UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    Form 10-K

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

For the fiscal year ended December 31, 2000        Commission file number 1-7553

                               KNIGHT-RIDDER, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

     Florida 38-0723657                                  38-0723657
-----------------------------               ------------------------------------
(State or other jurisdiction)               (I.R.S. Employer Identification No.)

                   50 W. San Fernando St., San Jose, CA 95113
                   ------------------------------------------
                    (Address of principal executive offices)

                                 (408) 938-7700
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


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

     Title of each class               Name of each exchange on which registered
Common Stock, $.02 1/12 Par Value          New York Stock Exchange
                                           Frankfurt Stock Exchange
                                           Philadelphia Stock Exchange
                                           Chicago Stock Exchange
                                           Boston Stock Exchange
                                           Pacific Exchange
                                           Cincinnati Stock Exchange

           Securities registered pursuant to Section 12(g) of the Act:
                                      none

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

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

State the aggregate market value of the voting stock held by non-affiliates of
the registrant. (The aggregate market value is computed by reference to the
price at which the stock was sold as of March 20, 2001: $3,980,940,123.)

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date: March 20, 2001 - 73,851,611 one
class Common Stock, $.02 1/12 Par Value

                       DOCUMENTS INCORPORATED BY REFERENCE

(1)  Portions of Registrant's definitive Proxy Statement, in connection with the
     Annual Meeting of Shareholders to be held on April 24, 2001 are
     incorporated by reference into Part III.

<PAGE>

                      Table of Contents for 2000 Form 10-K

                                                                            Page

PART I

Item 1.    Business                                                           2
Item 2.    Properties                                                         5
Item 3.    Legal Proceedings                                                  5
Item 4.    Submission of Matters to a Vote of Security Holders                5

PART II

Item 5.    Market for Registrant's Common Equity and Related Stockholder
           Matters                                                            9
Item 6.    Selected Financial Data                                           10
Item 7.    Management's Discussion and Analysis of Financial Condition
           and Results of Operations                                         12

Item 7A.   Quantitative and Qualitative Disclosures About Market Risk        17

Item 8.    Financial Statements and Supplementary Data                       18

Item 9.    Changes in and Disagreements with Accountants on Accounting
           and Financial Disclosure                                          36


PART III

Item 10.   Directors and Executive Officers of the Registrant                36

Item 11.   Executive Compensation                                            36
Item 12.   Security Ownership of Certain Beneficial Owners and Management    36
Item 13.   Certain Relationships and Related Transactions                    36


PART IV

Item 14.   Exhibits, Financial Statement Schedules, and Reports on Form
           8-K                                                               37

SIGNATURES                                                                   39

SCHEDULES                                                                    41

EXHIBITS                                                                     41

<PAGE>

PART I

ITEM 1.  BUSINESS

                                   THE COMPANY

Knight-Ridder, Inc. was formed in 1974 by a merger between Knight Newspapers,
Inc. and Ridder Publications, Inc.

In 1903, Charles Landon Knight purchased the Akron Beacon Journal. Knight
Newspapers was founded by John S. Knight, who inherited the Beacon Journal from
his father in 1933. Ridder Publications was founded in 1892 when Herman Ridder
acquired the German-language StaatsZeitung in New York. Both groups flourished,
each taking its stock public in 1969. The merger created a company with
operations coast to coast.

Knight-Ridder, Inc., incorporated in Florida in 1976, is headquartered in San
Jose, California, and employs about 22,000 people.

NEWSPAPERS

Knight Ridder had 32 daily and 25 nondaily newspapers at the end of 2000.

Newspaper operating revenue is derived primarily from the sale of newspaper
advertising. Due to seasonal factors such as heavier retail selling during
Christmas and Easter, advertising income fluctuates significantly throughout the
year. Consecutive quarterly results are not uniform or comparable and are not
indicative of the results over an entire year.

Each of Knight Ridder's newspapers is operated on a substantially autonomous
basis by local management appointed by executive management in San Jose. Each
newspaper is free to manage its own news coverage, set its own editorial
policies and establish most business practices. Basic business policies,
however, are set by the corporate staff in San Jose. Editorial and quality
control assistance is also provided by the corporate staff.

Each newspaper is served by the company-owned news bureau in Washington, D.C.
Supplemental news, graphic and photographic services provided by Knight Ridder
Tribune Information Services ("KRT"), a partnership between Knight Ridder and
Tribune Co., include editorial material produced by all Knight Ridder
newspapers, by Knight Ridder's 15 foreign correspondents and by a number of
other newspapers. The supplemental news, graphic and photographic services are
distributed through another Knight Ridder and Tribune Co. partnership.

All of the company's newspapers compete for advertising and readers' time and
attention with broadcast, satellite and cable television, the Internet and other
computer services, radio, magazines, nondaily suburban newspapers, free
shoppers, billboards and direct mail. In some cases, the newspapers also compete
with other newspapers published in nearby cities and towns - particularly in
Miami, St. Paul and Fort Worth. In Detroit and Fort Wayne, Knight Ridder has
joint operating agreements with a second newspaper. The rest of Knight Ridder's
newspapers are the only daily and Sunday papers of general circulation published
in their communities.

The newspapers rely on local sales operations for local retail and classified
advertising. The larger papers are assisted by Newspapers First and by the
Newspaper National Network in obtaining national or general advertising.

The table below presents the relative percentage contributions by individual
papers to the company's overall operating revenue in 2000, 1999 and 1998. The
percentage contributions of each paper to operating revenue are not necessarily
indicative of contributions to operating profit.

<TABLE>
<CAPTION>
                                                                  2000     1999     1998
-----------------------------------------------------------------------------------------
Sources of Knight Ridder Newspaper Operating Revenue

<S>                                                               <C>      <C>      <C>
    The Philadelphia Inquirer and Philadelphia Daily News         18.3%    18.8%    18.8%
    The Miami Herald and el Nuevo Herald                          10.3     10.4     10.6
    San Jose Mercury News                                         10.3      9.5      9.3
    The Kansas City Star                                           8.6      8.5      8.8
    Fort Worth Star-Telegram                                       7.4      7.3      7.1
    The Charlotte Observer                                         5.8      6.1      6.0
    Contra Costa Newspapers                                        4.5      4.1      3.9
    Saint Paul Pioneer Press                                       3.8      4.0      4.0
    Akron Beacon Journal                                           3.2      3.3      3.3
    All other                                                     27.8     28.0     28.2
-----------------------------------------------------------------------------------------
                                                                 100.0%   100.0%   100.0%
-----------------------------------------------------------------------------------------
</TABLE>

                                       2

<PAGE>

NEWSPAPERS

Revenue figures discussed in this section are presented on a 52-week basis,
unless otherwise noted.

NEWSPRINT

Knight Ridder consumed approximately 761,700 metric tons of newsprint in 2000,
excluding Detroit (see page 25, Detroit Newspapers). Approximately 15.3% of the
company's total operating expenses during the year was for newsprint. Purchases
are made under long-term agreements with 15 newsprint producers. In 2000, Knight
Ridder purchased approximately 65% of its consumption from 15 mills in the
United States and 35% from 17 mills in Canada. Management believes that current
sources are more than adequate to meet current demands.

Approximately 81% of the newsprint consumed by the company contained some
recycled content; the average content of these rolls was 48.6% recycled fiber.
This translates into an overall recycled newsprint average of 39.4%.

Knight Ridder is a one-third partner with Cox Enterprises and Media General,
Inc., in SP Newsprint Co., formerly Southeast Paper Manufacturing Co ("SP"). It
is the fourth-largest newsprint manufacturing company in North America.

SP's mill in Dublin, Ga., produces more than 500,000 metric tons per year of
100% recycled-content newsprint. Its plant in Newberg, Ore., produces more than
363,000 metric tons per year of newsprint with at least 40% recycled content.

SP provides recycled-content newsprint to its owners and more than 200
publishers and commercial printers. Its SP Recycling Corp. subsidiary recycles
more than 1.2 million short tons of recovered material annually.

Knight Ridder also owns a 13.5% equity share of Ponderay Newsprint Company in
Usk, Wash., which produced more than 242,000 metric tons of newsprint in 2000.

Knight Ridder expects that its purchases from these two newsprint companies will
represent approximately 40% of its annual consumption for 2001, providing an
important hedge against price volatility and a secure source of supply.

TECHNOLOGY

The focus in 2000 was on defining the vision for technology in the areas of
circulation, advertising, marketing and data warehousing. Strategic planning and
organizational structure were developed for the corporate Technology Department
to enable the company to quickly adapt new technology and reap the associated
benefits.

The Miami Herald and Fort Worth Star-Telegram installed data warehousing systems
that put significantly improved information in the hands of the newspapers'
marketing people.

GENERAL ADVERTISING SALES

Knight Ridder newspapers depend most heavily on two agents for the sale of
general advertising.

Newspapers First, a national advertising sales cooperative, is the primary sales
representative for many of Knight Ridder's newspapers, many of the other leading
newspaper groups and several leading independents. It acts as an interface to
national advertisers across the country.

Newspaper National Network, Knight Ridder's second general sales agent, was
established in 1994 to focus national selling on behalf of the newspaper
industry. It represents all Knight Ridder newspapers and more than 500 others.
Like Newspapers First, it offers "one-stop shopping" and "one-order, one-bill."

KNIGHT RIDDER/TRIBUNE

KRT, a joint venture of Knight Ridder and Tribune Co., offers stories, graphics,
illustrations, photos and paginated pages for print publishers; news animations
for TV broadcasters; and Web packages for online publishers.

In 2000, KRT improved its profitability by improving margins for its business,
general news and photo services and by reducing the cost of delivering its
products through the Web.

              THE PHILADELPHIA INQUIRER AND PHILADELPHIA DAILY NEWS

Philadelphia Newspapers, Inc. (PNI), publishes two of the nation's most
respected newspapers: The Philadelphia Inquirer and the Philadelphia Daily News.
They are sold in nine counties in Pennsylvania and southern New Jersey. The

                                       3

<PAGE>

weekly net cumulative penetration of the newspapers is 63% of all adults in the
region. Together, the papers have won 20 Pulitzer Prizes. Operating revenue in
2000 was $604.3 million.

The Philadelphia Primary Metropolitan Statistical Area (PMSA) population is
expected to grow 0.3% between 2000 and 2005; the U.S. average is 4.5%. In 2000,
Philadelphia had income per capita 14.6% above the U.S. average; by 2005 it is
projected to be 15.1% above.

                        THE MIAMI HERALD/EL NUEVO HERALD

The Miami Herald, Florida's largest newspaper. El Nuevo Herald is America's
premier newspaper in Spanish. Both are published by the Miami Herald Publishing
Company (MHPC). The Miami Herald is sold in South Florida and in 28 Latin
American and Caribbean countries, primarily through its International Edition.
El Nuevo Herald serves the growing Spanish-speaking population of Miami-Dade and
Broward counties. Operating revenue in 2000 was $310.2 million for The Miami
Herald and $27.8 million for the el Nuevo Herald.

The Miami-Fort Lauderdale combined market population is expected to grow 6.1%
between 2000 and 2005. In 2000, the area had income per capita 10.8% below the
U.S. average; by 2005 it is projected to be 17.9% below.

                              SAN JOSE MERCURY NEWS

The San Jose Mercury News, the newspaper of Silicon Valley, serves one of the
most prosperous markets in the nation. Circulation is concentrated in Santa
Clara County, which encompasses San Jose - California's third-largest city - and
surrounding communities. The region is the world leader in high technology and
ranks fourth nationally in exports. Operating revenue in 2000 was $341.4
million.

The population of the San Jose Primary Metropolitan Statistical Area is expected
to grow 5.8% between 2000 and 2005. In 2000, San Jose had income per capita that
was 54.8% above the U.S. average; by 2005 it is projected to be 58.4% above the
U.S. average.

                              THE KANSAS CITY STAR

The Kansas City Star serves the Kansas City metropolitan area. The Star's
primary market consists of 11 counties in Kansas and Missouri. Operating revenue
in 2000 was $284.4 million.

The Kansas City Metropolitan Statistical Area population is expected to grow
4.5% between 2000 and 2005, equivalent to the projected growth for the United
States. Kansas City in 2000 had income per capita 7.1% above the U.S. average;
by 2005 it is projected to be 8.7% above the U.S. average.

                            FORT WORTH STAR-TELEGRAM

The Star-Telegram serves the western portion of the Dallas/Fort Worth market.
The four-county Fort Worth/Arlington market is the third largest in Texas and is
projected to be the nation's fifth-fastest-growing major metropolitan area over
the next five years. Operating revenue in 2000 was $242.9 million.

Fort Worth/Arlington's population is expected to grow 11.4% between 2000 and
2005, compared with 4.5% for the United States. In 2000, Fort Worth/Arlington
had income per capita 8.2% above the U.S. average; by 2005 it is projected to be
10.1% above the U.S. average.

                               DETROIT FREE PRESS

The Detroit Free Press, Michigan's largest daily newspaper, is sold primarily in
the six-county area surrounding Detroit. It is sold throughout the state, in
Windsor, Ontario, and in Toledo, Ohio.

The Detroit Free Press is published in combination with The Detroit News by
Detroit Newspapers (DN), a joint operating agency formed in 1989 to combine the
business operations of the two partners, Knight Ridder and Gannett Co. The
profits (or losses) are split equally. The Free Press, owned by Knight Ridder,
is a morning paper; The News, owned by Gannett, is an evening paper. On weekends
and holidays, they publish combined editions. The Sunday edition ranks seventh
in circulation in the nation.

The population of the Detroit Primary Metropolitan Statistical Area is expected
to grow 0.7% between 2000 and 2005. Detroit in 2000 had per capita income 7.2%
above the U.S. average; in 2005 it is projected to be 6.0% above the U.S.
average.

                                       4

<PAGE>

                             THE CHARLOTTE OBSERVER

The Charlotte Observer, the largest-circulation daily between Washington D.C.,
and Atlanta, is sold primarily in a 15-county region across the two Carolinas.
Operating revenue in 2000 was $192.2 million.

Population in the Charlotte Metropolitan Statistical Area is projected to grow
7.1% between 2000 and 2005. Charlotte in 2000 had per capita income 10.4% in
2005 it is projected to be 15.0% above the U.S. average.

                                ONLINE ACTIVITIES

During the first quarter of 2000, the company consolidated all its Internet
operations under a new business unit, KnightRidder.com. Previously, Knight
Ridder's Internet activities were reported and managed as a part of the
company's newspaper operations. KnightRidder.com controls all of Knight Ridder's
online efforts, including the Web sites previously operated by the newspapers.
KnightRidder.com operates and manages the Real Cities Network, which consists of
all Knight Ridder Web sites and those of several other media affiliates.

ITEM 2.  PROPERTIES

Knight Ridder has daily newspaper facilities in 28 markets situated in 17
states. These facilities vary in size from 8,000 square feet at The Buyer's
Guide in Warner Robins, Ga., to 2.9 million square feet in Philadelphia. In
total, they occupy about 8.1 million square feet. Approximately 1.7 million of
the total square footage is leased from others. The company owns substantially
all of its production equipment, although certain office equipment is leased.
The company also owns land for future expansion in Columbus and Macon, Ga., and
Detroit, MI.

Knight Ridder properties are maintained in excellent condition and are suitable
for current and foreseeable operations. During the three years ended December
31, 2000, the company spent approximately $320 million for additions to
property, plant and equipment.

ITEM 3.  LEGAL PROCEEDINGS

On July 13, 1995, six unions struck the Detroit Free Press, The Detroit News and
Detroit Newspapers (DN), which operates both newspapers. Subsequently, the
unions filed numerous unfair labor practice charges against the newspapers and
DN. In June 1997, after a long trial, a National Labor Relations Board (NLRB)
administrative judge ruled that the strike was caused by the unfair labor
practices of DN and The Detroit News and ordered that DN and the newspapers
reinstate all strikers, displacing permanent replacements if necessary. DN and
the newspapers appealed the decision to the NLRB.

On Aug. 27, 1998, the NLRB affirmed certain unfair labor practice findings
against The Detroit News and DN and reversed certain findings of unfair labor
practices against DN. DN and the newspapers filed a motion to reconsider with
the NLRB, which was denied on March 4, 1999. The unions and DN filed appeals to
the U.S. Court of Appeals for the District of Columbia Circuit..

The U.S. Court of Appeals, on July 7, 2000, unanimously reversed the NLRB,
holding that the strike was an economic strike. Thus, the NLRB order to
reinstate and pay back pay to the strikers was also set aside. The time to
appeal has expired and no appeal was filed.

Various libel and copyright infringement actions and environmental and other
legal proceedings that have arisen in the ordinary course of business are
pending against the company and its subsidiaries. In the opinion of management,
the ultimate liability to the company and its subsidiaries as a result of all
legal proceedings will not be material to its financial position or results of
operations on a consolidated basis.

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

No matters were submitted to the vote of security holders of Knight-Ridder, Inc.
during the three months ended December 31, 2000.

EXECUTIVE OFFICERS OF KNIGHT RIDDER

MANAGEMENT COMMITTEE*

JERRY CEPPOS, 54
Vice president/news since 1999. Oversees news operations of Knight Ridder's 32
daily newspapers; responsible for the Knight Ridder Washington Bureau and the
content of Knight Ridder/Tribune Information Services. Served as vice president
and executive editor, San Jose Mercury News, 1995 to 1999; managing editor 1983
to 1995; various editing positions 1981 to 1983. B.S., journalism, University of
Maryland, 1969.

MARY JEAN CONNORS, 48
Senior vice president/human resources since 1996; vice president/human resources
1989 to 1996. Oversees human resources for Knight Ridder; manages annual
strategy and goal-setting. Served as vice president/human resources,
Philadelphia Newspapers, Inc., 1988 to 1989; assistant to the senior vice
president/news, Knight Ridder, 1988; assistant managing editor/personnel, The
Miami Herald, 1985 to 1988. Stanford Executive Program, Stanford University,
1999; B.A., English, Miami University in Oxford, Ohio, 1973.

