##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION



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FORM 10-K

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

For the Fiscal Year Ended June 30, 2002
OR

Commission File Number

MEDIANEWS GROUP, INC.

|                                                                         |  |                                                   
|------------------------------------------------------------------------ |  | --------------------------------------------------
|Delaware
(State or other jurisdiction of incorporation or organization)  |  | 76-0425553
(I.R.S. Employer Identification Number)
|                                                                         |  |                                                   
|1560 Broadway, Denver, Colorado
(Address of principal executive offices) |  | 80202
(Zip Code)                                  

Registrants telephone number, including area code: (303) 563-6360

Securities registered pursuant to Section 12(b) of the Act:NONE

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

Indicate by check mark whether the registrant (1) has filed all reports 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  No

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

State the aggregate market value of the voting stock held by
non-affiliates of the registrant. The aggregate market value shall be computed
by reference to the price at which the stock was sold, or the average market
value shall be computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date
within 60 days prior to the date of filing.

|                                                   |  |                                     |  |            
|-------------------------------------------------- |  | ----------------------------------- |  | -----------
|Class of Voting Stock and Number of Shares Held by |  |                                    
|Non-Affiliates at September 16, 2002               |  | Market Value Held by Non-Affiliates
|                                                   |  |                                    
|Class A                                            |  | 157,576 shares                      |  | Unavailable

Indicate the number of shares outstanding of each of the registrants
classes of common stock, as of the close of the latest practicable date.

|                                   |  |                 
|---------------------------------- |  | ----------------
|Common Stock at September 16, 2002
|                                  
|Class A                            |  | 2,298,346 shares

Documents Incorporated by Reference: None





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TABLE OF CONTENTS



|                                                   |                                                                                               |  |  |  |  |  |  | 
|-------------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                                            
|                                                   | Item 1. Business                                                                             
|                                                   | Item 2. Property                                                                             
|                                                   | Item 3. Legal Proceedings                                                                    
|                                                   | Item 4. Submission of Matters to a Vote of Security Holders                                  
|PART II                                           
|                                                   | Item 5. Market for Registrants Common Equity and Related Shareholder Matters                
|                                                   | Item 6. Selected Financial Data                                                              
|                                                   | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                   | Item 8. Financial Statements and Supplementary Data                                          
|                                                   | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
|PART III                                          
|                                                   | Item 10. Directors and Executive Officers of the Registrant                                  
|                                                   | Item 11. Executive Compensation                                                              
|                                                   | Item 12. Security Ownership of Certain Beneficial Owners and Management                      
|                                                   | Item 13. Certain Relationships and Related Transactions                                      
|                                                   | Item 14. Certain Relationships and Related Transactions                                      
|PART IV                                           
|                                                   | Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K                     
|SIGNATURES                                        
|EXHIBIT INDEX                                     
|EX-21.1 Subsidiaries of the Registrant            
|EX-99.1 Certification pursuant to 18 USC Sec. 1350
|EX-99.2 Certification pursuant to 18 USC Sec. 1350



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##### Table of Contents






PART I




Item 1. Business

General

MediaNews Group, Inc. (MediaNews or the Company) is the successor
issuer to Garden State Newspapers, Inc. MediaNews and its predecessor
companies were founded in March 1985 by William Dean Singleton and Richard B.
Scudder. We are the seventh largest newspaper company in the United States in
terms of circulation and, including The Reporterin Vacaville, California, the
purchase of which is scheduled to close October 1, 2002, we control 47 market
dominant daily, and approximately 80 non-daily newspapers in ten states
(including suburban markets in close proximity to the San Francisco Bay area,
Los Angeles, New York, Baltimore and Boston). We also own metropolitan daily
newspapers in Denver and Salt Lake City, which operate under Joint Operating
Agreements (JOA). Our principal sources of revenue are print advertising and
circulation. Other sources of revenue include commercial printing and
electronic advertising. Our newspapers had a combined daily and Sunday paid
circulation of approximately 1.7 million and 2.4 million, respectively, as of
March 31, 2002.

We have grown primarily through strategic acquisitions, partnerships and
to a lesser extent, through internal growth. See pages 18 through 20 for a
description of significant acquisitions, dispositions and partnerships for the
years ended June 30, 1998 through 2002. Our main acquisition focus is on
newspaper markets contiguous to our own, allowing us to realize certain
operating synergies. We refer to this strategy as clustering. A majority of
our newspapers are located in regional clusters, allowing them to achieve
higher operating margins through efficient use of shared labor and equipment
and by providing opportunities to cross-sell advertising. We occasionally
divest newspaper properties when they no longer have strategic value and when
we believe the propertys value to us has been maximized. This strategy has
enabled us to reinvest sale proceeds in newspaper properties that are available
at attractive prices and can be clustered with our newspapers. This has
historically allowed us to achieve greater revenue and EBITDA growth than we
otherwise would have been able to achieve.

Our newspapers are geographically diverse and generally positioned in
markets with limited direct competition for local newspaper advertising.
Start-ups of new daily newspapers in suburban markets with pre-existing local
newspapers are rare. We believe our newspaper markets, taken as a whole, have
above average population and sales growth potential. Most suburban and small
city daily newspapers, such as a majority of the newspapers we own, have the
leading or sole distribution in the market areas served by the newspaper.
Suburban newspapers address the specific needs of the community by publishing a
broad spectrum of local news as well as advertiser-specific editions which
television, because of its broader geographic coverage, is unwilling or unable
to provide. Thus, in many communities the local newspaper provides a
combination of social and economic services in a way that only it can provide,
making it attractive for both consumers and advertisers.

Sizeable weekly newspapers are generally found in and around metropolitan
areas in addition to smaller towns and cities. Suburban weeklies, such as the
weekly newspapers operated by our divisions, ANG Newspapers, Los Angeles
Newspapers Group, and the Connecticut Newspapers Group,have several advantages
over metropolitan dailies, including (1) a lower cost structure, (2) the
ability to publish only on their most profitable days such as one midweek and
one weekend day, and (3) the ability to more effectively exploit zoned
advertising. Zoned advertising provides a means for small merchants,
individuals, and other local advertisers to advertise solely in their own local
market at a cost lower than that of a full-run metropolitan daily newspaper.
Thus, the typical suburban weekly newspaper has a broader advertiser base and
does not rely to the same degree as a metropolitan daily on major retailers for
advertising revenues. A majority of our weekly newspapers are distributed in
markets where we own and distribute daily newspapers. This strategy allows us
to achieve greater market penetration and eliminate or reduce the threat of
direct-mail competition in many of our markets.

Industry Background

Newspaper publishing is the oldest and largest segment of the media
industry. We believe the focus on local news has allowed newspapers to remain
the dominant medium for local advertising, accounting for over 40% of all local
media advertising expenditures in the United States in calendar year 2001(1).
In calendar year 2001, newspaper advertising expenditures in the United States
were approximately $44.3 billion, representing a compounded annual growth rate
of 4.0% since 1991(1). Newspapers continue to be viewed as
the best medium for retail advertising, which emphasizes the price of
goods, in contrast to television, which is generally used for image
advertising.



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|(1) |  | Source: NAA 2002 Facts About Newspapers
|--- |  | ---------------------------------------

2



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##### Table of Contents



Industry Background (continued)

Readers of newspapers tend to be more highly educated and have higher
incomes than non-newspaper readers. For instance, 60% of college graduates and
64% of households with income greater than $75,000 are reported to read a daily
newspaper(1). We believe that newspapers continue to be the most cost-effective
means for advertisers to reach this highly targeted demographic group.

Total morning daily and Sunday circulation has increased nationally from
29.4 million and 54.7 million in 1980 to 46.8 million and 59.1 million in 2001,
respectively(1). Total reported daily circulation, including evening editions,
however, declined nationally from 62.2 million in 1980 to 55.6 million in
2001(1). This decrease can be directly attributed to the national decline in
the circulation of evening newspapers, which is reported to have decreased from
32.8 million in 1980 to 8.8 million in 2001(1). The decline in evening
newspaper circulation is the result of most evening newspapers inability to
compete with existing morning newspapers in the same market. Many evening
newspapers have converted to morning newspapers or ceased publishing
altogether. Circulation statistics for suburban daily newspapers are not
published separately from circulation statistics for daily newspapers as a
whole. Reliable circulation statistics for weekly newspapers are not available.

Newspaper advertising revenues are cyclical and are generally affected by
changes in national and regional economic conditions. Classified advertising,
which makes up approximately 38%(1) of newspaper advertising revenues, is the
most sensitive to economic improvements or slowdowns as it is affected by
employment trends, real estate transactions and automotive sales.

Recent Company Developments

Effective August 1, 2002, we took over management of Kearns-Tribune, LLC,
our wholly-owned subsidiary and the publisher of The Salt Lake Tribune.As a
result, we have begun to integrate its business, utilizing our methods and
strategy of operating a newspaper. See additional discussion of Salt Lake and
the legal issues associated with this acquisition under Item 3. Legal
Proceedings.

In August 2002, the California Newspapers Partnership (CNP), a 54.23%
owned subsidiary of MediaNews, agreed to acquire substantially all of the
operating assets used in the publication of The Reporter,a morning daily
newspaper, and Valu-Pack,a total market coverage product, both published in
Vacaville, California. The newspaper has daily and Sunday paid circulation of
approximately 18,000 and 20,000, respectively. The purchase price of $31.0
million includes $30.0 million of cash, net of working capital, plus future
payments under a covenant not to compete with a discounted value of
approximately $1.0 million. Closing is scheduled to be effective on October 1,
2002 and will be funded by the CNP partners capital contributions. Our share
of capital funding is $16.3 million.

Significant Transactions in Fiscal Year 2002

We had no significant acquisitions or dispositions in fiscal year 2002.

Operating Strategy

Our strategy is to increase revenues and cash flows through geographic
clustering and internal growth. The key components of our long-term internal
growth strategy are targeted marketing programs, local news leadership,
circulation growth, cost control, Internet delivery of news and advertising and
convergence. These strategies are more fully described below.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Geographic Clustering. We have acquired and assembled newspapers, and may
continue to acquire newspapers, in contiguous markets. We refer to this
strategy as clustering. Clustering enables us to realize operating
efficiencies and economic synergies, such as the sharing of management,
accounting, newsgathering, advertising and production facilities. In
addition, we seek to increase operating cash flows at acquired newspapers by
reducing labor costs, page width of the newspapers, and overall improved cost
management. Clustering also enables management to maximize revenues by
selling advertising into newspapers owned by us in contiguous markets. As a
result of clustering, we believe that our newspapers are able to obtain
higher operating margins than they would otherwise be able to achieve on a
stand-alone basis. CNP and the Denver JOA are extensions of this strategy.



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|(1) |  | Source: NAA 2002 Facts About Newspapers
|--- |  | ---------------------------------------

3



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##### Table of Contents



Operating Strategy (continued)



| |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Targeted Marketing Programs. Through a strong local presence and active
community relations, we are able to develop and implement marketing programs
that maximize our advertising revenues. We utilize research, demographic
studies and zoning (marketing directed to a particular sub-segment of a local
area) in developing marketing programs and new products that meet the unique
needs of specific advertisers.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Local News Leadership. We are dedicated to being the leaders in providing
high quality local news. Our newspapers generally have the largest local
newsgathering resources in their markets. We believe that our focus on local
news coverage is key to our success. Providing high quality local and
regional news makes us unique in our markets. Our newspapers include local
sports, local business, weekend sections, highlights of people in the
community, local editorials and letters to the editors, in addition to
national and international news. With the timeliness and availability of
national and world news 24 hours a day on television, we believe that
providing in-depth local news coverage is invaluable and sets us apart from
other news sources, generating reader loyalty and increasing franchise value.
Statistics have shown newspapers that focus on local news and content achieve
greater market penetration. Additionally, our ongoing involvement in the
communities in which we operate not only strengthens our relationships with
these communities but also provides our advertisers a superior product for
promoting their goods and services.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our newspapers are committed to editorial excellence by providing the proper
mix of local and national news to effectively serve the needs of their local
markets. The majority of our newspapers receive awards annually for
excellence in various editorial categories in their respective regions and
circulation size. During 2000, The Denver Postachieved the highest award for
editorial excellence, winning a Pulitzer Prize for its coverage of the
Columbine High School tragedy. Our other newspapers have also received
numerous awards from state press associations as well as other peer
organizations for their editorial content, local news and sports coverage,
and photography. In addition, our newspapers are designed to visually attract
readers through attractive layouts and color enhancements.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Circulation Growth. We believe that circulation growth is essential to the
creation of long-term franchise value at our newspapers. Accordingly, we have
and will continue to make significant investments in promotion, telemarketing
and other circulation growth campaigns to increase circulation and
readership. Our management incentive programs are also designed to reward our
publishers for circulation growth, at each of their daily newspapers. We
continue to balance our commitment to circulation growth with circulation
profit by instituting programs that target the replacement of higher churn
short-term circulation orders with longer term, more profitable circulation.
This strategy has improved circulation profits but may at times decrease
circulation volumes in the short-term.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Cost Control. We emphasize cost control with a particular focus on managing
staffing requirements. At newspapers with collective bargaining unions,
management strives to enter into long-term agreements with minimal annual
increases. In addition, we further control labor costs through investments in
state-of-the-art production equipment that improve production quality and
increase efficiency. We are equally focused on newsprint cost control. Each
of our newspapers benefits from the discounted newsprint pricing we obtain as
the seventh largest newspaper group in the United States. We purchase
newsprint from several suppliers under arrangements resulting in what we
believe are some of the most favorable newsprint prices in the industry. We
have also entered into fixed price newsprint contracts and newsprint swaps,
which expire in June 30, 2004 and May 31, 2005, as well as newsprint
purchasing arrangements with certain of our other suppliers, which delay the
adverse effect of newsprint price increases. All of our fixed price and
hedged newsprint is used by the Denver JOA.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We were the first newspaper company in the United States to convert all of
our newspapers to a 50-inch web width, which reduced the width of a single
newspaper page to 12.5 inches from either 13.5 inch or 13.75 inch page
widths. These conversions have permanently reduced our newsprint consumption
in excess of 8% over levels prior to conversion. While converting to the
50-inch web-width cut our newsprint costs, it also had the added benefit of
improving customer satisfaction.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Internet.To take advantage of the increasing use of the Internet and its
advertising growth opportunities, we established MediaNews Group interactive
(MNGi), to develop and maintain websites for each of our daily newspapers.
Statistics show that in 2001, 62% of general Internet users and 86% of online
newspaper users went to their local newspapers websites for local news(1).
MNGi has developed websites that provide an online editorial news product and
full online classified services for each of our daily newspapers. We have also
made strategic investments related to our Internet strategy, including PowerOne
Media (successor to AdOne LLC), Employment Specialists and Mortgage Rate Watch,
to expand and enrich our online content as is



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|(1) |  | Source: NAA 2002 Facts About Newspapers
|--- |  | ---------------------------------------

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##### Table of Contents



Operating Strategy (continued)



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | more fully described below. Although we believe that providing an online
product is important to broaden the reach of our newspapers and ultimately
increase our revenues by upselling value added products and services to our
advertisers, we believe that almost all of our customers still prefer the
newspaper in a printed form. By being the leading, and in certain instances
the sole, provider of local news in most of our markets, we believe that our
newspapers are well positioned to respond to and benefit from changes in the
way in which advertising, news and information are delivered to customers in
the future. Our online newspapers can be found at www.newschoice.com.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In January 1999, MediaNews, the Hearst Corporation, E.W. Scripps, Stephens
Media Group (previously Donrey Media Group) and Advance Publications each
acquired a 20.0% interest in AdOne LLC, which was formed to acquire the
assets of AdOne Classified Network, Inc. (AdOne) and its consumer website,
abracat.com, a fully searchable classified advertising database. In July
1999, Belo Corporation, Journal Register Company, Lee Enterprises, Media
General, Morris Communications Corporation and Pulitzer, Inc. each made an
equity investment in AdOne LLC, reducing our interest to approximately 12.1%.
In November 2001, AdOne merged with PowerAdz.com to form PowerOne Media
(PowerOne) www.powermedia.com. Our interest in PowerOne is now
approximately 6.1%. PowerOne provides interactive vertical advertising
solutions, primarily for the newspaper industry.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | One of PowerOnes main products is a hosted website for classified
advertising. Approximately 90% of our hosted newspaper websites employ this
product to display their classified advertising on-line. Other interactive
solutions provided by PowerOne include Zwire!, a content publishing solution,
and Carcast, an on-line automotive marketplace. PowerOne currently has
classified listings from approximately 1,500 daily and weekly newspapers, in
95 of the top 100 markets representing 83% of total United States households.
As of June 30, 2002, PowerOnes database aggregates and delivers over 1
million paid newspaper classified ads daily. PowerOnes network averages 45
million page views per month, representing approximately 1.5 million unique
users. We believe PowerOne is solidly positioned to play a leading role in
the expanding online classified marketplace.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In August 1999, we acquired an 80% interest in Employment Specialists, LLC.
We re-launched the website under the name Employment Wizard,
www.employmentwizard.com, in December 1999. In June 2001, Employment
Specialists, LLC merged with CareerSite, which has reduced our interest in
Employment Specialists, LLC to approximately 40%. The combination of
Employment Specialists and CareerSite created a stronger company, better
positioned to develop and sell Internet based application tools that allow
job seekers and employers to search job opportunities and resumes for the
best match. Employment Specialists has one of the most powerful and robust
employment tools allowing more job seekers and employers to find exact
matches. Employment Specialists currently hosts over 150 different
e-recruitment sites that support over 70,000 registered advertisers, contains
over 90,000 current jobs, supports almost 1,650,000 registered candidates and
serves over 500,000 unique visitors per month. As of June 30, 2002,
approximately 100 newspapers are using Employment Specialists as their
Internet employment vertical, of which more than 50 are not owned or
controlled by MediaNews. Employment advertising is an important revenue
stream at our newspapers, and with our investment in Employment Specialists,
LLC, we are able to integrate and provide the best of newspaper and Internet
functionality for users and advertisers.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Mortgage Rate Watch provides various video promotion services to
participating realtors and newspaper affiliates. Operating under the name
See It Buy It (www.seeitbuyit.com), this company provides realtors: the
service of video photography of real estate for sale; the conversion of photo
shoots into online home tours with full video streaming; and production of
brochures, street signs, direct mail pieces, and other items used by realtors
in the home sales process. Our newspapers sell this service to new and
existing real estate advertisers. In addition, newspapers use the service to
gather full video clips of schools, parks, downtown and other public areas,
for use on their web sites, which enhances the real estate selling process.
In short, when this strategy is fully developed, our newspapers in
combination with See It Buy It will provide a one stop shopping marketing
solution for our real estate advertising customers.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Convergence.We have also made strategic investments in other media outlets
beginning with our acquisition of radio stations in and around Graham, Texas,
which are operated in conjunction with our weekly newspapers published in and
around Graham. We also own the CBS television affiliate in Anchorage, Alaska,
which is now operated in conjunction with the Fox affiliate in Anchorage
under the terms of a Joint Sales Agreement and a Shared Services Agreement.
In addition, many of our newspapers have a television partner, which provides
promotional value and enables the sharing of newsgathering resources and
cross-selling opportunities.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Several of our newspapers are currently working with Employment Television,
Inc. to produce television shows exclusively focused on employment
advertising, illustrating how our newspapers are actively leveraging content
across multiple platforms (in this case, print, television and Internet) to
create multimedia packages. While our share of revenue under this multimedia
package is currently not significant, it is growing rapidly.

5



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##### Table of Contents



Operating Strategy (continued)



| |                                                                                                                                                                                                                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As the digital age continues to evolve and FCC rules and regulations change,
we will continue to explore new and innovative ways to leverage our content
across multiple platforms with a clear focus toward profitable new revenue
streams. We will continue to develop strategic partners, such as Employment
Television, Inc. to assist in the development of this strategy in a cost
efficient manner.

We may, from time to time, make strategic or targeted acquisitions and
dispositions. Acquisitions will be considered only when they contribute to our
clustering strategy or represent a compelling value proposition due to the
attractiveness of the price in relation to the growth potential of the asset,
as was the case with The Salt Lake Tribune.Furthermore, our acquisition
strategy will continue to be governed by the strong financial disciplines that
have enabled us to grow through acquisitions without substantial increases to
our leverage ratio in the short term. We will also continue to invest
conservatively in the Internet and other electronic media companies and enter
into partnerships that complement our existing newspapers or our other
electronic media investments to the extent that such investments and
partnerships enhance our convergence strategy.

6



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##### Table of Contents



Paid Circulation

The following table sets forth paid circulation of each of our daily
newspapers. The JOA data for daily circulation reflects only our newspapers
share of the combined circulation:

|                                   |                                                                     |          |  |                     |           |        |  |         |           | 
|---------------------------------- | ------------------------------------------------------------------- | -------- |  | ------------------- | --------- | ------ |  | ------- | --------- | 
|                                   |                                                                     |          |  | Paid Circulation at
|                                   |                                                                     |          |  | March 31, 2002     
|                                   |                                                                     |          |  |                    
|                                   |                                                                     |          |  | Daily               |           | Sunday
|                                   |                                                                     |          |  |                     |           |       
|MediaNews Newspapers:              |                                                                     |          |  |                     |           |        |  |        
|                                   | The Denver Post, Denver, CO (JOA)                                   |          |  | 309,174             |           |        |  | 795,049 |          
|                                   | Daily News, Los Angeles, CA                                         |          |  | 177,170             |           |        |  | 200,161 |          
|                                   | Salt Lake Tribune, Salt Lake City, UT (JOA)                         |          |  | 142,567             |           |        |  | 162,250 |          
|                                   | Long Beach, CA                                                      |          |  | 95,152              |           |        |  | 107,132 |          
|                                   | The York Dispatch and York Sunday News, York, PA (JOA)              |          |  | 40,617              |           |        |  | 93,757  |          
|                                   | Charleston Daily Mail and Sunday Gazette-Mail, Charleston, WV (JOA) |          |  | 35,707              |           |        |  | 92,492  |          
|                                   | Bridgeport, CT                                                      |          |  | 78,231              |           |        |  | 88,642  |          
|                                   | Lowell, MA                                                          |          |  | 50,132              |           |        |  | 52,042  |          
|                                   | Pittsfield, MA                                                      |          |  | 31,326              |           |        |  | 35,844  |          
|                                   | Las Cruces, NM                                                      |          |  | 22,625              |           |        |  | 25,040  |          
|                                   | Lebanon, PA                                                         |          |  | 21,423              |           |        |  | 21,342  |          
|                                   | Hanover, PA                                                         |          |  | 19,744              |           |        |  | 21,138  |          
|                                   | Farmington, NM                                                      |          |  | 17,784              |           |        |  | 19,488  |          
|                                   | Fitchburg, MA                                                       |          |  | 17,290              |           |        |  | 17,746  |          
|                                   | Eastern Colorado Publishing Company, CO                             |          |  | 12,684              |           |        |  |        |          
|                                   | Brattleboro, VT                                                     |          |  | 10,572              |           |        |  |        |          
|                                   | Carlsbad, NM                                                        |          |  | 8,487               |           |        |  | 8,750   |          
|                                   | Bennington, VT                                                      |          |  | 7,785               |           |        |  |        |          
|                                   | Alamogordo, NM                                                      |          |  | 7,436               |           |        |  | 8,446   |          
|                                   | North Adams, MA                                                     |          |  | 7,059               |           |        |  |        |          
|                                   | Deming, NM                                                          |          |  | 3,154               |           |        |  |        |          
|                                   |                                                                     |          |  |                     |           |        |  |        
|                                   |                                                                     | Subtotal |  |                     | 1,116,119 |        |  |         | 1,749,319 | 
|California Newspapers Partnership: |                                                                     |          |  |                     |           |        |  |        
|                                   | ANG Newspapers, San Francisco Bay Area, CA                          |          |  | 258,954             |           |        |  | 219,881 |          
|                                   | San Gabriel Valley Newspaper Group, CA                              |          |  | 100,314             |           |        |  | 106,203 |          
|                                   | San Bernardino, CA                                                  |          |  | 72,309              |           |        |  | 83,327  |          
|                                   | Ontario, CA                                                         |          |  | 65,124              |           |        |  | 75,166  |          
|                                   | Chico/Oroville, CA                                                  |          |  | 33,775              |           |        |  | 33,305  |          
|                                   | Vallejo, CA                                                         |          |  | 20,911              |           |        |  | 22,213  |          
|                                   | Eureka, CA                                                          |          |  | 19,021              |           |        |  | 20,855  |          
|                                   | Vacaville,
CA(1)                                                    |          |  | 18,130              |           |        |  | 19,517  |          
|                                   | Woodland, CA                                                        |          |  | 9,901               |           |        |  | 10,101  |          
|                                   | Ukiah, CA                                                           |          |  | 7,702               |           |        |  | 7,806   |          
|                                   | Red Bluff, CA                                                       |          |  | 7,068               |           |        |  |        |          
|                                   | Redlands, CA                                                        |          |  | 7,027               |           |        |  | 7,156   |          
|                                   | Lakeport, CA                                                        |          |  | 7,021               |           |        |  |        |          
|                                   |                                                                     |          |  |                     |           |        |  |        
|                                   |                                                                     | Subtotal |  |                     | 627,257   |        |  |         | 605,530   | 
|                                   |                                                                     |          |  |                     |           |        |  |        
|                                   |                                                                     | Total    |  |                     | 1,743,376 |        |  |         | 2,354,849 | 
|                                   |                                                                     |          |  |                     |           |        |  |        

Circulation figures are based on the Audit Bureau of Circulation (ABC) Fas-Fax
Statements for the six-month period ended March 31, 2002, except for Deming,
which does not report to ABC.



---

|(1) |  | Closing scheduled for October 1, 2002
|--- |  | -------------------------------------

7



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##### Table of Contents



Newspaper Properties

The following is a description of our newspapers and the markets in which
they serve as of the date of this report.

Denver.The Denver Postis our largest daily newspaper and is the 6th and
7th largest Sunday and daily newspaper, respectively, in the United States. We
believe it is one of the most respected newspapers in its region. On January
23, 2001, the formation of the Denver Newspaper Agency (DNA) was completed
and The Denver Postand the Rocky Mountain Newsbegan to operate under the
terms of a JOA. Under the terms of the JOA, DNA controls all operations, other
than news and editorial. We are responsible for the editorial staff and
producing the news and editorial content of The Denver Post. The Denver Post
and the Rocky Mountain Newsare each published five days a week as morning
editions, with the Rocky Mountain Newsbeing published exclusively on Saturday
and The Denver Postexclusively on Sunday.

Los Angeles Newspaper Group. The Los Angeles Newspaper Group (LANG) is
located in Los Angeles County, California, and publishes eight daily
newspapers. LANG consists of the Daily News,the Press-Telegram,which are
owned by MediaNews, and newspapers owned by the California Newspapers
Partnership, which include the San Gabriel Valley Newspaper Group, San
Bernardino, Ontario, and Redlands and are described below under California
Newspapers Partnership. These newspapers cover the San Fernando Valley region
of Los Angeles, Long Beach, Pasadena, West Covina, Whittier, San Bernardino,
Ontario, and Redlands, California. According to the March 31, 2002 ABC Fas-Fax
Statements, LANGs total daily circulation was 0.5 million and total Sunday
circulation was 0.6 million. LANG also publishes several weekly newspapers, in
addition to those published by the San Gabriel Valley Newspaper Group,
including the Star Watchand El Economico(a Spanish language newspaper), which
are distributed in and around the Los Angeles Newspaper Group markets.

Salt Lake City.The Newspaper Agency Corporation (NAC), a partnership
owned 50% by Kearns-Tribune, LLC, a wholly owned subsidiary of MediaNews,
publishes The Salt Lake Tribuneand the Deseret Newsunder the terms of a JOA.
Net income of NAC is distributed 58% to Kearns-Tribune, LLC and 42% to the
Deseret News Publishing Company (the other party to the JOA). NAC controls all
business functions other than news and editorial for both newspapers.
Kearns-Tribune, LLC is responsible for the editorial staff producing the news
and editorial content of The Salt Lake Tribune. The Salt Lake Tribuneand the
Deseret Newsare each published seven days a week with The Salt Lake Tribuneas
a morning edition and the Deseret Newsas an evening edition.

York. York Newspaper Company, a partnership owned 57.5% by York
Newspapers, Inc. (YNI), a wholly owned subsidiary of MediaNews, publishes The
York Dispatch, the York Sunday Newsand the York Daily Recordin York,
Pennsylvania, approximately 30 miles south of Harrisburg, Pennsylvania and 50
miles north of Baltimore, Maryland. These newspapers are published under the
terms of a JOA. All operations, other than news and editorial, are controlled
by the partnership. YNI maintains its own editorial staff and produces the news
and editorial content of both The York Dispatchand the York Sunday News. The
York Dispatch(evening) and the York Daily Record(morning) are published five
days a week with the York Daily Recordpublished exclusively on Saturday and
the York Sunday News,exclusively on Sunday. The York Newspaper Company also
publishes the Weekly Recordeach Tuesday.

Charleston. Charleston Newspapers, is a joint venture operated under the
terms of a JOA and publishes the Charleston Daily Mail(evening),the
Charleston Gazette(morning) six days a week, and the Sunday Gazette-Mail,on
Sunday in Charleston, West Virginia. All operations, other than news and
editorial are controlled by the joint venture, and profits are split equally.
We are responsible for maintaining the editorial staff and producing the
editorial content for the Charleston Daily Mail.

Bridgeport.The Connecticut Postis located in Bridgeport, Connecticut and
publishes a morning newspaper seven days a week, distributed primarily in and
around Fairfield County, Connecticut, one of the most affluent counties in the
United States. The Connecticut Postalso publishes the Westport News, Fairfield
Citizen-News, Darien News-Review,and the Norwalk Citizen-News,weekly
newspapers distributed in Fairfield County and surrounding areas.

Lowell. The Sunis located in Lowell, Massachusetts, approximately 30
miles north of Boston, and publishes an evening newspaper five days a week and
morning editions on Saturday and Sunday.

Pittsfield.The Berkshire Eagleis located in Pittsfield, Massachusetts,
approximately 30 miles southeast of Albany, New York, and publishes a morning
newspaper seven days a week. The Berkshire Eaglealso publishes a weekly
newspaper, The Eagle Shopper.

Las Cruces. The Las Cruces Sun-Newsis located in Las Cruces, New Mexico,
approximately 45 miles north of El Paso, Texas, and publishes a morning
newspaper seven days a week. The Las Cruces Sun-Newsalso publishes the Voz del
Valle, a weekly Spanish language newspaper, and The Shopping Times, a weekly
shopper.

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##### Table of Contents



Newspaper Properties (continued)

Lebanon. The Lebanon Daily Newsis located in Lebanon, Pennsylvania,
approximately 35 miles northeast of York, Pennsylvania. The Lebanon Daily News
publishes an evening newspaper five days a week and morning editions on
Saturday and Sunday. The Lebanon Daily Newsalso publishes the Palm Advertiser,
a weekly newspaper, which is distributed in and around Lebanon, Pennsylvania.

Hanover. The Evening Sunis located in Hanover, Pennsylvania,
approximately 20 miles southwest of York, Pennsylvania. The Evening Sun
publishes an evening newspaper five days a week and morning editions on
Saturday and Sunday. The Evening Sunalso publishes a weekly newspaper, The
Community Sun.

Farmington.The Daily Timesis located in Farmington, New Mexico
approximately 160 miles northwest of Albuquerque, New Mexico and publishes a
morning newspaper seven days a week. The Daily Timesalso publishes the San
Juan Sunand the Four Corners Business Journal,both weekly newspapers.

Fitchburg. The Sentinel & Enterpriseis located in Fitchburg,
Massachusetts, approximately 40 miles northwest of Boston, Massachusetts, and
approximately 30 miles west of Lowell, Massachusetts, and publishes an evening
newspaper five days a week and morning editions on Saturday and Sunday. The
Sentinel & Enterprisealso publishes nine weekly newspapers: North County
Leader, The Weekender Plus, The Independent, Pepperell Free Press, Townsend
Times, Groton Landmark, Harvard Hillside, The Public Spiritand the Shirley
Oracle,which are all distributed in and around areas surrounding Fitchburg and
Nashoba, Massachusetts.

Eastern Colorado Publishing Company.Eastern Colorado Publishing Company
(Eastern Colorado) publishes the Fort Morgan Times,the Journal-Advocateand
the Lamar Daily News,daily newspapers published in Fort Morgan, Sterling and
Lamar, Colorado. Each of these daily newspapers also publishes a weekly
newspaper, which includes the Morgan Times Review, Journal-Advocate Shopperand
the Tri-State Trader.These weekly newspapers are distributed free in and
around each of the daily newspapers geographic markets. Eastern Colorado also
publishes the Akron News Reporter, Brush News-Tribune, The Burlington Record,
The Plains Dealer, The Estes Park Trail Gazetteand the Julesburg Advocate,
paid weekly newspapers distributed in Akron, Brush, Burlington, Estes Park and
Julesburg, Colorado.

Brattleboro.The Brattleboro Reformeris located in Brattleboro, Vermont,
approximately 65 miles northeast of Albany, New York, and publishes a morning
newspaper seven days a week. The Brattleboro Reformeralso publishes The Town
Crier,a weekly shopper.

Carlsbad.The Carlsbad Current-Argusis located in Carlsbad, New Mexico,
approximately 210 miles east of Las Cruces, New Mexico. The Carlsbad
Current-Arguspublishes a morning newspaper six days a week (excluding Monday).

Bennington.The Bennington Banneris located in Bennington, Vermont,
approximately 35 miles northeast of Albany, New York, and publishes a morning
newspaper five days a week and a weekend edition. The Bennington Banneralso
publishes the Manchester Journal, a paid weekly newspaper distributed on
Wednesdays in Manchester, Vermont, and The Bennington Shopper, a free weekly
shopper.

Alamogordo.The Alamogordo Daily Newsis located in Alamogordo, New
Mexico, approximately 100 miles north of El Paso, Texas and 65 miles northeast
of Las Cruces. The Alamogordo Daily Newspublishes an evening newspaper Monday
through Friday and a Sunday edition.

North Adams.The North Adams Transcriptis located in North Adams,
Massachusetts, approximately 30 miles east of Albany, New York, and publishes
an evening newspaper six days a week (excluding Sunday).

Deming.The Deming Headlightis located in Deming, New Mexico,
approximately 60 miles west of Las Cruces, New Mexico, and publishes a morning
newspaper Monday through Friday.

Graham. The Graham Leaderis located in Graham, Texas, approximately 90
miles northwest of Fort Worth, Texas. The Graham Leaderis a bi-weekly
newspaper with total paid circulation of approximately 4,100. Graham Newspapers
also publishes the Lake Country Sun,the Lake Country Shopper,and The Olney
Enterpriseeach Thursday; the Jacksboro Gazette-Newsand The Jack County
Herald,weekly newspapers, published each Monday and Thursday, respectively;
and the Breckenridge American,a bi-weekly newspaper located nearby in
Breckenridge, Texas. We also own two AM and two FM radio stations in Graham and
Breckenridge.

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##### Table of Contents



Newspaper Properties (continued)

California Newspapers Partnership

The California Newspapers Partnership includes the following newspaper
properties:

ANG Newspapers.ANG Newspapers is headquartered in Oakland, California,
and publishes seven newspapers. ANG Newspapers consists of the Oakland Tribune,
The Daily Review, Tri-Valley Herald, The Argus, Alameda Times-Star, San Mateo
County Times,and the Marin Independent Journal. All the newspapers, except for
the San Mateo County Times,are morning newspapers and also publish a Sunday
newspaper. These newspapers cover the city of Oakland, California, and affluent
suburban markets located in the immediate area surrounding Oakland in Alameda
County, Marin County and San Mateo County. ANG Newspapers also publishes San
Bruno Herald, Daly City Recordand Brisbane Bee, Times Weekend, Millbrae
Recorder-Progress, The Wave, The Pacifica Tribune, The Milpitas Post, The
Fremont Bulletin, The Berryessa Sunand The Coastside Chronicleeach week, and
East Bay Real Estate Connection,monthly. Additionally, Marin is a print site
for USA TODAYand Investor Business Daily.

