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 26, 1999
                         Commission file number 1-7553

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

                               Florida 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 3, 2000: $3,681,884,942.

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest  practicable date: March 3, 2000 - 78,934,708 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 25, 2000, to be filed with
the Securities and Exchange Commission,  are incorporated by reference into Part
III.

<PAGE>


                     Table of Contents for 1999 Form 10-K
                                                                            Page
 PART I

 Item 1.    Business                                                          2

 Item 2.    Properties                                                        6

 Item 3.    Legal Proceedings                                                 6

 Item 4.    Submission of Matters to a Vote of Security Holders               7


PART II

 Item 5.    Market for Registrant's Common Equity and Related Stockholder
            Matters                                                           7

 Item 6.    Selected Financial Data                                           8

 Item 7.    Management's Discussion and Analysis of Financial Condition
            and Results of Operations                                        12

 Item 7A.   Quantitative and Qualitative Disclosures About Market Risks      19

 Item 8.    Financial Statements and Supplementary Data                      19

 Item 9.    Changes in and Disagreements with Accountants on Accounting
            and Financial Disclosure                                         46


PART III

 Item 10.   Directors and Executive Officers of the Registrant               46

 Item 11.   Executive Compensation                                           49

 Item 12.   Security Ownership of Certain Beneficial Owners and
            Management                                                       49

 Item 13.   Certain Relationships and Related Transactions                   49


PART IV

 Item 14.   Exhibits, Financial Statement Schedules, and Reports on
            Form 8-K                                                         50

SIGNATURES                                                                   53

SCHEDULES                                                                    56

EXHIBITS                                                                     56


                                       1
<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 31 daily  newspapers and 22 nondaily  newspapers at the end of
1999.

Newspaper  operating  revenue is derived  primarily  from the sale of  newspaper
advertising.  Due to seasonal  factors such as heavier retail selling during the
winter and spring holiday seasons,  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 corporate  headquarters 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  services and
quality control also are provided by the corporate staff.

Each newspaper is served by the company-owned news bureau in Washington,  D.C. A
supplemental  news service provided by KRT Information  Services,  a partnership
between Knight Ridder and Tribune Co.,  distributes  editorial material produced
by all Knight Ridder  newspapers and by 15 foreign  correspondents.  The service
also distributes  editorial computer graphics and deadline photos via the Knight
Ridder-owned PressLink Online.

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 1999, 1998 and 1997. The
percentage  contributions of each paper to operating revenue are not necessarily
indicative of contributions to operating profit.

                                       2
<PAGE>

                                               1999       1998       1997
                                               ----       ----       ----
SOURCE OF KNIGHT RIDDER OPERATING REVENUE

  The Philadelphia Inquirer and
    Philadelphia Daily News                    18.8%      18.8%      19.0%
  The Miami Herald                             10.4       10.6       11.4
  San Jose Mercury News                         9.5        9.3       10.4
  The Kansas City Star(1)                       8.5        8.7        6.1
  Fort Worth Star-Telegram(1)                   7.3        7.1        4.9
  Detroit Free Press(2)                         7.2        7.3        7.0
  The Charlotte Observer                        6.1        6.0        6.2
  Contra Costa Newspapers                       4.1        3.9        3.9
  Saint Paul Pioneer Press                      4.0        4.0        4.1
  Akron Beacon Journal                          3.3        3.3        3.6
  All other                                    20.8       21.0       23.4
                                              -----      -----      -----
                                              100.0%     100.0%     100.0%
                                              =====      =====      =====

(1) The Kansas City Star and Fort Worth  Star-Telegram  were  acquired on May 9,
    1997. This table presents their part-year  contribution  percentage in 1997.
(2) Knight Ridder portion of Detroit Newspapers

                                   NEWSPRINT

Knight Ridder consumed  approximately  801,000 metric tons of newsprint in 1999.
Approximately  15.2% of the company's total  operating  expenses during the year
were for  newsprint.  Purchases  are made  under  long-term  agreements  with 18
newsprint  producers.  Knight Ridder purchases  approximately  60% of its annual
consumption from United States mills, with 35% purchased from 17 mills in Canada
and 5% from other offshore sources. 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 49% recycled  fiber.
This translates into an overall recycled newsprint average of 39.2%.

Knight Ridder is a one-third  partner with Cox  Enterprises  and Media  General,
Inc., in SP Newsprint Co., formerly Southeast Paper  Manufacturing Co. It is the
fifth-largest  newsprint  manufacturing  company in North  America.  It recently
acquired Smurfit Newsprint Corporation's Newberg, Ore., mill.

                                       3
<PAGE>

SP's mill in Dublin,  Ga.,  produces  more than 500,000  metric tons per year of
100% recycled  content  newsprint.  The Newberg plant produces more than 363,000
metric tons per year of newsprint with at least 55% recycled content.

SP  provides  recycled  content  newsprint  to its  owners  and  more  than  200
publishers and  commercial  printers.  Its SP Recycling  Corp.  subsidiary  will
recycle 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 in 1999.

Knight  Ridder's  purchases  from  these  three  newsprint   companies  will  be
approximately  40% of its annual  consumption  for 2000,  providing an important
hedge against price volatility and a secure source of supply.

                                   TECHNOLOGY

YEAR  2000  READINESS:  During  1999,  the  company  focused  on  preparing  its
technology infrastructure for the Year 2000. All significant operations were Y2K
capable by year end. For further  information,  see page 16, Year 2000 Readiness
Disclosure.

A major press replacement project was completed at the Fort Worth Star- Telegram
in 1999. Another, at The Miami Herald, is due for completion during 2000.

                           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,  Detroit Newspapers and
several leading independents.  It allows customers to place ads in a combination
of newspapers.

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 of the Knight Ridder  newspapers and more than 500
others. Like Newspapers First, it makes the purchase of newspaper  advertising a
"one-stop shopping," "one-order, one-bill" prospect.

             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
weekly net cumulative penetration of the daily Inquirer, Sunday Inquirer and the
Daily News is 66% of all adults in the region.  Together, the papers have won 19
Pulitzer Prizes. Revenue in 1999 was $607.0 million.

The Philadelphia  Primary  Metropolitan  Statistical  Area (PMSA)  population is
expected to decline  0.1% between  1999 and 2004,  compared  with an increase of
4.2% for the United States.  In 1999,  Philadelphia  had income per capita 15.3%
above the U.S. average; by 2004 it is projected to be 16.2% above.

                                       4
<PAGE>

                        The Miami Herald/el Nuevo Herald

The Miami Herald,  Florida's  largest  Sunday  newspaper,  is sold  primarily in
Miami-Dade,  Broward and Monroe counties. It is also distributed in 29 countries
in  Latin  America  and  the  Caribbean,  primarily  through  its  International
Satellite  Edition.  El Nuevo Herald, one of the  fastest-growing  U.S. dailies,
serves  the  growing  Spanish-speaking  population  of  Miami-Dade  and  Broward
counties.  It is the 12th-largest  paper in Florida.  Revenue in 1999 was $309.9
million for The Miami Herald and $26.8 million for the el Nuevo Herald. In 1999,
The Herald won its 16th Pulitzer Prize, for investigative journalism.

The Miami-Fort Lauderdale designated Market Area (DMA) population is expected to
grow 6.5% between 1999 and 2004,  compared with 4.2% for the United  States.  In
1999, the DMA had income per capita 5.5% below the U.S.  average;  by 2004 it is
projected to be 11.1% below.

                             San Jose Mercury News

The San Jose Mercury  News,  the newspaper of Silicon  Valley,  reaches close to
800,000  readers  daily and  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 second  nationally in exports.
Revenue in 1999 was $306.3  million.  The Mercury News recently was named one of
the nation's top 10 newspapers in a survey by the Columbia Journalism Review.

The  population of the San Jose Primary  Metropolitan  Statistical  Area,  which
includes  only Santa Clara  County,  is expected to grow 6.0%  between  1999 and
2004; the U.S. average is 4.2%. In 1999, San Jose had income per capita that was
52.4% above the U.S. average; by 2004 it is projected to be 55.5% above.

                              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.  Revenue in 1999
was $274.5 million.

The Kansas City  Metropolitan  Statistical  Area  population is expected to grow
4.4% between 1999 and 2004,  compared  with 4.2% for the United  States.  Kansas
City in 1999 had income per capita  7.8% above the U.S.  average;  by 2004 it is
projected to be 9.6% above.

                            Fort Worth Star-Telegram

The  Star-Telegram  serves the booming western portion of the Dallas/Fort  Worth
market,  the nation's  ninth-largest  metropolitan  area. The  four-county  Fort
Worth/Arlington  PMSA  metropolitan  area ranks as the  third-largest  in Texas.
Revenue in 1999 was $236.8 million.

Fort  Worth/Arlington's  population  is expected to grow 8.9%  between  1999 and
2004,  compared with 4.2% for the United States.  In 1999, Fort  Worth/Arlington
had income per capita 4.5% above the U.S. average; by 2004 it is projected to be
4.8% above.

                                       5
<PAGE>

                               Detroit Free Press

The Detroit Free Press,  Michigan's oldest daily newspaper, is sold primarily in
the six-county area  surrounding  Detroit.  It covers and 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 an a.m. paper; The News, owned by Gannett, is p.m. On weekends,  they publish
combined editions. Knight Ridder's share of revenue in 1999 was $232.1 million.

The population of the Detroit Primary Metropolitan  Statistical Area is expected
to grow 1.8% between 1999 and 2004,  compared  with 4.2% for the United  States.
Detroit in 1999 had income per capita 10.8% above the U.S.  average;  in 2004 it
is projected to be 11.5% above.

                             The Charlotte Observer

The Charlotte Observer, the largest-circulation daily in both Carolinas, is sold
primarily  in a  15-county  region  across the two  states.  Revenue in 1999 was
$197.0 million.

Population in the Charlotte  Metropolitan  Statistical Area is projected to grow
8.2% between 1999 and 2004, compared with the U.S. average of 4.2%. Charlotte in
1999 had per capita income 9.3% above the U.S. average;  in 2004 it is projected
to be 13.7% above.

                               Online Activities

The  company   announced  in  the  fourth   quarter  of  1999  the  creation  of
KnightRidder.com,   which  will  consolidate  all  of  the  company's   Internet
operations as a separate  business unit by the end of the first quarter of 2000.
Historically, Knight Ridder's Internet activities have been reported and managed
as a part of the company's  newspaper  operations,  but once the transition to a
stand-alone business unit is made, they will be reported and managed separately.
KnightRidder.com  will  continue to operate and manage the Real Cities  network,
which now  consists  of all Knight  Ridder Web sites as well as those of several
other media  affiliates.  Revenue from Real Cities  sites  increased by 75.4% in
1999,  to $31.4  million.  The  company  expects  significant  growth from these
operations in 2000.

Item 2.  PROPERTIES

Knight  Ridder  has daily  newspaper  facilities  in 28 markets  situated  in 17
states.  These  facilities  vary in size from 4,900  square feet at The Monterey
County  Herald  operation in  Monterey,  Calif.,  to 2.9 million  square feet in
Philadelphia. In total, they occupy about 9.1 million square feet. Approximately
2.1 million of the total square footage is leased from others.  Virtually all of
the owned  property is owned in fee. 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.

Knight Ridder properties are maintained in excellent operating condition and are
suitable for present and  foreseeable  operations.  During the three years ended
Dec.  26,  1999,  the company  spent  approximately  $331.2  million for capital
additions and improvements to its existing properties.

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 lengthy 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 case is
pending in the U.S.  Court of Appeals.  The case is currently  being briefed and
oral argument has been set for May 2000.

Various libel 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,  including
Detroit,  will  not  be  material  to  its  financial  position  or  results  of
operations, on a consolidated basis.

                                       6
<PAGE>

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 26, 1999.

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 in  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 79.6 million shares  outstanding at December 26, 1999 were held in
all 50 states by 11,014 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 $47.0625 on March 3, 2000.

The average stock trading  volume per day for the years 1999,  1998 and 1997 was
417,000,  242,000 and 271,000,  respectively.  The following  table presents the
company's common stock market data:


                                 1999                          1998
                        ----------------------        ----------------------
Quarter                   High           Low           High            Low
-------                 --------       -------        ------          ------
1st                     53 1/8         46             57 3/8          50 7/16
2nd                     56 15/16       48 7/16        59 5/8          53 1/8
3rd                     56 9/16        52 11/16       57 3/4          44
4th                     65             52 5/8         54 15/16        40 1/2


                            Treasury Stock Purchases

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

                          Shares              Cost
                       Purchased            (000s)
---------------------------------------------------

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 8 to
the consolidated financial statements.

                                       7
<PAGE>
Item 6.  SELECTED FINANCIAL DATA

11-YEAR FINANCIAL HIGHLIGHTS

The following data were compiled from the consolidated  financial  statements of
Knight Ridder and its subsidiaries.  The consolidated  financial  statements and
related notes and discussions for the year ended Dec. 26, 1999 (pages 19 through
44 should be read in order to obtain a better understanding of this data.

<TABLE>
<CAPTION>

                                              Compound
                                            Growth Rate
(In thousands, except per             -----------------------           Dec. 26             Dec. 27             Dec. 28
share data and ratios)                 5-Year         10-Year             1999                1998                1997
                                      -------         -------         -----------         -----------         -----------
<S>                                     <C>             <C>           <C>                 <C>                 <C>
SUMMARY OF OPERATIONS
Operating Revenue
  Advertising                           9.3%            4.6%          $ 2,468,903         $ 2,362,859         $ 2,202,251
  Circulation                           3.6             4.2               578,769             587,529             567,757
  Other                                21.9            18.8               180,553             141,531             106,777
                                                                      -----------         -----------         -----------
    Total Operating Revenue             8.6             4.9             3,228,225           3,091,919           2,876,785
                                                                      -----------         -----------         -----------
Operating Costs
  Labor, newsprint and other
    operating costs                     6.9             4.2             2,414,621           2,399,249           2,214,026
  Depreciation and amortization        14.4             7.5               189,354             188,052             156,731
                                                                      -----------         -----------         -----------
    Total Operating Costs               7.3             4.4             2,603,975           2,587,301           2,370,757
                                                                      -----------         -----------         -----------
Operating Income                       15.2             7.3               624,250             504,618             506,028
  Interest expense                     17.1             1.4               (97.444)           (105,936)           (102,662)
  Other, net(1)                        87.0            (3.3)               41,209             109,234             290,486
  Income taxes, net                    16.5             7.7              (228,076)           (202,285)           (297,348)

