | (In thousands)
|                          
|                          
|                          
|                          
|State:                     |  |                |        |      |  |      |        |   |  |   |        |  
|                          
|                          
|                          
|                          
|Currently payable          |  | $              | 10,454 |      |  | $    | 12,075 |   |  | $ | 10,903 |  
|                          
|                          
|                          
|                          
|Deferred                   |  |                | 1,186  |      |  |      | (865   | ) |  |   | (60    | )
|                           |  |                |        |      |  |      |        |   |  |   |        |  
|                           |  |                | 11,640 |      |  |      | 11,210 |   |  |   | 10,843 |  
|                           |  |                |        |      |  |      |        |   |  |   |        |  
|Federal:                   |  |                |        |      |  |      |        |   |  |   |        |  
|                          
|                          
|                          
|                          
|Currently payable          |  |                | 62,078 |      |  |      | 53,373 |   |  |   | 48,477 |  
|                          
|                          
|                          
|                          
|Deferred                   |  |                | 4,760  |      |  |      | (1,458 | ) |  |   | (523   | )
|                           |  |                |        |      |  |      |        |   |  |   |        |  
|                           |  |                | 66,838 |      |  |      | 51,915 |   |  |   | 47,954 |  
|                           |  |                |        |      |  |      |        |   |  |   |        |  
|Provision for income taxes |  | $              | 78,478 |      |  | $    | 63,125 |   |  | $ | 58,797 |  
|                           |  |                |        |      |  |      |        |   |  |   |        |  

Reconciliation of the U.S. federal statutory tax rate to the
effective tax rate is presented below:

|                                      |  |                |        |      |  |      |      |   |  |   |        |  |  |  |      |   |  |   |        |  |  |  |      |  
|------------------------------------- |  | -------------- | ------ | ---- |  | ---- | ---- | - |  | - | ------ |  |  |  | ---- | - |  | - | ------ |  |  |  | ---- | -
|                                      |  |                |        |      |  |     
|                                      |  | 1999           |        | 1998 |  | 1997
|                                      |  |                |        |      |  |     
|                                      |  |                |        |      |  |      |      |   |  |   |        | 
|                                      |  |               
|                                      |  | (In thousands)
|                                     
|                                     
|                                     
|                                     
|Federal statutory tax rate            |  | $              | 68,669 |      |  |      | 35.0 | % |  | $ | 53,550 |  |  |  | 35.0 | % |  | $ | 50,116 |  |  |  | 35.0 | %
|                                     
|                                     
|                                     
|                                     
|State taxes net of federal tax effect |  |                | 7,981  |      |  |      | 4.1  |   |  |   | 7,286  |  |  |  | 4.8  |   |  |   | 7,048  |  |  |  | 5.0  |  
|                                     
|                                     
|                                     
|                                     
|Goodwill and other                    |  |                | 1,828  |      |  |      | .9   |   |  |   | 2,289  |  |  |  | 1.5  |   |  |   | 1,633  |  |  |  | 1.1  |  
|                                      |  |                |        |      |  |      |      |   |  |   |        |  |  |  |      |   |  |   |        |  |  |  |      |  
|Provision for income taxes            |  | $              | 78,478 |      |  |      | 40.0 | % |  | $ | 63,125 |  |  |  | 41.3 | % |  | $ | 58,797 |  |  |  | 41.1 | %
|                                      |  |                |        |      |  |      |      |   |  |   |        |  |  |  |      |   |  |   |        |  |  |  |      |  

Components of net deferred income tax liability:

|                                  |  |                |         |      |  |   |         |  
|--------------------------------- |  | -------------- | ------- | ---- |  | - | ------- | -
|                                  |  | 1999           |         | 1998
|                                  |  |                |         |     
|                                  |  |               
|                                  |  | (In thousands)
|                                 
|                                 
|                                 
|                                 
|Depreciation                      |  | $              | 61,668  |      |  | $ | 56,666  |  
|                                 
|                                 
|                                 
|                                 
|Pension                           |  |                | 2,913   |      |  |   | 2,752   |  
|                                 
|                                 
|                                 
|                                 
|Other                             |  |                | 3,483   |      |  |   | 1,526   |  
|                                  |  |                |         |      |  |   |         |  
|Gross deferred tax liability      |  |                | 68,064  |      |  |   | 60,944  |  
|                                  |  |                |         |      |  |   |         |  
|Postretirement benefits           |  |                | (38,750 | )    |  |   | (38,494 | )
|                                 
|                                 
|                                 
|                                 
|Vacation                          |  |                | (3,589  | )    |  |   | (3,769  | )
|                                 
|                                 
|                                 
|                                 
|Other                             |  |                | (2,632  | )    |  |   | (2,757  | )
|                                  |  |                |         |      |  |   |         |  
|Gross deferred tax asset          |  |                | (44,971 | )    |  |   | (45,020 | )
|                                  |  |                |         |      |  |   |         |  
|Net deferred income tax liability |  | $              | 23,093  |      |  | $ | 15,924  |  
|                                  |  |                |         |      |  |   |         |  

8  Inventories

Newsprint inventory, valued at LIFO, amounted to $9,604,000 and
$9,639,000 at the end of 1999 and 1998. If the FIFO inventory
valuation method had been exclusively used for newsprint, the
value would have been $3,157,000 and $5,627,000 higher,
respectively. Other inventories, consisting primarily of
newspaper production supplies, amounted to $1,792,000 and
$2,202,000 at the end of 1999 and 1998.