San Gabriel Valley Newspaper Group. The San Gabriel Valley Newspaper
Group, is located in West Covina, California, approximately 10 miles east of
Los Angeles California, and publishes three morning daily newspapers, the
Pasadena Star-News, San Gabriel Valley Tribune,and Whittier Daily News. These
newspapers cover the cities of Pasadena, West Covina and Whittier, California,
as well as other cities in the San Gabriel Valley. The San Gabriel Valley
Newspaper Group also publishes the Highlander Newspapers, Cheers,and The Star,
weekly newspapers distributed in and around these same cities.

San Bernardino.The Sunis located approximately 20 miles east of Ontario.
The Sunpublishes a morning newspaper seven days a week.

Ontario.The Inland Valley Daily Bulletinis located in Ontario,
California, adjacent to West Covina and the San Gabriel Valley Newspaper Group.
The Inland Valley Daily Bulletinpublishes a morning newspaper seven days a
week.

Chico/Oroville. The Enterprise-Recordis located in Chico, California,
approximately 150 miles northeast of San Francisco. The Enterprise-Record
publishes a morning newspaper seven days a week in Chico and publishes an
Oroville edition, The Mercury-Register, six mornings a week (excluding Sunday).

Vallejo.The Times-Heraldis located in Vallejo California, approximately
40 miles north of Oakland, California and publishes a morning newspaper seven
days a week.

Eureka. The Times-Standardis located in Eureka, California, approximately
250 miles north of San Francisco, and publishes a morning newspaper seven days
a week. The Times-Standardalso publishes three weekly newspapers,
Times-Standard Plus, On The Market, Tri-City Weekly, and The Buyers Guide,
which are distributed in and around the areas surrounding Eureka, California.

Vacaville.The Reporteris located in Vacaville, California, approximately
25 miles northeast of Vallejo and approximately 35 miles southwest of
Sacramento. The Reporterpublishes a morning newspaper seven days a week.
Valu-Pack,a total market coverage product is also published in Vacaville. We
expect to complete the acquisition of Vacaville on October 1, 2002.

Woodland. The Daily Democratis located in Woodland, California,
approximately 50 miles from Vallejo and 100 miles from Chico, California. The
Daily Democratpublishes an evening newspaper seven days a week.

Ukiah.The Ukiah Daily Journalis located in Ukiah, California,
approximately 110 miles north of San Francisco and 140 miles south of Eureka,
California. The Ukiah Daily Journalpublishes an evening newspaper six days a
week (excluding Saturday). The Ukiah Daily Journalalso publishes The Hometown
Shopper.

Red Bluff. The Daily Newsis located in Red Bluff, California,
approximately 40 miles north of Chico, California and publishes an evening
newspaper six days a week (excluding Sunday).

Redlands. The Redlands Daily Factsis located in southern San Bernardino
County and publishes an evening newspaper six days a week (excluding Saturday).

10



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##### Table of Contents



Newspaper Properties (continued)

California Newspapers Partnership (continued)

Lakeport. The Lake County Record-Beeis located in Lakeport, California,
approximately 120 miles northeast of San Francisco and approximately 35 miles
southeast of Ukiah. The Lake County Record-Beepublishes a morning newspaper
five days a week (excluding Sunday and Monday). The Lake County Record-Beealso
publishes weekly newspapers and shoppers including the Clearlake
Observer-American, Willits News, Penny Slaver,and Bee-Smart Shopper,all
distributed in and around Lakeport, California. The Fort-Bragg Advocate-Newsis
also printed in Lakeport.

Advertising and Circulation Revenues

Advertising is the largest component of a newspapers revenues followed by
circulation revenue. Advertising rates at each newspaper are established based
upon market size, circulation, readership, demographic makeup of the market,
and the availability of alternative advertising media in the marketplace. While
circulation revenue is not as significant as advertising revenue, circulation
trends can impact the decisions of advertisers and advertising rates.

Advertising revenue includes Retail(local and national department stores,
specialty shops, preprinted advertising circulars and other local retailers),
National(national advertising accounts), and Classifiedadvertising
(employment, automotive, real estate, private party and personals). The
contributions of Retail, National, Classified and Circulation revenue to total
revenues for fiscal years 2002, 2001 and 2000 are shown in the table below.
Generally accepted accounting principles require us to use the equity method of
accounting for the JOA investments we do not control. Therefore, our share of
revenues for the JOAs we do not control (Charleston, Denver and Salt Lake City)
is excluded from this summary (see further discussion under Significant
Accounting Policies). However, if our pro rata share of revenues were included
in this summary, the results would not be significantly different from the
results shown below.

|            |  |                             |     |      |  |      |     |   |  |  |     |  
|----------- |  | --------------------------- | --- | ---- |  | ---- | --- | - |  |  | --- | -
|            |  | Fiscal Years Ended June 30,
|            |  |                            
|            |  | 2002                        |     | 2001 |  | 2000
|            |  |                             |     |      |  |     
|Retail      |  |                             | 41  | %    |  |      | 39  | % |  |  | 39  | %
|National    |  |                             | 4   |      |  |      | 6   |   |  |  | 6   |  
|Classified  |  |                             | 30  |      |  |      | 34  |   |  |  | 36  |  
|Circulation |  |                             | 20  |      |  |      | 17  |   |  |  | 16  |  
|Other       |  |                             | 5   |      |  |      | 4   |   |  |  | 3   |  
|            |  |                             |     |      |  |      |     |   |  |  |     |  
|            |  |                             | 100 | %    |  |      | 100 | % |  |  | 100 | %
|            |  |                             |     |      |  |      |     |   |  |  |     |  

Newsprint

Newsprint is one of the largest costs of producing a newspaper. We buy
newsprint from several suppliers under arrangements, resulting in what we
believe are some of the most favorable long-term newsprint prices in the
industry. We also own, through Kearns-Tribune, LLC, a 6% interest in Ponderay
Newsprint Company. During fiscal years 2002, 2001, and 2000, excluding our
unconsolidated JOA operations, we consumed approximately 148,000, 226,000 and
293,000 metric tons of newsprint, respectively, and, during the same periods,
incurred newsprint expense of approximately $74.8 million, $126.0 million and
$147.2 million, respectively. Newsprint expense as a percentage of revenue from
our newspaper operations for fiscal years 2002, 2001 and 2000 was approximately
10.6%, 14.9% and 15.7%, respectively. Newsprint expense in fiscal years 2002
and 2001 decreased primarily due to the formation of DNA on January 23, 2001
and in 2002 due to a 10% decrease in average price per metric ton. Prior to the
formation of DNA, The Denver Postsnewsprint expense was consolidated in our
results. Now the operations of DNA are accounted for under the equity method.
In addition, because The Denver Post,prior to the JOA, had lower circulation
rates and lower advertising costs per thousand of distribution than other metro
markets of similar size and our market dominant suburban newspapers, our
newsprint expense as a percentage of revenue was greater in fiscal years 2000
and 2001, prior to the JOA. As described above, newsprint prices decreased
significantly during fiscal year 2002. For the year ended June 30, 2002, our
average price per metric ton was $504, whereas for the year ended June 30,
2001, our average price was $558. See Near Term Outlook on page 30 for
additional information on our newsprint pricing.

11



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##### Table of Contents



Employee Relations

We employ at our consolidated entities and unconsolidated JOAs
approximately 8,600 full-time and 2,600 part-time employees, of which
approximately 3,700 are unionized. There has never been a strike or work
stoppage at any of our newspapers during our ownership, and we believe that our
relations with our employees are generally good.

Seasonality

Newspaper companies tend to follow a distinct and recurring seasonal
pattern, with higher advertising revenues in months containing significant
events or holidays. Accordingly, the fourth calendar quarter, or our second
fiscal quarter, is our strongest revenue quarter of the year. Due to generally
poor weather and a lack of holidays, the first calendar quarter, or our third
fiscal quarter, is our weakest revenue quarter of the year.

Competition

Each of our newspapers compete for advertising revenue to varying degrees
with magazines, radio, television and cable television, as well as with some
weekly publications, direct mail and other advertising media, including
electronic media. Competition for newspaper advertising is largely based upon
circulation, price and the content of the newspaper. Our suburban and small
city daily newspapers are the dominant local news and information source, with
strong name recognition in their market and no direct competition from similar
daily newspapers published in their markets. However, as with most suburban
small city daily newspapers, some circulation competition exists from larger
daily newspapers, which are usually published in nearby metropolitan areas.

We believe larger metro daily newspapers with circulation in our newspaper
markets generally do not compete in any meaningful way for local advertising
revenues, a newspapers main source of revenues. Our daily newspapers capture
the largest share of local advertising as a result of their direct coverage of
the suburban market by providing our reader with local stories and information
that major metropolitan newspapers are unable or unwilling to provide. In
addition, we believe advertisers generally regard newspaper advertising as a
more effective method of advertising promotions and pricing as compared to
television, which is generally used to advertise image. We may from time to
time compete with other companies, which have greater financial resources than
we do.

Electronic Media

Many newspaper companies are now publishing news and other content on the
Internet. In addition, there are many sites on the Internet, which are, by
design, advertising and/or subscription supported. Many of these sites target
specific types of advertising such as employment, real estate and automotive
classified.

Due to many issues associated with advertising on the Internet, such as
fragmentation and lack of agreement and/or meaningful research on how to
effectively measure viewers and penetration levels, we have not seen
advertisers making a significant commitment to advertise on the Internet. After
the issues mentioned above are resolved, we expect advertising on the Internet
to grow to meaningful levels. Accordingly, we have invested and will continue
to invest in our online strategy, which we believe allows us to capture our
share of the advertising dollars being spent on the Internet advertising now
and in the future.

MNGi, MediaNews electronic publishing division, is responsible for
developing and maintaining a website for each of our daily newspapers. In the
fourth quarter of fiscal year 2001, MNGibegan the installation of a state of
the art Internet publishing system, which was substantially completed during
fiscal year 2002 and is expected to be fully completed in second quarter of
fiscal year 2003. MNGialso continues to develop strategic alliances to enhance
content, functionality and delivery of advertising and information over the
Internet. In addition, we have made strategic investments in PowerOne, Mortgage
Rate Watch, See It Buy It, and Employment Specialists, each of which is an
integral part of our online strategy. We believe the design, functionality, and
content of our websites have attracted viewers that continually return to our
websites for news and information, a key for advertisers. Our online newspapers
can be found at www.newschoice.com.

Regulation and Environmental Matters

Substantially all of our facilities are subject to federal, state and
local laws concerning, among other things, emissions to the air, water
discharges, handling and disposal of wastes or otherwise relating to protection
of the environment. Compliance with these laws has not had, and we do not
expect it to have, a material effect upon our capital expenditures, net income
or competitive position.

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##### Table of Contents



Regulation and Environmental Matters (continued)

Environmental laws and regulations and their interpretation, however, have
changed rapidly in recent years and may continue to do so in the future.
Environmental Assessment Reports of our properties have identified historic
activities on certain of these properties, as well as current and historic uses
of properties in surrounding areas, which may affect our properties and require
further study or remedial measures. No material remedial measures are currently
anticipated or planned by us or required by regulatory authorities with respect
to our properties. However, no assurance can be given that existing
Environmental Assessment Reports reveal all environmental liabilities, that any
prior owner of our properties did not create a material environmental condition
not known to us, or that a material environmental condition does not otherwise
exist as to any such property.

Because we deliver certain newspapers by second-class mail, we are
required to obtain permits from, and to file an annual statement of ownership
with, the United States Postal Service.




Item 2. Property

Our corporate headquarters are located in Denver, Colorado. Our production
facilities are, in most cases, complete newspaper production and office
facilities, but also include television and radio stations. The principal
operating facilities we own are located in:

|           |  |                   |  |             |  |               |  |                |  |              
|---------- |  | ----------------- |  | ----------- |  | ------------- |  | -------------- |  | -------------
|Alaska     |  | California        |  | Colorado    |  | Massachusetts |  | Pennsylvania   |  | Vermont      
|Anchorage  |  | Northern (cont.): |  | Denver      |  | Pittsfield    |  | York           |  | Brattleboro  
|           |  | Fort Bragg        |  | Sterling    |  | North Adams   |  | Hanover        |  | Bennington   
|California |  | Red Bluff         |  | Fort Morgan |  | Lowell        |  | Lebanon        |  |              
|Northern:  |  |                   |  | Lamar       |  | Fitchburg     |  |                |  | West Virginia
|San Mateo  |  | Southern:         |  |             |  |               |  | Texas          |  | Charleston   
|Union City |  | West Covina       |  | Connecticut |  | New Mexico    |  | Graham         |  |              
|Marin      |  | Valencia          |  | Bridgeport  |  | Las Cruces    |  | Breckenridge   |  |              
|Eureka     |  | San Bernardino    |  |             |  | Carlsbad      |  |                |  |              
|Chico      |  | Ontario           |  |             |  | Alamogordo    |  | Utah           |  |              
|Vallejo    |  |                   |  |             |  | Farmington    |  | Salt Lake City |  |              
|Lakeport   |  |                   |  |             |  |               |  |                |  |              

Certain facilities located in Denver, Colorado; Oakland, Pasadena and
Pleasanton, California are operated under long-term leases. With the January
23, 2001 formation of DNA in Denver, the Denver long-term lease obligations
were transferred to DNA, except for long-term lease obligations related to our
corporate headquarters.

We believe that all of our properties are generally well maintained, in
good condition and suitable for current operations. Our equipment is adequately
insured.




Item 3. Legal Proceedings

In December 2000, Salt Lake Tribune Publishing Company (Salt Lake
Publishing) brought a lawsuit and moved for a preliminary injunction against
MediaNews, AT&T Corporation, and AT&T Broadband, LLC. That lawsuit is now
pending in the United States District Court for the District of Utah as case
number 2:00 CV 936. Salt Lake Publishing was the manager at the time of The
Salt Lake Tribune, a newspaper owned by our now wholly-owned subsidiary
Kearns-Tribune, LLC (Kearns, LLC). Salt Lake Publishing initially moved to
prevent us from acquiring Kearns, LLC from AT&T Broadband, LLC. The district
court denied the preliminary injunction motion by order dated December 15,
2000, and we acquired Kearns, LLC on January 2, 2001. After Kearns, LLC was
acquired by us, Salt Lake Publishing filed a second motion for a preliminary
injunction claiming that actions taken by Kearns, LLC after its acquisition by
us breached a certain Management Agreement and a certain Option Agreement
between Kearns, LLC and Salt Lake Publishing, both of which are dated July 31,
1997. That motion sought to restore certain Salt Lake Publishing employees to
certain director and officer positions at the Newspaper Agency Corporation
(NAC) from which they were removed and to suspend the implementation of
various amendments to a Joint Operating Agreement between Kearns, LLC and
Deseret Publishing. The District Court granted Salt Lake Publishings motion in
part by order dated February 21, 2001, and Salt Lake Publishing continued to
manage Kearns, LLC until July 31, 2002.

13



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##### Table of Contents



Item 3. Legal Proceedings (continued)

In September 2001, Deseret News Publishing Company (Deseret Publishing),
the publisher of the Deseret News, the other party to the Joint Operating
Agreement with Kearns, LLC, joined the lawsuit pending in federal court between
Salt Lake Publishing and us. Deseret Publishing named both Salt Lake Publishing
and Kearns, LLC as defendants, and is seeking, among other things, damages
(Deseret Publishings damages claims are confined to Salt Lake Publishing only
and do not include Kearns, LLC) and declaratory and injunctive relief as to the
meaning and enforceability of the Option, Management, and Joint Operating
Agreements. Among Deseret Publishings claims against Kearns, LLC is its
request for a declaration that the Management Agreement is unenforceable to the
extent that it purports to authorize Salt Lake Publishing to take on behalf of
Kearns, LLC certain required or permitted actions under the Joint Operating
Agreement. In April, 2002 AT&T Broadband, LLC was dismissed from this lawsuit.

In accordance with the Management Agreement, in January 2002 we notified
Salt Lake Publishing that we would not be renewing the Management Agreement and
that we would take over management of Kearns, LLC on July 31, 2002, when the
Management Agreement expired by its terms. Seeking to continue its management
of Kearns, LLC, Salt Lake Publishing filed an injunction seeking to stay on as
manager until the issues surrounding the option exercise (more fully described
below) are resolved on appeal. The injunction was denied, and on August 1,
2002, we began managing the operations of Kearns, LLC, subject to certain
conditions imposed in the District Courts Order dated July 22, 2002. That
Order required MediaNews to provide Salt Lake Publishing with 30 days advance
notice before disposing of any Tribune Asset exceeding $250,000.00 in value and
to refrain from amending the Joint Operating Agreement or proceeding with
irrevocable acts to acquire land and build a new press facility until 10 days
after an entry of judgment in the case by the District Court. Salt Lake
Publishing is appealing the denial of the injunction to the United States Court
of Appeals for the Tenth Circuit, which will hear oral argument on the appeal
on November 18, 2002.

In January 2002, certain controlling members of Salt Lake Publishing filed
a separate lawsuit in Colorado State Court in Denver. This lawsuit names all
the same defendants, arises from the same underlying facts, and seeks
overlapping equitable relief and compensatory and punitive damages as the
pending federal case discussed above. We and the other defendants filed motions
seeking to have this lawsuit dismissed or, in the alternative, stayed pending
resolution of the federal action. On February 21, 2002, the Colorado court
granted defendants motion to stay the Colorado action until the Utah federal
court action has been resolved.

On May 31, 2002, the Utah District Court issued an Order on Motions for
Summary Judgment ruling that Salt Lake Publishing held a valid and enforceable
option to purchase the Tribune Assets owned by Kearns, LLC. However, the
District Court also ruled that one of the key components of the Tribune Assets,
stock in Newspaper Agency Corporation (NAC), was subject to an
anti-alienation provision contained in the Joint Operating Agreement that
precludes the sale, assignment or transfer of the NAC stock by either party
absent waiver or modification of the provision. Subsequent to the court ruling,
Deseret Publishing notified Salt Lake Publishing that it would not waive or
modify the anti-alienation provision or consent to the sale or transfer of the
NAC stock to Salt Lake Publishing. On August 21, 2002, the District Court
certified for immediate appeal to the United States Court of Appeals for the
Tenth Circuit the question of whether the anti-alienation provision contained
in the Joint Operating Agreement is enforceable, as the District Court held in
its Summary Judgment Order, or is instead void as against public policy, as
Salt Lake Publishing contends. On September 6, 2002, the appellate court agreed
to hear an immediate appeal of this issue, and consolidated it with the appeal
of the denial of the injunction which is scheduled to be argued on November 18,
2002.

On August 23, 2002, we filed a motion asking that the District Court amend
its prior certification order to request that the United States Court of
Appeals for the Tenth Circuit consider an additional legal issue arising out of
the Summary Judgment Order: whether the Option Agreement, as construed by the
Court, is void and unenforceable. Salt Lake Publishing has opposed any
amendment of the certification order, and the District Court has not yet ruled
on the request. If the District Court grants the request to amend its
certification order, the Tenth Circuit has discretion to either add this legal
issue to the issues it is already considering in the pending appeal or to
decline to consider the additional legal issue in the currently pending
interlocutory appeal.

Notwithstanding Deseret Publishings communication to Salt Lake Publishing
and us that it will not waive the anti-alienation provision of the Joint
Operating Agreement, Salt Lake Publishing has notified Kearns, LLC of its
intention to exercise its option to acquire the Tribune Assets owned by Kearns,
LLC. Salt Lake Publishing is seeking a judicial order requiring Kearns, LLC to
specifically perform the Option Agreement. MediaNews and Deseret Publishing
oppose specific performance. In the event the option were to be exercised, the
Option Agreement provides for the purchase of all, and not less than all of
the Tribune Assets held by Kearns, LLC at their fair market value as determined
by an appraisal process involving up to three appraisers. That appraisal
process is ongoing. We continue to believe that the Tribune Assets will be
appraised at a value substantially in excess of our $200.0 million purchase
price.

14



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##### Table of Contents



Item 3. Legal Proceedings (continued)

Salt Lake Publishing has amended its original complaint several times and
currently asserts against MediaNews and Kearns, LLC various claims, including
claims for breaches of contract, tort claims and claims for declaratory and
injunctive relief relating to the Management, Option, and Joint Operating
Agreements. Salt Lake Publishing is seeking, among other things, both
compensatory and punitive damages and specific performance of the Option
Agreement. MediaNews and Kearns, LLC have pending counterclaims against Salt
Lake Publishing seeking declaratory and injunctive relief relating to the
Management, Option and Joint Operating Agreements, and damages for breaches of
contract and interference with contract. Additionally, MediaNews and Kearns,
LLC have pending counterclaims for declaratory judgment, but no damages claims,
naming Deseret Publishing. A trial on the issues that remain after the District
Courts Summary Judgment Order is currently scheduled to commence January 13,
2003. We are not in a position at this time to comment on the likely outcome of
the damage portion of the litigation or the success of any appeals of the Utah
District Court rulings; however, we do not believe that the litigation will
have a materially adverse impact on our financial condition, results of
operations, or liquidity. The cost of defending these lawsuits has been and may
continue to be substantial.

Other

In November 2001, one of our former newsprint vendors brought a lawsuit
against us seeking actual and compensatory damages relating to our alleged
breach of a newsprint agreement between the vendor and us. We believe we have
meritorious arguments in defense of the alleged breach and intend to vigorously
defend ourselves in this matter. In addition, we have filed a counterclaim
against the plaintiff related to damages caused by the plaintiffs breaches.
While we do not expect an unfavorable outcome, we do not believe an unfavorable
outcome would have a material adverse impact on our financial condition,
results of operations, or liquidity. We are currently seeking to resolve this
legal action through mediation.

We are involved in other litigation arising in the ordinary course of
business. In our opinion, the outcome of these legal proceedings will not have
a material adverse impact on our financial condition, results of operations, or
liquidity.




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

None.

15



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##### Table of Contents






PART II




Item 5. Market for Registrants Common Equity and Related Shareholder Matters.

The Class A Common Stock is not registered and has no established trading
market and is not widely held. As of September 16, 2002, there were 25
shareholders of record.

We have never paid a dividend on our common stock and do not intend to pay
any cash dividends on our common stock in the foreseeable future. In addition,
our long-term debt agreements contain covenants, which among other things
restrict the payment of dividends to our shareholders.

16



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##### Table of Contents






Item 6. Selected Financial Data

|                                                                                       |                      |   |                             |         |                             |   |           |          |          |   |           |         |   |   |          |         |   |   |         |          |  
|-------------------------------------------------------------------------------------- | -------------------- | - | --------------------------- | ------- | --------------------------- | - | --------- | -------- | -------- | - | --------- | ------- | - | - | -------- | ------- | - | - | ------- | -------- | -
|                                                                                       |                      |   | MediaNews Group,            |         | Garden State Newspapers    
|                                                                                       |                      |   | Inc. & Subsidiaries         |         | Inc. & Subsidiaries (c)    
|                                                                                       |                      |   |                             |         |                            
|                                                                                       |                      |   | Fiscal Years Ended June 30, |         | Fiscal Years Ended June 30,
|                                                                                       |                      |   |                             |         |                            
|                                                                                       |                      |   | 2002                        |         | 2001                        |   | 2000      |          | 1999 (b) |   | 1998 (b) 
|                                                                                       |                      |   |                             |         |                             |   |           |          |          |   |          
|                                                                                       |                      |   | (Dollars in thousands)     
|INCOME STATEMENT DATA (a):                                                             |                      |   |                             |         |                             |   |           |          |          |   |           |         |   |   |          |         |   |   |         |         
|Revenues                                                                               |                      |   |                             |         |                             |   |           |          |          |   |           |         |   |   |          |         |   |   |         |         
|                                                                                       | Advertising          |   | $                           | 536,314 |                             |   | $         | 673,737  |          |   | $         | 769,976 |   |   | $        | 440,734 |   |   | $       | 345,169  |  
|                                                                                       | Circulation          |   |                             | 138,844 |                             |   |           | 144,292  |          |   |           | 148,194 |   |   |          | 113,515 |   |   |         | 93,620   |  
|                                                                                       | Other                |   |                             | 36,502  |                             |   |           | 34,971   |          |   |           | 28,936  |   |   |          | 15,936  |   |   |         | 14,421   |  
|                                                                                       |                      |   |                             |         |                             |   |           |          |          |   |           |         |   |   |          |         |   |   |         |         
|Total Revenues                                                                         |                      |   | 711,660                     |         |                             |   | 853,000   |          |          |   | 947,106   |         |   |   | 570,185  |         |   |   | 453,210 |         
|                                                                                      
|Cost of Sales                                                                          |                      |   | 250,369                     |         |                             |   | 312,664   |          |          |   | 339,660   |         |   |   | 182,544  |         |   |   | 150,202 |         
|Selling, General and Administrative                                                    |                      |   | 329,974                     |         |                             |   | 383,108   |          |          |   | 421,981   |         |   |   | 253,506  |         |   |   | 197,872 |         
|Depreciation and Amortization                                                          |                      |   | 49,893                      |         |                             |   | 64,480    |          |          |   | 62,438    |         |   |   | 43,884   |         |   |   | 39,279  |         
|Interest Expense                                                                       |                      |   | 75,302                      |         |                             |   | 82,241    |          |          |   | 75,758    |         |   |   | 56,765   |         |   |   | 45,629  |         
|Equity Income in Unconsolidated JOAs                                                   |                      |   | 50,077                      |         |                             |   | 10,344    |          |          |   | 2,656     |         |   |   | 1,894    |         |   |   |        |         
|Gain on Sale of Newspaper Properties                                                   |                      |   |                            |         |                             |   | 74,255    |          |          |   | 117,621   |         |   |   |         |         |   |   | 31,829  |         
|Minority Interest                                                                      |                      |   | (32,218                     | )       |                             |   | (40,927   | )        |          |   | (34,092   | )       |   |   | (12,295  | )       |   |   | (6,192  | )       
|Income Before Income Taxes
and Extraordinary Items                                     |                      |   | 9,883                       |         |                             |   | 39,271    |          |          |   | 124,976   |         |   |   | 10,030   |         |   |   | 34,392  |         
|Net Income (Loss)                                                                      |                      |   | 12,365                      |         |                             |   | 25,227    |          |          |   | 130,383   |         |   |   | (822     | )       |   |   | 29,600  |         
|                                                                                      
|OTHER FINANCIAL DATA:                                                                  |                      |   |                             |         |                             |   |           |          |          |   |           |         |   |   |          |         |   |   |         |         
|Capital Expenditures                                                                   |                      | $ | 11,323                      |         |                             | $ | 19,611    |          |          | $ | 25,505    |         |   | $ | 13,005   |         |   | $ | 11,397  |         
|Cash Flow from:                                                                        |                      |   |                             |         |                             |   |           |          |          |   |           |         |   |   |          |         |   |   |         |         
|                                                                                       | Operating Activities |   |                             | 57,592  |                             |   |           | 43,678   |          |   |           | 96,404  |   |   |          | 61,891  |   |   |         | 63,441   |  
|                                                                                       | Investing Activities |   |                             | 34,441  |                             |   |           | (307,534 | )        |   |           | 117,921 |   |   |          | (70,670 | ) |   |         | (208,740 | )
|                                                                                       | Financing Activities |   |                             | (97,153 | )                           |   |           | 126,373  |          |   |           | (74,438 | ) |   |          | 10,332  |   |   |         | 137,633  |  
|                                                                                      
|EBITDA (d)                                                                             |                      | $ | 131,317                     |         |                             | $ | 157,228   |          |          | $ | 185,465   |         |   | $ | 134,135  |         |   | $ | 105,136 |         
|Minority Interest EBITDA (d)                                                           |                      |   | (45,946                     | )       |                             |   | (45,647   | )        |          |   | (44,298   | )       |   |   | (14,939  | )       |   |   | (7,021  | )       
|Combined EBITDA of Unconsolidated JOAs (d)                                             |                      |   | 71,373                      |         |                             |   | 25,568    |          |          |   | 4,881     |         |   |   | 3,279    |         |   |   |        |         
|                                                                                       |                      |   |                             |         |                             |   |           |          |          |   |           |         |   |   |          |         |   |   |         |         
|EBITDA Available to Company (d)                                                        |                      | $ | 156,744                     |         |                             | $ | 137,149   |          |          | $ | 146,048   |         |   | $ | 122,475  |         |   | $ | 98,115  |         
|                                                                                       |                      |   |                             |         |                             |   |           |          |          |   |           |         |   |   |          |         |   |   |         |         
|BALANCE SHEET DATA:                                                                    |                      |   |                             |         |                             |   |           |          |          |   |           |         |   |   |          |         |   |   |         |         
|Total Assets                                                                           |                      | $ | 1,323,184                   |         |                             | $ | 1,386,884 |          |          | $ | 1,138,892 |         |   | $ | 846,454  |         |   | $ | 656,979 |         
|Long-Term Debt and Capital Leases, net of
cash and Minority Interest in Long-Term
Debt |                      |   | 941,272                     |         |                             |   | 991,373   |          |          |   | 683,932   |         |   |   | 758,937  |         |   |   | 520,430 |         
|Other Long-Term Liabilities and
Obligations                                            |                      |   | 30,462                      |         |                             |   | 23,906    |          |          |   | 17,633    |         |   |   | 7,543    |         |   |   | 6,479   |         
|Total Shareholders Equity (Deficit)                                                   |                      |   | 24,501                      |         |                             |   | 22,737    |          |          |   | 939       |         |   |   | (150,901 | )       |   |   | 33,547  |         



---

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##### Table of Contents



(footnotes from preceding page)



|(a) |  | Revenues and operating expenses are affected by the following significant
acquisition and disposition transactions. The revenue numbers provided
below are from the actual fiscal year results of operations of the
respective newspapers since the date of acquisition or prior to their
disposition.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Fiscal Year 2002

There were no significant acquisition or disposition transactions.

Fiscal Year 2001



| |  |  | Effective May 31, 2001, we acquired substantially all of the assets
used in the publication of The Ruidoso News, a bi-weekly newspaper
published in Ruidoso, New Mexico for approximately $3.8 million. This
newspaper contributed approximately $0.1 million in revenue in fiscal
year 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Effective March 31, 2001, we purchased substantially all of the
assets used in the publication of Alamogordo Daily News, a daily
newspaper published in Alamogordo, New Mexico, for $9.5 million. This
newspaper contributed approximately $0.6 million in revenue in fiscal
year 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  |  | Effective February 1, 2001, the California Newspapers Partnership
purchased substantially all of the assets used in the publications of
the Lake County Record-Bee, Clearlake Observer-American, Willits News,
Penny Slaver,and Bee-Smart Shopper, located in and around Lakeport,
California, for approximately $7.3 million. These publications
contributed approximately $1.7 million in revenue in fiscal year 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  |  | Effective January 31, 2001, the California Newspapers Partnership
sold substantially all of the assets used in the publication of The
Lompoc Recordin Lompoc, California for approximately $8.0 million,
resulting in a pre-tax gain of approximately $4.6 million. This
newspaper contributed approximately $1.8 million in revenue in fiscal
year 2001 prior to the sale and approximately $2.8 million in fiscal
year 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  |  | Effective January 23, 2001, MediaNews Group and E.W. Scripps Company,
owner of the Rocky Mountain News, began the operations of the Denver
Newspaper Agency. Upon formation of DNA, MediaNews and Scripps each
contributed substantially all of their operating assets used in the
publication of The Denver Postand the Rocky Mountain Newsto DNA. In
addition to the assets contributed to DNA, Scripps also paid MediaNews
$60.0 million to obtain its 50% interest in DNA. We recognized a pre-tax
gain on the payment from Scripps of approximately $46.7 million. Prior
to the formation of DNA, The Denver Postcontributed approximately
$139.7 million in revenue in fiscal 2001 and approximately $242.5
million in fiscal 2000. Our total revenues have declined because we no
longer consolidate the operations of The Denver Postthat were
transferred to DNA. Our investment in DNA is accounted for under the
equity method.
|
| |  |  | Effective January 2, 2001, we purchased the stock of Kearns-Tribune,
LLC for $200.0 million. Kearns-Tribune, LLC owns the masthead of The
Salt Lake Tribuneand a 50% interest in the Newspaper Agency Corporation
(NAC). Net income of NAC is distributed 58% to Kearns-Tribune, LLC and
42% to the Deseret News Publishing Company. NAC publishes The Salt Lake
Tribune(morning) and the Deseret News(evening) under the terms of a
JOA between Kearns-Tribune, LLC and the Deseret News Publishing Company.
We account for our investment in NAC under the equity method.                                                                                                                                                                                                                                                                                                                                                             
|
| |  |  | Effective October 31, 2000, we sold substantially all the assets used
in the publication of the Daily Nonpareil,in Council Bluffs, Iowa and
the related daily and weekly newspapers located in the Southwestern Iowa
cluster, in exchange for $32.0 million in cash and substantially all the
assets of the Carlsbad Current-Argus,a daily newspaper located in
Carlsbad, New Mexico, valued at approximately $7.0 million. The sale
resulted in a pre-tax gain of approximately $23.6 million. The
newspapers in the Southwestern Iowa cluster contributed approximately
$4.0 million in revenue in fiscal year 2001 prior to the sale and
approximately $11.5 million in fiscal year 2000. The Carlsbad newspaper
contributed approximately $2.0 million in revenue in fiscal year 2001.                                                                                                                                                
|
| |  |  | Effective October 1, 2000, The Sun Company of San Bernardino
California (Gannett) contributed the Marin Independent Journal,
published in Marin, California, to the California Newspapers
Partnership. Effective with the contribution, MediaNews, Stephens Media
Group (previously Donrey Newspapers, LLC) and Gannetts interests in the
California Newspapers Partnership were adjusted to 54.23%, 26.28% and
19.49%, respectively. Prior to the contribution, MediaNews held a 58.8%
interest in the partnership. This newspaper contributed approximately
$22.5 million to revenue in fiscal year 2001.                                                                                                                                                                                                                                                                                                                            
|
| |  |  | Effective October 1, 2000, we acquired all of the assets used in the
publication of the Connecticut Post,a morning newspaper published in
Bridgeport, Connecticut for approximately $194.0 million, net of working
capital of approximately $5.0 million. This newspaper contributed
approximately $48.9 million of revenue in fiscal year 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

Fiscal Year 2000



| |  |  | In fiscal year 2000, MediaNews and Garden State merged, with
MediaNews as the surviving entity and the successor issuer to Garden
State Newspapers, Inc. Garden State Newspapers owned 80% of The Denver
Post Corporation. As a result of the reorganization, The Denver Post
Corporation has been consolidated with the operations of MediaNews
effective July 1, 1999.                                                                                                                                                                              
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Effective June 30, 2000, we sold substantially all of the assets used
in the publication of The Express Times, in Easton, Pennsylvania; the
Gloucester County Times,in Woodbury, New Jersey; Todays Sunbeam,in
Salem, New Jersey; The Bridgeton News,in Bridgeton, New Jersey and our
North Jersey weekly newspapers for $145.0 million. We recognized a
pre-tax gain on the sale of approximately $114.3 million. These
newspapers contributed approximately $55.0 million and $53.3 million of
revenue in fiscal years 2000 and 1999, respectively.
|
| |  |  | Effective May 26, 2000, we acquired the stock of Northern Television,
Inc. KTVA, a CBS affiliate broadcasting in Anchorage, Alaska, for
approximately $7.0 million. KTVA contributed $0.3 million to revenue in
fiscal year 2000.                                                                                                                                                                                                                                                                                                                     

(footnotes continued on following page)

18



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##### Table of Contents



(footnotes continued from preceding page)

Fiscal Year 2000 (continued)



| |  |  | Effective March 1, 2000, we acquired substantially all the assets
used in the publication of six weekly newspapers and three monthly
publications, distributed in and around Ayer, Massachusetts, for
approximately $4.2 million. These weekly newspapers contributed
approximately $0.8 million to revenue in fiscal year 2000.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Effective October 31, 1999, we acquired substantially all of the
assets used in the publication of the Deming Headlight, a morning
newspaper published in Deming, New Mexico, for approximately $2.0
million cash. This newspaper contributed approximately $0.7 million in
revenue during 2000.                                
|
| |  |  | Effective October 1, 1999 and January 1, 2000, the California
Newspapers Partnership purchased a shopper in Ukiah, California and a
weekly newspaper in Milpitas, California, respectively, for
approximately $2.7 million. These weekly newspapers contributed
approximately $1.4 million to revenue in fiscal year 2000.      
|
| |  |  | Effective July 31, 1999, the California Newspapers Partnership sold
the assets of The Hemet Newsand Moreno Valley Timesfor pre-tax gain of
approximately $3.3 million. These newspapers each contributed
approximately $0.4 million to revenue in fiscal year 2000 and 1999,
respectively.                                      

