##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


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FORM 10-K

|                                                              
|--------------------------------------------------------------
|[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE      
|SECURITIES EXCHANGE ACT OF 1934                               
|                                                              
|For the Fiscal Year Ended June 30, 2003                       
|OR                                                            
|[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
|SECURITIES EXCHANGE ACT OF 1934                               
|                                                              
|Commission File Number 033-75156                              

MEDIANEWS GROUP, INC.

(Exact name of registrant as specified in its charter)


|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Delaware                                                       |  | 76-0425553                             
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)
|                                                               |  |                                        
|1560 Broadway, Denver, Colorado                                |  | 80202                                  
|(Address of principal executive offices)                       |  | (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  X   No

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

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).   Yes       No.  X

State the aggregate market value of the voting and non-voting common
equity stock held by non-affiliates computed by reference to the price at which
the common equity was last sold, or the average bid and asked prices of such
common equity, as of the last business day of the registrants most recently
completed second fiscal quarter.

|                                                   |  |                                     |  |            
|-------------------------------------------------- |  | ----------------------------------- |  | -----------
|Class of Voting Stock and Number of Shares Held by |  |                                    
|Non-Affiliates at December 31, 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 26, 2003 |  |                 
|                                   |  |                 
|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 7A. Quantitative and Qualitative Disclosures about Market Risk                          
|                                                           | Item 8. Financial Statements and Supplementary Data                                          
|                                                           | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
|                                                           | Item 9A. Controls and Procedures                                                             
|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. Principal Accountants Fees and Services                                             
|PART IV                                                   
|                                                           | Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K                     
|INDEX TO CONSOLIDATED FINANCIAL STATEMENTS                
|REPORT OF INDEPENDENT AUDITORS                            
|CONSOLIDATED BALANCE SHEETS                               
|CONSOLIDATED STATEMENTS OF OPERATIONS                     
|CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
|CONSOLIDATED STATEMENTS OF CASH FLOWS                     
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                
|EXHIBIT INDEX                                             
|SIGNATURES                                                
|SCHEDULE II                                               
|EX-21.1 Subsidiaries of Registrant                        
|Ex-31.1 Certification of William Dean Singleton           
|EX-31.2 Certification of Joseph J. Lodovic, IV            
|EX-31.3 Certification of Ronald A. Mayo                   
|EX-32.1 Certification Pursuant to 18 USC Sec. 1350        
|EX-32.2 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., which was founded in March 1985. We
control 40 market dominant daily, and approximately 65 non-daily newspapers in
nine 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 Agency (JOA) agreements. 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 2.3 million,
respectively, as of March 31, 2003.

We have grown primarily through strategic acquisitions, partnerships and
to a lesser extent, through internal growth. See page 12 for a description of
significant acquisitions, dispositions and partnerships created during each of
the last five years. One of our key acquisition strategies is to focus on
newspaper markets contiguous to our own, allowing us to realize operating
synergies. We refer to this strategy as clustering.

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 they serve. 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, 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. We own numerous suburban weekly
newspapers, such as the weekly newspapers operated by Alameda Newspapers Group
(ANG), Los Angeles Newspapers Group, and the Connecticut Post. 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
and shopper 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 approximately 40% of
all local media advertising expenditures in the United States in calendar year
2002(1). We believe 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.

Readers of newspapers tend to be more highly educated and have higher
incomes than non-newspaper readers. For instance, 61% 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.

Newspaper advertising revenues are cyclical and are generally affected by
changes in national and regional economic conditions. Classified advertising,
which makes up approximately 36%(1) of newspaper advertising revenues
industry-wide, is the most sensitive to economic improvements or slowdowns as
it is affected by employment trends, real estate transactions and automotive
sales.

Significant Transactions in Fiscal Year 2003

Effective October 1, 2002, the California Newspapers Partnership (CNP), of
which we are the majority owner, acquired substantially all of the operating
assets used in the publication of The Reporter,a morning daily newspaper and
Valu-Pack, a total



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|(1) |  | Source: NAA.org Newspaper Association of America 2003 Facts About Newspapers
|--- |  | ----------------------------------------------------------------------------

2



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##### Table of Contents



Significant Transactions in Fiscal Year 2003 (continued)

market coverage product, both published in Vacaville, California. The purchase
price was $30.9 million. At the date of purchase, the newspaper had daily and
Sunday paid circulation of approximately 18,000 and 20,000, respectively.

Effective October 1, 2002, CNP acquired substantially all of the operating
assets used in the publication of the Original Apartment Magazine,a free
distribution apartment rental magazine. The Original Apartment Magazineis
published every two weeks in three different zones of the greater Los Angeles
metropolitan area: Los Angeles/San Fernando, Orange County, and the Inland
Empire. The purchase price was $10.0 million, plus an additional earnout of up
to $6.0 million dependent on future operating performance. At the date of
purchase, the magazine had monthly distribution of approximately 296,000.

Effective January 31, 2003, CNP acquired substantially all of the
operating assets used in the publication of the Paradise Post,a paid weekly
newspaper published three times weekly in Paradise, California, plus related
publications and a large commercial printing business. The purchase price was
approximately $13.0 million.

On December 10, 2002, MediaNews announced that, through its subsidiary,
Alaska Broadcasting Company, Inc., it had reached an agreement in principle to
purchase the Anchorage Fox affiliate, KTBY, from Piedmont (formerly GOCOM).
Alaska Broadcasting Company, Inc. owns KTVA, a CBS affiliate in Anchorage. We
have filed a waiver request with the FCC under the new FCC media
cross-ownership rules and are awaiting approval to allow us to purchase KTBY
for a purchase price of $4.5 million. However, a recent ruling by the federal
appeals court in Philadelphia has stayed any ownership changes under the new
rules, and until the stay is lifted, our waiver request cannot be considered.
In connection with the pending transaction, Alaska Broadcasting Company, Inc.
has assumed responsibility for purchasing and reselling advertising on KTBY
under a revised joint sales agreement. Under the original joint sales
agreement, Piedmonts KTBY had purchased and resold KTVAs advertising.

Effective March 3, 2003, MediaNews and Gannett Co., Inc. (Gannett)
formed the Texas-New Mexico Newspapers Partnership. MediaNews contributed
substantially all the operating assets and current liabilities of its New
Mexico newspapers, including the Las Cruces Sun-News, The Daily Times
(Farmington), Carlsbad Current-Argus, Alamogordo Daily News,and The Deming
Highlight,as well as all the weekly and other publications published by these
daily newspapers, in exchange for a 33.8% interest in the Texas-New Mexico
Newspapers Partnership. Gannett contributed the El Paso Times,located in El
Paso, Texas, in exchange for a 66.2% controlling partnership interest. As a
result, effective March 3, 2003, MediaNews no longer consolidates the
operations of the entities it contributed to the partnership and began
accounting for its share of the operations of the Texas-New Mexico Newspapers
Partnership under the equity method of accounting. The contribution to the
Texas-New Mexico Newspapers Partnership was treated as two separate, but
simultaneous events: (1) a sale whereby, for accounting purposes, we sold 66.2%
of our interest in our New Mexico properties and, as a result, recognized a
non-monetary pre-tax gain of approximately $27.4 million, and (2) the
acquisition of a 33.8% interest in the partnership.

Operating Strategy

Our long-term operating strategy is to increase revenues and cash flows
through geographic clustering, partnerships 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. One of our key acquisition strategies is to acquire
newspapers in markets contiguous to our own, allowing us to realize operating
synergies. 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, and implementing overall improvements in
cost management. Clustering also enables us 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, the Denver JOA, and the Texas-New Mexico Newspapers
Partnership are extensions of this strategy.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Targeted Marketing Programs. Through a strong local presence and active
community relations, we are able to develop and implement marketing programs
that maximize our share of advertising revenues in each newspapers market. We
utilize research, demographic studies and zoning (marketing directed to a
particular sub-segment of a local area) in developing marketing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

3



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##### Table of Contents



Operating Strategy (continued)



| |  | programs and new products that meet the unique needs of specific advertisers.
We have also formed strategic alliances, such as partnering with ADVO in
three markets, including most recently Los Angeles, to provide direct mail
programs to capture mid-week preprint and print and delivery business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Local News Leadership. We are committed to being the leaders in providing
high quality local news. Our newspapers generally have the largest local news
gathering resources in their markets. We believe that our focus on local news
coverage is key to our success and that providing high quality local and
regional news makes us unique in our markets. With the timeliness and
availability of national and world news 24 hours a day on television and the
Internet, 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. 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 vehicle
for promoting their goods and services. Although our focus is primarily on
local news, we are committed to providing quality national and international
news coverage when it is of particular interest to the local community, such
as sending embedded reporters and photographers from our metropolitan daily
newspapers to cover the recent war in Iraq.                                                                                                                                                                                                                                                                                       
|
| |  | The majority of our newspapers receive awards annually for excellence in
various editorial categories in their respective regions and circulation
size. Recently, The Denver Postachieved the highest award for editorial
excellence, winning a Pulitzer Prize in 2000 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, and in an ongoing
effort to improve quality, we have made investments in digital photography.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | 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 designed to reward our
publishers for circulation growth at their daily newspapers. For the March
2003 ABC (Audit Bureau of Circulation) reporting period, our newspapers
exceeded planned growth by almost 1% both daily and Sunday. MediaNews Group
as a whole showed growth of 0.5% daily and Sunday, after adjusting for the
impact of the Salt Lake City 2002 Olympics, easily outperforming the industry
average which showed a decline of 0.1% for both daily and Sunday. 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, thereby
delivering a stable subscriber base for our advertising customers and
controlling subscriber acquisition costs. This strategy has improved
circulation profits, but may at times decrease circulation volumes in the
short-term. We are also making substantial investments in technology to
enhance demographic targeting of potential subscribers aimed at selling to
and retaining high quality subscribers.
|
| |  | 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
one of the largest newspaper groups 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 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 through ease of use.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | Internet.MediaNews Group interactive (MNGi), the Internet arm of the
company, provides our newspapers with the tools, technologies and services that
our newspapers need to maintain their presence as the leading Web sites in each
of the communities that they serve. Those services include: hosting, online
publishing/site delivery, maintenance, ongoing-development, training,
advertisement delivery, site analytics and business development support. We are
zealously focused on leveraging our extensive news gathering resources and our
existing sales infrastructure in both print and electronic media to extend the
reach and the profitability of our local media franchises. Our newspapers
Internet operations have seen their local markets reach grow significantly
with unique visitor growth of 50% year over year. Recently, we have begun to
implement next generation classified capabilities which we believe will result
in more revenue per order, new revenue streams, significant cost savings, and
the                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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Operating Strategy (continued)



| |  | development of better products that will allow us to better compete with new
entrants into on-line advertising and enhance advertiser satisfaction.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | In addition, we will soon be introducing site registration and
personalization across each of our sites, giving us the ability to integrate
our online/offline databases to allow for a very high degree of online
targeted marketing including print subscription acquisitions, email marketing
and the ability to target advertising based on the captured demographic and
psychographic data.                                                                                                                                                                                                           
|
| |  | We have also made strategic Internet investments to expand and enrich our
online content and advertising services as is more fully described below. By
being the leading, and in certain instances the sole provider of local news
in most of our markets, and leveraging the Internet, electronic media,
emerging wireless and broadband technologies, 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.
|
| |  | Our strategic Internet investments include:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                



| |  |  | PowerOne Media(PowerOne) (www.poweronemedia.com), provides
interactive vertical classified advertising solutions, primarily for
the newspaper industry. PowerOne Media solutions include CarCast,
Zwire!, Classified Hosting, Employment, Display Ads, Franchise
Solutions, Online Dating, and Real Estate. Our equity interest in
PowerOne is approximately 6.0%.                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | CareerSite(www.careersite.com) develops and sells Internet
based application tools that allow job seekers and employers to
search job opportunities and resumes for the best match. As of June
30, 2003, approximately 140 newspapers are using CareerSite as their
Internet employment vertical, of which more than 90 are not owned or
controlled by MediaNews. Employment advertising is an important
revenue stream at our newspapers, and with our investment in
CareerSite, we are able to integrate and provide the best of
newspaper and Internet functionality for users and advertisers. Our
equity interest in CareerSite is approximately 40%. It is currently
anticipated that CareerSite will merge with PowerOne on or around
September 30, 2003, after which we expect to own approximately 16.0%
of PowerOne.
|
| |  |  | SeeitBuyit(www.seeitbuyit.com), incorporated as Mortgage Rate
Watch, is a marketing and promotional services company focused on
providing the real estate industry powerful listing and selling tools
to participating realtors and newspaper affiliates under a program
designed to provide a one stop shopping marketing solution for our
real estate advertising customers. SeeitBuyit provides realtors
with 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 selling new and existing homes. SeeitBuyit
is a wholly-owned subsidiary of MediaNews.                                                                                        



| |  | Convergence.We have made strategic investments in other media outlets,
including 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 sharing of news gathering resources and advertising cross-selling
opportunities.                                                                    
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | As the digital age continues to evolve, we will explore new and innovative
ways to leverage our content across multiple platforms with a clear focus
toward developing profitable new revenue streams. Currently, there is some
uncertainty as to what the final FCC rules and regulations will be with
respect to newspaper cross-ownership. However, even if final newspaper
cross-ownership rules and regulations are relaxed, we do not anticipate
making significant television or radio acquisitions in the aggregate or
making changes to our current business strategy. We will continue to develop
strategic partners to assist in the development of our strategy in a cost
efficient manner.

We may, from time to time, make strategic or targeted acquisitions and
dispositions, which individually or in the aggregate may be material.
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. 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. 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.

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Paid Circulation

The following table sets forth paid circulation of each of our daily
newspapers. The daily circulation data for our JOAs reflects only our
newspapers share of the combined circulation; however, Sunday circulation for
Denver, York and Charleston reflect the combined JOA circulation as only one
newspaper is published on Sunday for these JOAs.

|                                                                       |                                                                   |          |  |                                    |         |       |  |         |           |  |  |         |           | 
|---------------------------------------------------------------------- | ----------------------------------------------------------------- | -------- |  | ---------------------------------- | ------- | ----- |  | ------- | --------- |  |  | ------- | --------- | 
|                                                                       |                                                                   |          |  | Paid Circulation at March 31, 2003
|                                                                       |                                                                   |          |  |                                   
|                                                                       |                                                                   |          |  | Morning(M)                         |         |       |  |         |           |  |  |        
|                                                                       |                                                                   |          |  | Evening(E)                         |         | Daily |  | Sunday 
|                                                                       |                                                                   |          |  |                                    |         |       |  |        
|MediaNews:                                                             |                                                                   |          |  |                                    |         |       |  |         |           |  |  |        
|                                                                       | The Denver Post, Denver, CO (JOA)                                 |          |  | M                                  |         |       |  | 301,107 |           |  |  | 790,508 |          
|                                                                       | Daily News,Los Angeles, CA                                        |          |  | M                                  | (1)     |       |  | 177,562 |           |  |  | 200,570 |          
|                                                                       | The Salt Lake Tribune, Salt Lake City, UT (JOA)                   |          |  | M                                  |         |       |  | 137,317 |           |  |  | 159,429 |          
|                                                                       | Press-Telegram, Long Beach, CA                                    |          |  | M                                  | (1)     |       |  | 96,576  |           |  |  | 108,625 |          
|                                                                       | The York Dispatch& York Sunday News, York, PA (JOA)               |          |  | E                                  |         |       |  | 38,491  |           |  |  | 93,207  |          
|                                                                       | Charleston Daily Mail& Sunday Gazette-Mail,Charleston, WV (JOA)   |          |  | E                                  |         |       |  | 35,985  |           |  |  | 93,152  |          
|                                                                       | Connecticut Post, Bridgeport, CT                                  |          |  | M                                  |         |       |  | 78,374  |           |  |  | 88,892  |          
|                                                                       | The Sun, Lowell, MA                                               |          |  | E                                  |         |       |  | 50,335  |           |  |  | 52,089  |          
|                                                                       | The Berkshire Eagle, Pittsfield, MA                               |          |  | M                                  |         |       |  | 31,132  |           |  |  | 35,641  |          
|                                                                       | The Evening Sun, Hanover, PA                                      |          |  | E                                  |         |       |  | 19,767  |           |  |  | 21,197  |          
|                                                                       | Lebanon Daily News, Lebanon, PA                                   |          |  | E                                  |         |       |  | 20,517  |           |  |  | 20,310  |          
|                                                                       | Sentinel & Enterprise,Fitchburg, MA                               |          |  | E                                  |         |       |  | 17,296  |           |  |  | 17,762  |          
|                                                                       | Eastern Colorado Publishing Company, CO                           |          |  | E                                  | (2)     |       |  | 12,684  |           |  |  | (5)     |          
|                                                                       | Brattleboro Reformer, Brattleboro, VT                             |          |  | M                                  |         |       |  | 10,261  |           |  |  | (5)     |          
|                                                                       | Bennington Banner, Bennington, VT                                 |          |  | M                                  |         |       |  | 7,849   |           |  |  | (5)     |          
|                                                                       | North Adams Transcript, North Adams, MA                           |          |  | E                                  |         |       |  | 7,101   |           |  |  | (5)     |          
|                                                                       |                                                                   |          |  |                                    |         |       |  |         |           |  |  |        
|                                                                       |                                                                   | Subtotal |  |                                    |         |       |  |         | 1,042,354 |  |  |         | 1,681,382 | 
|California
Newspapers Partnership (consolidated, 54.23% owned):        |                                                                   |          |  |                                    |         |       |  |         |           |  |  |        
|                                                                       | ANG Newspapers, San Francisco Bay Area, CA                        |          |  |                                    | (3)     |       |  | 219,141 |           |  |  | 180,195 |          
|                                                                       | San Gabriel Valley Newspaper Group, CA                            |          |  | M                                  | (4),(1) |       |  | 101,335 |           |  |  | 107,259 |          
|                                                                       | The Sun, San Bernardino, CA                                       |          |  | M                                  | (1)     |       |  | 74,581  |           |  |  | 84,170  |          
|                                                                       | Inland Valley Daily Bulletin, Ontario, CA                         |          |  | M                                  | (1)     |       |  | 65,181  |           |  |  | 75,371  |          
|                                                                       | Marin Independent Journal,Marin CA                                |          |  | E                                  |         |       |  | 40,378  |           |  |  | 40,179  |          
|                                                                       | Enterprise-Record/Oroville Mercury-Register, Chico & Oroville, CA |          |  | M                                  |         |       |  | 33,785  |           |  |  | 33,334  |          
|                                                                       | Times-Herald, Vallejo, CA                                         |          |  | M                                  |         |       |  | 20,921  |           |  |  | 22,270  |          
|                                                                       | Times-Standard, Eureka, CA                                        |          |  | M                                  |         |       |  | 19,081  |           |  |  | 20,875  |          
|                                                                       | The Reporter, Vacaville, CA                                       |          |  | M                                  |         |       |  | 18,186  |           |  |  | 19,562  |          
|                                                                       | Daily Democrat, Woodland, CA                                      |          |  | E                                  |         |       |  | 9,917   |           |  |  | 10,117  |          
|                                                                       | The Ukiah Daily Journal, Ukiah, CA                                |          |  | E                                  |         |       |  | 7,712   |           |  |  | 8,083   |          
|                                                                       | Redlands Daily Facts, Redlands, CA                                |          |  | E                                  | (1)     |       |  | 7,100   |           |  |  | 7,201   |          
|                                                                       | Red Bluff Daily News, Red Bluff, CA                               |          |  | E                                  |         |       |  | 7,097   |           |  |  | (5)     |          
|                                                                       | Lake County Record-Bee, Lakeport, CA                              |          |  | M                                  |         |       |  | 7,047   |           |  |  | (5)     |          
|                                                                       |                                                                   |          |  |                                    |         |       |  |         |           |  |  |        
|                                                                       |                                                                   | Subtotal |  |                                    |         |       |  |         | 631,462   |  |  |         | 608,616   | 
|                                                                       |                                                                   |          |  |                                    |         |       |  |         |           |  |  |        
|                                                                       |                                                                   | Total    |  |                                    |         |       |  |         | 1,673,816 |  |  |         | 2,289,998 | 
|                                                                       |                                                                   |          |  |                                    |         |       |  |         |           |  |  |        
|Texas-New
Mexico Newspapers Partnership (unconsolidated, 33.8% owned): |                                                                   |          |  |                                    |         |       |  |         |           |  |  |        
|                                                                       | El Paso Times, El Paso, TX                                        |          |  | M                                  |         |       |  | 74,418  |           |  |  | 91,715  |          
|                                                                       | Las Cruces Sun-News, Las Cruces, NM                               |          |  | M                                  |         |       |  | 22,640  |           |  |  | 25,045  |          
|                                                                       | The Daily Times, Farmington, NM                                   |          |  | M                                  |         |       |  | 18,260  |           |  |  | 19,804  |          
|                                                                       | Carlsbad Current-Argus, Carlsbad, NM                              |          |  | M                                  |         |       |  | 8,503   |           |  |  | 8,784   |          
|                                                                       | Alamogordo Daily News, Alamogordo, NM                             |          |  | E                                  |         |       |  | 7,179   |           |  |  | 7,926   |          
|                                                                       | The Deming Headlight, Deming, NM                                  |          |  | M                                  |         |       |  | 3,084   |           |  |  | (5)     |          
|                                                                       |                                                                   |          |  |                                    |         |       |  |         |           |  |  |        
|                                                                       |                                                                   | Total    |  |                                    |         |       |  |         | 134,084   |  |  |         | 153,274   | 
|                                                                       |                                                                   |          |  |                                    |         |       |  |         |           |  |  |        