37



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##### Table of Contents



CENTRAL NEWSPAPERS, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

9  Investment in Affiliate

The Company, through its subsidiaries, has a 13.5% partnership
interest in Ponderay Newsprint Company (Ponderay),
which was formed to own a newsprint mill in the State of
Washington. Under the terms of the loan agreement, the Company
has guaranteed a pro rata share of the guaranteed term facility
in the amount of $16,875,000.

The Company has committed to purchase for use in Phoenix the
lesser of 13.5% of annual newsprint production or 28,400 metric
tons on a take if tendered basis until the debt is
repaid. During 1999, 1998 and 1997 newsprint purchased from
Ponderay amounted to $16,078,000, $19,042,000 and $23,735,000,
respectively.

Summarized financial data for Affiliate:

|                       |                                       |                |         |         |   |      |         |         |  |   |         |         |  
|---------------------- | ------------------------------------- | -------------- | ------- | ------- | - | ---- | ------- | ------- |  | - | ------- | ------- | -
|                       |                                       | 1999           |         | 1998    |   | 1997
|                       |                                       |                |         |         |   |     
|                       |                                       |               
|                       |                                       | (In thousands)
|                      
|                      
|                      
|                      
|Results of operations: |                                       |                |         |         |   |      |         |         |  |   |         |        
|                      
|                      
|                      
|                      
|                       | Net sales                             |                | $       | 126,648 |   |      | $       | 144,776 |  |   | $       | 131,330 |  
|                      
|                      
|                      
|                      
|                       | Income from operations                |                |         | 3,770   |   |      |         | 24,047  |  |   |         | 10,412  |  
|                      
|                      
|                      
|                      
|                       | Net income (loss)                     |                |         | (6,338  | ) |      |         | 11,304  |  |   |         | (4,040  | )
|Financial position     |                                       |                |         |         |   |      |         |         |  |   |         |        
|                      
|                      
|                      
|                      
|                       | Current assets                        |                | $       | 20,524  |   |      | $       | 22,872  |  |   | $       | 22,150  |  
|                      
|                      
|                      
|                      
|                       | Property and equipment, at cost  net |                |         | 217,371 |   |      |         | 233,747 |  |   |         | 250,038 |  
|                      
|                      
|                      
|                      
|                       | Other assets                          |                |         | 1,158   |   |      |         | 1,844   |  |   |         | 2,433   |  
|                       |                                       |                |         |         |   |      |         |         |  |   |         |        
|                       |                                       | $              | 239,053 |         |   | $    | 258,463 |         |  | $ | 274,621 |        
|                       |                                       |                |         |         |   |      |         |         |  |   |         |        
|Current liabilities    |                                       | $              | 166,171 |         |   | $    | 34,194  |         |  | $ | 29,018  |        
|                       |                                       |                |         |         |   |      |         |         |  |   |         |        
|Long-term debt         |                                       |                | 295     |         |   |      | 151,343 |         |  |   | 183,982 |        
|                      
|                      
|                      
|                      
|Partners capital      |                                       |                | 72,587  |         |   |      | 72,926  |         |  |   | 61,621  |        
|                       |                                       |                |         |         |   |      |         |         |  |   |         |        
|                       |                                       | $              | 239,053 |         |   | $    | 258,463 |         |  | $ | 274,621 |        
|                       |                                       |                |         |         |   |      |         |         |  |   |         |        

Summary of the Companys investment in Affiliate:

|                                           |  |                |       |      |  |      |        |   |  |   |       |  
|------------------------------------------ |  | -------------- | ----- | ---- |  | ---- | ------ | - |  | - | ----- | -
|                                           |  | 1999           |       | 1998 |  | 1997
|                                           |  |                |       |      |  |     
|                                           |  |               
|                                           |  | (In thousands)
|                                          
|                                          
|                                          
|                                          
|Investment, beginning of year              |  | $              | 9,848 |      |  | $    | 8,321  |   |  | $ | 8,867 |  
|                                          
|                                          
|                                          
|                                          
|Equity in partnership income (loss)        |  |                | (856  | )    |  |      | 1,527  |   |  |   | (546  | )
|                                          
|                                          
|                                          
|                                          
|Additional investments                     |  |                | 810   |      |  |      |        |   |  |   |       |  
|                                           |  |                |       |      |  |      |        |   |  |   |       |  
|Investment, end of year                    |  | $              | 9,802 |      |  | $    | 9,848  |   |  | $ | 8,321 |  
|                                           |  |                |       |      |  |      |        |   |  |   |       |  
|Equity in Affiliate:                       |  |                |       |      |  |      |        |   |  |   |       |  
|                                          
|                                          
|                                          
|                                          
|Equity in partnership income (loss)        |  | $              | (856  | )    |  | $    | 1,527  |   |  | $ | (546  | )
|                                          
|                                          
|                                          
|                                          
|Current income tax expense                 |  |                | (287  | )    |  |      | (1,087 | ) |  |   | (377  | )
|                                          
|                                          
|                                          
|                                          
|Deferred tax benefit                       |  |                | 587   |      |  |      | 552    |   |  |   | 592   |  
|                                           |  |                |       |      |  |      |        |   |  |   |       |  
|Equity in net earnings (loss) of Affiliate |  | $              | (556  | )    |  | $    | 992    |   |  | $ | (331  | )
|                                           |  |                |       |      |  |      |        |   |  |   |       |  

10  Short-Term Borrowings and Long-Term Debt

In November 1998, the Company entered into a $100,000,000
unsecured, committed, 365 day credit agreement and a
$200,000,000 unsecured, committed, five year credit agreement. Of
 such borrowings,

38



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##### Table of Contents



CENTRAL NEWSPAPERS, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

$252,000,000 was drawn in 1998 and $90,000,000 in 1999 to fund
the repurchase of stock. As of December 26, 1999,
$20,000,000 remained outstanding on the 365 day revolving
credit line, and $200,000,000 remained outstanding on the five
year facility both at annual interest rates approximating 6.75%.
In 1999, the 365-day facility was renewed with an expiration date
 of November 2000. Compliance with certain covenants under
the terms of the credit facilities must be maintained. As of
December 26, 1999, the Company was in compliance with all
such covenants.

Interest expense on these facilities and other debt amounted to
$14,354,000 in 1999, $3,922,000 in 1998 and $1,710,000 in 1997.
Such amounts are included in other expenses in the accompanying
consolidated statement of income.

11  Rental Expense and Lease Commitments

Rental expense for 1999, 1998 and 1997 amounted to $6,472,000,
$6,341,000 and $5,532,000, respectively. Future obligations for
minimum annual rentals under noncancelable long-term leases are
not significant.

12  Capital Stock and Stock Compensation Plan

Class A common stock is entitled to   1/10 of a vote
per share. The Class B common stock has one vote per share
while its dividend and liquidation distributions are   1/10
of the amount of Class A common stock. Class B common
stock may be converted into Class A common stock at a ratio
of ten shares of Class B common stock for one share of
Class A common stock. The Eugene C. Pulliam Trust
(Trust) owns Class B common stock which provides
 the Trust the majority voting control of the Company. At
December 26, 1999, the Company has reserved 4,297,957 shares
 of Class A common stock for issuance under its Stock
Compensation Plan, 2,000,000 shares under its Long Term Incentive
 Plan, 1,000,000 shares for issuance under its 401(k) plan and
5,539,101 shares for issuance upon conversion of Class B
common stock.

Dividends declared per share:

|                     |  |      |      |      |  |      |      |  |  |   |      | 
|-------------------- |  | ---- | ---- | ---- |  | ---- | ---- |  |  | - | ---- | 
|                     |  | 1999 |      | 1998 |  | 1997
|                     |  |      |      |      |  |     
|Class A common stock |  | $    | .50  |      |  | $    | .45  |  |  | $ | .40  | 
|                    
|                    
|                    
|                    
|Class B common stock |  |      | .050 |      |  |      | .045 |  |  |   | .040 | 

The Companys Stock Compensation Plan provides for the
granting of stock options and the issuance of restricted stock
grants to certain officers, key employees and members of the
Board of Directors. Options issued under this plan are granted at
 prices determined by the Stock Option Committee of the Board of
Directors but not less than fair market value on the date of the
grant. Options granted may be incentive or non-qualified options
with a term of 10 years. Options granted prior to
September 13, 1996, are exercisable three years from date of
 grant and options granted after September 13, 1996, become
exercisable ratably over a three year period beginning on the
first anniversary of the grant. Board of Director member options
are exercisable six months from the date of grant.