Fiscal Year 1999



| |  |  | On March 31, 1999, through our wholly owned subsidiary, West Coast
MediaNews LLC, we formed the California Newspaper Partnership with
Stephens Media Group (formerly Donrey Newspapers LLC) and the Sun
Company of San Bernardino California (Gannett). We contributed ANG
Newspapers, comprised of six daily newspapers published in the San
Francisco Bay area; San Gabriel Valley Newspapers, which includes three
daily newspapers published in the Los Angeles area; and the
Times-Standard, a daily newspaper published in Eureka, California in
exchange for a 58.8% partnership interest. The Stephens Media Group and
Gannett newspapers contributed to the partnership added approximately
$31.6 million of revenue in fiscal year 1999.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Effective October 1, 1998 we acquired substantially all of the assets
used in the publication of the Daily Times, a morning newspaper
published in Farmington, New Mexico for cash and discounted notes with
the prior owners. This newspaper contributed approximately $5.0 million
of revenue in fiscal year 1999.                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| |  |  | On August 22, 1998 we acquired for approximately $47.0 million, a 50%
interest in Charleston Newspapers, a joint venture, which publishes the
Charleston Gazette(morning) and Charleston Daily Mail(evening), six
days a week and the Sunday Gazette-Mail, under the terms of a JOA. This
newspaper contributed approximately $16.0 million of revenue in fiscal
year 1999.                                                                                                                                                                                                                                                                                                                                                                         

Fiscal Year 1998



| |  |  | On May 11, 1998 we acquired substantially all the assets used in the
publication of The Tri-City Weekly, a weekly newspaper published in
Eureka, California for approximately $2.6 million in cash, plus a
covenant not to compete with a discounted value of $0.5 million. This
newspaper contributed approximately $0.4 million of revenue in fiscal
year 1998.                                                                                                                                      
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | On May 1, 1998, we acquired substantially all the assets used in the
publication of the Valley News Today, a morning newspaper published five
times a week in Shenandoah Iowa, and seven weekly publications
distributed primarily in Shenandoah and Dennison, Iowa. These assets
were purchased for approximately $5.1 million in cash, plus covenants
not to compete with a discounted value of $0.6 million. These
newspapers contributed approximately $0.7 million of revenue in fiscal
year 1998.
|
| |  |  | On January 29, 1998, we acquired substantially all the assets used in
the publication of the Daily News, a daily newspaper published in the
San Fernando Valley of Los Angeles, California, for approximately $130.0
million. This newspaper contributed approximately $36.9 million of
revenue in fiscal year 1998.                                                                                                                                                                                   
|
| |  |  | On December 16, 1997, we acquired substantially all the assets used
in the publication of the Press-Telegram, a daily newspaper published in
Long Beach, California, for approximately $38.2 million in cash.
Proceeds from the sale of the North Jersey Herald & News were used to
fund the acquisition. This newspaper contributed approximately $22.7
million of revenue in fiscal year 1998.                                                                                                       
|
| |  |  | On December 5, 1997, we sold substantially all the assets used in the
publication of the North Jersey Herald & Newsand sixteen weekly
publications for $43.0 million in cash plus an adjustment for working
capital. The Company recognized a pre-tax gain on the sale of
approximately $31.8 million, net of selling expenses. These newspapers
contributed $16.2 million of revenues prior to the sale and $36.2
million in fiscal year 1997.                                                        
|
| |  |  | On July 31, 1997, we acquired substantially all the assets used in
the publication of The Sun, an evening newspaper published in Lowell,
Massachusetts. The assets were purchased for approximately $60.8
million. The Sun contributed $22.3 million of revenue in fiscal 1998.                                                                                                                                                                                                                        



|(b) |  | Change in Accounting Principle.Effective June 15, 2000, the Financial
Accounting Standards Board issued EITF Issue 00-1, which required us to
change our method of accounting for JOAs from pro-rata consolidation to:
(i) consolidation for the JOAs we control, and (ii) the equity method for
the JOAs we do not control. Accordingly, fiscal year 1999 and 1998
financial statements have been reclassified to reflect this change in
accounting. The Denver and Salt Lake JOAs, new beginning in fiscal year 2001 are
accounted for under the equity method.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(c) |  | Corporate Reorganization.During fiscal years 1999 and 2000 we underwent
a corporate reorganization, whereby, MediaNews Group, Inc. (MediaNews)
became the successor issuer to Garden State Newspapers, Inc. The
reorganization included our June 30, 1999 purchase of an additional 20%
interest in The Denver Post Corporation, bringing our total ownership
interest in The Denver Post Corporation to 80%. In addition, The Denver
Post Shareholder Agreement was modified,                                                                                   

(footnotes continued on following page)

19



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##### Table of Contents



(footnotes continued from preceding page)



|    |  | giving us control of The Denver Post Corporation board of directors.
Accordingly, effective June 30, 1999, The Denver Post Corporation became a
consolidated subsidiary. Additionally, on September 1, 1999, Garden State
Newspapers, Inc. was merged into MediaNews, with MediaNews as the surviving
corporation. As a result of this reorganization, the consolidated financial
statement data for each fiscal year after 1999 include the consolidated
results of MediaNews and its subsidiaries (including The Denver Post
Corporation, parent company for The Denver Postand Eastern Colorado
Publishing Company). The consolidated financial statement data for fiscal
years 1999 and 1998 include Garden State Newspapers, Inc. information only.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(d) |  | EBITDA and EBITDA Available to Company.EBITDA and EBITDA Available to
Company are not measures of performance recognized under GAAP. However, we
believe that they are indicators and measurements of our leverage capacity
and debt service ability. EBITDA and EBITDA Available to Company should
not be considered as a measure of profitability, liquidity or as an
alternative to net income, cash flows generated by operating, investing or
financing activities or other financial statement data presented in our
consolidated financial statements or any other GAAP measure as an
indicator of our performance.                                                                                                                              
|   
|    |  | EBITDA is calculated by deducting cost of sales, selling and general and
administrative expense from total revenues. EBITDA Available to Company is
calculated by: (i) reducing EBITDA by the minoritys interest in the EBITDA
generated from the California Newspapers Partnership, York Newspaper Company,
and The Denver Post Corporation, our less than 100% owned consolidated
subsidiaries; and (ii) increasing EBITDA by our combined proportionate share
of the EBITDA generated by our unconsolidated JOAs, in Denver, Salt Lake City
and Charleston.                                                                                                                                                                                         

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

Introduction

The following analysis of the financial condition and results of
operations should be read in conjunction with the Selected Financial Data and
the Consolidated Financial Statements of MediaNews Group, Inc. and the notes
thereto appearing elsewhere herein.

Overview

We are in the business of owning and operating daily and weekly newspapers
and websites related thereto. In addition, we own radio stations in Graham and
Breckenridge, Texas. We also own a CBS affiliate television station in
Anchorage, Alaska. However the combined results of these non-newspaper
operations are insignificant to us, comprising less than 0.5% of our
consolidated revenue. Our newspapers derive their revenues primarily from
advertising and circulation. Our primary operating expenses (before
depreciation and amortization) are employee salaries, newsprint, marketing, and
distribution.

Since our inception, we have grown primarily through acquisitions. A large
portion of the value of the assets acquired in these transactions are
attributable to intangible assets, principally subscriber accounts, mastheads
and goodwill, which we believe are generally the most valuable assets of a
newspaper. As a result of the amortization expense historically associated with
these intangible assets, the interest expense associated with acquisition
indebtedness, and debt fees, including the make whole premiums, we have
historically operated at a loss or near break-even levels (before factoring in
the gain from the sale of newspaper properties). On July 1, 2001, we adopted
the Financial Accounting Standards Board, SFAS No. 142, Goodwill and Other
Intangible Assets.Under the new standard, excess of cost over fair value of
assets acquired (goodwill) and other indefinite life intangibles are no longer
amortized, but instead are periodically reviewed for impairment, which
significantly reduced our amortization expense beginning in fiscal year 2002.

Significant Accounting Policies

Generally speaking, the preparation of financial statements in accordance
with generally accepted accounting principles at times requires the use of
estimates and assumptions that affect the reported amount of assets,
liabilities, revenues and expenses and related disclosure of contingent
matters. Notes to our consolidated financial statements contain a more complete
discussion of our significant accounting policies. Significant accounting
policies for us involve our assessment of the recoverability of our long-lived
assets, including goodwill and other intangible assets, which are based on such
factors as estimated future cash flows and current fair value estimates. Our
accounting for pension and retiree medical benefits requires the use of various
estimates concerning the work force, interest rates, plan investment return,
and involves the use of advice from consulting actuaries. Our accounting for
federal and state income taxes is sensitive to interpretation of various laws
and regulations and the valuations of deferred tax assets. We base our
estimates on historical experience, actuarial studies and other assumptions, as
appropriate, concerning the carrying values of its assets and liabilities and
disclosure of contingent matters. We re-evaluate our estimates on an ongoing
basis. Actual results could differ from these estimates.

During 2000, the Emerging Issues Task Force (EITF) reached a consensus
on Issue 00-1, Balance Sheet and Income Statement Display under the Equity
Method of Investments in Certain Partnerships and Other Unincorporated Joint
Ventures(EITF 00-1),effective for periods ending after June 15, 2000, which
prohibits the use of pro-rata consolidation except in the extractive and
construction industries. Prior to our adoption of EITF 00-1, we accounted for
all of our JOA operations using the pro-rata consolidation method for those
JOAs which we do not control. Upon adoption of EITF 00-1, effective June 30,
2000, we began accounting for our unconsolidated JOA investments under the
equity method. Accordingly, we now report our share of our unconsolidated JOA
operations as a single net amount in our consolidated statement of operations
under the financial statement line item Equity Income in Unconsolidated JOAs.
Our investments in unconsolidated JOAs are included in the consolidated balance
sheet under the financial statement line item Investment in Unconsolidated
JOAs. In accordance with EITF 00-1, all previously reported financial
statements have been reclassified to conform to the new reporting
classification requirements.

In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement No. 141, Business Combinationsand Statement No. 142, Goodwill and
Other Intangible Assets, collectively the Statements. Statement No. 141
requires business combinations initiated after June 30, 2001 to use the
purchase method of accounting. Under the new Statements, excess of cost over
fair value of net assets acquired (goodwill) and other indefinite life
intangibles are no longer amortized but instead are periodically reviewed for
impairment. All other intangible assets with a finite useful life will continue
to be amortized over their remaining useful lives. We adopted the Statements
effective July 1, 2001.

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##### Table of Contents



Operating Results

We have provided below certain summary historical financial data for
fiscal years ended 2002, 2001 and 2000, including the percentage change between
fiscal years.

Summary Historical Financial Data(Dollars in thousands)

|                                           |                             |                       |            |         |                             |   |                             |         |         |   |               |         |               |  |       |       |   |  |       |      |    |  | 
|------------------------------------------ | --------------------------- | --------------------- | ---------- | ------- | --------------------------- | - | --------------------------- | ------- | ------- | - | ------------- | ------- | ------------- |  | ----- | ----- | - |  | ----- | ---- | -- |  | 
|                                           |                             |                       |            |         | Fiscal Years Ended June 30, |   | Fiscal Years Ended June 30,
|                                           |                             |                       |            |         |                             |   |                            
|                                           |                             |                       |            |         | 2002(d)                     |   | 2001(d)                     |         | 2000(d) |   | 2002 vs. 2001 |         | 2001 vs. 2000
|                                           |                             |                       |            |         |                             |   |                             |         |         |   |               |         |              
|                                           |                             | INCOME STATEMENT DATA |            |         |                             |   |                             |         |         |   |               |         |               |  |       |       |   |  |       |      |    | 
|                                           |                             |                       |            |         |                             |   |                             |         |         |   |               |         |               |  |       |       |   |  |       |     
|Total Revenues                             |                             | $                     | 711,660    |         |                             | $ | 853,000                     |         |         | $ | 947,106       |         |               |  | (16.6 | )%    |   |  | (9.9  | )%  
|                                          
|Cost of Sales                              |                             |                       | 250,369    |         |                             |   | 312,664                     |         |         |   | 339,660       |         |               |  | (19.9 | )     |   |  | (7.9  | )   
|Selling, General and Administrative        |                             |                       | 329,974    |         |                             |   | 383,108                     |         |         |   | 421,981       |         |               |  | (13.9 | )     |   |  | (9.2  | )   
|Depreciation and Amortization              |                             |                       | 49,893     |         |                             |   | 64,480                      |         |         |   | 62,438        |         |               |  | (22.6 | )     |   |  | 3.3   |     
|Interest Expense                           |                             |                       | 75,302     |         |                             |   | 82,241                      |         |         |   | 75,758        |         |               |  | (8.4  | )     |   |  | 8.6   |     
|Other (Net)                                |                             |                       | 14,098     |         |                             |   | 14,908                      |         |         |   | 8,478         |         |               |  | (5.4  | )     |   |  | 75.8  |     
|                                           |                             |                       |            |         |                             |   |                             |         |         |   |               |         |               |  |       |       |   |  |       |     
|                                           | Total Costs and Expenses    |                       |            | 719,636 |                             |   |                             | 857,401 |         |   |               | 908,315 |               |  |       | (16.1 | ) |  |       | (5.6 | ) 
|                                          
|Equity Income in Unconsolidated JOAs       |                             |                       | 50,077     |         |                             |   | 10,344                      |         |         |   | 2,656         |         |               |  | (e    | )     |   |  | (e    | )   
|                                          
|Minority Interest                          |                             |                       | (32,218    | )       |                             |   | (40,927                     | )       |         |   | (34,092       | )       |               |  | (21.3 | )     |   |  | 20.0  |     
|                                          
|Net Income                                 |                             |                       | 12,365     |         |                             |   | 25,227                      |         |         |   | 130,383       |         |               |  | (51.0 | )     |   |  | (e    | )   
|                                           |                             |                       | EBITDA (a) |         |                             |   |                             |         |         |   |               |         |               |  |       |       |   |  |       |      |    |  | 
|                                           |                             |                       |            |         |                             |   |                             |         |         |   |               |         |               |  |       |       |   |  |       |     
|EBITDA                                     |                             | $                     | 131,317    |         |                             | $ | 157,228                     |         |         | $ | 185,465       |         |               |  | (16.5 | )%    |   |  | (15.2 | )%  
|Minority Interest EBITDA (b)               |                             |                       | (45,946    | )       |                             |   | (45,647                     | )       |         |   | (44,298       | )       |               |  | 0.7   |       |   |  | 3.0   |     
|Combined EBITDA of Unconsolidated JOAs (c) |                             |                       | 71,373     |         |                             |   | 25,568                      |         |         |   | 4,881         |         |               |  | (e    | )     |   |  | (e    | )   
|                                           |                             |                       |            |         |                             |   |                             |         |         |   |               |         |               |  |       |       |   |  |       |     
|                                           | EBITDA Available to Company |                       | $          | 156,744 |                             |   | $                           | 137,149 |         |   | $             | 146,048 |               |  |       | 14.3  | % |  |       | (6.1 | )%
|                                           |                             |                       |            |         |                             |   |                             |         |         |   |               |         |               |  |       |       |   |  |       |     



---

|(a) |  | EBITDA is calculated by deducting cost of sales and selling, general
and administrative expenses from total revenues. EBITDA and EBITDA
Available to Company are not measures of performance recognized under
GAAP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Includes minority interest in EBITDA of the California Newspapers
Partnership, The Denver Post Corporation and York Newspaper Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|(c) |  | Includes our proportionate share of EBITDA from JOAs in Denver, Salt
Lake City, and Charleston.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(d) |  | Effective June 15, 2000, the Financial Accounting Standards Board
issued EITF 00-1, which required us to change our method of accounting
for JOAs from pro-rata consolidation to: (i) consolidation for the JOAs
we control, and (ii) the equity method for the JOAs we do not control.
While all periods presented above reflect this accounting, fiscal year
2001 comparisons are difficult since The Denver Postoperations, after
formation of DNA on January 23, 2001, are no longer consolidated and are
now included in Equity Income in Unconsolidated JOAs. However, editorial
expenses of The Denver Postcontinue to be reflected in cost of sales,
reducing our EBITDA margins.
|   
|(e) |  | Not meaningful.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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##### Table of Contents



Summary Supplemental Pro Forma Financial Data

Joint operating agencies, or JOAs, represent a unique operating structure
within the newspaper industry. Prior to the Financial Accounting Standard Board
issuing EITF 00-1, which eliminated the use of pro-rata consolidation except in
the extractive and construction industries, we reported the results of our JOA
interests, on a pro-rata consolidated basis. Under this method, we consolidated
(on a line-item basis) our proportionate share of the JOAs operations.
Although pro-rata consolidation is no longer considered an acceptable method of
financial reporting under GAAP, we believe it provides a meaningful
presentation of the results of our operations. Accordingly, we have presented
in the table below, the results of operations of our JOAs using pro-rata
consolidation. Our JOAs include York Newspaper Company and Charleston
Newspapers for all periods presented, the Denver Newspaper Agency since
formation on January 23, 2001, and the Newspaper Agency Corporation (Salt Lake
City) since acquisition on January 2, 2001. See Note 3 of the consolidated
financial statements for additional discussion of the accounting for our JOAs.

THE INFORMATION IN THE FOLLOWING TABLE IS NOT PRESENTED IN ACCORDANCE WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES AND DOES NOT COMPLY WITH ARTICLE 11 OF REGULATION S-X FOR
PRO FORMA FINANCIAL DATA

Summary Selected Pro Forma Financial Data(Dollars in thousands)

|                                    |                             |                                             |         |         |                             |   |                             |         |      |   |               |         |               |  |       |      |   |  |       |      |    |  | 
|----------------------------------- | --------------------------- | ------------------------------------------- | ------- | ------- | --------------------------- | - | --------------------------- | ------- | ---- | - | ------------- | ------- | ------------- |  | ----- | ---- | - |  | ----- | ---- | -- |  | 
|                                    |                             |                                             |         |         | Fiscal Years Ended June 30, |   | Fiscal Years Ended June 30,
|                                    |                             |                                             |         |         |                             |   |                            
|                                    |                             |                                             |         |         | 2002                        |   | 2001                        |         | 2000 |   | 2002 vs. 2001 |         | 2001 vs. 2000
|                                    |                             |                                             |         |         |                             |   |                             |         |      |   |               |         |              
|                                    |                             | PRO-RATA CONSOLIDATED
INCOME STATEMENT DATA |         |         |                             |   |                             |         |      |   |               |         |               |  |       |      |   |  |       |      |    | 
|                                    |                             |                                             |         |         |                             |   |                             |         |      |   |               |         |               |  |       |      |   |  |       |     
|Total Revenues                      |                             | $                                           | 992,340 |         |                             | $ | 978,929                     |         |      | $ | 948,508       |         |               |  | 1.4   | %    |   |  | 3.2   | %   
|                                   
|Cost of Sales                       |                             |                                             | 349,028 |         |                             |   | 366,290                     |         |      |   | 342,764       |         |               |  | (4.7  | )    |   |  | 6.9   |     
|Selling, General and Administrative |                             |                                             | 448,354 |         |                             |   | 437,719                     |         |      |   | 423,741       |         |               |  | 2.4   |      |   |  | 3.3   |     
|Depreciation and Amortization       |                             |                                             | 64,720  |         |                             |   | 72,890                      |         |      |   | 63,820        |         |               |  | (11.2 | )    |   |  | 14.2  |     
|Interest Expense                    |                             |                                             | 75,517  |         |                             |   | 82,161                      |         |      |   | 75,489        |         |               |  | (8.1  | )    |   |  | 8.8   |     
|Other (Net)                         |                             |                                             | 19,561  |         |                             |   | 21,027                      |         |      |   | 8,798         |         |               |  | (7.0  | )    |   |  | 139.0 |     
|                                    |                             |                                             |         |         |                             |   |                             |         |      |   |               |         |               |  |       |      |   |  |       |     
|                                    | Total Costs and Expenses    |                                             |         | 957,180 |                             |   |                             | 980,087 |      |   |               | 914,612 |               |  |       | (2.3 | ) |  |       | 7.2  |   
|                                   
|Minority Interest                   |                             |                                             | (25,278 | )       |                             |   | (33,827                     | )       |      |   | (26,541       | )       |               |  | (25.3 | )    |   |  | 27.5  |     
|                                   
|Net Income                          |                             |                                             | 12,365  |         |                             |   | 25,227                      |         |      |   | 130,383       |         |               |  | (51.0 | )    |   |  | (b    | )   
|                                    |                             |                                             | EBITDA  |         |                             |   |                             |         |      |   |               |         |               |  |       |      |   |  |       |      |    |  | 
|                                    |                             |                                             |         |         |                             |   |                             |         |      |   |               |         |               |  |       |      |   |  |       |     
|EBITDA                              |                             | $                                           | 194,958 |         |                             | $ | 174,920                     |         |      | $ | 182,003       |         |               |  | 11.5  | %    |   |  | (3.9  | )%  
|Minority Interest EBITDA (a)        |                             |                                             | (38,214 | )       |                             |   | (37,771                     | )       |      |   | (35,955       | )       |               |  | 1.2   |      |   |  | 5.1   |     
|                                    |                             |                                             |         |         |                             |   |                             |         |      |   |               |         |               |  |       |      |   |  |       |     
|                                    | EBITDA Available to Company |                                             | $       | 156,744 |                             |   | $                           | 137,149 |      |   | $             | 146,048 |               |  |       | 14.3 | % |  |       | (6.1 | )%
|                                    |                             |                                             |         |         |                             |   |                             |         |      |   |               |         |               |  |       |      |   |  |       |     



---

|(a) |  | Includes minority interest in EBITDA of the California Newspapers
Partnership and The Denver Post Corporation.
|--- |  | --------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Not meaningful.                                                                                               

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##### Table of Contents



COMPARISON OF FISCAL YEARS ENDED JUNE 30, 2002 AND 2001

Certain transactions in fiscal year 2001 had a significant impact on the
comparison of results between the years ended June 30, 2002 and 2001.

Significant acquisitions that affect comparisons between the years ended
June 30, 2002 and 2001 include the October 1, 2000 acquisition of the
Connecticut Post,the October 1, 2000 contribution of the Marin Independent
Journalto the California Newspapers Partnership, and the October 31, 2000
purchase of the Carlsbad Current-Argus.Additionally, on January 2, 2001, we
purchased Kearns-Tribune, LLC, which publishes The Salt Lake Tribuneand owns a
58% profit interest in the Newspaper Agency Corporation (NAC), a 50%
controlled JOA in Salt Lake City. We consolidate the editorial expenses of The
Salt Lake Tribune; however, our investment in NAC is accounted for under the
equity method of accounting. Comparisons are also affected by our acquisitions
in Lakeport, California and Alamogordo and Ruidoso, New Mexico that were
completed in the third and fourth quarters of fiscal year 2001.

The impact of these transactions was offset in part by the October 31,
2000 sale of our Southwestern Iowa newspaper cluster, the January 23, 2001
formation of the Denver Newspaper Agency (DNA), after which we no longer
consolidate the results of The Denver Post(other than editorial), and the sale
of a small newspaper in Lompoc, California.

Revenues

Revenues for the years ended June 30, 2002 and 2001 were $711.7 million
and $853.0 million, respectively. This represents a $141.3 million, or 16.6%
decrease. The aforementioned transactions in fiscal year 2001 had the net
impact of decreasing reported revenues by $120.6 million for the year ended
June 30, 2002 as compared to the year ended June 30, 2001, primarily associated
with deconsolidation of the revenues of The Denver Postbecause of the
formation of the Denver JOA.

Excluding the transactions described above, total revenues at our other
newspaper operations (existing newspapers) decreased in fiscal year 2002 by
$20.7 million, or 3.3%, as compared to fiscal year 2001. Advertising revenues
at our existing newspapers decreased by 5.0% during fiscal year 2002. The
decrease in advertising revenues was felt across all major advertising
categories; however, national advertising and classified advertising
experienced the largest percentage declines. In classified advertising, auto
and real estate had increases compared to the prior year, but these increases
were offset by the decline in employment classified. Employment and national
advertising in particular were hit hard by the economic slowdown that has been
experienced throughout the United States. The events of September 11, 2001,
also had a negative impact on an already soft advertising market, further
compounding revenue declines in most advertising categories. These revenue
decreases were somewhat mitigated by increases associated with new sales
initiatives which focused on creating new revenue streams by attracting new
regional and local advertisers by providing niche products and other programs
specifically targeted to their needs.

Circulation revenues at existing newspapers remained flat between years
despite small decreases in circulation volumes due in part to our efforts to
improve circulation profitability in certain of our markets by increasing
single copy and home delivery prices.

Revenues from our interactive media division, MNGi, increased $3.4 million
or 140% for the year ended June 30, 2002 compared to the year ended June 30,
2001, as a result of new revenue initiatives and acceleration in the market
acceptance of the value of combined print and online advertising packages that
we offered to our advertisers, particularly in the online employment and
classified categories.

Cost of Sales

Cost of sales for the years ended June 30, 2002 and 2001 was $250.4
million and $312.7 million, respectively. This represents a $62.3 million, or
19.9%, decrease. The aforementioned transactions in fiscal year 2001 had the
net impact of decreasing cost of sales by $50.7 million for the year ended June
30, 2002 as compared to the year ended June 30, 2001, again primarily
associated with the deconsolidation of The Denver Postoperating results
(except editorial).

On an existing newspaper basis, our cost of sales in fiscal year 2002
decreased $11.6 million, or 5.6%, as compared to the prior fiscal year. The
majority of the decrease for the year ended June 30, 2002 was due to
substantially lower newsprint prices experienced during fiscal year 2002, as
well as lower page counts resulting from the decline in advertising volumes we
experienced during the year. The lower page counts resulted in a 4.7% decrease
in newsprint consumption, and related production supplies for the fiscal year
ended 2002, as compared to prior fiscal year. Lower newsprint prices also
reduced expenses in fiscal year 2002 as compared to prior fiscal year 2001 as
our average price per metric ton of newsprint consumed decreased 9.0% during
fiscal year 2002. Our editorial expenses remained relatively flat for the
fiscal year ended June 30, 2002, as compared to the prior fiscal year.

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##### Table of Contents



COMPARISON OF FISCAL YEARS ENDED JUNE 30, 2002 AND 2001 (continued)

Selling, General and Administrative

Selling, general and administrative (SG&A) expense for the years ended
June 30, 2002 and 2001 was $330.0 million and $383.1 million, respectively.
This represents a $53.1 million, or 13.9% decrease for the year ended June 30,
2002 as compared to the year ended June 30, 2001. The aforementioned
transactions in fiscal year 2001 had the net impact of decreasing SG&A expense
by $52.2 million for the fiscal year ended June 30, 2002 as compared to the
fiscal year ended June 30, 2001, primarily associated with the deconsolidation
of The Denver Postoperating results.

On an existing newspaper basis, SG&A expense in fiscal year 2002 decreased
$0.9 million, or 0.3%, for the fiscal year ended 2002, as compared to fiscal
year ended 2001. The decrease in SG&A expense is in part the result of a
decrease in order solicitation expenses associated with our strategy to improve
circulation profitability by reducing churn and a reduction in delivery costs
as a result of small declines in circulation volume at some newspapers. This
strategy was implemented in the third quarter of our fiscal year 2001.
Marketing and advertising expenses were down $0.8 million for the fiscal year
ended June 30, 2002, as compared to the prior fiscal year. This decrease is
primarily the result of declines in advertising revenues; however, we have
implemented new sales initiatives and the associated start up costs partially
offset the fiscal year 2002 marketing expense reductions. These initiatives and
the related start up costs will continue into fiscal year 2003. In addition,
SG&A expense has decreased as a result of cost-cutting measures that began
during the second half of fiscal year 2001 with additional cuts being made in
the first half of fiscal year 2002. These decreases have been offset in small
part by increased costs associated with the revenue growth experienced in our
Internet operations.

Depreciation and Amortization

Depreciation and amortization expense for the years ended June 30, 2002
and 2001 was $49.9 million and $64.5 million, respectively. This represents a
decrease of $14.6 million, or 22.6%, for the fiscal year ended June 30, 2002,
as compared to the prior fiscal year.

The decrease is primarily the result of a decrease in amortization expense
associated with our adoption of the Financial Accounting Standards Board
Statement No. 142, Goodwill and Other Intangible Assets(SFAS No. 142) on
July 1, 2001. Under the new standard, goodwill and other indefinite life
intangibles are no longer amortized, but instead are periodically reviewed for
impairment. All other intangibles with a finite useful life continue to be
amortized over their remaining useful life. Had SFAS No. 142 been in effect
during the year ended June 30, 2001, amortization expense would have been $14.8
million less.

Interest Expense

Interest expense for the years ended June 30, 2002 and 2001 was $75.3
million and $82.2 million, respectively. This represents a $6.9 million, or
8.4%, decrease for the year ended June 30, 2002, as compared to the prior
fiscal year.

For the year ended June 30, 2002, despite debt paydowns of $53.7 million
throughout the year, our average debt increased by approximately $48.6 million,
or 5.1%, as compared to the same period in the prior year as a direct result of
our 2001 acquisition transactions in which we borrowed $180.1 million, net of
proceeds from newspaper sales and cash on hand. However, our weighted average
cost of debt decreased 117 basis points during this same period, more than
offsetting the increase in our average debt. As a result, interest expense
decreased 8.4% for the year ended June 30, 2002 as compared to the same period
in the prior year. The decrease in the weighted average cost of debt would have
been greater except for the negative impact of unfavorable hedges which did not
expire until October 2001.

Other (Net) Expense

Other (net) expense for the years ended June 30, 2002 and 2001 was $14.1
million and $14.9 million, respectively. We include in other (net) expense
costs which are considered to be non-recurring charges and those costs not
related to ongoing operations. The decrease is primarily a result of one-time
charges for transition team payroll and consulting fees related to the
integration planning for the formation of DNA of $7.7 million, which were
included in our results for fiscal year 2001. The decrease associated with DNA
integration planning was partially offset by litigation expense associated with
the acquisition of Kearns-Tribune, LLC (Salt Lake City), $0.7 million in bank
fees paid to amend our bank credit facility and a one-time charge associated
with employee reductions at certain of our newspapers and at corporate. The
impact of $3.0 million related to marking to market our fixed to floating
interest rate derivative instruments entered into during the third quarter
2002, which did not qualify for hedge accounting, is also reflected here. An

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##### Table of Contents



COMPARISON OF FISCAL YEARS ENDED JUNE 30, 2002 AND 2001 (continued)

Other (Net) Expense (continued)

additional component of other expense is the ongoing accretion of the cost to
repurchase an option held by a third party to acquire one of our newspapers.
The holder of the option can exercise the option beginning in January 2003 and
may hold the option until 2010.

Equity Income in Unconsolidated JOAs

Equity income from unconsolidated JOAs for years ended June 30, 2002 and
2001 was $50.1 million and $10.3 million, respectively. Equity income in
unconsolidated JOAs represents our share of the net income from our
unconsolidated JOA operations, which as of June 30, 2002 includes Charleston
Newspapers, the Denver Newspaper Agency, and the Newspaper Agency Corporation
in Salt Lake City. The $39.8 million increase in equity income in
unconsolidated JOAs for year ended June 30, 2002 as compared to the prior
fiscal year is due to the January 23, 2001 formation of DNA, a significant
improvement in the fiscal year 2002 net income at DNA, and the January 2, 2001
acquisition of our interest in NAC in Salt Lake City. Also impacting the
increase was a small increase in the results of operations of Charleston
Newspapers for the year ended June 30, 2002 as compared to the same period in
the prior year.

EBITDA and EBITDA Available to Company

EBITDA Available to Company, which includes pro-rata EBITDA from
Unconsolidated JOAs and excludes EBITDA related to minority interests,
increased by $19.6 million, or 14.3%, for the year ended June 30, 2002 as
compared to the same period of the prior year.

The aforementioned fiscal year 2001 transactions increased EBITDA
Available to Company by $24.9 million for the year ended June 30, 2002, as
compared to the same period the prior year. The increase associated with the
fiscal year 2001 transactions was offset in part by a $5.3 million reduction in
net EBITDA Available to the Company from our existing newspapers compared to
the same period of fiscal year 2001 (excluding The Denver Post). Pro-rata
EBITDA from The Denver Postincreased $8.1 million, primarily associated with
the significantly improved Denver JOA results.

EBITDA and EBITDA Available to Company are not measures of performance
recognized under GAAP. However, we believe that they are indicators and
measurements of our leverage capacity and debt service ability. EBITDA and
EBITDA Available to Company should not be considered as an alternative to
measuring profitability, liquidity, or performance, nor should they be
considered an alternative to net income, cash flows generated by operating,
investing or financing activities, or other financial statement data presented
in our consolidated financial statements. EBITDA is calculated by deducting
cost of sales and SG&A expense from total revenues. EBITDA Available to Company
is calculated by: (i) reducing EBITDA by the minoritys interest in the EBITDA
generated from the California Newspapers Partnership, York Newspaper Company
and The Denver Post Corporation, our less than 100% owned consolidated
subsidiaries; and (ii) increasing EBITDA by our combined proportionate share of
the EBITDA generated by our unconsolidated JOAs in Denver, Salt Lake City and
Charleston.

Net Income

We reported net income for the years ended June 30, 2002 and 2001 of $12.4
million and $25.2 million, respectively.

In addition to the year over year changes described above, net income was
impacted by a $16.5 million change in income taxes (from an expense in fiscal
year 2001 to a benefit in fiscal year 2002), and a $74.3 million gain on sale
of newspaper properties that was recognized in fiscal year 2001. The change in
income tax expense was primarily associated with the $74.3 million gain on sale
of newspaper properties for the year ended June 30, 2001, as well as a change
in tax regulation in fiscal year 2002, which allowed us to recognize deferred
tax assets related to a loss carryforward that had been previously disallowed.
Excluding the $74.3 million gain in fiscal year 2001, income before taxes
improved $44.9 million in fiscal year 2002 compared to fiscal year 2001.

COMPARISON OF FISCAL YEARS ENDED JUNE 30, 2001 AND 2000

In addition to the fiscal year 2001 transactions described earlier,
certain fiscal year 2000 transactions affect comparisons between June 30, 2001
and 2000.

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COMPARISON OF FISCAL YEARS ENDED JUNE 30, 2001 AND 2000 (continued)

Significant fiscal year 2000 transactions that affect comparisons between
the years ended June 30, 2001 and 2000 include our June 30, 2000 disposition of
our newspaper in Easton, Pennsylvania and our New Jersey newspapers.
Comparisons are also affected by the sale of two small newspapers in southern
California in fiscal year 2000. The impact of these transactions was offset in
part by our fiscal year 2000 acquisitions in California, New Mexico,
Massachusetts and Alaska.

Revenues

Revenues for the years ended June 30, 2001 and 2000 were $853.0 million
and $947.1 million, respectively. This represents a decrease of $94.1 million
or 9.9% in fiscal year 2001 as compared to fiscal year 2000. The aforementioned
transactions in fiscal year 2001 and 2000 had the net impact of decreasing
revenue by $88.1 million for the year ended June 2001 as compared to the year
ended June 30, 2000. Excluding the fiscal year 2001 and 2000 acquisition and
disposition transactions and the previously discussed Denver JOA, our existing
newspapers experienced a $6.0 million or 1.0% decrease in revenues in fiscal
year 2001. National advertising and classified advertising revenues remained
relatively flat for the year as a whole (second half decreases offset first
half increases), while retail advertising revenues and circulation revenues
experienced decreases of 2.7% and 3.0%, respectively. The majority of the
decrease in these two revenue categories came from our southern California
newspapers. The decrease in retail advertising revenues is due to the economic
slowdown that has been experienced throughout the United States; however, the
effects of the downturn in the economy hit southern California earlier in
fiscal year 2001 than the rest of our operations. The decrease in circulation
revenues was primarily due to temporary declines in circulation volume at
certain of our southern California newspapers as a result of our strategy to
replace higher churn, short-term circulation orders with more profitable,
long-term circulation. This strategy has produced both short-term and long-term
circulation expense savings but at times may decrease circulation volumes in
the short-term. In an effort to grow circulation revenues, the majority of our
southern California newspapers also implemented single copy and home delivery
price increases in the fourth quarter of fiscal year 2001. In addition to the
changes described above, revenue from our Internet operations in fiscal 2001
increased $3.2 million as compared to fiscal year 2000.