Circulation figures are based on the Audit Bureau of Circulation (ABC) Fas-Fax
Statements for the six-month period ended March 31, 2003, except for The Deming
Headlight, which does not report to ABC.



---

|(footnotes on following page)
|-----------------------------

6



---



##### Table of Contents



(footnotes from preceding page)



| | (1) |  | Part of Los Angeles Newspapers Group (LANG), located in Los Angeles
County, California. Combined LANG daily and Sunday circulation is
522,335 and 583,196, respectively.                                                                                                                                                                                                       
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) |  | Eastern Colorado Publishing Company publishes The Fort Morgan Times,
the Journal-Advocateand the Lamar Daily News, published in Fort Morgan,
Sterling and Lamar, Colorado, respectively. All three are evening
newspapers.                                                                                                                                                       
|
| | (3) |  | Alameda Newspapers Group is headquartered in Oakland, California and
publishes six daily newspapers: Oakland Tribune, The Daily Review
(Hayward), Tri-Valley Herald(Pleasanton), The Argus(Fremont), Alameda
Times-Star,and San Mateo County Times.All the newspapers except for
the San Mateo County Timesare morning newspapers. San Mateo does not
publish a Sunday newspaper.
|
| | (4) |  | San Gabriel Valley Newspapers Group is located in West Covina,
California, approximately 10 miles east of Los Angeles and publishes
three morning daily newspapers: Pasadena Star-News, San Gabriel Valley
Tribuneand Whittier Daily News.                                                                                                                                       
|
| | (5) |  | This newspaper does not publish a Sunday edition.                                                                                                                                                                                                                                                                                                                                

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). Retail
revenue increased overall due to increases in preprints and national revenue
also improved in 2003. Classified revenue has been impacted by the significant
decline in classified employment advertising due to the continued economic
slowdown that has been experienced in our newspaper markets and throughout the
United States. The contributions of Retail, National, Classified and
Circulation revenue to total revenues for fiscal years 2003, 2002 and 2001 are
shown in the table below.

|            |  |                                |     |      |  |      |     |   |  |  |     |  
|----------- |  | ------------------------------ | --- | ---- |  | ---- | --- | - |  |  | --- | -
|            |  | Fiscal Years Ended June 30,(1)
|            |  |                               
|            |  | 2003                           |     | 2002 |  | 2001
|            |  |                                |     |      |  |     
|Retail      |  |                                | 42  | %    |  |      | 41  | % |  |  | 39  | %
|National    |  |                                | 6   |      |  |      | 4   |   |  |  | 6   |  
|Classified  |  |                                | 28  |      |  |      | 30  |   |  |  | 34  |  
|Circulation |  |                                | 19  |      |  |      | 20  |   |  |  | 17  |  
|Other       |  |                                | 5   |      |  |      | 5   |   |  |  | 4   |  
|            |  |                                |     |      |  |      |     |   |  |  |     |  
|            |  |                                | 100 | %    |  |      | 100 | % |  |  | 100 | %
|            |  |                                |     |      |  |      |     |   |  |  |     |  



| | (1) |  | Generally accepted accounting principles do not allow us to
consolidate the revenues for our JOA investments we do not control;
accordingly, we record our share of the JOAs net results in one line
item, Income from Unconsolidated JOAs. Therefore, revenue data for the
JOAs we do not control (Charleston and Salt Lake City, and Denver upon
the Denver JOAs January 23, 2001 formation) are excluded from this
summary (see further discussion under Critical Accounting Policies).
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Newsprint

Newsprint is one of the largest costs of producing a newspaper. We buy
newsprint from several suppliers under arrangements that 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 2003, 2002, and 2001, excluding our unconsolidated JOA
operations, we consumed approximately 154,000, 148,000 and 226,000 metric tons
of newsprint, respectively, and, during the same periods, incurred newsprint
expense of $67.3 million, $74.8 million and $126.0 million, respectively.
Newsprint expense as a percentage of revenue from our newspaper operations
(excluding unconsolidated JOAs) for fiscal years 2003, 2002 and 2001 was 9.2%,
10.6% and 14.9%, respectively. Newsprint expense has decreased since fiscal
year 2001, primarily due to the formation of the Denver JOA on January 23,
2001, and a decrease in the average price per metric ton of 13% and 10% in 2003
and 2002, respectively. The January 2001 formation of the Denver JOA impacted
newsprint expense because prior to the JOA, The Denver Postsnewsprint expense
was consolidated in our results and now the operations of the Denver JOA are
included as a component of Income from Unconsolidated JOAs. 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, including our market dominant suburban newspapers, our
newsprint expense as a percentage of revenue was greater in fiscal year 2001.
Also, as mentioned above, the decrease in the average price per metric ton,
which began in fiscal year 2002 and continued into 2003, also impacted our
newsprint expense. For the year ended June 30, 2003 our average price per
metric ton was $438, whereas for the year ended June 30, 2002, our average
price was $504 per metric ton. See Near Term Outlook for current newsprint
pricing trends.

7



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##### Table of Contents



Employee Relations

We employ at our consolidated entities and unconsolidated JOAs
approximately 8,500 full-time and 2,200 part-time employees, of which
approximately 3,000 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 competes for advertising revenue to varying degrees
with magazines, yellow pages, radio, television and cable television, as well
as with some weekly publications, direct mail and other advertising media,
including electronic media (Internet). 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 brand name recognition 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 metropolitan 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.

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.

We may from time to time compete with other companies, which have greater
financial resources than we do.

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, nor do we expect it
to have, a material effect upon our capital expenditures, net income or
competitive position.

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 at 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.

8



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##### Table of Contents






Item 2. Property

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

|            |  |               |  |                |  |            |  |               
|----------- |  | ------------- |  | -------------- |  | ---------- |  | --------------
|Alaska      |  | Massachusetts |  | Texas          |  | California |  |               
|Anchorage   |  | Pittsfield    |  | Graham         |  | Vacaville  |  | West Covina   
|            |  | North Adams   |  |                |  | Paradise   |  | Valencia      
|Colorado    |  | Lowell        |  | Utah           |  | Hayward    |  | Long Beach    
|Denver      |  | Fitchburg     |  | Salt Lake City |  | Pleasanton |  | San Bernardino
|Sterling    |  | Devens        |  |                |  | Marin      |  | Ontario       
|Fort Morgan |  |               |  | Vermont        |  | Eureka     |  | Woodland Hills
|Lamar       |  | Pennsylvania  |  | Brattleboro    |  | Chico      |  |               
|            |  | York          |  | Bennington     |  | Vallejo    |  |               
|Connecticut |  | Hanover       |  |                |  | Lakeport   |  |               
|Bridgeport  |  | Lebanon       |  | West Virginia  |  | San Mateo  |  |               
|            |  |               |  | Charleston     |  |            |  |               

Certain facilities located in Denver, Colorado and Oakland, Pasadena,
Hayward and Pleasanton, California are operated under long-term leases.

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

We are involved in legal proceedings related to:



| |  |  | The former owner of Kearns-Tribune, LLCs option to purchase
substantially all of the assets of The Salt Lake Tribune;and
| | - |  | -------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Alleged amounts owed in conjunction with the termination of a
newsprint swap agreement.                                  

In addition, 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. For further discussion of significant legal
proceedings and the related financial impact, see Note 11 of the Notes to
Consolidated Financial Statements.




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

None.

9



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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 26, 2003, there were 25
shareholders of record.

We have not paid a dividend on our common stock and we do not currently
have plans to pay cash dividends on our common stock. In addition, our
long-term debt agreements contain covenants, which among other things, restrict
our ability to pay dividends to our shareholders.

We do not currently have any equity compensation plans, although an equity
plan is currently being explored.

10



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##### Table of Contents






Item 6. Selected Financial Data

|                                                                                       |                                                       |   |                             |         |                   |   |           |         |         |   |           |          |   |   |           |         |   |   |              |         |  
|-------------------------------------------------------------------------------------- | ----------------------------------------------------- | - | --------------------------- | ------- | ----------------- | - | --------- | ------- | ------- | - | --------- | -------- | - | - | --------- | ------- | - | - | ------------ | ------- | -
|                                                                                       |                                                       |   |                             |         |                   |   |           |         |         |   |           |          |   |   |           |         |   |   | Garden State
|                                                                                       |                                                       |   | MediaNews Group, Inc.       |         | Newspapers Inc. &
|                                                                                       |                                                       |   | & Subsidiaries              |         | Subsidiaries(c)  
|                                                                                       |                                                       |   |                             |         |                  
|                                                                                       |                                                       |   | Fiscal Years Ended June 30,
|                                                                                       |                                                       |   |                            
|                                                                                       |                                                       |   | 2003(b)                     |         | 2002(b)           |   | 2001(b)   |         | 2000(b) |   | 1999(b)  
|                                                                                       |                                                       |   |                             |         |                   |   |           |         |         |   |          
|                                                                                       |                                                       |   | (Dollars in thousands)     
|INCOME STATEMENT DATA(a):                                                              |                                                       |   |                             |         |                   |   |           |         |         |   |           |          |   |   |           |         |   |   |              |        
|Revenues                                                                               |                                                       |   |                             |         |                   |   |           |         |         |   |           |          |   |   |           |         |   |   |              |        
|                                                                                       | Advertising                                           |   | $                           | 556,016 |                   |   | $         | 535,687 |         |   | $         | 673,737  |   |   | $         | 769,976 |   |   | $            | 440,734 |  
|                                                                                       | Circulation                                           |   |                             | 137,445 |                   |   |           | 139,495 |         |   |           | 144,292  |   |   |           | 148,194 |   |   |              | 113,515 |  
|                                                                                       | Other                                                 |   |                             | 45,137  |                   |   |           | 35,948  |         |   |           | 34,151   |   |   |           | 28,936  |   |   |              | 15,936  |  
|                                                                                       |                                                       |   |                             |         |                   |   |           |         |         |   |           |          |   |   |           |         |   |   |              |        
|                                                                                       | Total Revenues                                        |   |                             | 738,598 |                   |   |           | 711,130 |         |   |           | 852,180  |   |   |           | 947,106 |   |   |              | 570,185 |  
|                                                                                      
|Income (Loss) from Unconsolidated JOAs                                                 |                                                       |   | 25,227                      |         |                   |   | 8,770     |         |         |   | (3,202    | )        |   |   | 2,142     |         |   |   | 1,511        |        
|                                                                                      
|Cost of Sales                                                                          |                                                       |   | 221,888                     |         |                   |   | 220,082   |         |         |   | 297,825   |          |   |   | 339,660   |         |   |   | 182,544      |        
|Selling, General and Administrative                                                    |                                                       |   | 346,763                     |         |                   |   | 324,364   |         |         |   | 385,764   |          |   |   | 421,825   |         |   |   | 253,371      |        
|Depreciation and Amortization                                                          |                                                       |   | 40,553                      |         |                   |   | 47,545    |         |         |   | 62,593    |          |   |   | 62,152    |         |   |   | 43,636       |        
|Interest Expense                                                                       |                                                       |   | 64,252                      |         |                   |   | 75,302    |         |         |   | 82,241    |          |   |   | 75,758    |         |   |   | 56,765       |        
|Gain on Sale of Newspaper Properties                                                   |                                                       |   | 27,399                      |         |                   |   |          |         |         |   | 74,255    |          |   |   | 117,621   |         |   |   |             |        
|Minority Interest                                                                      |                                                       |   | (34,088                     | )       |                   |   | (32,218   | )       |         |   | (40,927   | )        |   |   | (34,092   | )       |   |   | (12,295      | )      
|Income Before Income Taxes and
Extraordinary Items                                     |                                                       |   | 67,855                      |         |                   |   | 9,883     |         |         |   | 39,271    |          |   |   | 124,976   |         |   |   | 10,030       |        
|Net Income (Loss)                                                                      |                                                       |   | 40,828                      |         |                   |   | 12,365    |         |         |   | 25,227    |          |   |   | 130,383   |         |   |   | (822         | )      
|                                                                                      
|CASH FLOW DATA:                                                                        |                                                       |   |                             |         |                   |   |           |         |         |   |           |          |   |   |           |         |   |   |              |        
|Capital Expenditures                                                                   |                                                       | $ | 20,669                      |         |                   | $ | 11,323    |         |         | $ | 19,611    |          |   | $ | 25,505    |         |   | $ | 13,005       |        
|Cash Flows from:                                                                       |                                                       |   |                             |         |                   |   |           |         |         |   |           |          |   |   |           |         |   |   |              |        
|                                                                                       | Operating Activities                                  |   | $                           | 57,838  |                   |   | $         | 57,592  |         |   | $         | 43,678   |   |   | $         | 96,404  |   |   | $            | 61,891  |  
|                                                                                       | Investing Activities (including Capital
Expenditures) |   |                             | 38,206  |                   |   |           | 34,441  |         |   |           | (307,534 | ) |   |           | 117,921 |   |   |              | (70,670 | )
|                                                                                       | Financing Activities                                  |   |                             | (94,730 | )                 |   |           | (97,153 | )       |   |           | 126,373  |   |   |           | (74,438 | ) |   |              | 10,332  |  
|                                                                                      
|BALANCE SHEET DATA:                                                                    |                                                       |   |                             |         |                   |   |           |         |         |   |           |          |   |   |           |         |   |   |              |        
|Total Assets                                                                           |                                                       | $ | 1,384,085                   |         |                   | $ | 1,323,184 |         |         | $ | 1,386,884 |          |   | $ | 1,138,892 |         |   | $ | 846,454      |        
|Long-Term Debt and Capital Leases, Net of Cash
and Minority Interest in Long-Term Debt |                                                       |   | 893,797                     |         |                   |   | 941,272   |         |         |   | 991,373   |          |   |   | 683,932   |         |   |   | 758,937      |        
|Other Long-Term Liabilities and Obligations                                            |                                                       |   | 33,947                      |         |                   |   | 30,462    |         |         |   | 23,906    |          |   |   | 17,633    |         |   |   | 7,543        |        
|Total Shareholders Equity (Deficit)                                                   |                                                       |   | 60,008                      |         |                   |   | 24,501    |         |         |   | 22,737    |          |   |   | 939       |         |   |   | (150,901     | )      
|                                                                                      
|NON-GAAP FINANCIAL DATA(d):                                                            |                                                       |   |                             |         |                   |   |           |         |         |   |           |          |   |   |           |         |   |   |              |        
|Adjusted EBITDA                                                                        |                                                       | $ | 169,947                     |         |                   | $ | 166,684   |         |         | $ | 168,591   |          |   | $ | 185,621   |         |   | $ | 134,270      |        
|Minority Interest in Adjusted EBITDA                                                   |                                                       |   | (49,089                     | )       |                   |   | (45,946   | )       |         |   | (45,647   | )        |   |   | (44,298   | )       |   |   | (14,939      | )      
|Combined Adjusted EBITDA of
Unconsolidated JOAs                                        |                                                       |   | 40,371                      |         |                   |   | 36,006    |         |         |   | 14,205    |          |   |   | 4,725     |         |   |   | 3,144        |        
|Distributions from Texas-New
Mexico Newspapers Partnership(e)                          |                                                       |   | 2,896                       |         |                   |   |          |         |         |   |          |          |   |   |          |         |   |   |             |        
|                                                                                       |                                                       |   |                             |         |                   |   |           |         |         |   |           |          |   |   |           |         |   |   |              |        
|Adjusted EBITDA Available to Company                                                   |                                                       | $ | 164,125                     |         |                   | $ | 156,744   |         |         | $ | 137,149   |          |   | $ | 146,048   |         |   | $ | 122,475      |        
|                                                                                       |                                                       |   |                             |         |                   |   |           |         |         |   |           |          |   |   |           |         |   |   |              |        