                                       5

<PAGE>

FRANK MCCOMAS, 55
Senior vice president/operations since 1996; vice president/operations 1995 to
1996. Oversees operations for newspapers in Akron, Bradenton, Charlotte,
Columbia, Columbus, Detroit, Fort Wayne, Lexington, Macon, Miami, Myrtle Beach,
Tallahassee and Warner Robins; publishers report to him. Served as publisher,
The (Columbia) State, 1988 to 1995; publisher, Bradenton Herald, 1980 to 1988.
Advanced Management Program, Harvard Business School, 1994; B.B.A., business
administration, Kent State University, 1968.

JEAN H. MORDO, 56
Senior vice president and chief financial officer of the company since March 7,
2001. Previously, he served as group executive vice president of Scotts Company,
Inc. from 1998 to 2000, and as executive vice president/chief financial officer
from 1997 to 1999. From 1992 through December 1996, he served as Senior Vice
President and Chief Financial Officer of Pratt and Whitney Aircraft, a division
of United Technologies Corporation.

P. ANTHONY RIDDER, 60
Chairman of the Management Committee since 1995; Knight Ridder chairman and CEO
since 1995. Served as president 1989 to 1995; president of the Newspaper
Division 1986 to 1995. Served as publisher, San Jose Mercury News, 1977 to 1986;
general manager 1975 to 1977. B.A., economics, University of Michigan, 1962.

STEVEN B. ROSSI, 51
President/Newspaper Division since February 2001. Responsible for all Knight
Ridder newspaper operations; oversees newspapers in Contra Costa, Fort Worth,
Kansas City, Olathe, Philadelphia, St. Paul, San Jose and Wichita; publishers
report to him. Served as senior vice president/operations Knight Ridder, 1998 to
2001; executive vice president and general manager, Philadelphia Newspapers,
Inc., 1992 to 1998. M.B.A., The Wharton School of the University of
Pennsylvania, 1974; B.A., economics, Ursinus College, 1971.

GORDON YAMATE, 45
Vice president and general counsel since September 2000. Manages companywide
legal affairs. Served as vice president, general counsel and corporate secretary
at Liberate Technologies, 1999 to 2000; partner in the law firm of McCutchen,
Doyle, Brown & Enersen, LLP, in Palo Alto and San Jose, 1988 to 1999; associate
1983 to 1988. J.D., Santa Clara University School of Law, 1980; B.A., economics
and political science, University of California, Davis, 1977.


OFFICERS*

MARSHALL W. ANSTANDIG, 52
Vice president/senior labor and employment counsel since 1998. Advises and
assists Knight Ridder and its companies on legal matters related to labor
relations and employment law. Served as partner in the law firm of Brown & Bain,
P.A., 1996 to 1998; managing partner in law firm of Bryan Cave in Phoenix, 1990
to 1996. J.D., Detroit College of Law, Michigan State University, 1974; B.A.,
political science, Hope College, 1971.

ARDEN DICKEY, 47
Assistant vice president/circulation and regional call centers since April 2000.
Oversees circulation operations at all newspapers and directly manages Knight
Ridder's two regional customer service centers. Served as vice
president/circulation, Miami Herald Publishing Company, 1992 to 2000;
circulation director, Knight Ridder, 1997; various circulation roles, Miami
Herald Publishing Company, 1971 to 1992. M.B.A., University of Miami, 1987;
B.B.A., corporate management, Florida Atlantic University, 1985.

GARY R. EFFREN, 44
Vice president/controller since 1995. Responsible for all financial reporting,
corporate accounting, risk management and financial aspects of benefit plans.
Served as assistant vice president/assistant treasurer 1993 to 1995; assistant
to the vice president/finance and treasurer 1989 to 1993; director of corporate
accounting 1986 to 1989; business manager, Viewdata Corporation of America, 1984
to 1986. M.B.A., University of Miami, 1989; B.S., accounting, Rider College,
1978; CPA.

VIRGINIA DODGE FIELDER, 52
Vice president/research since 1989. Responsible for market research for Knight
Ridder, including its annual reader, advertiser and Internet surveys; consults
with the newspapers on local research projects. Served as vice president/news
and circulation research 1986 to 1989; director/news and circulation research
1981 to 1985; editorial research manager, Chicago Sun-Times, 1979 to 1981.
Ph.D., mass communications, Indiana University, 1976; M.A., journalism, Indiana
University, 1974; B.A., psychology, Transylvania University, 1970.

                                       6

<PAGE>

DAN FINNIGAN, 37
Vice president since 1999 and president of KnightRidder.com. Heads the company's
Internet operations and helps lead the company's interactive strategies and
investments. Served as president and CEO, SBC Interactive, 1998 to 1999; held
various positions at SBC Communications, Inc., 1995 to 1998; group manager for
product development, ESS Ventures, LLC, 1994 to 1995. M.B.A., finance and
marketing, The Wharton School of the University of Pennsylvania, 1993; B.A.,
communication studies, University of California, Los Angeles, 1984.

STEVE HANNAH, 42
Vice president/technology since April 2000. Responsible for creating the vision
for technology while setting the standards in implementing new technology.
Served as vice president/technology and Chief Information Officer, Gazette
Communications, 1996 to 2000; director of management information systems 1993 to
1996; computer services manager, Journal/Sentinel, Inc., 1986 to 1993. B.A.,
business administration, Eastern Michigan University, 1982.

LYNDA HAUSWIRTH, 38
Assistant vice president/taxation since 1998. Responsible for all tax-related
items, including income, sales/use and property taxes, tax planning and
research; assists individual companies with audits and filing requirements.
Served as senior tax manager, Ernst & Young LLP, 1996 to 1998; senior associate,
BDO Seidman, 1995 to 1996; various other tax positions 1987 to 1995. B.S.,
business administration/accounting, University of Vermont, 1983; CPA.

POLK LAFFOON IV, 55
Vice president/corporate relations since 1994 and corporate secretary since
1999. Oversees the investor relations, public and media relations and corporate
secretary functions, including contact with the financial community. Served as
assistant to the president 1992 to 1994; assistant circulation
director/distribution, The Miami Herald, 1991 to 1992. Served as director and
vice president/investor relations, Taft Broadcasting Co., 1982 to 1987. M.B.A.,
marketing, The Wharton School of the University of Pennsylvania, 1970; B.A.,
English, Yale, 1967.

ADRIENNE LILLY, 30
Assistant vice president/assistant general counsel since February 2001;
assistant general counsel since 1999. Assists in the management of companywide
legal affairs. Served as corporate, commercial and securities lawyer at
Fredrikson & Byron, P.A., in Minneapolis, 1995 to 1999. J.D., University of
California at Berkeley, Boalt Hall School of Law, 1995; B.A., history,
University of Notre Dame, 1992.

MARIO R. LOPEZ, 61
Assistant vice president/internal audit since 1993. Oversees the internal audit
function for Knight Ridder and its subsidiary companies; reports directly to the
Audit Committee of the Knight Ridder Board of Directors on these matters. Served
as partner, Deloitte & Touche, 1978 to 1993. B.S., business administration,
Saint Joseph's University, 1962; CPA.

LARRY D. MARBERT, 47
Vice president/production and facilities since 1998. Oversees capital
investments in facilities and manufacturing systems; tracks and promotes
advances in newspaper production technology and acts as an internal consultant.
Served as vice president/technology, Knight Ridder, 1994 to 1998; senior vice
president/operations, Philadelphia Newspapers, Inc., 1991 to 1994; vice
president/operations research and planning 1988 to 1991; vice
president/production 1986 to 1988. M.S., management science, Auburn University,
1977; B.S., University of North Carolina, business administration, 1976.

JACQUI LOVE MARSHALL, 52
Vice president/human resources/diversity and development since October 2000.
Oversees recruiting, corporate learning and diversity. Served as assistant vice
president/human resources 1996 to 2000; vice president/ human resources, Miami
Herald Publishing Company, 1993 to 1996; various roles, The Washington Post,
1986 to 1993. Ed.M., educational counseling, Harvard University, 1970; B.A.,
education, Trenton State College, 1969.

LARRY OLMSTEAD, 43
Assistant vice president/news since February 2001. Oversees news operations of
some daily newspapers; assists with recruiting and some newsroom functions.
Served as managing editor, The Miami Herald, 1996 to 2001; Knight Ridder
assistant vice president/human resources/diversity 1993 to 1996; special
projects editor, The New York Times, 1993. Attended George Washington
University.

MIKE ROGERS, 49
Vice president/marketing since 1999. Oversees planning and implementation of
strategic marketing initiatives, including sales, branding efforts, reader and
advertising research, new product initiatives and database marketing across the
company. Served in various capacities, including president and publisher of
Computerworld, Inc., and executive vice president of International Data Group
Marketing Services Division in Boston, 1992 to 1999; senior vice president,
Ammirati Puris Lintas advertising agency in New York, 1986 to 1992. M.B.A.,
marketing, University of Denver, 1978; B.S., management, New Mexico State
University, 1973.

                                       7

<PAGE>

ALAN G. SILVERGLAT, 54
Vice president/treasurer since 1995. Manages the merger and acquisition process
and is responsible for taxation, capital structure of the company and related
debt ratings. Also assists in the review and oversight of minority investments.
Served as senior vice president/finance and planning for Knight Ridder Business
Information Services, 1983 to 1995. B.S., business administration, University of
Missouri, 1968; CPA.

STEVEN J. STEIN, 47
Vice president/human resources/compensation and benefits since October 2000.
Oversees benefits, compensation and human resources information systems, and
works with companies on succession planning, organizational development and
employee research activities. Served as assistant vice president/human resources
1995 to 2000; vice president/human resources for Knight Ridder Business
Information Services, 1989 to 1995. Ph.D., psychology, University of Florida,
1981; B.A., psychology, George Washington University, 1974.

STEVE STONE, 48
Assistant vice president since March 2000. Leads the Knight Ridder Shared
Services Center (SSC), which consolidates the routine financial transactions,
general ledger, accounts payable, fixed assets, purchasing and vendor management
activities of all Knight Ridder companies. A member of the group that created
the SSC, he served as general manager 1995 to 2000; vice president/finance and
CFO, The Charlotte Observer, 1992 to 1995; director/finance and controller, The
Miami Herald, 1987 to 1992. B.A., business administration, Southwestern College,
1974.

JOSEPH (CHIP) VISCI, 47
Vice president/operations since March 2000 and assistant to the chairman and CEO
since 1996. Oversees operations for newspapers in Aberdeen, Belleville, Biloxi,
Duluth, Grand Forks, Monterey, San Luis Obispo, State College and Wilkes-Barre;
publishers report to him. Served as managing editor, Detroit Free Press, 1996,
and in various newsroom positions 1978 to 1996. M.A., journalism, Ohio State
University, 1977; B.A., journalism, Ohio Wesleyan University, 1975.


*Ages as of February 1, 2001

                                       8

<PAGE>

PART II

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

                                    KRI STOCK

Knight Ridder common stock is listed on the New York Stock Exchange and the
Frankfurt Stock Exchange under the symbol KRI.

The stock is also traded on exchanges in Philadelphia, Chicago, Boston, San
Francisco, Los Angeles and Cincinnati and through the Intermarket Trading
System. Options are traded on the Philadelphia Exchange.

The company's 73.9 million shares outstanding at March 20, 2001 were held in all
50 states by 9,860 shareholders of record.

                          MARKET PRICE OF COMMON STOCK

The last closing price of the company's common stock prior to the preparation of
this report was $54.45 on March 20, 2001.

The average stock trading volume of shares per day for the years 2000, 1999 and
1998 was 398,000, 417,000 and 242,000, respectively. The following table
presents the high and low sales price of the company's common stock by fiscal
quarter for the two most recent fiscal years:

                             2000                                1999
                    ----------------------             -----------------------
Quarter               High           Low                 High           Low
-------               ----           ---                 ----           ---
1st                 59 13/16       44 3/16             53 1/8         46
2nd                 55 7/8         45 7/8              56 15/16       48 7/16
3rd                 56 11/16       49 3/8              56 9/16        52 11/16
4th                 57 5/8         44 1/8              65             52 5/8


                            TREASURY STOCK PURCHASES

The table below is a summary of treasury stock purchases since 1989:

                                 Shares                Cost
                              Purchased              (000S)
                              ---------              ------

2000                          9,048,895            $464,835
1999                          3,703,817             210,141
1998                          4,725,000             255,533
1997                         13,824,300             643,375
1996                          6,219,100             221,768
1995                         11,508,600             319,363
1994                          5,044,600             136,977
1993                          1,500,000              40,693
1992                                  -                   -
1991                                  -                   -
1990                          5,325,400             129,909
1989                          5,522,200             131,885


                                    Dividends

Common stock dividend history and policy appears in Item 6, "11 Year Financial
Highlights" and Item 8, "Financial Statements and Supplementary Data", Note 6 to
the consolidated financial statements.

                                       9

<PAGE>

ITEM 6.  SELECTED FINANCIAL HIGHLIGHTS

11-YEAR FINANCIAL HIGHLIGHTS

The following information was compiled from the consolidated financial
statements of Knight Ridder and its subsidiaries. All years reflect the
reclassification of DN's results in accordance with EITF 00-1. In addition,
certain elements of other revenue were reclassified to advertising revenue to
conform with industry practice. The consolidated financial statements and
related notes and discussions for the year ended December 31, 2000, (pages 18
through 34) should be read to obtain a better understanding of this information.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                                          Compound Growth Rate        Dec. 31          Dec. 26          Dec. 27
(In Thousands, Except Per Share Data and Ratios)           5-Year      10-Year           2000             1999             1998
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>        <C>       <C>               <C>              <C>
SUMMARY OF OPERATIONS
Operating Revenue
  Advertising                                             10.3%       5.9%     $ 2,507,836       $ 2,353,520      $ 2,222,597
  Circulation                                              3.3        4.0          523,856           525,686          533,340
  Other                                                   40.6       21.1          180,075           154,569          139,617
----------------------------------------------------                         ------------------------------------------------------
     Total Operating Revenue                               9.8        6.0        3,211,767         3,033,775        2,895,554
----------------------------------------------------                         ------------------------------------------------------
Operating Costs
  Labor, newsprint and other operating costs               6.8        5.2        2,355,398         2,229,410        2,209,819
  Depreciation and amortization                           15.3        8.0          187,597           182,943          181,112
----------------------------------------------------                         ------------------------------------------------------
     Total Operating Costs                                 7.3        5.4        2,542,995         2,412,353        2,390,931
----------------------------------------------------                         ------------------------------------------------------
Operating Income                                          24.0        9.0          668,772           621,422          504,623
  Interest expense                                        14.4        5.0         (116,652)          (97,444)        (105,936)
  Other, net                                              13.8        4.7          (26,830)           44,037          109,229
  Income taxes, net                                       23.7        9.1         (210,927)         (228,076)        (202,285)
----------------------------------------------------                         ------------------------------------------------------
Income from continuing operations                         23.4        8.4          314,363           339,939          305,631
Discontinued BIS operations(1)                                                                                         60,226
Cumulative effect of changes in accounting
principles(2)
-----------------------------------------------------------------------------------------------------------------------------------
Net Income                                                14.5        7.7      $   314,363       $   339,939      $   365,857
===================================================================================================================================
Operating income percentage (profit margin)                                           20.8%             20.5%            17.4%
-----------------------------------------------------------------------------------------------------------------------------------
SHARE DATA
Basic weighted-average number of shares                                             75,370            80,025           78,882
Diluted weighted-average number of shares                                           89,105            97,460           98,176
Earnings per share
  Basic:   Continuing operations                          29.4       11.1      $      4.02       $      4.07      $      3.70
           Discontinued BIS operations(1)                                                                                0.77
           Cumulative effect of changes in accounting
           principles(2)
           Net income                                     20.1       10.4             4.02              4.07             4.47
  Diluted: Continuing operations                          26.3        9.8      $      3.53       $      3.49      $      3.11
           Discontinued BIS operations(1)                                                                                0.62
           Cumulative effect of changes in accounting
           principles(2)
           Net income                                     17.1        9.2             3.53              3.49             3.73
Dividends declared per common share(3)                     4.5        3.2             0.92              0.89             0.80
Common stock price: High                                                                59 13/16          65               59 5/8
                    Low                                                                 44 1/8            46               40 1/2
                    Close                                                               56 7/8            58 15/16         50 13/16
Shareholders' equity per common share                      9.6        7.2      $     18.09       $     19.07      $     17.33
Price/earnings ratio(4)                                                               16.1              16.9             13.6
Adjusted price/earnings ratio(5)                                                      15.4              17.9             19.3
-----------------------------------------------------------------------------------------------------------------------------------
OTHER FINANCIAL DATA
Treasury Stock Purchases:  Number of shares                                          9,049             3,704            4,725
                           Cost                                                $   464,835       $   210,141      $   255,533
Payment of cash dividends                                                           81,002            85,526           77,152
Ratio of earnings to fixed charges(6)                                                  5.6               6.2              5.3
At year end
  Total assets                                                                 $ 4,243,526       $ 4,192,334      $ 4,257,097
  Long-term debt (excluding current maturities)                                  1,591,910         1,260,814        1,329,001
  Total debt                                                                     1,672,272         1,300,754        1,527,278
  Shareholders' equity                                                           1,541,470         1,780,684        1,662,731
  Return on average shareholders' equity(7)                                           18.3%             19.7%            22.8%
  Current ratio                                                                        1.1               1.1              0.8
  Total debt/total capital ratio                                                      52.0%             42.2%            47.9%
</TABLE>

(1)  Results of operations of the company's Business Information Services (BIS)
     Division (discontinued in 1997) and the gains on the sales of BIS companies
     are presented as "discontinued BIS operations."
(2)  For 1995, the cumulative effect of change in accounting principle relates
     to the implementation of FAS 116-Accounting for Contributions Received and
     Contributions Made. For 1992, the cumulative effect of change in accounting
     principle relates to the implementation of FAS 109-Accounting for Income
     Taxes and FAS 106-Accounting for Postretirement Benefits Other Than
     Pensions.
(3)  On January 28, 1997, the Board of Directors declared a $.20 per share
     dividend. The quarterly dividend previously paid in January was paid on
     February 24, 1997, to shareholders of record as of the close of business on
     February 12, 1997.
(4)  Price/earnings ratio is computed by dividing closing market price by
     diluted earnings per share.