Cost of Sales

Cost of sales decreased $27.0 million or 7.9% in fiscal year 2001 compared
to fiscal year 2000. The aforementioned acquisition and disposition
transactions in fiscal year 2001 and 2000 and the Denver JOA had the net impact
of decreasing cost of sales by $28.1 million for the year ended June 30, 2001
as compared to the year ended June 30, 2000. Cost of sales, excluding these
transactions increased $1.1 million or 0.5%. The majority of this increase in
cost of sales was caused by newsprint price increases during fiscal year 2001.
On an existing newspapers basis, our fiscal year 2001 newsprint consumption
declined by approximately 6.3% as compared to fiscal year 2000, while the
average cost per metric ton of newsprint consumed during these same periods
increased approximately 12.0%.

Selling, General and Administrative

Selling, general and administrative (SG&A) expenses decreased $38.9
million or 9.2% in fiscal year 2001 as compared to fiscal year 2000. The
aforementioned acquisition and disposition transactions in fiscal year 2001 and
2000 and the Denver JOA had the net impact of decreasing SG&A by $42.3 million
for the year ended June 30, 2001 as compared to the year ended June 30, 2000.
SG&A expenses, excluding these transactions, increased $3.4 million or 1.2%.
The increase in SG&A on a existing newspapers basis is primarily the result of
increased advertising commissions in the California Newspapers Partnership
associated with their substantial advertising revenue growth in the first half
of fiscal year 2001 and increased costs associated with the growth experienced
in our Internet operations. These cost increases have been partially offset by
cost reductions related to the circulation strategy discussed above and
cost-cutting measures we put in place in the second half of fiscal year 2001 to
reduce expenses.

Interest Expense

Interest expense increased $6.5 million in fiscal year 2001 as compared to
fiscal year 2000. Interest expense increased as a result of an $82.3 million,
or 9.5%, increase in average debt outstanding, primarily associated with
acquisitions, net of proceeds from dispositions. The increase in average debt
was offset by a 100 basis point reduction in the weighted average cost of debt,
primarily associated with changes in short-term interest rates in fiscal year
2001.

Other (Net) Expense

Other (net) expense increased approximately $6.4 million in fiscal year 2001 as
compared to fiscal year 2000. As mentioned previously, we include in other
(net) expense costs, which are considered to be non-recurring charges and those
costs not related to

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COMPARISON OF FISCAL YEARS ENDED JUNE 30, 2001 AND 2000 (continued)

Other (Net) Expense (continued)

ongoing operations. The majority of the increase is due to increases in equity
losses from our investment in PowerOne (successor to AdOne), $1.3 million in
bank fees and legal costs associated with the $150.0 million term loan entered
into in January 2001, and the non-recurring costs associated with the formation
of DNA. The DNA expenses were primarily related to transition team payroll and
consulting fees related to integration planning in anticipation of the Denver
JOA. An additional component of other (net) expense is the ongoing accretion of
the cost to repurchase an option held by a third party to acquire one of our
newspapers. The holder of the option can exercise the option beginning in
January 2003 and may hold the option until 2010.

Equity Income in Unconsolidated JOAs

Equity income in unconsolidated JOAs represents our pro-rata share of the
net income from our unconsolidated JOA operations, which as of June 30, 2001
includes Charleston Newspapers, the Denver Newspaper Agency, and the Newspaper
Agency Corporation (NAC) in Salt Lake City. The $7.7 million increase in
equity income in unconsolidated JOAs in fiscal year 2001 compared to fiscal
year 2000 is due primarily to the January 23, 2001 formation of DNA and the
January 2, 2001 acquisition of our interest in NAC. The increase associated
with the addition of DNA and NAC were partially offset by a decrease in the
results of operations of Charleston Newspapers in fiscal year 2001 compared to
fiscal year 2000 caused by the advertising slowdown in the second half of the
year.

EBITDA and EBITDA Available to Company

EBITDA Available to Company (inclusive of our share of JOAs and exclusive
of minority interest) declined $8.9 million or 6.1% in fiscal year 2001 as
compared to fiscal year 2000. Approximately $9.6 million of the decrease in
EBITDA Available to Company is due to a decrease in EBITDA, net of minority
interest, from The Denver Post. EBITDA at The Denver Postdecreased primarily
as a result of implementing a strategy, prior to our agreement to form the
Denver JOA in May 2000, in which The Denver Postsought to grow circulation
volumes by selling low priced long-term circulation orders. The result was a
large growth in circulation volumes, newsprint and delivery cost, with little
revenue to offset the substantial cost increase. Also contributing to the
decrease in The Denver PostEBITDA was the fact that integration efforts under
the JOA did not get under way until April 2001, and once it did, the economic
downturn in Denver eroded much of the cost savings initially achieved in the
JOA. EBITDA Available to Company from our existing newspapers (other than The
Denver Post), decreased $10.3 million as a result of the previously discussed
decrease in revenues and increase in newsprint expense. These decreases in
EBITDA Available to Company were partially offset by the $10.9 million net
increase in EBITDA associated with the previously discussed acquisition and
disposition transactions and the contribution of Marin to the California
Newspapers Partnership.

As mentioned previously, EBITDA Available to Company is not a measure of
performance recognized under GAAP. However, we believe it is an indicator and
measurement of our leverage capacity and debt service ability. EBITDA Available
to Company is calculated by: (i) reducing EBITDA by the minoritys interest in
the EBITDA generated from the California Newspapers Partnership, York Newspaper
Company, and The Denver Post Corporation, our less than 100% owned consolidated
subsidiaries; and (ii) increasing EBITDA by our combined proportionate share of
the EBITDA generated by our unconsolidated JOAs, in Denver, Salt Lake City, and
Charleston.

Net Income

In addition to the year over year changes described above, net income was
impacted by the $23.6 million gain recognized on sale of Council Bluffs, the
$46.7 million gain resulting from the payment from Scripps and the $4.6 million
gain on the sale of Lompoc, net of minority interest. In fiscal year 2000, we
recognized gains on sales of newspaper properties of approximately $116.3
million and a $1.5 million loss on the sale of land and buildings in California
Newspapers Partnership (CNP).

LIQUIDITY AND CAPITAL RESOURCES

Our sources of liquidity are existing cash and other working capital, cash
flow provided from operating activities, distributions from JOAs and
partnerships and the borrowing capacity under our credit facility. Our
operations, consistent with the newspaper industry, require little investment
in inventory, as less than 30 days of newsprint is generally maintained on
hand. We, from time to time, increase our newsprint inventories in anticipation
of price increases. We are currently building newsprint inventories to take
advantage of the current low prices since the majority of the major newsprint
suppliers announced a $50 per metric ton price increase for August 2002
deliveries. In general, our receivables have been collected on a timely basis.

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LIQUIDITY AND CAPITAL RESOURCES (continued)

June 30, 2002 Compared to June 30, 2001

Net cash flows from operating activities were approximately $57.6 million
and $43.7 million for fiscal years ended June 30, 2002 and 2001, respectively.
The $13.9 million increase in cash flows from operating activities was
primarily the result of a $29.8 million dollar change in operating assets and
liabilities, partially offset by a $25.9 million decrease in EBITDA, in fiscal
year 2002 compared to the prior year. Also contributing to the change was a
$10.9 million decrease in cash tax expense. The decrease in EBITDA related to
the Denver JOA has shifted in part to investing activities as net distributions
from unconsolidated JOAs.

Net cash flows from investing activities were $34.4 million and ($307.5)
million for fiscal years ended June 30, 2002 and 2001, respectively. The $341.9
million change was primarily the result of our spending $385.1 million on
acquisitions, net of proceeds from dispositions, and the $60.0 million payment
from E. W. Scripps Company (Scripps) in fiscal year 2001 for Scripps to
obtain its 50% interest in DNA. In fiscal year 2002, we had no significant
acquisitions or dispositions. Also contributing to the increase in cash from
investing activities was an $8.0 million increase in net distributions from
unconsolidated JOAs.

Net cash flows from financing activities were ($97.2) million and $126.4
million for fiscal years ended June 30, 2002 and 2001, respectively. The
increase is attributable to a $219.9 million decrease in our net borrowings
during fiscal year 2002, compared to fiscal year 2001, primarily associated
with our 2001 acquisitions activity. Cash on hand, asset sales and the $60.0
million Scripps payment helped reduce borrowings related to the acquisition
activity. In fiscal year 2002, we had a net debt paydown of $53.7 million.

Capital Expenditures

Our capital expenditure plan for fiscal year 2003 for wholly owned
subsidiaries (not including business acquisitions) provides for capital
expenditures for improvements of approximately $7.3 million and other capital
projects totaling approximately $8.3 million. Our share of capital expenditures
planned for both maintenance and other capital projects in fiscal year 2003 for
non-wholly owned subsidiaries is approximately $5.3 million; the majority of
these expenditures are for improvements at DNA and the California Newspapers
Partnership. Non-maintenance expenditures planned during fiscal 2003 include
the consolidation of Las Cruces and Alamogordo press and mailroom operations,
and building projects in Las Cruces and Graham, which include increasing press
capacity and production facilities. Significant improvements in the Farmington
press and production machinery and equipment are also planned. Carryover
expenditures from the prior year are approximately $10.0 million and are
primarily for a new printing plant to consolidate certain printing in New
England. Our total expected capital expenditures for wholly owned subsidiaries,
plus our share of partnerships and JOAs, is $30.9 million, including the
carryover expenditures from the prior year. Management will review the capital
expenditure plan throughout the year and will modify it as required to meet our
current business needs. Capital expenditures related to these projects are
expected to be funded either through available cash or borrowings under our
bank credit facility.

Liquidity

Based upon current and expected future operating results, we believe that
we will have sufficient cash flows from operations to fund scheduled payments
of principal and interest and to meet anticipated capital expenditure and
working capital requirements for at least the next twelve months. In addition
to cash flows from operations, we have approximately $134.8 million available
under our bank credit facility, which should be more than sufficient to fund
unanticipated needs.

The holder of an option to purchase one of our newspapers has the right to
cancel the option and require us to purchase the option and redeem a related
note payable after January 31, 2003. The current amount accrued at June 30,
2002 to repurchase the option and redeem the related note is $71.9 million.
Should the option purchase and note redemption be required, it will likely be
funded from borrowings under our existing bank credit agreement.

Through Kearns-Tribune, LLC, we have a 6.0% interest in Ponderay Newsprint
Company (Ponderay). As a result of our interest in Ponderay, we also are
guarantors for 6.0% of approximately $125.0 million owed by Ponderay and due on
April 12, 2006. While we have guaranteed the debt, we do not currently expect
any payments to be made in conjunction with the guarantee.

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LIQUIDITY AND CAPITAL RESOURCES (continued)

We have commitments under operating leases, which are as follows at June
30, 2002 (in thousands):

|           |  |   |        | 
|---------- |  | - | ------ | 
|2003       |  | $ | 3,864  | 
|2004       |  |   | 3,332  | 
|2005       |  |   | 3,206  | 
|2006       |  |   | 3,003  | 
|2007       |  |   | 2,808  | 
|Thereafter |  |   | 4,955  | 
|           |  |   |        | 
|           |  | $ | 21,168 | 
|           |  |   |        | 

Additionally, our share of long-term debt of unconsolidated JOAs is
approximately $4.0 million at June 30, 2002.

We may, from time to time, consider strategic or targeted newspaper
acquisitions and dispositions. In the event an acquisition opportunity is
identified, management expects that it would be able to arrange financing on
terms and conditions satisfactory to us to the extent current resources are
insufficient.

Near Term Outlook

Newsprint Prices

To minimize the influence of newsprint price fluctuations, we periodically
enter into fixed price newsprint contracts and newsprint swap agreements. In
December 2001, a counterparty to one of our newsprint swap agreements declared
bankruptcy. As a result, we terminated the related swap agreement on February
5, 2002. The decline in the market rates of newsprint and changes in the
associated long-term pricing curves used by analysts to value our newsprint
swap agreements has caused the value of our remaining newsprint swap agreement
to decrease since June 30, 2001. The decline has been recorded as a component
of other comprehensive income in fiscal year 2002.

During fiscal year 2002, we saw the market price for newsprint steadily
decline as daily newspapers consumption continued to decline throughout the
period as a result of the soft economy. North American newsprint suppliers
continue to take downtime in an attempt to more closely match supply with the
declining demand from newspaper publishers. Despite an announced price increase
for August 2002 of $50 a metric ton for 30 pound newsprint, the August 2002
RISI (Resource Information Systems, Inc.) price index for 30 pound newsprint
was $455 per metric ton compared to $435 in July 2002. Additionally, large
buyers of newsprint are currently reporting spot market purchases of newsprint
at prices below $425 per metric ton from domestic and foreign suppliers. As a
result, we expect to continue to benefit at least in the short-term from the
low newsprint prices. However, the low market price for newsprint has been and
will continue to be partially offset by our fixed price newsprint contract and
newsprint swap, which at June 30, 2002 are in excess of the market price.
Currently, the weighted average price for our newsprint under both our fixed
price agreement and the newsprint swap agreement is approximately $611 per
metric ton. Less than 15% of our annual consumption, including our pro-rata
share of JOAs, is subject to fixed price or swap agreements, all of which is
used in our JOA operations. We anticipate the fiscal year 2003 average market
price will be $475 per metric ton compared to our fiscal year 2002 average
price per metric ton of $504.

Recently Issued Accounting Standards

In August 2001, the FASB issued Statement No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets(SFAS No. 144), which addresses
financial accounting and reporting for the impairment or disposal of long-lived
assets and supersedes Statement No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of, and the
accounting and reporting provisions of APB Opinion No. 30, Reporting the
Results of Operationsfor a disposal of a segment of a business. We expect to
adopt SFAS No. 144 as of July 1, 2002, and while we have not yet determined the
effect, if any, the adoption of SFAS No. 144 will have on our financial
position and results of operations, we do not expect adoption of the
pronouncement will have a material impact on our financial position.

In April 2002, the FASB issued Statement No. 145, Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections(SFAS No. 145). This statement provides guidance on the
classification of gains and losses from the extinguishments of debt and on the
accounting for certain specified lease transactions. While we have not yet

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Recently Issued Accounting Standards (continued)

determined the effect, if any, the adoption of SFAS No. 145 will have on our
financial position and results of operations as it relates to the rescission of
Statement No. 4 (effective in fiscal years beginning after May 15, 2002) or the
rescission of Statement No. 13 (effective for transactions occurring after May
15, 2002), we do not expect adoption of the pronouncement as it relates to
these rescissions will have a material impact on our financial position. All
other provisions of SFAS No. 145 are effective for financial statements issued
on or after May 15, 2002 and, based on our evaluation, do not have any impact
on our financial position or results of operations.

In July 2002, the FASB issued Statement No. 146, Accounting for Costs
Associated with Exit or Disposal Activities(SFAS No. 146).The standard
requires companies to recognize costs associated with exit or disposal
activities when they are incurred rather than at the date of a commitment to an
exit or disposal plan. Examples of costs covered by the standard include lease
termination costs and certain employee severance costs that are associated with
a restructuring, discontinued operation, plant closing, or other exit or
disposal activity. Previous accounting guidance was provided by EITF Issue No.
94-3, Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs incurred in a Restructuring
(EITF 94-3). SFAS No. 146 replaces EITF 94-3 and is to be applied
prospectively to exit or disposal activities initiated after December 31, 2002.
We will apply the statement accordingly.

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Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate

The following table provides information about our derivative financial
instruments and other financial instruments that are sensitive to changes in
interest rates. For debt obligations, the table presents principal cash flows
and related weighted-average interest rates by expected maturity dates.
Weighted-average variable rates are based on implied forward rates as derived
from appropriate annual spot rate observations as of the reporting date. For
interest rate swaps, the table presents notional amounts and weighted-average
interest rates by contractual maturity dates. Notional amounts are used to
calculate the contractual cash flows to be exchanged under the contract.

We periodically enter into interest rate swap agreements to reduce our
exposure to the uncertainty of short-term interest rate fluctuations associated
with our bank debt. Interest rate swap agreements on our variable rate debt are
designated with a notional principal balance and generally have terms of 90
days. The amounts reflected in the table below represent the interest rate swap
that we were committed to as of June 30, 2002, which terminates effective
October 2, 2002.

On February 28, 2002, we entered into several interest rate swaps on a
portion of our fixed-rate debt, swapping the fixed-rate interest payments for a
variable-rate interest payment. We entered into these swaps in order to
mitigate the effects of a protracted and slow economic recovery and to take
advantage of the current low interest rates. The amounts reflected in the table
below represent the interest rate swaps that we are committed to as of June 30,
2002, all of which expire either in January or July 2004. In August 2002, we
terminated two of these interest rate swaps, reducing the total notional amount
to $150.0 million. As a result of monetizing these two interest rate swaps, we
received $2.2 million in cash and realized a gain of $2.0 million, of which
$1.1 million was recorded as a gain at June 30, 2002, due to the mark to market
accounting for these swaps. We also recorded an offset of $0.2 million to
interest expense from the net settlement in fiscal year 2003.

Interest Rate Sensitivity
Principal or Notional Amount by Expected Maturity
Average Interest or Swap Rate
Year Ended June 30,(Dollars in thousands)

|                                                               |                      |  |      |        |      |   |        |         |      |   |         |   |            |   |         |   |      |   |        |   |  |   |         |   |  |   |         |         |  |   |            |       |  
|-------------------------------------------------------------- | -------------------- |  | ---- | ------ | ---- | - | ------ | ------- | ---- | - | ------- | - | ---------- | - | ------- | - | ---- | - | ------ | - |  | - | ------- | - |  | - | ------- | ------- |  | - | ---------- | ----- | -
|                                                               |                      |  |      |        |      |   |        |         |      |   |         |   |            |   |         |   |      |   |        |   |  |   |         |   |  |   |         |         |  |   | Fair Value
|                                                               |                      |  | 2003 |        | 2004 |   | 2005   |         | 2006 |   | 2007    |   | Thereafter |   | Total   |   | 2002
|                                                               |                      |  |      |        |      |   |        |         |      |   |         |   |            |   |         |   |     
|Liabilities                                                    |                      |  |      |        |      |   |        |         |      |   |         |   |            |   |         |   |      |   |        |   |  |   |         |   |  |   |         |         |  |   |            |      
|Long-Term Debt
including Current Portion                       |                      |  |      |        |      |   |        |         |      |   |         |   |            |   |         |   |      |   |        |   |  |   |         |   |  |   |         |         |  |   |            |      
|                                                              
|Fixed Rate                                                     |                      |  |     |        |      |   |       |         |      |   |        |   |            |   |        |   |      |   |       |   |  | $ | 500,000 |   |  | $ | 500,000 |         |  | $ | 490,500    |      
|Average Interest Rate                                          |                      |  | 9.03 | %      |      |   | 9.03   | %       |      |   | 9.03    | % |            |   | 9.03    | % |      |   | 9.03   | % |  |   | 9.03    | % |  |   |         |         |  |   |            |      
|                                                              
|Variable Rate                                                  |                      |  |     |        |      | $ | 59,150 |         |      | $ | 137,500 |   |            | $ | 141,250 |   |      | $ | 22,500 |   |  |   |        |   |  | $ | 360,400 |         |  | $ | 360,400    |      
|Average Interest Rate                                          |                      |  | 4.25 | %      |      |   | 4.25   | %       |      |   | 4.25    | % |            |   | 4.25    | % |      |   | 4.25   | % |  |   |        |   |  |   |         |         |  |   |            |      
|                                                              
|Interest Rate Derivative
Financial Instruments
Related to Debt
|Interest Rate Swaps on
Variable Rate Debt                     
|                                                               | Notional Amount      |  | $    | 75,000 |      |   |        |        |      |   |         |  |            |   |         |  |      |   |        |  |  |   |         |  |  |   | $       | 75,000  |  |   | $          | (380  | )
|                                                               | Average pay rate     |  |      | 3.85   | %    |   |        |        |      |   |         |  |            |   |         |  |      |   |        |  |  |   |         |  |  |   |         |         |  |   |            |       |  
|                                                               | Average receive rate |  |      | 1.875  | %    |   |        |        |      |   |         |  |            |   |         |  |      |   |        |  |  |   |         |  |  |   |         |         |  |   |            |       |  
|                                                              
|Interest Rate Swaps on
Fixed Rate Debt                        
|                                                               | Notional Amount      |  |      |       |      |   | $      | 250,000 |      |   |         |  |            |   |         |  |      |   |        |  |  |   |         |  |  |   | $       | 250,000 |  |   | $          | 2,951 |  
|                                                               | Average pay rate     |  |      | 1.949  | %    |   |        | 1.949   | %    |   |         |  |            |   |         |  |      |   |        |  |  |   |         |  |  |   |         |         |  |   |            |       |  
|                                                               | Average receive rate |  |      | 3.5    | %    |   |        | 3.5     | %    |   |         |  |            |   |         |  |      |   |        |  |  |   |         |  |  |   |         |         |  |   |            |       |  

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FORWARD-LOOKING STATEMENTS

This Form 10-K includes Forward-Looking Statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act.
Forward-Looking Statements contained herein and elsewhere in this report are
based on current expectations. Such statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.The
terms expect, anticipate, intend, believe, and project and similar
words or expressions are intended to identify forward-looking statements. These
statements speak only as of the date of this report. These forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results and events to differ materially from those anticipated and
should be viewed with caution. Potential risks and uncertainties that could
adversely affect our ability to obtain these results, and in most instances are
beyond our control, include, without limitation, the following factors: (a)
increased consolidation among major retailers, bankruptcy 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 our 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) increases in newsprint costs over the level anticipated, (e) labor
disputes which may cause revenue declines or increased labor costs, (f)
acquisitions of new businesses or dispositions of existing businesses, (g)
costs or difficulties related to the integration of businesses acquired by us
may be greater than expected, (h) increases in interest or financing costs, (i)
rapid technological changes and frequent new product introductions prevalent in
electronic publishing, including the evolution of the Internet and (j) other
unanticipated events and conditions. It is not possible to foresee or identify
all such factors. We make no commitment to update any forward-looking statement
or to disclose any facts, events, or circumstances after the date hereof that
may affect the accuracy of any forward-looking statements.




Item 8. Financial Statements and Supplementary Data

The response to this item is filed as a separate part of this report (see
page 40).




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

None.

33



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##### Table of Contents






PART III




Item 10. Directors and Executive Officers of the Registrant

Set forth below are the names, ages and titles, and a brief account of the
business experience of each person who is a director, executive officer or
other significant employee of ours.

|                       |  |     |    |       |  |                                                       
|---------------------- |  | --- | -- | ----- |  | ------------------------------------------------------
|NAME                   |  | AGE |    | TITLE
|                       |  |     |    |      
|Richard B. Scudder     |  |     | 89 |       |  | Chairman of the Board and Director                    
|William Dean Singleton |  |     | 51 |       |  | Vice Chairman and Chief Executive Officer and Director
|Joseph J. Lodovic, IV  |  |     | 41 |       |  | President                                             
|Gerald E. Grilly       |  |     | 55 |       |  | Executive Vice President and Chief Operating Officer  
|Anthony F. Tierno      |  |     | 57 |       |  | Senior Vice President Operations                      
|Ronald A. Mayo         |  |     | 41 |       |  | Vice President and Chief Financial Officer            
|Michael C. Bush        |  |     | 47 |       |  | Vice President Operations                             
|James L. McDougald     |  |     | 49 |       |  | Treasurer                                             
|Michael J. Koren       |  |     | 35 |       |  | Vice President and Controller                         
|Jean Scudder           |  |     | 48 |       |  | Director                                              
|Howell E. Begle, Jr.   |  |     | 58 |       |  | Director                                              

Each director is elected annually and serves until the next annual meeting
of shareholders or until his successor is duly elected and qualified. Our
directors are not compensated for their service as directors. They do, however,
receive reimbursement of expenses incurred from the attendance at Board of
Directors meetings. Our executive officers are appointed by and serve at the
pleasure of the Board of Directors.

Business Experience

Richard B. Scudderhas served as Chairman of the Board and a Director of
MediaNews since 1985.

William Dean Singletonhas served as Vice Chairman and Chief Executive
Officer and a Director of MediaNews since 1985. He is also the Publisher of The
Denver Posteffective February 2001 and the Publisher of The Salt Lake Tribune
effective August 2002.

Joseph J. Lodovic, IV,has served as President of MediaNews since February
2001. Prior thereto, he served as Executive Vice President and Chief Financial
Officer from 1993 to February 2001. Mr. Lodovic has been with MediaNews since
1987.

Gerald E. Grillyhas served as Executive Vice President and Chief
Operating Officer of MediaNews since February 2001. Prior thereto he served as
President, Publisher and Chief Executive Officer of The Denver Post Corporation
from November 1998 to February 2001. Mr. Grilly was President of McClatchy
Companys The Newspaper Network from 1993 to October 1998.

Anthony F. Tiernohas served as Senior Vice President of Operations since
February 2001. Prior thereto, he served as Executive Vice President and Chief
Operating Officer of MediaNews from 1993 to February 2001. Mr. Tierno has been
with MediaNews since its inception in 1985.

Ronald A. Mayohas served as Vice President and Chief Financial Officer
since February 2001. Prior thereto, he served as Vice President Finance and
Controller from September 1994 to February 2001.

Michael C. Bushhas served as Vice President Operations since January
1997. Prior thereto, he served as Director of Marketing of Morris Newspaper
Corp., and Regional Director and Assistant Administrator of Park Newspapers
from 1986 to 1996.

James L. McDougaldhas served as Treasurer since September 1994. Prior
thereto, he was Controller for MediaNews from 1988 to 1994.

Michael J. Korenhas served as Vice President and Controller since July
2001. From 1991 to 2001, Mr. Koren was employed by Ernst & Young LLP, most
recently as a Senior Manager.

Jean Scudderhas served as a Director of MediaNews since July 1998. Ms.
Scudder is the daughter of Richard B. Scudder.

34



---



##### Table of Contents



Item 10. Directors and Executive Officers of the Registrant (continued)

Business Experience (continued)

Howell E. Begle, Jr.has served as a Director of MediaNews since November
1996. Mr. Begle is of Counsel to Verner, Liipfert, Bernhard, McPherson and
Hand, chartered, which law firm is counsel of MediaNews and its affiliates.




Item 11. Executive Compensation

The following table sets forth the cash compensation paid or payable to
Mr. Singleton and each of the other four most highly compensated executive
officers whose direct or allocated cash compensation exceeded $100,000 for
services rendered to the Company in fiscal year 2002. The Company does not have
long-term compensation or stock option plans for its executives or employees.

|                              |  |             |      |        |  |                     |              |  |  |   |         |  |  |   |        | 
|----------------------------- |  | ----------- | ---- | ------ |  | ------------------- | ------------ |  |  | - | ------- |  |  | - | ------ | 
|                              |  |             |      |        |  | Annual Compensation | All Other   
|Name and Principal Position   |  | Fiscal Year |      | Salary |  | Bonus               | Compensation
|                              |  |             |      |        |  |                     |             
|William Dean Singleton (a)    |  |             | 2002 |        |  | $                   | 810,000      |  |  | $ | 150,000 |  |  | $ | 41,302 | 
|Vice Chairman,                |  |             | 2001 |        |  |                     | 790,500      |  |  |   | 200,000 |  |  |   | 38,822 | 
|Chief Executive Officer       |  |             | 2000 |        |  |                     | 748,500      |  |  |   | 350,000 |  |  |   | 50,566 | 
|                             
|                              |  |             | 2002 |        |  | $                   | 534,000      |  |  | $ | 150,000 |  |  | $ | 4,900  | 
|Joseph J. Lodovic IV (a), (b) |  |             | 2001 |        |  |                     | 519,300      |  |  |   | 200,000 |  |  |   | 9,152  | 
|President                     |  |             | 2000 |        |  |                     | 489,800      |  |  |   | 450,000 |  |  |   | 9,188  | 
|                             
|Gerald E. Grilly (c)          |  |             | 2002 |        |  | $                   | 500,000      |  |  | $ | 132,500 |  |  | $ | 1,497  | 
|Executive Vice President &    |  |             | 2001 |        |  |                     | 470,937      |  |  |   | 631,250 |  |  |   | 18,766 | 
|Chief Operating Officer       |  |             |      |        |  |                     |              |  |  |   |         |  |  |   |        | 
|                             
|Anthony F. Tierno             |  |             | 2002 |        |  | $                   | 300,000      |  |  | $ | 40,000  |  |  | $ | 9,971  | 
|Senior Vice President         |  |             | 2001 |        |  |                     | 375,000      |  |  |   | 100,000 |  |  |   | 13,101 | 
|Operations                    |  |             | 2000 |        |  |                     | 350,000      |  |  |   | 150,000 |  |  |   | 12,215 | 
|                             
|                              |  |             | 2002 |        |  | $                   | 193,317      |  |  | $ | 151,588 |  |  | $ | 12,843 | 
|Michael C. Bush               |  |             | 2001 |        |  |                     | 190,700      |  |  |   | 20,000  |  |  |   | 6,950  | 
|Vice President Operations     |  |             | 2000 |        |  |                     | 180,000      |  |  |   | 22,500  |  |  |   | 10,100 | 



---

|(a) |  | In fiscal year 2000 and 2002, these officers also received
significant compensation that was charged to other affiliates that does
not appear here as compensation.                                                                                                                                                                                                                                                                                  
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Mr. Lodovics fiscal year 2000 bonus includes a bonus earned in
accordance with his employment agreement discussed below and a bonus
that was earned as of December 1999, under a plan that was in effect
prior to his employment agreement. Subsequent future bonuses were earned
in accordance with the employment agreement.                                                                                                                      
|   
|(c) |  | Prior to February 2001, Mr. Grilly was not an officer of MediaNews.
Mr. Grillys compensation in fiscal year 2001 includes compensation
earned as MediaNews Executive Vice President and Chief Operating
Officer and prior to that appointment, the compensation he earned as
President, Publisher, and Chief Executive Officer of The Denver Post
Corporation, including a one-time bonus associated with the Denver JOA
in the amount of $450,000.

Employment and Other Agreements

None of our executive officers have an employment agreement with us except
Messrs. Singleton and Lodovic. Under the terms of Mr. Singletons Employment
Agreement, which was amended and renewed effective March 15, 2000 (Mr.
Singletons Employment Agreement), Mr. Singleton is currently entitled to
receive cash compensation at an annual rate of not less than $812,000, subject
to annual adjustment of not less than 5% by the Board of Directors. In
addition, Mr. Singleton is entitled to receive a bonus of up to $200,000 for
each fiscal year based on a comparison of our actual profits to budgeted
profits during such fiscal year. Other discretionary bonuses may be paid which
are not part of his Employment Agreement, if approved by the Board of
Directors. Mr. Singletons employment agreement expires on December 31, 2009,
but will be automatically renewed for successive one-year terms
unless Mr. Singleton gives notice terminating the Employment Agreement at least
120 days prior to the expiration of the existing term. Mr. Singletons
Employment Agreement contains a five-year non-compete covenant for all counties
and geographical areas in which

35



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##### Table of Contents



Item 11. Executive Compensation (continued)

Employment and Other Agreements (continued)

newspapers are owned or circulated by us or our subsidiaries (currently or in
the future). Since 1996, the Company has advanced a total of $1.4 million to
the Singleton Irrevocable Trust (further discussed under Item 12. Security
Ownership and Management) to fund premiums on cash surrender life insurance
policies covering Mr. Singleton and his wife. The advance is recorded in other
long-term assets. Advances will be repaid when the policy is surrendered. No
interest is charged to Mr. Singleton on these advances. The cash surrender
value life insurance policies were originally purchased in order to mitigate
the impact of estate taxes that may be due on the Company stock held in the
Singleton Revocable Trust as a result of the death of Mr. Singleton and his
wife and the resulting need for the Company to repurchase such shares to
provide liquidity in the trust. Mr. Singleton and the Company will continue to
evaluate the need for this insurance coverage and the funding by the Company,
as a result of recent changes in estate tax laws and the law governing loans
and advances to corporate executives. Mr. Lodovics Employment Agreement with
us was entered into effective March 15, 2000. Mr. Lodovic is currently entitled
to receive cash compensation at an annual rate of not less than $534,000,
subject to annual adjustment of not less than 5% by the Board of Directors. In
addition, Mr. Lodovic is also entitled to receive a bonus of up to $200,000 for
each fiscal year based on a comparison of our actual profits to budgeted
profits during such year. Other discretionary bonuses may also be paid which
are not part of his employment agreement, if approved by the Board of
Directors. Mr. Lodovics employment agreement expires by its terms on December
31, 2009. Mr. Lodovics Employment Agreement entitles him to participate in any
stock options, stock ownership or similar plan, which we may adopt in the
future relative to any of our executives. It also entitles Mr. Lodovic, upon
termination of his employment under certain circumstances, to put to us at a
price not to exceed 100% of the then fair market value all shares of any class
of equity securities, which he owns. The price payable under the put is equal
to a percentage of fair market value, which increases up to 100% on December
31, 2009. We also have a call under Mr. Lodovics Employment Agreement to
acquire such shares, upon termination of his employment under certain
circumstances, at a price not to exceed 100% of their then fair market value.
Neither the put nor the call can be exercised if it causes a default under any
credit agreement existing at that time. Nor can any stock be put until our
leverage ratio, as defined, is below 3:1.

Compensation Committee Interlocks and Insider Participation

Decisions regarding annual compensation of executives other than Messrs.
Singleton and Lodovic are made by Mr. Singleton and Mr. Lodovic. In addition,
our Board of Directors is responsible for approving Mr. Singletons and Mr.
Lodovics Employment Agreements, including their compensation. The Board of
Directors of MediaNews does not have a compensation committee.




Item 12. Security Ownership of Certain Beneficial Owners and Management

The authorized capital stock of MediaNews consists of 3,000,000 shares of
Class A common stock, $.001 par value, 2,314,346 shares of which are issued of
which 2,298,346 are outstanding and 16,000 are held in treasury (collectively
the MediaNews Common Stock); we have not declared or paid any cash dividends
on our common stock in the past and do not intend to do so in the foreseeable
future. Our long-term debt agreements limit our ability to pay such dividends.