Income from continuing operations(1)   16.4             6.9               339,939             305,631             396,504
Discontinued BIS operations(2)                                                                 60,226              16,511
Discontinued broadcast operations(2)
Cumulative effect of changes in
  accounting principles(3)
                                                                      -----------         -----------         -----------
Net Income(1)                          14.7             3.2           $   339,939         $   365,857         $   413,015
                                     ======          ======           ===========         ===========         ===========
Operating income percentage
  (profit margin)                                                            19.3%               16.3%               17.6%
-------------------------------------------------------------------------------------------------------------------------------
SHARE DATA(4)
Basic weighted-average number of
  shares                                                                   80,025              78,882              88,475
Diluted weighted-average number
  of shares                                                                97,460              98,176             101,314
Earnings per share
  Basic:   Continuing operations(1)    22.4             9.2           $      4.07         $      3.70         $      4.40
           Discontinued BIS
             operations(2)                                                                       0.77                0.19
           Discontinued broadcast
             operations (2)
           Cumulative effect of
             changes in accounting
             principles(3)
           Net income(1)               20.8             5.4                  4.07                4.47                4.59
  Diluted: Continuing operations(1)    18.9             7.7           $      3.49         $      3.11         $      3.91
           Discontinued BIS
             operations(2)                                                                       0.62                0.17
           Discontinued broadcast
             operations(2)
           Cumulative effect of
             changes in accounting
             principles(3)
           Net income(1)               17.3             4.0                  3.49                3.73                4.08
Dividends declared per common
  share(5)                              4.0             3.6                  0.89                0.80                0.80
Common stock price:  High                                                      65                  59 5/8              57 1/8
                     Low                                                       46                  40 1/2              35 3/4
                     Close                                                     58 15/16            50 13/16            50 3/16
Shareholders' equity per
  common share                         10.5             7.9           $     19.07         $     17.33         $     15.65
Price/earnings ratio(6)                                                      16.9                13.6                12.3
Adjusted price/earnings ratio(7)                                             17.9                19.3                21.8
-------------------------------------------------------------------------------------------------------------------------------
OTHER FINANCIAL DATA
Treasury Stock Purchases:
  Number of shares                                                          3,704               4,725              13,824
  Cost                                                                $   210,141         $   255,533         $   643,375
Payment of cash dividends                                                  85,526              77,152              78,335
Ratio of earnings to fixed
  charges(8)                                                                  6.2                 5.3                 7.1
At year end
  Total assets                                                        $ 4,192,334         $ 4,257,097         $ 4,355,142
  Long-term debt (excluding
    current maturities)                                                 1,260,814           1,329,001           1,599,133
  Total debt                                                            1,300,754           1,527,278           1,668,830
  Shareholders' equity                                                  1,780,684           1,662,731           1,551,673
  Return on average shareholders'
    equity(9)                                                                19.8%               22.8%               30.8%
  Current ratio                                                               1.1                 0.8                 1.1
  Total debt/total capital ratio                                             42.2%               47.9%               51.8%
</TABLE>

                                       8
<PAGE>
<TABLE>
<CAPTION>

11-YEAR FINANCIAL HIGHLIGHTS

(In thousands, except per               Dec. 29           Dec. 31          Dec. 25         Dec. 26
share data and ratios)                   1996              1995             1994            1993
                                      -----------       -----------      -----------     -----------
<S>                                   <C>               <C>              <C>             <C>
SUMMARY OF OPERATIONS
Operating Revenue
  Advertising                         $ 1,793,424       $ 1,672,970      $ 1,583,373     $ 1,481,631
  Circulation                             501,826           495,315          484,581         474,420
  Other                                    78,974            81,897           66,968          56,772
                                      -----------       -----------      -----------     -----------
    Total Operating Revenue             2,374,224         2,250,182        2,134,922       2,012,823
                                      -----------       -----------      -----------     -----------
Operating Costs
  Labor, newsprint and other
    operating costs                     1,920,444         1,923,179        1,730,158       1,655,138
  Depreciation and amortization           120,647            98,741           96,613          96,233
                                      -----------       -----------      -----------     -----------
    Total Operating Costs               2,041,091         2,021,920        1,826,771       1,751,371
                                      -----------       -----------      -----------     -----------
Operating Income                          333,133           228,262          308,151         261,452
  Interest expense                        (73,137)          (59,512)         (44,216)        (44,403)
  Other, net(1)                            50,213            14,067            1,802           2,987
  Income taxes, net                      (124,829)          (72,861)        (106,493)        (83,281)
                                      -----------       -----------      -----------     -----------
Income from continuing operations(1)      185,380           109,956          159,244         136,755
Discontinued BIS operations(2)             82,493            57,426           11,656          11,334
Discontinued broadcast operations(2)
Cumulative effect of changes in
  accounting principles(3)                                   (7,320)
                                      -----------       -----------      -----------     -----------
Net Income(1)                         $   267,873       $   160,062      $   170,900     $   148,089
                                      ===========       ===========      ===========     ===========
Operating income percentage
  (profit margin)                            14.0%             10.1%            14.4%           13.0%
------------------------------------------------------------------------------------------------------------
SHARE DATA(4)
Basic weighted-average number of
  shares                                   96,021            99,451          107,888         109,702
Diluted weighted-average number
  of shares                                97,420           100,196          108,551         110,663
Earnings per share
 Basic:  Continuing operations(1)     $      1.93       $      1.11      $      1.48     $      1.25
         Discontinued BIS operations(2)      0.86              0.57             0.10            0.10
         Discontinued broadcast
           operations(2)
         Cumulative effect of changes
           in accounting principles(3)                        (0.07)
         Net income(1)                       2.79              1.61             1.58            1.35
 Diluted:Continuing operations(1)     $      1.90       $      1.10      $      1.47     $      1.24
         Discontinued BIS operations(2)      0.85              0.57             0.10            0.10
         Discontinued broadcast
         Cumulative effect of changes
           in accounting
           principles(3)                                      (0.07)
         Net income(1)                       2.75              1.60             1.57            1.34
Dividends declared per common
  share(5)                                   0.58 1/2          0.74             0.73            0.70
Common stock price: High                       42                33 5/16          30 1/2          32 1/2
                    Low                        29 7/8            25 1/8           23 1/4          25 5/16
                    Close                      39 1/4            31 1/4           25 7/16         29 11/16
Shareholders' equity per common
  share                               $     12.12       $     11.43      $     11.58     $     11.33
Price/earnings ratio(6)                      14.3              19.5             16.2            22.2
Adjusted price/earnings ratio(7)             21.6              28.4             17.3            23.9
------------------------------------------------------------------------------------------------------------
OTHER FINANCIAL DATA
Treasury Stock Purchases:
  Number of shares                          6,219            11,509            5,045           1,500
  Cost                                $   221,768       $   319,363      $   136,977     $    40,693
Payment of cash dividends                  74,262            74,377           77,942          76,787
Ratio of earnings to fixed
  charges(8)                                  4.0               3.2              5.2             4.4
At year end
  Total assets                        $ 2,860,907       $ 2,966,321      $ 2,409,239     $ 2,399,067
  Long-term debt (excluding
    current maturities)                   771,335         1,000,721          411,504         410,388
  Total debt                              821,335         1,013,850          411,504         451,075
  Shareholders' equity                  1,131,508         1,110,970        1,224,654       1,243,169
  Return on average shareholders'
    equity(9)                                23.9%             14.3%            13.9%           12.2%
  Current ratio                               1.0               1.1              1.0             1.0
  Total debt/total capital ratio             42.1%             47.7%            25.2%           26.6%
</TABLE>

                                        9
<PAGE>

11-YEAR FINANCIAL HIGHLIGHTS (Continued)

<TABLE>
<CAPTION>
(In thousands, except per                 Dec. 27         Dec. 29         Dec. 30         Dec. 31
share data and ratios)                     1992            1991            1990            1989
                                        -----------     -----------     -----------     -----------
<S>                                     <C>             <C>             <C>             <C>
SUMMARY OF OPERATIONS
Operating Revenue
  Advertising                           $ 1,444,144     $ 1,429,661     $ 1,556,932     $ 1,577,449
  Circulation                               460,014         439,029         403,188         385,214
  Other                                      39,932          35,127          31,981          32,212
                                        -----------     -----------     -----------     -----------
    Total Operating Revenue               1,944,090       1,903,817       1,992,101       1,994,875
                                        -----------     -----------     -----------     -----------
Operating Costs
  Labor, newsprint and other
    operating costs                       1,597,983       1,593,847       1,617,138       1,593,186
  Depreciation and amortization              89,665          86,896          91,553          91,780
                                        -----------     -----------     -----------     -----------
    Total Operating Costs                 1,687,648       1,680,743       1,708,691       1,684,966
                                        -----------     -----------     -----------     -----------
Operating Income                            256,442         223,074         283,410         309,909
  Interest expense                          (52,358)        (68,806)        (71,784)        (84,492)
  Other, net(1)                              13,868          35,832          17,019          57,505
  Income taxes, net                         (82,496)        (67,965)        (88,076)       (108,883)
                                        -----------     -----------     -----------     -----------
Income from continuing operations(1)        135,456         122,135         140,569         174,039
Discontinued BIS operations(2)               10,630           9,933           8,476           5,797
Discontinued broadcast operations(2)                                                         67,366
Cumulative effect of changes in
  accounting principles(3)                 (105,200)
                                        -----------     -----------     -----------     -----------
Net Income(1)                           $    40,886     $   132,068     $   149,045     $   247,202
                                        ===========     ===========     ===========     ===========
Operating income percentage
  (profit margin)                              13.2%           11.7%           14.2%           15.5%
------------------------------------------------------------------------------------------------------------
SHARE DATA(4)
Basic weighted-average number of
  shares                                    108,948         102,586         100,098         103,110
Diluted weighted-average number
  of shares                                 110,356         103,594         101,366         104,878
Earnings per share
 Basic:   Continuing operations(1)      $      1.24     $      1.19     $      1.40     $      1.69
          Discontinued BIS operations(2)       0.11            0.10            0.09            0.06
          Discontinued broadcast
            operations(2)                                                                      0.65
          Cumulative effect of changes
            in accounting principles(3)       (0.97)
          Net income(1)                        0.38            1.29            1.49            2.40
 Diluted: Continuing operations(1)      $      1.22     $      1.18     $      1.39     $      1.66
          Discontinued BIS operations(2)       0.10            0.09            0.08            0.06
          Discontinued broadcast                                                               0.64
          Cumulative effect of changes in
            accounting principles(3)          (0.95)
          Net income(1)                        0.37            1.27            1.47            2.36
Dividends declared per common
  share(5)                                     0.70            0.70            0.67            0.62 1/4
Common stock price: High                         32 1/16         28 3/4          29              29 3/16
                    Low                          25 3/8          21 7/8          18 1/2          21 7/16
                    Close                        29 1/16         25 3/8          22 15/16        29 3/16
Shareholders' equity per common
  share                                 $     10.75     $     10.72     $      9.05     $      8.92
Price/earnings ratio(6)                        78.5            20.0            15.6            12.4
Adjusted price/earnings ratio(7)               23.8            21.5            16.5            21.2
------------------------------------------------------------------------------------------------------------
OTHER FINANCIAL DATA
Treasury Stock Purchases:
  Number of shares                                                            5,325           5,522
  Cost                                                                  $   129,909     $   131,885
Payment of cash dividends                    75,992          71,087          66,422          63,260
Ratio of earnings to fixed
  charges(8)                                    3.8             2.8             3.3             3.6
At year end
  Total assets                          $ 2,431,307     $ 2,305,731     $ 2,244,919     $ 2,112,184
  Long-term debt (excluding
    current maturities)                     495,941         556,797         803,914         660,900
  Total debt                                560,245         606,840         823,958         712,940
  Shareholders' equity                    1,181,812       1,148,620         894,913         917,145
  Return on average shareholders'
    equity(9)                                  12.0%           12.9%           16.5%           28.4%
  Current ratio                                 1.1             1.1             1.2             1.2
  Total debt/total capital ratio               32.2%           34.6%           47.9%           43.7%
</TABLE>
                                       10
<PAGE>

(1) Other,  net, Income from continuing  operations and Net Income include:  The
    gain on sale of Zip2, AT&T and SportsLine  stock during 1999; the gains from
    the sales of the balance of TKR Cable Company,  the newspaper in Gary, Ind.,
    and  final  sales  settlements  in 1998;  the  gains  from the  sales of the
    majority of TKR Cable Company and our newspapers in Long Beach, Calif., Boca
    Raton, Fla., Milledgeville,  Ga., and Newberry, S.C., as well as the gain on
    the exchange of the Boulder,  Colo., newspaper in 1997; the gain on Netscape
    Communications  Corporation  in  1996;  and the  gain  from  the sale of the
    Pasadena  Star-News in 1989. Net Income also includes the gains on the sales
    of  Technimetrics  in  1998,  Knight-Ridder  Information,   Inc.,  in  1997,
    Knight-Ridder Financial in 1996 and the Journal of Commerce in 1995.
(2) All years have been  restated to present the Business  Information  Services
    (BIS) Division and Broadcast Division as discontinued operations. Results of
    operations  of  the  company's  BIS  Division  (discontinued  in  1997)  and
    Broadcast Division  (discontinued in 1989) and the gains on the sales of BIS
    and broadcast  assets are presented as  "discontinued  BIS  operations"  and
    "discontinued broadcast operations," respectively.
(3) For 1995, the cumulative effect of change in accounting principle represents
    an  adjustment   from  the   implementation   of  FAS   116-Accounting   for
    Contributions  Received and  Contributions  Made.  For 1992,  the cumulative
    effect of change in accounting  principle  represents  adjustments  from the
    implementation of FAS 109-Accounting for Income Taxes and FAS 106-Accounting
    for Postretirement Benefits Other than Pensions.
(4) In the  second  quarter  of 1999,  the  Board  of  Directors  increased  the
    quarterly  dividend to $0.23 per share from $0.20 per share.  All share data
    prior to 1996 is restated for the 1996 stock  split;  Basic EPS for 1998 and
    1997 has been restated to exclude  preferred  dividends  from net income for
    the purpose of  calculating  EPS  attributable  to common stock (see Note 1,
    page 58).
(5) The Board of Directors  declared a $.20 per share dividend on Jan. 28, 1997.
    The  quarterly  dividend  previously  paid in January was paid in  February.
(6) Price/earnings ratio is computed by dividing closing market price by diluted
    earnings per share.
(7) 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 on one-time sales.
(8) 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.
(9) 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 & ANALYSIS OF OPERATIONS

Knight Ridder is the nation's second-largest newspaper publisher,  with products
in print and  online.  The  company  publishes  31 daily  newspapers  in 28 U.S.
markets,  with a readership of 8.7 million daily and 12.9 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 maintains a variety of online services, including
RealCities.com, a national network of regional hubs in 31 U.S. markets. In 1999,
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. Small, 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.

NEWSPAPER  revenue is derived  principally  from  advertising and newspaper copy
sales.  Advertising revenue accounted for about 76.5% of consolidated revenue in
1999.  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 market segments.

Circulation  revenue  results from the sale of newspapers.  Circulation of daily
and Sunday newspapers accounted for 17.9% of consolidated revenue in 1999. 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  delivery  agents  who  are  paid a fee for  delivery  of the
newspapers.

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

                                       12
<PAGE>

RESULTS OF OPERATIONS: 1999, 1998 and 1997

The following  table sets forth the results of operations  for the periods ended
Dec. 26, 1999,  Dec. 27, 1998,  and Dec. 28, 1997.

<TABLE>
<CAPTION>

                                                                                                            Change
(In thousands of dollars, except                                                                 ---------------------------
per share amounts)                     1999               1998               1997                 99-98               98-97
                                   -----------        -----------        -----------             -------             -------
<S>                                <C>                <C>                <C>                        <C>                <C>
Operating revenue                  $ 3,228,225        $ 3,091,919        $ 2,876,785                4.4%               7.5%
Operating income                       624,250            504,618            506,028               23.7%              (0.3)%
Income
  Continuing operations
    Before gains on investment
      sales, severance and
      relocation costs                 321,146            273,162            233,319               17.6%              17.1%
    Gains on investment sales,
      severance and relocation
      costs                             18,793             32,469            163,185
  Discontinued operations                                  60,226             16,511
                                   -----------        -----------        -----------
  Net income                       $   339,939        $   365,857        $   413,015               (7.1)%            (11.4)%
                                   ===========        ===========        ===========
Diluted earnings per share
  Continuing operations
    Before gains on investment
      sales, severance and
      relocation costs                    3.30               2.78               2.30               18.7%              20.9%
    Gains on investment sales,
      severance and relocation
      costs                               0.19               0.33               1.61
  Discontinued operations                                    0.62               0.17
                                   -----------        -----------        -----------
  Net income                       $      3.49        $      3.73        $      4.08               (6.4)%             (8.6)%
                                   ===========        ===========        ===========

</TABLE>

Knight Ridder earned $3.30 per diluted share from continuing operations in 1999,
up $0.52, or 18.7%, from the $2.78 earned in 1998,  excluding one-time gains and
severance from both years and excluding corporate relocation costs in 1998. On a
comparable basis, the company's earnings per diluted share was $2.78 in 1998, up
$.48, or 20.9%, from the $2.30 earned in 1997.