                                       10

<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
  Dec. 28         Dec. 29         Dec. 31         Dec. 25         Dec. 26         Dec. 27         Dec. 29         Dec. 30
    1997            1996            1995            1994            1993            1992            1991            1990
---------------------------------------------------------------------------------------------------------------------------
<S>             <C>             <C>             <C>             <C>             <C>             <C>             <C>
$ 2,060,772     $ 1,659,336     $ 1,534,761     $ 1,414,343     $ 1,324,312     $ 1,294,944     $ 1,284,748     $ 1,409,149
    521,135         457,306         444,506         426,799         418,726         406,388         386,363         355,174
    103,515          65,913          32,789          91,818          69,689          47,747          35,100          26,471
---------------------------------------------------------------------------------------------------------------------------
  2,685,422       2,182,555       2,012,056       1,932,960       1,812,727       1,749,079       1,706,211       1,790,794
---------------------------------------------------------------------------------------------------------------------------
  2,029,587       1,735,639       1,691,655       1,534,496       1,460,563       1,408,480       1,401,750       1,420,426
    149,802         113,778          92,134          90,310          90,712          84,144          81,375          86,946
---------------------------------------------------------------------------------------------------------------------------
  2,179,389       1,849,417       1,783,789       1,624,806       1,551,275       1,492,624       1,483,125       1,507,372
---------------------------------------------------------------------------------------------------------------------------
    506,033         333,138         228,267         308,154         261,452         256,455         223,086         283,422
   (102,662)        (73,137)        (59,512)        (44,216)        (44,403)        (52,358)        (68,806)        (71,784)
    290,481          50,208          14,062           1,799           2,987          13,855          35,820          17,007
   (297,348)       (124,829)        (72,861)       (106,493)        (83,281)        (82,496)        (67,965)        (88,076)
---------------------------------------------------------------------------------------------------------------------------
    396,504         185,380         109,956         159,244         136,755         135,456         122,135         140,569
     16,511          82,493          57,426          11,656          11,334          10,630           9,933           8,476
                                     (7,320)                                       (105,200)
---------------------------------------------------------------------------------------------------------------------------
$   413,015     $   267,873     $   160,062     $   170,900     $   148,089     $    40,886     $   132,068     $   149,045
===========================================================================================================================
       18.8%           15.3%           11.3%           15.9%           14.4%           14.7%           13.1%           15.8%
---------------------------------------------------------------------------------------------------------------------------
     88,475          96,021          99,451         107,888         109,702         108,948         102,586         100,098
    101,314          97,420         100,196         108,551         110,663         110,356         103,594         101,366
$      4.40     $      1.93     $      1.11     $      1.48     $      1.25     $      1.24     $      1.19     $      1.40
       0.19            0.86            0.57            0.10            0.10            0.11            0.10            0.09
                                      (0.07)                                          (0.97)
       4.59            2.79            1.61            1.58            1.35            0.38            1.29            1.49
$      3.91     $      1.90     $      1.10     $      1.47     $      1.24     $      1.22     $      1.18     $      1.39
       0.17            0.85            0.57            0.10            0.10            0.10            0.09            0.08
                                      (0.07)                                          (0.95)
       4.08            2.75            1.60            1.57            1.34            0.37            1.27            1.47
       0.80            0.58 1/2        0.74            0.73            0.70            0.70            0.70            0.67
         57 1/8          42              33 5/16         30 1/2          32 1/2          32 1/16         28 3/4          29
         35 3/4          29 7/8          25 1/8          23 1/4          25 5/16         25 3/8          21 7/8          18 1/2
         50 3/16         39 1/4          31 1/4          25 7/16         29 11/16        29 1/16         25 3/8          22 15/16
$     15.65     $     12.12     $     11.43     $     11.58     $     11.33     $     10.75     $     10.72     $      9.05
       12.3            14.3            19.5            16.2            22.2            78.5            20.0            15.6
       21.8            21.6            28.4            17.3            23.9            23.8            21.5            16.5
---------------------------------------------------------------------------------------------------------------------------
     13,824           6,219          11,509           5,045           1,500                                           5,325
$   643,375     $   221,768     $   319,363     $   136,977     $    40,693     $        --     $        --     $   129,909
     78,335          74,262          74,377          77,942          76,787          75,992          71,087          66,422
        7.1             4.0             3.2             5.2             4.4             3.8             2.8             3.3
$ 4,355,142     $ 2,860,907     $ 2,966,321     $ 2,409,239     $ 2,399,067     $ 2,431,307     $ 2,305,731     $ 2,244,919
  1,599,133         771,335       1,000,721         411,504         410,388         495,941         556,797         803,914
  1,668,830         821,335       1,013,850         411,504         451,075         560,245         606,840         823,958
  1,551,673       1,131,508       1,110,970       1,224,654       1,243,169       1,181,812       1,148,620         894,913
       30.8%           23.9%           14.3%           13.9%           12.2%           12.0%           12.9%           16.5%
        1.1             1.0             1.1             1.0             1.0             1.1             1.1             1.2
       51.8%           42.1%           47.7%           25.2%           26.6%           32.2%           34.6%           47.9%
</TABLE>

(5)  Adjusted price/earnings ratio is computed by dividing closing market price
     by diluted earnings per share from continuing operations. For comparability
     purposes, diluted earnings per share from continuing operations was
     adjusted to exclude relocation and severance costs and gains and losses on
     sales, exchange and write-down of investments.
(6)  The ratio of earnings to fixed charges is computed by dividing earnings (as
     adjusted for fixed charges and undistributed equity income from
     unconsolidated subsidiaries) by fixed charges for the period. Fixed charges
     include the interest on debt (before capitalized interest), the interest
     component of rental expense, and the proportionate share of interest
     expense on guaranteed debt of certain equity-method investees and on debt
     of 50%-owned companies.
(7)  Return on average shareholders' equity is computed by dividing net income
     before the cumulative effect of changes in accounting principles in 1995
     and 1992, including the results of discontinued operations in 1988 through
     1998, by average shareholders' equity. Average shareholders' equity is the
     average of shareholders' equity on the first day and the last day of the
     fiscal year.

                                       11

<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS

FORWARD-LOOKING STATEMENTS
Certain statements in this annual report on Form 10-K are forward-looking
statements. These forward-looking statements are subject to certain risks and
uncertainties that could cause actual results and events to differ materially
from those anticipated.

Potential risks and uncertainties that could adversely affect the company's
ability to obtain these results include, without limitations, the following
factors: (a) increased consolidation among major retailers or other events that
might adversely affect business operations of major customers and depress the
level of local and national advertising; (b) an economic downturn in some or all
of the company's principal newspaper markets that might lead to decreased
circulation or decreased local or national advertising; (c) a decline in general
newspaper readership patterns as a result of competitive alternative media or
other factors; (d) an increase in newsprint costs over the levels anticipated;
(e) labor disputes that might cause revenue declines or increased costs; (f)
acquisitions of new businesses or dispositions of existing businesses; (g)
increases in interest or financing costs; and (h) rapid technological changes
and frequent new product introductions prevalent in electronic publishing,
including the evolution of the Internet.

Knight Ridder is the nation's second-largest newspaper publisher, with products
in print and online. The company publishes 32 daily newspapers in 28 U.S.
markets, with a readership of 8.5 million daily and 12.6 million Sunday. Knight
Ridder also has investments in a variety of Internet and technology companies
and two newsprint production companies. The company's Internet operation,
KnightRidder.com, creates and manages a variety of online services, including
the Real Cities Network of regional hubs in 38 U.S. markets. In 2000, the gross
revenue from these businesses was about $3.2 billion.

GLOSSARY OF NEWSPAPER ADVERTISING TERMS
The following definitions may be helpful when reading Management's Discussion
and Analysis of Operations.

RETAIL Display advertising from local merchants, such as department and grocery
stores, selling goods and services to the public.

GENERAL Display advertising by national advertisers that promotes products or
brand names on a nationwide basis.

CLASSIFIED Locally placed ads listed together and organized by category, such as
real estate sales, employment opportunities or automobile sales, and
display-type advertisements in these same categories.

FULL-RUN Advertising appearing in all editions of a newspaper.

PART-RUN Advertising appearing in select editions or zones of a newspaper's
market. Part-run advertising is translated into full-run equivalent linage
(referred to as factored) based on the ratio of the circulation in a particular
zone to the total circulation of a newspaper.

RUN-OF-PRESS (ROP) All advertising printed on Knight Ridder presses and
appearing within a newspaper.

PREPRINT Advertising supplements prepared by advertisers and inserted into a
newspaper.

ANALYSIS BY SEGMENT
The following sections discuss the segment results of the company's principal
lines of business, newspaper and online. Online results are included in the
"Other Revenue" line of total revenue and primarily consist of Web banner,
classified and recruitment advertising.

Newspaper revenue is derived principally from advertising and newspaper sales.
Advertising revenue accounted for about 78.1% of consolidated revenue in 2000.
This revenue comes from the three basic categories of advertising - retail,
general and classified. Newspaper advertising volume is categorized as either
run-of-press (ROP) or preprint. Volume for ROP advertising is measured in terms
of either full-run or part-run advertising linage. By using part-run
advertising, advertisers can target their messages to selected geographically
zoned market segments.

Circulation revenue results from the sale of newspapers. Circulation of daily
and Sunday newspapers accounted for 16.3% of consolidated revenue in 2000. It is
reported at the net wholesale price for newspapers delivered or sold by
independent contractors and at the retail price for newspapers delivered or sold
by employees and by delivery agents who are paid a fee for delivery of the
newspapers.

Other revenue comes from commercial job printing, niche and book publications,
online services, newsprint waste sales, audiotext and other miscellaneous
sources.

SUMMARY OF OPERATIONS A summary of the company's operations, certain share data
and other financial information for the past 11 years is provided on pages 10
and 11. Compound growth rates for the past five- and 10-year periods are also
included, if applicable. A review of this summary and of the supplemental
information on pages 2 through 5 will provide a better understanding of the
following discussion and analysis of operating results and of the financial
statements as a whole. The supplemental information contains financial data for
the company's largest newspapers and information regarding the company's
properties, technology and raw materials used in operations.

                                       12

<PAGE>

RESULTS OF OPERATIONS: 2000, 1999 AND 1998

The company's fiscal year ends on the last Sunday of the calendar year. Results
for 2000 are for the 53 weeks ended December 31, and results for 1999 and 1998
are for the 52 weeks ended December 26 and December 27, respectively. The
following tables set forth the results of operations for the periods ended
December 31, 2000, December 26, 1999, and December 27, 1998, which are discussed
in more detail on pages 14 and 15.

<TABLE>
<CAPTION>
                                                                                                            Change
(In Thousands of Dollars,                                                                              ---------------
Except Per Share AmountS)                                    2000           1999          1998         00-99     99-98
----------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>            <C>           <C>              <C>       <C>
Operating revenue                                        $ 3,211,767    $ 3,033,775   $ 2,895,554       5.9%      4.8%
Operating income                                             668,772        621,422       504,623       7.6%     23.1%
Income
  Continuing operations
      Before gains (losses) on investments and assets,
         Severance and relocation costs                      329,436        321,146       273,162       2.6%     17.6%
      Gains (losses) on investments and assets,
         severance and relocation costs                      (15,073)        18,793        32,469
  Discontinued operations                                                                  60,226
                                                         ----------------------------------------
  Net income                                             $   314,363    $   339,939   $   365,857      (7.5)%    (7.1)%
                                                         ========================================
Diluted earnings per share
  Continuing operations
      Before gains (losses) on investments and assets,
         Severance and relocation costs                         3.70           3.30          2.78      12.1%     18.7%
      Gains (losses) on investments and assets,
         severance and relocation costs                        (0.17)          0.19          0.33
  Discontinued operations                                                                    0.62
                                                         ----------------------------------------
  Net income                                             $      3.53    $      3.49   $      3.73       1.1%     (6.4)%
                                                         ========================================
</TABLE>

Knight Ridder earned $3.70 per diluted share from continuing operations in 2000,
up $0.40, or 12.1%, from the $3.30 earned in 1999, excluding one-time gains and
losses on investments and assets and severance from both years. On a comparable
basis, the company's earnings per diluted share was $3.30 in 1999, up $.52, or
18.7%, from the $2.78 earned in 1998.

NEWSPAPER DIVISION

OPERATING REVENUE The following table summarizes the results of Operating
Revenue of the Newspaper Division and related full-run ROP linage statistics for
the periods ended December 31, 2000, December 26, 1999 and December 27, 1998.

<TABLE>
<CAPTION>
                                    2000                                             Change
                          -----------------------                               --------------
In Thousands               53 Weeks     52 Weeks       1999         1998        00-99*   99-98
----------------------------------------------------------------------------------------------
<S>                       <C>          <C>          <C>          <C>            <C>      <C>
Operating revenue
  Advertising
     Retail               $1,104,767   $1,081,188   $1,065,971   $1,026,926      1.4%     3.8%
     General                 336,613      331,010      289,894      240,258     14.2%    20.7%
     Classified            1,066,457    1,052,956      997,656      955,413      5.5%     4.4%
                          -------------------------------------------------
         Total             2,507,837    2,465,154    2,353,521    2,222,597      4.7%     5.9%
                          -------------------------------------------------
  Circulation                523,856      514,053      525,686      533,340     (2.2)%   (1.4)%
  Other                      134,896      133,733      123,172      121,713      8.6%     1.2%
                          -------------------------------------------------
Total operating revenue   $3,166,589   $3,112,940   $3,002,379   $2,877,650      3.7%     4.3%
                          =================================================
Average circulation(1)
  Daily                        3,911           --        3,932        3,998     (0.5)%   (1.7)%
  Sunday                       5,308           --        5,400        5,507     (1.7)%   (1.9)%
Advertising linage(1)
Full-run
  Retail                      18,231           --       18,355       18,518     (0.7)%   (0.9)%
  General                      3,432           --        2,730        2,172     25.7%    25.7%
  Classified                  20,798           --       19,847       19,026      4.8%     4.3%
                          -------------------------------------------------
     Total full-run           42,461           --       40,932       39,716      3.7%     3.1%
                          =================================================
</TABLE>

*    Excluding the 53rd week in 2000 for revenue amounts only
(1)  Circulation and linage statistics were not restated on a 52-week basis.

                                       13

<PAGE>

Retail advertising was up 1.4% in 2000 from 1999 on a full-run ROP linage
decrease of 0.7%. The weak results were due primarily to consolidations and
bankruptcies in many major markets. In 1999, retail advertising was up 3.8% from
1998 on a 0.9% decrease in full-run ROP linage. General advertising revenue had
strong growth in 2000, up 14.2% from 1999 on a full-run ROP linage increase of
25.7%. This increase was due largely to a surge of e-commerce and
Internet-related advertising and strength in telecommunications, financial and
travel advertising. In 1999, general advertising was up 20.7% from 1998 on a
25.7% increase in full-run ROP linage. Classified advertising was up 5.5% in
2000 from 1999 on a full-run ROP linage increase of 4.8%. This increase
reflected a relatively strong first half of 2000, up 7.8%. In 1999, classified
was up 4.4% from 1998 on a 4.3% increase in full-run ROP linage. Help wanted
contributed significantly to the classified growth in both years.

Circulation revenue decreased 2.2% in 2000 from 1999 on a 0.5% decrease in daily
circulation and a 1.7% decrease in Sunday circulation. The decline in
circulation came primarily from a few large markets, and the company expects
circulation to remain essentially flat in 2001.

In 1999, circulation revenue decreased by $7.7 million, or 1.4% from 1998. Daily
circulation decreased 1.7% and Sunday circulation decreased 1.9% during the same
period.

OPERATING COSTS The following table summarizes operating costs for the Newspaper
Division for the periods ended December 31, 2000, December 26, 1999 and December
27, 1998.

<TABLE>
<CAPTION>
                                                  2000                                                     Change
                                      ---------------------------                                     ---------------
In Thousands                            53 Weeks        52 Weeks         1999            1998         00-99*    99-98
---------------------------------------------------------------------------------------------------------------------
<S>                                   <C>             <C>            <C>             <C>               <C>       <C>
Operating costs
Labor and employee benefits           $ 1,166,308     $ 1,132,693    $ 1,099,932     $ 1,089,976       3.0%      0.9%
Newsprint, ink and supplements            473,724         465,534        449,577         478,239       3.5%     (6.0)%
Other operating costs                     604,758         597,652        593,208         573,736       0.7%      3.4%
Depreciation and amortization             179,243         179,167        176,340         175,960       1.6%      0.2%
                                      -----------     -----------    -----------     -----------
Total operating costs                 $ 2,424,033     $ 2,375,046    $ 2,319,057     $ 2,317,911       2.4%      0.0%
                                      ===========     ===========    ===========     ===========
</TABLE>

*    Excluding the 53rd week in 2000

The increase in labor and employee benefits in 2000 from 1999 resulted from a
4.5% increase in the average wage per employee, and an increase of 0.5% in the
number of full-time-equivalent employees. Bonus and incentive costs were down
2.5% while benefit costs were up 12.3% from 1999. The increase in benefit costs
was due to higher health and welfare claims. During 2000, the company incurred
$17.2 million in severance costs. In 1999, the company incurred $4.7 million in
newspaper severance and corporate relocation costs. The relocation costs
resulted from the move of the company headquarters from Miami to San Jose.
Without these severance and relocation costs, labor and employee benefits
increased 1.8% in 2000 from 1999. On a comparable basis and excluding corporate
relocation and newspaper severance costs, labor and employee benefits were up
$20.3 million, or 4.9%, in 1999 from 1998, on a 1.2% decrease in the work force
and an average wage rate increase of 3.8%, offset by a decline in employee
benefit costs.