The fair value of options granted in 1999, 1998 and 1997 was
estimated on the grant date using the Black-Scholes option
pricing model using the following assumptions:

|                                           |  |             |  |          |  |         
|------------------------------------------ |  | ----------- |  | -------- |  | --------
|                                           |  | 1999        |  | 1998     |  | 1997    
|                                           |  |             |  |          |  |         
|Risk-free interest rates                   |  | 5.1%  5.3% |  | 5.5%     |  | 6.2%    
|                                          
|                                          
|                                          
|                                          
|Dividend yields                            |  | 1.3%        |  | 1.2%     |  | 1.2%    
|                                          
|                                          
|                                          
|                                          
|Expected volatility                        |  | 21%         |  | 20%      |  | 21%     
|                                          
|                                          
|                                          
|                                          
|Weighted average expected life of options  |  | 5 years     |  | 4  years |  | 4  years
|                                          
|                                          
|                                          
|                                          
|Fair market value per share option granted |  | $10.40      |  | $9.47    |  | $6.80   

39



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##### Table of Contents



CENTRAL NEWSPAPERS, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

Under SFAS No. 123, compensation cost is recognized in the
amount of the estimated fair value of the options and amortized
to expense over the options vesting period. The pro forma
effects on net income and earnings per share of this statement
are as follows:

|                    |             |                                       |      |         |  |      |      |        |  |   |      |        | 
|------------------- | ----------- | ------------------------------------- | ---- | ------- |  | ---- | ---- | ------ |  | - | ---- | ------ | 
|                    |             | 1999                                  |      | 1998    |  | 1997
|                    |             |                                       |      |         |  |     
|                    |             |                                      
|                    |             | (In thousands, except per share data)
|                   
|                   
|                   
|                   
|Net income:         |             |                                       |      |         |  |      |      |        |  |   |      |       
|                   
|                   
|                   
|                   
|                    | As reported |                                       | $    | 115,643 |  |      | $    | 88,542 |  |   | $    | 81,495 | 
|                   
|                   
|                   
|                   
|                    | Pro forma   |                                       |      | 112,938 |  |      |      | 85,924 |  |   |      | 79,430 | 
|                   
|                   
|                   
|                   
|Earnings per share: |             |                                       |      |         |  |      |      |        |  |   |      |       
|                   
|                   
|                   
|                   
|As reported Basic   |             | $                                     | 2.89 |         |  | $    | 1.83 |        |  | $ | 1.58 |       
|                   
|                   
|                   
|                   
|Diluted             |             |                                       | 2.79 |         |  |      | 1.78 |        |  |   | 1.54 |       
|                   
|                   
|                   
|                   
|Pro forma Basic     |             | $                                     | 2.82 |         |  | $    | 1.77 |        |  | $ | 1.54 |       
|                   
|                   
|                   
|                   
|Diluted             |             |                                       | 2.72 |         |  |      | 1.72 |        |  |   | 1.50 |       

The following is a summary of the status of the Companys
Stock Compensation Plan and Long Term Incentive Plan as of and
for the three years ended December 26, 1999:

|                               |                                      |            |           |              |   |                  |           |          |   |   |       |       | 
|------------------------------ | ------------------------------------ | ---------- | --------- | ------------ | - | ---------------- | --------- | -------- | - | - | ----- | ----- | 
|                               |                                      | Shares     |           |              |   |                 
|                               |                                      | Reserved   |           | Shares Under |   | Weighted Average
|                               |                                      | For Grants |           | Option       |   | Exercise Price  
|                               |                                      |            |           |              |   |                 
|Outstanding, December 29, 1996 |                                      |            | 5,398,800 |              |   |                  | 2,967,800 |          |   | $ | 13.82 |      
|                              
|                              
|                              
|                              
|                               | Granted                              |            |           |              |   |                  |           | 247,950  |   |   |       | 24.23 | 
|                              
|                              
|                              
|                              
|                               | Exercised                            |            |           | (353,226     | ) |                  |           | (353,226 | ) |   |       | 10.77 | 
|                              
|                              
|                              
|                              
|                               | Cancelled                            |            |           | 20,100       |   |                  |           | (20,100  | ) |   |       | 16.08 | 
|                              
|                              
|                              
|                              
|                               | Restricted shares,  net             |            |           | (37,500      | ) |                  |           |          |   |   |       |       | 
|                               |                                      |            |           |              |   |                  |           |          |   |   |       |      
|Outstanding, December 28, 1997 |                                      |            | 5,028,174 |              |   |                  | 2,842,424 |          |   | $ | 15.09 |      
|                              
|                              
|                              
|                              
|                               | Granted                              |            |           |              |   |                  |           | 718,200  |   |   |       | 36.00 | 
|                              
|                              
|                              
|                              
|                               | Exercised                            |            |           | (431,088     | ) |                  |           | (431,088 | ) |   |       | 12.46 | 
|                              
|                              
|                              
|                              
|                               | Cancelled                            |            |           | 34,504       |   |                  |           | (34,504  | ) |   |       | 23.22 | 
|                              
|                              
|                              
|                              
|                               | Restricted shares,  net             |            |           | (19,500      | ) |                  |           |          |   |   |       |       | 
|                               |                                      |            |           |              |   |                  |           |          |   |   |       |      
|Outstanding, December 27, 1998 |                                      |            | 4,612,090 |              |   |                  | 3,095,032 |          |   | $ | 20.21 |      
|                              
|                              
|                              
|                              
|                               | Additional shares reserved for grant |            |           | 2,000,000    |   |                  |           |          |   |   |       |       | 
|                              
|                              
|                              
|                              
|                               | Granted                              |            |           |              |   |                  |           | 469,800  |   |   |       | 34.67 | 
|                              
|                              
|                              
|                              
|                               | Exercised                            |            |           | (317,102     | ) |                  |           | (317,102 | ) |   |       | 14.54 | 
|                              
|                              
|                              
|                              
|                               | Cancelled                            |            |           | 87,219       |   |                  |           | (87,219  | ) |   |       | 34.31 | 
|                              
|                              
|                              
|                              
|                               | Restricted shares,  net             |            |           | (84,250      | ) |                  |           |          |   |   |       |       | 
|                               |                                      |            |           |              |   |                  |           |          |   |   |       |      
|Outstanding, December 26, 1999 |                                      |            | 6,297,957 |              |   |                  | 3,160,511 |          |   | $ | 22.54 |      
|                               |                                      |            |           |              |   |                  |           |          |   |   |       |      