(footnotes on following page)

11



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(footnotes from preceding page)



|(a) |  | The income statement data is impacted by the following significant
transactions.
|--- |  | --------------------------------------------------------------------------------

|                                    |  |                             |  |                             |  |                           |  |                                                        |  |               
|----------------------------------- |  | --------------------------- |  | --------------------------- |  | ------------------------- |  | ------------------------------------------------------ |  | --------------
|                                   
|Acquisitions Fiscal Years 1999-2003
|                                   
|Year                                |  | Date                        |  | Publication                 |  | Location                  |  | Description                                            |  | Purchase Price
|                                    |  |                             |  |                             |  |                           |  |                                                        |  |               
|2003                                |  | 01/31/03                    |  | Paradise Post               |  | Paradise, California      |  | Three times weekly newspaper,
plus commercial printing |  | $13.0 million 
|                                    |  | 10/01/02                    |  | The Reporter                |  | Vacaville, California     |  | Daily morning newspaper                                |  | $30.9 million 
|                                    |  | 10/01/02                    |  | Original Apartment Magazine |  | Los Angeles, California   |  | Free distribution apartment
rental
magazine            |  | $10.0 million 
|2002                                |  | No significant acquisitions
|2001                                |  | 05/31/01                    |  | Ruidoso News                |  | Ruidoso, New Mexico       |  | Bi-weekly newspaper                                    |  | $3.8 million  
|                                    |  | 03/31/01                    |  | Alamogordo Daily News       |  | Alamogordo, New Mexico    |  | Daily evening newspaper                                |  | $9.5 million  
|                                    |  | 02/01/01                    |  | Lake County Record-Bee      |  | Lakeport, California      |  | Daily morning newspaper                                |  | $7.3 million  
|                                    |  | 01/02/01                    |  | The Salt Lake Tribune       |  | Salt Lake City, Utah      |  | Daily morning newspaper JOA                            |  | $200.0 million
|                                    |  | 10/31/00                    |  | Carlsbad Current-Argus      |  | Carlsbad, New Mexico      |  | Daily morning newspaper                                |  | $7.0 million  
|                                    |  | 10/01/00                    |  | Connecticut Post            |  | Bridgeport, Connecticut   |  | Daily morning newspaper                                |  | $194.0 million
|2000                                |  | 05/06/00                    |  | KTVA                        |  | Anchorage, Alaska         |  | Television station; CBS affiliate                      |  | $7.0 million  
|                                    |  | 03/01/00                    |  | Nashoba Publishing          |  | Ayers, Massachusetts      |  | Six weekly newspapers and three
monthly publications   |  | $4.2 million  
|                                    |  | 01/01/00                    |  | Hometown Shopper            |  | Ukiah, California         |  | Shopper                                                |  | (1)           
|                                    |  | 10/31/99                    |  | The Deming Headlight        |  | Deming, New Mexico        |  | Daily morning newspaper                                |  | $2.0 million  
|                                    |  | 10/01/99                    |  | Milpitas Post               |  | Milpitas, California      |  | Weekly newspaper                                       |  | (1)           
|1999                                |  | 10/01/98                    |  | The Daily Times             |  | Farmington, New Mexico    |  | Daily morning newspaper                                |  | $14.9 million 
|                                    |  | 08/22/98                    |  | Charleston Newspapers       |  | Charleston, West Virginia |  | Daily evening newspaper JOA                            |  | $47.0 million 

|                                    |  |                 |  |                                                                                                |  |                                                                                                            |  |                                                                                                                   |  |                                                     
|----------------------------------- |  | --------------- |  | ---------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------
|                                   
|Dispositions Fiscal Years 1999-2003
|                                   
|Year                                |  | Date            |  | Publication                                                                                    |  | Location                                                                                                   |  | Description                                                                                                       |  | Sales Price                                         
|                                    |  |                 |  |                                                                                                |  |                                                                                                            |  |                                                                                                                   |  |                                                     
|2003                                |  | No dispositions
|2002                                |  | No dispositions
|2001                                |  | 01/31/01        |  | The Lompoc Record                                                                              |  | Lompoc, California                                                                                         |  | Daily evening newspaper                                                                                           |  | $8.0 million,   
pre-tax gain
of    $4.6 million    
|                                    |  | 10/31/00        |  | Daily Nonpareil                                                                                |  | Council Bluffs, Iowa                                                                                       |  | Daily evening newspaper                                                                                           |  | $39.0 million,   
pre-tax gain
of    $23.6 million  
|2000                                |  | 06/30/00        |  | The Express Times
Gloucester County Times
Todays Sunbeam
Bridgeton News
North Jersey weeklies |  | Easton, Pennsylvania
Woodbury, New Jersey
Salem, New Jersey
Bridgeton, New Jersey
North Jersey, New Jersey |  | Daily morning newspaper
Daily evening newspaper
Daily morning newspaper
Daily evening newspaper
Weekly newspapers |  | $145.0 million,   
pre-tax gain
of    $114.3 million
|                                    |  | 07/31/99        |  | The Hemet Newsand Moreno   
Valley Times                                                       |  | Hemet and Moreno    Valley, California                                                                     |  | Daily and weekly newspaper                                                                                        |  | $8.0 million,   
pre-tax gain
of    $3.3 million    
|1999                                |  | No dispositions

|                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|----------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                     
|Other Significant Transactions Fiscal Years 1999-2003
|                                                     
|Year                                                  |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|2003                                                  |  | Effective March 3, 2003, we formed the Texas-New Mexico Newspapers Partnership with Gannett. Upon formation, we recognized a non-monetary
pre-tax gain of $27.4 million.                                                                                                                                                                                                                                                                                                                                                                                
|2002                                                  |  | None.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|2001                                                  |  | Effective January 23, 2001, we formed the Denver Newspaper Agency (DNA or Denver JOA) with E.W. Scripps (Scripps), owner of the Rocky
Mountain News.Upon formation of DNA, MediaNews and Scripps each contributed to DNA substantially all of their operating assets used in the
publication of The Denver Postand the Rocky Mountain News.In addition to the assets contributed to DNA, Scripps paid us $60.0 million to
obtain its 50% interest in DNA. We recognized a pre-tax gain of approximately $46.7 million related to this transaction.
|2001                                                  |  | Effective October 1, 2000, Gannett contributed the Marin Independent Journalto the California Newspapers Partnership. Effective with the
contribution, the partners, MediaNews, Stephens Media Group and Gannett, 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.                                                                                                                                          
|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.                                                                                                                                                                                                                                                                                                                                                                                                
|1999                                                  |  | On March 31, 1999 we formed the California Newspapers Partnership.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      



---

|(1) |  | Combined $2.7 million purchase.
|--- |  | -------------------------------

12



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##### Table of Contents



(footnotes continued from preceding page)



|(b) |  | Change in Accounting Principle and Prior Year Reclassifications.
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 consolidation for the JOAs we control,
and for the JOAs we do not control, we include our share of the JOAs net
results as a component of the line item Income from Unconsolidated JOAs.
Accordingly, all financial statements presented reflect this change in
accounting. In addition to the change in accounting principle, certain
prior year balances have been reclassified to conform to current reporting
classifications for comparability.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(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, 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 includes 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 year 1999
includes Garden State Newspapers, Inc. information only.                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(d) |  | Non-GAAP Financial Data.The Non-GAAP Financial Data presented, including
Adjusted EBITDA and Adjusted 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. Adjusted EBITDA and Adjusted EBITDA Available to Company should
not be considered as an alternative to measure 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. Adjusted EBITDA is calculated by
deducting cost of sales and SG&A expense from total revenues. Adjusted
EBITDA Available to Company is calculated by: (i) reducing Adjusted EBITDA
by the minorities interest in the Adjusted EBITDA generated from the
California Newspapers Partnership, York Newspaper Company and The Denver
Post Corporation, our less than 100% owned subsidiaries (Minority
Interest in Adjusted EBITDA); (ii) increasing Adjusted EBITDA by our
combined proportionate share of the Adjusted EBITDA generated by our
unconsolidated JOAs in Denver, Salt Lake City and Charleston (Combined
Adjusted EBITDA of Unconsolidated JOAs); and (iii) increasing Adjusted
EBITDA by Distributions from the Texas-New Mexico Newspapers Partnership
(see footnote e). See page 16 for a reconciliation of Adjusted EBITDA
(non-GAAP measure) to Cash Flows from Operating Activities (GAAP measure).
|   
|(e) |  | The Texas-New Mexico Newspapers Partnership agreement, effective March 3,
2003, requires the partnership to make monthly distributions equal to the
earnings of the partnership before depreciation and amortization (EBITDA).
These distributions have been included in Adjusted EBITDA Available to
Company as they are an integral part of our cash flows from operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

13



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##### Table of Contents






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 Internet Web sites related thereto. 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. In addition to our newspaper operations, we own
radio stations in Graham and Breckenridge, Texas, and a CBS affiliate
television station in Anchorage, Alaska. However, the combined revenues of
these non-newspaper operations comprise less than 0.5% of our consolidated
revenue and are not significant to our operations.

Critical Accounting Policies

The preparation of financial statements in accordance with generally
accepted accounting principles at times requires the use of estimates and
assumptions. We use estimates, based on historical experience, actuarial
studies and other assumptions, as appropriate, to assess the carrying values of
assets and liabilities and disclosure of contingent matters. We re-evaluate our
estimates on an ongoing basis. Actual results could differ from these
estimates. Critical accounting policies for us include revenue recognition;
accounts receivable allowances; 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; pension and
retiree medical benefits, which require 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. The notes to our consolidated financial
statements contain a more complete discussion of our significant accounting
policies.

Advertising revenue is earned and recognized when advertisements are
published, inserted, aired or displayed and are net of provisions for estimated
rebates, credit and rate adjustments and discounts. Circulation revenue
includes home delivery subscription revenue, single copy and third party sales.
Single copy revenue is earned and recognized based on the date the publication
is delivered to the single copy outlet, net of provisions for returns. Home
delivery subscription revenue is earned and recognized when the newspaper is
delivered to the customer or sold to a third party. Amounts received in advance
of an advertisement or newspaper delivery are deferred and recorded on the
balance sheet as a current liability to be recognized into income when the
revenue has been earned.

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. Upon
adoption of EITF 00-1, effective June 30, 2000, we discontinued pro-rata
consolidation. All previously reported financial statements were reclassified
to conform to the current presentation. Our investments in unconsolidated JOAs
are included in the consolidated balance sheet under the line item Investment
in Unconsolidated JOAs, for the JOAs we do not control.

The operating results of our unconsolidated JOAs are reported as a single
net amount, in the accompanying financial statements in the line item Income
from Unconsolidated JOAs. This line item includes:



| |  |  | Our proportionate share of net income from JOAs;                                                                                                                                                                                                                                            
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  | The amortization of subscriber lists and, up until our July 1, 2001
adoption of SFAS No. 142, Goodwill and Other Intangible Assets,the
amortization of goodwill created by the original purchase by us as the
subscriber lists and goodwill are attributable to our earnings in the
JOA; and
| |  |  | Editorial costs, miscellaneous publishing revenue, and other charges
incurred by our wholly-owned subsidiaries directly attributable to
providing editorial content and news for our newspapers published by the
JOAs.                                                                      

14



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##### Table of Contents



Operating Results

We have provided below certain summary historical financial data for
fiscal years ended 2003, 2002 and 2001, including the percentage change between
fiscal years. For comparability, certain prior year balances have been
reclassified to conform to current reporting classifications.

|                                                              |                          |   |                                   |         |      |   |         |         |               |   |               |          |   |  |       |      |   |  |       |       |  
|------------------------------------------------------------- | ------------------------ | - | --------------------------------- | ------- | ---- | - | ------- | ------- | ------------- | - | ------------- | -------- | - |  | ----- | ---- | - |  | ----- | ----- | -
|                                                              |                          |   | Summary Historical Financial Data
|                                                              |                          |   |                                  
|                                                              |                          |   | Fiscal Years Ended June 30,      
|                                                              |                          |   |                                  
|                                                              |                          |   | 2003                              |         | 2002 |   | 2001    |         | 2003 vs. 2002 |   | 2002 vs. 2001
|                                                              |                          |   |                                   |         |      |   |         |         |               |   |              
|                                                              |                          |   | (Dollars in thousands)           
|INCOME
STATEMENT DATA                                         |                          |   |                                   |         |      |   |         |         |               |   |               |          |   |  |       |      |   |  |       |      
|Total Revenues                                                |                          | $ | 738,598                           |         |      | $ | 711,130 |         |               | $ | 852,180       |          |   |  | 3.9   | %    |   |  | (16.6 | )%   
|                                                             
|Income from Unconsolidated JOAs                               |                          |   | 25,227                            |         |      |   | 8,770   |         |               |   | (3,202        | )        |   |  | (c)   |      |   |  | (c)   |      
|                                                             
|Cost of Sales                                                 |                          |   | 221,888                           |         |      |   | 220,082 |         |               |   | 297,825       |          |   |  | 0.8   |      |   |  | (26.1 | )    
|Selling, General and Administrative                           |                          |   | 346,763                           |         |      |   | 324,364 |         |               |   | 385,764       |          |   |  | 6.9   |      |   |  | (15.9 | )    
|Depreciation and Amortization                                 |                          |   | 40,553                            |         |      |   | 47,545  |         |               |   | 62,593        |          |   |  | (14.7 | )    |   |  | (24.0 | )    
|Interest Expense                                              |                          |   | 64,252                            |         |      |   | 75,302  |         |               |   | 82,241        |          |   |  | (14.7 | )    |   |  | (8.4  | )    
|Other (Income) Expense, Net                                   |                          |   | 19,534                            |         |      |   | 10,941  |         |               |   | 13,200        |          |   |  | 78.5  |      |   |  | (17.1 | )    
|                                                              |                          |   |                                   |         |      |   |         |         |               |   |               |          |   |  |       |      |   |  |       |      
|                                                              | Total Costs and Expenses |   |                                   | 692,990 |      |   |         | 678,234 |               |   |               | 841,623  |   |  |       | 2.2  |   |  |       | (19.4 | )
|                                                             
|Equity Investment Income (Loss), Net                          |                          |   | 3,709                             |         |      |   | 435     |         |               |   | (1,412        | )        |   |  | (c)   |      |   |  | (c)   |      
|                                                             
|Gain on Sale of Newspaper Properties                          |                          |   | 27,399                            |         |      |   |        |         |               |   | 74,255        |          |   |  | (c)   |      |   |  | (c)   |      
|                                                             
|Minority Interest                                             |                          |   | (34,088                           | )       |      |   | (32,218 | )       |               |   | (40,927       | )        |   |  | 5.8   |      |   |  | (21.3 | )    
|                                                             
|Net Income                                                    |                          |   | 40,828                            |         |      |   | 12,365  |         |               |   | 25,227        |          |   |  | (c)   |      |   |  | (51.0 | )    
|CASH
FLOW DATA                                                |                          |   |                                   |         |      |   |         |         |               |   |               |          |   |  |       |      |   |  |       |      
|Cash Flows from:                                              |                          |   |                                   |         |      |   |         |         |               |   |               |          |   |  |       |      |   |  |       |      
|                                                              | Operating Activities     |   | $                                 | 57,838  |      |   | $       | 57,592  |               |   | $             | 43,678   |   |  |       | 0.4  | % |  |       | 31.9  | %
|                                                              | Investing Activities     |   |                                   | 38,206  |      |   |         | 34,441  |               |   |               | (307,534 | ) |  |       | 10.9 |   |  |       | (c)   |  
|                                                              | Financing Activities     |   |                                   | (94,730 | )    |   |         | (97,153 | )             |   |               | 126,373  |   |  |       | (2.5 | ) |  |       | (c)   |  
|NON-GAAP FINANCIAL DATA(a)                                    |                          |   |                                   |         |      |   |         |         |               |   |               |          |   |  |       |      |   |  |       |      
|Adjusted EBITDA                                               |                          | $ | 169,947                           |         |      | $ | 166,684 |         |               | $ | 168,591       |          |   |  | 2.0   | %    |   |  | (1.1  | )%   
|Minority Interest in Adjusted EBITDA                          |                          |   | (49,089                           | )       |      |   | (45,946 | )       |               |   | (45,647       | )        |   |  | 6.8   |      |   |  | 0.7   |      
|Combined Adjusted EBITDA of
Unconsolidated JOAs               |                          |   | 40,371                            |         |      |   | 36,006  |         |               |   | 14,205        |          |   |  | 12.1  |      |   |  | (c)   |      
|Distributions from Texas-New Mexico
Newspapers Partnership(b) |                          |   | 2,896                             |         |      |   |        |         |               |   |              |          |   |  | (c)   |      |   |  |      |      
|                                                              |                          |   |                                   |         |      |   |         |         |               |   |               |          |   |  |       |      |   |  |       |      
|Adjusted EBITDA Available to Company                          |                          | $ | 164,125                           |         |      | $ | 156,744 |         |               | $ | 137,149       |          |   |  | 4.7   | %    |   |  | 14.3  | %    
|                                                              |                          |   |                                   |         |      |   |         |         |               |   |               |          |   |  |       |      |   |  |       |      

See footnotes described on page 16.