The following table sets forth the number and percentage of shares of
MediaNews Common Stock currently issued and outstanding and beneficially owned
by (i) each person known to us to be the beneficial owner of more than 5.0% of
any class of our equity securities; (ii) each executive officer is defined in
Item 402(a)(3) of Section 229.402(a)(3) of Regulations S-K; and (iii) all
directors and executive officers of MediaNews as a group.

|                                            |  |                          |              |                      |  |  |  |  |  |  |       |  
|------------------------------------------- |  | ------------------------ | ------------ | -------------------- |  |  |  |  |  |  | ----- | -
|                                            |  | Amount and Nature of     |              | Percentage of       
|                                            |  | Beneficial Ownership (a) |              | Ownership of        
|                                            |  | Class A Common Stock     |              | Class A Common Stock
|                                            |  |                          |              |                     
|William Dean Singleton (c), (l), (m)        |  |                          | 254,859.00   |                      |  |  |  |  |  |  | 11.09 | %
|Howell E. Begle, Jr. (b), (d), (l)          |  |                          | 786,426.50   |                      |  |  |  |  |  |  | 34.22 | %
|Patricia Robinson (e)                       |  |                          | 786,426.50   |                      |  |  |  |  |  |  | 34.22 | %
|Joseph J. Lodovic, IV (f)                   |  |                          | 58,199.00    |                      |  |  |  |  |  |  | 2.53  | %
|Jean L. Scudder (g), (k)                    |  |                          | 384,065.12   |                      |  |  |  |  |  |  | 16.71 | %
|Charles Scudder (h), (k)                    |  |                          | 260,321.37   |                      |  |  |  |  |  |  | 11.32 | %
|Elizabeth A. Difani (h), (i), (k)           |  |                          | 219,073.45   |                      |  |  |  |  |  |  | 9.53  | %
|Carolyn Miller (h), (j), (k)                |  |                          | 177,825.56   |                      |  |  |  |  |  |  | 7.74  | %
|All directors and executives as a group (n) |  |                          | 2,140,770.00 |                      |  |  |  |  |  |  | 93.14 | %

(footnotes on following page)

36



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##### Table of Contents



Item 12. Security Ownership of Certain Beneficial Owners and Management (continued)

(footnotes from preceding page)



| | (a) |  | Beneficial ownership is determined in accordance with the rules of
the Securities and Exchange Commission. Except as indicated by footnote,
the persons named in the tables above have sole voting and investment
power with respect to all shares of capital stock indicated as
beneficially owned by them.                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | The address of each such person is: c/o Howell E. Begle, Jr.,
Trustee, 901 15th Street, N.W., Suite 700, Washington, D.C. 20005. Mr.
Begle is Of Counsel to the law firm of Verner, Liipfert, Bernhard,
McPherson and Hand, Chartered, which law firm is counsel to us.                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | (c) |  | These shares are held by a revocable trust for the benefit of the
children of Mr. Singleton (the Singleton Family Revocable Trust), for
which trust Mr. Begle and Mr. Singleton are trustees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | (d) |  | Includes all shares for which Mr. Begle has sole voting power under
the Singleton Family Voting Trust Agreement for MediaNews (the
Singleton Family Voting Trust Agreement for MediaNews) and shared
investment power, as a trustee for an irrevocable trust for the benefit
of Mr. Singletons children (the Singleton Irrevocable Trust). Also
includes all shares of common stock held by the Singleton Family
Revocable Trust for which Mr. Begle is a trustee.                                                                                                                                                                                                                                                              
|
| | (e) |  | These shares are held by the Singleton Irrevocable Trust for which
Ms. Robinson serves as a trustee and as to which she has shared
investment power. Ms. Robinson is Mr. Singletons sister.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | (f) |  | Legal ownership of 50% of such shares is held by the Singleton Family
Voting Trust. Legal ownership of the remaining 50% of such shares is
held by the Scudder Family Voting Trust.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| | (g) |  | Includes 123,743.75 shares of common stock held by a trust for the
benefit of two of Ms. Scudders nephews, for which trust Ms. Scudder
serves as the sole trustee. Also includes 74,504 shares of common stock
held for the benefit of Ms. Scudders son, Benjamin Fulmer, for which
Ms. Scudder also serves as the sole trustee. Does not include the shares
held by Charles Scudder, Elizabeth Difani, as trustee and/or custodian
for certain of her minor children, or Carolyn Miller, as trustee and/or
custodian for certain of her minor children, with respect to which Ms.
Scudder has sole voting power pursuant to the Scudder Family Voting
Trust Agreement for MediaNews (the Scudder Family Voting Trust
Agreement).
|
| | (h) |  | Sole voting power with respect to these shares is held by Ms. Scudder
pursuant to the Scudder Family Voting Trust Agreement. See note (g)
above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| | (i) |  | Ms. Difani holds 132,299.67 shares as trustee and/or custodian for
certain of her minor children. Sole voting power with respect to all
219,073.45 shares is held by Ms. Scudder pursuant to the Scudder Family
Voting Trust Agreement. See note (g) above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| | (j) |  | Ms. Miller holds 118,550.37 shares as trustee and/or custodian for
certain of her minor children. Sole voting power with respect to all
177,825.56 shares is held by Ms. Scudder pursuant to the Scudder Family
Voting Trust Agreement. See note (g) above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| | (k) |  | The address of each person is: c/o Jean L. Scudder, 193 Old Kents
Hill Road, Readfield, Maine 04355.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | (l) |  | Indicates shared voting power.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | (m) |  | Indicates shared investment power.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | (n) |  | No directors or officers of MediaNews beneficially own any shares in
MediaNews except Mr. Singleton, Ms. Scudder, Mr. Begle, Ms. Robinson and
Mr. Lodovic.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

Scudder Family Voting Trust Agreement for MediaNews

The children of Richard B. Scudder, Charles A. Scudder, Carolyn S. Miller,
Elizabeth H. Difani and Jean L. Scudder, respectively, and Joseph J. Lodovic,
IV have entered into the Scudder Family Voting Trust Agreement for MediaNews
(the Scudder Family Voting Trust) in accordance with which all shares of
Class A Common Stock of MediaNews held by Charles Scudder, Carolyn Miller,
Elizabeth A. Difani, Jean L. Scudder and 50% of those shares held by Joseph J.
Lodovic, IV, were transferred to the Scudder Family Voting Trust for MediaNews.
Under the Scudder Family Voting Trust for MediaNews, Jean L. Scudder (the
Scudder Trustee) exercises all voting rights (subject to the consent of
shareholders holding 50% of the common stock held by the Scudder Family Voting
Trust for MediaNews on such matters as election of directors, mergers,
dissolution or reorganization of MediaNews, sale, exchange or pledge of all or
substantially all of the assets of MediaNews and acquisition or divestiture by
MediaNews of any newspaper venture) and substantially all other rights to which
such shareholders would otherwise be entitled until January 31, 2010, subject
to extension by written agreement of one or more beneficiaries of the Scudder
Family Voting Trust Agreement for MediaNews and the Scudder Trustee.

Singleton Family Voting Trust Agreement for MediaNews

The Singleton Irrevocable Trust, the Singleton Family Revocable Trust and
Joseph J. Lodovic, IV have entered into the Singleton Family Voting Trust
Agreement for MediaNews (the Singleton Family Voting Trust Agreement for
MediaNews) in accordance with which all shares of Class A common stock of
MediaNews held by the Singleton Irrevocable Trust and the remaining 50% of
those shares held by Joseph J. Lodovic, IV were transferred to the Singleton
Family Voting Trust for MediaNews and the shares of Class A common

37



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##### Table of Contents



Item 12. Security Ownership of Certain Beneficial Owners and Management (continued)

Singleton Family Voting Trust Agreement for MediaNews (continued)

stock of the Company held by the Singleton Revocable Trust will be transferred
to the Singleton Family Voting Trust for MediaNews upon the death or incapacity
of Mr. Singleton. Under the Singleton Family Voting Trust Agreement for
MediaNews, the Singleton Trustees exercise all voting and substantially all
other rights to which such shareholders would otherwise be entitled until
January 31, 2010, subject to extension by written agreement of one or more
beneficiaries of the Singleton Family Voting Trust Agreement for MediaNews.

The Singleton Revocable Trust, the Singleton Family Voting Trust for
MediaNews, the Scudder Family Voting Trust for MediaNews, certain of the
beneficiaries of such trusts, Joseph J. Lodovic, IV and MediaNews entered into
a Shareholders Agreement (the MediaNews Shareholders Agreement) which
provides, among other things, that action by the Board of Directors with
respect to such matters as the declaration of dividends, redemption of capital
stock, certain capital expenditures, mergers or consolidation, and incurring
indebtedness requires the unanimous approval of all Directors then serving on
the Board of Directors or approval by the holders of 75% of the shares of
common stock entitled to vote on such matters.

MediaNews Shareholders Agreement

The MediaNews Shareholders Agreement also provides that until the earlier
of (i) the date on which none of our 8 3/4% Senior Subordinated Notes due
October 1, 2009 or its 8 5/8% Senior Subordinated Notes due July 1, 2011 are
outstanding, or (ii) when MediaNews Leverage Ratio is less than 3:1, no
shareholder may sell, transfer, pledge or otherwise encumber their shares, nor
their interest in their shares, of MediaNews common stock to any third party,
except certain permitted transfers to family members and other shareholders,
without the consent of all the shareholders of MediaNews or unless all shares
of MediaNews common stock then outstanding are sold in a single transaction or
a contemplated sale to a third party. If any shareholder desires to sell or
transfer his shares to MediaNews or the other shareholders without an
identified third party buyer, then such shareholder may offer to sell his
shares to MediaNews at fair market value determined by appraisal, or if
MediaNews declines to purchase such shares, such shareholder may offer to sell
his shares to MediaNews at fair market value determined by appraisal, or if
MediaNews declines to purchase such shares, such shareholder may offer to sell
his shares to the remaining shareholders at fair market value.




Item 13. Certain Relationships and Related Transactions

Management Services

MediaNews is party to a consulting agreement, renewable annually, with Mr.
Scudder, which requires annual payments of $250,000.

We entered into a management agreement with the California Newspapers
Partnership, providing us with a management fee of 1.25% of revenues and
thereby reducing our total corporate overhead, the effect of which is a
reduction of the impact minority interest expense has on our consolidated
statement of operations.




Item 14. Certain Relationships and Related Transactions

We currently have in place systems relating to internal controls and
procedures with respect to our financial information. Our management
periodically reviews and evaluates these internal control systems with our
independent accountants. We have completed such a review and evaluation in
connection with the preparation of this Form 10-K. We have determined that
there have been no significant changes in our internal controls or in other
factors that could significantly affect these controls subsequent to our most
recent evaluation.

38



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##### Table of Contents






PART IV




Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K



| | (a) |  | Financial Statements                                                                                                                                                                                                  
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 1.  |  | The list of financial statements contained in the accompanying Index
to Consolidated Financial Statements and Schedule Covered by Report of
Independent Auditors is filed as a part of this Report (see page 40).     
|
| | 2.  |  | Financial Statement Schedule                                                                                                                                                                                          
|
| |     |  | The list of financial statement schedule contained in the accompanying
Index to Consolidated Financial Statements and Schedule Covered by Report
of Independent Auditors is filed as part of the Report (see page 40).
|
| | 3.  |  | Exhibits                                                                                                                                                                                                              
|
| |     |  | The exhibits listed in the accompanying index to exhibits are filed as a
part of this annual report. (See page 40).                                                                                                   
|
| | (b) |  | Reports on Form 8-K                                                                                                                                                                                                   
|
| |     |  | There were no reports on Form 8-K filed in the fourth quarter of fiscal
year 2002.                                                                                                                                    

39



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##### Table of Contents



MEDIANEWS GROUP, INC.ITEMS 8, and 15(a) (1) AND (2)

Index to Consolidated Financial Statements and Schedule
Covered by Report of Independent Auditors

The following financial statements of the registrant and its subsidiaries
required to be included in Items 8 and 15(a)(1) are listed below:

|                                                                                                                              |  |  |      |  | 
|----------------------------------------------------------------------------------------------------------------------------- |  |  | ---- |  | 
|                                                                                                                              |  |  | PAGE
|                                                                                                                              |  |  |     
|Report of Independent Auditors                                                                                                |  |  | 41   | 
|Consolidated Balance Sheets as of June 30, 2002 and 2001                                                                      |  |  | 42   | 
|Consolidated Statements of Operations for the Fiscal Years Ended June 30, 2002, 2001 and 2000                                 |  |  | 44   | 
|Consolidated Statements of Changes in Shareholders Equity (Deficit) for the
Fiscal Years Ended June 30, 2002, 2001, and 2000 |  |  | 45   | 
|Consolidated Statements of Cash Flows for the Fiscal Years Ended June 30, 2002, 2001 and 2000                                 |  |  | 46   | 
|Notes to Consolidated Financial Statements                                                                                    |  |  | 47   | 

The following financial statement schedule of the registrant and its
subsidiaries required to be included in Item 14(a)(2) is listed below:

|                                              |  |  |    |  | 
|--------------------------------------------- |  |  | -- |  | 
|Schedule II Valuation and Qualifying Accounts |  |  | 74 | 

All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable and therefore have
been omitted or the information is presented in the consolidated financial
statements or related notes.

40



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##### Table of Contents



REPORT OF INDEPENDENT AUDITORS

The Board of Directors
MediaNews Group, Inc.

We have audited the accompanying consolidated balance sheets of MediaNews
Group, Inc. and subsidiaries as of June 30, 2002 and 2001, and the related
consolidated statements of operations, changes in shareholders equity
(deficit), and cash flows for each of the three years in the period ended June
30, 2002. Our audits also included the financial statement schedule II. These
financial statements and schedule are the responsibility of the Companys
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of MediaNews Group, Inc. and subsidiaries at June 30, 2002 and 2001, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended June 30, 2002, 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.

|                                   |  |                                      
|---------------------------------- |  | -------------------------------------
|September 9, 2002
Denver, Colorado |  | /S/Ernst & Young LLPErnst & Young LLP

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                          |                                     |      |                |           |  |   |         |           | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------- | ---- | -------------- | --------- |  | - | ------- | --------- | 
|                                                                                                                                                          |                                     |      | June 30,      
|                                                                                                                                                          |                                     |      |               
|ASSETS                                                                                                                                                    |                                     | 2002 |                | 2001     
|                                                                                                                                                          |                                     |      |                |          
|                                                                                                                                                          |                                     |      | (In thousands)
|CURRENT ASSETS                                                                                                                                            |                                     |      |                |           |  |   |         |          
|Cash and cash equivalents                                                                                                                                 |                                     | $    | 2,029          |           |  | $ | 7,149   |          
|Trade accounts receivable, less allowance for doubtful accounts of $10,669 at
June 30, 2002 and $10,923 at June 30, 2001                                  |                                     |      | 74,013         |           |  |   | 76,916  |          
|Other receivables                                                                                                                                         |                                     |      | 4,995          |           |  |   | 10,269  |          
|Inventories of newsprint and supplies                                                                                                                     |                                     |      | 10,205         |           |  |   | 14,554  |          
|Prepaid expenses and other assets                                                                                                                         |                                     |      | 7,760          |           |  |   | 5,354   |          
|Income taxes receivable                                                                                                                                   |                                     |      | 6,137          |           |  |   | 6,539   |          
|                                                                                                                                                          |                                     |      |                |           |  |   |         |          
|                                                                                                                                                          | TOTAL CURRENT ASSETS                |      |                | 105,139   |  |   |         | 120,781   | 
|                                                                                                                                                         
|PROPERTY, PLANT AND EQUIPMENT                                                                                                                             |                                     |      |                |           |  |   |         |          
|Land                                                                                                                                                      |                                     |      | 37,225         |           |  |   | 36,779  |          
|Buildings and improvements                                                                                                                                |                                     |      | 103,915        |           |  |   | 103,237 |          
|Machinery and equipment                                                                                                                                   |                                     |      | 306,630        |           |  |   | 299,155 |          
|                                                                                                                                                          |                                     |      |                |           |  |   |         |          
|                                                                                                                                                          | TOTAL PROPERTY, PLANT AND EQUIPMENT |      |                | 447,770   |  |   |         | 439,171   | 
|Less accumulated depreciation and amortization                                                                                                            |                                     |      | 144,418        |           |  |   | 117,765 |          
|                                                                                                                                                          |                                     |      |                |           |  |   |         |          
|                                                                                                                                                          | NET PROPERTY, PLANT AND EQUIPMENT   |      |                | 303,352   |  |   |         | 321,406   | 
|                                                                                                                                                         
|OTHER ASSETS                                                                                                                                              |                                     |      |                |           |  |   |         |          
|Investment in unconsolidated JOAs                                                                                                                         |                                     |      | 244,549        |           |  |   | 230,390 |          
|Subscriber accounts, less accumulated amortization of
$112,587 at June 30, 2002 and $92,292 at June 30, 2001                                              |                                     |      | 98,311         |           |  |   | 117,971 |          
|Excess of cost over fair value of net assets acquired                                                                                                     |                                     |      | 382,872        |           |  |   | 383,813 |          
|Newspaper mastheads                                                                                                                                       |                                     |      | 145,282        |           |  |   | 143,671 |          
|Covenants not to compete and other identifiable intangible
assets, less accumulated amortization of $33,556 at June 30, 2002 and
$30,106 at June 30, 2001 |                                     |      | 4,480          |           |  |   | 7,501   |          
|Net pension assets                                                                                                                                        |                                     |      | 12,864         |           |  |   | 38,886  |          
|Other                                                                                                                                                     |                                     |      | 26,335         |           |  |   | 22,465  |          
|                                                                                                                                                          |                                     |      |                |           |  |   |         |          
|                                                                                                                                                         
|                                                                                                                                                         
|                                                                                                                                                          | TOTAL OTHER ASSETS                  |      |                | 914,693   |  |   |         | 944,697   | 
|                                                                                                                                                          |                                     |      |                |           |  |   |         |          
|                                                                                                                                                          | TOTAL ASSETS                        |      | $              | 1,323,184 |  |   | $       | 1,386,884 | 
|                                                                                                                                                          |                                     |      |                |           |  |   |         |          

See notes to consolidated
financial statements

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|                                                                                                                               |                                            |      |                                   |           |   |   |         |           |  
|------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------ | ---- | --------------------------------- | --------- | - | - | ------- | --------- | -
|                                                                                                                               |                                            |      | June 30,                         
|                                                                                                                               |                                            |      |                                  
|LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                           |                                            | 2002 |                                   | 2001     
|                                                                                                                               |                                            |      |                                   |          
|                                                                                                                               |                                            |      | (In thousands, except share data)
|CURRENT LIABILITIES                                                                                                            |                                            |      |                                   |           |   |   |         |          
|Trade accounts payable                                                                                                         |                                            | $    | 12,417                            |           |   | $ | 16,027  |          
|Accrued employee compensation                                                                                                  |                                            |      | 24,174                            |           |   |   | 23,272  |          
|Accrued interest                                                                                                               |                                            |      | 17,110                            |           |   |   | 19,904  |          
|Other accrued liabilities                                                                                                      |                                            |      | 24,048                            |           |   |   | 19,892  |          
|Unearned income                                                                                                                |                                            |      | 21,085                            |           |   |   | 22,886  |          
|Current portion of long-term debt and obligations under capital leases                                                         |                                            |      | 7,707                             |           |   |   | 9,078   |          
|                                                                                                                               |                                            |      |                                   |           |   |   |         |          
|                                                                                                                               | TOTAL CURRENT LIABILITIES                  |      |                                   | 106,541   |   |   |         | 111,059   |  
|                                                                                                                              
|OBLIGATIONS UNDER CAPITAL LEASES                                                                                               |                                            |      | 7,001                             |           |   |   | 7,148   |          
|                                                                                                                              
|LONG-TERM DEBT                                                                                                                 |                                            |      | 942,382                           |           |   |   | 992,247 |          
|                                                                                                                              
|OTHER LIABILITIES                                                                                                              |                                            |      | 30,462                            |           |   |   | 23,906  |          
|                                                                                                                              
|DEFERRED INCOME TAXES                                                                                                          |                                            |      | 56,290                            |           |   |   | 63,308  |          
|                                                                                                                              
|MINORITY INTEREST                                                                                                              |                                            |      | 156,007                           |           |   |   | 166,479 |          
|SHAREHOLDERS EQUITY                                                                                                           |                                            |      |                                   |           |   |   |         |          
|Common stock, par value $.001 per share; 3,000,000 shares authorized;
2,314,346 shares issued and 2,298,346 shares outstanding |                                            |      | 2                                 |           |   |   | 2       |          
|Additional paid-in capital                                                                                                     |                                            |      | 3,631                             |           |   |   | 3,631   |          
|Accumulated other comprehensive loss, net of taxes:                                                                            |                                            |      |                                   |           |   |   |         |          
|                                                                                                                               | Unrealized loss on hedging activities      |      |                                   | (6,481    | ) |   |         | (3,429    | )
|                                                                                                                               | Minimum pension liability                  |      |                                   | (7,549    | ) |   |         |          |  
|Retained earnings                                                                                                              |                                            |      | 36,898                            |           |   |   | 24,533  |          
|Common stock in treasury, at cost, 16,000 shares                                                                               |                                            |      | (2,000                            | )         |   |   | (2,000  | )        
|                                                                                                                               |                                            |      |                                   |           |   |   |         |          
|                                                                                                                               | TOTAL SHAREHOLDERS EQUITY                 |      |                                   | 24,501    |   |   |         | 22,737    |  
|                                                                                                                               |                                            |      |                                   |           |   |   |         |          
|                                                                                                                              
|                                                                                                                               | TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |      | $                                 | 1,323,184 |   |   | $       | 1,386,884 |  
|                                                                                                                               |                                            |      |                                   |           |   |   |         |          

See notes to consolidated
financial statements

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

|                                     |                                               |                          |         |                                                 |         |      |         |           |         |   |         |           |         | 
|------------------------------------ | --------------------------------------------- | ------------------------ | ------- | ----------------------------------------------- | ------- | ---- | ------- | --------- | ------- | - | ------- | --------- | ------- | 
|                                     |                                               |                          |         | Years Ended June 30,                           
|                                     |                                               |                          |         |                                                
|                                     |                                               |                          |         | 2002                                            |         | 2001 |         | 2000     
|                                     |                                               |                          |         |                                                 |         |      |         |          
|                                     |                                               |                          |         | (In thousands, except share and per share data)
|REVENUES                             |                                               |                          |         |                                                 |         |      |         |           |         |   |         |          
|                                     | Advertising                                   |                          | $       | 536,314                                         |         |      | $       | 673,737   |         |   | $       | 769,976   |        
|                                     | Circulation                                   |                          |         | 138,844                                         |         |      |         | 144,292   |         |   |         | 148,194   |        
|                                     | Other                                         |                          |         | 36,502                                          |         |      |         | 34,971    |         |   |         | 28,936    |        
|                                     |                                               |                          |         |                                                 |         |      |         |           |         |   |         |          
|                                     |                                               | TOTAL REVENUES           |         |                                                 | 711,660 |      |         |           | 853,000 |   |         |           | 947,106 | 
|                                     |                                               |                          |         |                                                 |         |      |         |           |         |   |         |          
|COSTS AND EXPENSES                   |                                               |                          |         |                                                 |         |      |         |           |         |   |         |          
|                                     | Cost of sales                                 |                          |         | 250,369                                         |         |      |         | 312,664   |         |   |         | 339,660   |        
|                                     | Selling, general and administrative           |                          |         | 329,974                                         |         |      |         | 383,108   |         |   |         | 421,981   |        
|                                     | Depreciation and amortization                 |                          |         | 49,893                                          |         |      |         | 64,480    |         |   |         | 62,438    |        
|                                     | Interest expense                              |                          |         | 75,302                                          |         |      |         | 82,241    |         |   |         | 75,758    |        
|                                     | Other (net)                                   |                          |         | 14,098                                          |         |      |         | 14,908    |         |   |         | 8,478     |        
|                                     |                                               |                          |         |                                                 |         |      |         |           |         |   |         |          
|                                     |                                               | TOTAL COSTS AND EXPENSES |         |                                                 | 719,636 |      |         |           | 857,401 |   |         |           | 908,315 | 
|                                     |                                               |                          |         |                                                 |         |      |         |           |         |   |         |          
|EQUITY INCOME IN UNCONSOLIDATED JOAS |                                               |                          | 50,077  |                                                 |         |      | 10,344  |           |         |   | 2,656   |          
|                                     |                                               |                          |         |                                                 |         |      |         |           |         |   |         |          
|GAIN ON SALE OF NEWSPAPER PROPERTIES |                                               |                          |        |                                                 |         |      | 74,255  |           |         |   | 117,621 |          
|                                     |                                               |                          |         |                                                 |         |      |         |           |         |   |         |          
|MINORITY INTEREST                    |                                               |                          | (32,218 | )                                               |         |      | (40,927 | )         |         |   | (34,092 | )        
|                                     |                                               |                          |         |                                                 |         |      |         |           |         |   |         |          
|                                     |                                               |                          |         |                                                 |         |      |         |           |         |   |         |          
|INCOME BEFORE INCOME TAXES           |                                               |                          | 9,883   |                                                 |         |      | 39,271  |           |         |   | 124,976 |          
|                                     |                                               |                          |         |                                                 |         |      |         |           |         |   |         |          
|INCOME TAX BENEFIT (EXPENSE)         |                                               |                          | 2,482   |                                                 |         |      | (14,044 | )         |         |   | 5,407   |          
|                                     |                                               |                          |         |                                                 |         |      |         |           |         |   |         |          
|                                     |                                               |                          |         |                                                 |         |      |         |           |         |   |         |          
|NET INCOME                           |                                               | $                        | 12,365  |                                                 |         | $    | 25,227  |           |         | $ | 130,383 |          
|                                     |                                               |                          |         |                                                 |         |      |         |           |         |   |         |          
|                                     |                                               |                          |         |                                                 |         |      |         |           |         |   |         |          
|NET
INCOME PER COMMON SHARE:         |                                               |                          |         |                                                 |         |      |         |           |         |   |         |          
|                                     | Net
income per common share                   |                          | $       | 5.38                                            |         |      | $       | 10.98     |         |   | $       | 56.40     |        
|                                     |                                               |                          |         |                                                 |         |      |         |           |         |   |         |          
|                                     | Weighted average number of shares outstanding |                          |         | 2,298,346                                       |         |      |         | 2,298,346 |         |   |         | 2,311,679 |        
|                                     |                                               |                          |         |                                                 |         |      |         |           |         |   |         |          

See notes to consolidated
financial statements

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)

|                         |                       |                                                                                             |   |                |   |                 |       |               |       |           |         |             |        |                  |          |        |         |       |        |   |        |   |          |        |         |  
|------------------------ | --------------------- | ------------------------------------------------------------------------------------------- | - | -------------- | - | --------------- | ----- | ------------- | ----- | --------- | ------- | ----------- | ------ | ---------------- | -------- | ------ | ------- | ----- | ------ | - | ------ | - | -------- | ------ | ------- | -
|                         |                       |                                                                                             |   |                |   |                 |       |               |       |           |         | Accumulated |        |                  |          |        |         |       |        |   |        |   |          |       
|                         |                       |                                                                                             |   |                |   |                 |       |               |       |           |         | Other       |        | Retained         |          | Common |         | Total
|                         |                       |                                                                                             |   | Common         |   | Additional      |       | Comprehensive |       | Earnings  |         | Stock in    |        | Shareholders'   
|                         |                       |                                                                                             |   | Stock          |   | Paid-In Capital |       | Loss          |       | (Deficit) |         | Treasury    |        | Equity (Deficit)
|                         |                       |                                                                                             |   |                |   |                 |       |               |       |           |         |             |        |                 
|                         |                       |                                                                                             |   | (In thousands)
|                        
|BALANCE AT JUNE 30, 1999 |                       | $                                                                                           | 1 |                |   | $               |      |               |       | $         |        |             |        | $                | (150,902 | )      |         | $     |       |   |        | $ | (150,901 | )     
|                         |                       | Garden State merger with
MediaNews                                                          |   |                | 1 |                 |       |               | 3,631 |           |         |             |       |                  |          |        | 19,825  |       |        |   |       |   |          |        | 23,457  |  
|                         |                       | Treasury stock                                                                              |   |                |  |                 |       |               |      |           |         |             |       |                  |          |        |        |       |        |   | (2,000 | ) |          |        | (2,000  | )
|                         |                       | Net income                                                                                  |   |                |  |                 |       |               |      |           |         |             |       |                  |          |        | 130,383 |       |        |   |       |   |          |        | 130,383 |  
|                         |                       |                                                                                             |   |                |   |                 |       |               |       |           |         |             |        |                  |          |        |         |       |        |   |        |   |          |       
|BALANCE AT JUNE 30, 2000 |                       |                                                                                             | 2 |                |   |                 | 3,631 |               |       |           |        |             |        |                  | (694     | )      |         |       | (2,000 | ) |        |   | 939      |       
|                         | Comprehensive income: |                                                                                             |   |                |   |                 |       |               |       |           |         |             |        |                  |          |        |         |       |        |   |        |   |          |        |        
|                         |                       | Cumulative effect of change
in accounting principle,
net of tax benefit of $445             |   |                |  |                 |       |               |      |           |         |             | (655   | )                |          |        |        |       |        |   |       |   |          |        | (655    | )
|                         |                       | Unrealized loss on hedging
activities, net of tax benefit
of $1,889                         |   |                |  |                 |       |               |      |           |         |             | (2,774 | )                |          |        |        |       |        |   |       |   |          |        | (2,774  | )
|                         |                       | Net income                                                                                  |   |                |  |                 |       |               |      |           |         |             |       |                  |          |        | 25,227  |       |        |   |       |   |          |        | 25,227  |  
|                         |                       |                                                                                             |   |                |   |                 |       |               |       |           |         |             |        |                  |          |        |         |       |        |   |        |   |          |       
|                         | Comprehensive income  |                                                                                             |   |                |   |                 |       |               |       |           |         |             |        |                  |          |        |         |       |        |   |        |   |          | 21,798 |        
|                         |                       |                                                                                             |   |                |   |                 |       |               |       |           |         |             |        |                  |          |        |         |       |        |   |        |   |          |       
|BALANCE AT JUNE 30, 2001 |                       |                                                                                             | 2 |                |   |                 | 3,631 |               |       |           | (3,429  | )           |        |                  | 24,533   |        |         |       | (2,000 | ) |        |   | 22,737   |       
|                         | Comprehensive income: |                                                                                             |   |                |   |                 |       |               |       |           |         |             |        |                  |          |        |         |       |        |   |        |   |          |        |        
|                         |                       | Unrealized loss on hedging
activities, net of tax benefit
of $2,695                         |   |                |  |                 |       |               |      |           |         |             | (3,280 | )                |          |        |        |       |        |   |       |   |          |        | (3,280  | )
|                         |                       | Unrealized loss on hedging
activities, reclassified to
earnings, net of tax expense
of $174 |   |                |  |                 |       |               |      |           |         |             | 228    |                  |          |        |        |       |        |   |       |   |          |        | 228     |  
|                         |                       | Minimum pension liability
adjustment, net of tax
benefit of $5,466                          |   |                |  |                 |       |               |      |           |         |             | (7,549 | )                |          |        |        |       |        |   |       |   |          |        | (7,549  | )
|                         |                       | Net income                                                                                  |   |                |  |                 |       |               |      |           |         |             |       |                  |          |        | 12,365  |       |        |   |       |   |          |        | 12,365  |  
|                         |                       |                                                                                             |   |                |   |                 |       |               |       |           |         |             |        |                  |          |        |         |       |        |   |        |   |          |       
|                         | Comprehensive income  |                                                                                             |   |                |   |                 |       |               |       |           |         |             |        |                  |          |        |         |       |        |   |        |   |          | 1,764  |        
|                         |                       |                                                                                             |   |                |   |                 |       |               |       |           |         |             |        |                  |          |        |         |       |        |   |        |   |          |       
|BALANCE AT JUNE 30, 2002 |                       | $                                                                                           | 2 |                |   | $               | 3,631 |               |       | $         | (14,030 | )           |        | $                | 36,898   |        |         | $     | (2,000 | ) |        | $ | 24,501   |       
|                         |                       |                                                                                             |   |                |   |                 |       |               |       |           |         |             |        |                  |          |        |         |       |        |   |        |   |          |       

See notes to consolidated
financial statements

45



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MEDIANEWS GROUP, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS

|                                                 |                                                                                   |                                                                                                           |                                             |                                          |          |                      |          |        |          |                |          |         |          |         |         |  
|------------------------------------------------ | --------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------- | ------------------------------------------- | ---------------------------------------- | -------- | -------------------- | -------- | ------ | -------- | -------------- | -------- | ------- | -------- | ------- | ------- | -
|                                                 |                                                                                   |                                                                                                           |                                             |                                          |          | Years Ended June 30,
|                                                 |                                                                                   |                                                                                                           |                                             |                                          |          |                     
|                                                 |                                                                                   |                                                                                                           |                                             |                                          |          | 2002                 |          | 2001   |          | 2000          
|                                                 |                                                                                   |                                                                                                           |                                             |                                          |          |                      |          |        |          |               
|                                                 |                                                                                   |                                                                                                           |                                             |                                          |          |                      |          |        |          | (In thousands) |          |         |          |        
|CASH FLOWS FROM OPERATING ACTIVITIES:            |                                                                                   |                                                                                                           |                                             |                                          |          |                      |          |        |          |                |          |        
|                                                 | Net income                                                                        |                                                                                                           | $                                           | 12,365                                   |          |                      | $        | 25,227 |          |                | $        | 130,383 |         
|                                                 | Adjustments to reconcile net income to net cash
provided by operating activities: |                                                                                                           |                                             |                                          |          |                      |          |        |          |                |          |         |         
|                                                 |                                                                                   | Depreciation                                                                                              |                                             |                                          | 26,352   |                      |          |        | 31,365   |                |          |         | 33,497   |        
|                                                 |                                                                                   | Amortization                                                                                              |                                             |                                          | 23,541   |                      |          |        | 33,115   |                |          |         | 28,941   |        
|                                                 |                                                                                   | Net gain on sale of newspaper assets                                                                      |                                             |                                          | (398     | )                    |          |        | (74,125  | )              |          |         | (116,839 | )      
|                                                 |                                                                                   | Provision for losses on accounts receivable                                                               |                                             |                                          | 10,213   |                      |          |        | 10,916   |                |          |         | 10,859   |        
|                                                 |                                                                                   | Amortization of debt discount                                                                             |                                             |                                          | 2,645    |                      |          |        | 3,255    |                |          |         | 3,811    |        
|                                                 |                                                                                   | Minority interest                                                                                         |                                             |                                          | 32,218   |                      |          |        | 40,927   |                |          |         | 34,092   |        
|                                                 |                                                                                   | Equity income in unconsolidated JOAs                                                                      |                                             |                                          | (50,077  | )                    |          |        | (10,344  | )              |          |         | (2,656   | )      
|                                                 |                                                                                   | Equity (income) loss from non-JOA investments                                                             |                                             |                                          | (435     | )                    |          |        | 1,340    |                |          |         | 1,390    |        
|                                                 |                                                                                   | Deferred income tax (benefit) expense                                                                     |                                             |                                          | 1,178    |                      |          |        | 12,467   |                |          |         | (12,299  | )      
|                                                 |                                                                                   | Change in defined benefit plan assets                                                                     |                                             |                                          | 1,172    |                      |          |        | (5,948   | )              |          |         | (2,802   | )      
|                                                 |                                                                                   | Unrealized loss on hedging activities, reclassified to earnings
from accumulated other comprehensive loss |                                             |                                          | 402      |                      |          |        |         |                |          |         |         |        
|                                                 |                                                                                   | Gain on interest rate swaps                                                                               |                                             |                                          | (2,951   | )                    |          |        |         |                |          |         |         |        
|                                                 |                                                                                   | Change in operating assets and liabilities:                                                               |                                             |                                          |          |                      |          |        |          |                |          |         |          |        
|                                                 |                                                                                   |                                                                                                           | Accounts receivable                         |                                          |          | (4,161               | )        |        |          | (5,497         | )        |         |          | (16,277 | )      
|                                                 |                                                                                   |                                                                                                           | Inventories                                 |                                          |          | 4,349                |          |        |          | (4,876         | )        |         |          | (203    | )      
|                                                 |                                                                                   |                                                                                                           | Prepaid expenses and other assets           |                                          |          | (433                 | )        |        |          | 1,393          |          |         |          | 1,100   |        
|                                                 |                                                                                   |                                                                                                           | Accounts payable and accrued liabilities    |                                          |          | (873                 | )        |        |          | (21,956        | )        |         |          | (1,315  | )      
|                                                 |                                                                                   |                                                                                                           | Unearned income                             |                                          |          | 587                  |          |        |          | (4,714         | )        |         |          | (2,689  | )      
|                                                 |                                                                                   |                                                                                                           | Change in other assets and liabilities, net |                                          |          | 1,898                |          |        |          | 11,133         |          |         |          | 7,411   |        
|                                                 |                                                                                   |                                                                                                           |                                             |                                          |          |                      |          |        |          |                |          |        
|                                                 |                                                                                   |                                                                                                           |                                             | NET CASH FLOWS FROM OPERATING ACTIVITIES |          |                      | 57,592   |        |          |                | 43,678   |         |          |         | 96,404  |  
|                                                 |                                                                                   |                                                                                                           |                                             |                                          |          |                      |          |        |          |                |          |        
|CASH FLOWS FROM INVESTING ACTIVITIES:            |                                                                                   |                                                                                                           |                                             |                                          |          |                      |          |        |          |                |          |        
|                                                 |                                                                                   | Distributions from unconsolidated JOAs                                                                    |                                             |                                          | 58,449   |                      |          |        | 38,070   |                |          |         | 3,900    |        
|                                                 |                                                                                   | Investment in unconsolidated JOAs                                                                         |                                             |                                          | (12,416  | )                    |          |        |         |                |          |         |         |        
|                                                 |                                                                                   | Distribution from non-JOA investments                                                                     |                                             |                                          | 1,448    |                      |          |        |         |                |          |         | 657      |        
|                                                 |                                                                                   | Investment in non-JOA investments                                                                         |                                             |                                          | (2,280   | )                    |          |        | (914     | )              |          |         | (880     | )      
|                                                 |                                                                                   | Sale of newspapers and other assets                                                                       |                                             |                                          | 3,840    |                      |          |        | 100,266  |                |          |         | 153,000  |        
|                                                 |                                                                                   | Business acquisitions, net of cash acquired                                                               |                                             |                                          | (3,277   | )                    |          |        | (425,345 | )              |          |         | (13,251  | )      
|                                                 |                                                                                   | Purchase of machinery and equipment                                                                       |                                             |                                          | (11,323  | )                    |          |        | (19,611  | )              |          |         | (25,505  | )      
|                                                 |                                                                                   |                                                                                                           |                                             |                                          |          |                      |          |        |          |                |          |        
|                                                 |                                                                                   |                                                                                                           |                                             | NET CASH FLOWS FROM INVESTING ACTIVITIES |          |                      | 34,441   |        |          |                | (307,534 | )       |          |         | 117,921 |  
|                                                 |                                                                                   |                                                                                                           |                                             |                                          |          |                      |          |        |          |                |          |        
|CASH FLOWS FROM FINANCING ACTIVITIES:            |                                                                                   |                                                                                                           |                                             |                                          |          |                      |          |        |          |                |          |        
|                                                 |                                                                                   | Issuance of long-term debt                                                                                |                                             |                                          | 66,994   |                      |          |        | 363,851  |                |          |         | 60,838   |        
|                                                 |                                                                                   | Reduction of long-term debt and other liabilities                                                         |                                             |                                          | (120,741 | )                    |          |        | (197,731 | )              |          |         | (94,158  | )      
|                                                 |                                                                                   | Distributions paid to minority interest                                                                   |                                             |                                          | (43,406  | )                    |          |        | (39,747  | )              |          |         | (39,118  | )      
|                                                 |                                                                                   | Repurchase of common stock                                                                                |                                             |                                          |         |                      |          |        |         |                |          |         | (2,000   | )      
|                                                 |                                                                                   |                                                                                                           |                                             |                                          |          |                      |          |        |          |                |          |        
|                                                 |                                                                                   |                                                                                                           |                                             | NET CASH FLOWS FROM FINANCING ACTIVITIES |          |                      | (97,153  | )      |          |                | 126,373  |         |          |         | (74,438 | )
|                                                 |                                                                                   |                                                                                                           |                                             |                                          |          |                      |          |        |          |                |          |        
|                                                 |                                                                                   |                                                                                                           |                                             |                                          |          |                      |          |        |          |                |          |        
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |                                                                                   |                                                                                                           | (5,120                                      | )                                        |          |                      | (137,483 | )      |          |                | 139,887  |        
|                                                 |                                                                                   |                                                                                                           |                                             |                                          |          |                      |          |        |          |                |          |        
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR   |                                                                                   |                                                                                                           | 7,149                                       |                                          |          |                      | 144,632  |        |          |                | 4,745    |        
|                                                 |                                                                                   |                                                                                                           |                                             |                                          |          |                      |          |        |          |                |          |        
|                                                 |                                                                                   |                                                                                                           |                                             |                                          |          |                      |          |        |          |                |          |        
|CASH AND CASH EQUIVALENTS AT END OF YEAR         |                                                                                   | $                                                                                                         | 2,029                                       |                                          |          | $                    | 7,149    |        |          | $              | 144,632  |        
|                                                 |                                                                                   |                                                                                                           |                                             |                                          |          |                      |          |        |          |                |          |        

See notes to consolidated
financial statements

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##### Table of Contents



MEDIANEWS GROUP, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Basis of Presentation

On September 1, 1999, Garden State Newspapers, Inc. (Garden State) was
merged into MediaNews, with MediaNews as the surviving corporation. As a result
of the corporate reorganization, MediaNews Group, Inc. (the Company or
MediaNews), formerly known as Affiliated Newspapers Investments, Inc., became
the successor issuer to Garden State Newspapers, Inc., pursuant to Rule 15d-5,
under the Securities Act of 1933.