The increase in the cost of newsprint, ink and supplements in 2000 was due
primarily to a 3.3% increase in the average cost per ton of newsprint and an
increase of 2.0% in newsprint consumption from 1999. For 1999 compared to 1998,
the decrease in newsprint, ink and supplements was due to a 12.3% decrease in
the average cost per ton of newsprint, offset slightly by a 0.7% increase in
newsprint consumption.

Other operating costs remained relatively constant from 1999 to 2000, increasing
0.7%. The increase was due to strike preparation and outside service costs in
San Jose, and circulation promotion costs at various newspapers. In addition,
bankruptcies resulted in an increase in the reserve for bad debt expense.
Offsetting these unfavorable variances was a decrease in legal fees as a result
of a settlement in Detroit.

The increase in other operating expenses from 1998 to 1999 was due primarily to
an increase in the cost of contract services and legal fees and an increase in
the reserve for bad debt expense.

For 2000, depreciation and amortization expense increased 1.6% from 1999. The
increase in depreciation resulted from a slightly larger asset base.

                                       14

<PAGE>

ONLINE DIVISION

GLOSSARY OF ONLINE TERMS
UNIQUE VISITORS Number of persons who visited a site or network of sites at
least once in the month. Visitors to multiple sites in a network in a given
month are counted only once as a unique visitor for that network. In separate,
individual site tallies, they are counted once as a unique visitor for each site
visited.

PAGE VIEWS Total requests for HTML pages or unique screens of information as
presented to the user, including co-branded pages from partner sites.

ONLINE ACTIVITIES During the first quarter of 2000, the company consolidated all
its Internet operations under a new business unit, KnightRidder.com. Previously,
Knight Ridder's Internet activities were reported and managed as a part of the
company's newspaper operations. KnightRidder.com controls all of Knight Ridder's
online efforts, including the Web sites previously operated by the newspapers.
KnightRidder.com operates and manages the Real Cities Network, which consists of
all Knight Ridder Web sites and those of several other media affiliates. The
company expects significant growth from these operations in 2001.

<TABLE>
<CAPTION>
                                                                                          Change
                                                                                     --------------
(In Thousands)                             2000           1999          1998         00-99    99-98
---------------------------------------------------------------------------------------------------
<S>                                      <C>            <C>           <C>            <C>      <C>
Operating costs
  Labor and employee benefits            $ 39,901       $ 27,279      $ 23,491       46.3%    16.1%
  Other operating costs                    48,643         26,339        14,300       84.7%    84.2%
  Depreciation and amortization             2,655          1,819         1,288       46.0%    41.2%
                                         -------------------------------------
     Total operating costs               $ 91,199       $ 55,437      $ 39,079       64.5%    41.9%
                                         =====================================

Operating revenue                        $ 45,178       $ 31,396      $ 17,904       43.9%    75.4%
Unique visitors                            47,148         37,001        25,875       27.4%    43.0%
Average monthly page views                153,541        104,246        61,351       47.3%    69.9%
</TABLE>


The increase in labor and employee benefits was due primarily to increases in
full-time employees. Other operating costs increased primarily as a result of
increased promotion-related expenses and volume-related fees paid to advertising
and content providers. Depreciation and amortization expense increased due to
the acquisition of additional equipment.

NON-OPERATING ITEMS
Net interest expense increased $23.1 million, or 25.7%, in 2000 from 1999 as a
result of higher debt levels and an increase in the average effective interest
rate. For 1999, net interest expense decreased $8.2 million from 1998, or 8.4%,
due to lower debt levels. The average debt balance increased $371.5 million in
2000. It decreased $180.9 million from 1998 to 1999. The increase in debt during
2000 was due to share repurchases and the acquisition of Career Holdings, Inc.

From 1999 to 2000, equity in earnings of unconsolidated companies and joint
ventures decreased $21.1 million due to losses from CareerBuilder, Inc., and a
decrease in earnings from investments in the Seattle Times Company and newsprint
mills. From 1998 to 1999, equity in earnings of unconsolidated companies
decreased $10.8 million, due to a decrease in earnings from newsprint mill
investments, InfiNet Company and various other investments.

The "Other, Net "line of the non-operating section decreased $45.1 million or
126% in 2000 from 1999. The decline was due almost entirely to gains on the sale
of assets and the write-down of certain Internet-related investments in 2000.
The results in 2000 include gains from the sale of two companies the company had
minority investments in - Cadabra, Inc., and Prio, Inc. The write-down of
Internet-related investments was for other than temporary declines in the market
value of InfoSpace, Inc., GoTo.com, Inc., and Webvan Group, inc. Results in 1999
included a gain on the sale of shares of AT&T Corporation, Zip2 Corp. and
SportsLine USA, Inc., partially offset by adjustments in the carrying value of
certain other assets.

ACQUISITIONS
In August 2000, Career Holdings, Inc., a company jointly controlled by
KnightRidder.com and Tribune Co., completed the acquisitions of CareerBuilder,
Inc., and CareerPath.com, Inc., respectively. In the CareerBuilder acquisition,
a wholly owned subsidiary of Career Holdings made a tender offer for all of
CareerBuilder's common stock at a price of $8 per share in cash. The tender
offer, which began on July 25, 2000, and expired on August 21, 2000, was
followed by the merger of the subsidiary into CareerBuilder on August 24, 2000.
The CareerPath.com acquisition was accomplished by the merger of a wholly owned
subsidiary of Career Holdings into CareerPath.com on August 31, 2000. Knight
Ridder's share of the total purchase price for the CareerBuilder and
CareerPath.com acquisitions was approximately $250 million. The company, through
KnightRidder.com, currently owns a 46.4% interest in Career Holdings, Inc.

                                       15

<PAGE>

DISPOSITIONS
On March 18, 1998, the company closed on the sale of its remaining interest in a
cable system jointly owned with Tele-Communications, Inc. (TCI). On February 2,
1998, the company sold the Post-Tribune in Gary, Ind., to Hollinger
International, Inc. The proceeds from these sales were $95.8 million, consisting
of $58.1 million in cash and TCI stock with an aggregate market value of $37.7
million. The pretax and after-tax gains on the sales were $75.3 million and
$45.0 million, respectively.

LIQUIDITY AND CAPITAL RESOURCES
Cash flow from operations is the company's primary source of liquidity.
Management is focused on growing cash flow and on managing cash effectively. In
addition, the company uses financial leverage to minimize the overall cost of
capital and maintain adequate operating and financial flexibility.

Management monitors leverage through its interest coverage and cash-flow-to-debt
ratios. The following schedule summarizes these ratios for the years ended
December 31, 2000, and December 26, 1999:

                                      2000           1999
----------------------------------------------------------
  Interest coverage ratio(a)          7.3:1          8.3:1
  Cash flow to debt(b)                30.0%          40.2%

(a)  Defined as operating income plus depreciation and amortization divided by
     interest expense
(b)  Defined as net income plus depreciation and amortization divided by debt

The company's interest coverage ratio and cash flow to debt ratio decreased in
2000 from 1999 primarily due to the $254.7 million increase in treasury stock
purchases in 2000 over 1999 as well as the acquisition of other business and
investments in 2000, including Career Holdings Inc. (CareerBuilder), for
approximately $194.5 million.

The company's financial position remained strong throughout 2000, with cash and
cash equivalents and short-term investments of $41.7 million at December 31,
2000, compared with $34.1 million at December 26, 1999. During 2000, cash flows
from operating activities were used to fund treasury stock purchases of $464.8
million. In addition, the company paid dividends of $81.0 million during 2000.

Cash provided by operating activities was $417.2 million in 2000, compared with
$505.7 million in 1999. The decrease in 2000 was partially attributed to lower
net income, exclusive of gains on sales of investments in both years and the
gain on the sale of a building in 2000.

At December 31, 2000, working capital was $67.7 million, compared with $73.2
million at December 26, 1999. The decrease in working capital from 1999 to 2000
was due primarily to a $40.4 million increase in short-term borrowings,
partially offset by decreases in accounts payable of $21.2 million and accrued
compensation of $11.7 million.

Cash required for investing activities was primarily for the purchase of $108.0
million of property and equipment and $194.5 million for the acquisition of
businesses and other investments, including Career Holdings, Inc.
(CareerBuilder) in August 2000, partially offset by proceeds of $15.7 million
from the sale of certain assets.

The company invests excess cash in short- and long-term investments, depending
on projected cash needs from operations, capital expenditures and other business
purposes. The company supplements internally generated cash flow with a
combination of short- and long-term borrowings. Average outstanding commercial
paper during the year was $638.4 million, with an average effective interest
rate of 6.0%. At December 31, 2000, the company's revolving credit and term loan
agreements, which back up the commercial paper outstanding, had a remaining
availability of $157.0 million. The 364-day revolving credit and term loan
portion of the facility matures in June 2001; however, the company has the
option and intention to renew this facility for an additional term through June
2002. In February 2000, Moody's upgraded the company's short- and long-term debt
to P1 and A2, respectively. At year end, Standard & Poor's and Fitch continued
to rate the company's short- and long-term debt at A-1 and A, and F1 and A,
respectively.

The company believes it has adequate access to the capital debt markets to meet
its short- and long-term capital needs. Such access includes the company's $1
billion commercial paper and its $200 million extendable commercial notes.

During 2000, the company repurchased 9.0 million common shares at a total cost
of $464.8 million and an average cost of $51.37 per share. At year end,
authorization remained to purchase 2.5 million shares.

The company's operations have historically generated strong positive cash flow,
which, along with the company's commercial paper program, revolving credit lines
and ability to issue public debt, has provided adequate liquidity to meet the
company's short- and long-term cash requirements, including requirements for
working capital and capital expenditures.

                                       16

<PAGE>

The company's capital spending program includes normal replacements,
productivity improvements, capacity increases, building construction and
expansion and printing press equipment. Over the past three years, capital
expenditures, excluding the discontinued BIS operations, have totaled $320.1
million for additions and improvements to properties.

Additions to property, plant and equipment increased by $15.4 million to $108.0
million in 2000 from $92.6 million in 1999, due primarily to higher expenditures
for year 2000 capital projects. Expenditures in 2000 included $7.6 million for
press projects in Fort Worth and Miami. The $37.8 million Fort Worth press
expansion was completed during 2000, and the $109.2 million Miami press
expansion is scheduled to be completed in 2001. During 2000, $10.4 million was
spent on a $27.2 million press project at The Wichita Eagle that is scheduled
for completion in 2003. These press replacement projects are expected to
significantly improve reliability, speed, print quality and page and color
capacity, and reduce waste.

Also during 2000, $3.3 million was spent to begin an $11.8 million mailroom and
insertion facility project in Lexington, to be completed by the end of 2002.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

BORROWINGS By balancing the mix of variable- versus fixed-rate borrowings, the
company manages the interest-rate risk of its debt portfolio. Note 3 to the
Consolidated Financial Statements includes information related to the
contractual interest rates and fair value of the individual borrowings within
the portfolio. A hypothetical 10% change in interest rates would increase
interest expense associated with both fixed- and variable-rate borrowings by
approximately $11.4 million. This hypothetical interest rate change would also
decrease the fair value of the fixed debt by $64.6 million.

NEWSPRINT The company consumed approximately 761,700 metric tons of newsprint in
2000, excluding Detroit. This represents 15.3% of the company's 2000 total
operating expenses. Under the caption "Newsprint" on page 3, the company has
included information on its suppliers, the long-term purchase agreements used to
manage the related risk of price increases, and natural hedges the company has
in place through its investment in newsprint mills.

COLLECTIVE BARGAINING AGREEMENTS About 37% of the company's 22,000 employees are
represented by approximately 70 local unions and work under multi-year
collective bargaining agreements. These agreements are typically renegotiated in
the years in which they expire.

During 2001, there will be negotiations to extend collective bargaining
agreements with a single union at each of six newspapers. Individual newspapers
that are unionized to a greater or lesser degree include those in Akron,
Detroit, Duluth, Fort Wayne, Grand Forks, Kansas City, Lexington, Monterey,
Philadelphia, St. Paul, San Jose, State College and Wichita.

EFFECT OF CHANGING PRICES
The Consumer Price Index, a widely used measure of the impact of changing
prices, has increased only moderately in recent years, up between 2% and 3% each
year since 1991. Historically, when inflation was at higher levels, the impact
on the company's operations was not significant.

The principal effect of inflation on the company's operating results is to
increase costs. Subject to normal competitive conditions, the company generally
has demonstrated the ability to raise sales prices to offset these cost
increases.

                                       17

<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Selected quarterly financial data is presented in Note 8 of Notes to
Consolidated Financial Statements. Schedule II - Valuations and Qualifying
Accounts is included in Item 14 of this report and incorporated herein by
reference.

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET
(In thousands, except share data)

                                                                                        Dec. 31, 2000     Dec. 26, 1999
----------------------------------------------------------------------------------------------------------------------
<S>                                                                                         <C>               <C>
ASSETS
CURRENT ASSETS
  Cash, including short-term cash investments of $7,001 in 2000 and $5,598 in 1999          $ 41,661          $ 34,084
  Accounts receivable, net of allowances of $20,238 in 2000 and $15,917 in 1999              416,498           423,016
  Inventories                                                                                 52,786            39,238
  Prepaids                                                                                    30,767            32,246
  Other current assets                                                                        34,382            41,720
----------------------------------------------------------------------------------------------------------------------
     Total Current Assets                                                                    576,094           570,304
----------------------------------------------------------------------------------------------------------------------
INVESTMENTS AND OTHER ASSETS
  Equity in unconsolidated companies and joint ventures                                      304,486           206,880
  Other                                                                                      202,951           181,583
----------------------------------------------------------------------------------------------------------------------
     Total Investments and Other Assets                                                      507,437           388,463
----------------------------------------------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT
  Land and improvements                                                                       96,925            93,995
  Buildings and improvements                                                                 460,770           484,163
  Equipment                                                                                1,265,866         1,244,110
  Construction and equipment installations in progress                                        57,694            67,922
----------------------------------------------------------------------------------------------------------------------
                                                                                           1,881,255         1,890,190
  Less accumulated depreciation                                                             (841,812)         (831,041)
----------------------------------------------------------------------------------------------------------------------
     Net Property, Plant and Equipment                                                     1,039,443         1,059,149
----------------------------------------------------------------------------------------------------------------------
GOODWILL AND OTHER IDENTIFIED INTANGIBLE ASSETS
  Less accumulated amortization of $396,307 in 2000 and $331,504 in 1999                   2,120,552         2,174,418
----------------------------------------------------------------------------------------------------------------------
     Total                                                                               $ 4,243,526       $ 4,192,334
----------------------------------------------------------------------------------------------------------------------
</TABLE>

See "Notes to Consolidated Financial Statements."

                                       18

<PAGE>

<TABLE>
<CAPTION>
                                                                                        Dec. 31, 2000     Dec. 26, 1999
----------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
<S>                                                                                        <C>               <C>
CURRENT LIABILITIES
  Accounts payable                                                                         $ 121,300         $ 142,460
  Accrued expenses and other liabilities                                                     101,660           100,668
  Accrued compensation and amounts withheld from employees                                   114,810           126,529
  Federal and state income taxes                                                              16,928            16,039
  Deferred revenue                                                                            73,300            71,505
  Short-term borrowings and current portion of long-term debt                                 80,362            39,940
----------------------------------------------------------------------------------------------------------------------
     Total Current Liabilities                                                               508,360           497,141
----------------------------------------------------------------------------------------------------------------------

NONCURRENT LIABILITIES
  Long-term debt                                                                           1,591,910         1,260,814
  Deferred federal and state income taxes                                                    269,702           306,636
  Postretirement benefits other than pensions                                                137,791           145,143
  Employment benefits and other noncurrent liabilities                                       191,847           197,045
----------------------------------------------------------------------------------------------------------------------
     Total Noncurrent Liabilities                                                          2,191,250         1,909,638
----------------------------------------------------------------------------------------------------------------------

MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES                                                2,446             4,871

COMMITMENTS AND CONTINGENCIES (Note 11)

SHAREHOLDERS' EQUITY
  Preferred stock, $1.00 par value; shares authorized - 20,000,000;
     shares issued - 1,110,500 in 2000 and 1,374,100 in 1999                                   1,111             1,374
  Common stock, $.02 1/12 par value; shares authorized - 250,000,000;
     shares issued - 74,036,046 in 2000 and 79,654,493 in 1999                                 1,542             1,659
  Additional capital                                                                         919,582           938,969
  Retained earnings                                                                          622,801           798,971
  Accumulated other comprehensive income (loss)                                               (1,301)           42,084
  Treasury stock, at cost; 41,009 shares in 2000 and 42,510 shares in 1999                    (2,265)           (2,373)
----------------------------------------------------------------------------------------------------------------------
     Total Shareholders' Equity                                                            1,541,470         1,780,684
----------------------------------------------------------------------------------------------------------------------
     Total                                                                               $ 4,243,526       $ 4,192,334
======================================================================================================================
</TABLE>


See "Notes to Consolidated Financial Statements."