40



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##### Table of Contents



CENTRAL NEWSPAPERS, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

The following table summarizes information about stock options
outstanding at December 26, 1999:

|                     |  |             |           |             |  |          |     |          |  |          |       |  |  |  |           |  |  |   |       | 
|-------------------- |  | ----------- | --------- | ----------- |  | -------- | --- | -------- |  | -------- | ----- |  |  |  | --------- |  |  | - | ----- | 
|                     |  |             |           |            
|                     |  | Outstanding |           | Exercisable
|                     |  |             |           |            
|                     |  |             |           | Weighted    |  |          |     | Weighted
|                     |  |             |           | Average     |  |          |     | Average 
|                     |  |             |           | Average     |  | Exercise |     |          |  | Exercise
|Exercise Price Range |  | Shares      |           | Life(a)     |  | Price    |     | Shares   |  | Price   
|                     |  |             |           |             |  |          |     |          |  |         
|$ 5.00  $14.99      |  |             | 823,100   |             |  |          | 4.1 |          |  | $        | 11.96 |  |  |  | 823,100   |  |  | $ | 11.96 | 
|                    
|                    
|                    
|                    
|$15.00  $24.99      |  |             | 1,230,877 |             |  |          | 6.4 |          |  |          | 18.06 |  |  |  | 1,168,643 |  |  |   | 17.79 | 
|                    
|                    
|                    
|                    
|$25.00  $34.99      |  |             | 449,500   |             |  |          | 9.2 |          |  |          | 34.52 |  |  |  | 15,333    |  |  |   | 31.17 | 
|                    
|                    
|                    
|                    
|$35.00  $44.99      |  |             | 657,034   |             |  |          | 8.2 |          |  |          | 35.99 |  |  |  | 228,789   |  |  |   | 35.98 | 
|                     |  |             |           |             |  |          |     |          |  |          |       |  |  |  |           |  |  |   |       | 
|                     |  |             | 3,160,511 |             |  |          | 6.6 |          |  | $        | 22.54 |  |  |  | 2,235,865 |  |  | $ | 17.60 | 
|                     |  |             |           |             |  |          |     |          |  |          |       |  |  |  |           |  |  |   |       | 

At December 27, 1998 and December 28, 1997, the number
of options exercisable was 1,940,891 and 559,767, respectively,
and the weighted average exercise price of those options was
$19.89 and $24.81, respectively.




| |     |                                                      
| | --- | -----------------------------------------------------
| | (a) | Weighted average contractual life remaining in years:

The Company issued restricted stock grants to certain key
executives who have a critical impact on the long-term
performance of the Company. The Compensation Committee of the
Board of Directors awarded 99,250, 19,500 and 38,500 shares of
stock in 1999, 1998 and 1997, respectively, whereby transfer
restrictions lapse at the end of five years from the award date
or as early as three years upon achieving certain performance
goals. The restricted stock grants have all the rights of
shareholders, including the right to receive dividends, except
for conditions regarding transferability of shares or upon the
termination of employment. Upon issuance of the shares, unearned
compensation equivalent to the market value at the date of grant
was recorded as unamortized value of restricted stock and is
being charged to earnings over the period during which the
restrictions lapse. During 1999, 1998, and 1997 compensation
expense in the amount of $1,473,000, $1,159,000 and $834,000
respectively, has been recorded related to these restricted stock
 grants.

13  Contingencies

There are various libel and other legal actions that have arisen
in the normal course of business and are now pending against the
Company. It is the opinion of management that final disposition
of such litigation will not have any material adverse effect on
the Companys financial position or results of operations.

41



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##### Table of Contents








|        |                                                                                        
|------- | ---------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants on Accounting
	 and Financial Disclosure.