15



---



##### Table of Contents



The following table is provided to reconcile Cash Flows from Operating
Activities (GAAP measure) to Adjusted EBITDA (non-GAAP measure). In addition,
See footnotes (a), (b), (c), and (d) for a description of the non-GAAP measures
presented in the table below and on page 15.

|                                                                                        |  |                      |         |      |  |      |         |   |  |   |         |  
|--------------------------------------------------------------------------------------- |  | -------------------- | ------- | ---- |  | ---- | ------- | - |  | - | ------- | -
|                                                                                        |  | Years Ended June 30,
|                                                                                        |  |                     
|                                                                                        |  | 2003                 |         | 2002 |  | 2001
|                                                                                        |  |                      |         |      |  |     
|                                                                                        |  | (In thousands)      
|NON-GAAP
FINANCIAL DATA(a)                                                              |  |                      |         |      |  |      |         |   |  |   |         |  
|Cash Flows from Operating Activities (GAAP measure)                                     |  | $                    | 57,838  |      |  | $    | 57,592  |   |  | $ | 43,678  |  
|Net Change in Operating Assets and Liabilities                                          |  |                      | 8,619   |      |  |      | 459     |   |  |   | 25,504  |  
|Interest Expense                                                                        |  |                      | 64,252  |      |  |      | 75,302  |   |  |   | 82,241  |  
|Bad Debt Expense                                                                        |  |                      | (9,632  | )    |  |      | (10,213 | ) |  |   | (10,916 | )
|Pension Income (Expense), Net of Cash Contributions                                     |  |                      | (31     | )    |  |      | (1,172  | ) |  |   | 5,948   |  
|Direct
Costs of the Unconsolidated JOAs, Incurred Outside of the
Unconsolidated JOAs(d) |  |                      | 43,411  |      |  |      | 43,211  |   |  |   | 16,403  |  
|Net
Cash Related to Other (Income) Expense                                              |  |                      | 5,490   |      |  |      | 1,505   |   |  |   | 5,733   |  
|                                                                                        |  |                      |         |      |  |      |         |   |  |   |         |  
|Adjusted EBITDA                                                                         |  |                      | 169,947 |      |  |      | 166,684 |   |  |   | 168,591 |  
|Minority Interest in Adjusted EBITDA                                                    |  |                      | (49,089 | )    |  |      | (45,946 | ) |  |   | (45,647 | )
|Combined Adjusted EBITDA of Unconsolidated JOAs                                         |  |                      | 40,371  |      |  |      | 36,006  |   |  |   | 14,205  |  
|Distributions from Texas-New Mexico Newspapers
Partnership(b)                           |  |                      | 2,896   |      |  |      |        |   |  |   |        |  
|                                                                                        |  |                      |         |      |  |      |         |   |  |   |         |  
|Adjusted EBITDA Available to Company                                                    |  | $                    | 164,125 |      |  | $    | 156,744 |   |  | $ | 137,149 |  
|                                                                                        |  |                      |         |      |  |      |         |   |  |   |         |  

(footnotes from preceding page and the table
above)




|(a) |  | Adjusted EBITDA and Adjusted 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. Adjusted EBITDA and Adjusted
EBITDA Available to Company should not be considered as an
alternative to measure 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. Adjusted EBITDA is calculated by deducting cost of sales
and SG&A expense from total revenues. Adjusted EBITDA Available to
Company is calculated by: (i) reducing Adjusted EBITDA by the
minorities interest in the Adjusted EBITDA generated from the
California Newspapers Partnership, York Newspaper Company and The
Denver Post Corporation, our less than 100% owned consolidated
subsidiaries (Minority Interest in Adjusted EBITDA); (ii)
increasing Adjusted EBITDA by our combined proportionate share of
the Adjusted EBITDA generated by our unconsolidated JOAs in Denver,
Salt Lake City and Charleston (Combined Adjusted EBITDA of
Unconsolidated JOAs); and (iii) increasing Adjusted EBITDA by
Distributions from the Texas-New Mexico Newspapers Partnership (see
footnote b).
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | The Texas-New Mexico Newspapers Partnership agreement,
effective March 3, 2003, requires the partnership to make monthly
distributions equal to the earnings of the partnership before
depreciation and amortization (EBITDA). These distributions have
been included in Adjusted EBITDA Available to Company, as they are
an integral part of our cash flows from operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(c) |  | Not meaningful.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(d) |  | Direct Costs of the Unconsolidated JOAs, Incurred Outside of the
Unconsolidated JOAs includes the editorial costs, publishing related
revenues, depreciation, amortization, and other direct costs incurred
outside of the JOAs by our consolidated subsidiaries associated with The
Salt Lake Tribune, The Denver Post, and the Charleston Daily Mail. See
Note 3: Joint Operating Agencies in the footnotes to our consolidated
financial statements for further description and analysis of this
adjustment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

16



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##### Table of Contents



Summary Supplemental Non-GAAP Financial Data

Joint operating agencies, or JOAs, represent an operating structure that
is unique to the newspaper industry. Prior to 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 JOAs operations. Although pro-rata
consolidation is no longer considered an acceptable method for our financial
reporting under GAAP, we believe it provides a meaningful presentation of the
results of our operations and the amount of operating cash flow available to
the Company to meet debt service and capital expenditure requirements. Our JOA
agreements do not restrict cash distributions to the owners and in general our
JOAs make monthly or quarterly distributions. We use pro-rata consolidation to
internally evaluate our performance and present it here because our Bank Credit
Agreement and our publicly traded notes define cash flows (Adjusted EBITDA and
Adjusted EBITDA Available to Company) from operations for covenant purposes
using pro-rata consolidation. We also believe financial analysts and investors
use the pro-rata consolidation and the resulting Adjusted EBITDA, combined with
capital spending requirements, and leverage analysis to evaluate our
performance. This information should be used in conjunction with GAAP
performance measures in order to evaluate our overall prospects and
performance. Net income determined using pro-rata consolidation is identical to
net income determined under GAAP.

In the table below, we have presented the results of operations of our
JOAs using pro-rata consolidation. Our JOAs include York Newspaper Company and
Charleston Newspapers for all periods presented, Denver Newspaper Agency since
formation on January 23, 2001, and the Newspaper Agency Corporation (Salt Lake
City) since acquisition on January 2, 2001. See Liquidity and Capital Resources
for discussion of JOA capital spending and debt along with Note 2 to the
consolidated financial statements for additional discussion of the GAAP
accounting for our JOAs. For comparability, certain prior year balances have
been reclassified to conform to current reporting classifications.

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 Non-GAAP Financial Data
|                                                           |                          |   |                                         
|                                                           |                          |   | Fiscal Years Ended June 30,             
|                                                           |                          |   |                                         
|                                                           |                          |   | 2003                                     |         | 2002 |   | 2001    |         | 2003 vs. 2002 |   | 2002 vs. 2001
|                                                           |                          |   |                                          |         |      |   |         |         |               |   |              
|                                                           |                          |   | (Dollars in thousands)                  
|PRO-RATA CONSOLIDATEDINCOME STATEMENT DATA                 |                          |   |                                          |         |      |   |         |         |               |   |               |          |   |  |       |      |   |  |       |     
|Total Revenues                                             |                          | $ | 1,025,471                                |         |      | $ | 992,780 |         |               | $ | 978,929       |          |   |  | 3.3   | %    |   |  | 1.4   | %   
|                                                          
|Cost of Sales                                              |                          |   | 343,012                                  |         |      |   | 350,281 |         |               |   | 366,509       |          |   |  | (2.1  | )    |   |  | (4.4  | )   
|Selling, General and Administrative                        |                          |   | 480,185                                  |         |      |   | 447,541 |         |               |   | 437,500       |          |   |  | 7.3   |      |   |  | 2.3   |     
|Depreciation and Amortization                              |                          |   | 55,841                                   |         |      |   | 64,720  |         |               |   | 72,890        |          |   |  | (13.7 | )    |   |  | (11.2 | )   
|Interest Expense                                           |                          |   | 64,491                                   |         |      |   | 75,517  |         |               |   | 82,161        |          |   |  | (14.6 | )    |   |  | (8.1  | )   
|Other (Income) Expense, Net                                |                          |   | 18,312                                   |         |      |   | 19,996  |         |               |   | 19,614        |          |   |  | (8.4  | )    |   |  | 1.9   |     
|                                                           |                          |   |                                          |         |      |   |         |         |               |   |               |          |   |  |       |      |   |  |       |     
|                                                           | Total Costs and Expenses |   |                                          | 961,841 |      |   |         | 958,055 |               |   |               | 978,674  |   |  |       | 0.4  |   |  |       | (2.1 | )
|                                                          
|Gain on Sale of Newspaper Properties                       |                          |   | 27,399                                   |         |      |   |        |         |               |   | 74,255        |          |   |  | (c)   |      |   |  | (c)   |     
|                                                          
|Minority Interest                                          |                          |   | (26,884                                  | )       |      |   | (25,278 | )       |               |   | (33,827       | )        |   |  | 6.4   |      |   |  | (25.3 | )   
|                                                          
|Net Income (GAAP measure)                                  |                          |   | 40,828                                   |         |      |   | 12,365  |         |               |   | 25,227        |          |   |  | (c)   |      |   |  | (51.0 | )   
|CASH FLOW DATA (GAAP BASIS)                                |                          |   |                                          |         |      |   |         |         |               |   |               |          |   |  |       |      |   |  |       |     
|Cash Flows from:                                           |                          |   |                                          |         |      |   |         |         |               |   |               |          |   |  |       |      |   |  |       |     
|                                                           | Operating Activities     |   | $                                        | 57,838  |      |   | $       | 57,592  |               |   | $             | 43,678   |   |  |       | 0.4  | % |  |       | 31.9 | %
|                                                           | Investing Activities     |   |                                          | 38,206  |      |   |         | 34,441  |               |   |               | (307,534 | ) |  |       | 10.9 |   |  |       | (c)  |  
|                                                           | Financial Activities     |   |                                          | (94,730 | )    |   |         | (97,153 | )             |   |               | 126,373  |   |  |       | (2.5 | ) |  |       | (c)  |  
|PRO-RATA OTHER DATA(d)                                     |                          |   |                                          |         |      |   |         |         |               |   |               |          |   |  |       |      |   |  |       |     
|Adjusted EBITDA                                            |                          | $ | 202,274                                  |         |      | $ | 194,958 |         |               | $ | 174,920       |          |   |  | 3.8   | %    |   |  | 11.5  | %   
|Minority Interest Adjusted EBITDA                          |                          |   | (41,045                                  | )       |      |   | (38,214 | )       |               |   | (37,771       | )        |   |  | 7.4   |      |   |  | 1.2   |     
|Distributions from Texas-New
Mexico Newspapers Partnership |                          |   | 2,896                                    |         |      |   |        |         |               |   |              |          |   |  | (c)   |      |   |  |      |     
|                                                           |                          |   |                                          |         |      |   |         |         |               |   |               |          |   |  |       |      |   |  |       |     
|Adjusted EBITDA Available to Company                       |                          | $ | 164,125                                  |         |      | $ | 156,744 |         |               | $ | 137,149       |          |   |  | 4.7   | %    |   |  | 14.3  | %   
|                                                           |                          |   |                                          |         |      |   |         |         |               |   |               |          |   |  |       |      |   |  |       |     

See footnotes described on pages 18 and 19.

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##### Table of Contents



The following table is provided to reconcile the Income Statement Data
presented on a historical GAAP basis to Non-GAAP Income Statement Data
presented on a pro-rata consolidation basis. See footnotes (1) and (2) below
for a description of the adjustments made. See footnote (a) on page 16 for a
description of our method of calculating Adjusted EBITDA. All amounts below are
shown in thousands.

|                                     |                          |   |                          |         |                   |   |                 |         |                     |   |         |         |  |   |           |         | 
|------------------------------------ | ------------------------ | - | ------------------------ | ------- | ----------------- | - | --------------- | ------- | ------------------- | - | ------- | ------- |  | - | --------- | ------- | 
|                                     |                          |   | Year Ended June 30, 2003
|                                     |                          |   |                         
|                                     |                          |   |                          |         |                   |   | Adjustment to   |         |                     |   |         |         |  |   |          
|                                     |                          |   |                          |         |                   |   | Eliminate 42.5% |         | Unconsolidated JOAs |   |         |         | 
|                                     |                          |   | As Presented             |         | Minority Interest |   | Pro-Rata        |         | As Presented on a  
|                                     |                          |   | Under GAAP               |         | in York JOA(1)    |   | Adjustment(2)   |         | Pro-Rata Basis     
|                                     |                          |   |                          |         |                   |   |                 |         |                    
|Total Revenues                       |                          | $ | 738,598                  |         |                   | $ | (17,584         | )       |                     | $ | 304,457 |         |  | $ | 1,025,471 |        
|                                    
|Income from Unconsolidated JOAs      |                          |   | 25,227                   |         |                   |   |                |         |                     |   | (25,227 | )       |  |   |          |        
|                                    
|Cost of Sales                        |                          |   | 221,888                  |         |                   |   | (3,542          | )       |                     |   | 124,666 |         |  |   | 343,012   |        
|Selling, General and Administrative  |                          |   | 346,763                  |         |                   |   | (5,998          | )       |                     |   | 139,420 |         |  |   | 480,185   |        
|Depreciation and Amortization        |                          |   | 40,553                   |         |                   |   | (526            | )       |                     |   | 15,814  |         |  |   | 55,841    |        
|Interest Expense                     |                          |   | 64,252                   |         |                   |   | (106            | )       |                     |   | 345     |         |  |   | 64,491    |        
|Other (Income) Expense, Net          |                          |   | 19,534                   |         |                   |   | (207            | )       |                     |   | (1,015  | )       |  |   | 18,312    |        
|                                     |                          |   |                          |         |                   |   |                 |         |                     |   |         |         |  |   |           |        
|                                     | Total Costs and Expenses |   |                          | 692,990 |                   |   |                 | (10,379 | )                   |   |         | 279,230 |  |   |           | 961,841 | 
|Gain on Sale of Newspaper Properties |                          |   | 27,399                   |         |                   |   |                |         |                     |   |        |         |  |   | 27,399    |        
|Minority Interest                    |                          |   | (34,088                  | )       |                   |   | 7,204           |         |                     |   |        |         |  |   | (26,884   | )      
|Net Income                           |                          |   | 40,828                   |         |                   |   |                |         |                     |   |        |         |  |   | 40,828    |        
|                                    
|Adjusted EBITDA                      |                          | $ | 169,947                  |         |                   | $ | (8,044          | )       |                     | $ | 40,371  |         |  | $ | 202,274   |        

|                                    |                          |   |                          |         |                   |   |                 |         |                     |   |         |         |  |   |         |         | 
|----------------------------------- | ------------------------ | - | ------------------------ | ------- | ----------------- | - | --------------- | ------- | ------------------- | - | ------- | ------- |  | - | ------- | ------- | 
|                                    |                          |   | Year Ended June 30, 2002
|                                    |                          |   |                         
|                                    |                          |   |                          |         |                   |   | Adjustment to   |         |                     |   |         |         |  |   |        
|                                    |                          |   |                          |         |                   |   | Eliminate 42.5% |         | Unconsolidated JOAs |   |         |         | 
|                                    |                          |   | As Presented             |         | Minority Interest |   | Pro-Rata        |         | As Presented on a  
|                                    |                          |   | Under GAAP               |         | in York
JOA(1)    |   | Adjustment(2)   |         | Pro-Rata Basis     
|                                    |                          |   |                          |         |                   |   |                 |         |                    
|Total Revenues                      |                          | $ | 711,130                  |         |                   | $ | (17,252         | )       |                     | $ | 298,902 |         |  | $ | 992,780 |        
|                                   
|Income from Unconsolidated JOAs     |                          |   | 8,770                    |         |                   |   |                |         |                     |   | (8,770  | )       |  |   |        |        
|                                   
|Cost of Sales                       |                          |   | 220,082                  |         |                   |   | (3,730          | )       |                     |   | 133,929 |         |  |   | 350,281 |        
|Selling, General and Administrative |                          |   | 324,364                  |         |                   |   | (5,790          | )       |                     |   | 128,967 |         |  |   | 447,541 |        
|Depreciation and Amortization       |                          |   | 47,545                   |         |                   |   | (575            | )       |                     |   | 17,750  |         |  |   | 64,720  |        
|Interest Expense                    |                          |   | 75,302                   |         |                   |   | (149            | )       |                     |   | 364     |         |  |   | 75,517  |        
|Other (Income) Expense, Net         |                          |   | 10,941                   |         |                   |   | (69             | )       |                     |   | 9,124   |         |  |   | 19,996  |        
|                                    |                          |   |                          |         |                   |   |                 |         |                     |   |         |         |  |   |         |        
|                                    | Total Costs and Expenses |   |                          | 678,234 |                   |   |                 | (10,313 | )                   |   |         | 290,134 |  |   |         | 958,055 | 
|Minority Interest                   |                          |   | (32,218                  | )       |                   |   | 6,940           |         |                     |   |        |         |  |   | (25,278 | )      
|Net Income                          |                          |   | 12,365                   |         |                   |   |                |         |                     |   |        |         |  |   | 12,365  |        
|                                   
|Adjusted EBITDA                     |                          | $ | 166,684                  |         |                   | $ | (7,732          | )       |                     | $ | 36,006  |         |  | $ | 194,958 |        