                                       19

<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share data)

Year Ended                                                                       Dec. 31, 2000   Dec. 26, 1999    Dec. 27, 1998
------------------------------------------------------------------------------------------------------------------------------

OPERATING REVENUE
<S>                                                                               <C>             <C>              <C>
   Advertising
       Retail                                                                     $ 1,104,766     $ 1,065,970      $ 1,026,926
       General                                                                        336,613         289,894          240,258
       Classified                                                                   1,066,457         997,656          955,413
------------------------------------------------------------------------------------------------------------------------------
         Total                                                                      2,507,836       2,353,520        2,222,597
   Circulation                                                                        523,856         525,686          533,340
   Other                                                                              180,075         154,569          139,617
------------------------------------------------------------------------------------------------------------------------------
         Total Operating Revenue                                                    3,211,767       3,033,775        2,895,554
------------------------------------------------------------------------------------------------------------------------------

OPERATING COSTS
   Labor and employee benefits                                                      1,220,221       1,152,432        1,109,242
   Newsprint, ink and supplements                                                     460,463         437,054          488,802
   Other operating costs                                                              674,714         639,924          611,775
   Depreciation and amortization                                                      187,597         182,943          181,112
------------------------------------------------------------------------------------------------------------------------------
         Total Operating Costs                                                      2,542,995       2,412,353        2,390,931
------------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME                                                                      668,772         621,422          504,623
------------------------------------------------------------------------------------------------------------------------------

OTHER INCOME (EXPENSE)
   Interest expense                                                                  (116,652)        (97,444)        (105,936)
   Interest expense capitalized                                                         2,230           5,197            4,516
   Interest income                                                                      1,553           2,425            3,411
   Equity in earnings (losses) of unconsolidated companies and joint ventures          (8,506)         12,571           23,309
   Minority interests in earnings of consolidated subsidiaries                        (12,814)        (11,984)         (10,749)
   Other, net                                                                          (9,293)         35,828           88,742
------------------------------------------------------------------------------------------------------------------------------
         Total                                                                       (143,482)        (53,407)           3,293
------------------------------------------------------------------------------------------------------------------------------
Income before income taxes                                                            525,290         568,015          507,916
Income taxes                                                                          210,927         228,076          202,285
------------------------------------------------------------------------------------------------------------------------------

INCOME FROM CONTINUING OPERATIONS                                                     314,363         339,939          305,631
Net gain on sale of discontinued BIS operations, net of applicable income
    taxes of $43,752 in 1998                                                                                            60,042
Income from discontinued BIS operations, net of applicable income taxes
   of $133 in 1998                                                                                                         184
------------------------------------------------------------------------------------------------------------------------------
         Net Income                                                                 $ 314,363       $ 339,939        $ 365,857
==============================================================================================================================

EARNINGS PER SHARE
   Basic:
       Income from continuing operations                                               $ 4.02          $ 4.07           $ 3.70
       Net gain on sale of discontinued BIS operations                                                                     .76
       Income from discontinued BIS operations, net                                                                        .01
------------------------------------------------------------------------------------------------------------------------------
         Net Income                                                                    $ 4.02          $ 4.07           $ 4.47
==============================================================================================================================

Diluted:
   Income from continuing operations                                                   $ 3.53          $ 3.49           $ 3.11
   Net gain on sale of discontinued BIS operations                                                                         .61
   Income from discontinued BIS operations, net                                                                            .01
------------------------------------------------------------------------------------------------------------------------------
         Net Income                                                                    $ 3.53          $ 3.49           $ 3.73
==============================================================================================================================

AVERAGE SHARES OUTSTANDING (000S)
   Basic                                                                               75,370          80,025           78,882
   Diluted                                                                             89,105          97,460           98,176
</TABLE>

See "Notes to Consolidated Financial Statements."

                                       20

<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands of dollars)

Year Ended                                                                            Dec. 31, 2000  Dec. 26, 1999   Dec. 27, 1998
---------------------------------------------------------------------------------------------------------------------------------

<S>                                                                                      <C>            <C>             <C>
CASH PROVIDED BY (REQUIRED FOR) OPERATING ACTIVITIES                                     $ 314,363      $ 339,939       $ 365,857
   Net income
       Noncash items deducted from (included in) income:

           Depreciation                                                                    111,124        101,444          94,503
           Amortization of goodwill                                                         68,567         67,503          66,496
           Amortization of other intangibles                                                 7,906         13,996          20,113
           Losses (gains) on sales, exchange and write-down of investments                  19,401        (37,655)        (75,251)
           Net gain on sale of discontinued BIS operations                                                                (60,042)
           Benefit for deferred taxes                                                       (8,759)        (1,895)         (8,444)
           Provision for bad debts                                                          27,070         24,440          20,439
           Earnings (losses) from investees less distributions                               1,505          2,506         (21,856)
           Minority interests in earnings of consolidated subsidiaries                      12,814         11,984          10,749
           Other items, net                                                                 15,200          7,913          25,931
   Change in certain assets and liabilities:
       Accounts receivable                                                                 (20,767)       (64,221)        (39,927)
       Inventories                                                                         (13,548)        19,871          (9,398)
       Other  assets                                                                       (97,390)       (22,452)          3,296
       Accounts payable                                                                    (21,160)       (22,098)        (20,299)
       Federal and state income taxes                                                        3,976         16,176         (52,234)
       Other liabilities                                                                    (3,062)        48,253         (22,782)
---------------------------------------------------------------------------------------------------------------------------------
                Net Cash Provided by Operating Activities                                  417,240        505,704         297,151
---------------------------------------------------------------------------------------------------------------------------------

CASH PROVIDED BY (REQUIRED FOR) INVESTING ACTIVITIES
   Proceeds from sales of investments                                                       35,058        119,810          62,444
   Proceeds from sale of discontinued BIS operations                                                                      125,000
   Proceeds from sale of building                                                           15,694
   Change in net noncurrent assets of discontinued BIS operations                                                             520
   Acquisition of businesses                                                              (194,476)       (38,403)
   Other investments                                                                                      (38,227)
   Additions to property and equipment                                                    (107,956)       (92,563)       (132,025)
   Other items, net                                                                         23,685         33,205         (35,642)
---------------------------------------------------------------------------------------------------------------------------------
       Net Cash Provided by (Required for) Investing Activities                           (227,995)       (16,178)         20,297
---------------------------------------------------------------------------------------------------------------------------------

CASH PROVIDED BY (REQUIRED FOR) FINANCING ACTIVITIES
   Proceeds from sale of commercial paper, notes payable and senior notes payable        3,953,248      2,397,615         914,926
   Payment of total debt                                                                (3,625,691)    (2,624,906)     (1,057,186)
---------------------------------------------------------------------------------------------------------------------------------
       Net Change in Total Debt excluding amortization of discounts                        327,557       (227,291)       (142,260)
   Payment of cash dividends                                                               (81,002)       (85,526)        (77,152)
   Issuance of common stock to employees and directors                                      29,867         50,335          44,411
   Purchase of treasury stock                                                             (464,835)      (210,141)       (255,533)
   Other items, net                                                                          6,745         (9,655)        (20,369)
---------------------------------------------------------------------------------------------------------------------------------
       Net Cash Required for Financing Activities                                         (181,668)      (482,278)       (450,903)
---------------------------------------------------------------------------------------------------------------------------------
           Net Increase (Decrease) in Cash                                                   7,577          7,248        (133,455)
Cash and short-term cash investments at beginning of year                                   34,084         26,836         160,291
---------------------------------------------------------------------------------------------------------------------------------
Cash and short-term cash investments at end of year                                       $ 41,661       $ 34,084        $ 26,836
=================================================================================================================================

SUPPLEMENTAL CASH FLOW INFORMATION
   Noncash investing activities
       Securities received on the sale of investees                                      $ 195,624       $     --        $ 37,678
       Write-down of Internet-related investments                                         (167,827)
       Unrealized gains (net of tax) on investments available for sale                     109,442         23,346          18,738
   Noncash financing activities
       Conversion of preferred stock held by Disney to common stock
           Preferred stock                                                                    (263)          (381)
           Additional capital                                                              (98,872)      (142,842)
       Issuance of common stock upon conversion to preferred stock
           Preferred stock                                                                      55             79
           Additional capital                                                               99,080        143,144
</TABLE>

See "Notes to Consolidated Financial Statements."

                                       21

<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(In thousands of dollars, except share data)

                                                                                        Preferred       Common         Treasury
                                                                                          Shares        Shares          Shares
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                     <C>           <C>              <C>
BALANCE AT DEC. 28, 1997                                                                1,754,930     81,597,631              --
  Issuance of common shares under stock option plan                                                      369,372
  Issuance of common shares under stock purchase plan                                                     81,672
  Issuance of treasury shares under stock option plan                                                                    638,420
  Issuance of treasury shares under stock purchase plan                                                                  267,927
  Issuance of treasury shares to nonemployee directors                                                                     3,333
  Issuance of treasury shares                                                                                             94,173
  Purchase of treasury shares                                                                                         (4,725,000)
  Retirement of treasury shares                                                                       (3,674,480)      3,674,480
  Tax benefits arising from employee stock plans
  Comprehensive income:
       Net income
       Change in unrealized gains on securities available for sale, net of tax of
         $12,492
       Comprehensive income
  Cash dividends declared
--------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DEC. 27, 1998                                                                1,754,930     78,374,195         (46,667)
  Issuance of common shares under stock option plan                                                      840,375
  Issuance of common shares under stock purchase plan                                                    336,001
  Conversion of preferred shares                                                         (380,830)     3,808,300
  Issuance of treasury shares to nonemployee directors                                                                     4,157
  Purchase of treasury shares                                                                                         (3,704,378)
  Retirement of treasury shares                                                                       (3,704,378)      3,704,378
  Tax benefits arising from employee stock plans
  Comprehensive income:
       Net income
       Change in unrealized gains on securities available for sale, net of tax of
         $15,564
       Comprehensive income
  Cash dividends declared
--------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DEC. 26, 1999                                                                1,374,100     79,654,493         (42,510)
  Issuance of common shares under stock option plan                                                      447,453
  Issuance of common shares under stock purchase plan                                                    344,800
  Conversion of preferred shares                                                         (263,600)     2,636,000
  Issuance of treasury shares to nonemployee directors                                                                     3,696
  Purchase of treasury shares                                                                                         (9,048,895)
  Retirement of treasury shares                                                                       (9,046,700)      9,046,700
  Tax benefits arising from employee stock plans
  Comprehensive income:
       Net income
       Change in unrealized losses on securities available for sale, net of tax of
         $28,923
       Comprehensive income
  Cash dividends declared
--------------------------------------------------------------------------------------------------------------------------------
Balance at Dec. 31, 2000                                                                1,110,500     74,036,046         (41,009)
================================================================================================================================
</TABLE>

See "Notes to Consolidated Financial Statements."

                                       22

<PAGE>

<TABLE>
<CAPTION>
                                                                          Accumulated
                                                                              Other
   Preferred            Common         Additional          Retained       Comprehensive        Treasury
      Stock              Stock           Capital           Earnings       Income (Loss)          Stock          Total
------------------------------------------------------------------------------------------------------------------------
<S>                     <C>             <C>               <C>                  <C>               <C>         <C>
    $ 1,755             $ 1,700         $ 911,572         $ 636,646            $   -             $   -       $ 1,551,673
                              7            10,185                                                                 10,192
                              2             3,966                                                                  3,968
                                          (14,422)                                              32,797            18,375
                                           (1,352)                                              13,228            11,876
                                              (13)                                                 186               173
                                                                                                 5,021             5,021
                                                                                              (255,533)         (255,533)
                            (76)          (11,401)         (190,219)                           201,696
                                            9,543                                                                  9,543

                                                            365,857                                              365,857

                                                                              18,738                              18,738
                                                                                                                --------
                                                                                                                 384,595

                                                            (77,152)                                             (77,152)
------------------------------------------------------------------------------------------------------------------------
    $ 1,755             $ 1,633         $ 908,078         $ 735,132         $ 18,738          $ (2,605)      $ 1,662,731
                             17            25,893                                                                 25,910
                              7            14,996                                                                 15,003
       (381)                 79               302
                                                                                                   232               232
                                                                                              (210,141)         (210,141)
                            (77)          (19,490)         (190,574)                           210,141
                                            9,190                                                                  9,190

                                                            339,939                                              339,939

                                                                              23,346                              23,346
                                                                                                                --------
                                                                                                                 363,285

                                                            (85,526)                                             (85,526)
------------------------------------------------------------------------------------------------------------------------
    $ 1,374             $ 1,659         $ 938,969         $ 798,971         $ 42,084          $ (2,373)      $ 1,780,684
                              9            14,672                                                                 14,681
                              7            14,991                                                                 14,998
       (263)                 55               208
                                              (18)                                                 206               188
                                                                                              (464,835)         (464,835)
                           (188)          (53,345)         (409,531)                           464,737             1,673
                                            4,105                                                                  4,105

                                                            314,363                                              314,363

                                                                             (43,385)                            (43,385)
                                                                                                                ---------
                                                                                                                 270,978

                                                            (81,002)                                             (81,002)
------------------------------------------------------------------------------------------------------------------------
     $1,111              $1,542          $919,582        $  622,801         $ (1,301)       $   (2,265)      $ 1,541,470
========================================================================================================================
</TABLE>

                                       23

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The company reports on a fiscal year ending on the last Sunday in the calendar
year. Results are for the 53 weeks ended December 31, 2000, and the 52 weeks
ended December 26, 1999, and December 27, 1998, respectively.

The Basis of Consolidation is to include in the consolidated financial
statements all the accounts of Knight Ridder and its more-than-50%-owned
subsidiaries. All significant intercompany transactions and account balances
have been eliminated. Certain elements of other revenue have been reclassified
as advertising revenue to conform with industry practice.

Revenue Recognition varies by source. Advertising revenue is recognized when ads
are published. Circulation revenue is recognized when the newspaper is delivered
to the customer. Other revenue is recognized when the related product or service
has been delivered.

The company is a 50% partner in Detroit Newspapers (DN), a joint operating
agency between Detroit Free Press, Inc., a wholly owned subsidiary of Knight
Ridder, and The Detroit News, Inc., a wholly owned subsidiary of Gannett Co.,
Inc. In 1989, business operations of the Free Press and The Detroit News were
transferred to DN under a joint operating agreement that expires in 2089.
Previously, the company consolidated its share of revenue and expenses on a pro
rata basis. In 2000, new rules issued by the Financial Accounting Standards
Board no longer permit this practice. The company now shows its share of revenue
and expenses as a net amount in the "Other Revenue" line. All prior-year amounts
have been restated to conform to this presentation.

Investments in companies in which Knight Ridder has an equity interest of at
least 20% but not more than 50% are accounted for under the equity method. The
company records its share of earnings as income and increases the investment by
the equivalent amount. Dividends and losses are recorded as a reduction in the
investment.

The investment caption "Equity in Unconsolidated Companies and Joint Ventures"
in the Consolidated Balance Sheet represents the company's equity in the net
assets of DN; Seattle Times Company and subsidiaries; Newspapers First, a
company responsible for the sales and servicing of general, retail and
classified advertising accounts for a group of newspapers; SP Newsprint Co. and
Ponderay Newsprint Company, two newsprint mill partnerships; InfiNet Company, a
joint venture that provides Web-hosting services; and Career Holdings, Inc., a
company in the business of providing recruitment services through the Internet
via its wholly owned subsidiary, CareerBuilder, Inc.

The company owns 49.5% of the voting common stock and 65% of the nonvoting
common stock of the Seattle Times Company; 31.1% of the voting stock of
Newspapers First; a 46.4% equity share of Career Holdings, Inc.; a 13.5% equity
share of Ponderay Newsprint Company; and 33.3% of the voting stock and 50% of
the nonvoting stock of Infinet Company. It is a one-third partner in the SP
Newsprint Co.

The company owns a 55% equity interest in Fort Wayne Newspapers, Inc. and
consolidates 100% of its revenues and expenses. The minority shareholders'
interest in the net income of this subsidiary has been reflected as an expense
in the Consolidated Statement of Income in the caption "Minority Interests in
Earnings of Consolidated Subsidiaries." Also included in this caption is a
contractual minority interest resulting from a Joint Operating Agreement that
runs through 2021 between The Miami Herald Publishing Co. and Cox Newspapers,
Inc., covering the publication of The Herald and of The Miami News, which ceased
publication in 1988. The related effects are included in the Consolidated
Balance Sheet caption "Minority Interests in Consolidated Subsidiaries."

"Cash and Short-Term Cash Investments" includes currency and checks on hand,
demand deposits at commercial banks, overnight repurchase agreements of
government securities, and investment-grade commercial paper. Cash and
short-term investments are recorded at cost. Due to the short-term nature of
marketable securities, cost approximates market value.

Most of the company's "Accounts Receivable" as of December 31, 2000, and
December 26, 1999, is from advertisers, newspaper subscribers and information
users. Credit is extended based on the evaluation of the customer's financial
condition, and generally collateral is not required. Credit losses are provided
for in the financial statements and are written off to a reserve account at the
time they are deemed uncollectible. The company uses a combination of the
percentage of sales and the aging of accounts receivable to establish reserves
for losses on accounts receivable. Credit losses have historically been within
management's expectations.

"Inventories" are priced at the lower of cost (first-in, first-out FIFO method)
or market value. Most of the inventory is newsprint, ink and other supplies used
in printing newspapers. "Other Assets" includes investments in companies in
which Knight Ridder owns less than a 20% interest. These investments are
reviewed for appropriate classification at the time of purchase and re-evaluated
as of each balance sheet date. In the fourth quarter of 2000, the company
reviewed its investment portfolio and determined that an other than temporary
decline in value for certain Internet-related investments had occurred.
Accordingly, a charge of $168 million relating to this unrealized loss was
recorded in that period. Investments available for sale are carried on the
balance sheet at fair market value, with the unrealized gains/losses (net of
tax) reported as "Accumulated Other Comprehensive Income/Loss," a separate
component of shareholders' equity. Upon the sale of an investment, the gain/loss

                                       24

<PAGE>

is calculated based on the original cost less the proceeds from the sale.
Investments are classified as "held to maturity" when the company has the
positive intent and ability to hold the investment to maturity.