There were no disagreements with accountants on accounting and
financial disclosure in the fiscal year ended December 26,
1999 and December 27, 1998.




PART III




Item 10.  Our Directors and Executive
Officers.

Incorporated herein by reference is the information set forth
under the captions Election of Directors, and
Compliance with Section 16(a) of the Securities
Exchange Act of 1934 of our Proxy Statement for the 2000
Annual Meeting of Shareholders. See Part I, Item 1 of
this report for information regarding our executive officers.




Item 11.  Executive Compensation.

Incorporated herein by reference is the information set forth
under the caption Compensation of Named Executive
Officers of our Proxy Statement for the 2000 Annual Meeting
 of Shareholders.




Item 12.  Security Ownership of Certain
Beneficial Owners and Management.

Incorporated herein by reference is the information set forth
under the captions Beneficial Security Ownership of
Directors, Nominees, and Executive Officers and
Beneficial Owners of 5% or More of Our Common Stock
of our Proxy Statement for the 2000 Annual Meeting of
Shareholders.




Item 13.  Certain Relationships and Related
Transactions.

None




PART IV




Item 14.  Exhibits, Financial Schedule and
Reports on Form 8-K.

(a)  List of Documents Included in this Report.

1.  Financial Statements.

See
 Item 8 above.



| |    |                                          
| | -- | -----------------------------------------
| | 2. | Supplemental Data and Financial Schedule.

See
 Item 14(c) below.



| |    |                                                                         
| | -- | ------------------------------------------------------------------------
| | 3. | Exhibits Required by Securities and Exchange Commission
	Regulation S-K.

(i)  The following exhibits are filed as a part of this
report:

|        |       |                         |  |                                                                                                                                               
|------- | ----- | ----------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|        | 10.20 |                         |  | Agreement and Plan of Merger by and among BrassRing, Inc.,
	Central Newspapers, Inc. and Career Services, Inc. dated as of
	February 10, 2000.
|        | 21    |                         |  | Subsidiaries of the Registrant                                                                                                                
|        | 23.1  |                         |  | Consent of PricewaterhouseCoopers LLP                                                                                                         
|        | 27    |                         |  | Financial Data Schedule                                                                                                                       

42



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##### Table of Contents





| |      |                                                                                                                                                      
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii) | The following exhibits are incorporated herein by reference to
	documents previously filed with the Securities and Exchange
	Commission as indicated:

|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                
|------- | ----- | ----------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|        | 2.1   |                         |  | Contract to buy and sell entire stock of McCormick and Company,
	Inc., dated as of January 10, 1996. (Filed March 13, 1996 with
	Form 8-K)                                                                                                                                                                                                                                                                                     
|        | 3.1   |                         |  | Amended and Restated Articles of Incorporation of Central
	Newspapers, Inc.                                                                                                                                                                                                                                                                                                                                                    
|        | 3.2   |                         |  | Amended and Restated Code of By-Laws of Central Newspapers, Inc.                                                                                                                                                                                                                                                                                                                                                               
|        | 4.1   |                         |  | Form of Certificate for Class A Common Stock (Filed August 
	10, 1989 with Form S-1 Registration Statement, No. 
	33-30436)                                                                                                                                                                                                                                                                                                    
|        | 4.2   |                         |  | Indenture between Indianapolis Newspapers, Inc. and the Indiana
	Trust Company, as trustee, dated as of December 1, 1948
	(Filed August 10, 1989 with Form S-1 Registration
	Statement, No. 33-30436)                                                                                                                                                                                                                          
|        | 10.1  |                         |  | Indenture creating the Eugene C. Pulliam Trust, dated as of
	December 9, 1965, as amended (Filed August 10, 1989
	with Form S-1 Registration Statement, No. 33-30436)                                                                                                                                                                                                                                                          
|        | 10.2  |                         |  | Newsprint Purchase Agreement between Ponderay Newsprint Company
	and Phoenix Newspapers, Inc., dated as of November  18, 1987
	 (Filed August 10, 1989 with Form S-1 Registration
	Statement, No. 33-30436)                                                                                                                                                                                                                    
|        | 10.3  |                         |  | The Phoenix Newspapers, Inc. Non-Qualified Supplemental
	Retirement Plan (Filed with Form 10-K for year ended
	December 30, 1990)                                                                                                                                                                                                                                                                                              
|        | 10.4  |                         |  | Ponderay Newsprint Company Partnership Agreement between Lake
	Superior Forest Products Inc. and Central Newsprint Company, Inc.
	 dated as of September 12, 1985 (Filed August  10, 1989
	 with Form S-1 Registration Statement, No.  33-30436)                                                                                                                                                                               
|        | 10.5  |                         |  | Amendment to Ponderay Newsprint Company Partnership Agreement
	between Lake Superior Forest Products Inc., Central Newsprint
	Company, Inc., Bradley Paper Company, Copley Northwest, Inc.,
	Puller Paper Company, Newsprint Ventures, Inc., Wingate Paper
	Company, Tribune Newsprint Company and Nimitz Paper Company,
	dated as of June 30, 1987 (Filed August 10, 1989 with
	Form S-1 Registration Statement, No. 33-30436)
|        | 10.6  |                         |  | Guarantee by Central Newspapers, Inc. dated as of November 
	18, 1987 (Filed August 10, 1989 with Form S-1
	Registration Statement, No. 33-30436)*                                                                                                                                                                                                                                                                             
|        | 10.7  |                         |  | Form of Split Dollar Life Insurance Agreement for Executive
	Officers between the Registrant and Louis A. Weil, III,
	 Thomas K. MacGillivray and Eric S. Tooker (Filed with
	Form 10-K for year ended
	December 27, 1992)*                                                                                                                                                                                                    
|        | 10.8  |                         |  | Form of Split Dollar Life Insurance Agreement for Outside
	Directors between the Registrant and William A. Franke,
	Richard Snell and L. Ben Lytle (Filed with Form 10-K
	for year ended December 27, 1992)                                                                                                                                                                                                                    
|        | 10.9  |                         |  | Form of Death Benefit Only Insurance Plan Agreement between the
	Registrant and Frank E. Russell (Filed with Form 10-K
	for year ended December 27, 1992)*                                                                                                                                                                                                                                                                     
|        | 10.10 |                         |  | Central Newspapers, Inc. Unfunded Supplemental Retirement Plan
	(Filed with Form 10-K for the year ended December 25,
	1994)*                                                                                                                                                                                                                                                                                                  
|        | 10.11 |                         |  | Central Newspapers, Inc. Non-Qualified Savings Plan, as amended
	(Filed with Form 10-K for the year ended December  25,
	1994)*                                                                                                                                                                                                                                                                                                
|        | 10.12 |                         |  | Central Newspapers, Inc. Directors and Officers
	Charitable Award Program (Filed with Form 10-K for the year
	ended December 25, 1994)*                                                                                                                                                                                                                                                                                      
|        | 10.13 |                         |  | Termination Benefits Agreement dated as of February 23, 1996
	 between Central Newspapers, Inc. and Louis A. Weil, 
	III (Filed with Form 10-K for the year ended
	December 31, 1995)*                                                                                                                                                                                                                                         