MediaNews (through its subsidiaries) publishes daily and non-daily
newspapers serving markets in ten states. The Company also owns four radio
stations and one television station.

Note 2: Significant Accounting Policies and Other Matters

Significant accounting policies for the Company involve its assessment of
the recoverability of its long-lived assets, including goodwill and other
intangible assets, which are based on such factors as estimated future cash
flows and current fair value estimates. The Companys accounting for pension
and retiree medical benefits requires the use of various estimates concerning
the work force, interest rates, plan investment return, and involves the use of
advice from consulting actuaries. The Companys accounting for federal and
state income taxes is sensitive to interpretation of various laws and
regulations and assumptions on the realization of deferred tax assets.

Use of Estimates

The preparation of financial statements in accordance with generally
accepted accounting principles at times requires the use of estimates and
assumptions that affect the reported amount of assets, liabilities, revenues
and expenses and related disclosure of contingent matters. The Company bases
its estimates on historical experience, actuarial studies and other
assumptions, as appropriate, concerning the carrying values of its assets and
liabilities and disclosure of contingent matters. The Company re-evaluates its
estimates on an ongoing basis. Actual results could differ from these
estimates.

Principles of Consolidation

All intercompany accounts have been eliminated.

Reclassification

For comparability, certain prior year balances have been reclassified to
conform to current reporting classifications.

Joint Operating Agencies

A joint operating agency performs the production, sales, distribution and
administrative functions for two or more newspapers in the same market under
the terms of a joint operating agreement (JOA). Editorial control and news at
each of the individual newspapers, which are a party to a JOA continue to be
separate and outside of a joint operating agency. The Company, through its
subsidiaries, York Newspapers, Inc., Charleston Publishing Company,
Kearns-Tribune, LLC, and beginning January 23, 2001, The Denver Post
Corporation, participates in JOAs in York, PA, Charleston, WV, Salt Lake City,
UT, and Denver, CO, respectively.

In July 2000, the Emerging Issues Task Force (EITF) reached a consensus
on Issue 00-1, Balance Sheet and Income Statement Display under the Equity
Method of Investments in Certain Partnerships and Other Unincorporated Joint
Ventures(EITF 00-1), effective for periods ending after June 15, 2000, which
prohibits the use of pro-rata consolidation except in the extractive and
construction industries. Prior to adoption of EITF 00-1, the Company accounted
for all of its JOA operations using the pro-rata consolidation method. Upon
adoption of EITF 00-1, effective June 30, 2000, the Company began accounting
for its unconsolidated JOA investments under the equity method. Accordingly,
operations of the JOAs the Company does not control are reported as a net
amount in the consolidated statement of operations under the financial
statement line item Equity Income in Unconsolidated JOAs. Equity income in
unconsolidated JOAs also includes the amortization of subscriber lists and up
until the Companys July 1, 2001 adoption of SFAS No. 142, Goodwill and Other
Intangible Assets(see Goodwill and Other Intangible Assets), the amortization
of goodwill created by the original purchase by the Company. The Companys
investments in unconsolidated JOAs are included in the consolidated balance
sheet under the line item Investment in Unconsolidated JOAs, for the JOAs it
does not control.

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2: Significant Accounting Policies and Other Matters (continued)

Joint Operating Agencies (continued)

While the operating results of the Denver JOA and the Salt Lake City JOA
are accounted for under the equity method, the editorial expenses related to
the newspapers owned by MediaNews, which are published by these JOAs, continue
to be included in the Companys operating expenses as these expenses are
incurred outside of the related JOA. The Charleston JOA, on the other hand,
accounts for editorial expenses within the JOA. Accordingly, Charleston
editorial expenses are included in Equity Income in Unconsolidated JOAs
rather than operating expenses. The York JOA results are consolidated but
exclude the editorial costs of the York Daily Record, the other newspaper in
the York JOA, which is not owned by MediaNews.

Cash and Cash Equivalents

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

Inventories

Inventories, which largely consist of newsprint, are valued at the lower
of cost or market. Cost is generally determined using the first-in, first-out
method.

Investments

The Company has made the following strategic investments, which are
accounted for under the equity method as the Company does not exercise
significant control:



| |  |  | PowerOne Media, LLC (successor to AdOne, LLC), a company that
provides software tools and hosts classified advertising for daily and
weekly newspapers throughout the United States (approximately 6.1%
ownership interest);                                                               
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Employment Specialists, LLC, an Internet based employment classified
advertising application. We have a commitment to lend $0.7 million to
Employment Specialists, LLC as of June 30, 2002 (approximately 40%
ownership interest);                                                         
|
| |  |  | CIPS Marketing Group, Inc., a total market coverage delivery service
in Los Angeles (50% ownership interest).                                                                                                                                                                              
|
| |  |  | Gallup Independent Company, publisher of the Gallup Independentin
Gallup, New Mexico (approximately 38% ownership interest).                                                                                                                                                               
|
| |  |  | Ponderay Newsprint Company, a minority investment in a newsprint mill
made by Kearns-Tribune, LLC. In addition to our investment, the Company
is guarantor for 6.0% of approximately $125.0 million in long-term debt
owed by Ponderay and due on April 12, 2006 (6.0% ownership interest).

These investments are included in the consolidated balance sheet as
long-term assets under the caption Other assets.

Property, Plant and Equipment

Property, plant, and equipment are recorded at cost. Buildings and
machinery and equipment are depreciated using the straight-line method over the
expected useful lives of individual assets. Buildings and improvements are
depreciated over the lesser of 40 years or the term of the lease and machinery
and equipment is depreciated over 3 to 20 years.

Goodwill and Other Intangible Assets

In June 2001, the Financial Accounting Standards Board issued SFAS No.
142, Goodwill and Other Intangible Assets(SFAS No. 142),which the Company
adopted effective July 1, 2001. Under the new standard, excess of cost over
fair value of net assets acquired (goodwill) and other indefinite life
intangibles are no longer amortized, but instead are periodically reviewed for
impairment. All other intangibles with a finite useful life continue to be
amortized over their estimated useful lives. Subscriber accounts are amortized
using the straight-line method over periods ranging from 6 to 15 years, with a
weighted average remaining life based on the dates of acquisitions of
approximately 8 years. Other finite identified intangibles are being amortized
over periods not exceeding 10 years.

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2: Significant Accounting Policies and Other Matters (continued)

Goodwill and Other Intangible Assets (continued)

Results for the year ended June 30, 2002 are presented under SFAS No. 142;
however, in accordance with the new standard, the results for the years ended
June 30, 2001 and 2000 have not been restated. The following table illustrates
what the Companys reported results would have been had SFAS No. 142 been in
effect for the Companys fiscal years ended June 30:

|                                                 |  |                                       |        |      |  |   |         | 
|------------------------------------------------ |  | ------------------------------------- | ------ | ---- |  | - | ------- | 
|                                                 |  | 2001                                  |        | 2000
|                                                 |  |                                       |        |     
|                                                 |  | (in thousands, except per share data)
|Previously reported net income                   |  | $                                     | 25,227 |      |  | $ | 130,383 | 
|Add back: Goodwill amortization                  |  |                                       | 12,132 |      |  |   | 9,159   | 
|Add back: Masthead amortization                  |  |                                       | 2,646  |      |  |   | 122     | 
|                                                 |  |                                       |        |      |  |   |         | 
|Adjusted net income under SFAS No. 142           |  | $                                     | 40,005 |      |  | $ | 139,664 | 
|                                                 |  |                                       |        |      |  |   |         | 
|Adjusted net income per share under SFAS No. 142 |  | $                                     | 17.41  |      |  | $ | 60.42   | 
|                                                 |  |                                       |        |      |  |   |         | 

In addition, as required by SFAS No. 142, the Company performed a
transition impairment test effective July 1, 2001 and an annual test as of July
1, 2002. There was no impairment of intangible assets as a result of these
tests. Another impairment test will be performed July 1, 2003, unless
unexpected events or circumstances arise that require the Company to test for
impairment sooner.

Aggregate amortization expense for intangible assets subject to
amortization was $25.4 million, $36.0 million and $29.8 million for the years
ended June 30, 2002, 2001 and 2000, respectively. Of the aggregate amortization
expense for intangible assets subject to amortization, $1.9 million, $2.9
million and $0.8 million for the years ended June 30, 2002, 2001 and 2000,
respectively, is included in equity income in unconsolidated JOAs.

Estimated amortization expense for the next five years is as follows at
June 30, 2002 (in thousands):

|     |  |   |        | 
|---- |  | - | ------ | 
|2003 |  | $ | 19,018 | 
|2004 |  | $ | 17,786 | 
|2005 |  | $ | 17,631 | 
|2006 |  | $ | 15,328 | 
|2007 |  | $ | 11,558 | 

Long-Lived Assets

The carrying value of long-lived assets is reviewed annually. If at any
time the facts or circumstances at any of the Companys individual newspaper or
other operations indicate impairment of long-lived asset values as a result of
a continual decline in performance or as a result of fundamental changes in a
market, a determination is made as to whether the carrying value of the
long-lived assets exceeds estimated realizable value. For purposes of this
determination, estimated realizable value is evaluated based on values placed
on comparable assets, generally based on a multiple of revenue and/or operating
profit (before depreciation and amortization). See Recently Issued Accounting
Standardsfor further discussion regarding the impacts of adopting SFAS No.
144, Accounting for the Impairment or Disposal of Long-Lived Assets.

Debt Discount

Debt discount is amortized in a manner that results in a constant rate of
interest over the life of the related debt.

Income Taxes

The Company accounts for income taxes utilizing the liability method of
accounting for income taxes. Under the liability method, deferred income taxes
are recognized for the tax consequences of temporary differences by applying
enacted statutory tax rates applicable to differences between the financial
statement carrying amount and the tax basis of existing assets and liabilities.

49



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MEDIANEWS GROUP, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2: Significant Accounting Policies and Other Matters (continued)

Advertising Costs

The Company expenses all advertising costs as incurred. Advertising costs
included in the consolidated statement of operations for the fiscal years ended
June 30, 2002, 2001 and 2000, were approximately $0.8 million, $3.1 million and
$7.4 million, respectively.

Revenue Recognition

Advertising revenue is recognized when advertisements are published,
inserted, aired or displayed. Circulation revenue is recognized when the
newspaper is delivered to the customer. Amounts received in advance of the
advertisement or newspaper delivery are deferred and recorded on the balance
sheet as a current liability.

Disclosures about Segments of an Enterprise and Related Information

The Company conducts business in one reporting segment and determined its
reporting segment based on the individual operations that the chief operating
decision maker reviews for purposes of assessing performance and making
operating decisions. These individual operations have been aggregated into one
segment because the Company believes doing so helps users understand the
Companys performance and assess its prospects. The combined operations have
similar economic characteristics and each operation has similar products,
services, customers, production processes and distribution methods.

Comprehensive Income

As of July 1, 1998, the Company adopted SFAS No. 130, Reporting
Comprehensive Income. SFAS No. 130 requires the disclosure of comprehensive
income, which includes, in addition to net income, other gains and losses,
which affect shareholders equity, but under generally accepted accounting
principles are excluded from net income. While the Company adopted SFAS No. 130
on July 1, 1998, it did not have any items of comprehensive income until it
adopted SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities(SFAS No. 133), on July 1, 2000. Under SFAS No. 133, the Companys
newsprint and interest rate swap agreements on its variable rate debt are
recorded at fair value and changes in the value of such contracts, net of
income taxes, are reported in comprehensive income. Also, for the year ended
June 30, 2002, comprehensive income includes a minimum pension liability
adjustment related to two of the Companys pension plans. For purposes of
calculating income taxes related to comprehensive income, the Company uses its
combined statutory rate for federal and state income taxes.

Dividends

The Company has never paid a dividend on its common stock and does not
intend to pay any cash dividends on its common stock in the foreseeable future.
In addition, the Companys long-term debt agreements contain covenants, which
among other things, restrict the payment of dividends to the Companys
shareholders.

Employees

Certain employees of the Companys newspapers are employed under
collective bargaining agreements.

Hedging Activities

Under SFAS No. 133, the Companys newsprint and its variable to fixed
interest rate swap agreements have been designated as cash flow hedges and are
recorded at fair value, and changes in the value of such contracts, net of
income taxes, are reported in comprehensive income. The Companys fixed to
variable interest rate swaps do not qualify for hedge accounting. The changes
in the fair value of these fixed to variable interest rate swap agreements are
recognized in other (net) expense. The net settlements made under the interest
rate swap agreements are reflected in operations as an adjustment to interest
expense over the term of the related swap. See Note 11 for further discussion.
The periodic net settlements made under the newsprint swap agreements are
reflected in operations in the period the newsprint is consumed.

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2: Significant Accounting Policies and Other Matters (continued)

Recently Issued Accounting Standards

In August 2001, the Financial Accounting Standards Board issued Statement
No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets(SFAS
No. 144), which addresses financial accounting and reporting for the
impairment or disposal of long-lived assets and supersedes SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of,and the accounting and reporting provisions of APB Opinion No.
30, Reporting the Results of Operationsfor a disposal of a segment of a
business. SFAS No. 144 is effective for fiscal years beginning after December
15, 2001, with earlier application encouraged. The Company expects to adopt
SFAS No. 144 as of July 1, 2002 and while it has not yet determined the effect,
if any, the adoption of SFAS No. 144 will have on the its financial position
and results of operations, it does not expect adoption of the pronouncement to
have a material impact on the Companys financial position.

In April 2002, the FASB issued Statement No. 145, Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections(SFAS No. 145). This statement provides guidance on the
classification of gains and losses from the extinguishments of debt and on the
accounting for certain specified lease transactions. While the Company has not
yet determined the effect, if any, the adoption of SFAS No. 145 will have on
its financial position and results of operations as it relates to the
rescission of Statement No. 4 (effective in fiscal years beginning after May
15, 2002) or the rescission of Statement No. 13 (effective for transactions
occurring after May 15, 2002), the Company does not expect adoption of the
pronouncement as it relates to these rescissions will have a material impact on
its financial position. All other provisions of SFAS No. 145 are effective for
financial statements issued on or after May 15, 2002 and, based on the
Companys evaluation, does not have any impact on the its financial position or
results of operations.

In July 2002, the FASB issued Statement No. 146, Accounting for Costs
Associated with Exit or Disposal Activities(SFAS No. 146). SFAS No. 146
requires companies to recognize costs associated with exit or disposal
activities when they are incurred rather than at the date of a commitment to an
exit or disposal plan. Examples of costs covered by the standard include lease
termination costs and certain employee severance costs that are associated with
a restructuring, discontinued operation, plant closing, or other exit or
disposal activity. Previous accounting guidance was provided by EITF Issue No.
94-3, Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs incurred in a Restructuring)
(EITF 94-3). SFAS No. 146 replaces EITF 94-3. SFAS No. 146 is to be applied
prospectively to exit or disposal activities initiated after December 31, 2002.
The Company will apply the statement accordingly.

Note 3: Joint Operating Agreements

Prior to January 23, 2001, the Company consolidated the results of
operations of The Denver Post. On January 23, 2001, MediaNews Group and E.W.
Scripps Company (Scripps), owner of the Rocky Mountain News, completed the
formation of the Denver Newspaper Agency (DNA). Upon formation of DNA,
MediaNews and Scripps each contributed substantially all of their operating
assets used in the publication of The Denver Postand the Rocky Mountain News
to DNA. In addition to the assets contributed to DNA, Scripps also paid
MediaNews $60.0 million to obtain its 50% interest in DNA. The Company
recognized a pre-tax gain on the payment from Scripps of approximately $46.7
million, net of expenses. As a result of the Denver JOA, all newspaper
functions performed by DNA are accounted for under the equity method beginning
January 23, 2001. The Company continues to consolidate the editorial and other
non-JOA expenses related to The Denver Postas well as the operations of The
Denver Post Corporations subsidiary, Eastern Colorado Publishing Company,
comprised of several small daily and weekly newspapers.

On January 2, 2001, MediaNews purchased the stock of Kearns-Tribune, LLC
for $200.0 million in cash. Kearns-Tribune, LLC owns the masthead of The Salt
Lake Tribuneand a 50% interest in the Newspaper Agency Corporation (NAC).
NAC is operated under the terms of a JOA between Kearns-Tribune, LLC and the
Deseret News Publishing Company. Under the terms of this JOA, NAC is
responsible for performing all the business functions of The Salt Lake Tribune
and the Deseret News, including advertising and circulation sales, production
and distribution. News and editorial related to The Salt Lake Tribuneare
performed separately from NAC and are the sole responsibility of
Kearns-Tribune, LLC. While Kearns-Tribune, LLC owns 50% of NAC, net income of
NAC is distributed 58% to Kearns-Tribune, LLC and 42% to the Deseret News
Publishing Company. The Company consolidates the operations of Kearns-Tribune,
LLC, which includes the editorial costs of The Salt Lake Tribune; however, its
corresponding investment in NAC is accounted for under the equity method of
accounting.

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3: Joint Operating Agreements (continued)

On August 22, 1998, Charleston Publishing Company, a wholly owned
subsidiary of MediaNews, acquired a 50% interest in Charleston Newspapers,
which publishes the Charleston Gazette(morning) and Charleston Daily Mail
(evening) six days a week and the Sunday Gazette-Mail, under the terms of a
JOA. The acquisition also included rights to the masthead of the Charleston
Daily Mail. The managerial responsibility for the news and editorial functions
are completely separate from the JOA; accordingly, the Company is responsible
for the news and editorial content of the Charleston Daily Mail. However,
related editorial expenses are incurred within the JOA. Accordingly, Charleston
editorial expenses are included in equity income in unconsolidated JOAs. The
Company accounts for its investment in Charleston Newspapers using the equity
method of accounting.

Effective March 1990, York Newspapers, Inc. (YNI) entered into a general
partnership, York Newspaper Company (the Agency), with York Daily Record,
Inc. (YDR). YNI, YDR and the Agency entered into a JOA under which the Agency
is responsible for all newspaper publishing operations, other than news and
editorial, including production, sales, distribution and administration. The
Agency publishes The York Dispatch, a daily evening paper, the York Daily
Record, a daily morning paper, and the York Sunday News. YNI has a 57.5%
interest in the Agency and is the controlling partner. The operations of the
Agency are consolidated with those of the Company, with a minority interest
reflected for YDRs interest in the Agency. The operating results of the Agency
do not include the editorial costs associated with the publication of the York
Daily Record, which is not owned by the Company.

In September 1996, the Company signed a call/put agreement under which YNI
can purchase YDRs interest in the Agency or YDR can put its interest in the
Agency to YNI. The base call and put price is $32.0 million and $25.0 million,
respectively, and is adjusted annually based on changes in the consumer price
index (not to exceed 2.5%). The call option may be exercised on January 1, 2004
and expires on January 1, 2005. The put may be exercised at any time after the
expiration of the call through June 30, 2008.

Note 4: Unconsolidated Companies, Including JOAs

The following table represents the summary financial data, on a combined
basis, for the Companys investments accounted for under the equity method,
including unconsolidated JOAs (the entities represented in the table below are
included at 100%):

|                        |  |                             |         |      |  |                |         |  |  |   |        | 
|----------------------- |  | --------------------------- | ------- | ---- |  | -------------- | ------- |  |  | - | ------ | 
|                        |  | Fiscal Years Ended June 30,
|                        |  |                            
|                        |  | 2002                        |         | 2001 |  | 2000          
|                        |  |                             |         |      |  |               
|                        |  |                             |         |      |  | (In thousands) |         |  |  |  
|Current assets          |  | $                           | 116,516 |      |  | $              | 110,034 |  |  | $ | 14,729 | 
|Non-current assets      |  |                             | 247,724 |      |  |                | 261,233 |  |  |   | 41,435 | 
|Current liabilities     |  |                             | 61,808  |      |  |                | 62,600  |  |  |   | 15,239 | 
|Non-current liabilities |  |                             | 50,697  |      |  |                | 47,720  |  |  |   | 28,922 | 
|Total revenues          |  |                             | 618,069 |      |  |                | 318,709 |  |  |   | 60,390 | 
|Net income              |  |                             | 80,662  |      |  |                | 12,312  |  |  |   | 2,945  | 

Note 5: Investment in Partnerships

On March 31, 1999, through its wholly owned subsidiary, West Coast
MediaNews LLC, the Company formed the California Newspapers Partnership with
Stephens Media Group (SMG), previously known as Donrey Newspapers LLC, and
The Sun Company of San Bernardino California (Gannett). The Company
contributed ANG Newspapers, comprised of six daily newspapers published in the
San Francisco Bay area; San Gabriel Valley Newspapers, which includes three
daily newspapers published in the Los Angeles area; and the Times-Standard,a
daily newspaper published in Eureka, California; and all the weekly
publications published by these daily newspapers in exchange for a 58.8%
partnership interest. SMG contributed ten daily newspapers and two non-daily
newspapers, located in California, most of which are located in close proximity
to the Companys California newspaper publications, in exchange for a 28.5%
partnership interest. Gannett initially contributed the San Bernardino County
Sunin exchange for a 12.7% partnership interest. On October 1, 2000, Gannett also contributed the Marin
Independent Journal(see additional discussion in Note 6). As a result of the
Marin contribution, MediaNews, SMG and Gannetts interests in the California
Newspapers Partnership were

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5: Investment in Partnerships (continued)

adjusted to 54.23%, 26.28% and 19.49%, respectively. The Company is the
controlling partner and therefore the operations of the partnership are
consolidated with those of the Company with minority interest reflected for SMG
and Gannetts interest in the partnership.

At the formation of the California Newspapers Partnership, the Company
also contributed debt of $6.6 million to the partnership. However, in
accordance with the partnership agreement, the Company remains liable for the
contributed debt. All principal and interest payments associated with this debt
are charged to the MediaNews capital account at the California Newspapers
Partnership as a distribution. Approximately $1.7 million, $2.7 million and
$3.3 million of principal and interest payments were made in fiscal years 2002,
2001 and 2000, respectively, by the partnership on behalf of the Company.

The California Newspapers Partnership is governed by a management
committee. The management committee consists of seven members. MediaNews is
entitled to appoint four of the members on the management committee, SMG is
entitled to appoint two, and Gannett is entitled to appoint one. Decisions of
the management committee are by majority vote, except that unanimous votes are
required for certain extraordinary actions, including asset transfers or sales,
asset acquisitions, incurrence of debt and certain material changes in the
partnership business.

The California Newspapers Partnership agreement also contains transfer of
interests restrictions. None of the partners are able to transfer their
interests before January 1, 2004 and, after that date, transfers may be made
only subject to the right of first offer of the remaining partners to effect
the purchase of the transferring partners interest. In addition, where no
partner exercises its right of first offer, any sale of a partners interest
must include the right for the remaining partners to tag-along and sell its
interest to the third-party buyer at the same price. After January 1, 2005,
MediaNews has the right to require the other partners to sell their interests
to any third party to which MediaNews sells its interest.

SMG and Gannett each have a separate right to put their interest in the
partnership to the other two partners at fair market value. SMG and Gannett can
exercise these put rights anytime after January 1, 2005 and 2003, respectively.
Upon notification of the put and obtaining a valuation of the partnership
interest, the remaining partners have two years to complete the purchase.

The minority interest liability reflects the fair market value of the net
assets at the time they were contributed to the California Newspapers
Partnership by SMG and Gannett, plus the minority partners share of earnings,
net of distributions since inception. The California Newspapers Partnership
made cash distributions to the Company in the amount of $41.7 million, $37.4
million and $41.4 million in fiscal years 2002, 2001 and 2000, respectively.

Note 6: Acquisitions and Dispositions

There were no significant transactions in fiscal year 2002.

Acquisitions

Fiscal 2001

Effective May 31, 2001, the Company acquired substantially all of the
assets used in the publication of The Ruidoso News,a bi-weekly newspaper
published in Ruidoso, New Mexico for approximately $3.8 million in cash, net of
working capital.

Effective March 31, 2001, the Company purchased substantially all of the
assets used in the publication of Alamogordo Daily News, a daily newspaper
published in Alamogordo, New Mexico, for $9.5 million in cash, net of working
capital. At the date of acquisition, the newspaper had daily and Sunday
circulation of approximately 7,200 and 8,300, respectively.

Effective February 1, 2001, the California Newspapers Partnership
purchased substantially all of the assets used in the publications of the Lake
County Record-Bee,a daily newspaper and several weeklies including the
Clearlake Observer-American, Willits News, Penny Slaver,and Bee-Smart Shopper,
located in and around Lakeport, California, for approximately $7.3 million in
cash, net of working capital. At the date of acquisition, the Lake County
Record-Beehad daily circulation of approximately 6,300.

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 6: Acquisitions and Dispositions (continued)

Effective January 2, 2001, MediaNews purchased the stock of
Kearns-Tribune, LLC for $192.0 million, net of cash on hand at NAC.
Kearns-Tribune, LLC owns the masthead of The Salt Lake Tribuneand a 50%
interest in NAC. NAC is operated under the terms of a JOA between
Kearns-Tribune, LLC and the Deseret News Publishing Company (See Note 3). At
the date of acquisition, The Salt Lake Tribunehad daily and Sunday circulation
of approximately 136,000 and 160,000, respectively, and the combined Salt Lake
JOA had daily and Sunday circulation of approximately 200,000 and 230,000,
respectively. While Kearns-Tribune, LLC owns 50% of NAC, net income of the JOA
is distributed 58% to Kearns-Tribune, LLC and 42% to the Deseret News
Publishing Company. Proceeds from the sale of Council Bluffs, the Scripps
payment to acquire a 50% interest in the Denver JOA and bank borrowings were
used to fund this acquisition.

Effective October 31, 2001, the Company received substantially all the
assets of the Carlsbad Current-Argus,a daily newspaper in Carlsbad, New Mexico
valued at approximately $7.0 million, plus adjustments for working capital, as
a part of the proceeds from the sale of the Daily Nonpareil,in Council Bluffs,
Iowa and the related daily and weekly newspapers located in the Southwestern
Iowa cluster. At the date of acquisition, the Carlsbad Current-Argushad daily
and Sunday circulation of approximately 8,200 and 8,400, respectively.

Effective October 1, 2000, the Company acquired substantially all of the
assets used in the publication of the Connecticut Post, a morning newspaper
published in Bridgeport, Connecticut, for approximately $194.0 million in cash,
net of working capital of approximately $5.0 million and post closing
adjustments. At the date of acquisition, the newspaper had daily and Sunday
paid circulation of approximately 78,000 and 89,000, respectively. Proceeds of
approximately $145.0 million from the sale of newspapers on June 30, 2000 and
borrowings under the Companys bank credit facility were used to fund the
acquisition.

Effective October 1, 2000, the Company acquired substantially all of the
assets used in the publication of Breckenridge American, a bi-weekly newspaper
and radio stations, KLXK and KROO, located in Breckenridge, Texas for
approximately $1.0 million.

Effective October 1, 2000, Gannett contributed the Marin Independent
Journal,published in Marin, California, to the California Newspapers
Partnership. The Marin Independent Journalis operated in conjunction with the
ANG Newspapers, and had daily and Sunday circulation of approximately 40,000
(See Note 5).

Fiscal 2000

Effective May 26, 2000, the Company acquired the stock of Northern
Television, Inc. (KTVA, a CBS affiliate), a broadcasting company in Anchorage,
Alaska, for approximately $7.0 million in cash, including assumed debt.
Subsequent to the acquisition, Northern Television was renamed the Alaska
Broadcasting Company. In addition, the Company exchanged a note payable assumed
in the transaction for 5% of Alaska Broadcasting Companys common stock.

Effective March 1, 2000, the Company acquired substantially all the assets
used in the publication of six weekly newspapers and three monthly
publications, distributed in and around Ayer, Massachusetts. The purchase price
of approximately $4.2 million, included cash, a note payable and future
payments under covenants not to compete.

Effective October 31, 1999, the Company acquired substantially all of the
assets used in the publication of the Deming Headlight, a morning newspaper
published in Deming, New Mexico, for approximately $2.0 million cash. At the
time of acquisition, the newspaper had daily paid circulation of approximately
3,700.

Effective October 1, 1999 and January 1, 2000, the California Newspapers
Partnership, purchased a shopper in Ukiah, California and a weekly newspaper in
Milpitas, California, respectively. The purchase price of approximately $2.7
million, included cash and future payments under covenants not to compete.

The fiscal year 2001 and 2000 acquisitions have been accounted for as
purchases; accordingly, the consolidated financial statements include the
operations of the acquired businesses from the date of each acquisition. The
assets acquired and the liabilities assumed have been recorded at their fair
market value at the date of acquisition.

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 6: Acquisitions and Dispositions (continued)

Dispositions

Fiscal 2001

Effective January 31, 2001, the California Newspapers Partnership sold
substantially all of the assets used in the publication of The Lompoc Recordin
Lompoc, California for approximately $8.0 million in cash, net of working
capital. The sale resulted in a pre-tax gain of approximately $4.6 million.
Proceeds from this sale were used to purchase the assets in Lakeport,
California.

Effective October 31, 2000, the Company sold substantially all the assets
used in the publication of the Daily Nonpareil,in Council Bluffs, Iowa and the
related daily and weekly newspapers located in the Southwestern Iowa cluster,
in exchange for $32.0 million in cash and substantially all the assets of the
Carlsbad Current-Argus,a daily newspaper located in Carlsbad, New Mexico (as
previously discussed). The sale resulted in a pre-tax gain of approximately
$23.6 million.

Fiscal 2000

Effective June 30, 2000, the Company sold substantially all of the assets
used in the publication of The Express Times, in Easton, Pennsylvania; the
Gloucester County Times,in Woodbury, New Jersey; Todays Sunbeam,in Salem,
New Jersey; the Bridgeton News, in Bridgeton, New Jersey and the North Jersey
weekly newspapers for $145.0 million in cash, plus an adjustment for working
capital. The Company recognized a pre-tax gain on the sale of approximately
$114.3, net of selling expenses. Proceeds from this sale were used to purchase
the assets of the Connecticut Postin October 2000.

Effective July 31, 1999, the California Newspapers Partnership sold the
assets of The Hemet Newsand Moreno Valley Timesfor a pre-tax gain of
approximately $3.3 million. A portion of the proceeds from the sale was used to
purchase the California Newspapers Partnership newspaper assets in Milpitas,
California described above. The remaining cash was distributed to the partners
in the California Newspapers Partnership.