"Property, Plant and Equipment" is recorded at cost, and the provision for
depreciation for financial statement purposes is computed principally by the
straight-line method over the estimated useful lives of the assets as follows:

Type of Asset                                Depreciation or Amortization Period
--------------------------------------------------------------------------------
Buildings and improvements                   10 to 40 years
Machinery, equipment and fixtures            Three to 20 years
Automobile and trucks                        Three to eight years
Software                                     Three to seven years, not to exceed
                                             the remaining useful life of the
                                             related hardware

The company capitalizes interest costs as part of the cost of constructing major
facilities and equipment. Expenditures for maintenance, repairs and minor
renewals are charged to expense as incurred.

"Goodwill" includes the unamortized excess of cost over the fair market value on
the purchase of at least a 50% interest in a company's net tangible and
intangible assets. The goodwill is amortized over a 40-year period on a
straight-line basis, unless management concludes that a shorter term is more
appropriate. Identified acquired intangibles of approximately $400 million
consisting of trademarks, subscriber and advertiser lists, and mastheads are
amortized on a straight-line basis over periods ranging from five to 40 years,
with a weighted-average life of 25.7 years. If, in the opinion of management, an
impairment in value occurs, any additional write-down of assets will be charged
to expense. Management uses the undiscounted cash flow method to determine
impairment.

"Deferred Revenue" arises as a normal part of business from advance subscription
payments for newspapers. Revenue is recognized in the period in which it is
earned.

"Short-term Borrowings and Current Portion of Long-term Debt" includes the
carrying amounts of commercial paper and other short-term borrowings with
original maturities of less than one year that management does not intend to
refinance, and the portion of long-term debt payable within 12 months. The
carrying amounts of short-term borrowings approximate fair value. "Long-term
Debt" represents the carrying amounts of debentures, notes payable, other
indebtedness with maturities longer than one year, and commercial paper backed
by two revolving credit and term loan agreements that management intends to
refinance at maturity. Fair values, disclosed in Note 3, are estimated using the
discounted cash flow analysis based on the company's current incremental
borrowing rates for similar types of borrowing arrangements.

In accordance with FAS 121 - Accounting for the Impairment of Long-lived Assets
and for Long-lived Assets to be Disposed of, the company reviews long-lived
assets and related intangibles for impairment whenever events or changes in
circumstances indicate that the carrying amount of such assets may not be fully
recoverable. To date, no such impairment has been indicated. If this review
indicates that the carrying value of these assets would not be recoverable as
measured based on estimated undiscounted cash flows over their remaining life,
the carrying amount would be adjusted to fair value. The cash flow estimates
used contain management's best estimates, using appropriate and customary
assumptions and projections.

The company accounts for Stock-based Compensation plans under the provisions of
APB 25 - Accounting for Stock Issued to Employees and discloses the general and
pro forma financial information required by FAS 123. See Note 6.

Under FAS 128 - Earnings Per Share (EPS), "Basic Earnings Per Share" is computed
by dividing net income attributable to common stock (net income less preferred
stock dividends) by the weighted-average number of common shares outstanding.
Net income attributable to common shares was $303.0 million in 2000, $325.7
million in 1999 and $351.8 million in 1998. "Diluted Earnings Per Share" is
computed by dividing net income by the weighted-average number of common and
common equivalent shares outstanding. See Note 6.

The following table sets forth the calculation of basic and diluted
weighted-average shares outstanding (in thousands).

<TABLE>
<CAPTION>
                                                                 2000     1999     1998
----------------------------------------------------------------------------------------
<S>                                                             <C>      <C>      <C>
Basic weighted-average shares outstanding                       75,370   80,025   78,882
Effect of dilutive securities:
   Assumed conversion of convertible preferred stock            12,597   15,948   17,549
   Treasury stock effect of outstanding stock options            1,138    1,487    1,745
----------------------------------------------------------------------------------------
Diluted weighted-average shares outstanding                     89,105   97,460   98,176
========================================================================================
</TABLE>

Under FAS 130 - Reporting Comprehensive Income, the company presents unrealized
gains or losses on the company's available-for-sale securities as an element of
"Accumulated Other Comprehensive Income," a separate component of shareholders'
equity. See Note 9.

                                       25

<PAGE>

The company is a newspaper company with products in print and online. It
maintains operations and local management in the markets it serves, including
the metropolitan areas of Philadelphia, Miami, San Jose, Kansas City, Fort
Worth, Detroit and Charlotte. Revenue is earned through the sale of advertising
and circulation and related activities. Newspapers are distributed in print
through local distribution channels, as well as online through
KnightRidder.com's Real Cities Network (see "Management's Discussion and
Analysis of Operations: Online Activities" on page 15).

Beginning in the quarter ended March 26, 2000, although not required to do so,
the company elected to begin reporting its online operations as a separate
reportable business segment from its newspaper operations pursuant to FAS 131 -
Disclosures About Segments of an Enterprise and Related Information. See Note 5.

Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

In 2001, the company will adopt FAS 133 - Accounting for Derivative Instruments
And Hedging Activities. FAS 133's effective date was deferred until fiscal years
beginning after June 15, 2000, by FAS 137. Based on current circumstances, the
company does not believe the effect of adoption will be material.

2.   INCOME TAXES

The company's income tax expense is determined under the provisions of Statement
of Financial Accounting Standards 109, Accounting for Income Taxes, which
requires the use of the liability method in adjusting previously deferred taxes
for changes in tax rates.

Substantially all of the company's earnings are subject to domestic taxation. No
material foreign income taxes have been imposed on reported earnings.

Federal, state and local income taxes (benefits) consist of the following (in
thousands):

<TABLE>
<CAPTION>
                                          2000                           1999                          1998
                               ---------------------------    --------------------------    -------------------------
                                Current       Deferred         Current       Deferred        Current       Deferred
-------------------------------------------------------------------------------------------------------------------
<S>                            <C>           <C>              <C>           <C>             <C>           <C>
Federal income taxes           $ 191,635     $ (3,241)        $ 203,101     $ (6,447)       $ 213,161     $ (4,479)
State and local income taxes      28,051       (5,518)           26,870        4,552           39,953       (2,465)
-------------------------------------------------------------------------------------------------------------------
     Total                     $ 219,686     $ (8,759)        $ 229,971     $ (1,895)       $ 253,114     $ (6,944)
-------------------------------------------------------------------------------------------------------------------
Provision for:
     Continuing operations     $ 219,686     $ (8,759)        $ 229,971     $ (1,895)       $ 210,729     $ (8,444)
     Discontinued operations                                                                   42,385        1,500
-------------------------------------------------------------------------------------------------------------------
         Total                 $ 219,686     $ (8,759)        $ 229,971     $ (1,895)       $ 253,114     $ (6,944)
===================================================================================================================
</TABLE>


Cash payments of income taxes for the years 2000, 1999 and 1998 were $209.9
million, $213.1 million and $262.7 million, respectively. Payments in 1998
included the tax impact resulting from the sale of the Gary, Ind., paper and
Technimetrics.

The differences between income tax expense for continuing operations shown in
the financial statements and the amounts determined by applying the federal
statutory rate of 35% in each year are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                              2000             1999            1998
---------------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>              <C>             <C>
Federal statutory income tax                                               $ 183,851        $ 198,805       $ 177,771
State and local income taxes, net of federal benefit                          14,664           20,425          17,033
Statutory rate applied to nondeductible amortization of the excess of
     cost over net assets acquired                                            15,058           15,016          15,123
Other items, net                                                              (2,646)          (6,170)         (7,642)
---------------------------------------------------------------------------------------------------------------------
     Total                                                                 $ 210,927        $ 228,076       $ 202,285
=====================================================================================================================
</TABLE>


The deferred tax asset and liability at the fiscal year end consist of the
following components (in thousands):

<TABLE>
<CAPTION>
                                                                                            2000              1999
--------------------------------------------------------------------------------------------------------------------
<S>                                                                                       <C>               <C>
Deferred Tax Asset
     Postretirement benefits other than pensions (including amounts
         Related to partnerships in which the company participates)                       $ 80,812          $ 84,286
     Accrued interest                                                                        8,885             6,476
     Other nondeductible accruals                                                           80,498            71,307
--------------------------------------------------------------------------------------------------------------------
         Gross deferred tax asset                                                        $ 170,195         $ 162,069
--------------------------------------------------------------------------------------------------------------------
Deferred Tax Liability
     Depreciation and amortization                                                       $ 354,239         $ 356,726
     Compensation and benefit accruals                                                      20,068              (965)
     Equity in partnerships and investees                                                   36,806            55,408
     Unrealized appreciation in equity securities                                             (867)           28,056
     Other                                                                                      40               623
--------------------------------------------------------------------------------------------------------------------
         Gross deferred tax liability                                                      410,286           439,848
--------------------------------------------------------------------------------------------------------------------
         Net deferred tax liability                                                      $ 240,091         $ 277,779
--------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       26

<PAGE>

The components of deferred taxes included in the Consolidated Balance Sheet are
as follows (in thousands):

                                                2000              1999
------------------------------------------------------------------------
Current asset                                 $ 29,611          $ 28,857
Noncurrent liability                           269,702           306,636
------------------------------------------------------------------------
     Net deferred tax liability              $ 240,091         $ 277,779
------------------------------------------------------------------------


3.   DEBT

Debt consisted of the following (in thousands):

<TABLE>
<CAPTION>
                                                                                             Dec. 31           Dec. 26
                                                                                               2000              1999
------------------------------------------------------------------------------------------------------------------------
<S>                                                                                          <C>               <C>
Commercial paper due at various dates through March 14, 2001, at an effective
  interest rate of 6.55% as of Dec. 31, 2000. Amounts are net of unamortized
  discounts of $2,951 in 2000 and $4,004 in 1999(a)                                          $ 843,027         $ 433,796
Debentures due on April 15, 2009, bearing interest at 9.875%, net of unamortized
  discount of $1,370 in 2000 and $1,536 in 1999                                                198,630           198,464
Debentures due on Nov. 1, 2027, bearing interest at 7.15%, net of unamortized
  discount of $5,269 in 2000 and $5,466 in 1999                                                 94,731            94,534
Debentures due on March 15, 2029, bearing interest at 6.875%, net of
  Unamortized discount of $3,436 in 2000 and $3,557 in 1999                                    296,564           296,443
Notes payable, bearing interest at 8.5%, subject to mandatory pro rata
  amortization of 25% annually commencing Sept. 1, 1998, through maturity
  on Sept. 1, 2001, net of unamortized discount of $32 in 2000 and $97 in 1999                  39,969            79,903
Notes payable due on Nov. 1, 2007, bearing interest at 6.625%, net of unamortized
  discount of $1,562 in 2000 and $1,791 in 1999                                                 98,438            98,209
Senior notes payable due on Dec. 15, 2005, bearing interest at 6.3%, net of
  unamortized discount of $495 in 2000 and $595 in 1999                                         99,505            99,405
Notes payable, other                                                                             1,408
------------------------------------------------------------------------------------------------------------------------
                                                                                             1,672,272         1,300,754
Less amounts payable in one year                                                                80,362            39,940
------------------------------------------------------------------------------------------------------------------------
     Total long-term debt                                                                  $ 1,591,910       $ 1,260,814
========================================================================================================================
</TABLE>

(a)  Commercial paper is supported by $1 billion of revolving credit and term
     loan agreements, $500 million of which matures on June 22, 2003, and $500
     million of which matures on June 18, 2001. The company has the option and
     intention to renew the commercial paper prior to maturity on June 18, 2001,
     for an additional 364-day term through June 2002.
Interest payments during 2000 and 1999 were $100.6 million and $90.6 million,
respectively.


The carrying amounts and fair values of debt as of December 31, 2000, are as
follows (in thousands):

                                                 Carrying           Fair
                                                  Amount            Value
--------------------------------------------------------------------------
Commercial paper                                $ 843,027        $ 843,027
9.875% Debentures                                 198,630          233,810
7.15% Debentures                                   94,731           92,121
6.875% Debentures                                 296,564          265,211
8.5% Notes payable                                 39,969           40,506
6.625% Notes payable                               98,438           97,906
6.3% Senior notes payable                          99,505           98,655
Notes payable, other                                1,408            1,408
--------------------------------------------------------------------------
Total                                         $ 1,672,272      $ 1,672,644
==========================================================================


The following table presents the approximate annual maturities of debt for the
years after 2000 (in thousands):

2001                                   $80,362
2002                                       864
2003                                   803,178
2004                                         -
2005                                    99,505
2006 and thereafter                    688,363
----------------------------------------------
     Total                          $1,672,272
----------------------------------------------

                                       27

<PAGE>

4.   UNCONSOLIDATED COMPANIES AND JOINT VENTURES

Summary financial information for the company's unconsolidated companies and
joint ventures that are accounted for under the equity method is as follows (in
thousands):

<TABLE>
<CAPTION>
                                                         2000             1999            1998
-------------------------------------------------------------------------------------------------
<S>                                                    <C>              <C>             <C>
Current assets                                         $ 307,945        $ 226,155       $ 246,940
Property, plant and equipment and other assets         1,627,313        1,458,029       1,260,996
Current liabilities                                      192,030          199,114         170,856
Long-term debt and other noncurrent liabilities          669,911          645,555         518,560
Net sales                                                996,845          807,825         782,893
Gross profit                                              95,692           20,627          90,719
Net income (loss)                                          9,830           (8,899)         56,201
Company's share of:
     Net assets                                          304,486          206,880         201,120
     Net income                                           (8,506)          12,571          23,309
</TABLE>

In 1989, the Detroit Free Press and The Detroit News began operating under a
joint operating agreement as Detroit Newspapers (DN). Balance sheet amounts for
DN at December 31, 2000, December 26, 1999, and December 27, 1998, are included
above, and the net assets contributed to DN are included in "Equity in
Unconsolidated Companies and Joint Ventures" in the Consolidated Balance Sheet.
Excluding DN, the company's investment in unconsolidated subsidiaries includes
$292.0 million of net assets accumulated since the investment dates. Dividends
and cash distributions received from unconsolidated companies and joint ventures
(excluding DN) were $9.5 million in 2000, $10.8 million in 1999 and $6.6 million
in 1998.

In January 1997, the company and Tele-Communications, Inc., closed on the sale
of Knight Ridder's interest in all but one of their jointly owned cable systems.
The sale of the balance of the cable system was completed in March 1998.

5.   BUSINESS SEGMENTS

Financial data for the company's segments are as follows (in thousands):

                                      2000             1999            1998
------------------------------------------------------------------------------
Operating revenue
     Newspapers                   $ 3,166,589      $ 3,002,379     $ 2,877,650
     Online                            45,178           31,396          17,904
------------------------------------------------------------------------------
                                  $ 3,211,767      $ 3,033,775     $ 2,895,554
==============================================================================
Operating income (loss)
     Newspapers                     $ 742,556        $ 683,322       $ 559,739
     Online                           (46,021)         (24,041)        (21,175)
     Corporate                        (27,763)         (37,859)        (33,941)
------------------------------------------------------------------------------
                                    $ 668,772        $ 621,422       $ 504,623
==============================================================================
Depreciation and amortization
     Newspapers                     $ 179,243        $ 176,340       $ 175,960
     Online                             2,655            1,819           1,288
     Corporate                          5,699            4,784           3,864
------------------------------------------------------------------------------
                                    $ 187,597        $ 182,943       $ 181,112
==============================================================================

6.   CAPITAL STOCK

Shareholders authorized 20 million shares of preferred stock for future
issuance.

In 1997, the Board of Directors authorized 1,758,242 shares of Series B
preferred stock, $1.00 par value per share, and issued 1,754,930 preferred
shares in connection with the acquisition of four newspapers that were
indirectly owned by The Walt Disney Company. Each share of Series B preferred
stock is convertible into 10 shares of common stock. During 2000 and 1999,
263,600 and 380,830 shares of preferred stock were converted into 2.6 million
and 3.8 million common shares, respectively. If and when dividends and other
distributions are declared by the Board of Directors, holders of the Series B
preferred stock are entitled to receive the dividends or other distribution paid
on the number of shares of the corporation's common stock into which each share
of this series is convertible. Each holder of this series is entitled to vote
with respect to all matters upon which holders of the corporation's common stock
are entitled to vote. The holder of Series B preferred stock has two votes for
each preferred share.

The company has a stock rights agreement. The agreement grants each holder of a
common share a right, under certain conditions, to purchase from the company a
unit consisting of one one-hundredth of a share of preferred stock at a price of
$150, subject to adjustment. The rights provide that in the event the company is
a surviving corporation in a merger, each holder of a right will be entitled to
receive, upon exercise, common shares having a value equal to two times the
exercise price of the right. In the event the company engages in a merger or
other business combination transaction in which the company is not the surviving
corporation, the rights agreement provides that proper provision shall be made
so that each holder of a right will be entitled to receive, upon the exercise

                                       28

<PAGE>

thereof at the then-current exercise price of the right, common stock of the
acquiring company having a value equal to two times the exercise price of the
right. No rights certificates will be distributed until 10 days following a
public announcement that a person or group of affiliated or associated persons
has acquired, or obtained the right to acquire, beneficial ownership of 20% or
more of the company's outstanding common stock, or 10 business days following
the commencement of a tender offer or exchange offer for 20% or more of the
company's outstanding stock. Until such time, the rights are evidenced by the
common share certificates of the company. The rights are not exercisable until
distributed and will expire on July 10, 2006, unless earlier redeemed or
exchanged by the company.

The company has the option to redeem the rights in whole, but not in part, at a
price of $.01 per right, subject to adjustment. The company's Board of Directors
has reserved 1,500,000 preferred shares for issuance upon exercise of the
rights.