                                       13
<PAGE>

OPERATING  REVENUE.  The  following  table  summarizes  the results of Operating
Revenue and related  full-run ROP linage  statistics  for the periods ended Dec.
26, 1999, Dec. 27, 1998, and Dec. 28, 1997.
<TABLE>
<CAPTION>

                                                                                                           Change
                                                                                                  ------------------------
In thousands                         1999                1998                1997                 99-98              98-97
                                 -----------         -----------         -----------              -----              -----
<S>                              <C>                 <C>                 <C>                       <C>               <C>
Operating revenue
  Advertising
    Retail                       $ 1,102,381         $ 1,089,273         $ 1,008,736               1.2%              8.0%
    General                          316,857             261,831             246,096              21.0%              6.4%
    Classified                     1,049,665           1,011,755             947,419               3.7%              6.8%
                                 -----------         -----------         -----------
      Total                        2,468,903           2,362,859           2,202,251               4.5%              7.3%
                                 -----------         -----------         -----------
  Circulation                        578,769             587,529             567,757              (1.5)%             3.5%
  Other                              180,553             141,531             106,777              27.6%             32.5%
                                 -----------         -----------         -----------
Total operating revenue          $ 3,228,225         $ 3,091,919         $ 2,876,784               4.4%              7.5%
                                 ===========         ===========         ===========
Average circulation
  Daily                                3,932               3,998               4,236              (1.7)%            (5.6)%
  Sunday                               5,400               5,507               5,816              (1.9)%            (5.3)%

Advertising linage
Full-run
  Retail                              18,876              19,254              19,090              (2.0)%             0.9%
  General                              2,896               2,327               2,271              24.5%              2.5%
  Classified                          20,470              19,952              19,726               2.6%              1.1%
                                 -----------         -----------         -----------
    Total full-run                    42,242              41,533              41,087               1.7%              1.1%
                                 ===========         ===========         ===========
</TABLE>

General  advertising  revenue had  unprecedented  growth in 1999,  up 21.0% on a
full-run ROP linage increase of 24.5%.  This increase was due largely to a surge
of   e-commerce    and    Internet-related    advertising    and   strength   in
telecommunications,   financial  and  travel   advertising.   In  1998,  general
advertising  was up 6.4% on a 2.5%  increase in full-run ROP linage.  Classified
advertising  was up 3.7% in 1999 on a full-run ROP linage increase of 2.6%. This
increase  reflected a relatively  strong  second half of 1999, up 5.8%. In 1998,
classified  was up 6.8% on a 1.1%  increase in full-run ROP linage.  Help wanted
contributed  significantly to the classified growth in both years. Retail was up
1.2% in 1999 on a full-run  ROP linage  decrease of 2.0%.  The weak results were
due primarily to consolidations and bankruptcies in many major markets. In 1998,
retail was up 8.0% on a 0.9% increase in full-run ROP linage.

Circulation  revenue  decreased  by 1.5% in 1999  on a 1.7%  decrease  in  daily
circulation  and  a  1.9%  decrease  in  Sunday  circulation.   The  decline  in
circulation came primarily from a few large markets, and the company anticipates
that these declines will reverse in 2000. In 1998,  circulation revenue improved
by $19.8 million,  or 3.5%, on a 5.6% decrease in daily  circulation  and a 5.3%
decrease  in Sunday  circulation.  Including  full-year  results in 1997 for the
former  Disney  and  Scripps  newspapers  but  excluding  the  sold  newspapers,
circulation  revenue for 1998  compared to 1997 was  essentially  flat, on about
flat average  daily  circulation  copy and an average  Sunday  circulation  copy
decline of 1.1%.

                                       14
<PAGE>

OPERATING COSTS. The following table summarizes operating costs for the periods
ended Dec. 26, 1999, Dec. 27, 1998, and Dec. 28, 1997.

<TABLE>
<CAPTION>

                                                                                                          Change
                                                                                                 ------------------------
In thousands                         1999                1998                1997                 99-98             98-97
                                 -----------         -----------         -----------             -------            -----
<S>                              <C>                 <C>                 <C>                       <C>               <C>
Operating costs
  Labor and employee benefits    $ 1,246,491         $ 1,200,981         $ 1,132,227               3.8%              6.1%
                                 -----------         -----------         -----------
  Newsprint, ink and
    supplements                      472,727             529,154             466,329             (10.7)%            13.5%
  Other operating costs              695,403             669,114             615,470               3.9%              8.7%
  Depreciation and
    amortization                     189,354             188,052             156,731               0.7%             20.0%
                                 -----------         -----------         -----------
    Total operating costs        $ 2,603,975         $ 2,587,301         $ 2,370,757               0.6%              9.1%
                                 ===========         ===========         ===========

</TABLE>

The  increase  in labor  and  employee  benefits  in 1999  resulted  from a 3.8%
increase  in the average  wage per  employee,  offset by a 1.2%  decrease in the
number of full-time equivalent employees. In addition, bonus and incentive costs
were up 16.3% and benefit costs were up 7.4% from 1998. During 1999, the company
incurred $4.7 million in severance  costs.  In 1998, the company  incurred $23.9
million in newspaper  severance and corporate  relocation  costs.  The corporate
relocation costs resulted from the relocation of the company  headquarters  from
Miami to San Jose. Without these severance and corporate relocation costs, labor
and  employee  benefits  increased  5.1% in  1999.  On a  comparable  basis  and
excluding  corporate  relocation and newspaper  severance costs from 1998, labor
and employee  benefits  were up $27.1  million,  or 2.3%,  from 1997,  on a 1.0%
increase in the work force and an average wage rate increase of 3.0%,  offset by
a decline in employee benefit costs.

The  decrease  in the cost of  newsprint,  ink and  supplements  in 1999 was due
primarily to a 12.3%  decrease in the average cost per ton of newsprint,  offset
slightly by a 0.7%  increase in newsprint  consumption.  For 1998  compared with
1997, the increase in newsprint,  ink and supplements was due to a 7.0% increase
in the  average  cost per ton of  newsprint  and a 5.6%  increase  in  newsprint
consumption.

The  increase  in other  operating  costs  in 1999  resulted  primarily  from an
increase in the cost of contract  services,  legal fees,  and an increase in the
reserve for bad debt expense. The increase in other operating expenses from 1997
to 1998 was due primarily to promotion  costs and the  changeover to circulation
agents in Detroit,  which was offset by additional  circulation revenue recorded
at the retail price for newspapers  delivered.  Previous  circulation revenue in
Detroit was recorded at the net wholesale price.

For 1999,  depreciation and amortization expense increased 0.7%. The increase in
depreciation  resulted  from a slightly  larger  asset  base.  The  increase  in
depreciation and amortization  expense from 1997 to 1998 resulted primarily from
an  increase  in  amortization   expense  associated  with  the  acquisition  of
newspapers   from  The  Walt  Disney  Company  and  E.W.   Scripps  Company  and
depreciation  expense associated with major press projects.

NON-OPERATING  ITEMS. Net interest expense  decreased $8.2 million,  or 8.4%, in
1999 as a result of lower debt levels.  For 1998, net interest expense increased
$4.1  million,  or 4.4%,  due to higher debt levels  associated  with the Disney
acquisition  and higher  interest  rates in the early part of 1998.  The average
debt balance  decreased $180.9 million in 1999 and increased $153.7 million from
1997 to 1998.

From 1998 to 1999,  equity in earnings  of  unconsolidated  companies  and joint
ventures  decreased  by  $10.7  million  due  to a  decrease  in  earnings  from
investments in newsprint mills,  InfiNet Company, and various other investments.
From 1997 to 1998, equity in earnings of unconsolidated  companies  increased by
$12.5  million,  due to improved  results from newsprint  mill  investments  and
InfiNet.

The "OTHER, NET" line of the non-operating section decreased by $55.7 million in
1999,  due to the 1998 gains on the sale of the balance of the  company's  cable
systems, the Gary, Ind., newspaper,  and final settlements on the 1997 newspaper
sales.  Results in 1999 included a gain on the sale of AT&T, Zip2 and SportsLine
stock, offset by adjustments in the carrying value of certain other investments.
Results in 1997 included the sale of the majority of the TKR Cable Company,  the
Boulder exchange and the sale of four newspapers.

                                       15
<PAGE>

On March 18, 1998,  the company  (through its wholly  owned  subsidiary  Knight-
Ridder  Cablevision,  Inc.),  completed the sale of its remaining  jointly owned
cable  television  system to  Tele-Communications,  Inc.  On Feb.  2, 1998,  the
company  completed  the sale of 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.

DISCONTINUED  OPERATIONS.  On April 13, 1998,  the company closed on the sale of
Technimetrics,   Inc.,  to  an  operating  unit  of  the  Thomson   Corporation.
Technimetrics  was a  subsidiary  that sold  global  shareholding  and  business
contact  information.  This sale fully divested the company of the  discontinued
Business  Information  Services segment.  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.

INCOME TAXES. The effective income tax rates on continuing  operations for 1999,
1998 and 1997 were 40.2%, 39.8% and 42.9%, respectively.  The effective tax rate
was higher in 1997 because of the sale of cable assets,  which generated  income
in states with higher tax rates.  In addition,  in 1998  certain  prior year tax
matters were settled for amounts lower than originally estimated.

ONLINE  ACTIVITIES.  The  company  announced  in the fourth  quarter of 1999 the
creation  of  KnightRidder.com,  which  will  consolidate  all of the  company's
Internet  operations as a separate business unit by the end of the first quarter
of 2000.  Historically,  Knight Ridder's Internet  activities have been reported
and  managed  as a part of the  company's  newspaper  operations,  but  once the
transition  to a stand-alone  business  unit is made,  they will be reported and
managed separately.  KnightRidder.com will reorganize, manage and control all of
Knight  Ridder's  online  efforts,  including  the Web sites now operated by the
newspapers, as well as its current activities. KnightRidder.com will continue to
operate and manage the Real  Cities  network,  which now  consists of all Knight
Ridder Web sites as well as those of several  other  media  affiliates.  Revenue
from Real Cities sites increased by 75.4% in 1999, to $31.4 million. The company
expects significant growth from these operations in 2000.


                                  A LOOK AHEAD

Looking  ahead,  the company  expects  another year of earnings  growth in 2000.
Advertising  revenue  will likely  increase  between 4% and 5%, with general and
classified  stronger than retail.  As in 1999, the company believes some markets
will do considerably better than this, while others may lag. The company expects
the costs for newsprint to increase 4% to 5% in 2000.

                         YEAR 2000 READINESS DISCLOSURE

All  Year  2000  statements  in this  annual  report  are  Year  2000  Readiness
Disclosures  under the Year 2000  Information and Readiness  Disclosure Act. The
Year 2000 issue results from computer programs using two digits rather than four
to define  the  applicable  year.  Company  computer  programs  that have  time-
sensitive  software may recognize a date using "00" as the year 1900 rather than
the year 2000.  Failure to  recognize  the  correct  date may result in a system
failure,  disruption  of  operations,  and/or a temporary  inability  to conduct
normal business activities.

From  the   initiation  of  the  Year  2000  project,   the  company  has  spent
approximately  $60.0  million  of which  approximately  65% was  related  to the
purchase of hardware and software, which has been capitalized. The remainder was
expensed as incurred.

The company has not  experienced  any Year  2000-related  problems.  The company
believes all existing computer hardware,  software and software  conversions are
Year 2000  capable;  however,  there can be no  assurance  the company  will not
experience  Year 2000 problems in the future.  The company  continues to monitor
its  hardware and  software  systems for any Year 2000-related  problems and the
company continues to have contingency plans in place with alternative  solutions
in the event that they are required.

                                       16
<PAGE>

                        LIQUIDITY AND CAPITAL RESOURCES

Cash  flow  from  operations  is the  company's  primary  source  of  liquidity.
Management  continues  to have a strong  orientation  toward  cash flows and the
effective management of cash generated.  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 ratio, debt to equity
ratio and total debt to total capital ratio. The following  schedule  summarizes
these ratios for the periods ended Dec. 26, 1999, and Dec. 27, 1998:

                                        1999                1998
                                       -----               -----
Current assets to current
  liabilities                          1.1:1               0.8:1
Interest coverage ratio(a)             8.3:1               6.5:1
Total debt to equity                   73.0%               91.9%
Total debt to total capital            42.2%               47.9%

(a) Defined as operating income plus  depreciation  and amortization  divided by
    interest expense.

The company's  financial position remained strong throughout 1999, with cash and
cash  equivalents and short-term  investments of $34.1 million at Dec. 26, 1999,
compared  with $26.8  million at Dec.  27, 1998.  During  1999,  cash flows from
operating  activity were used to fund treasury stock purchases of $210.1 million
and to  reduce  debt by $227.3  million.  In  addition,  the  company  increased
dividends by $8.4 million from 1998 to 1999.

Cash provided by operating  activities was $505.7 million in 1999, compared with
$297.2  million in 1998.  The increase was  partially  attributed  to higher net
income, exclusive of gains on sales of investments in both years and the gain on
sale of discontinued operations in 1998.

At Dec. 26, 1999,  working  capital was $73.2  million  compared with a negative
$128.1  million at Dec. 27, 1998.  The increase in working  capital from 1998 to
1999 was due primarily to a $158.3 million decrease in short-term borrowings.

Cash required for investing  activities  was primarily for the purchase of $92.6
million of property,  plant and equipment and $76.6 million for the  acquisition
of businesses and other  investments,  offset by proceeds of $119.8 million from
the sale of investments. The proceeds from the sale of investments came from the
company's disposition of stock of AT&T, Zip2 and SportsLine.

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 $530.2  million,  with an average  effective  interest
rate of 5.5%.  At Dec. 26, 1999,  the company's  revolving  credit and term loan
agreements,  which back up the  commercial  paper  outstanding,  had a remaining
availability  of $466.2  million.  The  364-day  revolving  credit and term loan
portion of the  facility  matures in June 2000;  however,  the  company  has the
option and intention to renew this facility for an additional  term through June
2001.  At year end,  Standard & Poor's,  Moody's and Duff & Phelps  continued to
rate the company's  commercial paper A1, P2 and D1, and long-term debt A, A3 and
A,  respectively.  In February 2000,  Moody's  upgraded the company's short- and
long-term debt to P1 and A2, respectively.

During 1999, the company  repurchased  3.7 million common shares at a total cost
of $210.1  million and an average cost of $56.74 per share.  At year end,  there
was authorization remaining to purchase 5.5 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.

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 $331.2
million for additions and improvements to properties.

Additions to property,  plant and equipment  decreased by $39.4 million to $92.6
million  in  1999  from  $132.0   million  in  1998,  due  primarily  to  higher
expenditures in 1998 for major Year 2000 projects.

                                       17
<PAGE>

Expenditures  in 1999 included  $16.8 million for the Fort Worth and Miami press
projects.  The $37.8 million Fort Worth press  expansion  was  completed  during
1999, and the $108.0 million Miami press  expansion is scheduled to be completed
in 2000.

In addition,  The Wichita Eagle began a press project in 1999. The total project
cost is projected to be $27.7 million  through 2002,  with  expenditures of $8.0
million in 1999. These press projects are replacement projects that are expected
to significantly  improve  reliability,  speed, print quality and page and color
capacity, and reduce waste.

Also included in capital  expenditures for 1999 was $3.2 million to complete the
Philadelphia  Editorial  System  project,  for a total  project  cost  of  $13.6
million.  This  project  was  completed  at the end of 1999 and serves  both The
Philadelphia Inquirer and the Philadelphia Daily News.

Capitalized Year 2000 costs were approximately  $15.9 million in 1999.  Spending
is  estimated  to be lower in 2000,  partly due to the  completion  of Year 2000
capability and certain major projects.