Note 7: Long-Term Debt

Long-Term Debt

Long-term debt consisted of the following at June 30 of each year:

|                                           |  |       |    |   |         |                |         |      |         |   |           | 
|------------------------------------------ |  | ----- | -- | - | ------- | -------------- | ------- | ---- | ------- | - | --------- | 
|                                           |  |       |    |   |         | 2002           |         | 2001
|                                           |  |       |    |   |         |                |         |     
|                                           |  |       |    |   |         | (In thousands)
|Bank Term Loan                             |  |       | (I | ) |         | $              | 150,000 |      |         | $ | 150,000   | 
|Bank Credit Facility                       |  | (II)  |    |   | 210,400 |                |         |      | 256,500 |  
|9.00% Subordinated Promissory Note         |  | (III) |    |   | 62,970  |                |         |      | 60,509  |  
|Various Notes, payable through 2013        |  | (IV)  |    |   | 20,805  |                |         |      | 27,614  |  
|8.75% Senior Subordinated Notes, due 2009  |  |       | (V | ) |         |                | 300,164 |      |         |   | 300,186   | 
|8.625% Senior Subordinated Notes, due 2011 |  | (VI)  |    |   | 199,270 |                |         |      | 199,219 |  
|York Newspaper Companys Debt              |  | (VII) |    |   | 6,321   |                |         |      | 7,161   |  
|                                           |  |       |    |   |         |                |         |      |         |   |           | 
|                                           |  |       |    |   |         |                | 949,930 |      |         |   | 1,001,189 | 
|Less current portion of long-term debt     |  |       |    |   |         |                | 7,548   |      |         |   | 8,942     | 
|                                           |  |       |    |   |         |                |         |      |         |   |           | 
|                                           |  |       |    |   |         | $              | 942,382 |      |         | $ | 992,247   | 
|                                           |  |       |    |   |         |                |         |      |         |   |           | 

|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|I. |  | On January 2, 2001, the Company entered into an amended and restated
credit agreement that provided for a $125.0 million Term Loan (subsequently
increased to $150.0 million, on February 8, 2001), in addition to the
Companys existing $350.0 million Bank Credit Facility (discussed below).
Borrowings under the Term Loan bear interest at rates based upon, at the
Companys option, Eurodollar or prime rates plus a spread, based on the
Companys leverage ratio. Term Loan borrowing margins for Eurodollar and
prime vary from 2.375% to 1.5% and 1.125% to

(footnotes continue on preceding page)

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 7: Long-Term Debt (continued)

(footnotes continued from preceding page)

|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  | 0.25%, respectively. As of June 30, 2002, the Loans Eurodollar and
prime borrowing margins were set at 2.375% and 1.125%,
respectively. The Term Loan requires quarterly installments as
follows: $15.0 million on September 30 and December 31, 2003,
$9.375 million on March 31, 2004 through December 31, 2005 and
$11.25 million on March 31, 2006 through December 31, 2006.
Borrowing margins under the existing $350.0 million credit facility
are 25 to 37.5 basis points lower than the Term Loan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|II.  |  | On June 30, 1999, the Company entered into a seven year, amended
and restated Bank Credit Facility (Bank Credit Facility), which
provides for borrowings up to $350.0 million, including $15.0
million that can be used for standby letters of credit. On December
27, 2001, the Company further amended its credit agreement to
temporarily increase the consolidated debt to operating cash flow
ratio covenant and increased the borrowing margins on the $350.0
million revolving Bank Credit Facility by 12.5 basis points. On the
effective date of the amendment, an amendment equal to 0.125% of the
commitment amount, approximately $0.7 million, was paid to the banks
party to the Bank Credit Facility. As amended, borrowings under the
Bank Credit Facility bear interest at rates based upon, at the
Companys option, Eurodollar or prime rates plus a spread based on
the Companys leverage ratio. Prime borrowing margins vary from
1.125% to 0.25% and Eurodollar borrowing margins vary from 2.375% to
1.125%. Borrowing margins at June 30, 2002 were 2.375% and 1.125%
for the Eurodollar and prime borrowings, respectively. Interest on
prime borrowings is payable quarterly in arrears. Interest on
Eurodollar borrowings is due at the end of each interest rate
contract or quarterly, if the interest rate contract exceeds three
months. In addition to interest, the Company pays an annual
commitment fee of 0.5% to 0.25% on the unused portion of the
commitment based on the Companys leverage ratio. The Bank Credit
Facility requires a mandatory $75.0 million reduction in the credit
commitment on September 30, 2003 and quarterly reductions of $25.0
million beginning December 31, 2003, with a final reduction on June
30, 2006. The Bank Credit Facility and the Term Loan are secured by
a pledge of capital stock of the Company and its subsidiaries. The
Bank Credit Facility and the Term Loan contain a number of covenants
that, among other things, restrict the Companys ability and its
subsidiaries ability to dispose of assets, incur additional
indebtedness, pay dividends or make capital contributions, create
liens on assets, make investments, make acquisitions and engage in
mergers or consolidations. In addition, the Bank Credit Facility
requires compliance with certain cash flow ratios, debt and senior
debt to operating cash flow, operating cash flow to pro forma debt
service and pro forma interest expense and operating cash flow to
fixed charges.
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|III. |  | In January 1998, the Company entered into a subordinated note
purchase agreement pursuant to which it issued a $47.6 million, 9.0%
Subordinated Promissory Note (the Promissory Note) due January 31,
2010. Interest accruing on the Promissory Note is payable quarterly,
provided that on each interest payment date occurring on or prior to
December 31, 2002, the Company may elect to defer payment of any or
all accrued and unpaid interest. However, in calendar years 2000,
2001 and 2002, the Company must pay the lesser of $3.0 million or
all accrued and unpaid interest due in such year. Deferred interest
at June 30, 2002 was approximately $15.4 million. The Company paid
$3.0 million in interest in both fiscal years 2002 and 2001 and
$750,000 in fiscal year 2000. No scheduled principal payments are
required until January 31, 2010, at which time the outstanding
principal amount is due and payable. The holder of the Promissory
Note also holds a related option to purchase the assets used in the
publication of one of the Companys newspaper properties, which it
can exercise or put to the Company based on a predetermined formula.
The cost to repurchase the option, is currently estimated at $8.9
million, and is recorded in other long-term liabilities. If the
purchase option is put to the Company (the earliest date of exercise
is January 31, 2003), all outstanding principal and unpaid interest
associated with the note, as well as the option repurchase, are due
and payable in full. If the option holder exercises its option at
the earliest date, which the Company believes is unlikely, the
Company would fund the payment with available borrowings from its
Bank Credit Facility. As a result, in accordance with SFAS No. 6,
Classification of Short-Term Obligations Expected to Be Refinanced,
the note and related option repurchase price remains classified in
the Companys balance sheet as long-term. See additional discussion
of this note and the corresponding option agreement in Note 12:
Commitments and Contingencies.                                                                                                                                                                                                                                                                                                                                                                                                                                  

(footnotes continued on preceding page)

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 7: Long-Term Debt (continued)

(footnotes continued from preceding page)

|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|IV.  |  | In connection with various acquisitions, the Companys
subsidiaries have issued notes payable to prior owners and assumed
certain debt obligations. The notes payable and other debt
obligations bear interest at rates ranging from 0.0% to 6.0%. The
notes bearing interest at below market rates have been discounted at
rates ranging from 9.0% to 12.0%. The majority of these notes and
other debt obligations are unsecured obligations of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|V.   |  | In October 1997 and February 1998, Garden State, the predecessor
issuer of MediaNews Group, Inc., issued in the aggregate $300.0
million of Senior Subordinated Notes due 2009. These notes bear
interest at 8.75% payable semi-annually, in arrears, on April 1 and
October 1. The 8.75% Senior Subordinated Notes were issued at a
small premium, resulting in net proceeds to the Company of
approximately $300.0 million, excluding related debt issuance costs.
No principal payments are required until October 1, 2009, at which
time the outstanding principal amount is due and payable. The 8.75%
Senior Subordinated Notes are subordinated and junior in right of
payment to obligations under the Bank Credit Facility and Term Loan.
The 8.75% Senior Subordinated Notes are general unsecured
obligations of the Company ranking pari passuin right of payment
with the 8.625% Senior Subordinated Notes and all other future
senior subordinated indebtedness of the Company and senior in right
of payment to all existing and future subordinated indebtedness of
the Company, which is made expressly junior thereto.
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|VI.  |  | In the third quarter of fiscal year 1999, Garden State, the
predecessor issuer of MediaNews Group, Inc., issued $200.0 million
of 8.625% Senior Subordinated Notes due 2011. Interest accruing on
the 8.625% Senior Subordinated Notes is payable semi-annually, in
arrears on January 1 and July 1. The indebtedness evidenced by the
8.625% Senior Subordinated Notes are subordinated and junior in
right of payment to obligations under the Bank Credit Facility and
Term Loan. No principal payments are required until July 1, 2011, at
which time all outstanding principal and interest is due and
payable. The 8.625% Senior Subordinated Notes are general unsecured
obligations of the Company ranking pari passu in right of payment
with the existing 8.75% Senior Subordinated Notes.                                                                                                                                                                                                                                                                                                                                    
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|VII. |  | At June 30, 2002,York Newspaper Company has a revolving credit
note and a term bank loan totaling $4.7 million, which requires
monthly payments through October 2005. York Newspaper Company also
has a promissory note, with a balance of $1.6 million at June 30,
2002, which requires monthly payments through October 2025. The
obligations are secured by the assets of York Newspaper Company and
are non-recourse to MediaNews.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

Maturities of long-term debt as of June 30, 2002, for the five fiscal
years ending June 30, 2007 and thereafter, are shown below (in thousands).

|           |  |   |         | 
|---------- |  | - | ------- | 
|2003       |  | $ | 7,548   | 
|2004       |  |   | 61,506  | 
|2005       |  |   | 140,233 | 
|2006       |  |   | 145,565 | 
|2007       |  |   | 23,729  | 
|Thereafter |  |   | 571,349 | 
|           |  |   |         | 
|           |  | $ | 949,930 | 
|           |  |   |         | 

Interest paid during the fiscal years ended June 30, 2002, 2001, and 2000
was approximately $75.6 million, $76.8 million, and $66.0 million,
respectively. No interest was capitalized during fiscal years 2002 and 2001.
Approximately $0.3 million of interest was capitalized during the fiscal year
ended June 30, 2000.

Letters of credit have been issued in favor of an insurance company
providing workers compensation insurance coverage to the Company and its
subsidiaries totaling approximately $4.3 million as of June 30, 2002. In
addition, the Company issued approximately $0.5 million of additional letters
of credit in support of its obligations under non-compete agreements entered
into in connection with an acquisition and which expired in August 2002.

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 7: Long-Term Debt (continued)

The fair market value of the 8.625% Senior Subordinated Notes and the
8.75% Senior Subordinated Notes at June 30, 2002 was approximately $195.0
million and $295.5 million, respectively. The carrying value of the Companys
long-term debt, which has interest rates tied to prime or the Eurodollar,
approximates the fair value of such financial instruments. Management cannot
practicably estimate the fair value of the remaining long-term debt because of
the lack of quoted market prices for these types of securities and its
inability to estimate the fair value without incurring the excessive costs of
obtaining an appraisal. The carrying amount represents its original issue price
net of remaining original issue discounts, if applicable.

The Company enters into interest rate swap agreements to reduce its
exposure to the uncertainty of short term interest rate fluctuations associated
with its outstanding bank debt. The Companys interest rate swap agreements on
its variable rate debt are designated with a notional principal balance and
generally have terms of 90 days. These agreements involve a notional amount and
the exchange of a fixed interest rate for a variable interest rate over the
life of a swap agreement without an exchange of the notional amount upon
settlement. The differential to be paid or received as interest rates change is
accrued and recognized as an adjustment of interest expense related to the
debt. The related amount payable to, or receivable from counterparties, is
included in other assets or liabilities. The swap agreements are recorded at
their fair value and changes in the fair value of such contracts are reported
in comprehensive income.

On February 28, 2002, the Company entered into several interest rate swap
agreements which expire in either January or July 2004, and have a total
notional amount of $250.0 million. The agreements swap fixed-rate interest
payments for variable interest rate payments based on current pricing. The
Company entered into these swaps to mitigate the effects of a protracted and
slow economic recovery and to take advantage of the current low interest rates
available under a variable rate instrument. Net settlements of the interest
rate swap agreements occur semi-annually beginning July 1, 2002 and are
recorded as an adjustment to interest expense. The related amount payable to,
or receivable from counterparties, is included in other assets or liabilities.
These swaps do not qualify for hedge accounting and therefore changes in their
fair value are recognized in other (net) expense in the period of change. A
gain of approximately $3.0 million was recognized in other (net) expense for
the year ended June 30, 2002 as a result of marking these derivative
instruments to market. In August 2002, the Company terminated two of these
interest rate swap agreements, reducing the total notional amount to $150.0
million. As a result of monetizing these two interest rate swaps in fiscal year
2003, the Company received $2.2 million in cash and realized a gain of $2.0
million, of which $1.1 million was recorded as a gain at June 30, 2002, due to
the mark to market accounting for these swaps. The Company also recorded an
offset of $0.2 million to interest expense from the net settlement in fiscal
year 2003.

Note 8: Leases

The California Newspapers Partnership leases assets under capital leases.
Assets under capital leases and related accumulated amortization are included
in property, plant and equipment in the accompanying consolidated balance
sheets at June 30, as follows:

|                                 |  |                |        |      |  |   |        |  
|-------------------------------- |  | -------------- | ------ | ---- |  | - | ------ | -
|                                 |  | 2002           |        | 2001
|                                 |  |                |        |     
|                                 |  | (In thousands)
|Building                         |  | $              | 6,934  |      |  | $ | 6,934  |  
|Accumulated amortization         |  |                | (3,197 | )    |  |   | (2,735 | )
|                                 |  |                |        |      |  |   |        |  
|Assets under capital leases, net |  | $              | 3,737  |      |  | $ | 4,199  |  
|                                 |  |                |        |      |  |   |        |  

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8: Leases (continued)

The Company and its subsidiaries also lease certain facilities and
equipment under operating leases, some of which contain renewal or escalation
clauses. Rent expense was approximately $4.5 million, $6.2 million, and $8.3
million for the fiscal years ended June 30, 2002, 2001, and 2000, respectively.
Contingent rentals are not significant. Future minimum payments on capital and
operating leases are as follows at June 30, 2002:

|                                           |  |                |        |           |  |   |        | 
|------------------------------------------ |  | -------------- | ------ | --------- |  | - | ------ | 
|                                           |  | Capital        |        | Operating
|                                           |  | Leases         |        | Leases   
|                                           |  |                |        |          
|                                           |  | (In thousands)
|2003                                       |  | $              | 931    |           |  | $ | 3,864  | 
|2004                                       |  |                | 931    |           |  |   | 3,332  | 
|2005                                       |  |                | 931    |           |  |   | 3,206  | 
|2006                                       |  |                | 931    |           |  |   | 3,003  | 
|2007                                       |  |                | 931    |           |  |   | 2,808  | 
|Thereafter                                 |  |                | 11,238 |           |  |   | 4,955  | 
|                                           |  |                |        |           |  |   |        | 
|Total minimum lease payments               |  |                | 15,893 |           |  | $ | 21,168 | 
|                                           |  |                |        |           |  |   |        | 
|Less amount representing interest          |  |                | 8,745  |           |  |   |        | 
|                                           |  |                |        |           |  |   |        | 
|Present value of net future lease payments |  | $              | 7,148  |           |  |   |        | 
|                                           |  |                |        |           |  |   |        | 

Note 9: Employee Benefit Plans

Pension Plans

In conjunction with the acquisition of The Sunin Lowell, Massachusetts
and the Daily News, in Los Angeles, California during fiscal year 1998, the
Company assumed overfunded non-contributory defined benefit pension plans,
which covered substantially all the employees at the acquired newspapers.
Shortly after the acquisition of Daily News, the Company elected to freeze the
plan assumed in conjunction with that acquisition. Accordingly, all current
service cost under that plan has been terminated. Participants in the plan
assumed in conjunction with the acquisition of The Suncontinue to accrue
benefits associated with current services, based on years of service and
estimated compensation prior to retirement. The Sunspension plan was combined
with another of the Companys underfunded pension plan, to create a combined
actuarial overfunded pension plan.

The Denver Posthas and continues to sponsor two noncontributory defined
benefit pension plans, which cover substantially all its current employees. The
plan covering salaried and management employees provides benefits based on
employees years of service and compensation during the years immediately
preceding retirement. The plan covering certain union employees provides
benefits of stated amounts based on length of service. The Denver Postalso
sponsors post-retirement health care and life insurance plans that provide
certain union employees and their spouses with varying amounts of subsidized
medical coverage upon retirement and, in some instances, continued life
insurance benefits until age 65, if the employee retires prior to age 65.

Due to the formation of DNA on January 23, 2001, obligations related to
the employees of The Denver Postwho became employees of DNA were transferred
to DNA pension plans along with an amount of net pension asset actuarially
determined to fund the obligation. The Denver Posteditorial employees,
terminated vested employees and retired employees will continue to be covered
by the two non-contributory plans sponsored by The Denver Postas discussed
above. In June 2001, the first stage of the pension asset and liability
transfers occurred. The amount of obligations transferred was approximately
$11.4 million and a similar amount of the plan assets was also transferred at
that time; both transfers were reflected in the June 30, 2001 financial
statements. During fiscal year 2002, the Company transferred an additional
$16.7 million in plan assets to the DNA pension plans in order to further fund
the benefit obligation.

The Companys funding policy for all plans is to make the minimum annual
contributions required by the Employee Retirement Income Security Act of 1974.

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9: Employee Benefit Plans (continued)

Other Retirement Plans

The Company and several of its newspaper properties participate in
retirement/savings plans and, in addition, contribute to several multi-employer
plans on behalf of certain union-represented employee groups. The majority of
the Companys full-time employees are covered by one of these plans. Total
expense for these plans in the fiscal years ended June 30, 2002, 2001, and
2000, was approximately $2.4 million, $3.6 million, and $4.5 million,
respectively.

In addition to The Denver Posts other pension and post-retirement health
and life insurance plans, The Denver Postalso has an unfunded early retirement
obligation of approximately $0.8 million to certain employees who retired
between the ages of sixty-two and sixty-five. The supplemental retirement
benefits consist of cash payments to supplement the retirees pension. No
current employees are eligible for benefits under this plan.

Deferred Compensation Plan

Certain eligible executives of the Company have elected to defer a portion
of their compensation, including bonuses if any, on a pre-tax basis under a
nonqualified executive deferred compensation plan sponsored by the Company. The
Company matches deferred bonuses if certain performance criteria are achieved.
The Company match is subject to vesting, ratably over a period of 10 years and
is also subject to early withdrawal penalties. The executives receive a return
on the money deposited in the deferred compensation plan, which tracks the
return on certain mutual funds chosen by the executive.

The deferred compensation obligation is recorded in the Companys
consolidated balance sheets in financial statement line item Other
Liabilities at the vested value of the deferred compensation plus the
applicable return on investment, and amounted to $2.7 million and $2.2 million
as of June 30, 2002 and 2001, respectively. The Company in some cases invested
a portion of employee contributions in cash surrender value life insurance
policies, which were designed to closely mirror the performance of the
investment funds that the participants select. The Companys investments in
cash surrender value life insurance policies are recorded in the Companys
consolidated balance sheets at fair market value in the financial statement
line item Other Assets and amounted to $1.5
million and $1.8 million as of June 30, 2002, and 2001 respectively.

The following tables provide a reconciliation of benefit obligations, plan
assets and funded status of the Companys pension and other defined benefit
plans, as of June 30, 2002 and 2001. The tables also provide the components of
net periodic pension (benefit) cost associated with those plans for fiscal
years ended 2002 and 2001.

|                             |                                         |  |                                             |        |                |  |      |         |      |  |   |        |   |  |   |       |  
|---------------------------- | --------------------------------------- |  | ------------------------------------------- | ------ | -------------- |  | ---- | ------- | ---- |  | - | ------ | - |  | - | ----- | -
|                             |                                         |  | Pension Plans                               |        | Other Benefits
|                             |                                         |  |                                             |        |               
|                             |                                         |  | 2002                                        |        | 2001           |  | 2002 |         | 2001
|                             |                                         |  |                                             |        |                |  |      |         |     
|                             |                                         |  | (in thousands, except for assumptions data)
|Change in Benefit Obligation |                                         |  |                                             |        |                |  |      |         |      |  |   |        |   |  |   |      
|                             | Benefit Obligation at Beginning of Year |  | $                                           | 82,111 |                |  | $    | 84,199  |      |  | $ | 3,524  |   |  | $ | 3,112 |  
|                             | Service Cost                            |  |                                             | 916    |                |  |      | 1,633   |      |  |   |       |   |  |   | 40    |  
|                             | Interest Cost                           |  |                                             | 5,958  |                |  |      | 6,336   |      |  |   | 166    |   |  |   | 237   |  
|                             | Amendments                              |  |                                             | 1,271  |                |  |      | 2,687   |      |  |   |       |   |  |   |      |  
|                             | Curtailment                             |  |                                             |       |                |  |      | 259     |      |  |   |       |   |  |   |      |  
|                             | Termination Benefits                    |  |                                             |       |                |  |      | 763     |      |  |   |       |   |  |   |      |  
|                             | Actuarial Loss (Gain)                   |  |                                             | (853   | )              |  |      | 2,625   |      |  |   | 703    |   |  |   | 443   |  
|                             | Transfer to Denver Newspaper Agency     |  |                                             |       |                |  |      | (11,372 | )    |  |   | (1,167 | ) |  |   |      |  
|                             | Benefits Paid                           |  |                                             | (5,974 | )              |  |      | (5,019  | )    |  |   | (275   | ) |  |   | (308  | )
|                             |                                         |  |                                             |        |                |  |      |         |      |  |   |        |   |  |   |      
|                             | Benefit Obligation at End of Year       |  | $                                           | 83,429 |                |  | $    | 82,111  |      |  | $ | 2,951  |   |  | $ | 3,524 |  
|                             |                                         |  |                                             |        |                |  |      |         |      |  |   |        |   |  |   |      

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9: Employee Benefit Plans (continued)

Components of net periodic pension and other defined benefit plans (continued)

|                                                                                                                                    |                                                |  |                                             |             |                |  |      |             |      |  |   |        |   |  |   |        |  
|----------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------- |  | ------------------------------------------- | ----------- | -------------- |  | ---- | ----------- | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                                                                                    |                                                |  | Pension Plans                               |             | Other Benefits
|                                                                                                                                    |                                                |  |                                             |             |               
|                                                                                                                                    |                                                |  | 2002                                        |             | 2001           |  | 2002 |             | 2001
|                                                                                                                                    |                                                |  |                                             |             |                |  |      |             |     
|                                                                                                                                    |                                                |  | (in thousands, except for assumptions data)
|Change in Plan Assets                                                                                                               |                                                |  |                                             |             |                |  |      |             |      |  |   |        |   |  |   |       
|                                                                                                                                    | Fair Value of Plan Assets at Beginning of Year |  | $                                           | 110,778     |                |  | $    | 132,607     |      |  | $ |       |   |  | $ |       |  
|                                                                                                                                    | Actual Return on Plan Assets                   |  |                                             | (6,358      | )              |  |      | (7,665      | )    |  |   |       |   |  |   |       |  
|                                                                                                                                    | Company Contributions                          |  |                                             |            |                |  |      |            |      |  |   | 275    |   |  |   | 308    |  
|                                                                                                                                    | Transfer to Denver Newspaper Agency            |  |                                             | (16,691     | )              |  |      | (9,145      | )    |  |   |       |   |  |   |       |  
|                                                                                                                                    | Benefits Paid                                  |  |                                             | (5,974      | )              |  |      | (5,019      | )    |  |   | (275   | ) |  |   | (308   | )
|                                                                                                                                    |                                                |  |                                             |             |                |  |      |             |      |  |   |        |   |  |   |       
|                                                                                                                                    | Fair Value of Plan Assets at End of Year       |  | $                                           | 81,755      |                |  | $    | 110,778     |      |  | $ |       |   |  | $ |       |  
|                                                                                                                                    |                                                |  |                                             |             |                |  |      |             |      |  |   |        |   |  |   |       
|Reconciliation of Funded Status                                                                                                     |                                                |  |                                             |             |                |  |      |             |      |  |   |        |   |  |   |       
|                                                                                                                                    | Funded Status                                  |  | $                                           | (1,674      | )              |  | $    | 28,667      |      |  | $ | (2,951 | ) |  | $ | (3,524 | )
|                                                                                                                                    | Curtailment                                    |  |                                             |            |                |  |      | 259         |      |  |   |       |   |  |   |       |  
|                                                                                                                                    | Termination Benefits                           |  |                                             |            |                |  |      | 763         |      |  |   |       |   |  |   |       |  
|                                                                                                                                    | Unrecognized Net Actuarial Loss/(Gain)         |  |                                             | 22,802      |                |  |      | 3,346       |      |  |   | 94     |   |  |   | (961   | )
|                                                                                                                                    | Unrecognized Prior Service Cost                |  |                                             | 5,232       |                |  |      | 5,851       |      |  |   | (5     | ) |  |   | (10    | )
|                                                                                                                                    |                                                |  |                                             |             |                |  |      |             |      |  |   |        |   |  |   |       
|                                                                                                                                    | Net Prepaid (Accrued) Cost                     |  | $                                           | 26,360      |                |  | $    | 38,886      |      |  | $ | (2,862 | ) |  | $ | (4,495 | )
|                                                                                                                                    |                                                |  |                                             |             |                |  |      |             |      |  |   |        |   |  |   |       
|Assumptions as of June 30                                                                                                           |                                                |  |                                             |             |                |  |      |             |      |  |   |        |   |  |   |       
|                                                                                                                                    | Discount Rate                                  |  |                                             | 7.5         | %              |  |      | 7.5         | %    |  |   | 7.5    | % |  |   | 7.5    | %
|                                                                                                                                    | Expected Return on Plan Assets                 |  |                                             | 9.0% - 10.0 | %              |  |      | 9.0% - 10.0 | %    |  |   |       |   |  |   |       |  
|                                                                                                                                    | Rate of Compensation Increase                  |  |                                             | 3.0         | %              |  |      | 5.0         | %    |  |   |       |   |  |   |       |  
|                                                                                                                                   
|Components of Net Periodic (Benefit) Cost                                                                                           |                                                |  |                                             |             |                |  |      |             |      |  |   |        |   |  |   |       
|                                                                                                                                    | Service Cost                                   |  | $                                           | 916         |                |  | $    | 1,633       |      |  |   |       |   |  | $ | 40     |  
|                                                                                                                                    | Interest Cost                                  |  |                                             | 5,958       |                |  |      | 6,336       |      |  |   | 166    |   |  |   | 237    |  
|                                                                                                                                    | Expected Return on Plan Assets                 |  |                                             | (10,881     | )              |  |      | (12,331     | )    |  |   |       |   |  |   |       |  
|                                                                                                                                   
|                                                                                                                                    | Amortization of Deferral                       |  |                                             | 424         |                |  |      | 317         |      |  |   | (34    | ) |  |   | (140   | )
|                                                                                                                                    | Recognized Net Actuarial Gain                  |  |                                             |            |                |  |      | (251        | )    |  |   |       |   |  |   |       |  
|                                                                                                                                    | Settlement and Other Loss/(Gain)               |  |                                             | 3,850       |                |  |      | (3,009      | )    |  |   |       |   |  |   |       |  
|                                                                                                                                    |                                                |  |                                             |             |                |  |      |             |      |  |   |        |   |  |   |       
|                                                                                                                                    | Net Periodic (Benefit) Cost                    |  | $                                           | 267         |                |  | $    | (7,305      | )    |  | $ | 132    |   |  | $ | 137    |  
|                                                                                                                                    |                                                |  |                                             |             |                |  |      |             |      |  |   |        |   |  |   |       
|                                                                                                                                   
|Amounts of Recognized in the Consolidated Balance Sheets consist of:                                                                |                                                |  |                                             |             |                |  |      |             |      |  |   |        |   |  |   |       
|                                                                                                                                    | Prepaid (Accrued) Cost                         |  | $                                           | 12,864      |                |  | $    | 38,886      |      |  | $ | (2,862 | ) |  | $ | (4,495 | )
|                                                                                                                                    | Intangible Asset                               |  |                                             | 481         |                |  |      |            |      |  |   |       |   |  |   |       |  
|                                                                                                                                    | Accumulated Other Comprehensive Loss           |  |                                             | 13,015      |                |  |      |            |      |  |   |       |   |  |   |       |  
|                                                                                                                                    |                                                |  |                                             |             |                |  |      |             |      |  |   |        |   |  |   |       
|                                                                                                                                    | Net Prepaid (Accrued) Cost                     |  | $                                           | 26,360      |                |  | $    | 38,886      |      |  | $ | (2,862 | ) |  | $ | (4,495 | )
|                                                                                                                                    |                                                |  |                                             |             |                |  |      |             |      |  |   |        |   |  |   |       
|                                                                                                                                   
|Separate Disclosure for Pension Plans with Accumulated Benefit Obligation and Projected
Benefit Obligation in Excess of Plan Assets |                                                |  |                                             |             |                |  |      |             |      |  |   |        |   |  |   |       
|                                                                                                                                    | Projected (benefit) obligation                 |  | $                                           | 47,866      |                |  |      |            |      |  |   | N/A    |   |  |   | N/A    |  
|                                                                                                                                    | Accumulated benefit obligation                 |  | $                                           | 47,633      |                |  |      |            |      |  |   | N/A    |   |  |   | N/A    |  
|                                                                                                                                    | Fair value of assets                           |  | $                                           | 40,583      |                |  |      |            |      |  |   | N/A    |   |  |   | N/A    |  

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9: Employee Benefit Plans (continued)

The assumptions used in determined the Companys pension and
postretirement benefit obligation often differ from the actual results. As a
result of these differences as well as other external economic factors, the
assumptions used are periodically revised and updated. The differences between
actual and assumed experience, and the related changes in assumptions, give
rise to actuarial gains and losses in the table above. These actuarial gains
and losses represent differences in actual versus expected return on plan
assets and other changes in assumptions and are recognized over the expected
service period of active participants. The majority of the current year
differences are related to the expected versus actual return on plan assets,
which causes a minimum pension liability to be recorded, only for the purpose
of reporting other comprehensive income.

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

|                                                      |  |                |         |                |  |   |          |  
|----------------------------------------------------- |  | -------------- | ------- | -------------- |  | - | -------- | -
|                                                      |  | 1-Percentage   |         | 1-Percentage  
|                                                      |  | Point Increase |         | Point Decrease
|                                                      |  |                |         |               
|Effect on total of service & interest cost components |  | $              | 12,000  |                |  | $ | (11,000  | )
|Effect on postretirement benefit obligation           |  | $              | 161,000 |                |  | $ | (147,000 | )

The July 1, 2002 assumed health care trend rate was 5.0%. The Companys
policy is to fund the cost of providing postretirement health care and life
insurance benefits when they are entitled to be received.

Note 10: Income Taxes

The income tax provision (benefit) for each of the three years ended June
30, 2002, 2001 and 2000, consists of the following:

|                        |         |   |                |        |      |   |        |        |  |   |        |        |  
|----------------------- | ------- | - | -------------- | ------ | ---- | - | ------ | ------ |  | - | ------ | ------ | -
|                        |         |   | 2002           |        | 2001 |   | 2000  
|                        |         |   |                |        |      |   |       
|                        |         |   | (In thousands)
|Current:                |         |   |                |        |      |   |        |        |  |   |        |       
|                        | State   |   | $              | 1,295  |      |   | $      | 1,370  |  |   | $      | 5,820  |  
|                        | Federal |   |                | (4,955 | )    |   |        | 207    |  |   |        | 1,072  |  
|Deferred:               |         |   |                |        |      |   |        |        |  |   |        |       
|                        | State   |   |                | (5,726 | )    |   |        | 1,682  |  |   |        | (4,912 | )
|                        | Federal |   |                | 6,904  |      |   |        | 10,785 |  |   |        | (7,387 | )
|                        |         |   |                |        |      |   |        |        |  |   |        |       
|Net provision (benefit) |         | $ | (2,482         | )      |      | $ | 14,044 |        |  | $ | (5,407 | )     
|                        |         |   |                |        |      |   |        |        |  |   |        |       

A reconciliation between the actual income tax expense for financial
statement purposes and income taxes computed by applying the statutory Federal
income tax rate to financial statement earnings before income taxes for the
three years ended June 30, 2002, 2001 and 2000 is as follows:

|                                       |            |                                                                                             |     |      |     |      |    |      |    |   |    |    |     |  
|-------------------------------------- | ---------- | ------------------------------------------------------------------------------------------- | --- | ---- | --- | ---- | -- | ---- | -- | - | -- | -- | --- | -
|                                       |            |                                                                                             |     | 2002 |     | 2001 |    | 2000
|                                       |            |                                                                                             |     |      |     |      |    |     
|Statutory federal income tax rate      |            |                                                                                             | 35  | %    |     |      | 35 | %    |    |   | 35 | % 
|                                       | Effect of: |                                                                                             |     |      |     |      |    |      |    |   |    |    |    
|                                       |            | State income tax net of federal benefit                                                     |     |      | (11 | )    |    |      | 5  |   |    |    | 1   |  
|                                       |            | Utilization of net operating losses                                                         |     |      | (55 | )    |    |      |   |   |    |    | (25 | )
|                                       |            | Book/tax basis difference associated with
acquisitions and non-deductible
acquisition costs |     |      | 7   |      |    |      | 6  |   |    |    | (1  | )
|                                       |            | 1031 exchange                                                                               |     |      |    |      |    |      | (7 | ) |    |    | (14 | )
|                                       |            | Minority interests                                                                          |     |      | (4  | )    |    |      | 3  |   |    |    |    |  
|                                       |            | Dividends received deduction                                                                |     |      |    |      |    |      | (5 | ) |    |    |    |  
|                                       |            | Other, net                                                                                  |     |      | 3   |      |    |      | (1 | ) |    |    |    |  
|                                       |            |                                                                                             |     |      |     |      |    |      |    |   |    |   
|Financial statement effective tax rate |            |                                                                                             | (25 | )%   |     |      | 36 | %    |    |   | (4 | )%
|                                       |            |                                                                                             |     |      |     |      |    |      |    |   |    |   

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 10: Income Taxes (continued)

Components of the long-term deferred tax assets and liabilities as of June
30, 2002 and 2001 are as follows:

|                                             |  |                |        |      |  |   |        |  
|-------------------------------------------- |  | -------------- | ------ | ---- |  | - | ------ | -
|                                             |  | 2002           |        | 2001
|                                             |  |                |        |     
|                                             |  | (In thousands)
|Deferred tax assets:                         |  |                |        |      |  |   |        |  
|Net operating losses and other credits       |  | $              | 34,883 |      |  | $ | 21,957 |  
|Deferred employee compensation               |  |                | 3,273  |      |  |   | 5,264  |  
|Notes payable                                |  |                | 5,755  |      |  |   | 5,720  |  
|Hedging activities                           |  |                | 2,987  |      |  |   | 2,334  |  
|Other                                        |  |                | 5,066  |      |  |   | 4,106  |  
|                                             |  |                |        |      |  |   |        |  
|                                             |  |                | 51,964 |      |  |   | 39,381 |  
|Valuation allowance                          |  |                | (9,345 | )    |  |   | (9,280 | )
|                                             |  |                |        |      |  |   |        |  
|Deferred tax assets                          |  |                | 42,619 |      |  |   | 30,101 |  
|Deferred tax liabilities:                    |  |                |        |      |  |   |        |  
|Fixed assets                                 |  |                | 12,778 |      |  |   | 12,224 |  
|Intangibles                                  |  |                | 20,306 |      |  |   | 13,220 |  
|Partnership interests and equity investments |  |                | 61,241 |      |  |   | 54,943 |  
|Pension assets                               |  |                | 4,584  |      |  |   | 13,022 |  
|                                             |  |                |        |      |  |   |        |  
|Deferred tax liabilities                     |  |                | 98,909 |      |  |   | 93,409 |  
|                                             |  |                |        |      |  |   |        |  
|Net deferred tax liabilities                 |  | $              | 56,290 |      |  | $ | 63,308 |  
|                                             |  |                |        |      |  |   |        |  

During the year ended June 30, 2002, the Company recognized a previously
disallowed net operating loss carryover as a result of a change in the federal
tax regulation caused by a recent U.S. Court of Appeals, Federal Circuit Court
ruling. Accordingly, the Companys net operating loss carryover has increased
and the related deferred tax assets have been increased. At June 30, 2002, the
Company has approximately $98.0 million of net operating loss carryforwards for
tax reporting purposes available to offset its future taxable income, which
expire in 2019 through 2022 and $0.6 million of alternative minimum tax credit
carryforwards.

The Company made state and federal income tax payments of approximately
$0.7 million, $11.6 million, and $1.0 million during fiscal years 2002, 2001
and 2000, respectively.

Note 11: Hedging Activities

Under SFAS No. 133, the Companys newsprint and its variable to fixed
interest rate swap agreements have been designated as cash flow hedges and are
recorded at fair value and changes in the value of such contracts, net of
income taxes, are reported in comprehensive income. For purposes of calculating
income taxes related to comprehensive income, the Company uses its combined
statutory rate for federal and state income taxes. The periodic net settlements
made under the newsprint swap agreements are reflected in operations in the
period the newsprint is consumed. The net settlements made under the variable
to fixed interest rate swap agreements are reflected in operations as an
adjustment to interest expense over the term of the related swap.