|                                     |                          |   |                          |         |                   |   |                        |         |                   |   |         |         |  |   |         |         | 
|------------------------------------ | ------------------------ | - | ------------------------ | ------- | ----------------- | - | ---------------------- | ------- | ----------------- | - | ------- | ------- |  | - | ------- | ------- | 
|                                     |                          |   | Year Ended June 30, 2001
|                                     |                          |   |                         
|                                     |                          |   |                          |         |                   |   | Adjustment to          |         |                   |   |         |         |  |   |        
|                                     |                          |   |                          |         |                   |   | Eliminate 42.5%        |         |                   |   |         |         |  |   |        
|                                     |                          |   | As Presented             |         | Minority Interest |   | Unconsolidated JOAs    |         | As Presented on a
|                                     |                          |   | Under GAAP               |         | in York
JOA(1)    |   | Pro-Rata
Adjustment(2) |         | Pro-Rata Basis   
|                                     |                          |   |                          |         |                   |   |                        |         |                  
|Total Revenues                       |                          | $ | 852,180                  |         |                   | $ | (18,654                | )       |                   | $ | 145,403 |         |  | $ | 978,929 |        
|                                    
|Income from Unconsolidated JOAs      |                          |   | (3,202                   | )       |                   |   |                       |         |                   |   | 3,202   |         |  |   |        |        
|                                    
|Cost of Sales                        |                          |   | 297,825                  |         |                   |   | (4,039                 | )       |                   |   | 72,723  |         |  |   | 366,509 |        
|Selling, General and Administrative  |                          |   | 385,764                  |         |                   |   | (6,739                 | )       |                   |   | 58,475  |         |  |   | 437,500 |        
|Depreciation and Amortization        |                          |   | 62,593                   |         |                   |   | (491                   | )       |                   |   | 10,788  |         |  |   | 72,890  |        
|Interest Expense                     |                          |   | 82,241                   |         |                   |   | (244                   | )       |                   |   | 164     |         |  |   | 82,161  |        
|Other (Income) Expense, Net          |                          |   | 13,200                   |         |                   |   | (41                    | )       |                   |   | 6,455   |         |  |   | 19,614  |        
|                                     |                          |   |                          |         |                   |   |                        |         |                   |   |         |         |  |   |         |        
|                                     | Total Costs and Expenses |   |                          | 841,623 |                   |   |                        | (11,554 | )                 |   |         | 148,605 |  |   |         | 978,674 | 
|Gain on Sale of Newspaper Properties |                          |   | 74,255                   |         |                   |   |                       |         |                   |   |        |         |  |   | 74,255  |        
|Minority Interest                    |                          |   | (40,927                  | )       |                   |   | 7,100                  |         |                   |   |        |         |  |   | (33,827 | )      
|Net Income                           |                          |   | 25,227                   |         |                   |   |                       |         |                   |   |        |         |  |   | 25,227  |        
|                                    
|Adjusted EBITDA                      |                          | $ | 168,591                  |         |                   | $ | (7,876                 | )       |                   | $ | 14,205  |         |  | $ | 174,920 |        



|(1) |  | We eliminated the York Newspaper Company JOAs minority partners 42.5%
share from the individual line items with a corresponding adjustment to
GAAP minority interest. The difference between the minority interest
adjustment provided in the reconciliation of Cash Flows from Operating
Activities (GAAP measure) to Adjusted EBITDA presented on a pro-rata
consolidated basis (non-GAAP measure) and the pro-rata minority interest
adjustment above is that certain items (Depreciation and Amortization,
Interest Expense and Other (Income) Expense, Net) are excluded from
Minority Interest in Adjusted EBITDA on the following table.                                                                                                                                                                    
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | The adjustment to pro-rata consolidate our unconsolidated JOAs includes
our proportionate share, on a line item basis of the income statements of
our unconsolidated JOAs. Our interest in the earnings of Newspaper Agency
Corporation (Salt Lake City) is 58%, while our interests in Denver
Newspaper Agency and Charleston Newspapers are 50%. This adjustment also
includes the editorial costs, publishing related revenues, depreciation,
amortization, and other direct costs incurred outside of the JOAs by our
consolidated subsidiaries associated with The Salt Lake Tribune, The
Denver Post, and the Charleston Daily Mail. See Note 3: Joint Operating
Agencies in the footnotes to our consolidated financial statements for
further description and analysis of the components of this adjustment.

18



---



##### Table of Contents



The following table is provided to reconcile Cash Flows from Operating
Activities (GAAP measure) to Adjusted EBITDA presented on a pro-rata
consolidated basis (non-GAAP measure). In addition, see footnotes
(a), (b), (c), (d)
on page 16 and (e) and (f) below for a description of the non-GAAP
measures presented in the table below and on page 17.

|                                                                         |  |                      |         |      |  |      |         |   |  |   |         |  
|------------------------------------------------------------------------ |  | -------------------- | ------- | ---- |  | ---- | ------- | - |  | - | ------- | -
|                                                                         |  | Years Ended June 30,
|                                                                         |  |                     
|                                                                         |  | 2003                 |         | 2002 |  | 2001
|                                                                         |  |                      |         |      |  |     
|                                                                         |  | (In thousands)      
|NON-GAAP FINANCIAL DATA(e)                                               |  |                      |         |      |  |      |         |   |  |   |         |  
|Cash Flows from Operating Activities (GAAP measure)                      |  | $                    | 57,838  |      |  | $    | 57,592  |   |  | $ | 43,678  |  
|Net Change in Operating Assets and Liabilities                           |  |                      | 8,619   |      |  |      | 459     |   |  |   | 25,504  |  
|Interest Expense                                                         |  |                      | 64,252  |      |  |      | 75,302  |   |  |   | 82,241  |  
|Bad Debt Expense                                                         |  |                      | (9,632  | )    |  |      | (10,213 | ) |  |   | (10,916 | )
|Pension Income (Expense), Net of Cash Contributions                      |  |                      | (31     | )    |  |      | (1,172  | ) |  |   | 5,948   |  
|Net
Cash Related to Other (Income) Expense                               |  |                      | 5,490   |      |  |      | 1,505   |   |  |   | 5,733   |  
|Combined Adjusted EBITDA of Unconsolidated JOAs(f)                       |  |                      | 40,371  |      |  |      | 36,006  |   |  |   | 14,205  |  
|Direct Costs of the Unconsolidated JOAs,
Incurred Outside of the JOAs(d) |  |                      | 43,411  |      |  |      | 43,211  |   |  |   | 16,403  |  
|Minority Interest in Adjusted EBITDA of York Newspaper
Company           |  |                      | (8,044  | )    |  |      | (7,732  | ) |  |   | (7,876  | )
|                                                                         |  |                      |         |      |  |      |         |   |  |   |         |  
|Adjusted EBITDA                                                          |  |                      | 202,274 |      |  |      | 194,958 |   |  |   | 174,920 |  
|Minority Interest in Adjusted EBITDA                                     |  |                      | (41,045 | )    |  |      | (38,214 | ) |  |   | (37,771 | )
|Distributions from Texas-New Mexico Newspapers
Partnership               |  |                      | 2,896   |      |  |      |        |   |  |   |        |  
|                                                                         |  |                      |         |      |  |      |         |   |  |   |         |  
|Adjusted EBITDA Available to Company                                     |  | $                    | 164,125 |      |  | $    | 156,744 |   |  | $ | 137,149 |  
|                                                                         |  |                      |         |      |  |      |         |   |  |   |         |  

(footnotes from preceding page and the table above)




|(e) |  | See footnote (a) on page 16 for
discussion of Adjusted EBITDA, Distributions from Texas-New Mexico
Newspapers Partnership and Adjusted EBITDA Available to Company. The Minority Interest in Adjusted EBITDA shown is the same as
described in footnote (a) on page 16 except that Minority Interest in
Adjusted EBITDA on a pro-rata basis includes only the minority interest
in Adjusted EBITDA of the California Newspapers Partnership and The
Denver Post Corporation, as pro-rata consolidation factors out the
minority interest associated with York Newspaper Company.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(f) |  | Combined Adjusted EBITDA of Unconsolidated JOAs is calculated by
deducting cost of sales and SG&A expense from total revenues from the
Unconsolidated JOAs Pro-Rata Adjustment column in the Income Statement
data reconciliation on page 18.                                                                                                                                                                                                                                                                                                                                   

19



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##### Table of Contents



COMPARISON OF FISCAL YEARS ENDED JUNE 30, 2003 AND 2002

Certain transactions in fiscal year 2003 had an impact on the comparisons
of our results for the years ended June 30, 2003 and 2002. Acquisition
transactions that affect comparisons between the years ended June 30, 2003 and
2002 include the California Newspapers Partnerships October 1, 2002 purchases
of The Reporterin Vacaville, California and the Original Apartment Magazinein
southern California and the January 31, 2003 purchase of the Paradise Postin
Paradise, California. In addition to the acquisition transactions described,
comparisons between the years ended June 30, 2003 and 2002 are also affected by
the formation of the Texas-New Mexico Newspapers Partnership effective March 3,
2003, after which we no longer consolidate the results of the New Mexico
newspaper properties that we contributed to the partnership. Our investment in
the Texas-New Mexico Newspapers Partnership is accounted for under the equity
method of accounting and the partnerships results are included in Equity
Investment Income (Loss), Net.

Revenues

Revenues for the years ended June 30, 2003 and 2002 were $738.6 million
and $711.1 million, respectively. The change represents an increase of $27.5
million, or 3.9%. The aforementioned transactions in fiscal year 2003 had the
net impact of increasing reported revenues by $12.6 million for the year ended
June 30, 2003 as compared to the prior year.

Advertising Revenues.Excluding the transactions described above,
advertising revenues increased 2.5% for the year ended June 30, 2003, as
compared to the prior year. The advertising revenue increases during fiscal
year 2003 were primarily the result of increases in national and preprint
advertising, offset in part by small declines in total classified and retail
advertising. Total classified revenue was only down slightly overall. However,
of the components of classified revenue, classified employment represented most
of the decline, which was due to the continued economic slowdown that has been
experienced in the majority of our newspaper markets and throughout the United
States. We also experienced small declines in classified automotive
advertising, which were more than offset by improvements in real estate
advertising.

Circulation Revenues.Excluding the impact of the transactions described
above, circulation revenues remained flat compared to last year. Circulation
volumes at our consolidated subsidiaries also did not change materially between
periods.

Interactive Revenues.Revenues from our Internet operations increased $4.3
million for the year ended June 30, 2003 as compared to the prior year. These
results were due primarily to the continued strong market acceptance of the
combined print and online packages that we offer to our advertisers,
particularly in our online retail, automotive and employment categories, and
the introduction of new products related to automotive and obituaries.

Income from Unconsolidated JOAs

Income from unconsolidated JOAs represents (1) our share of the net income
from our unconsolidated JOA operations, which as of June 30, 2003 and 2002
includes Charleston Newspapers, the Denver Newspaper Agency (DNA), and the
Newspaper Agency Corporation (NAC) in Salt Lake City; (2) the amortization of
subscriber lists created by the original purchase by us; and (3) editorial
costs, miscellaneous publishing revenue and other charges incurred by our
subsidiaries that are directly attributable to providing editorial content and
news for our newspapers published by the JOAs. Income from unconsolidated JOAs
for the years ended June 30, 2003 and 2002 was $25.2 million and $8.8 million,
respectively. The improvement of $16.4 million for the year ended June 30,
2003, is primarily the result of improved revenues combined with lower
operating expenses at DNA. Expenses were lower as a result of lower newsprint
costs and a reduction in the number of employees. The results of NAC and
Charleston Newspapers did not change materially between periods.

Cost of Sales

Cost of sales for the years ended June 30, 2003 and 2002 was $221.9
million and $220.1 million, respectively. The change represents an increase of
$1.8 million, or 0.8%. The aforementioned transactions in fiscal year 2003 had
the net impact of increasing cost of sales by $5.4 million for the year ended
June 30, 2003 as compared to the prior year. Excluding the aforementioned
transactions, cost of sales decreased 1.6% on a year over year basis. Cost of
sales was impacted by increased production costs associated with us printing
certain new third party publications in northern California; however, our
overall newsprint costs declined by $7.5 million or 10.4%, which more than
offset the increase in editorial and production costs. The overall decline in
newsprint costs

20



---



##### Table of Contents



COMPARISON OF FISCAL YEARS ENDED JUNE 30, 2003 AND 2002 (continued)

is comprised of a 3.1% increase in consumption, offset by a 13.1% decrease in
the cost per metric ton consumed, on a year over year basis.

Selling, General and Administrative

Selling, general and administrative (SG&A) expense for the years ended
June 30, 2003 and 2002 was $346.8 million and $324.4 million, respectively. The
change represents an increase of $22.4 million, or 6.9%, for the year ended
June 30, 2003, as compared to the prior year. The aforementioned transactions
in fiscal year 2003 had the net impact of increasing SG&A by $6.3 million for
the year ended June 30, 2003, as compared to the prior year.

Excluding the impact of the transactions described above, SG&A expense
increased 4.9%, for the year ended June 30, 2003, as compared to the prior
year. The increase in SG&A expense was due in part to a $5.4 million increase
in marketing and advertising expenses for the year ended June 30, 2003, as
compared to the prior year. Marketing and advertising expense increased as a
result of the growth in national advertising revenue and new sales initiatives
that were implemented as we sought to grow revenue from non-traditional
newspaper advertisers. Circulation expense also increased as a result of
circulation growth strategies implemented in certain highly competitive
southern California markets as well as our strategies to maintain circulation
volumes in the highly competitive market around ANG Newspapers in the San
Francisco Bay area. Also contributing to the increase in SG&A expense were
increases in health insurance and other benefits, property and casualty
insurance costs, the reinstatement of 401(k) matching benefits, the lifting of
salary freezes for certain groups of employees, and increased costs associated
with the growth experienced in our Internet operations.

Depreciation and Amortization

Depreciation and amortization expense for the years ended June 30, 2003
and 2002 was $40.6 million and $47.5 million, respectively. The change
represents a decrease of $6.9 million, or 14.7% for the year ended June 30,
2003, as compared to the prior year. The fiscal year 2003 decreases were
primarily due to certain assets becoming fully depreciated during fiscal year
2002, offset in part by increased depreciation and amortization associated with
our fiscal year 2003 acquisitions.

Interest Expense

Interest expense for the years ended June 30, 2003 and 2002 was $64.3
million and $75.3 million, respectively. The change represents a decrease of
$11.0 million, or 14.7%, for the year ended June 30, 2003, as compared to the
prior year. The decrease in interest expense was due to a decrease in our
average debt outstanding, as well as a reduction in the weighted average cost
of debt. Our average debt outstanding decreased $50.4 million, or 5.1%, and our
weighted average interest rate decreased 76 basis points for the year ended
June 30, 2003, as compared to the prior year.

Interest expense was also impacted by net settlements related to our
interest rate swap agreements. The net settlements of our interest rate swap
agreements had the effect of decreasing interest expense by $2.6 million for
the year ended June 30, 2003.

Other (Income) Expense, Net

Included in other (income) expense, net are those costs or income items
that are not related to ongoing operations. Other (income) expense, net for the
year ended June 30, 2003 was $19.5 million. The charges incurred for the year
ended June 30, 2003 include $3.7 million in litigation expense related to the
acquisition of Kearns-Tribune, LLC (Salt Lake City), $5.5 million accretion of
the estimated cost to repurchase an option held by a third party to acquire one
of our newspapers, $1.0 million of costs for severance and restructuring, $2.7
million loss related to the jury verdict rendered against us in the case
brought by a former newsprint vendor, $1.8 million loss related to the
impairment of goodwill associated with Alaska Broadcasting Company, $3.9
million loss related to the impairment of fixed assets (land and building) at
one of CNPs properties, $(1.2) million related to hedging activities which did
not qualify for hedge accounting under SFAS No. 133, and a net $2.1 million for
various other costs not related to ongoing operations.

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COMPARISON OF FISCAL YEARS ENDED JUNE 30, 2003 AND 2002 (continued)

Equity Investment Income (Loss), Net

Included in equity investment income (loss), net is our share of the net
income (or loss) of our non-JOA equity investees, as further described in Note
2 of the notes to consolidated financial statements. The $3.3 million increase
in equity investment income (loss), net was primarily related to the equity
income from the Texas-New Mexico Newspapers Partnership, the formation of which
was described earlier.

Net Income

We reported net income for the years ended June 30, 2003 and 2002 of $40.8
million and $12.4 million, respectively.

Net income for fiscal year 2003 was impacted by a $27.4 million
non-monetary gain recognized in conjunction with the formation of the Texas-New
Mexico Newspapers Partnership. Excluding the $27.4 million non-monetary gain,
pretax net income was $40.5 million for the year ended June 30, 2003 as
compared to $9.9 million for the prior year. In addition to the activity
described in the preceding paragraphs, net income was impacted by a $1.9
million increase in minority interest expense and a $29.5 million increase in
income tax expense (primarily associated with the Texas-New Mexico Newspapers
Partnership gain described earlier), of which approximately $24.2 million is
related to deferred income taxes.

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 transactions 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 include the editorial expenses of The Salt
Lake Tribune,along with our proportionate share of the results in NAC, in the
line item Income from Unconsolidated JOAs. Comparisons
were also affected to a
lesser degree 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(the results are now included in the
line item, Income from Unconsolidated JOAs), and the sale of a small
newspaper in Lompoc, California.

Revenues

Revenues for the years ended June 30, 2002 and 2001 were $711.1 million
and $852.2 million, respectively. This represents a $141.1 million, or 16.6%
decrease. The aforementioned transactions in fiscal year 2001 had the net
impact of decreasing reported revenues by $120.3 million for the year ended
June 30, 2002 as compared to the prior year, primarily associated with
deconsolidation of the revenues of The Denver Postbecause of the formation of
the DNA.

Advertising Revenues.Excluding the impact of the fiscal year 2001
transactions described above, advertising revenues decreased by 5.0% during
fiscal year 2002 as compared to the prior year. 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 was 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.

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

Circulation Revenues.Excluding the impact of the transactions described
above, circulation revenues 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.

Interactive Revenues.Revenues from our Internet operations increased $5.1
million for the year ended June 30, 2002 compared to the prior year 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.

Income (Loss) from Unconsolidated JOAs

Income
(Loss) from Unconsolidated JOAs includes (1) our share of the
net income (or loss) from our unconsolidated JOA operations, which as of
June 30, 2002 included
Charleston Newspapers, the Denver Newspaper Agency, and the Newspaper Agency
Corporation in Salt Lake City (2) the amortization of subscriber lists created
by the original purchase by us; and (3) editorial costs, miscellaneous
publishing revenue and other charges incurred by our subsidiaries that are
directly attributable to providing editorial content and news to the JOA.
Income (Loss) from Unconsolidated JOAs for years ended June 30, 2002 and 2001 was $8.8
million and $(3.2) million, respectively. The $12.0 million increase for the
year ended June 30, 2002 compared to the prior year was the direct result of
the January 23, 2001 formation of DNA and the January 2, 2001 acquisition of
our interest in NAC, combined with significantly improved year over year
operating results at DNA as the Denver JOA began seeing the benefits of the
advertising revenue and cost synergies. The results at Charleston Newspapers
also improved.