In 2000, 1999 and 1998, the Series B preferred stock, each share of which is
convertible into 10 shares of common stock, and shares of common stock issuable
upon exercise of stock options are included in the diluted EPS calculation, but
excluded from the basic EPS calculation. The 2000, 1999 and 1998 diluted EPS
calculations include 12,596,170, 15,947,916 and 17,549,300 weighted-average
shares of Series B convertible preferred stock, respectively, and 1,138,199,
1,487,231 and 1,744,887 weighted-average shares of common stock issuable upon
exercise of stock options, respectively.

The Employees Stock Purchase Plan provides for the sale of common stock to
employees of the company and its subsidiaries at a price equal to 85% of the
market value at the end of each purchase period. Participants under the plan
received 344,800 shares in 2000, 336,001 shares in 1999 and 349,599 shares in
1998. The purchase price of shares issued in 2000 under this plan ranged from
$39.60 to $46.83, and the market value on the purchase dates of such shares
ranged from $46.59 to $55.09.

The Employee Stock Option Plan provides for the issuance of nonqualified stock
options and incentive stock options. Options are issued at prices not less than
market value at date of grant. Options granted vest in one year or three years
from the date of grant. Options vesting over three years vest annually in three
equal installments. Options expire no later than 10 years from the date of
grant. The option plan provides for the discretionary grant of stock
appreciation rights (SARs) in tandem with previously granted options, which
allow a holder to receive in cash, stock or combinations thereof the difference
between the exercise price and the fair market value of the stock at date of
exercise. Shares of common stock relating to options outstanding under this plan
are reserved at the date of grant.

Transactions under the Employee Stock Option Plan are summarized as follows:

                                                               Weighted-average
                                            Number of           Exercise Price
                                             Shares               Per Share
-----------------------------------------------------------------------------
Outstanding
   Dec. 28, 1997                            6,257,534               $35.74
   1998:   Exercised                       (1,007,792)               28.35
           Expired                            (25,230)               33.88
           Forfeited                          (90,224)               55.61
           Granted                          1,481,750                49.72

Outstanding
   Dec. 27, 1998                            6,616,038                39.74
   1999:   Exercised                         (840,375)               30.88
           Expired                            (24,907)               43.38
           Forfeited                         (140,295)               45.55
           Granted                          1,652,850                57.82

Outstanding
   Dec. 26, 1999                            7,263,311                44.75
   2000:   EXERCISED                         (448,447)               32.75
           EXPIRED                            (26,849)               55.45
           FORFEITED                         (237,571)               53.66
           GRANTED                          3,578,075                54.64

OUTSTANDING
   DECEMBER 31, 2000                       10,128,519                48.59

The company maintains a Long-Term Incentive Plan. The plan rewards participants
whose leadership helps the company reach levels of total shareholder return, as
defined. The plan originally covered a three-year performance period from
January 1, 1997, through December 31, 1999. Participants received grants, net of
forfeitures, of 314,925 in restricted shares outstanding at December 26, 1999,
and December 27, 1998, and 322,286 at December 28, 1997. There were no shares
vested as of December 26, 1999, since the company's total shareholder return did
not reach the performance goals. The plan was extended for an additional
three-year period beginning on January 1, 2000, with an initial grant of 342,012
shares, and ending on December 31, 2002. The grants of common stock are
restricted, as the vesting of these shares is triggered upon the occurrence of
certain performance goals. As of December 31, 2000, 120,837 shares were included
as contingently issuable based on shareholder return performance as of year end.

                                       29

<PAGE>

The company also maintains a Compensation Plan for Nonemployee Directors. The
purpose of the plan is to attract and retain the services of qualified
individuals who are not employees of the company to serve as members of the
Board of Directors. Part of the compensation plan includes the issuance of stock
options. Options vest in three equal installments over a three-year period and
expire no later than 10 years from the date of grant. In 1997, 200,000 shares
were authorized for issuance as options under the plan. Participants were
granted 32,000, 20,000 and 24,000 options in 2000, 1999 and 1998, respectively.
In addition, 3,696 and 4,157 shares were awarded under the plan as retainer
payments to nonemployee directors in 2000 and 1999, respectively.

Proceeds from the issuance of shares under these plans are included in
shareholders' equity and do not affect income.

At December 31, 2000, shares of the company's authorized but unissued common
stock were reserved and available for issuance as follows:

                                             Shares
-----------------------------------------------------
Employee Stock Option Plan                 11,668,886
Employees Stock Purchase Plan               1,390,706
Nonemployee Directors Plan                    100,000
-----------------------------------------------------
     Total                                 13,159,592
=====================================================

As required by FAS 123, pro forma information regarding net income and earnings
per share has been determined as if the company had accounted for its stock
options under the fair value method of that statement. The fair value for these
options was estimated at the date of grant using a Black-Scholes option pricing
model with the following weighted-average assumptions for 2000, 1999 and 1998,
respectively: risk-free rates of 6.1%, 6.2% and 4.7%; dividend yields of 1.8%,
1.5% and 1.6%; volatility factors of the expected market price of the company's
common stock of 0.20, 0.16 and 0.17; and a weighted-average expected life of the
option of 4.0, 5.6 and 6.4 years. The weighted-average fair values of the stock
options for 2000, 1999 and 1998 were $11.29, $14.67 and $11.58, respectively.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options that have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions, including the expected stock price volatility. Because
the company's stock options have characteristics significantly different from
those of traded options, and because changes in the subjective input assumptions
can materially affect the fair value estimate, the existing models, in
management's opinion, do not necessarily provide a reliable single measure of
the fair value of its stock options.

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period. In addition, the 15%
discount in market value under the Employees Stock Purchase Plan is treated as
compensation expense for pro forma purposes. The company's 2000, 1999 and 1998
pro forma information follows (in thousands, except for earnings per share
information):

                                            2000        1999        1998
--------------------------------------------------------------------------
Pro forma net income                     $ 288,408   $ 329,689   $ 356,777
Pro forma basic earnings per share            3.68        3.94        4.52
Pro forma diluted earnings per share          3.24        3.38        3.63

The pro forma effect on net income is not necessarily representative of the
effect in future years because it does not take into consideration pro forma
compensation expense related to grants made prior to 1995.

The exercise price of options outstanding at December 31, 2000, ranged from
$23.28 to $57.97. The weighted-average remaining contractual life of those
options for 2000, 1999 and 1998 is 7.8, 7.5 and 7.3 years, respectively. The
weighted-average exercise price of those options for 2000, 1999 and 1998 is
$48.64, $44.75 and $39.74, respectively. The number of options exercisable at
the end of 2000, 1999 and 1998 were 5,132,541, 4,262,694 and 3,882,661,
respectively.

                                       30

<PAGE>

7.   PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

A summary of the components of net periodic benefit cost for the defined benefit
plans and postretirement benefit plans (other benefits) is presented here, along
with the total amounts charged to pension expense for multi-employer union
defined benefit plans, defined contribution plans and other agreements (in
thousands):

<TABLE>
<CAPTION>
                                                        Pension Benefits                          Other Benefits
                                            ---------------------------------------    -----------------------------------
                                                 2000         1999         1998             2000        1999         1998
--------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>          <C>          <C>               <C>         <C>          <C>
Defined benefit plans:
   Service cost and plan expenses             $ 42,324     $ 36,340     $ 41,082          $ 1,271     $ 2,516      $ 2,266
   Interest cost                                75,897       71,900       65,754            8,186       7,812        7,114
   Expected return on plan assets             (102,917)     (93,141)     (85,058)            (702)       (805)        (778)
   Recognized net actuarial (gain) loss        (10,508)       1,380         (791)            (519)        (48)        (829)
   Amortization of prior service cost            6,733        6,596        6,225           (4,104)     (4,103)      (4,104)
   Amortization of transition asset             (3,128)      (3,865)      (3,706)
--------------------------------------------------------------------------------------------------------------------------
       Net                                       8,401       19,210       23,506            4,132       5,372        3,669
Multi-employer union plans                      11,218       10,860       10,508
Defined contribution plans                      12,534       11,741       11,378
Other                                            1,413        1,812        1,729
--------------------------------------------------------------------------------------------------------------------------
   Net periodic benefit cost                   $33,566     $ 43,623     $ 47,121          $ 4,132     $ 5,372      $ 3,669
==========================================================================================================================
</TABLE>

Service cost in 1998 and 2000 included approximately $7.0 million and $15.0
million, respectively, related to accelerating the retirement of certain
employees.

Weighted-average assumptions used each year in accounting for defined benefit
plans and postretirement benefits were:

<TABLE>
<CAPTION>
                                                    Pension Benefits                         Other Benefits
                                            -------------------------------          ------------------------------
                                             2000        1999         1998            2000         1999       1998
-------------------------------------------------------------------------------------------------------------------
<S>                                           <C>        <C>          <C>             <C>          <C>         <C>
Discount rate as of year end                  7.8%       7.8%         6.8%            7.8%         7.8%        6.8%
Return on plan assets                         9.0        9.0          8.8             6.5          6.5         6.5
Rate of compensation increase                 4.3        3.5          4.5             4.5          3.5         4.5
Medical trend rate:
   Projected                                                                          5.5          6.0         7.0
   Reducing to this percentage
   in 2001 and thereafter                                                             5.5          5.5         5.5
</TABLE>

The assumed health-care-cost trend rate has a significant effect on the amounts
reported. A one-percentage-point change in the assumed health-care-cost trend
rate would have the following effects:

                                           One-Percentage-      One-Percentage-
                                           Point Increase       Point Decrease
------------------------------------------------------------------------------
Effect on total of service and interest
   cost components in 2000                      $  676              $  (576)
Effect on postretirement benefit
   obligation as of Dec. 31, 2000               $4,541              $(3,987)

                                       31

<PAGE>

The following table sets forth the funded status and amounts recognized in the
Consolidated Balance Sheet for the company's benefit plans (excluding
liabilities of Detroit Newspapers that are reported net in the Consolidated
Balance Sheet under the caption "Equity in Unconsolidated Companies and Joint
Ventures") (in thousands):

<TABLE>
<CAPTION>
                                                         Pension Benefits                              Other Benefits
                                              ----------------------------------------    ----------------------------------------
                                                    2000         1999          1998            2000         1999           1998
----------------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>         <C>            <C>             <C>          <C>             <C>
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year          $ 940,990   $ 1,020,113    $ 923,734       $ 120,819    $ 121,229       $ 132,618
Service cost                                        40,717        35,143       37,318           1,271        2,516           2,266
Interest cost                                       75,897        71,900       65,754           8,186        7,812           7,114
Plan participants' contributions                                                                1,297        1,102           1,216
Amendments                                           3,820         4,361        5,666                                         (868)
Actuarial (gain) loss                               54,912      (136,868)      35,143           3,272       (1,575)        (11,788)
Benefits paid                                      (52,645)      (53,659)     (47,502)        (12,850)     (10,265)         (9,329)
----------------------------------------------------------------------------------------------------------------------------------
Benefit obligation at end of year              $ 1,063,691     $ 940,990  $ 1,020,113       $ 121,995    $ 120,819       $ 121,229
===================================================================================================================================
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year $ 1,171,546   $ 1,090,569  $ 1,009,187        $ 11,623     $ 12,701        $ 12,386
Actual return on plan assets                        65,878       120,730      119,955           1,027          520             916
Company contributions                               15,573        15,570        8,930          10,706        7,565           7,512
Plan participants' contributions                                                                1,297        1,102           1,216
Benefits paid and administrative costs             (55,034)      (55,323)     (47,503)        (12,850)     (10,265)         (9,329)
----------------------------------------------------------------------------------------------------------------------------------
Fair value of plan assets at end of year       $ 1,197,963   $ 1,171,546  $ 1,090,569        $ 11,803     $ 11,623        $ 12,701
===================================================================================================================================
Funded status of plan (underfunded)              $ 134,272     $ 230,556     $ 70,456      $ (110,192)  $ (109,196)      $(108,528)
Unrecognized net actuarial gain                   (177,783)     (273,818)    (106,716)        (16,292)     (19,758)        (18,297)
Unrecognized prior service cost                     43,369        40,693       41,265         (12,085)     (16,189)        (20,293)
Unrecognized transition obligation (asset)             306        (2,920)      (6,606)
----------------------------------------------------------------------------------------------------------------------------------
Net prepaid (accrued) benefit cost                 $   164      $ (5,489)    $ (1,601)     $ (138,569)  $ (145,143)     $ (147,118)
===================================================================================================================================
</TABLE>

Amounts recognized in the Consolidated Balance Sheet consist of:

<TABLE>
<CAPTION>
                                                         Pension Benefits                             Other Benefits
                                              ---------------------------------------    ---------------------------------------
                                                 2000          1999         1998             2000          1999          1998
--------------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>           <C>          <C>
Prepaid benefit cost                           $ 51,926      $ 44,263     $ 41,321
Accrued benefit liability                       (51,762)      (49,752)     (42,922)      $ (138,569)   $ (145,143)    $ (147,118)
Additional minimum liability                     (9,282)                    (9,200)
Intangible asset                                  9,282                      9,200
--------------------------------------------------------------------------------------------------------------------------------
Net prepaid (accrued) benefit cost               $  164      $ (5,489)    $ (1,601)      $ (138,569)   $ (145,143)    $ (147,118)
================================================================================================================================
</TABLE>

Amounts applicable to the company's pension plans with accumulated benefit
obligations in excess of plan assets are as follows:

                                               2000         1999          1998
--------------------------------------------------------------------------------
Projected benefit obligation                $ 122,878     $ 37,666     $ 119,794
Accumulated benefit obligation                106,057       26,462       106,092
Fair value of plan assets                      79,552                     68,988
--------------------------------------------------------------------------------
Unfunded accumulated benefit obligation     $  26,505     $ 26,462     $  37,104
================================================================================

Of the plans whose accumulated benefit obligations exceed plan assets, the
amounts applicable to qualified plans are as follows (none in 1999):

                                              2000          1999         1998
--------------------------------------------------------------------------------
Projected benefit obligation                $ 85,838      $    --      $ 79,800
Accumulated benefit obligation                82,239                     75,211
Fair value of plan assets                     79,552                     68,988
--------------------------------------------------------------------------------
Unfunded accumulated benefit obligation     $  2,687      $    --      $  6,223
================================================================================

Net pension assets are included in "Other" noncurrent assets, and net pension
liabilities are included in "Employment Benefits and Other Noncurrent
Liabilities." Substantially all of the assets of the company-administered plans
are invested in listed stocks and bonds.

In the fourth quarter of 1998, the company changed the method of accounting used
to determine the market-related value of pension plan assets, effective December
29, 1997. The method was changed to: (1) align the method of calculating the
return component of net periodic pension costs with the related plans'
investment strategy, and (2) minimize significant year-to-year fluctuations in
pension cost caused by financial market volatility. The effect of this change on
results of operations, including the cumulative effect of prior years, was not
material.

                                       32

<PAGE>

EMPLOYEE LABOR ARRANGEMENTS
About 37% of the company's 22,000 employees are represented by approximately 70
local unions and work under multi-year collective bargaining agreements. These
agreements are renegotiated in the years in which they expire. A six-year
extension of all labor contracts in Philadelphia was negotiated in January 2001
and ratified by all unions shortly thereafter.

8. QUARTERLY OPERATIONS (Unaudited)
The company's largest source of revenue, retail advertising, is seasonal and
tends to fluctuate with retail sales in markets served. Historically, retail
advertising is higher in the second and fourth quarters. General advertising,
while not as seasonal as retail, is lower during the summer months.

Classified advertising revenue has in the past been a reflection of the overall
economy and has not been significantly affected by seasonal trends. In 2000, new
Financial Accounting Standards Board rules for partially owned operations
affected how Knight Ridder accounts for Detroit Newspapers. All quarters have
been restated to reflect this change. See "Notes to Consolidated Financial
Statements."  The following table summarizes the company's quarterly results of
operations (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                                                             Quarter
                                                                 --------------------------------------------------------------
Description                                                          First           Second             Third          Fourth
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                               <C>               <C>              <C>              <C>
2000   Operating revenue                                          $ 758,567         $ 806,168        $ 769,234        $ 877,798
       Operating income                                             145,423           179,712          154,837          188,800
       Net income (loss)                                            160,855 (a)        96,273  (b)      76,106          (18,871) (c)
       Earnings per share
           Basic:   Net income                                         2.03              1.23             0.99            (0.29)
           Diluted: Net  income                                        1.74              1.08             0.87            (0.29)
       Dividends declared per common share                             0.23              0.23             0.23             0.23
-------------------------------------------------------------------------------------------------------------------------------
1999   Operating revenue                                          $ 720,568         $ 758,107        $ 737,201        $ 817,899
       Operating income                                             125,664           152,653          150,980          192,125
       Net income                                                    62,867  (d)       86,586  (e)      76,209          114,277  (f)
       Earnings per share
           Basic:   Net income                                         0.76              1.04             0.90             1.37
           Diluted: Net  income                                        0.65              0.88             0.78             1.18
       Dividends declared per common share                             0.20              0.23             0.23             0.23
-------------------------------------------------------------------------------------------------------------------------------
1998   Operating revenue                                          $ 694,037         $ 728,783        $ 704,119        $ 768,615
       Operating income                                             113,191           127,125          111,630          152,677
       Income from continuing operations                            101,437  (g)       66,925  (h)      56,983  (j)      80,286  (k)
       Net gain on sale of BIS operations                                              60,042  (i)
       Income from BIS operations, net                                  184
       Net income                                                   101,621           126,967           56,983           80,286
       Earnings per share
           Basic:   Income from continuing operations                  1.22              0.81             0.68             0.98
                    Net gain on sale of BIS operations                                   0.76
                    Income from BIS operations, net                    0.01
                    Net income                                         1.23              1.57             0.68             0.98
           Diluted: Income from continuing operations                  1.02              0.68             0.58             0.83
                    Net gain on sale of BIS operations                                   0.61
                    Income from BIS operations, net
                    Net income                                         1.02              1.29             0.58             0.83
       Dividends declared per common share                             0.20              0.20             0.20             0.20
</TABLE>

(a)  Includes after-tax gain of $92 million related to InfoSpace, Inc.'s,
     acquisition of Prio, Inc., and GoTo.com, Inc.'s, acquisition of Cadabra,
     Inc.
(b)  Includes after-tax gain of $5.7 million on sale of a building in
     Philadelphia.
(c)  Includes after-tax severance costs of $10.4 million and after-tax loss of
     $103.3 million on the write-down of investments primarily in InfoSpace,
     Inc., and GoTo.com, Inc.
(d)  Includes after-tax severance costs of $1.3 million and an after-tax gain of
     $2.3 million on the sale of SportsLine USA, Inc.
(e)  Includes after-tax severance costs of $1.4 million and after-tax gains on
     the sale of Zip2 Corp. and AT&T Corporation stock (net of adjustments to
     certain investments to write down permanent declines in their market value)
     of $6.7 million.
(f)  Includes an after-tax gain of $14.7 million on the sale of AT&T Corporation
     stock.
(g)  Includes the after-tax gain of $45.0 million on the sales of the balance of
     cable systems jointly owned with Tele-Communications, Inc., and the
     newspaper in Gary, Ind.
(h)  Includes after-tax corporate relocation costs, net of settlement
     adjustments on 1997 newspaper sales totaling $5.1 million.
(i)  Gain on the sale of Technimetrics, Inc.
(j)  Includes after-tax corporate relocation costs of $4.4 million.
(k)  Includes after-tax corporate relocation costs and other severance costs of
     $3.2 million.