On Jan. 31, 2000, Cadabra, Inc., an investment in which the company held a 19.5%
minority ownership  position at Dec. 26, 1999, was purchased by GoTo.com,  Inc.,
in exchange for $8.0 million in cash and 3.3 million  shares of GoTo.com,  Inc.,
stock.  Knight  Ridder now holds a minority  ownership  interest  in GoTo.com of
1.57%.  The market value of Cadabra was not readily  available at Dec. 26, 1999,
and therefore was not included in comprehensive income at year end.

On Feb. 15, 2000,  Prio,  Inc., an investment in which the company held a 12.41%
minority  ownership position at Dec. 26, 1999, was purchased by InfoSpace.com in
exchange for 5.4 million shares of InfoSpace.com,  Inc., stock. The market value
of Prio was not readily  available  at Dec.  26,  1999,  and  therefore  was not
included in comprehensive income at year end.

As of the date of these transactions, the company had an after-tax realized gain
on its investments in Cadabra and Prio of approximately $100 million.

                           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.

                           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
may 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  may  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 may cause revenue declines or increased labor 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.

                                       18
<PAGE>

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 4 to the
consolidated   financial   statements  includes   information  relating  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  $9.1 million.  This hypothetical  interest rate change would also
decrease the fair value of the fixed debt by $80.0 million.

NEWSPRINT.  The company consumed  approximately 801,000 metric tons of newsprint
in 1999. This represents  15.2% of the company's 1999 total operating  expenses.
Under the caption  "NEWSPRINT" on page 32 of this annual report, 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.  Approximately  37% of the company's  22,000
employees  are  represented  by some 70 local  unions and work  under  multiyear
collective bargaining agreements. These agreements are renegotiated in the years
in which they expire.

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.

CONSOLIDATED BALANCE SHEET
(In thousands, except share data)

                                           Dec. 26, 1999     Dec. 27, 1998
                                           -------------     -------------
ASSETS

CURRENT ASSETS
  Cash, including short-term cash
    investments of $5,598 in 1999 and
    $4,159 in 1998                          $   34,084        $   26,836
  Accounts receivable, net of allowances
    of $15,917 in 1999 and $15,738 in
    1998                                       423,016           386,455
  Inventories                                   39,238            59,109
  Prepaid expense                               32,246            14,078
  Other current assets                          41,720            39,213
                                            ----------        ----------
      Total Current Assets                  $  570,304        $  525,691
                                            ----------        ----------
INVESTMENTS AND OTHER ASSETS
  Equity in unconsolidated companies and
    joint ventures                             206,880           201,120
  Other                                        181,583           243,586
                                            ----------        ----------
      Total Investments and Other Assets       388,463           444,706
                                            ----------        ----------
PROPERTY, PLANT AND EQUIPMENT
  Land and improvements                         93,995            93,781
  Buildings and improvements                   484,163           484,367
  Equipment                                  1,244,110         1,175,044
  Construction and equipment
    installations in progress                   67,922            84,559
                                            ----------        ----------
                                             1,890,190         1,837,751
  Less accumulated depreciation               (831,041)         (764,750)
                                            ----------        ----------
      Net Property, Plant and Equipment      1,059,149         1,073,001
                                            ----------        ----------

GOODWILL
  Less accumulated amortization of
    $331,504 in 1999 and $264,001 in 1998    2,174,418         2,213,699
                                            ----------        ----------
      Total                                 $4,192,334        $4,257,097
                                            ==========        ==========

See "Notes to Consolidated Financial Statements."

                                       19
<PAGE>
CONSOLIDATED BALANCE SHEET (Continued)

                                           Dec. 26, 1999     Dec. 27, 1998
                                           -------------     -------------
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                          $  142,460        $  164,558
  Accrued expenses and other liabilities       100,668           111,088
  Accrued compensation and amounts
    withheld from employees                    126,529           112,827
  Federal and state income taxes                16,039
  Deferred revenue                              71,505            67,006
  Short-term borrowings and current
    portion of long-term debt                   39,940           198,277
                                            ----------        ----------
      Total Current Liabilities                497,141           653,756
                                            ----------        ----------

NONCURRENT LIABILITIES
  Long-term debt                             1,260,814         1,329,001
  Deferred Federal and state income taxes      306,636           293,015
  Postretirement benefits other than
    pensions                                   145,143           147,118
  Employment benefits and other
    noncurrent liabilities                     197,045           168,974
                                            ----------        ----------
      Total Noncurrent Liabilities           1,909,638         1,938,108
                                            ----------        ----------

MINORITY INTERESTS IN CONSOLIDATED
  SUBSIDIARIES                                   4,871             2,502

COMMITMENTS AND CONTINGENCIES (Note 11)

SHAREHOLDERS' EQUITY
  Preferred stock, $1.00 par value;
    shares authorized - 2,000,000; shares
    issued - 1,374,100 in 1999 and
    1,754,930 in 1998                            1,374             1,755
  Common stock, $.02 1/12 par value;
    shares authorized - 250,000,000;
    shares issued - 79,654,493 in 1999
    and 78,374,195 in 1998                       1,659             1,633
  Additional capital                           938,969           908,078
  Retained earnings                            798,971           735,132
  Accumulated other comprehensive income        42,084            18,738
  Treasury stock, at cost; 42,510 shares
    in 1999 and 46,667 shares in 1998           (2,373)           (2,605)
                                            ----------        ----------
      Total Shareholders' Equity             1,780,684         1,662,731
                                            ----------        ----------
      Total                                 $4,192,334        $4,257,097
                                            ==========        ==========

See "Notes to Consolidated Financial Statements."

                                       20
<PAGE>

CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share data)

                                                Year Ended
                             ---------------------------------------------
                             Dec. 26, 1999   Dec. 27, 1998   Dec. 28, 1997
                             -------------   -------------   -------------

OPERATING REVENUE
  Advertising
    Retail                    $ 1,102,381     $ 1,089,273     $ 1,008,736
    General                       316,857         261,831         246,096
    Classified                  1,049,665       1,011,755         947,419
                              -----------     -----------     -----------
      Total                     2,468,903       2,362,859       2,202,251
  Circulation                     578,769         587,529         567,757
  Other                           180,553         141,531         106,777
                              -----------     -----------     -----------
      Total Operating Revenue   3,228,225       3,091,919       2,876,785
                              -----------     -----------     -----------

OPERATING COSTS
  Labor and employee benefits   1,246,491       1,200,981       1,132,227
  Newsprint, ink and
    supplements                   472,727         529,154         466,329
  Other operating costs           695,403         669,114         615,470
  Depreciation and
    amortization                  189,354         188,052         156,731
                              -----------     -----------     -----------
      Total Operating Costs     2,603,975       2,587,301       2,370,757
                              -----------     -----------     -----------
OPERATING
  INCOME                          624,250         504,618         506,028
                              -----------     -----------     -----------

OTHER INCOME (EXPENSE)
  Interest expense                (97,444)       (105,936)       (102,662)
  Interest expense
    capitalized                     5,197           4,516           5,376
  Interest income                   2,429           3,416           3,404
  Equity in earnings of
    unconsolidated companies
    and joint ventures             12,571          23,309          10,800
  Minority interests in
    earnings of consolidated
    subsidiaries                  (11,984)        (10,749)        (11,503)
  Other, net                       32,996          88,742         282,409
                              -----------     -----------     -----------
      Total                       (56,235)          3,298         187,824
                              -----------     -----------     -----------
Income before income taxes        568,015         507,916         693,852
Income taxes                      228,076         202,285         297,348
                              -----------     -----------     -----------

INCOME FROM CONTINUING
  OPERATIONS                      339,939         305,631         396,504
Net gain on sale of
  discontinued BIS
  operations, net of
  applicable income taxes of
  $43,752 in 1998 and $8,365
  in 1997                                          60,042          15,261
Income from discontinued BIS
  operations, net of
  applicable income taxes of
  $133 in 1998 and $1,119 in
  1997                                                184           1,250
                              -----------     -----------     -----------
      Net Income              $   339,939     $   365,857     $   413,015
                              ===========     ===========     ===========


                                       21
<PAGE>

CONSOLIDATED STATEMENT OF INCOME (Continued)
(In thousands, except per share data)

                                                Year Ended
                             ---------------------------------------------
                             Dec. 26, 1999   Dec. 27, 1998   Dec. 28, 1997
                             -------------   -------------   -------------

EARNINGS PER SHARE
  Basic: (Note 1)
    Income from continuing
      operations              $      4.07     $      3.70     $      4.40
    Net gain on sale of
      discontinued BIS
      operations                                      .76             .17
    Income from discontinued
      BIS operations, net                             .01             .02
                              -----------     -----------     -----------
      Net Income              $      4.07     $      4.47     $      4.59
                              ===========     ===========     ===========

  Diluted:
    Income from continuing
      operations              $      3.49     $      3.11     $      3.91
    Net gain on sale of
      discontinued BIS
      operations                                      .61             .15
    Income from discontinued
      BIS operations, net                             .01             .02
                              -----------     -----------     -----------
      Net Income              $      3.49     $      3.73     $      4.08
                              ===========     ===========     ===========

AVERAGE SHARES OUTSTANDING
  (000S)
  Basic                            80,025          78,882          88,475
  Diluted                          97,460          98,176         101,314

See "Notes to Consolidated Financial Statements."

                                       22
<PAGE>

CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands of dollars)

                                                   Year Ended
                                ----------------------------------------------
                                 Dec. 26, 1999   Dec. 27, 1998   Dec. 28, 1997
                                --------------  --------------  --------------

CASH PROVIDED BY (REQUIRED FOR)
OPERATING ACTIVITIES
  Net income                       $ 339,939      $ 365,857      $ 413,015
    Noncash items deducted from
      (included in) income:
      Gains on sales of
        investments                  (37,655)       (75,251)      (283,126)
      Net gain on sale of
        discontinued BIS
        operations                                  (60,042)       (15,261)
      Depreciation                   107,855        101,950         94,138
      Amortization                    81,499         86,102         62,593
      Benefit for deferred taxes      (1,895)        (8,444)       (14,750)
      Provision for bad debts         25,135         20,854         23,332
      Earnings from investees
        less distributions             2,506        (21,856)       (14,658)
      Minority interests in
        earnings of consolidated
        subsidiaries                  12,024         10,749         11,503
      Other items, net                   767         18,576         38,656
  Change in certain assets and
    liabilities:
    Accounts receivable              (64,221)       (39,927)       (57,185)
    Inventories                       19,871         (9,398)          (326)
    Other current assets             (22,452)         3,296            380
    Accounts payable                 (22,098)       (20,299)       (83,969)
    Federal and state income
      taxes                           16,176        (52,234)        20,125
    Other liabilities                 48,253        (22,782)        47,724
                                   ---------      ---------      ---------
       Net Cash Provided by
         Operating Activities        505,704        297,151        242,191
                                   ---------      ---------      ---------

CASH PROVIDED BY (REQUIRED FOR)
  INVESTING ACTIVITIES
  Proceeds from sales of
    investments                      119,810         62,444        423,039
  Proceeds from sale of
    discontinued BIS operations                     125,000        416,983
  Change in net noncurrent
    assets of discontinued BIS
    operations                                          520          1,996
  Acquisition of businesses          (38,403)
  Other investments                  (38,227)
  Additions to property, plant
    and equipment                    (92,563)      (132,025)      (106,614)
  Other items, net                    33,205        (35,642)        (8,165)
                                   ---------      ---------      ---------
       Net Cash Provided by
         (Required for)
         Investing Activities        (16,178)        20,297        727,239
                                   ---------      ---------      ---------

CASH PROVIDED BY (REQUIRED FOR)
  FINANCING ACTIVITIES
  Proceeds from sale of
    commercial paper, notes
    payable and senior notes
    payable                        2,397,615        914,926        833,600
  Payment of total debt           (2,624,906)    (1,057,186)      (976,611)
                                   ---------      ---------      ---------
       Net Change in Total Debt
         excluding amortization
         of discounts               (227,291)      (142,260)      (143,011)
  Payment of cash dividends          (85,526)       (77,152)       (78,335)
  Issuance of common stock to
    employees and directors           50,335         44,411         60,029
  Purchase of treasury stock        (210,141)      (255,533)      (643,375)
  Other items, net                    (9,655)       (20,369)       (27,327)
                                   ---------      ---------      ---------
       Net Cash Required for
         Financing Activities       (482,278)      (450,903)      (832,019)
                                   ---------      ---------      ---------
         Net Increase (Decrease)
           in Cash                     7,248       (133,455)       137,411
Cash and short-term cash
  investments at beginning of
  the year                            26,836        160,291         22,880
                                   ---------      ---------      ---------
Cash and short-term cash
  investments at end of the year   $  34,084      $  26,836      $ 160,291
                                   =========      =========      =========

                                       23
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
(In thousands of dollars)

                                                   Year Ended
                                ----------------------------------------------
                                 Dec. 26, 1999   Dec. 27, 1998   Dec. 28, 1997
                                --------------  --------------  --------------
SUPPLEMENTAL CASH FLOW
INFORMATION
  Noncash investing activities
    Securities received as
      proceeds on the sale of
      investee                     $      --      $  37,678       $ 229,163
    Unrealized gains (net of
      tax) on investments
      available for sale              23,346         18,738           1,671
  Noncash financing activities
    Conversion of preferred
      stock held by Disney to
      common stock
      Preferred stock                   (381)
      Additional capital            (142,842)
    Issuance of common stock
      upon conversion to
      preferred stock
      Preferred stock                     79
      Additional capital             143,144
    Issuance of preferred stock
      for the acquisition of the
      Disney newspapers
      Preferred stock                                                 1,755
      Additional capital                                            658,245
    Long-term debt assumed on
      the acquisition of the
      Disney newspapers                                             990,000


See "Notes to Consolidated Financial Statements."

                                       24
<PAGE>

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

                                      Preferred        Common      Treasury
                                         Shares        Shares        Shares
------------------------------------------------------------------------------

BALANCE AT DEC. 29, 1996                     --    93,340,652            --
  Issuance of common shares under
    stock option plan                                  89,318
  Issuance of treasury shares under
    stock option plan                                             1,604,447
  Issuance of treasury shares under
    stock purchase plan                                             387,514
  Issuance of convertible preferred
    shares                            1,754,930
  Purchase of treasury shares                                   (13,824,300)
  Retirement of treasury shares                   (11,832,339)   11,832,339
  Tax benefits arising from
    employee stock plans
  Comprehensive income:
    Net income
    Change in unrealized gains on
      securities available for
      sale, net of tax of $1,210
    Comprehensive income
  Cash dividends declared
                                   ------------   -----------    ----------
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)
                                   ============   ===========    ==========

See "Notes to Consolidated Financial Statements."