Cost of Sales

Cost of sales for the years ended June 30, 2002 and 2001 was $220.1
million and $297.8 million, respectively. This represents a $77.7 million, or
26.1%, decrease. The aforementioned transactions in fiscal year 2002 had the
net impact of decreasing cost of sales by $66.1 million for the year ended June
30, 2002 as compared to the prior year, again primarily associated with the
deconsolidation of The Denver Postoperating results.

Excluding the impact of the fiscal year 2001 transactions described above,
our cost of sales in fiscal year 2002 decreased 6.0%, as compared to the prior
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 year. Lower newsprint prices also reduced
expenses in fiscal year 2002 as compared to fiscal year 2001 as our average
price per metric ton of newsprint consumed decreased 10.0% during year 2002.
Our editorial expenses remained relatively flat for the year ended June 30,
2002, as compared to the prior year.

Selling, General and Administrative

Selling, general and administrative (SG&A) expense for the years ended
June 30, 2002 and 2001 was $324.4 million and $385.8 million, respectively.
This represents a $61.4 million, or 15.9% decrease for the year ended June 30,
2002 as compared to the prior year. The aforementioned transactions in fiscal
year 2001 had the net impact of decreasing SG&A expense by $60.4 million for
the fiscal year ended June 30, 2002 as compared to the prior year, primarily
associated with the deconsolidation of The Denver Postoperating results.

Excluding the impact of the fiscal year 2001 transactions described above,
SG&A expense decreased 0.3%, for the fiscal year 2002, as compared to the
prior year. The decrease in SG&A expense was 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 year. This decrease was primarily
the result of declines in advertising revenues; however, in fiscal year 2002,
we 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 continued into fiscal year 2003. In
addition, SG&A expense 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 were offset in
small part by increased costs associated with the revenue growth experienced in
our Internet operations.

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

Depreciation and Amortization

Depreciation and amortization expense for the years ended June 30, 2002
and 2001 was $47.5 million and $62.6 million, respectively. This represents a
decrease of $15.1 million, or 24.0%, for the year ended June 30, 2002, as
compared to the prior year.

The decrease was 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 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 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 acquired. 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 prior year. The decrease in
the weighted average cost of debt would have been greater except for the
negative impact of unfavorable interest rate hedges, which did not expire until
October 2001. Interest rate swap agreements had the effect of increasing
interest rate expense for the years ended June 30, 2002 and 2001 by $2.4
million and $0.6 million, respectively.

Other (Income) Expense, Net

Included in other (income) expense, net are those costs or income items
that are not related to ongoing operations. Other (income) expense, net for the
years ended June 30, 2002 and 2001 were $10.9 million and $13.2 million,
respectively. The decrease was 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 (an additional $3.0 million was charged in fiscal year
2002 related to the JOA transition). The decrease associated with DNA
integration planning was partially offset by an increase of $2.8 million in
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 severance 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 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.

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.

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

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LIQUIDITY AND CAPITAL RESOURCES (continued)

our newsprint inventories in anticipation of price increases. In the fourth
quarter of our fiscal year 2003 and continuing into fiscal year 2004, we built
newsprint inventories to delay the impact of anticipated price increases. In
general, our receivables have been collected on a timely basis.

June 30, 2003 Compared to June 30, 2002

Net cash flows from operating activities were $57.8 million and $57.6
million for the years ended June 30, 2003 and 2002, respectively. The $0.2
million increase was due to an $8.4 million year over year improvement in net
income, adjusted for minority interest and non-cash items, offset by a $8.2
million decrease in cash flows associated with operating assets and
liabilities. The increase in net income was primarily the result of a $3.3
million increase in Adjusted EBITDA, and an $11.0 million reduction in interest
expense, offset by a $4.0 million increase in cash related other (income)
expense items. The change in cash outflows associated with operating assets and
liabilities were the result of our build up of our newsprint inventory levels
at June 30, 2003 as compared to the prior year, and timing on receipts of
accounts receivables.

Net cash flows from investing activities were $38.2 million and $34.4
million for the years ended June 30, 2003 and 2002, respectively. The $3.8
million increase was primarily the result of a net $37.6 million increase in
cash flows from unconsolidated JOAs, partially offset by a $25.6 million
increase in cash used for acquisitions (net of cash contributed by minority
partners), and a net $11.9 million associated with fixed asset additions and
disposals.

Net cash flows from financing activities were $(94.7) million and $(97.2)
million for the years ended June 30, 2003 and 2002, respectively. The change of
$2.5 million was primarily the result of a $4.6 million decrease in
distributions to minority interest during fiscal year 2003 as compared to the
prior year. Although operating results of the California Newspapers Partnership
have improved over the prior year, distributions to our minority partners
decreased from the prior year due to timing. Partially offsetting the decrease
in minority interest distributions was a $2.2 million increase in our net
paydowns of long-term debt during fiscal year 2003 as compared to the prior
year. Net debt paydowns, excluding acquisition borrowings in fiscal year 2003,
were $84.6 million.

Capital Expenditures

|                                   |  |                       |        |                         |  |       |        |              |  |          |        |                  |  |   |        |  |  |   |        |   |  |   |        |  
|---------------------------------- |  | --------------------- | ------ | ----------------------- |  | ----- | ------ | ------------ |  | -------- | ------ | ---------------- |  | - | ------ |  |  | - | ------ | - |  | - | ------ | -
|                                   |  | Capital Expenditures 
|                                   |  |                      
|                                   |  | Fiscal Year 2004 Plan |        | Fiscal Year 2003 Actual
|                                   |  |                       |        |                        
|                                   |  | (In thousands)       
|                                   |  | Wholly-               |        | Non Wholly-Owned        |  |       |        |              |  | Wholly-  |        | Non Wholly-Owned |  |   |        | 
|                                   |  | Owned                 |        | Subsidiaries            |  |       |        |              |  | Owned    |        | Subsidiaries     |  |   |        | 
|                                   |  | Subsidiaries          |        | and JOAs                |  | Total |        | Subsidiaries |  | and JOAs |        | Total           
|                                   |  |                       |        |                         |  |       |        |              |  |          |        |                 
|Carryover projects
from prior year |  | $                     | 2,077  |                         |  | $     | 2,427  |              |  | $        | 4,504  |                  |  | $ | 6,785  |  |  | $ | 313    |   |  | $ | 7,098  |  
|Capital Projects                   |  |                       | 11,583 |                         |  |       | 15,563 |              |  |          | 27,146 |                  |  |   | 9,525  |  |  |   | 13,253 |   |  |   | 22,778 |  
|                                   |  |                       |        |                         |  |       |        |              |  |          |        |                  |  |   |        |  |  |   |        |   |  |   |        |  
|                                   |  |                       | 13,660 |                         |  |       | 17,990 |              |  |          | 31,650 |                  |  |   | 16,310 |  |  |   | 13,566 |   |  |   | 29,876 |  
|Less Partners Share               |  |                       |       |                         |  |       | (8,998 | )            |  |          | (8,998 | )                |  |   |       |  |  |   | (7,381 | ) |  |   | (7,381 | )
|                                   |  |                       |        |                         |  |       |        |              |  |          |        |                  |  |   |        |  |  |   |        |   |  |   |        |  
|                                   |  | $                     | 13,660 |                         |  | $     | 8,992  |              |  | $        | 22,652 |                  |  | $ | 16,310 |  |  | $ | 6,185  |   |  | $ | 22,495 |  
|                                   |  |                       |        |                         |  |       |        |              |  |          |        |                  |  |   |        |  |  |   |        |   |  |   |        |  

Non-maintenance expenditures planned for fiscal 2004 include installation
of a front-end system for the Los Angeles Newspapers Group and new advertising
and circulation systems Company-wide. Carryover expenditures from the prior
year of $4.5 million are primarily for inserters at Alameda Newspapers Group
and York Newspaper Company, and the completion of a new printing plant in
Devens, Massachusetts which will print publications for our newspapers in
Lowell and Fitchburg, Massachusetts. 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. After eliminating our partners share of expenditures
from the 2004 plan and 2003 actual expenditures, our share of capital
expenditures for 2004 is expected to approximate 2003 actual expenditures.

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Liquidity

Based upon current and expected future operating results, we believe 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. As of June 30, 2003,
we had $117.4 million available for future borrowings under our bank credit
facility, net of $5.7 million in outstanding letters of credit, which should be
more than sufficient to fund unanticipated capital needs or other cash
requirements should they arise. The available borrowings of $117.4 million at
June 30, 2003 will be impacted over the next twelve months by the following:
$3.2 million of scheduled principal payments on the current portion of
long-term debt and obligations under capital leases; quarterly installments of
$15.0 million each are due on one of our bank term loans on September 30 and
December 31, 2003 and $9.375 million is due on both March 31 and June 30, 2004;
and a reduction in the commitment under the bank credit facility of $25.0
million on both March 31, and June 30, 2004. However, we expect that cash flows
from operations, net of capital expenditures, will offset a large portion of
this reduction. The Company plans to fund the payments with available
borrowings from its bank credit facility.

In May 2003, we amended our bank credit agreement and, in connection
therewith, funded in June 2003 a $97.0 million Term Loan (Term Loan B) from
certain members of our existing bank group and other financial institutions.
Proceeds from the Term Loan B were used to redeem our 9% Promissory Note,
(discussed in Note 6: Long-Term Debt of the notes to the consolidated financial
statements of this Form 10-K), and to pay down amounts outstanding under the
bank credit facility. In conjunction with the Term Loan B, we accelerated the
September 30, 2003 $75.0 million and the December 31, 2003 $25.0 million
reductions of the available borrowings under the bank credit facility effective
with the amendment (up to the $97.0 million that was ultimately funded). No
principal payments are required on Term Loan B until December 31, 2006, at
which time all outstanding principal and interest are due and payable. Based on
current LIBOR rates, we expect the prepayment of the 9% Promissory Note and
commitment reduction will result in annual interest savings of $3.3 million.

In conjunction with the Term Loan B, we also amended our bank credit
agreement to temporarily increase the consolidated debt to operating cash flow
ratio covenant. The consolidated debt to operating cash flow covenant was
increased to take into account that the borrowings under Term Loan B are
included in consolidated debt for purposes of the covenant calculations, while
the 9% Subordinated Promissory Note was excluded from the bank credit
agreements definition of consolidated debt.

We do not expect our defined benefit pension plans will require any
significant cash contributions in fiscal year 2004, despite the decrease
related to pension assets experienced in fiscal year 2003. We estimate
contributions to be made in fiscal year 2004 will be $0.3 million.

We may, from time to time, consider strategic or targeted newspaper
acquisitions and dispositions, which individually or in the aggregate may be
material. In the event an acquisition opportunity is identified, we expect we
would be able to arrange financing on terms and conditions satisfactory to us
to the extent current resources are insufficient.

In September, 2003, we made an offer to acquire the common stock of
Freedom Communications, Inc. (Freedom) as part of an auction process in which
other bidders have also submitted offers. Our offer consists of cash and stock
consideration and assumes that Freedoms broadcast division is spun off or sold
in a separate transaction at or prior to the closing. We have received
financing commitments (subject to customary conditions) in excess of the
anticipated cash portion of the consideration. In addition, we expect a
significant portion of potential cash needs in connection with the transaction
will be funded by partners as a result contributing certain Freedom assets into
one or more partnerships. The transaction may require waivers or consents
under, or the refinancing of, our currently outstanding indebtedness. If our
current offer is accepted and the transaction is consummated, our pro forma
leverage ratio (debt to Adjusted EBITDA) would decrease from current levels
after giving effect to the transaction. There can be no assurance that our
offer will not be restructured in order to achieve a successful bid. Such
restructuring may involve increasing the cash component of the consideration.
Any such restructuring may increase the amount of debt we incur in connection
with the transaction; however, we do not currently anticipate that any such
increase would result in a pro forma leverage ratio (after giving effect to the
transaction) that is materially greater than current levels. It is too early to
assess the likelihood of success of our offer.

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Off-Balance Sheet Arrangements

Our share of long-term debt in unconsolidated JOAs is approximately $4.2
million at June 30, 2003.

Through our wholly-owned subsidiary, Kearns-Tribune, LLC, we own a 6.0%
interest in Ponderay Newsprint Company (Ponderay) and are also guarantors on
a several basis of 6.0% of up to $125.0 million Ponderays credit facility,
which is due April 12, 2006. The guarantee could be triggered by Ponderays
failure to meet any or all of its bank covenants at which time we could be
liable for our portion or 6.0% of the guarantee. At June 30, 2003, our share of
the guarantee was approximately $6.8 million, which is not recorded in our
financial statements.

Contractual Obligations

|                                                                         |  |                |           |        |  |           |        |       |  |         |         |           |  |   |         |  |  |   |         | 
|------------------------------------------------------------------------ |  | -------------- | --------- | ------ |  | --------- | ------ | ----- |  | ------- | ------- | --------- |  | - | ------- |  |  | - | ------- | 
|                                                                         |  |                |           |        |  | Less than |        | 1-3   |  | 3-5     |         | More than
|                                                                         |  | Total          |           | 1 Year |  | Years     |        | Years |  | 5 Years
|                                                                         |  |                |           |        |  |           |        |       |  |        
|                                                                         |  | (In thousands)
|Long-Term Debt                                                           |  | $              | 897,540   |        |  | $         | 2,990  |       |  | $       | 263,927 |           |  | $ | 122,623 |  |  | $ | 508,000 | 
|Capital Lease Obligations, net of imputed
interest                       |  |                | 7,014     |        |  |           | 181    |       |  |         | 409     |           |  |   | 499     |  |  |   | 5,925   | 
|Operating Leases                                                         |  |                | 21,452    |        |  |           | 4,968  |       |  |         | 8,120   |           |  |   | 5,832   |  |  |   | 2,532   | 
|Purchase Obligations(1)                                                  |  |                | 167,319   |        |  |           | 37,368 |       |  |         | 56,691  |           |  |   | 49,510  |  |  |   | 23,750  | 
|Other Long-Term Liabilities Reflected on the
Balance Sheet under GAAP(2) |  |                | 34,605    |        |  |           | 658    |       |  |         | 11,452  |           |  |   | 2,060   |  |  |   | 20,435  | 
|                                                                         |  |                |           |        |  |           |        |       |  |         |         |           |  |   |         |  |  |   |         | 
|Total                                                                    |  | $              | 1,127,930 |        |  | $         | 46,165 |       |  | $       | 340,599 |           |  | $ | 180,524 |  |  | $ | 560,642 | 
|                                                                         |  |                |           |        |  |           |        |       |  |         |         |           |  |   |         |  |  |   |         | 



---

| | (1) |  | Purchase obligations primarily include commitments to purchase
newsprint. One of our newsprint contracts requires us to purchase
newsprint at a floating price based on RISI (Resource Information
Systems, Inc.). For purposes of this disclosure we used the RISI
price as of
August 2003. It is difficult to predict the price of newsprint over the
term of the contract.                                                                                                       
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) |  | Reflected on the balance sheet in Other Long-Term Liabilities is
$14.9 million related to the amount accrued to repurchase an option held
by a third party to purchase the assets used in the publication of one
of our newspaper properties. The option was exercisable beginning in
January 2003; however it is included in Other Long-Term Liabilities
because if the option is put to us, we expect to fund the payment with
available borrowings from our bank credit facility.

Near Term Outlook

Newsprint Prices

In June 2003, newsprint suppliers announced a $50 per metric ton price
increase to be effective August 1, 2003. The August 1 announced increase was
the third during the last twelve months. Of the first two announced increases,
only $60 per metric ton of the proposed total of $100 per metric ton took hold.
As of the date of this report, we are not paying any of the August 1, 2003
announced price increase. North American newsprint suppliers continue to take
downtime in an attempt to more closely match supply with the declining demand
from newspaper publishers. The August 2003 RISI (Resource Information Systems,
Inc.) price index for 30 pound newsprint was $495 per metric ton compared to
$450 in August 2002.

Recently Issued Accounting Standards

See Note 2: Recently Issued Accounting Standardsof our notes to the
consolidated financial statements for further discussion.

27



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##### Table of Contents






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.

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 available under a variable rate
instrument. The amounts reflected in the following table represent the interest
rate swaps that we are committed to as of June 30, 2003, all of which expire
either in January or July 2004.