                                       33

<PAGE>

9.   COMPREHENSIVE INCOME

The following table presents the components of other comprehensive income for
2000, 1999 and 1998 as shown in the Statement of Shareholders' Equity (in
thousands):

<TABLE>
<CAPTION>
                                                                                    2000            1999          1998
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>             <C>           <C>
Net income                                                                        $ 314,363       $ 339,939     $ 365,857
Total gains (losses) on securities available for sale, net of taxes                (144,559)         47,462        18,738
Less: reclassification adjustment for realized losses (gains), net of taxes         101,174         (24,116)            0
-------------------------------------------------------------------------------------------------------------------------
Change in accumulated comprehensive income                                          (43,385)         23,346        18,738
-------------------------------------------------------------------------------------------------------------------------
Comprehensive income                                                              $ 270,978       $ 363,285     $ 384,595
=========================================================================================================================
</TABLE>

10.  ACQUISITIONS AND DISPOSITIONS

ACQUISITIONS
In August 2000, Career Holdings, Inc., a company jointly controlled by
KnightRidder.com and Tribune Co., completed the acquisitions of CareerBuilder,
Inc., and CareerPath.com, Inc., respectively. In the CareerBuilder acquisition,
a wholly owned subsidiary of Career Holdings made a tender offer for all of
CareerBuilder's common stock at a price of $8 per share in cash. The tender
offer, which began on July 25, 2000, and expired on August 21, 2000, was
followed by the merger of the subsidiary into CareerBuilder on August 24, 2000.
The CareerPath.com acquisition was accomplished by the merger of a wholly owned
subsidiary of Career Holdings into CareerPath.com on August 31, 2000. The total
purchase price for the CareerBuilder and CareerPath.com acquisitions was
approximately $250 million. The company, through KnightRidder.com, currently
owns a 46.4% interest in Career Holdings, Inc.

DISPOSITIONS

RELATED TO CONTINUING OPERATIONS:
On March 18, 1998, the company closed on the sale of its remaining interest in a
cable system jointly owned with Tele-Communications, Inc. (TCI). On February 2,
1998, the company sold the Post-Tribune in Gary, Ind., to Hollinger
International, Inc. The proceeds from these sales were $95.8 million, consisting
of $58.1 million in cash and TCI stock with an aggregate market value of $37.7
million. The pretax and after-tax gains on the sales were $75.3 million and
$45.0 million, respectively.

RELATED TO DISCONTINUED OPERATIONS:
In 1997, the company announced its intention to sell the remaining Business
Information Services (BIS) Division subsidiaries. This decision resulted in the
reclassification of the former BIS segment as discontinued operations. The
company fully divested the BIS segment with the sale of Technimetrics, Inc., its
global diversified information subsidiary, in 1998.

On April 13, 1998, the company closed on the sale of Technimetrics, Inc., to an
operating unit of The Thomson Corporation. The proceeds from the sale were
$125.0 million and resulted in pretax and after-tax gains of $103.8 million and
$60.0 million, respectively.

11.  COMMITMENTS AND CONTINGENCIES

At December 31, 2000, the company had lease commitments currently estimated to
aggregate approximately $94.7 million that expire from 2001 through 2051 as
follows (in thousands):

2001                              $ 20,151
2002                                17,098
2003                                14,072
2004                                11,668
2005                                 9,118
2006 and thereafter                 22,610
------------------------------------------
Total                             $ 94,717
==========================================

Payments under the lease contracts were $23.1 million in 2000, $24.7 million in
1999 and $19.3 million in 1998.

In connection with the company's insurance program, letters of credit are
required to support certain projected worker compensation obligations. At
December 31, 2000, the company had approximately $50 million of undrawn letters
of credit outstanding.

On July 13, 1995, six unions struck the Detroit Free Press, The Detroit News and
Detroit Newspapers (DN), which operates both newspapers. Subsequently, the
unions filed numerous unfair labor practice charges against the newspapers and
DN. In June 1997, after a long trial, a National Labor Relations Board (NLRB)
administrative judge ruled that the strike was caused by the unfair labor
practices of DN and The Detroit News and ordered that DN and the newspapers
reinstate all strikers, displacing permanent replacements if necessary. DN and
the newspapers appealed the decision to the NLRB.

On Aug. 27, 1998, the NLRB affirmed certain unfair labor practice findings
against The Detroit News and DN and reversed certain findings of unfair labor
practices against DN. DN and the newspapers filed a motion to reconsider with
the NLRB, which was denied on March 4, 1999. The unions and DN filed appeals to
the U.S. Court of Appeals for the District of Columbia Circuit..

The U.S. Court of Appeals, on July 7, 2000, unanimously reversed the NLRB,
holding that the strike was an economic strike. Thus, the NLRB order to
reinstate and pay back pay to the strikers was also set aside. The time to
appeal has expired and no appeal was filed.

Various libel and copyright infringement actions and environmental and other
legal proceedings that have arisen in the ordinary course of business are
pending against the company and its subsidiaries. In the opinion of management,
the ultimate liability to the company and its subsidiaries as a result of all
legal proceedings will not be material to its financial position or results of
operations on a consolidated basis.

                                       34

<PAGE>

REPORT OF INDEPENDENT AUDITORS

Shareholders
Knight-Ridder, Inc.

We have audited the accompanying consolidated balance sheets of Knight-Ridder,
Inc., as of December 31, 2000, and December 26, 1999, and the related
consolidated statements of income, cash flows and shareholders' equity for each
of the three years in the period ended December 31, 2000. Our audits also
included the financial statement schedule listed in the index of Item 14(a).
These financial statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements and schedule based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Knight-Ridder,
Inc., at December 31, 2000, and December 26, 1999, and the consolidated results
of its operations and its cash flows for each of the three years in the period
ended December 31, 2000, in conformity with accounting principles generally
accepted in the United States. Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.




                                             ---------------------
                                             /s/ Ernst & Young LLP


San Jose, California
January 24, 2001

                                       35
<PAGE>

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

Not applicable

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

In addition to the information set forth under the caption "Executive Officers
of Knight Ridder" in Part I of this Form 10-K, the information required by this
section is incorporated by reference from the Proxy Statement for the 2001
Annual Meeting under the captions "Item 1: Election of Directors - Nominees for
Election for Three Year Terms Ending 2004," "Directors Continuing in Office
Until 2003," "Directors Continuing in Office Until 2002" and "Section 16(a)
Beneficial Ownership Reporting Compliance."

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is incorporated by reference from the
Proxy Statement for the 2001 Annual Meeting under the captions "Item 1: Election
of Directors - How the Company Compensates Directors" and "Executive
Compensation."

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this item is incorporated by reference from the
Proxy Statement for the 2001 Annual Meeting under the captions "Principal
Holders of the Company's Stock" and Stock Ownership of Directors and Officers"
under the heading "Information About Knight Ridder Stock Ownership."

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is incorporated by reference from the
Proxy Statement for the 2001 Annual Meeting under the captions "Compensation
Committee Interlocks and Insider Participation" and "Certain Relationships and
Related Transactions."

                                       36

<PAGE>

PART IV

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

(a)

     1.   The following consolidated financial statements of Knight-Ridder, Inc.
          and subsidiaries, included in the annual report of the registrant to
          its shareholders for the year ended December 31, 2000, are included in
          Item 8:

          Consolidated Balance Sheet - December 31, 2000 and December 26, 1999

          Consolidated Statement of Income - Years ended December 31, 2000,
          December 26,1999, and December 27, 1998

          Consolidated Statement of Cash Flows - Years ended December 31, 2000,
          December 26,1999, and December 27, 1998

          Consolidated Statement of Shareholders' Equity - Years ended December
          31, 2000, December 26,1999, and December 27, 1998

          Notes to consolidated financial statements - December 31, 2000

     2.   The following consolidated financial statement schedule of
          Knight-Ridder, Inc and subsidiaries is included in Item 14(d):

          Schedule II - Valuation and qualifying accounts

          All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not required
under the related instructions, or are inapplicable, or have been shown in the
consolidated financial statements or notes thereto, and therefore have been
omitted from this section.

     3.   Exhibits

              No. 2         Disposition of Assets is incorporated by reference
                            to the Company's Form 8-K dated as of March 18,
                            1998, filed March 31, 1998.

              No. 3(i)  -   Amended and Restated  Articles of Incorporation of
                            Knight-Ridder,  Inc.  (amended  and restated as of
                            February 3, 1998) are incorporated by reference to
                            the Company's Form 10-K filed March 13, 1998.

                   (ii)  -  Bylaws of Knight-Ridder, Inc. (as amended July 25,
                            2000), are incorporated by reference to the
                            Company's Form 10-Q filed August 9, 2000.

                                       37
<PAGE>

              No. 4.     -  Indenture, dated as of April 6, 1989, is
                            incorporated by reference to the Company's
                            Registration Statement on Form S-3, effective April
                            7, 1989. (No. 33-28010)

                            Rights Agreement, dated as of June 21, 1996, is
                            incorporated by reference to the Company's Form 8-K
                            filed July 9, 1996.

                            Indenture, dated as of October 9, 1997, is
                            incorporated by reference to the Company's
                            Registration Statement on Form S-3, effective
                            October 10, 1997 (No. 333-37603).

              No. 10 (a)    Knight-Ridder, Inc. Employee Stock Option Plan (as
                            amended through October 24, 2000.)*

                     (b)    Knight-Ridder, Inc. Compensation Plan for
                            Nonemployee Directors effective July 1, 1997 (as
                            amended through October 24, 2000.)*

                     (c)    Knight Ridder Annual Incentive Plan as amended and
                            restated effective January 1, 2001.*

                     (d)    Knight Ridder Long-Term Incentive Plan (as amended
                            effective January 1, 2000) is incorporated by
                            reference to the company's Form 10-K/A filed April
                            12, 2000.*

                     (e)    Executive Officer's Retirement Agreement dated
                            December 19, 1991, is incorporated by reference to
                            the Company's Form 10-K filed on March 23, 1994.

                     (f)    Executive Income Security Agreement (as amended
                            effective October 24, 2000.)*

              No. 11        Statement re Computation of Per Share Earnings is
                            filed herein.

              No. 12        Statement re Computation of Earnings to Fixed
                            Charges Ratio From Continuing Operations is filed
                            herein.

              No. 21        Subsidiaries of the Registrant is filed herein.

              No. 23        Consent of Independent Auditors is filed herein.

              No. 24        Powers of Attorney.


                                       38

<PAGE>

                                   SIGNATURES

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

                                       KNIGHT-RIDDER, INC.



Dated March 23, 2001                   /s/ P. ANTHONY RIDDER
---------------------                  -----------------------------------------
                                  By   P. Anthony Ridder
                                       Chairman and
                                       Chief Executive Officer

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

Dated March 23, 2001                   /s/ P. ANTHONY RIDDER
---------------------                  -----------------------------------------
                                       P. Anthony Ridder
                                       Chairman and
                                       Chief Executive Officer

Dated March 23, 2001                   /s/ JEAN MORDO
---------------------                  -----------------------------------------
                                       Jean Mordo
                                       Chief Financial Officer and
                                       Senior Vice President/Finance

Dated March 23, 2001                   /s/ GARY R. EFFREN
---------------------                  -----------------------------------------
                                       Gary R. Effren
                                       Vice President/Controller
                                       (Chief Accounting Officer)

                                       39

<PAGE>

                                       /s/ JAMES I. CASH, JR.*
                                       -----------------------------------------
                                       James I. Cash, Jr.
                                       Director

                                       /s/ JOAN RIDDER CHALLINOR *
                                       -----------------------------------------
                                       Joan Ridder Challinor
                                       Director

                                       /s/ KATHLEEN FOLEY FELDSTEIN*
                                       -----------------------------------------
                                       Kathleen Foley Feldstein
                                       Director

                                       /s/ THOMAS P. GERRITY*
                                       -----------------------------------------
                                       Thomas P. Gerrity
                                       Director

                                       /s/ BARBARA BARNES HAUPTFUHRER*
                                       -----------------------------------------
                                       Barbara Barnes Hauptfuhrer
                                       Director

                                       /s/ M. KENNETH OSHMAN*
                                       -----------------------------------------
                                       M. Kenneth Oshman
                                       Director

                                       /s/ P. ANTHONY RIDDER*
                                       -----------------------------------------
                                       P. Anthony Ridder
                                       Director

                                       /s/ RANDALL L. TOBIAS*
                                       -----------------------------------------
                                       Randall L. Tobias
                                       Director

                                       /s/ GONZALO F. VALDES-FAULI*
                                       -----------------------------------------
                                       Gonzalo F. Valdes-Fauli
                                       Director

                                       /s/ JOHN L. WEINBERG*
                                       -----------------------------------------
                                       John L. Weinberg
                                       Director

Dated March 23, 2001              By:  /s/ JEAN MORDO
--------------------                   -----------------------------------------
                                       Jean Mordo
                                       Attorney-in-fact

                                       40

<PAGE>

EXHIBIT INDEX

(a)

1.   The following consolidated financial statements of Knight-Ridder, Inc. and
     subsidiaries, included in the annual report of the registrant to its
     shareholders for the year ended December 31, 2000, are included in Item 8:

     Consolidated Balance Sheet - December 31, 2000 and December 26, 1999

     Consolidated Statement of Income - Years ended December 31, 2000, December
     26, 1999, and December 27, 1998

     Consolidated Statement of Cash Flows - Years ended December 31, 2000,
     December 26, 1999, and December 27, 1998

     Consolidated Statement of Shareholders' Equity - Years ended December 31,
     2000 December 26, 1999, December 27, 1998

     Notes to consolidated financial statements - December 31, 2000

2.   The following consolidated financial statement schedule of Knight-Ridder,
     Inc. and subsidiaries is included in Item 14(d):

     Schedule II - Valuation and qualifying accounts

     All other schedules for which provision is made in the applicable
     accounting regulation of the Securities and Exchange Commission are not
     required under the related instructions, or are inapplicable, or have been
     shown in the consolidated financial statements or notes thereto, and
     therefore have been omitted from this section.

3.   Exhibits

          No. 2             Disposition of Assets is incorporated by reference
                            to the Company's Form 8-K dated as of March 18,
                            1998, filed March 31, 1998.

          No. 3 (i) -       Amended and Restated Articles of Incorporation of
                            Knight-Ridder, Inc. (amended and restated as of
                            February 3, 1998) are incorporated by reference to
                            the Company's Form 10-K filed March 13, 1998.

                (ii) -      Bylaws of Knight-Ridder, Inc. (as amended July 25,
                            2000), are incorporated by reference to the
                            Company's Form 10-Q filed August 9, 2000.

          No. 4 -           Indenture, dated as of April 6, 1989, is
                            incorporated by reference to the Company's
                            Registration Statement on Form S-3, effective April
                            7, 1989. (No. 33-28010)

                            Rights Agreement, dated as of June 21, 1996, is
                            incorporated by reference to the Company's Form 8-K
                            filed July 9, 1996.

                            Indenture, dated as of October 9, 1997, is
                            incorporated by reference to the Company's
                            Registration Statement on Form S-3, effective
                            October 10, 1997 (No. 333-37603).

          No. 10   (a) -    Knight-Ridder, Inc. Employee Stock Option Plan (as
                            amended through October 24, 2000).*

                   (b) -    Knight-Ridder, Inc. Compensation Plan for
                            Nonemployee Directors effective July 1, 1997 (as
                            amended through October 24, 2000).*

                                       41
<PAGE>

                   (c) -    Knight Ridder Annual Incentive Plan as amended and
                            restated effective January 1, 2001.*

                   (d) -    Knight Ridder Long-Term Incentive Plan (as amended
                            effective January 1, 2000) is incorporated by
                            reference to the company's Form 10-K/A filed April
                            12, 2000).*

                   (e) -    Executive Officer's Retirement Agreement dated
                            December 19, 1991, is incorporated by reference to
                            the Company's Form 10-K filed on March 23, 1994.

                   (f) -    Executive Income Security Agreement (as amended
                            effective October 24, 2000).*

          No. 11 - Statement re Computation of Per Share Earnings is filed
                   herein.

          No. 12 - Statement re Computation of Earnings to Fixed Charges Ratio
                   From Continuing Operations is filed herein.

          No. 21 - Subsidiaries of the Registrant is filed herein.

          No. 23 - Consent of Independent Auditors is filed herein.

          No. 24 - Powers of Attorney.

*    Denotes a management contract or compensatory plan or arrangement.

                                       42