43



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##### Table of Contents



|        |       |                         |  |                                                                                                                                                                                                                                                      
|------- | ----- | ----------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|        | 10.14 |                         |  | Amended and Restated Central Newspapers, Inc. Stock Compensation
	Plan (Filed with Form 10-K for the year ended
	December 29, 1996)                                                                                                                  
|        | 10.15 |                         |  | Stock Purchase Agreement by and between the Nina Mason Pulliam
	Charitable Trust and Central Newspapers, Inc., dated as of
	September, 21, 1998 incorporated by reference to
	Form 10-Q dated November 5, 1998                                       
|        | 10.16 |                         |  | Standstill and Option Agreement by and between the Nina Mason
	Pulliam Charitable Trust and Central Newspapers, Inc., dated as
	of September 21, 1998 incorporated by reference to
	Form 10-Q dated November 5, 1998                                 
|        | 10.17 |                         |  | Stock Purchase Agreement by and between the Nina Mason Pulliam
	Charitable Trust and Central Newspapers, Inc., dated as of
	November 13, 1998 incorporated by reference to Form 
	10-Q dated November 5, 1998                                        
|        | 10.18 |                         |  | Credit Agreement among Central Newspapers, Inc., The First
	National Bank of Chicago, Bank of Montreal, and Norwest Bank
	Minnesota dated as of November 10, 1998 (Filed with
	Form  10-K for the year ended December 27, 1998)                      
|        | 10.19 |                         |  | First Amendment to Credit Agreement among Central Newspapers,
	Inc., The First National Bank of Chicago, Bank of Montreal, and
	Norwest Bank of Minnesota dated as of November 16, 1998
	(Filed with Form 10-K for the year ended December 27,
	1998)




|  |                                                                                                  
|- | -------------------------------------------------------------------------------------------------
|* | Represents a contract, plan or arrangement providing for
	executive officer or director benefits.

(b)  Reports on Form 8-K.

None

(c)  Supplemental Data and Financial Schedule.