                                       25
<PAGE>
<TABLE>
<CAPTION>

                                    Preferred            Common        Additional          Retained
                                        Stock             Stock           Capital          Earnings
-----------------------------------------------------------------------------------------------------
<S>                                   <C>               <C>             <C>               <C>
BALANCE AT DEC. 29, 1996              $    --           $ 1,945         $ 308,320         $ 819,572
  Issuance of common shares under
    stock option plan                                         2             2,395
  Issuance of treasury shares under
    stock option plan                                                     (28,149)
  Issuance of treasury shares under
    stock purchase plan                                                    (2,222)
  Issuance of convertible preferred
    shares                              1,755                             658,245
  Purchase of treasury shares
  Retirement of treasury shares                            (247)          (37,519)         (517,606)
  Tax benefits arising from
    employee stock plans                                                   10,502
  Comprehensive income:
    Net income                                                                              413,015
    Change in unrealized gains on
      securities available for
      sale, net of tax of $1,210

    Comprehensive income

  Cash dividends declared                                                                   (78,335)
                                      -------           -------         ---------         ---------
BALANCE AT DEC. 28,  1997             $ 1,755           $ 1,700         $ 911,572         $ 636,646
  Issuance of common shares under
    stock option plan                                         7            10,185
  Issuance of common shares under
    stock purchase plan                                       2             3,966
  Issuance of treasury shares under
    stock option plan                                                     (14,422)
  Issuance of treasury shares under
    stock purchase plan                                                    (1,352)
  Issuance of treasury shares to
    nonemployee directors                                                     (13)
  Issuance of treasury shares
  Purchase of treasury shares
  Retirement of treasury shares                             (76)          (11,401)         (190,219)
  Tax benefits arising from
    employee stock plans                                                    9,543
  Comprehensive income:
    Net income                                                                              365,857
    Change in unrealized gains on
      securities available for
      sale, net of tax of $12,492

    Comprehensive income

  Cash dividends declared                                                                   (77,152)
                                      -------           -------         ---------         ---------
BALANCE AT DEC. 27, 1998              $ 1,755           $ 1,633         $ 908,078         $ 735,132
  Issuance of common shares under
    stock option plan                                        17            25,893
  Issuance of common shares under
    stock purchase plan                                       7            14,996
  Conversion of preferred shares         (381)               79               302
  Issuance of treasury shares to
    nonemployee directors
  Purchase of treasury shares
  Retirement of treasury shares                             (77)          (19,490)         (190,574)
  Tax benefits arising from
    employee stock plans                                                    9,190
  Comprehensive income:
    Net income                                                                              339,939
    Change in unrealized gains on
      securities available for
      sale, net of tax of $15,564

    Comprehensive income

  Cash dividends declared                                                                   (85,526)
                                       -------           -------        ---------         ---------
BALANCE AT DEC. 26, 1999               $ 1,374           $ 1,659        $ 938,969         $ 798,971
                                       =======           =======        =========         =========
</TABLE>

                                                  26
<PAGE>
<TABLE>
<CAPTION>
                                        Accumulated
                                       Other Compre-         Treasury
                                      hensive Income            Stock            Total
--------------------------------------------------------------------------------------
<S>                                         <C>              <C>           <C>
BALANCE AT DEC. 29, 1996                    $  1,671         $     --      $ 1,131,508
  Issuance of common shares under
    stock option plan                                                            2,397
  Issuance of treasury shares under
    stock option plan                                          70,785           42,636
  Issuance of treasury shares under
    stock purchase plan                                        17,218           14,996
  Issuance of convertible preferred
    shares                                                                     660,000
  Purchase of treasury shares                                (643,375)        (643,375)
  Retirement of treasury shares                               555,372               --
  Tax benefits arising from
    employee stock plans                                                        10,502
  Comprehensive income:
    Net income                                                                 413,015
    Change in unrealized gains on
      securities available for
      sale, net of tax of $1,210            $  1,671                            (1,671)
                                                                           -----------
    Comprehensive income                                                       411,344
                                                                           -----------
  Cash dividends declared                                                      (78,335)
                                            --------         --------      -----------
BALANCE AT DEC. 28,  1997                   $     --         $     --      $ 1,551,673
  Issuance of common shares under
    stock option plan                                                           10,192
  Issuance of common shares under
    stock purchase plan                                                          3,968
  Issuance of treasury shares under
    stock option plan                                          32,797           18,375
  Issuance of treasury shares under
    stock purchase plan                                        13,228           11,876
  Issuance of treasury shares to
    nonemployee directors                                         186              173
  Issuance of treasury shares                                   5,021            5,021
  Purchase of treasury shares                                (255,533)        (255,533)
  Retirement of treasury shares                               201,696               --
  Tax benefits arising from
    employee stock plans                                                         9,543
  Comprehensive income:
    Net income                                                                 365,857
    Change in unrealized gains on
      securities available for
      sale, net of tax of $12,492             18,738                            18,738
                                                                           -----------
    Comprehensive income                                                       384,595
                                                                           -----------
  Cash dividends declared                                                      (77,152)
                                            --------         --------      -----------
BALANCE AT DEC. 27, 1998                    $ 18,738        $ (2,605)      $ 1,662,731
  Issuance of common shares under
    stock option plan                                                           25,910
  Issuance of common shares under
    stock purchase plan                                                         15,003
  Conversion of preferred shares                                                    --
  Issuance of treasury shares to
    nonemployee directors                                        232               232
  Purchase of treasury shares                               (210,141)         (210,141)
  Retirement of treasury shares                              210,141                --
  Tax benefits arising from
    employee stock plans                                                         9,190
  Comprehensive income:
    Net income                                                                 339,939
    Change in unrealized gains on
      securities available for
      sale, net of tax of $15,564             23,346                            23,346
                                                                           -----------
    Comprehensive income                                                       363,285
                                                                           -----------
  Cash dividends declared                                                      (85,526)
                                            --------        --------       -----------
BALANCE AT DEC. 26, 1999                    $ 42,084        $ (2,373)      $ 1,780,684
                                            ========        ========       ===========
</TABLE>

                                           27
<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 for 1999,  1998 and 1997 are for the 52 weeks ended Dec. 26, Dec.
27 and Dec. 28, 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.

REVENUE  RECOGNITION  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 the joint operating  agreement that expires in the year
2089, as of Dec. 26, 1994,  profits are split equally between the partners.  The
Consolidated  Statement  of  Income  includes,  on  a  line-by-line  basis,  the
company's  pro rata share of the revenue and expense  generated by the operation
of the agency.

INVESTMENTS  in companies in which  Knight  Ridder has an equity  interest of at
least 20% but not more than 50% are  generally  accounted  for under the  equity
method.  Under this 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; the 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 allows  newspapers to offer Internet  access to  subscribers;
TKR Cable Company and TKR Cable Partners,  cable  television joint ventures (all
but one of the cable  companies  jointly  owned with  Tele-Communications,  Inc.
[TCI],  were sold in January 1997 and the balance was sold in March  1998);  and
Interealty,  Inc. (formerly known as PRC Realty Systems, Inc., sold in September
1998), a software system producer for the real estate industry.

The  company  owns 49.5% of the  voting  common  stock and 65% of the  nonvoting
common  stock of the SEATTLE  TIMES  COMPANY,  owns 31.1% of the voting stock of
NEWSPAPERS  FIRST, is a one-third  partner in the SP NEWSPRINT CO., and an 18.7%
partner  in  CareerPath.com  Inc.  and owns a 13.5%  equity  share  of  PONDERAY
NEWSPRINT  COMPANY.  The company  owns 33.3% of the voting  stock and 50% of the
nonvoting stock of INFINET COMPANY.

FORT WAYNE NEWSPAPERS,  INC. and THE PROFESSIONAL  EXCHANGE LLC (a subsidiary of
Philadelphia Newspapers,  Inc.) are the only consolidated subsidiaries that have
a minority ownership interest.  The minority  shareholders'  interest in the net
income  of  these   subsidiaries  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 JOA that runs through the year 2021 between
The Miami  Herald  Publishing  Company and Cox  Newspapers,  Inc.,  covering the
publication of The Herald and The Miami News, which ceased  publication in 1988.
The company's liability to the minority interest shareholders is included in the
Consolidated   Balance  Sheet  caption,   "MINORITY  INTERESTS  IN  CONSOLIDATED
SUBSIDIARIES."

                                       28
<PAGE>

"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.

The majority of the company's  "ACCOUNTS  RECEIVABLE"  as of Dec. 26, 1999,  and
Dec. 27, 1998,  are 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 consistently have been within  management's
expectations.

"INVENTORIES" are priced at the lower of cost (first-in,  first-out FIFO method)
or market.  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 an equity interest.  These investments are reviewed
for appropriate  classification  at the time of purchase and re- evaluated as of
each  balance  sheet  date.  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," a separate component
of  shareholders'  equity.  Upon the sale of an  investment,  the  gain/loss  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.

"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  arising  from  these  acquisitions.  The  goodwill  is being
amortized  over a 40-year period on a  straight-line  basis,  unless  management
concludes  that a shorter term is more  appropriate.  Identified  intangibles of
approximately $400 million acquired through  acquisitions consist of trademarks,
subscriber  and  advertiser  lists and mastheads  that are being  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,  based on the  undiscounted  cash flow method,  any
necessary additional write-downs will be charged to expense.

"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 and which  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 4, are  estimated  using
discounted  cash  flow  analyses  based  on the  company's  current  incremental
borrowing rates for similar types of borrowing arrangements.

In  accordance  with FAS NO. 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  will  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 that will be used will contain management's best estimates, using
appropriate and customary assumptions and projections at the time.

In  1996,  the  company   implemented  FAS  123  -  ACCOUNTING  FOR  STOCK-BASED
COMPENSATION.  Under  this  statement,  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.

                                       29
<PAGE>

In 1997,  the  company  adopted  FAS 128 -  EARNINGS  PER SHARE  (EPS).  FAS 128
replaced the calculation of primary and fully diluted EPS with basic and diluted
EPS. Basic EPS will typically be higher than primary EPS due to the exclusion of
any dilutive  effects of options,  warrants and convertible  securities from the
calculation.  Diluted  EPS is very  similar  to the  previously  reported  fully
diluted  EPS.  All EPS  amounts  for all  earlier  periods  presented  have been
restated to conform to the FAS 128 requirements.

"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 $325.7 million in 1999,  $351.8 million in 1998 and $406.0 million in
1997.  Basic EPS  attributable to common shares was restated in 1998 and 1997 to
exclude  preferred  dividends  from net income in the  calculation of net income
attributable to common shares. Basic EPS decreased by $0.17 in 1998 and $0.08 in
1997 as a result of the restatement. "DILUTED EARNINGS PER SHARE" is computed by
dividing  net  income  by the  weighted-average  number  of  common  and  common
equivalent shares outstanding.

In 1998, the company adopted FAS 130 - REPORTING  COMPREHENSIVE  INCOME. FAS 130
establishes new rules for the reporting and display of comprehensive  income and
its  components.  FAS 130  requires  that  unrealized  gains  or  losses  on the
company's  available-for-sale  securities  be  included  in  "ACCUMULATED  OTHER
COMPREHENSIVE  INCOME," a separate component of shareholders'  equity.  Prior to
its adoption,  unrealized gains or losses on available-for-sale  securities were
separately  identified as such in shareholders'  equity. The adoption of FAS 130
expanded the disclosure  provided in the statement of shareholders'  equity. See
Note 9.

FAS 131 - DISCLOSURES  ABOUT SEGMENTS OF AN ENTERPRISE  AND RELATED  INFORMATION
was effective in 1998. 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,  Pa., Miami, Fla., San
Jose,  Calif.,  Kansas  City,  Mo.,  Fort  Worth,  Texas,  Detroit,  Mich.,  and
Charlotte,  N.C. Revenue is earned through the sale of advertising,  circulation
and related  activities.  Newspapers  are  distributed  in print  through  local
distribution  channels,  as well as online through  Knight  Ridder's Real Cities
network  (see  "Management's  Discussion  and  Analysis  of  Operations:  Online
Activities" on page 16).

Reportable  online  operations  did not meet the definition of a segment per FAS
131. This  assessment will be re-evaluated in 2000 as a result of the separation
of online  activities  into a separate  business unit.  During 1999, the company
conducted business as one operating segment. This determination was based on the
individual  operations  that the chief  operating  decision-maker  reviewed  for
purposes of assessing performance and making operating decisions.

In 1998,  the  company  also  adopted  FAS 132 -  EMPLOYERS'  DISCLOSURES  ABOUT
PENSIONS AND OTHER POSTRETIREMENT  BENEFITS. FAS 132 standardizes the disclosure
requirements for pensions and other postretirement benefits, requires additional
information on changes in the benefit obligations and fair values of plan assets
and eliminates  certain  disclosures that are no longer considered  useful.  See
Note 7.

In 2001,  the  company  plans  to  adopt  FAS 133 -  ACCOUNTING  FOR  DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES. Based on current circumstances,  the company
does not believe the effect of adoption will be material.

The  company  adopted  STATEMENT  OF POSITION  98-5 - REPORTING  ON THE COSTS OF
START-UP  ACTIVITIES  as of the beginning of 1999.  The  statement  requires all
costs of start-up  activities,  including  organization  costs, to be charged to
operations  as incurred.  The adoption of this  statement has not had a material
effect on the financial statements.

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.

                                       30
<PAGE>

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>

                                             1999                              1998                            1997
                                 ---------------------------        -------------------------       -------------------------
                                  Current           Deferred         Current         Deferred        Current         Deferred
                                 ---------          --------        ---------        --------       ---------       ---------
<S>                              <C>                <C>             <C>              <C>            <C>             <C>
Federal income taxes             $ 203,100          $ (6,447)       $ 213,161        $ (4,479)      $ 286,645       $ (33,176)
State and local income taxes        26,870             4,552           39,953          (2,465)         64,519         (11,156)
                                 ---------          --------        ---------        --------       ---------       ---------
  Total                          $ 229,970          $ (1,895)       $ 253,114        $ (6,944)      $ 351,164       $ (44,332)
                                 =========          ========        =========        ========       =========       =========

Provision for:
  Continuing operations          $ 229,970          $ (1,895)       $ 210,729        $ (8,444)      $ 312,098       $ (14,750)
  Discontinued operations                                              42,385           1,500          39,066         (29,582)
                                 ---------          --------        ---------        --------       ---------       ---------
    Total                        $ 229,970          $ (1,895)       $ 253,114        $ (6,944)      $ 351,164       $ (44,332)
                                 =========          ========        =========        ========       =========       =========

</TABLE>

Cash  payments  of income  taxes for the years  1999,  1998 and 1997 were $213.1
million,  $262.7  million  and $278.5  million,  respectively.  Payments in 1998
included  the  tax  impact  resulting  from  the  sale  of the  Gary  paper  and
Technimetrics.  Payments in 1997 included the tax impact resulting from the gain
on the sale of  Knight-Ridder  Information,  Inc.,  newspapers in Boca Raton and
Long Beach, and TKR Cable Company.

                                       31
<PAGE>

3.  EFFECTIVE INCOME TAX RATES

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):

                                          1999          1998         1997
                                       ---------     ---------    ---------
Federal statutory income tax           $ 198,805     $ 177,771    $ 242,848
State and local income taxes, net of
  federal benefit                         20,425        17,033       34,300
Statutory rate applied to
  nondeductible amortization of the
  excess of cost over net assets
  acquired                                15,016        15,123       13,482
Other items, net                          (6,170)       (7,642)       6,718
                                       ---------     ---------    ---------
  Total                                $ 228,076     $ 202,285    $ 297,348
                                       =========     =========    =========


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

                                                1999              1998
                                             ---------         ---------
Deferred Tax Asset
  Postretirement benefits other than
    pensions (including amounts relating
    to partnerships in which the company
    participates)                            $  84,286         $  84,100
  Accrued interest                               6,476             7,175
  Other nondeductible accruals                  71,307            60,022
                                             ---------         ---------
    Gross deferred tax asset                 $ 162,069         $ 151,297
                                             =========         =========

Deferred Tax Liability
  Depreciation and amortization              $(356,726)        $(341,618)
  Compensation and benefit accruals                965            (7,810)
  Equity in partnerships and investees         (55,408)          (51,170)
  Unrealized appreciation in equity
    securities                                 (28,056)          (12,492)
  Other                                           (623)           (3,361)
                                             ---------         ---------
    Gross deferred tax liability             $(439,848)        $(416,451)
                                             ---------         ---------
    Net deferred tax liability               $(277,779)        $(265,154)
                                             =========         =========

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

                                                1999              1998
                                             ---------         ---------
Current asset                                $  28,857         $  27,861
Noncurrent liability                          (306,636)         (293,015)
                                             ---------         ---------
  Net deferred tax liability                 $(277,779)        $(265,154)
                                             =========         =========

                                       32
<PAGE>

4. DEBT

Debt consisted of the following (in thousands):

                                         Dec. 26              Dec. 27
                                           1999                 1998
                                       -----------          -----------
Commercial paper due at
  various dates through June
  20, 2000, at an effective
  interest rate of 5.5% as of
  Dec. 26, 1999. Amounts are
  net of unamortized discounts
  of $4,004 in 1999 and $9,639
  in 1998(a)                           $   433,796          $   917,533
Debentures due on April 15,
  2009, bearing interest at
  9.875%, net of unamortized
  discount of $1,536 in 1999
  and $1,701 in 1998                       198,464              198,299
Debentures due on Nov. 1,
  2027, bearing interest at
  7.15%, net of unamortized
  discount of $5,466 in 1999
  and $5,614 in 1998                        94,534               94,386
Debentures due on March 15,
  2029, bearing interest at
  6.875%, net of unamortized
  discount of $3,557 in 1999(b)            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 $97 in 1999 and
  $223 in 1998                              79,903              119,777
Notes payable due on Nov. 1,
  2007, bearing interest at
  6.625%, net of unamortized
  discount of $1,791 in 1999
  and $2,022 in 1998                        98,209               97,978
Senior notes payable due on
  Dec. 15, 2005, bearing
  interest at 6.3%, net of
  unamortized discount of $595
  in 1999 and $695 in 1998                  99,405               99,305
                                       -----------          -----------
                                         1,300,754            1,527,278

Less amounts payable in one
  year(c)                                   39,940              198,277
                                       -----------          -----------
    Total long-term debt               $ 1,260,814          $ 1,329,001
                                       ===========          ===========

(a) Commercial  paper is supported by $900 million of revolving  credit and term
    loan  agreements,  $500 million of which matures on June 22, 2003,  and $400
    million of which  matures on June 20,  2000.  The company has the option and
    intention to renew the $400 million  facility  before June 22, 2000,  for an
    additional 364-day term through June 2001.
(b) During the first  quarter  1999,  the company  issued $300 million of 6.875%
    debentures  under a shelf  registration  statement filed with the Securities
    and Exchange  Commission in November  1997.  Proceeds from the issuance were
    used to reduce  borrowings  under the company's  commercial paper program in
    April 1999.
(c) In 1999,  this  represents  $39.9  million for the 8.5% notes payable due on
    Sept. 1, 2000.  Interest  payments  during 1999  and 1998 were $90.6 million
    and $118.4 million, respectively.