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

|                                         |  |      |      |      |  |      |         |      |  |      |         |            |  |       |         |       |  |   |      |   |  |   |         |   |  |   |         |     |  |             |          |  
|---------------------------------------- |  | ---- | ---- | ---- |  | ---- | ------- | ---- |  | ---- | ------- | ---------- |  | ----- | ------- | ----- |  | - | ---- | - |  | - | ------- | - |  | - | ------- | --- |  | ----------- | -------- | -
|                                         |  |      |      |      |  |      |         |      |  |      |         |            |  |       |         |       |  |   |      |   |  |   |         |   |  |   |         |     |  | Fair Value 
|                                         |  |      |      |      |  |      |         |      |  |      |         |            |  |       |         |       |  |   |      |   |  |   |         |   |  |   |         |     |  | 2003       
|                                         |  |      |      |      |  |      |         |      |  |      |         |            |  |       |         |       |  |   |      |   |  |   |         |   |  |   |         |     |  | (Liability)
|                                         |  | 2004 |      | 2005 |  | 2006 |         | 2007 |  | 2008 |         | Thereafter |  | Total |         | Asset
|                                         |  |      |      |      |  |      |         |      |  |      |         |            |  |       |         |      
|Liabilities                              |  |      |      |      |  |      |         |      |  |      |         |            |  |       |         |       |  |   |      |   |  |   |         |   |  |   |         |     |  |             |          |  
|Long-Term Debt including
Current Portion |  |      |      |      |  |      |         |      |  |      |         |            |  |       |         |       |  |   |      |   |  |   |         |   |  |   |         |     |  |             |          |  
|Fixed Rate                               |  | $    |     |      |  | $    |        |      |  | $    |        |            |  | $     |        |       |  | $ |     |   |  | $ | 499,507 |   |  | $ | 499,507 |     |  | $           | (515,000 | )
|Average Interest Rate                    |  |      | 7.44 | %    |  |      | 7.44    | %    |  |      | 7.44    | %          |  |       | 7.44    | %     |  |   | 7.44 | % |  |   | 7.44    | % |  |   |         |     |  |             |          |  
|                                        
|Variable Rate                            |  | $    |     |      |  | $    | 116,150 |      |  | $    | 141,250 |            |  | $     | 119,500 |       |  | $ |     |   |  | $ |        |   |  | $ | 376,900 |     |  | $           | (376,900 | )
|Average Interest Rate                    |  |      | 3.28 | %    |  |      | 3.28    | %    |  |      | 3.28    | %          |  |       | 3.28    | %     |  |   |      |   |  |   |         |   |  |   |         |     |  |             |          |  
|                                         |  |      |      |      |  |      |         |      |  |      |         |            |  |       |         |       |  |   |      |   |  |   |         |   |  |   |         |     |  |             |          |  
|Total                                    |  |      |      |      |  |      |         |      |  |      |         |            |  |       |         |       |  |   |      |   |  |   |         |   |  | $ | 876,407 | (a) |  |             |          |  



| | (a) |  | The long-term debt (including current portion) of $876.4
million from the Market Risk table above differs from total
long-term debt of $897.5 million reported in Note 6: Long-term
Debt of the notes to the consolidated financial statements due to
$15.7 million related to various notes payable due through 2013
and York Newspaper Company debt of $5.5 million . The Market Risk
table above excludes these long-term obligations as we could not
practicably estimate fair value due to the lack of quoted market
prices for these types of instruments and our inability to
estimate the fair value without incurring the excessive costs of
obtaining an appraisal.
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                               |  |      |         |      |  |      |   |      |  |      |   |            |  |       |   |       |  |   |   |  |  |   |   |  |  |   |         |  |  |             |       | 
|-------------------------------------------------------------- |  | ---- | ------- | ---- |  | ---- | - | ---- |  | ---- | - | ---------- |  | ----- | - | ----- |  | - | - |  |  | - | - |  |  | - | ------- |  |  | ----------- | ----- | 
|                                                               |  |      |         |      |  |      |   |      |  |      |   |            |  |       |   |       |  |   |   |  |  |   |   |  |  |   |         |  |  | Fair Value 
|                                                               |  |      |         |      |  |      |   |      |  |      |   |            |  |       |   |       |  |   |   |  |  |   |   |  |  |   |         |  |  | 2003       
|                                                               |  |      |         |      |  |      |   |      |  |      |   |            |  |       |   |       |  |   |   |  |  |   |   |  |  |   |         |  |  | (Liability)
|                                                               |  | 2004 |         | 2005 |  | 2006 |   | 2007 |  | 2008 |   | Thereafter |  | Total |   | Asset
|                                                               |  |      |         |      |  |      |   |      |  |      |   |            |  |       |   |      
|Interest Rate Derivative
Financial Instruments
Related to Debt |  |      |         |      |  |      |   |      |  |      |   |            |  |       |   |       |  |   |   |  |  |   |   |  |  |   |         |  |  |             |       | 
|Interest Rate Swaps on Fixed
Rate Debt                         |  |      |         |      |  |      |   |      |  |      |   |            |  |       |   |       |  |   |   |  |  |   |   |  |  |   |         |  |  |             |       | 
|Notional Amount                                                |  | $    | 150,000 |      |  | $    |  |      |  | $    |  |            |  | $     |  |       |  | $ |  |  |  | $ |  |  |  | $ | 150,000 |  |  | $           | 2,970 | 
|Average Pay Rate                                               |  |      | 1.123   | %    |  |      |   |      |  |      |   |            |  |       |   |       |  |   |   |  |  |   |   |  |  |   |         |  |  |             |       | 
|Average Receive Rate                                           |  |      | 3.47    | %    |  |      |   |      |  |      |   |            |  |       |   |       |  |   |   |  |  |   |   |  |  |   |         |  |  |             |       | 

28



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##### Table of Contents



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 ongoing 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 37).




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

None.




Item 9A. Controls and Procedures

As of June 30, 2003, we carried out an evaluation, under the supervision
and with the participation of our management, including our Chief Executive
Officer, President, and Chief Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures as defined in
Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934. Based upon that
evaluation, the Chief Executive Officer, President, and Chief Financial Officer
concluded that our disclosure controls and procedures were effective to ensure
that information required to be disclosed by us in the reports filed or
submitted by us under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission rules and forms. 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.

The Companys management, including the CEO, President, and CFO, does not
expect that our disclosure controls or our internal controls will prevent all
errors and all fraud. A control system, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within the company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or mistake. Additionally, controls
can be circumvented by the individual acts of some persons or by collusion of
two or more people. The design of any system of controls also is based in part
upon certain assumptions about the likelihood of future events, and there can
be no assurance that any design will succeed in achieving its stated goals
under all potential future conditions; over time, controls may become
inadequate because of changes in conditions, or the degree of compliance with
the policies or procedures may deteriorate. Because of the inherent limitations
in a cost-effective control system, misstatements due to error or fraud may
occur and not be detected.

29



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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     |  |     | 90 |       |  | Chairman of the Board and Director                    
|William Dean Singleton |  |     | 52 |       |  | Vice Chairman and Chief Executive Officer and Director
|Joseph J. Lodovic, IV  |  |     | 42 |       |  | President                                             
|Gerald E. Grilly       |  |     | 56 |       |  | Executive Vice President and Chief Operating Officer  
|Anthony F. Tierno      |  |     | 58 |       |  | Senior Vice President of Operations                   
|Ronald A. Mayo         |  |     | 42 |       |  | Vice President and Chief Financial Officer            
|James L. McDougald     |  |     | 50 |       |  | Treasurer                                             
|Michael J. Koren       |  |     | 36 |       |  | Vice President and Controller                         
|Eric J. Grilly         |  |     | 32 |       |  | President, MediaNews Group Interactive                
|Patricia Robinson      |  |     | 61 |       |  | Secretary                                             
|Jean L. Scudder        |  |     | 49 |       |  | Director                                              
|Howell E. Begle, Jr.   |  |     | 59 |       |  | Director                                              

Each director is elected annually and serves until the next annual meeting
of shareholders or until his/her 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. Gerald 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.

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.

Eric J. Grillyhas served as President of MediaNews Group Interactive
since October 2002. Prior thereto, he served as Vice President of MediaNews
Group Interactive from October 2000 to October 2002. From May 1999 to October
2000, Mr. Eric Grilly was Vice President of Interactive Media of The Denver
Post Corporation and from June 1998 to May 1999, Mr. Eric Grilly was the Vice
President of Sales at Nando Media, the Interactive Media division of McClatchy
Newspapers. Mr. Eric Grilly is the son of Mr. Gerald E. Grilly.

30



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##### Table of Contents



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

Business Experience (continued)

Patricia Robinsonhas served as Secretary of MediaNews since 1986. Ms.
Robinson is the sister of Mr. William Dean Singleton.

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

Howell E. Begle, Jr.has served as a Director of MediaNews since November
1996. Mr. Begle is Of Counsel to Hughes Hubbard and Reed LLP, 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 MediaNews Group in fiscal year 2003. We do not have
long-term compensation or stock option plans for our executives or employees.
However, during 2003, we adopted the non-qualified MediaNews Group Supplemental
Executive Retirement Plan, or the 2003 Plan, which does not qualify as a
long-term incentive plan as defined in Item 402(a)(3)(iii) of Section
229.402(a)(3) of Regulation S-K. This plan has been offered to certain of our
eligible corporate executives. The 2003 Plan allows participants to defer a
portion of their compensation, including bonuses, if any, on a pre-tax basis.
There is no company match on these deferrals; however, the deferrals earn a
return based on notional investment elections made by the individual
participants. In addition, we may at our discretion, elect to make
contributions to the participants accounts based on a comparison of our actual
profits to budgeted profits during each fiscal year. Any such contribution is
subject to vesting, which is generally ten years from the date of participation
in the plan.

|                                       |  |             |      |        |  |                     |         |                 |  |   |         |  |  |   |         | 
|-------------------------------------- |  | ----------- | ---- | ------ |  | ------------------- | ------- | --------------- |  | - | ------- |  |  | - | ------- | 
|                                       |  |             |      |        |  | Annual Compensation |         | All Other      
|Name and Principal Position            |  | Fiscal Year |      | Salary |  | Bonus               |         | Compensation(d)
|                                       |  |             |      |        |  |                     |         |                
|William Dean Singleton(a)              |  |             | 2003 |        |  | $                   | 830,250 |                 |  | $ | 200,000 |  |  | $ | 118,168 | 
|Vice Chairman,                         |  |             | 2002 |        |  |                     | 810,000 |                 |  |   | 150,000 |  |  |   | 41,302  | 
|Chief Executive Officer                |  |             | 2001 |        |  |                     | 790,500 |                 |  |   | 200,000 |  |  |   | 38,822  | 
|                                      
|Joseph J. Lodovic IV(a),               |  |             | 2003 |        |  | $                   | 547,350 |                 |  | $ | 200,000 |  |  | $ | 64,228  | 
|President                              |  |             | 2002 |        |  |                     | 534,000 |                 |  |   | 150,000 |  |  |   | 4,900   | 
|                                       |  |             | 2001 |        |  |                     | 519,300 |                 |  |   | 200,000 |  |  |   | 9,152   | 
|                                      
|Gerald E. Grilly(b)                    |  |             | 2003 |        |  | $                   | 512,500 |                 |  | $ | 175,000 |  |  | $ | 53,119  | 
|Executive Vice President &             |  |             | 2002 |        |  |                     | 500,000 |                 |  |   | 132,500 |  |  |   | 1,497   | 
|Chief Operating Officer                |  |             | 2001 |        |  |                     | 470,937 |                 |  |   | 631,250 |  |  |   | 18,766  | 
|                                      
|Anothony F. Tierno                     |  |             | 2003 |        |  | $                   | 307,500 |                 |  | $ | 42,500  |  |  | $ | 29,517  | 
|Senior Vice President of               |  |             | 2002 |        |  |                     | 300,000 |                 |  |   | 20,000  |  |  |   | 29,971  | 
|Operations                             |  |             | 2001 |        |  |                     | 375,000 |                 |  |   | 50,000  |  |  |   | 63,101  | 
|                                      
|Eric J. Grilly(c)                      |  |             | 2003 |        |  | $                   | 187,500 |                 |  | $ | 75,000  |  |  | $ | 17,842  | 
|President, MediaNews Group Interactive |  |             | 2002 |        |  |                     | 175,000 |                 |  |   | 27,500  |  |  |   | 388     | 
|                                       |  |             | 2001 |        |  |                     | 163,055 |                 |  |   | 146,000 |  |  |   | 4,554   | 



---

|(a) |  | In fiscal year 2001, these officers also received significant
compensation that was charged to other affiliates that does not appear
here as compensation.                                                                                                                                                                                                                                                                                                                                
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Prior to February 2001, Mr. Gerald E. Grilly was not an officer of
MediaNews. Mr. Gerald E. 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
formation of the Denver JOA in the amount of $450,000.
|   
|(c) |  | Prior to October 2000, Mr. Eric J. Grilly was not an officer of
MediaNews. Mr. Eric J. Grillys compensation in fiscal year 2001
includes compensation earned as MediaNews Vice President of MediaNews
Group Interactive and prior to that appointment, the compensation he
earned as Vice President of Interactive Media of The Denver Post
Corporation, including a one-time bonus associated with the formation of
the Denver JOA in the amount of $130,000.                          
|   
|(d) |  | Included in All Other Compensation are amounts earned under the
deferred compensation plans described above.                                                                                                                                                                                                                                                                                                                                                                            

None of our executive officers have an employment agreement with us except
Messrs. Singleton and Lodovic.

31



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##### Table of Contents



Employment and Other Agreements

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 $850,500, 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 newspapers are owned or circulated by us or our
subsidiaries (currently or in the future). From 1996 through 2002, MediaNews
Group advanced a total of $1.5 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 our consolidated balance sheet as a
component of other long-term assets. Advances will be repaid when the policy is
surrendered or earlier at Mr. Singletons option. No interest is charged to Mr.
Singleton on these advances. As a result of Sarbanes-Oxley, which prohibits us
from making loans to our executive officers, and pending clarification as to
whether Sarbanes-Oxley applies to these types of advances, no further funding
by MediaNews Group of this insurance coverage occurred subsequent to July 2002.
The cash surrender value life insurance policies were originally purchased in
order to mitigate the impact of estate taxes that may be due on MediaNews Group
stock held in the Singleton Revocable Trust as a result of the death of Mr.
Singleton and his wife and the resulting need for us to repurchase such shares
to provide liquidity in the Singleton Revocable Trust. Mr. Singleton and
MediaNews Group will continue to evaluate the need for this insurance coverage
as a result of recent changes in estate tax laws.

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 $560,700, 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 Mr. Lodovics put is equal to a percentage of
fair market value, which increases up to 100% on December 31, 2009 (at June 30,
2003, Mr. Lodovic is entitled to 65% of the fair market value). 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, $0.001 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 we do not currently have plans to pay
common stock dividends. Our current long-term debt agreements limit our ability
to pay such dividends.

32



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##### Table of Contents



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

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 as defined in
Item 402(a)(3) of Section 229.402(a)(3) of Regulation 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(b), (c), (l), (m)   |  |                         | 254,858.9900   |                      |  |  | 11.09 | %
|Howell E. Begle, Jr.(b), (d), (l), (m)     |  |                         | 786,426.5100   |                      |  |  | 34.22 | %
|Patricia Robinson(b), (e), (l), (m)        |  |                         | 786,426.5100   |                      |  |  | 34.22 | %
|Joseph J. Lodovic, IV(b), (f)              |  |                         | 58,199.0000    |                      |  |  | 2.53  | %
|Jean L. Scudder(g), (k)                    |  |                         | 384,065.1200   |                      |  |  | 16.71 | %
|Charles Scudder(h), (k)                    |  |                         | 260,321.3750   |                      |  |  | 11.32 | %
|Elizabeth A. Difani(h), (i), (k)           |  |                         | 219,073.4575   |                      |  |  | 9.53  | %
|Carolyn Miller(h), (j), (k)                |  |                         | 177,825.5475   |                      |  |  | 7.74  | %
|All directors and executives as a group(n) |  |                         | 2,140,770.0000 |                      |  |  | 93.14 | %



---

|(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 Mr. Howell E. Begle, Jr.,
Trustee, 1775 I Street N.W., Suite 600, Washington, D.C. 20006. Mr.
Begle is Of Counsel to the law firm of Hughes Hubbard & Reed LLP, 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). Charles Scudder, Elizabeth Difani and Carolyn Miller are
siblings of Ms. Scudder; all four are the children of Mr. Richard B.
Scudder.
|   
|(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 132,299.6658 shares as trustee and/or custodian for
certain of her minor children. Sole voting power with respect to all
219,073.4575 shares is held by Ms. Scudder pursuant to the Scudder
Family Voting Trust Agreement. See note (g) above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(j) |  | Ms. Miller holds 118,550.365 shares as trustee and/or custodian for
certain of her minor children. Sole voting power with respect to all
177,825.5475 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

33



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

Scudder Family Voting Trust Agreement for MediaNews

The children of Richard B. Scudder, which includes 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 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 our 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 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.

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##### Table of Contents






Item 14. Principal Accountants Fees and Services

Although this disclosure is not effective for us for the year ended June
30, 2003, we have chosen to disclose this information.

|                   |  |                      |     |      |  |   |     | 
|------------------ |  | -------------------- | --- | ---- |  | - | --- | 
|                   |  | Years Ended June 30,
|                   |  |                     
|                   |  | 2003                 |     | 2002
|                   |  |                      |     |     
|                   |  | (In thousands)      
|Audit Fees         |  | $                    | 469 |      |  | $ | 500 | 
|Audit-Related Fees |  |                      | 125 |      |  |   | 175 | 
|Tax Fees           |  |                      | 58  |      |  |   | 99  | 
|                   |  |                      |     |      |  |   |     | 
|Total              |  | $                    | 652 |      |  | $ | 774 | 
|                   |  |                      |     |      |  |   |     | 

ADDITIONAL INFORMATION

You can inspect and copy, at prescribed rates, our annual, quarterly and
current reports, and other information filed with the Securities and Exchange
Commission (SEC) at the public reference facilities of the SEC, 450 Fifth
Street N.W., Washington D.C. 20549. The SEC also maintains an Internet site
www.sec.gov containing reports and other information.

Copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K, and amendments to those reports filed or furnished
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are
available free of charge through our Internet site www.medianewsgroup.com as
soon as reasonably practicable after we electronically file the material with,
or furnish it to, the Securities and Exchange Commission.

35



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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 37).     
|
| | 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 37).
|
| | 3.  |  | Exhibits                                                                                                                                                                                                              
|
| |     |  | The exhibits listed in the accompanying index to exhibits are filed as a
part of this annual report (See page 68).                                                                                                    
|
| | (b) |  | Reports on Form 8-K                                                                                                                                                                                                   
|
| |     |  | On May 14, 2003, we filed a Form 8-K regarding Amendments No. 3 and 4 of
our Credit Agreement dated as of May 12, 1999, as amended and restated as
of January 2, 2001.                                                

36



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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                                                                                      |  |      | 38 | 
|Consolidated Balance Sheets as of June 30, 2003 and 2002                                                            |  |      | 39 | 
|Consolidated Statements of Operations for the Fiscal Years Ended June 30, 2003, 2002 and 2001                       |  |      | 41 | 
|Consolidated Statements of Changes in Shareholders Equity for the
Fiscal Years Ended June 30, 2003, 2002, and 2001 |  |      | 42 | 
|Consolidated Statements of Cash Flows for the Fiscal Years Ended June 30, 2003, 2002 and 2001                       |  |      | 43 | 
|Notes to Consolidated Financial Statements                                                                          |  |      | 44 | 

The following financial statement schedule of the registrant and its
subsidiaries required to be included in Item 15(a)(2) is listed below:

|                                              |  |  |    | 
|--------------------------------------------- |  |  | -- | 
|Schedule II Valuation and Qualifying Accounts |  |  | 71 | 

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.