CENTRAL NEWSPAPERS, INC. AND SUBSIDIARIES

Valuation Accounts

|                                                        |  |                |       |            |  |            |       |            |  |           |  |  |  |   |        |   |  |   |       | 
|------------------------------------------------------- |  | -------------- | ----- | ---------- |  | ---------- | ----- | ---------- |  | --------- |  |  |  | - | ------ | - |  | - | ----- | 
|                                                        |  | Column A       |       | Column B   |  | Column C   |       | Column D   |  | Column E 
|                                                        |  |                |       |            |  |            |       |            |  |          
|                                                        |  | Additions      |       |            |  |            |       |            |  |          
|                                                        |  | Balance at     |       | Charged to |  | Charged to |       |            |  | Balance  
|                                                        |  | Beginning      |       | Costs and  |  | Other      |       |            |  | at End   
|                                                        |  | of Period      |       | Expenses   |  | Accounts   |       | Deductions |  | of Period
|                                                        |  |                |       |            |  |            |       |            |  |          
|                                                        |  |               
|                                                        |  | (In thousands)
|                                                       
|                                                       
|                                                       
|                                                       
|Year ended December 26, 1999 (52 weeks):                |  |                |       |            |  |            |       |            |  |           |  |  |  |   |        |   |  |   |       | 
|                                                       
|                                                       
|                                                       
|                                                       
|Provision for doubtful accounts and advertising refunds |  | $              | 2,602 |            |  | $          | 7,261 |            |  |           |  |  |  | $ | (6,558 | ) |  | $ | 3,305 | 
|                                                       
|                                                       
|                                                       
|                                                       
|Year ended December 27, 1998 (52 weeks):                |  |                |       |            |  |            |       |            |  |           |  |  |  |   |        |   |  |   |       | 
|                                                       
|                                                       
|                                                       
|                                                       
|Provision for doubtful accounts and advertising refunds |  | $              | 2,959 |            |  | $          | 8,157 |            |  |           |  |  |  | $ | (8,514 | ) |  | $ | 2,602 | 
|                                                       
|                                                       
|                                                       
|                                                       
|Year Ended December 28, 1997 (52 weeks):                |  |                |       |            |  |            |       |            |  |           |  |  |  |   |        |   |  |   |       | 
|                                                       
|                                                       
|                                                       
|                                                       
|Provision for doubtful accounts and advertising refunds |  | $              | 1,639 |            |  | $          | 8,193 |            |  |           |  |  |  | $ | (6,873 | ) |  | $ | 2,959 | 

44



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##### Table of Contents



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, the Registrant has
duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Phoenix,
state of Arizona, on this 14th day of March, 2000.



| |                         
| | ------------------------
| | CENTRAL NEWSPAPERS, INC.



| |     |                       
| | --- | ----------------------
| | By: | /s/ LOUIS A. WEIL, III

| |                                      
| | -------------------------------------
| |                                      
| | Chairman of the Board, President, and
| | Chief Executive Officer              

Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, this report has been signed by the following
persons on behalf of the Registrant and in the capacities
indicated on this 14th day of March, 2000.

|                                                 |  |                                                              
|------------------------------------------------ |  | -------------------------------------------------------------
|Signature                                        |  | Title                                                        
|                                                 |  |                                                              
|(1) Principal Executive Officer                  |  |                                                              
|/s/ LOUIS A. WEIL, IIILouis A. Weil, III         |  | Chairman of the Board, President, and Chief Executive Officer
|                                                
|(2) Principal Financial and Accounting Officer   |  |                                                              
|/s/ THOMAS K. MACGILLIVRAYThomas K. MacGillivray |  | Senior Vice President and Chief Financial Officer            
|                                                
|(3) Board of Directors                           |  |                                                              
|/s/ WILLIAM A. FRANKEWilliam A. Franke           |  | Director                                                     
|/s/ L. BEN LYTLEL. Ben Lytle                     |  | Director                                                     
|/s/ KATHRYN L. MUNROKathryn L. Munro             |  | Director                                                     
|/s/ MYRTA J. PULLIAMMyrta J. Pulliam             |  | Director                                                     
|/s/ FRANK E. RUSSELLFrank E. Russell             |  | Director                                                     
|/s/ RICHARD SNELLRichard Snell                   |  | Director                                                     

45



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REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT
SCHEDULE

To the Board of Directors



Our audits of the consolidated financial statements referred to
in our report dated January 28, 2000 included in this Annual
 Report on Form 10-K also included an audit of the financial
 statement schedule listed in Item 14(a)(2) of this
Form 10-K. In our opinion, this financial statement schedule
 presents fairly, in all material respects, the information set
forth therein when read in conjunction with the related
consolidated financial statements.

/s/ PRICEWATERHOUSECOOPERS LLP





46



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EXHIBIT INDEX

|        |      |                         |  |                                                                                                                                               
|------- | ---- | ----------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |                        
|Number  |      | Description of Document
|        |      |                        
|        | 10.2 | 0                       |  | Agreement and Plan of Merger by and among BrassRing, Inc.,
	Central Newspapers, Inc. and Career Services, Inc. dated as of
	February 10, 2000.
|       
|       
|       
|       
|        | 21   |                         |  | Subsidiaries of the Registrant                                                                                                                
|       
|       
|       
|       
|        | 23.1 |                         |  | Consent of PricewaterhouseCoopers LLP                                                                                                         
|       
|       
|       
|       
|        | 27   |                         |  | Financial Data Schedule