                                       33
<PAGE>

The carrying amounts and fair values of debt as of Dec. 26, 1999, are as
follows (in thousands):

                                       Carrying               Fair
                                        Amount                Value
                                     -----------          -----------
Commercial paper                     $   433,796          $   433,796
9.875% Debentures                        198,464              228,536
7.15% Debentures                          94,534               90,660
6.875% Debentures                        296,443              262,338
8.5% Notes payable                        79,903               81,754
6.625% Notes payable                      98,209               94,360
6.3% Senior notes payable                 99,405               94,446
                                     -----------          -----------
  Total                              $ 1,300,754          $ 1,285,890
                                     ===========          ===========

The following table presents the approximate annual maturities of debt for
the years after 1999 (in thousands):


2000                                   $    39,940
2001                                        39,963
2003                                       433,796
2005 and thereafter                        787,055
                                       -----------
  Total                                $ 1,300,754
                                       ===========


5.  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):

                                     1999             1998           1997
                                 ----------       ----------     ----------
Current assets                   $  226,155       $  246,940     $  212,939
Property, plant and equipment
  and other assets                1,458,029        1,260,996      1,158,224
Current liabilities                 199,114          170,856        143,683
Long-term debt and other
  noncurrent liabilities            645,555          518,560        394,253
Net sales                           807,825          782,893        806,587
Gross profit                         20,627           90,719         62,426
Net income (loss)                    (8,899)          56,201         24,428
Company's share of:
  Net assets                        206,880          201,120        197,585
  Net income                         12,571           23,309         10,800

In 1989,  the Detroit  Free Press and The Detroit News began  operating  under a
joint operating  agreement as the Detroit Newspaper (DN).  Balance sheet amounts
for DN at Dec. 26, 1999,  Dec. 27, 1998, and Dec. 28, 1997, 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 $180.8 million
of undistributed  earnings accumulated since the investment dates. Dividends and
cash  distributions  received from  unconsolidated  companies and joint ventures
(excluding DN) were $10.8 million in 1999, $6.6 million in 1998 and $3.1 million
in 1997.

In January 1997, the company and  Tele-Communications,  Inc., closed on the sale
of the company'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.

                                       34
<PAGE>

6. CAPITAL STOCK

In 1991,  shareholders  authorized 2 million shares of Series B preferred  stock
for future  issuance  (which is  convertible  into 20  million  shares of common
stock).

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 May 9, 1997,  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 1999,
380,830 shares of preferred stock were converted into 3.8 million common shares.
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 such 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.

Concurrent with the 1996 stock split, the company executed a rights agreement to
replace a similar  agreement that expired on July 10, 1996. 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  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 1999,  1998 and 1997,  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 1999,  1998 and 1997 diluted EPS
calculations  include  15,947,916,  17,549,300 and  10,968,313  weighted-average
shares of Series B convertible  preferred  stock,  respectively,  and 1,487,231,
1,744,887 and 1,870,340  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  336,001 shares in 1999,  349,599 shares in 1998, and 387,514 shares in
1997. The purchase price of shares issued in 1999 under this plan ranged between
$42.47 and $45.95,  and the market  value on the  purchase  dates of such shares
ranged from $49.97 to $54.06.

                                       35
<PAGE>

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 three equal installments
over a three-year period from the date of grant. 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:

                                      Number of          Weighted-Average
                                       Shares        Exercise Price Per Share
                                      ---------      ------------------------
Outstanding
  Dec. 29, 1996                       6,904,845              $ 29.89
    Exercised                        (1,693,765)               26.54
    Expired                            (340,341)               29.00
    Forfeited                           (25,873)               32.55
    Granted                           1,412,668                51.65
Outstanding
  Dec. 28, 1997                       6,257,534                35.74
    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
    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

In 1997, the company  established the 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 Jan.  1, 1997,  through  Dec.  31,  1999.  Participants
received an  aggregate  initial  grant of 347,218  shares of  restricted  Knight
Ridder  common  stock.  Additional  grants,  net  of  forfeitures,  resulted  in
restricted  shares  outstanding  of 314,925 at Dec. 26, 1999, and Dec. 27, 1998,
and 322,286 at Dec. 28, 1997.  There were no shares  vested as of Dec. 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
Jan. 1, 2000,  with an initial grant of 342,012  shares,  and ending on Dec. 31,
2002. The grants of common stock are restricted,  as the vesting of these shares
is triggered upon the occurrence of certain performance goals.

In  1997,  the  company   established  the  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  20,000,  24,000 and 26,000 options in 1999, 1998 and
1997,  respectively.  In addition, 4,157 and 3,333 shares were awarded under the
plan  as  retainer   payments  to  nonemployee   directors  in  1999  and  1998,
respectively.

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

At Dec. 27, 1999,  shares of the company's  authorized but unissued common stock
were reserved and available for issuance as follows:

                                         Shares
                                       ---------
Employee Stock Option Plan             6,322,817
Employees Stock Purchase Plan          1,735,506
Nonemployee Directors Plan               122,510
                                       ---------
  Total                                8,180,833
                                       =========


                                       36
<PAGE>

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 1999, 1998 and 1997,
respectively:  risk-free rates of 6.2%, 4.7% and 5.7%;  dividend yields of 1.5%,
1.6% and 1.6%;  volatility factors of the expected market price of the company's
common stock of 0.16, 0.17 and 0.14; and a weighted-average expected life of the
option of 5.6, 6.4 and 6.4 years. The weighted-average  fair values of the stock
options for 1999, 1998 and 1997 were $14.67, $11.58 and $12.44, 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 1999, 1998 and 1997
pro forma  information  follows (in  thousands,  except for  earnings  per share
information):

                                    1999             1998           1997
                                 ---------        ---------      ---------
Pro forma net income             $ 329,689        $ 356,777      $ 407,274
Pro forma basic earnings per
  share                               3.94             4.35           4.52
Pro forma diluted earnings
  per share                           3.38             3.63           4.02

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 Dec. 26,  1999,  ranged  between
$22.66 and $57.97.  The  weighted-average  remaining  contractual  life of those
options for 1999,  1998 and 1997 is 7.5,  7.3 and 6.9 years,  respectively.  The
weighted-average  exercise  price of those  options  for 1999,  1998 and 1997 is
$44.75,  $39.74 and $35.74,  respectively.  4,262,694,  3,882,661  and 3,643,950
options were exercisable at the end of 1999, 1998 and 1997, respectively.

                                       37
<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  multiemployer  union
defined  benefit  plans,  defined  contribution  plans and other  agreements (in
thousands):
<TABLE>
<CAPTION>

                                                Pension Benefits                                  Other Benefits
                                  -------------------------------------------         ---------------------------------------
                                    1999              1998             1997             1999            1998            1997
                                  --------          --------         --------         -------         -------         -------
<S>                               <C>               <C>              <C>              <C>             <C>             <C>
Defined benefit plans:
  Service cost                    $ 37,421          $ 41,994         $ 30,116         $ 4,368         $ 3,390         $ 3,524
  Interest cost                     74,264            67,864           61,458          10,876          10,380          10,988
  Expected return on plan
    assets                         (98,064)          (89,264)         (75,151)           (805)           (778)           (753)
  Recognized net actuarial
    (gain) loss                        989            (1,095)              57            (541)           (829)           (324)
  Amortization of prior
    service cost                     6,788             6,418            5,990          (4,597)         (4,649)         (4,508)
  Amortization of transition
    asset                           (4,157)           (3,999)          (4,516)
                                  --------          --------         --------         -------         -------         -------
      Net                           17,241            21,918           17,954           9,301           7,514           8,927
Multiemployer union plans           15,120            11,731           11,125
Defined contribution plans          11,889            11,681           10,742
Other                                3,799             1,695            1,968
                                  --------          --------         --------         -------         -------         -------
  Net periodic benefit cost       $ 48,049          $ 47,025         $ 41,789         $ 9,301         $ 7,514         $ 8,927
                                  ========          ========         ========         =======         =======         =======


Service cost in 1998 included approximately $7.0 million related to accelerating
the retirement of certain employees.

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


                                           Pension Benefits                           Other Benefits
                                  --------------------------------          --------------------------------
                                  1999          1998          1997          1999          1998          1997
                                  ----          ----          ----          ----          ----          ----
<S>                               <C>           <C>           <C>           <C>           <C>           <C>
Discount rate as of year end      7.8%          6.8%          7.0%          7.8%          6.8%          7.0%
Return on plan assets             9.0           8.8           8.5           6.5           6.5           6.5
Rate of compensation increase     3.5           4.5           4.5           3.5           4.5           4.5
Medical trend rate:
  Projected                                                                 6.0           7.0           8.0
  Reducing to this percentage
    in 2001 and thereafter                                                  5.5           5.5           5.5

</TABLE>

                                       38
<PAGE>

The assumed health care cost trend rate has a significant  effect on the amounts
reported. A 1-percentage-point change in the assumed health care cost trend rate
would have the following effects:

                                          1-Percentage-       1-Percentage-
                                         Point Increase      Point Decrease
                                         --------------      --------------
Effect on total of service and
  interest cost components in 1999           $   672            $   (573)
Effect on postretirement benefit
  obligation as of Dec. 26, 1999             $ 4,492            $ (3,943)

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 DN 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
                               ---------------------------------------------        -------------------------------------------
                                   1999             1998             1997              1999             1998             1997
                               -----------      -----------      -----------        ---------        ---------        ---------
<S>                            <C>              <C>              <C>                <C>              <C>              <C>
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at
  beginning of year            $ 1,053,899      $   955,332      $   796,879        $ 121,229        $ 132,618        $ 121,488
Service cost                        36,144           38,230           27,423            2,516            2,266            2,316
Interest cost                       74,264           67,864           61,458            7,812            7,114            7,987
Plan participants'
  contributions                                                                         1,102            1,216            1,653
Amendments                           4,361            5,666            4,483                              (868)
Actuarial (gains) losses          (139,871)          35,582           57,444           (1,575)         (11,788)           2,695
Net acquisitions                                                      51,384                                              6,931
Benefits paid                      (54,995)         (48,775)         (43,739)         (10,265)          (9,329)         (10,452)
                               -----------      -----------      -----------        ---------        ---------        ---------
Benefit obligation at end of
  year                         $   973,802      $ 1,053,899      $   955,332        $ 120,819        $ 121,229        $ 132,618
                               ===========      ===========      ===========        =========        =========        =========

CHANGE IN PLAN ASSETS
Fair value of plan assets at
  beginning of year            $ 1,149,173      $ 1,058,759      $   859,911        $  12,701        $  12,386        $  12,400
Actual return on plan assets       127,641          130,259          173,445              520              916              843
Acquisitions                                                          59,495
Company contributions               15,570            8,930            9,647            7,565            7,512            7,942
Plan participants'
  contributions                                                                         1,102            1,216            1,653
Benefits paid                      (56,659)         (48,775)         (43,739)         (10,265)          (9,329)         (10,452)
                               -----------      -----------      -----------        ---------        ---------        ---------
Fair value of plan assets at
  end of year                  $ 1,235,725      $ 1,149,173      $ 1,058,759        $  11,623        $  12,701         $ 12,386
                               ===========      ===========      ===========        =========        =========        =========

Funded status of plan
  (underfunded)                $   261,923      $    95,274      $   103,427        $(109,196)       $(108,528)      $ (120,232)
Unrecognized net actuarial
  gain                            (292,022)        (120,239)        (126,768)         (19,758)         (18,297)          (6,724)
Unrecognized prior service
  cost                              41,395           42,159           42,911          (16,189)         (20,293)         (23,529)
Unrecognized transition asset       (4,501)          (8,480)         (12,576)
                               -----------      -----------      -----------        ---------        ---------       ----------
Net prepaid (accrued) benefit
  cost                         $     6,795      $     8,714      $     6,994        $(145,143)       $(147,118)      $ (150,485)
                               ===========      ===========      ===========        =========        =========       ==========
</TABLE>
                                       39
<PAGE>

Amounts recognized in the Consolidated Balance Sheet consist of:

<TABLE>
<CAPTION>

                                               Pension Benefits                                     Other Benefits
                                  ------------------------------------------        -------------------------------------------
                                    1999             1998             1997             1999             1998             1997
                                  --------         --------         --------        ---------        ---------        ---------
<S>                                <C>              <C>              <C>            <C>              <C>              <C>
Prepaid benefit cost              $ 56,547         $ 51,636         $ 56,504
Accrued benefit liability          (49,752)         (42,922)         (49,510)       $(145,143)       $(147,118)       $(150,485)
Additional minimum liability                         (9,200)          (5,922)
Intangible asset                                      9,200            5,922
                                  --------         --------         --------        ---------        ---------        ---------
Net prepaid (accrued) benefit
  cost                            $  6,795         $  8,714         $  6,994        $(145,143)       $(147,118)       $(150,485)
                                  ========         ========         ========        =========        =========        =========
</TABLE>

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

                                      1999          1998            1997
                                   ---------     ----------      ---------
Projected benefit obligation       $ (37,666)    $ (119,794)     $ (43,497)
                                   ---------     ----------      ---------
Accumulated benefit obligation       (26,462)      (106,092)       (32,484)
Fair value of plan assets                            68,988          2,529
                                   ---------     ----------      ---------
Unfunded accumulated benefit
  obligation                       $ (26,462)    $  (37,104)     $ (29,955)
                                   =========     ==========      =========

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

                                      1999          1998            1997
                                   ---------     ----------      ---------
Projected benefit obligation       $      --     $  (79,800)     $  (2,934)
                                   ---------     ----------      ---------
Accumulated benefit obligation                      (75,211)        (2,934)
Fair value of plan assets                            68,988          2,529
                                   ---------     ----------      ---------
Unfunded accumulated benefit
  obligation                       $      --     $   (6,223)     $    (405)
                                   =========     ==========      =========

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 Dec. 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) to 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.