During the second quarter of fiscal year 2002, the creditworthiness of the
counterparty to one of the Companys newsprint swap agreements, Enron North
America Corp. (Enron) was downgraded below investment grade; subsequently,
Enron filed for bankruptcy and failed to make required payments to the Company
under the swap agreement, creating an event of default under the swap
agreement. These events caused the Company to notify Enron on February 5, 2002,
of its termination of the swap agreement under the early termination provisions
of the swap agreement and that the Company believes it has no financial
obligations to Enron, based on its calculations pursuant to the terms of the
agreement. Enron has acknowledged the termination of the swap agreement and has
notified the Company that it disagrees with the Companys calculation of the
amount owing in connection with the termination. The Company accounted for the
early termination of the swap in accordance with SFAS No. 133, which required
the Company to record a liability and a charge to comprehensive income to
reflect the fair value of the derivative instrument as of the

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 11: Hedging Activities (continued)

date prior to that which the hedge was deemed ineffective. Since a liquid
market for a swap similar to the terminated swap did not exist, the valuation
of the swap was based on a discounted cash flow model that projected newsprint
prices. The valuation required significant judgment and was subject to
assumptions, most notably estimates of future newsprint prices. The Company
terminated the newsprint hedge during the third quarter of fiscal year 2002;
however, the Company considers the date at which the hedging instrument became
ineffective to be the date Enron filed bankruptcy. The Company discontinued
cash flow hedge accounting on the date the hedge instrument was deemed
ineffective. As a result of discontinuing hedge accounting the Company recorded
an unrealized loss of $5.7 million (as required by SFAS No. 133) at the date
before the hedge became ineffective, which was recorded in other liabilities
and other comprehensive income. The unrealized loss is not related to any
financial obligation to Enron. The amount in accumulated other comprehensive
loss related to this ineffective hedge is being amortized on a straight-line
basis and charged to other (net) expense over what would have been the original
remaining life of the swap agreement. Approximately $0.4 million was
reclassified from accumulated other comprehensive loss to earnings for the year
ended June 30, 2002 and approximately $0.8 million is expected to be
reclassified during fiscal year ended June 30, 2003 related to the terminated
swap.

The Company expects to reclassify $1.2 million from accumulated other
comprehensive loss to other (net) expense for hedging activities during fiscal
year 2003, including the amounts related to the terminated newsprint swap
discussed above.

Note 12: Commitments and Contingencies

Commitments

As previously mentioned in Note 2, the Company has entered into a
newsprint swap agreement, which expires in May 2005. Swap agreements are used
by the Company from time to time to reduce its exposure to the uncertainty of
future newsprint price fluctuations. The Company currently has 25,000 metric
tons, at an average price of $615 per metric ton, hedged by the swap agreement.
The Company also participates in fixed price contracts, which expire in June
2004. The Company currently has 10,800 metric tons, at an average price of $602
per metric ton, covered by fixed price contracts.

The Denver Post Shareholder Agreement provides Media General and MediaNews
with a put and a call option, respectively, on Media Generals remaining 20%
interest in The Denver Post Corporation. The put can be exercised by Media
General beginning June 30, 2001 and expires June 30, 2004. The call option can
be exercised by MediaNews beginning July 1, 2004 and expires June 30, 2005. The
price of the put and call are the same and are based on the appraised fair
market value of the Denver Post, less Permitted Debt of the Denver Post as
defined in The Denver Post Shareholder Agreement. MediaNews has one year to
close on the purchase from the date of the put notice.

In fiscal year 1998, in exchange for $2.4 million, the Company granted an
option to a third party to purchase substantially all the assets used in the
publication of a certain newspaper beginning in 2003 and expiring in 2010 at
the newspapers fair market value. The holder of the option can also require
the Company to repurchase the option anytime beginning in 2003 through 2010,
based on a fixed formula. As of June 30, 2002, the estimated cost of
repurchasing the option in 2010 is approximately $26.0 million. If the option
holder has not exercised the option by the twelfth anniversary of the option
grant, the Company must repurchase the option based on the same fixed formula.
If the option holder elects to put the option to the Company (the earliest date
is January 31, 2003), which the Company believes is unlikely, the Company would
be required to repurchase the option and the related subordinated note (see
Note 7). Should the Company be required to repurchase the option and
Subordinated Note, it would fund the payment with available borrowings from its
existing Bank Credit Facility. As a result, in accordance with SFAS No. 6,
Classification of Short-Term Obligations Expected to Be Refinanced,the option
repurchase price and note remain classified in the Companys consolidated
balance sheet as long-term. At June 30, 2002, the Company has accrued
approximately $8.9 million associated with the option repurchase.

One of the Companys employees has the right, under certain circumstances,
to put his shares of common stock to the Company, if the shares have not been
registered on a national or international securities exchange. The Company has
the right to call this employees shares of common stock in the Company if the
employee is terminated under certain circumstances. The price of the put and
the call is based on the fair market value of the common stock of MediaNews,
excluding any adjustment for minority interest.

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 12: Commitments and Contingencies (continued)

Contingencies

In December 2000, Salt Lake Tribune Publishing Company (Salt Lake
Publishing) brought a lawsuit and moved for a preliminary injunction against
MediaNews, AT&T Corporation, and AT&T Broadband, LLC. That lawsuit is now
pending in the United States District Court for the District of Utah as case
number 2:00 CV 936. Salt Lake Publishing was the manager at the time of The
Salt Lake Tribune, a newspaper owned by the Companys now wholly-owned
subsidiary Kearns-Tribune, LLC (Kearns, LLC). Salt Lake Publishing initially
moved to prevent the Company from acquiring Kearns, LLC from AT&T Broadband,
LLC. The district court denied the preliminary injunction motion by order dated
December 15, 2000, and the Company acquired Kearns, LLC on January 2, 2001.
After Kearns, LLC was acquired by the Company, Salt Lake Publishing filed a
second motion for a preliminary injunction claiming that actions taken by
Kearns, LLC after its acquisition by the Company breached a certain Management
Agreement and a certain Option Agreement between Kearns, LLC and Salt Lake
Publishing, both of which are dated July 31, 1997. That motion sought to
restore certain Salt Lake Publishing employees to certain director and officer
positions at the Newspaper Agency Corporation (NAC) from which they were
removed and to suspend the implementation of various amendments to a Joint
Operating Agreement between Kearns, LLC and Deseret Publishing. The District
Court granted Salt Lake Publishings motion in part by order dated February 21,
2001, and Salt Lake Publishing continued to manage Kearns, LLC until July 31,
2002.

In September 2001, Deseret News Publishing Company (Deseret Publishing),
the publisher of the Deseret News, the other party to the Joint Operating
Agreement with Kearns, LLC, joined the lawsuit pending in federal court between
Salt Lake Publishing and the Company. Deseret Publishing named both Salt Lake
Publishing and Kearns, LLC as defendants, and is seeking, among other things,
damages (Deseret Publishings damages claims are confined to Salt Lake
Publishing only and do not include Kearns, LLC) and declaratory and injunctive
relief as to the meaning and enforceability of the Option, Management, and
Joint Operating Agreements. Among Deseret Publishings claims against Kearns,
LLC is its request for a declaration that the Management Agreement is
unenforceable to the extent that it purports to authorize Salt Lake Publishing
to take on behalf of Kearns, LLC certain required or permitted actions under
the Joint Operating Agreement. In April, 2002 AT&T Broadband, LLC was
dismissed from this lawsuit.

In accordance with the Management Agreement, in January 2002 the Company
notified Salt Lake Publishing that Company would not be renewing the Management
Agreement and that the Company would take over management of Kearns, LLC on
July 31, 2002, when the Management Agreement expired by its terms. Seeking to
continue its management of Kearns, LLC, Salt Lake Publishing filed an
injunction seeking to stay on as manager until the issues surrounding the
option exercise (more fully described below) are resolved on appeal. The
injunction was denied, and on August 1, 2002, the Company began managing the
operations of Kearns, LLC, subject to certain conditions imposed in the
District Courts Order dated July 22, 2002. That Order required MediaNews to
provide Salt Lake Publishing with 30 days advance notice before disposing of
any Tribune Asset exceeding $250,000.00 in value and to refrain from amending
the Joint Operating Agreement or proceeding with irrevocable acts to acquire
land and build a new press facility until 10 days after an entry of judgment in
the case by the District Court. Salt Lake Publishing is appealing the denial of
the injunction to the United States Court of Appeals for the Tenth Circuit,
which will hear oral argument on the appeal on November 18, 2002.

In January 2002, certain controlling members of Salt Lake Publishing filed
a separate lawsuit in Colorado State Court in Denver. This lawsuit names all
the same defendants, arises from the same underlying facts, and seeks
overlapping equitable relief and compensatory and punitive damages as the
pending federal case discussed above. The Company and the other defendants
filed motions seeking to have this lawsuit dismissed or, in the alternative,
stayed pending resolution of the federal action. On February 21, 2002, the
Colorado court granted defendants motion to stay the Colorado action until the
Utah federal court action has been resolved.

On May 31, 2002, the Utah District Court issued an Order on Motions for
Summary Judgment ruling that Salt Lake Publishing held a valid and enforceable
option to purchase the Tribune Assets owned by Kearns, LLC. However, the
District Court also ruled that one of the key components of the Tribune Assets,
stock in Newspaper Agency Corporation (NAC), was subject to an
anti-alienation provision contained in the Joint Operating Agreement that
precludes the sale, assignment or transfer of the NAC stock by either party
absent waiver or modification of the provision. Subsequent to the court ruling,
Deseret Publishing notified Salt Lake Publishing that it would not waive or
modify the anti-alienation provision or consent to the sale or transfer of the
NAC stock to Salt Lake Publishing. On August 21, 2002, the District Court
certified for immediate appeal to the United States Court of Appeals for the
Tenth Circuit the question of whether the anti-alienation provision contained
in the Joint Operating Agreement is enforceable, as the District Court held in
its Summary Judgment Order, or is instead void as against public policy, as
Salt Lake Publishing contends. On September 6, 2002, the appellate court
agreed to hear an immediate appeal of this issue, and consolidated it with the
appeal of the denial of the injunction, which is scheduled to be argued on
November 18, 2002.

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 12: Commitments and Contingencies (continued)

Contingencies (continued)

On August 23, 2002, the Company filed a motion asking that the District
Court amend its prior certification order to request that the United States
Court of Appeals for the Tenth Circuit consider an additional legal issue
arising out of the Summary Judgment Order: whether the Option Agreement, as
construed by the Court, is void and unenforceable. Salt Lake Publishing has
opposed any amendment of the certification order, and the District Court has
not yet ruled on the request. If the District Court grants the request to
amend its certification order, the Tenth Circuit has discretion to either add
this legal issue to the issues it is already considering in the pending appeal
or to decline to consider the additional legal issue in the currently pending
interlocutory appeal.

Notwithstanding Deseret Publishings communication to Salt Lake Publishing
and the Company that it will not waive the anti-alienation provision of the Joint
Operating Agreement, Salt Lake Publishing has notified Kearns, LLC of its
intention to exercise its option to acquire the Tribune Assets owned by Kearns,
LLC. Salt Lake Publishing is seeking a judicial order requiring Kearns, LLC to
specifically perform the Option Agreement. MediaNews and Deseret Publishing
oppose specific performance. In the event the option were to be exercised, the
Option Agreement provides for the purchase of all, and not less than all of
the Tribune Assets held by Kearns, LLC at their fair market value as determined
by an appraisal process involving up to three appraisers. That appraisal
process is ongoing. The Company continues to believe that the Tribune Assets
will be appraised at a value substantially in excess of the Companys $200.0
million purchase price.

Salt Lake Publishing has amended its original complaint several times and
currently asserts against MediaNews and Kearns, LLC various claims, including
claims for breaches of contract, tort claims and claims for declaratory and
injunctive relief relating to the Management, Option, and Joint Operating
Agreements. Salt Lake Publishing is seeking, among other things, both
compensatory and punitive damages and specific performance of the Option
Agreement. MediaNews and Kearns, LLC have pending counterclaims against Salt
Lake Publishing seeking declaratory and injunctive relief relating to the
Management, Option and Joint Operating Agreements, and damages for breaches of
contract and interference with contract. Additionally, MediaNews and Kearns,
LLC have pending counterclaims for declaratory judgment, but no damages claims,
naming Deseret Publishing. A trial on the issues that remain after the District
Courts Summary Judgment Order is currently scheduled to commence January 13,
2003. The Company is not in a position at this time to comment on the likely
outcome of the damage portion of the litigation or the success of any appeals
of the Utah District Court rulings; however, the Company does not believe that
the litigation will have a materially adverse impact on its financial
condition, results of operations, or liquidity. The cost of defending these
lawsuits has been and may continue to be substantial.

Other

In November 2001, one of the Companys former newsprint vendors brought a
lawsuit against the Company seeking actual and compensatory damages relating to
the Companys alleged breach of a newsprint agreement between the vendor and
the Company. The Company believes it has meritorious arguments in defense of
the alleged breach and intends to vigorously defend itself in this matter. In
addition, the Company has filed a counterclaim against the plaintiff related to
damages caused by the plaintiffs breaches. While the Company does not expect
an unfavorable outcome, the Company does not believe an unfavorable outcome
would have a material adverse impact on its financial condition, results of
operations, or liquidity. The Company is currently seeking to resolve this legal action
through mediation.

MediaNews terminated a newsprint swap with Enron North America Corp.
(Enron) effective February 6, 2002. MediaNews informed Enron that such
termination creates a payment obligation on the part of Enron in favor of
MediaNews in the amount of $0.02 million.

Enron has informed MediaNews that it disagrees with MediaNews method of
calculating the amount due in respect of the early termination of the swap.
Enron has asserted that by its calculations MediaNews owes Enron approximately
$16.2 million as a result of the termination. Enron has threatened to take
legal action if MediaNews does not make such payment.

MediaNews does not agree with Enrons calculations and intends to
vigorously defend any claim by Enron. MediaNews believes that it has properly
calculated the amount of the payment due in connection with the termination of
the swap, and that it has meritorious defenses to any claim by Enron.
MediaNews has not recorded any liability associated with the termination of
this swap, except as required by SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities,at the time the swap was deemed to be an
ineffective hedge.

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 12: Commitments and Contingencies (continued)

Contingencies (continued)

The Company is involved in other litigation arising in the ordinary course
of business. In managements opinion, the outcome of these legal proceedings
will not have a material adverse impact on its financial condition, results of
operations, or liquidity.

Note 13: Treasury Stock

On April 7, 2000, the Company repurchased 16,000 shares of its common
stock at $125.00 per share, for a total purchase price of $2.0 million. The
repurchased shares represent less than 1.0% of the Companys outstanding shares
and are held in treasury.

Note 14: Related Party Transactions

MediaNews is party to a consulting agreement, renewable annually, with Mr.
Richard B. Scudder, the Chairman of the Board of MediaNews, which requires
annual payments of $250,000.

Since 1996, the Company has advanced to the Singleton Irrevocable Trust
funds to pay the premiums on cash surrender value life insurance policies
covering Mr. William Dean Singleton, the Vice Chairman of the Board and Chief
Executive Officer of MediaNews, and his wife. The Singleton Irrevocable Trust
benefits Mr. Singletons children. The amount advanced as of June 30, 2002 and
2001 was $1.4 million and $1.2 million, respectively. Advances will be repaid
when the policy is surrendered. No interest is charged on these advances.

Note 15: Recent Events

The California Newspapers Partnership has agreed to acquire substantially
all of the operating assets used in the publication of The Reporter,a morning
daily newspaper, and Valu-Pack,a total market coverage product, both published
in Vacaville, California. The newspaper has daily and Sunday paid circulation
of approximately 18,000 and 20,000, respectively. The purchase price of $31.0
million includes $30.0 million of cash, net of working capital, plus future
payments under a covenant not to compete with a discounted value of
approximately $1.0 million. Closing is scheduled to be effective on October 1,
2002 and will be funded by the CNP partners capital contributions. The
Companys share of capital funding is 54.23% or $16.3 million.

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|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|------- |  | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|No.     |  |   | Description                                                                                                                                                                                                                                                                                                                                                                     
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|4.1*    |  | - | Form of Indenture dated as of March 16, 1999 (the Indenture) between Garden State Newspapers, Inc.,
as Issuer, and The Bank of New York, as Trustee                                                                                                                                                                                                                           
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|4.2*    |  | - | Form of Garden State Newspapers, Inc.s 8-5/8% Senior Subordinated Notes due 2011, Series A (contained
in the Indenture filed as Exhibit 4.1)                                                                                                                                                                                                                                   
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|4.3*    |  | - | Form of Garden State Newspapers, Inc.s 8-5/8% Senior Subordinated Notes due 2011, Series B, the
Exchange Note (contained in the Indenture filed as Exhibit 4.1)                                                                                                                                                                                                              
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|5.0*    |  | - | Opinion of Verner, Liipfert, Bernhard, McPherson & Hand                                                                                                                                                                                                                                                                                                                         
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.1*   |  | - | $350.0 million amended and restated credit agreement dated as of June 30, 1999 among Garden State
Newspapers, Inc., the Banks listed therein, the Guarantors listed therein and the various agents listed
therein and which is herein referred to as the new credit agreement                                                                                                   
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.2*   |  | - | Employment Agreement dated March 15, 2000 between MediaNews Services and Joseph J. Lodovic, IV                                                                                                                                                                                                                                                                                  
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.3*   |  | - | Employment Agreement dated March 15, 2000, between MediaNews Services and William Dean Singleton                                                                                                                                                                                                                                                                                
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.4*   |  | - | Joint Operating Agreement dated January 13, 1989, among York Daily Record, Inc., York Newspapers, Inc.,
and The York Newspaper Company                                                                                                                                                                                                                                          
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.5*   |  | - | Consulting Agreement dated November 16, 1993, between J. Allan Meath and Garden State Newspapers, Inc.                                                                                                                                                                                                                                                                          
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.6*   |  | - | Asset Purchase Agreement dated July 31, 1995, by and among EPC Holding, Inc., The Eagle Publishing
Company, Reformer Publishing Corporation, Middletown Press Publishing Corporation, and Eagle Street
Realty Trust, as Sellers, and New England Newspapers, Inc., Brattleboro Publishing Company, Connecticut
Newspapers, Inc. and Pittsfield Publications, Inc., as Purchasers
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.7*   |  | - | Asset Purchase Agreement dated July 31, 1995, by and among Banner Publishing Corporation and Eagle
Street Realty Trust, as Sellers, and New England Newspapers, Inc. and North Eastern Publishing Company,
as Purchasers                                                                                                                                                        
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.8*   |  | - | Asset Purchase Agreement by and among Lowell Sun Publishing Company and Lowell Sun Realty Company
(Sellers), Garden State Newspapers, Inc. (Purchaser), and John H. Costello, Jr., Alexander S. Costello,
Thomas F. Costello, Charlotte E. LaPierre and Dana Biadi (Guarantors), relating to the Acquisition of
The Sunand The Sunday Sundated July 31, 1997                    
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.9*   |  | - | Asset Purchase and Sale Agreement by and between Tower Media, Inc., as Seller; Jack Kent Cooke
Incorporated, as Guarantor; and Garden State Newspapers, Inc., as Purchaser, dated as of December 1,
1997                                                                                                                                                                        
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.10*  |  | - | Indenture dated as of October 1, 1997, between Garden State Newspapers, Inc. and The Bank of New York,
as Trustee, for the issuance of up to $300,000,000 of Series A & B 8-3/4% Senior Subordinated Notes due
2009                                                                                                                                                             
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.11*  |  | - | Subordinated Note Purchase Agreement between Garden State Newspapers, Inc. and Greenco, Inc. dated as
of January 30, 1998                                                                                                                                                                                                                                                       
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.12*  |  | - | Note Purchase Agreement dated February 6, 1998, by and among Garden State Newspapers, Inc. and the
Initial Purchasers of $50,000,000 of 8-3/4 Notes due 2009                                                                                                                                                                                                                    
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.13*  |  | - | Purchase Agreement dated March 10, 1999, by and among Garden State Newspapers, Inc. and the Initial
Purchasers of $200,000,000 of 8-5/8% Notes due 2011                                                                                                                                                                                                                         
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.14*  |  | - | Partnership Agreement of California Newspapers Partnership, a Delaware General Partnership, by and
among West Coast MediaNews LLC, Donrey Newspapers LLC, the Sun Company of San Bernardino, California and
MediaWest-SBC, Inc. dated March 31, 1999                                                                                                                            
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.15*  |  | - | Contribution Agreement dated March 3, 1999 by and among Garden State Newspapers, Inc., Alameda
Newspapers, Inc., V&P Publishing, Inc., Internet Media Publishing, Inc., DR Partners, MediaWest-SBC,
Inc. and The Sun Company of San Bernardino, California                                                                                                                      
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.16*  |  | - | Third Amended and Restated Shareholders Agreement dated as of June 30, 1999 among the shareholders of
Denver Newspapers, Inc.                                                                                                                                                                                                                                                  
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.17*  |  | - | Tax Agreement dated as of June 30, 1999 among the Shareholders of Denver Newspapers, Inc. (now known as
The Denver Post Corporation)                                                                                                                                                                                                                                            
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.18*  |  | - | Asset Purchase Agreement dated June 30, 2000 between Penn Jersey Advance, Inc. and MediaNews Group,
Inc. and its wholly owned subsidiaries, Long Beach Publishing Company, Easton Publishing Company, South
Jersey Newspapers Company and Internet Media Publishing, Inc.                                                                                                       
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.19*  |  | - | Asset Purchase Agreement dated as of July 10, 2000 among Thomson Newspapers, Inc., Thomson
Newspapers Licensing Corporation, TN Customer Holding LLC and MediaNews Group, Inc.                                                                                                                                                                                                  
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.20*  |  | - | Asset Purchase Agreement dated as of December 1, 2000, between AT&T Broadband LLC and MediaNews
Group, Inc.                                                                                                                                                                                                                                                                     

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|        |  |   |                                                                                                                                       
|------- |  | - | --------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |   |                                                                                                                                       
|No.     |  |   | Description                                                                                                                           
|        |  |   |                                                                                                                                       
|10.21*  |  | - | Credit Agreement, dated as of May 12, 1999, as Amended and Restated as of January 2, 2001.                                            
|        |  |   |                                                                                                                                       
|10.22*  |  | - | Amendment No. 1 dated May 11, 2001, to Credit Agreement, dated as of May 12, 1999, as amended and
restated as of January 2, 2001.     
|        |  |   |                                                                                                                                       
|10.23*  |  | - | Amendment No. 2 dated December 27, 2001, to Credit Agreement, dated as of May 12, 1999. As amended
and restated as of January 2, 2001.
|        |  |   |                                                                                                                                       
|12.1*   |  | - | Computation of Ratio Earnings to Fixed Charges                                                                                        
|        |  |   |                                                                                                                                       
|21.1    |  | - | Subsidiaries of Registrant                                                                                                            
|        |  |   |                                                                                                                                       
|99.1    |  | - | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.               
|        |  |   |                                                                                                                                       
|99.2    |  | - | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.               
|        |  |   |                                                                                                                                       
|        |  |   | * Previously Filed                                                                                                                    

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SIGNATURES

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

|      |  |                    |  |                                                                                           
|----- |  | ------------------ |  | ------------------------------------------------------------------------------------------
|      |  |                    |  | MEDIANEWS GROUP, INC.                                                                     
|     
|Date: |  | September 16, 2002 |  | By:/S/Ronald A. Mayo
      Ronald A. Mayo
      Vice President and Chief Financial Officer

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

|                                                     |  |                                                                               |  |                   
|---------------------------------------------------- |  | ----------------------------------------------------------------------------- |  | ------------------
|SIGNATURE                                            |  | TITLE                                                                         |  | DATE              
|                                                     |  |                                                                               |  |                   
|                                                    
|/s/ William Dean Singleton

(William Dean Singleton) |  | Vice Chairman, Chief Executive Officer
and Director (Chief Executive Officer) |  | September 16, 2002
|                                                     |  |                                                                               |  |                   
|/s/ Joseph J. Lodovic, IV

(Joseph J. Lodovic, IV)   |  | President                                                                     |  | September 16, 2002
|                                                     |  |                                                                               |  |                   
|/s/ Richard B. Scudder

(Richard B. Scudder)         |  | Chairman and Director                                                         |  | September 16, 2002
|                                                     |  |                                                                               |  |                   
|/s/ Jean Scudder

(Jean Scudder)                     |  | Director                                                                      |  | September 16, 2002
|                                                     |  |                                                                               |  |                   
|/s/ Ronald A. Mayo

(Ronald A. Mayo)                 |  | Vice President and Chief Financial Officer                                    |  | September 16, 2002
|                                                     |  |                                                                               |  |                   
|/s/ Michael J. Koren

(Michael J. Koren)             |  | Vice President and Controller
(Principal Accounting Officer)                  |  | September 16, 2002

Supplemental Information to be Furnished with Reports Filed
Pursuant to Section 15(d) of the Act by Registrants Which Have Not
Registered Securities Pursuant to Section 12 of the Act

No annual report or proxy material has been sent to our security holders. We
will furnish to our security holders an annual report subsequent to this
filing.

70



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CERTIFICATIONS

I, William Dean Singleton certify that:



| | 1) |  | I have reviewed this annual report on Form 10-K of MediaNews Group,
Inc.;                                                                                                                                                                                                                                               
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2) |  | Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
|
| | 3) |  | Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report.                   

Date: September 16, 2002

/s/ William Dean Singleton
___________________________________
(William Dean Singleton)
Vice Chairman, Chief Executive Officer and Director

71



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CERTIFICATIONS

I, Joseph J. Lodovic, IV certify that:



| | 1) |  | I have reviewed this annual report on Form 10-K of MediaNews Group,
Inc.;                                                                                                                                                                                                                                               
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2) |  | Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
|
| | 3) |  | Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report.                   

Date: September 16, 2002

/s/ Joseph J. Lodovic, IV
___________________________________
(Joseph J. Lodovic, IV)
President

72



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CERTIFICATIONS

I, Ronald A. Mayo certify that:



| |                                                                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. I have reviewed this annual report on Form 10-K of MediaNews Group,
Inc.;                                                                                                                                                                                                                                               
|
| | 2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
|
| | 3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report.                   

Date: September 16, 2002

/s/ Ronald A. Mayo
___________________________________
(Ronald A. Mayo)
Vice President, Chief Financial Officer

73



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MEDIANEWS GROUP, INC. AND SUBSIDIARIES
SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS
FISCAL YEARS ENDED JUNE 30, 2002, 2001 AND 2000

|                         |                                                       |  |                |        |             |  |            |        |                |  |              |        |            |  |   |       |  |  |   |        | 
|------------------------ | ----------------------------------------------------- |  | -------------- | ------ | ----------- |  | ---------- | ------ | -------------- |  | ------------ | ------ | ---------- |  | - | ----- |  |  | - | ------ | 
|                         |                                                       |  | Balance at     |        | Additions   |  |            |        |                |  | Acquisitions |        | Balance at
|                         |                                                       |  | Beginning of   |        | Charged to  |  | Net        |        | (Dispositions) |  | End of      
|                         |                                                       |  | Period         |        | Expense Net |  | Deductions |        | Net            |  | Period      
|                         |                                                       |  |                |        |             |  |            |        |                |  |             
|                         |                                                       |  | (In thousands)
|YEAR ENDED JUNE 30, 2002 |                                                       |  |                |        |             |  |            |        |                |  |              |        |            |  |   |       |  |  |   |       
|                         | Reserves and allowances deducted from
asset accounts: |  |                |        |             |  |            |        |                |  |              |        |            |  |   |       |  |  |   |        | 
|                         | Allowance for doubtful accounts                       |  | $              | 10,923 |             |  | $          | 10,213 |                |  | $            | 10,467 |            |  |   |      |  |  | $ | 10,669 | 
|YEAR ENDED JUNE 30, 2001 |                                                       |  |                |        |             |  |            |        |                |  |              |        |            |  |   |       |  |  |   |       
|                         | Reserves and allowances deducted from
asset accounts: |  |                |        |             |  |            |        |                |  |              |        |            |  |   |       |  |  |   |        | 
|                         | Allowance for doubtful accounts                       |  | $              | 9,910  |             |  | $          | 10,916 |                |  | $            | 11,815 |            |  | $ | 1,912 |  |  | $ | 10,923 | 
|YEAR ENDED JUNE 30, 2000 |                                                       |  |                |        |             |  |            |        |                |  |              |        |            |  |   |       |  |  |   |       
|                         | Reserves and allowances deducted from
asset accounts: |  |                |        |             |  |            |        |                |  |              |        |            |  |   |       |  |  |   |        | 
|                         | Allowance for doubtful accounts                       |  | $              | 8,334  |             |  | $          | 10,859 |                |  | $            | 11,531 |            |  | $ | 2,248 |  |  | $ | 9,910  | 

See notes to consolidated
financial statements.

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EXHIBIT INDEX

|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|------- |  | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|No.     |  |   | Description                                                                                                                                                                                                                                                                                                                                                                     
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|4.1*    |  | - | Form of Indenture dated as of March 16, 1999 (the Indenture) between Garden State Newspapers, Inc.,
as Issuer, and The Bank of New York, as Trustee                                                                                                                                                                                                                           
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|4.2*    |  | - | Form of Garden State Newspapers, Inc.s 8-5/8% Senior Subordinated Notes due 2011, Series A (contained
in the Indenture filed as Exhibit 4.1)                                                                                                                                                                                                                                   
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|4.3*    |  | - | Form of Garden State Newspapers, Inc.s 8-5/8% Senior Subordinated Notes due 2011, Series B, the
Exchange Note (contained in the Indenture filed as Exhibit 4.1)                                                                                                                                                                                                              
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|5.0*    |  | - | Opinion of Verner, Liipfert, Bernhard, McPherson & Hand                                                                                                                                                                                                                                                                                                                         
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.1*   |  | - | $350.0 million amended and restated credit agreement dated as of June 30, 1999 among Garden State
Newspapers, Inc., the Banks listed therein, the Guarantors listed therein and the various agents listed
therein and which is herein referred to as the new credit agreement                                                                                                   
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.2*   |  | - | Employment Agreement dated March 15, 2000 between MediaNews Services and Joseph J. Lodovic, IV                                                                                                                                                                                                                                                                                  
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.3*   |  | - | Employment Agreement dated March 15, 2000, between MediaNews Services and William Dean Singleton                                                                                                                                                                                                                                                                                
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.4*   |  | - | Joint Operating Agreement dated January 13, 1989, among York Daily Record, Inc., York Newspapers, Inc.,
and The York Newspaper Company                                                                                                                                                                                                                                          
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.5*   |  | - | Consulting Agreement dated November 16, 1993, between J. Allan Meath and Garden State Newspapers, Inc.                                                                                                                                                                                                                                                                          
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.6*   |  | - | Asset Purchase Agreement dated July 31, 1995, by and among EPC Holding, Inc., The Eagle Publishing
Company, Reformer Publishing Corporation, Middletown Press Publishing Corporation, and Eagle Street
Realty Trust, as Sellers, and New England Newspapers, Inc., Brattleboro Publishing Company, Connecticut
Newspapers, Inc. and Pittsfield Publications, Inc., as Purchasers
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.7*   |  | - | Asset Purchase Agreement dated July 31, 1995, by and among Banner Publishing Corporation and Eagle
Street Realty Trust, as Sellers, and New England Newspapers, Inc. and North Eastern Publishing Company,
as Purchasers                                                                                                                                                        
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.8*   |  | - | Asset Purchase Agreement by and among Lowell Sun Publishing Company and Lowell Sun Realty Company
(Sellers), Garden State Newspapers, Inc. (Purchaser), and John H. Costello, Jr., Alexander S. Costello,
Thomas F. Costello, Charlotte E. LaPierre and Dana Biadi (Guarantors), relating to the Acquisition of
The Sunand The Sunday Sundated July 31, 1997                    
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.9*   |  | - | Asset Purchase and Sale Agreement by and between Tower Media, Inc., as Seller; Jack Kent Cooke
Incorporated, as Guarantor; and Garden State Newspapers, Inc., as Purchaser, dated as of December 1,
1997                                                                                                                                                                        
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.10*  |  | - | Indenture dated as of October 1, 1997, between Garden State Newspapers, Inc. and The Bank of New York,
as Trustee, for the issuance of up to $300,000,000 of Series A & B 8-3/4% Senior Subordinated Notes due
2009                                                                                                                                                             
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.11*  |  | - | Subordinated Note Purchase Agreement between Garden State Newspapers, Inc. and Greenco, Inc. dated as
of January 30, 1998                                                                                                                                                                                                                                                       
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.12*  |  | - | Note Purchase Agreement dated February 6, 1998, by and among Garden State Newspapers, Inc. and the
Initial Purchasers of $50,000,000 of 8-3/4 Notes due 2009                                                                                                                                                                                                                    
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.13*  |  | - | Purchase Agreement dated March 10, 1999, by and among Garden State Newspapers, Inc. and the Initial
Purchasers of $200,000,000 of 8-5/8% Notes due 2011                                                                                                                                                                                                                         
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.14*  |  | - | Partnership Agreement of California Newspapers Partnership, a Delaware General Partnership, by and
among West Coast MediaNews LLC, Donrey Newspapers LLC, the Sun Company of San Bernardino, California and
MediaWest-SBC, Inc. dated March 31, 1999                                                                                                                            
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.15*  |  | - | Contribution Agreement dated March 3, 1999 by and among Garden State Newspapers, Inc., Alameda
Newspapers, Inc., V&P Publishing, Inc., Internet Media Publishing, Inc., DR Partners, MediaWest-SBC,
Inc. and The Sun Company of San Bernardino, California                                                                                                                      
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.16*  |  | - | Third Amended and Restated Shareholders Agreement dated as of June 30, 1999 among the shareholders of
Denver Newspapers, Inc.                                                                                                                                                                                                                                                  
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.17*  |  | - | Tax Agreement dated as of June 30, 1999 among the Shareholders of Denver Newspapers, Inc. (now known as
The Denver Post Corporation)                                                                                                                                                                                                                                            
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.18*  |  | - | Asset Purchase Agreement dated June 30, 2000 between Penn Jersey Advance, Inc. and MediaNews Group,
Inc. and its wholly owned subsidiaries, Long Beach Publishing Company, Easton Publishing Company, South
Jersey Newspapers Company and Internet Media Publishing, Inc.                                                                                                       
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.19*  |  | - | Asset Purchase Agreement dated as of July 10, 2000 among Thomson Newspapers, Inc., Thomson
Newspapers Licensing Corporation, TN Customer Holding LLC and MediaNews Group, Inc.                                                                                                                                                                                                  
|        |  |   |                                                                                                                                                                                                                                                                                                                                                                                 
|10.20*  |  | - | Asset Purchase Agreement dated as of December 1, 2000, between AT&T Broadband LLC and MediaNews
Group, Inc.                                                                                                                                                                                                                                                                     





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##### Table of Contents



|        |  |   |                                                                                                                                       
|------- |  | - | --------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |   |                                                                                                                                       
|No.     |  |   | Description                                                                                                                           
|        |  |   |                                                                                                                                       
|10.21*  |  | - | Credit Agreement, dated as of May 12, 1999, as Amended and Restated as of January 2, 2001.                                            
|        |  |   |                                                                                                                                       
|10.22*  |  | - | Amendment No. 1 dated May 11, 2001, to Credit Agreement, dated as of May 12, 1999, as amended and
restated as of January 2, 2001.     
|        |  |   |                                                                                                                                       
|10.23*  |  | - | Amendment No. 2 dated December 27, 2001, to Credit Agreement, dated as of May 12, 1999. As amended
and restated as of January 2, 2001.
|        |  |   |                                                                                                                                       
|12.1*   |  | - | Computation of Ratio Earnings to Fixed Charges                                                                                        
|        |  |   |                                                                                                                                       
|21.1    |  | - | Subsidiaries of Registrant                                                                                                            
|        |  |   |                                                                                                                                       
|99.1    |  | - | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.               
|        |  |   |                                                                                                                                       
|99.2    |  | - | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.               
|        |  |   |                                                                                                                                       
|        |  |   | * Previously Filed