                                       40
<PAGE>

                          EMPLOYEE LABOR ARRANGEMENTS

Approximately  37% of the company's  22,000 employees are represented by some 70
local unions and work under multiyear 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 2000
and  ratified  by all unions  shortly  thereafter.  During  2000,  there will be
negotiations to extend collective bargaining agreements with the Newspaper Guild
in Akron and with a single union at each of six other newspapers.

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.  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>
1999  Operating revenue                     $ 770,799            $ 809,666            $ 784,739            $ 863,021
      Operating income                        125,662              155,485              150,977              192,125
      Income from continuing
        operations                             62,867               86,586               76,209              114,278
      Net income                               62,867(a)            86,586(b)            76,209              114,278(c)
      Earnings per share
        Basic:   Net income (1)                  0.76                 1.04                 0.90                 1.37
        Diluted: Net income                      0.65                 0.88                 0.78                 1.18
      Dividends declared per common
        share (3)                                0.20                 0.23                 0.23                 0.23
---------------------------------------------------------------------------------------------------------------------------
1998  Operating revenue                     $ 743,883            $ 779,292            $ 752,778            $ 815,966
      Operating income                        113,187              127,125              111,629              152,677
      Income from continuing
        operations                            101,437(d)            66,925(e)            56,983(g)            80,286(h)
      Net gain on sale of BIS
        operations                                                  60,042(f)
      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)                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)                  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
---------------------------------------------------------------------------------------------------------------------------
1997  Operating revenue (2)                 $ 600,830            $ 711,656            $ 748,704            $ 815,595
      Operating income                         98,169              136,977              107,936              162,946
      Income from continuing
        operations                            175,458(i)            60,950               73,467(j)            86,629(k)
      Net gain on sale of BIS
        operations                                                                                            15,261(l)
      Income (loss) from BIS
        operations, net                          (726)                 350                  545                1,081
      Net income                              174,732               61,300               74,012              102,971
      Earnings per share
        Basic:   Income from continuing
                   operations (1)                1.88                 0.67                 0.81                 1.00
                 Net gain on sale of
                   BIS operations                                                                               0.18
                 Income from BIS
                   operations, net                                    0.01                                      0.01
                 Net income (1)                  1.88                 0.68                 0.81                 1.19
        Diluted: Income from continuing
                   operations                    1.85                 0.60                 0.69                 0.84
                 Net gain on sale of
                   BIS operations                                                                               0.15
                 Income from BIS
                   operations, net                                    0.01                                      0.01
                 Net income                      1.85                 0.61                 0.69                 1.00
      Dividends declared per common
        share                                    0.20                 0.20                 0.20                 0.20
</TABLE>

                                       41
<PAGE>

(1) Basic EPS has been  restated  for the last two  quarters of 1997 through the
    first quarter of 1999 to exclude  preferred  dividends from the numerator in
    the calculation of income  attributable to common shares. As a result of the
    restatements,  basic EPS  decreased  by the  following  amounts in the years
    indicated  for the first, second, third and fourth  quarters,  respectively:
    1999 - $0.04, N/A, N/A, N/A; 1998 - $0.04,  $0.04,  $0.04, $0.05; and 1997 -
    N/A, N/A, $0.04, $0.04.
(2) Certain  amounts  in 1997  have been  reclassified  to  conform  to the 1998
    presentation.
(3) The Board of Directors  declared a $.23 per share dividend on Jan. 25, 1999,
    payable on Feb. 21, 2000,  to  shareholders  of record on Feb. 9, 2000.
    (a)  Includes  after-tax  severance  costs of $1.3  million and an after-tax
         gain of $2.3 million on the sale of SportsLine.
    (b)  Includes after-tax  severance costs of $1.4 million and after-tax gains
         on the sale of Zip2 and  AT&T  stock  (net of  adjustments  to  certain
         investments to write down permanent  declines in their market value) of
         $6.7 million.
    (c)  Includes an after-tax gain of $14.7 million on the sale of AT&T stock.
    (d)  Includes an after-tax gain of $45.0 million on the sales of the balance
         of our jointly owned cable systems with Tele-Communications,  Inc., and
         the newspaper in Gary, Ind.
    (e)  Includes  after-tax  corporate  relocation  costs,  net  of  settlement
         adjustments on 1997 newspaper sales totaling $5.1 million.
    (f)  Gain on the sale of Technimetrics, Inc.
    (g)  Includes after-tax corporate relocation costs of $4.4 million.
    (h)  Includes after-tax corporate relocation costs and other severance costs
         of $3.2 million.
    (i)  Includes  the  after-tax  gain of  $128.3  million  on the  sale of the
         majority of TKR Cable Company.
    (j)  Includes the  after-tax  gain of $24.5  million on the Boulder,  Colo.,
         exchange.
    (k)  Includes  the  after-tax  gain of  $10.3  million  on the  sale of four
         newspapers.
    (l) Gain on the sale of KRII.

9. COMPREHENSIVE INCOME

The following  table presents the components of other  comprehensive  income for
1999,  1998 and  1997 as shown in the  Statement  of  Shareholders'  Equity  (in
thousands):

                                           1999         1998         1997
                                        ---------    ---------    ---------
Net income                              $ 339,939    $ 365,857    $ 413,015
Total gains on securities available
  for sale, net of taxes                   47,462       18,738       (1,086)
Less: reclassification adjustment for
  realized gains, net of taxes            (24,116)           0         (585)
                                        ---------    ---------    ---------
Change in accumulated comprehensive
  income                                   23,346       18,738       (1,671)
                                        ---------    ---------    ---------
Comprehensive income                    $ 363,285    $ 384,595    $ 411,344
                                        =========    =========    =========

(Unaudited) On Jan. 31, 2000, Cadabra,  Inc., an investment in which the company
held a 19.5%  minority  ownership  position at Dec. 26, 1999,  was  purchased by
GoTo.com,  Inc., in exchange for $8.0 million in cash and 3.3 million  shares of
GoTo.com,  Inc., stock. Knight Ridder now holds a minority ownership interest in
GoTo.com of 1.57%. The market value of Cadabra was not readily available at Dec.
26, 1999, and therefore was not included in comprehensive income at year end.

On Feb. 15, 2000,  Prio,  Inc., an investment in which the company held a 12.41%
minority  ownership position at Dec. 26, 1999, was purchased by InfoSpace.com in
exchange for 5.4 million shares of InfoSpace.com,  Inc., stock. The market value
of Prio was not readily  available  at Dec.  26,  1999,  and  therefore  was not
included in comprehensive income at year end.

As of the date of these transactions, the company had an after-tax realized gain
on its investments in Cadabra and Prio totaling approximately $100 million.

                                       42
<PAGE>

10. ACQUISITIONS AND DISPOSITIONS

ACQUISITIONS

On May 9, 1997, the company  completed the acquisition for $1.65 billion of four
newspapers  indirectly  owned by The Walt Disney  Company.  The  acquisition was
accomplished  through  the  merger of a wholly  owned  subsidiary  with and into
Cypress Media, Inc.  ("Media"),  formerly known as ABC Media, Inc., the owner of
the four  newspapers.  Media owns  newspapers  in Kansas City,  Mo., Fort Worth,
Texas, Belleville,  Ill., and Wilkes-Barre,  Pa. The company intends to continue
to manage and operate Media as a newspaper company.

The acquisition was accounted for under the purchase method.  The purchase price
was  allocated  based on the  estimated  fair market  value of net  tangible and
intangible  assets  acquired.  The fair  market  value of the net  tangible  and
intangible assets of Media was approximately $317.3 million at date of purchase,
including  $351.6 million of intangible  assets,  which are being amortized on a
straight-line  basis  over  periods  ranging  from 10  years  to 40  years.  The
intangible  assets  acquired  primarily  represent  mastheads,   which  have  an
indefinite  life, but are being amortized over 40 years.  The excess of purchase
price over these net assets,  approximately $1.33 billion,  has been recorded as
goodwill and is being amortized on a straight-line basis over 40 years.

Pursuant to the  merger,  the company  issued  1,754,930  shares of its Series B
convertible  preferred stock.  Each share of preferred stock is convertible into
10 shares of common stock.  At the effective time of the merger,  Media had $990
million of bank debt, which was assumed by the company. The company's results of
operations include Media from May 9, 1997.

On Aug. 24, 1997, the company exchanged its newspaper in Boulder, Colo., for two
newspapers in California owned by the E.W. Scripps Company,  The Monterey County
Herald and the San Luis Obispo County Telegram-Tribune.

The exchange was accounted for under the purchase method.  The fair market value
of the two newspapers  received in the exchange was approximately $55.8 million,
and that value was allocated to the net tangible and intangible  assets of these
newspapers.  The fair market value of the  identified  tangible  and  intangible
assets was  approximately  $50.3  million at date of exchange,  including  $17.7
million of intangible assets, which are being amortized on a straight-line basis
over periods ranging from 10 years to 40 years.  The excess of the fair value of
these newspapers over their net assets, of approximately $5.5 million,  has been
recorded as goodwill  and is being  amortized on a  straight-line  basis over 40
years.  The company's  results of operations  include  Boulder  through Aug. 24,
1997, and Monterey and San Luis Obispo from that same date forward.

DISPOSITIONS

RELATED TO CONTINUING OPERATIONS:

On March 18, 1998, the company closed on the sale of its remaining interest in a
jointly  owned cable system with  Tele-Communications,  Inc.  (TCI).  On Feb. 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.

In December  1997,  the company sold its  newspapers in Boca Raton,  Fla.,  Long
Beach,  Calif.,  Milledgeville,  Ga.,  and  Newberry,  S.C. The sale of the Boca
Raton,  Newberry and Milledgeville  newspapers to Community  Newspaper Holdings,
Inc., also included the transfer to the company of The Daily Sun and The Buyer's
Guide, a shopper,  in Warner Robins,  Ga., and The Byron (Ga.) Gazette, a weekly
newspaper.  The Long Beach newspaper was sold to Garden State Newspapers,  Inc.,
an  affiliate  of  Media  News  Group.  The  proceeds  from the sale of the four
newspapers  were $50.7 million.  The pretax and after-tax  gains from their sale
were $18.1 million and $10.3 million, respectively.

On Aug. 24, 1997, the company exchanged its newspaper in Boulder, Colo., for two
newspapers  in  California  owned  by the E.W.  Scripps  Company.  The  exchange
resulted  in pretax and  after-tax  gains of $43.2  million  and $24.5  million,
respectively.

In  January  1997,  the  company  and TCI  closed  on the sale of the  company's
interest in all but one of their  jointly owned cable  systems.  As noted above,
the balance of the cable system was sold in March 1998. The total sale price was
$377.6 million and resulted in pretax and after-tax  gains of $221.8 million and
$128.3 million, respectively.

                                       43
<PAGE>

RELATED TO DISCONTINUED OPERATIONS:

In 1997,  the company  announced its  intention to sell the  remaining  Business
Information   Services  (BIS)  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  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.

On Nov. 14, 1997, the company sold Knight-Ridder  Information,  Inc., to M.A.I.D
plc for $420  million  plus a  working  capital  purchase  price  adjustment  of
approximately  $15 million.  The sale resulted in a pretax gain of $23.6 million
and an after-tax gain of $15.3 million.

11. COMMITMENTS AND CONTINGENCIES

At Dec.  26,  1999,  the company had lease  commitments  currently  estimated to
aggregate  approximately  $77.6  million  that expire from 2000  through 2051 as
follows (in thousands):

2000                                      $ 16,397
2001                                        14,128
2002                                        11,252
2003                                         9,245
2004                                         7,460
2005 and thereafter                         19,078
                                          --------
  Total                                   $ 77,560
                                          ========

Payments under the lease contracts were $24.7 million in 1999,  $19.3 million in
1998 and $15.6 million in 1997.

In  connection  with the  company's  insurance  program,  letters  of credit are
required to support certain projected worker compensation  obligations.  At Dec.
26, 1999, the company had approximately $45 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 lengthy 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 case is
pending in the U.S.  Court of Appeals.  The case is currently  being briefed and
oral argument has been set for May 2000.

Various libel 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,  including
Detroit,  will  not  be  material  to  its  financial  position  or  results  of
operations, on a consolidated basis.

                                       44
<PAGE>

REPORT OF INDEPENDENT AUDITORS

Shareholders
Knight-Ridder, Inc.

We have audited the accompanying  consolidated  balance sheets of Knight-Ridder,
Inc.,  as  of  December  26,  1999  and  December  27,  1998,  and  the  related
consolidated  statements of income, cash flows and shareholders' equity for each
of the three  years in the period  ended  December  26,  1999.  Our audits  also
included the  financial  statement  schedule  listed in the index of Item 14(a).
These financial  statements are the responsibility of the Company's  management.
Our  responsibility  is to express an  opinion on these  consolidated  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the consolidated  financial position of Knight- Ridder,
Inc., at December 26, 1999, and December 27, 1998, and the consolidated  results
of their  operations  and their  cash  flows for each of the three  years in the
period ended Dec. 26, 1999, 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.

As discussed in Note 7 to the  consolidated  financial  statements,  in 1998 the
company changed its method of accounting for certain postretirement benefits.


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


San Jose, California
Jan. 18, 2000

                                       45
<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

Except for the  information  regarding the company's  executive  officers of the
company set forth below, the information called for by this item is incorporated
by reference to the  company's  definitive  Proxy  Statement for the 1999 Annual
Meeting of Shareholders to be held on April 25, 2000.

MANAGEMENT COMMITTEE

ROSS  JONES,  57
Senior vice president and CFO since 1993.  Served as vice  president/finance  in
1993; vice president and treasurer of Reader's Digest Association, Inc., 1985 to
1993 and in other  positions  there  1977 to 1985.  Served as  manager  at Brown
Brothers  Harriman & Co.  1970 to 1977.  Advanced  Management  Program,  Harvard
Business School,  1988; M.B.A.,  finance,  Columbia  University Business School,
1970; B.A., classics, Brown University, 1965.

ALVAH H. CHAPMAN JR., 78
Served as chairman of the  Management  (formerly  Executive)  Committee  1984 to
1995;  chairman of the Board 1982 to 1989;  CEO 1976 to 1988;  president 1973 to
1982;  executive vice  president 1967 to 1973;  vice president 1966 to 1967; The
Miami Herald general manager 1962 to 1969. B.S.,  business  administration,  The
Citadel, 1942.

MARY JEAN CONNORS, 47
Senior vice president/human resources since 1996; vice president/human resources
1989 to 1996.  Served as Philadelphia  Newspapers,  Inc.,  vice  president/human
resources 1988 to 1989;  assistant to the senior vice  president/news for Knight
Ridder 1988; The Miami Herald assistant managing  editor/personnel 1985 to 1988;
held  various  editing  positions  at The Miami  Herald  1980 to 1985.  Stanford
Executive Program, Stanford University, 1999; B.A., English, Miami University in
Oxford, Ohio, 1973.

P. ANTHONY RIDDER, 59
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; chairman of the Operating Committee since 1985. Served as
publisher  of the San Jose Mercury  News 1977 to 1986;  general  manager 1975 to
1977;  business manager 1969 to 1975. B.A.,  economics,  University of Michigan,
1962.

FRANK McCOMAS, 54
Senior vice  president/operations  since 1996; vice president/operations 1995 to
1996.  Served as  publisher,  The  (Columbia)  State,  1988 to 1995;  publisher,
Bradenton  Herald,  1980 to 1988; held various positions at The Miami Herald and
The Charlotte  Observer,  1970 to 1980.  Advanced  Management  Program,  Harvard
Business School, 1994; B.B.A. in business administration, Kent State University,
1968.

STEVEN B. ROSSI, 50
Senior vice president/operations  since 1998. Served as executive vice president
and general manager, Philadelphia Newspapers, Inc., 1992 to 1998; executive vice
president   1991  to  1992;   senior   vice   president   1988  to  1991;   vice
president/finance  and CFO 1987 to 1988. Served as vice president and divisional
general manager of Amerigas,  Inc., 1981 to 1987.  M.B.A., The Wharton School of
the University of Pennsylvania, 1974; B.A., economics, Ursinus College, 1971.

KAREN STEVENSON, 49
Vice  president  and  general  counsel  since  1998.  Served as  executive  vice
president,  general  counsel and secretary of TELE-TV in New York, 1995 to 1997;
member of the San Francisco law firm of Howard, Rice, Nemerovski, Canady, Falk &
Rabkin,   1990  to  1995;  vice   president/law   and  secretary,   Transamerica
Corporation,  1988 to 1990.  J.D.,  Boalt  Hall  School  of Law,  University  of
California, 1980; B.A., sociology, University of California, Los Angeles, 1971.

                                       46
<PAGE>

OFFICERS

MIKE ROGERS, 48
Vice  president/marketing   since  June  1999.  Served  in  various  capacities,
including  president  and  publisher  of  Computerworld,  Inc.,  executive  vice
president  of  IDG  Marketing  Services  Division,  and  corporate  senior  vice
president and publisher of Windows NT World, at  International  Data Group (IDG)
in Boston,  1992 to 1999;  senior  vice  president  for  Ammirati  Puris  Lintas
advertising  agency  in New  York,  1986 to  1992,  senior  vice  president  for
Campbell-Ewald   advertising  in  Detroit,  1981  to  1986.  M.B.A.   marketing,
University of Denver, 1978; B.S., management, New Mexico State University; 1973.

VIRGINIA DODGE FIELDER, 51
Vice   president/research   since  1989.  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; held
various  positions  at  Lexington   Herald-Leader  1976  to  1979.  Ph.D.,  mass
communications,  Indiana University, 1976; M.A., journalism, Indiana University,
1974; B.A., psychology, Transylvania University, 1970.

JACQUI LOVE MARSHALL, 51
Assistant vice  president/human  resources since 1996. Served as vice president,
human resources,  Miami Herald Publishing  Company,  1993 to 1996; various human
resources  roles and assistant to the publisher,  The Washington  Post,  1986 to
1993;  human  resources  roles and  assistant  to the  president,  Times  Mirror
Publishing  Company,  1983 to 1986;  teaching and counseling jobs, 1970 to 1983.
Ed.M, educational counseling, Harvard University, 1970; B.A., education, Trenton
State College, 1969.

LARRY D. MARBERT, 46
Vice  president/production  and facilities  since 1998.  Served as Knight Ridder
vice  president/technology  1994 to 1998; Philadelphia Newspapers,  Inc., senior
vice president/operations  1991 to 1994; vice president/operations  research and
planning  1988  to  1991;  vice   president/production  1986  to  1988;  various
production  positions,  Knight Ridder and The Miami Herald,  1977 to 1986. M.S.,
management science, Auburn University, 1977; B.S., University of North Carolina,
business administration, 1976.

POLK LAFFOON IV, 54
Vice  president/corporate  relations  since 1994 and corporate  secretary  since
January  1999.  Served as assistant  to the  president  1992 to 1994;  assistant
circulation  director/distribution,  The Miami Herald,  1991 to 1992;  executive
assistant to the vice president/marketing 1989 to 1991; Living Today editor 1987
to  1989.  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.

DAN FINNIGAN, 36
Vice  president  since July 1999 and  president of  KnightRidder.com,  (formerly
Knight Ridder New Media).  Served as president and CEO of SBC  Interactive  from
1998 to 1999; held various positions at SBC Communications,  Inc., 1995 to 1998;
group  manager for product  development  for 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, the University of California,
Los Angeles, 1984.

ALAN G. SILVERGLAT, 53
Vice president/treasurer since 1995. Served as senior vice president/finance and
planning for Business  Information  Services  Division  1983 to 1995;  other BIS
positions  1980  to  1983.   Formerly  with  Ernst  &  Young.   B.S.,   business
administration, University of Missouri, 1968; CPA.

MARTY CLAUS, 51
Vice  president/news  since 1993.  Served as Detroit Free Press managing editor/
business and features 1987 to 1992; held various  editing  positions at the Free
Press 1977 to 1987.  Held  various  writing  and  editing  positions  at the San
Bernardino (Calif.) Sun-Telegram 1970 to 1977. B.A., journalism,  Michigan State
University Honors College, 1970.

                                       47
<PAGE>

OFFICERS (Continued)

TALLY C. LIU, 49
Vice  president/finance  and  advanced  technology  since  1998.  Served as vice
president/finance  and administration 1994 to 1998; vice  president/finance  and
controller 1993 to 1994;  vice president and controller 1990 to 1993.  Served as
San Jose Mercury News vice  president  and CFO 1987 to 1990 and in various roles
1983 to 1987.  Advanced  Management  Program,  Harvard  Business  School,  1998;
M.B.A.,  Florida  Atlantic  University,  1977;  B.S.,  business  administration,
National Chen-Chi University, 1973; CPA.

MARSHALL ANSTANDIG, 51
Vice president/senior labor and employment counsel since 1998. 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.

GARY R. EFFREN, 43
Vice  president/controller  since  1995.  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 of Viewdata  Corporation  of America 1984 to 1986;  manager of financial
reporting 1983 to 1984.  M.B.A.,  University of Miami,  1989; B.S.,  accounting,
Rider College, 1978; CPA.

LYNDA HAUSWIRTH, 37
Assistant  vice  president/taxation  since 1998.  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.

JOSEPH (CHIP) VISCI, 46
Assistant vice  president/operations  since  September 1999 and assistant to the
chairman and CEO since 1996.  Served as Detroit Free Press managing  editor 1996
and held various  editing  positions  1978 to 1996.  Served in various  roles at
Columbus (Ohio)  Citizen-Journal  1977 to 1978 and Naples (Fla.) Daily News 1975
to 1976. M.A., journalism,  Ohio State University,  1977; B.A., journalism, Ohio
Wesleyan University, 1975.

STEVEN J. STEIN, 46
Assistant vice  president/human  resources since 1995. Served as vice president/
human  resources for Knight Ridder Business  Information  Services 1989 to 1995;
Knight  Ridder  director/human  resources  from  1983  to  1989;  director,  Hay
Consulting from 1981 to 1983.  Ph.D.  psychology,  University of Florida,  1981;
B.A. psychology, George Washington University, 1974.

MARIO R. LOPEZ, 60
Assistant  vice  president/internal  audit  since  1993.  Served as  partner  at
Deloitte & Touche 1978 to 1993 and in other  positions  there from 1964 to 1978.
B.S., business administration, Saint Joseph's University, 1962; CPA.

JERRY CEPPOS, 53
Vice  president/news  since May 1999.  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.

                                       48
<PAGE>

Item 11. EXECUTIVE COMPENSATION

The  information  regarding  executive   compensation  and  related  matters  is
incorporated  by reference to the company's  Proxy Statement for the 1999 Annual
Meeting of Shareholders.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  information  required  by this item is  incorporated  by  reference  to the
company's Proxy Statement for the 1999 Annual Meeting of Shareholders.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The  information  required  by this item is  incorporated  by  reference  to the
company's Proxy Statement for the 1999 Annual Meeting of Shareholders.

                                       49
<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 26, 1999, are included in Item 8:

                  Consolidated  Balance  Sheet - December  26, 1999 and December
                  27, 1998

                  Consolidated  Statement  of Income - Years ended  December 26,
                  1999, December 27, 1998, and December 28, 1997

                  Consolidated  Statement  of Cash Flows - Years ended  December
                  26, 1999, December 27, 1998, and December 28, 1997

                  Consolidated Statement of Shareholders' Equity - Years ended
                  December 26, 1999, December 27, 1998, and December 28, 1997

                  Notes to consolidated financial statements - December 26, 1999

         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.
                                    (totally   amended   and   restated   as  of
                                    February,    1998)   are   incorporated   by
                                    reference to the  Company's  Form 10-K filed
                                    March 13, 1998.

                        (ii)     -  Bylaws of  Knight-Ridder,  Inc.  (As Amended
                                    Through January 28, 1997),  are incorporated
                                    by  reference  to the  Company's  Form  10-Q
                                    filed May 9, 1997.

                  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)

                                       50
<PAGE>


                                    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  January 26, 1999)
                                    is   incorporated   by   reference   to  the
                                    Company's Form 10-K filed March 19, 1999.

                         (b)     -  Knight-Ridder,  Inc.  Compensation  Plan for
                                    Nonemployee Directors effective July 1, 1997
                                    (As  amended   through   January  26,  1999)
                                    incorporated  by reference to the  Company's
                                    Form 10-K filed March 19, 1999.

                         (c)     -  Knight   Ridder   Annual    Incentive   Plan
                                    incorporated  by reference to the  Company's
                                    Form 10-K filed March 19, 1999.

                         (d)     -  Consulting    Agreement    incorporated   by
                                    reference to the  Company's  Form 10-K filed
                                    March 19, 1999.

                         (e)     -  Stock     Purchase     Agreement     between
                                    Knight-Ridder Business Information Services,
                                    Inc. and M.A.I.D.  plc,  dated as of October
                                    1, 1997 is  incorporated by reference to the
                                    Company's Form 10-Q filed November 12, 1997.

                         (f)     -  Knight-Ridder, Inc. Long-Term Incentive Plan
                                    is   incorporated   by   reference   to  the
                                    Company's Form 10-Q filed on May 9, 1997.

                         (g)     -  Knight-Ridder   Local   Incentive   Plan  is
                                    incorporated  by reference to the  Company's
                                    Form 10-K filed on March 20,  1996.

                         (h)     -  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.

                         (i)     -  Purchase  Agreement  dated as of October 19,
                                    1999, between Northwest  Publications,  Inc.
                                    and  Spieker  Properties,   L.P.,  is  filed
                                    herein.

                  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.

                                       51
<PAGE>


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

                  No. 24         -  "Powers of  Attorney"  for Thomas P. Gerrity
                                    and    Kathleen    Foley    Feldstein    are
                                    incorporated  by reference to the  Company's
                                    Form 10-K filed on March 19, 1999. "Power of
                                    Attorney"   for   M.   Kenneth   Oshman   is
                                    incorporated  by reference to the  Company's
                                    Form 10-K filed on March 10, 1997. "Power of
                                    Attorney"   for  James  I.   Cash,   Jr.  is
                                    incorporated  by reference to the  Company's
                                    Form 10-K filed on March 20,  1996.  "Powers
                                    of  Attorney"  for all other  members of the
                                    Board  of  Directors  are   incorporated  by
                                    reference to the  Company's  Form 10-K filed
                                    on March 24, 1995.

                  No. 27         -  "Financial Data Schedule" is filed herein.

   (b)   Reports on Form 8-K filed during the fourth quarter of 1999:

         There  were no  reports  on Form 8-K filed  during  the  quarter  ended
         December 26, 1999.

   (c)   Exhibits

         The  response  to this  portion of Item 14 is  submitted  as a separate
         section of this report.

   (d)   Financial Statement Schedules

         The  response  to this  portion of Item 14 is  submitted  as a separate
         section of this report.

                                       52
<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 21, 2000
-----------------------------               ------------------------------------
                                        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 21, 2000
-----------------------------               ------------------------------------
                                            P. Anthony Ridder
                                            Chairman and
                                            Chief Executive Officer

Dated March 21, 2000
-----------------------------               ------------------------------------
                                            Ross Jones
                                            Chief Financial Officer and
                                            Senior Vice President/Finance

Dated March 21, 2000
-----------------------------               ------------------------------------
                                            Gary R. Effren
                                            Vice President/Controller
                                            (Chief Accounting Officer)

                                       53
<PAGE>


                                            /s/ James I. Cash, Jr.*
                                            ------------------------------------
                                            James I. Cash, Jr.
                                            Director

                                            /s/ Alvah H. Chapman, Jr.*
                                            ------------------------------------
                                            Alvah H. Chapman, 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/ Jesse Hill, Jr.*
                                            ------------------------------------
                                            Jesse Hill, Jr.
                                            Director

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

                                            /s/ Thomas L. Phillips*
                                            ------------------------------------
                                            Thomas L. Phillips
                                            Director

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

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

                                       54
<PAGE>


                                            /s/ Gonzalo F. Valdes-Fauli*
                                            ------------------------------------
                                            Gonzalo F. Valdes-Fauli
                                            Director

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


Dated March 21, 2000                        * By Ross Jones
------------------------------              ------------------------------------
                                            Ross Jones
                                            Attorney-in-fact

                                       55
<PAGE>

                           ANNUAL REPORT ON FORM 10-K

                          ITEM 14 (a) (2), (c) and (d)

                               SUPPLEMENTARY DATA

                                CERTAIN EXHIBITS

                          YEAR ENDED DECEMBER 26, 1999

                      KNIGHT-RIDDER, INC. AND SUBSIDIARIES

                              SAN JOSE, CALIFORNIA

                                       56
<PAGE>
<TABLE>
<CAPTION>
                                                                                                                 SCHEDULE II

                                                         VALUATION AND QUALIFYING ACCOUNTS
                                                       KNIGHT-RIDDER, INC. AND SUBSIDIARIES
                                                             (IN THOUSANDS OF DOLLARS)

COLUMN  A                                 COLUMN B                      COLUMN C                COLUMN D            COLUMN E
---------                                 ---------                     ---------               ---------           --------
                                                                        ADDITIONS
                                                          ---------------------------------
                                          BALANCE AT           CHARGED          CHARGED
                                          BEGINNING            TO COSTS            TO                               BALANCE
DESCRIPTION                                    OF                 AND             OTHER                              AT END
                                            PERIOD             EXPENSES         ACCOUNTS        DEDUCTIONS         OF PERIOD
                                         -------------    -----------------  ---------------  --------------      ------------
<S>                                            <C>                 <C>              <C>           <C>                  <C>
YEAR ENDED DECEMBER 26, 1999:

    RESERVES AND ALLOWANCES
       DEDUCTED FROM ASSET ACCOUNT:
            ACCOUNTS RECEIVABLE
                  ALLOWANCES                   $15,738             $25,135                        $24,956 (2)          $15,917
           VALUATION ALLOWANCE FOR
                  DEFERRED TAXES                 1,357                                                                   1,357
                                            ----------          ----------       -------------  ---------           ----------
                                               $17,095             $25,135           $0           $24,956              $17,274
                                            ==========          ==========       =============  =========           ==========
YEAR ENDED DECEMBER 27, 1998:

    RESERVES AND ALLOWANCES
       DEDUCTED FROM ASSET ACCOUNT:
            ACCOUNTS RECEIVABLE
                  ALLOWANCES                   $14,963             $20,854           (9)(1)       $20,070 (2)          $15,738
           VALUATION ALLOWANCE FOR
                  DEFERRED TAXES                 1,357                                                                   1,357
                                            ----------          ----------       -------------  ---------           ----------
                                               $16,320             $20,854          ($9)          $20,070              $17,095
                                            ==========          ==========       =============  =========           ==========
YEAR ENDED DECEMBER 28, 1997:

    RESERVES AND ALLOWANCES
       DEDUCTED FROM ASSET ACCOUNT:
            ACCOUNTS RECEIVABLE
                  ALLOWANCES                   $12,685             $23,332         $752 (1)       $21,806 (2)          $14,963
           VALUATION ALLOWANCE FOR
                  DEFERRED TAXES                 1,357                                                                   1,357
                                            ----------          ----------       -------------  ----------          ----------
                                               $14,042             $23,332         $752           $21,806              $16,320
                                            ==========          ==========       =============  =========           ==========
</TABLE>

(1)    Represents  amounts from the former BIS division  included  under "Income
       (loss) from discontinued BIS operations" in the Consolidated Statement of
       Income.

(2)    Represents  uncollectible  accounts  written-off,  net  of  recoveries,
       and dispositions of subsidiaries' balances.

                                       57