37



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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, 2003 and 2002, and the related
consolidated statements of operations, statements of changes in shareholders
equity and cash flows for each of the three years in the period ended June 30,
2003. 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, 2003 and 2002, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended June 30, 2003, 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 12, 2003 |  | /S/ Ernst & Young LLP
|                   |  |                      
|                   |  | Ernst & Young LLP    
|Denver, Colorado   |  |                      

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                          |                                     |        |          |                |  |      |          |           |  | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------- | ------ | -------- | -------------- |  | ---- | -------- | --------- |  | 
|                                                                                                                                                          |                                     |        |          | June 30,      
|                                                                                                                                                          |                                     |        |          |               
|                                                                                                                                                          |                                     |        |          | 2003           |  | 2002
|                                                                                                                                                          |                                     |        |          |                |  |     
|                                                                                                                                                          |                                     |        |          | (In thousands)
|                                                                                                                                                          |                                     | ASSETS |          |                |  |      |          |           |  | 
|CURRENT ASSETS                                                                                                                                            |                                     |        |          |                |  |      |          |          
|Cash and cash equivalents                                                                                                                                 |                                     | $      | 3,343    |                |  | $    | 2,029    |          
|Trade accounts receivable, less allowance for doubtful accounts of $9,393
at June 30, 2003 and $10,669 at June 30, 2002                                   |                                     |        | 74,106   |                |  |      | 74,013   |          
|Other receivables                                                                                                                                         |                                     |        | 6,101    |                |  |      | 4,995    |          
|Inventories of newsprint and supplies                                                                                                                     |                                     |        | 14,314   |                |  |      | 10,205   |          
|Prepaid expenses and other assets                                                                                                                         |                                     |        | 8,654    |                |  |      | 7,760    |          
|Income taxes receivable                                                                                                                                   |                                     |        | 468      |                |  |      | 6,137    |          
|                                                                                                                                                          |                                     |        |          |                |  |      |          |          
|                                                                                                                                                          | TOTAL CURRENT ASSETS                |        |          | 106,986        |  |      |          | 105,139   | 
|                                                                                                                                                         
|PROPERTY, PLANT AND EQUIPMENT                                                                                                                             |                                     |        |          |                |  |      |          |          
|Land                                                                                                                                                      |                                     |        | 39,954   |                |  |      | 37,225   |          
|Buildings and improvements                                                                                                                                |                                     |        | 111,180  |                |  |      | 103,962  |          
|Machinery and equipment                                                                                                                                   |                                     |        | 312,817  |                |  |      | 301,045  |          
|Construction in progress                                                                                                                                  |                                     |        | 2,940    |                |  |      | 5,538    |          
|                                                                                                                                                          |                                     |        |          |                |  |      |          |          
|                                                                                                                                                          | TOTAL PROPERTY, PLANT AND EQUIPMENT |        |          | 466,891        |  |      |          | 447,770   | 
|Less accumulated depreciation and amortization                                                                                                            |                                     |        | (165,754 | )              |  |      | (144,418 | )        
|                                                                                                                                                          |                                     |        |          |                |  |      |          |          
|                                                                                                                                                          | NET PROPERTY, PLANT AND EQUIPMENT   |        |          | 301,137        |  |      |          | 303,352   | 
|                                                                                                                                                         
|OTHER ASSETS                                                                                                                                              |                                     |        |          |                |  |      |          |          
|Investment in unconsolidated JOAs                                                                                                                         |                                     |        | 221,640  |                |  |      | 244,549  |          
|Equity investments                                                                                                                                        |                                     |        | 93,343   |                |  |      | 13,757   |          
|Subscriber accounts, less accumulated amortization of $118,572 at
June 30, 2003 and $112,595 at June 30, 2002                                             |                                     |        | 79,320   |                |  |      | 98,303   |          
|Excess of cost over fair value of net assets acquired                                                                                                     |                                     |        | 381,199  |                |  |      | 381,945  |          
|Newspaper mastheads                                                                                                                                       |                                     |        | 145,781  |                |  |      | 145,282  |          
|Covenants not to compete and other identifiable intangible assets,
less accumulated amortization of $29,622 at June 30, 2003
and $33,581 at June 30, 2002 |                                     |        | 4,547    |                |  |      | 5,415    |          
|Net pension assets                                                                                                                                        |                                     |        | 3,620    |                |  |      | 12,864   |          
|Other                                                                                                                                                     |                                     |        | 10,512   |                |  |      | 12,578   |          
|                                                                                                                                                          |                                     |        |          |                |  |      |          |          
|                                                                                                                                                          | TOTAL OTHER ASSETS                  |        |          | 939,962        |  |      |          | 914,693   | 
|                                                                                                                                                          |                                     |        |          |                |  |      |          |          
|                                                                                                                                                          | TOTAL ASSETS                        |        | $        | 1,348,085      |  |      | $        | 1,323,184 | 
|                                                                                                                                                          |                                     |        |          |                |  |      |          |          

See notes to consolidated financial statements

39



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|                                                                       |                                                          |                                      |         |                                   |   |      |         |           |   | 
|---------------------------------------------------------------------- | -------------------------------------------------------- | ------------------------------------ | ------- | --------------------------------- | - | ---- | ------- | --------- | - | 
|                                                                       |                                                          |                                      |         | June 30,                         
|                                                                       |                                                          |                                      |         |                                  
|                                                                       |                                                          |                                      |         | 2003                              |   | 2002
|                                                                       |                                                          |                                      |         |                                   |   |     
|                                                                       |                                                          |                                      |         | (In thousands, except share data)
|                                                                       |                                                          | LIABILITIES AND SHAREHOLDERS EQUITY |         |                                   |   |      |         |           |   | 
|CURRENT LIABILITIES                                                    |                                                          |                                      |         |                                   |   |      |         |          
|Trade accounts payable                                                 |                                                          | $                                    | 9,894   |                                   |   | $    | 12,417  |          
|Accrued employee compensation                                          |                                                          |                                      | 28,232  |                                   |   |      | 24,174  |          
|Accrued interest                                                       |                                                          |                                      | 14,762  |                                   |   |      | 17,110  |          
|Other accrued liabilities                                              |                                                          |                                      | 23,823  |                                   |   |      | 24,048  |          
|Unearned income                                                        |                                                          |                                      | 20,032  |                                   |   |      | 21,085  |          
|Current portion of long-term debt and obligations under capital leases |                                                          |                                      | 3,171   |                                   |   |      | 7,707   |          
|                                                                       |                                                          |                                      |         |                                   |   |      |         |          
|                                                                       | TOTAL CURRENT LIABILITIES                                |                                      |         | 99,914                            |   |      |         | 106,541   |  
|                                                                      
|OBLIGATIONS UNDER CAPITAL LEASES                                       |                                                          |                                      | 6,833   |                                   |   |      | 7,001   |          
|                                                                      
|LONG-TERM DEBT                                                         |                                                          |                                      | 894,550 |                                   |   |      | 942,382 |          
|                                                                      
|OTHER LIABILITIES                                                      |                                                          |                                      | 33,947  |                                   |   |      | 30,462  |          
|                                                                      
|DEFERRED INCOME TAXES, NET                                             |                                                          |                                      | 77,845  |                                   |   |      | 56,290  |          
|                                                                      
|MINORITY INTEREST                                                      |                                                          |                                      | 174,988 |                                   |   |      | 156,007 |          
|                                                                      
|SHAREHOLDERS EQUITY                                                   |                                                          |                                      |         |                                   |   |      |         |          
|Common stock, par value $0.001; 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                               |                                      |         | (4,264                            | ) |      |         | (6,481    | )
|                                                                       | Minimum pension liability                                |                                      |         | (15,087                           | ) |      |         | (7,549    | )
|Retained earnings                                                      |                                                          |                                      | 77,726  |                                   |   |      | 36,898  |          
|Common stock in treasury, at cost, 16,000 shares                       |                                                          |                                      | (2,000  | )                                 |   |      | (2,000  | )        
|                                                                       |                                                          |                                      |         |                                   |   |      |         |          
|                                                                       | TOTAL SHAREHOLDERS EQUITY                               |                                      |         | 60,008                            |   |      |         | 24,501    |  
|                                                                       |                                                          |                                      |         |                                   |   |      |         |          
|                                                                       | TOTAL LIABILITIES AND SHAREHOLDERS EQUITY               |                                      | $       | 1,348,085                         |   |      | $       | 1,323,184 |  
|                                                                       |                                                          |                                      |         |                                   |   |      |         |          

See notes to consolidated financial statements

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MEDIANEWS GROUP, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

|                                       |                                               |                          |         |                                   |         |      |         |           |         |   |         |           |         | 
|-------------------------------------- | --------------------------------------------- | ------------------------ | ------- | --------------------------------- | ------- | ---- | ------- | --------- | ------- | - | ------- | --------- | ------- | 
|                                       |                                               |                          |         | Years Ended June 30,             
|                                       |                                               |                          |         |                                  
|                                       |                                               |                          |         | 2003                              |         | 2002 |         | 2001     
|                                       |                                               |                          |         |                                   |         |      |         |          
|                                       |                                               |                          |         | (In thousands, except share data)
|REVENUES                               |                                               |                          |         |                                   |         |      |         |           |         |   |         |          
|                                       | Advertising                                   |                          | $       | 556,016                           |         |      | $       | 535,687   |         |   | $       | 673,737   |        
|                                       | Circulation                                   |                          |         | 137,445                           |         |      |         | 139,495   |         |   |         | 144,292   |        
|                                       | Other                                         |                          |         | 45,137                            |         |      |         | 35,948    |         |   |         | 34,151    |        
|                                       |                                               |                          |         |                                   |         |      |         |           |         |   |         |          
|                                       |                                               | TOTAL REVENUES           |         |                                   | 738,598 |      |         |           | 711,130 |   |         |           | 852,180 | 
|                                      
|INCOME (LOSS) FROM UNCONSOLIDATED JOAS |                                               |                          | 25,227  |                                   |         |      | 8,770   |           |         |   | (3,202  | )        
|                                      
|COSTS AND EXPENSES                     |                                               |                          |         |                                   |         |      |         |           |         |   |         |          
|                                       | Cost of sales                                 |                          |         | 221,888                           |         |      |         | 220,082   |         |   |         | 297,825   |        
|                                       | Selling, general and administrative           |                          |         | 346,763                           |         |      |         | 324,364   |         |   |         | 385,764   |        
|                                       | Depreciation and amortization                 |                          |         | 40,553                            |         |      |         | 47,545    |         |   |         | 62,593    |        
|                                       | Interest expense                              |                          |         | 64,252                            |         |      |         | 75,302    |         |   |         | 82,241    |        
|                                       | Other (income) expense, net                   |                          |         | 19,534                            |         |      |         | 10,941    |         |   |         | 13,200    |        
|                                       |                                               |                          |         |                                   |         |      |         |           |         |   |         |          
|                                       |                                               | TOTAL COSTS AND EXPENSES |         |                                   | 692,990 |      |         |           | 678,234 |   |         |           | 841,623 | 
|                                      
|EQUITY INVESTMENT INCOME (LOSS), NET   |                                               |                          | 3,709   |                                   |         |      | 435     |           |         |   | (1,412  | )        
|                                      
|GAIN ON SALE OF NEWSPAPER PROPERTIES   |                                               |                          | 27,399  |                                   |         |      |        |           |         |   | 74,255  |          
|                                      
|MINORITY INTEREST                      |                                               |                          | (34,088 | )                                 |         |      | (32,218 | )         |         |   | (40,927 | )        
|                                       |                                               |                          |         |                                   |         |      |         |           |         |   |         |          
|INCOME BEFORE INCOME TAXES             |                                               |                          | 67,855  |                                   |         |      | 9,883   |           |         |   | 39,271  |          
|INCOME TAX BENEFIT (EXPENSE)           |                                               |                          | (27,027 | )                                 |         |      | 2,482   |           |         |   | (14,044 | )        
|                                       |                                               |                          |         |                                   |         |      |         |           |         |   |         |          
|NET INCOME                             |                                               | $                        | 40,828  |                                   |         | $    | 12,365  |           |         | $ | 25,227  |          
|                                       |                                               |                          |         |                                   |         |      |         |           |         |   |         |          
|NET INCOME PER COMMON SHARE:           |                                               |                          |         |                                   |         |      |         |           |         |   |         |          
|                                       | Net income per common share                   |                          | $       | 17.76                             |         |      | $       | 5.38      |         |   | $       | 10.98     |        
|                                       |                                               |                          |         |                                   |         |      |         |           |         |   |         |          
|                                       | Weighted average number of shares outstanding |                          |         | 2,298,346                         |         |      |         | 2,298,346 |         |   |         | 2,298,346 |        
|                                       |                                               |                          |         |                                   |         |      |         |           |         |   |         |          

See notes to consolidated financial statements

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##### Table of Contents






MEDIANEWS GROUP, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

|                         |                                                                                             |                                                                                             |   |                |   |                            |       |                                   |   |                          |         |                        |        |                          |        |   |        |   |        |   |   |   |        |        |        |  
|------------------------ | ------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------- | - | -------------- | - | -------------------------- | ----- | --------------------------------- | - | ------------------------ | ------- | ---------------------- | ------ | ------------------------ | ------ | - | ------ | - | ------ | - | - | - | ------ | ------ | ------ | -
|                         |                                                                                             |                                                                                             |   |                |   |                            |      
|                         |                                                                                             |                                                                                             |   | CommonStock    |   | Additional
Paid-In Capital |       | AccumulatedOtherComprehensiveLoss |   | RelatedEarnings(Deficit) |         | CommonStock
inTreasury |        | TotalShareholdersEquity
|                         |                                                                                             |                                                                                             |   |                |   |                            |       |                                   |   |                          |         |                        |        |                         
|                         |                                                                                             |                                                                                             |   | (In thousands)
|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 |       
|                         | Comprehensive income:                                                                       |                                                                                             |   |                |   |                            |       |                                   |   |                          |         |                        |        |                          |        |   |        |   |        |   |   |   |        |        |       
|                         | Unrealized gain on hedging
activities, net of tax
expense of $1,075                         |                                                                                             |   |               |   |                            |       |                                  |   |                          |         | 1,548                  |        |                          |        |  |        |   |        |  |   |   |        | 1,548  |       
|                         | Unrealized loss on hedging
activities, reclassified to
earnings, net of tax expense
of $348 |                                                                                             |   |               |   |                            |       |                                  |   |                          |         | 669                    |        |                          |        |  |        |   |        |  |   |   |        | 669    |       
|                         | Minimum pension liability
adjustment, net of tax
benefit of $5,600                          |                                                                                             |   |               |   |                            |       |                                  |   |                          |         | (7,538                 | )      |                          |        |  |        |   |        |  |   |   |        | (7,538 | )     
|                         |                                                                                             | Net income                                                                                  |   |                |  |                            |       |                                   |  |                          |         |                        |       |                          |        |   | 40,828 |   |        |   |  |   |        |        | 40,828 |  
|                         |                                                                                             |                                                                                             |   |                |   |                            |       |                                   |   |                          |         |                        |        |                          |        |   |        |   |        |   |   |   |        |       
|                         | Comprehensive income                                                                        |                                                                                             |   |                |   |                            |       |                                   |   |                          |         |                        |        |                          |        |   |        |   |        |   |   |   |        | 35,507 |       
|                         |                                                                                             |                                                                                             |   |                |   |                            |       |                                   |   |                          |         |                        |        |                          |        |   |        |   |        |   |   |   |        |       
|BALANCE AT JUNE 30, 2003 |                                                                                             | $                                                                                           | 2 |                |   | $                          | 3,631 |                                   |   | $                        | (19,351 | )                      |        | $                        | 77,726 |   |        | $ | (2,000 | ) |   | $ | 60,008 |       
|                         |                                                                                             |                                                                                             |   |                |   |                            |       |                                   |   |                          |         |                        |        |                          |        |   |        |   |        |   |   |   |        |       

See notes to consolidated financial statements

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

|                                                 |                                                                                   |                                          |                                                                                                           |                                             |         |                      |        |          |         |         |          |          |          |         |         |  
|------------------------------------------------ | --------------------------------------------------------------------------------- | ---------------------------------------- | --------------------------------------------------------------------------------------------------------- | ------------------------------------------- | ------- | -------------------- | ------ | -------- | ------- | ------- | -------- | -------- | -------- | ------- | ------- | -
|                                                 |                                                                                   |                                          |                                                                                                           |                                             |         | Years Ended June 30,
|                                                 |                                                                                   |                                          |                                                                                                           |                                             |         |                     
|                                                 |                                                                                   |                                          |                                                                                                           |                                             |         | 2003                 |        | 2002     |         | 2001   
|                                                 |                                                                                   |                                          |                                                                                                           |                                             |         |                      |        |          |         |        
|                                                 |                                                                                   |                                          |                                                                                                           |                                             |         | (In thousands)      
|CASH FLOWS FROM OPERATING ACTIVITIES:            |                                                                                   |                                          |                                                                                                           |                                             |         |                      |        |          |         |         |          |         
|                                                 | Net income                                                                        |                                          | $                                                                                                         | 40,828                                      |         |                      | $      | 12,365   |         |         | $        | 25,227   |         
|                                                 | Adjustments to reconcile net income to net cash provided by
operating activities: |                                          |                                                                                                           |                                             |         |                      |        |          |         |         |          |          |         
|                                                 |                                                                                   |                                          | Depreciation                                                                                              |                                             |         | 23,771               |        |          |         | 26,352  |          |          |          | 31,365  |        
|                                                 |                                                                                   |                                          | Amortization                                                                                              |                                             |         | 20,914               |        |          |         | 25,446  |          |          |          | 35,973  |        
|                                                 |                                                                                   |                                          | Net gain on sale of newspaper assets                                                                      |                                             |         | (28,620              | )      |          |         | (398    | )        |          |          | (74,125 | )      
|                                                 |                                                                                   |                                          | Impairment loss                                                                                           |                                             |         | 5,715                |        |          |         |        |          |          |          |        |        
|                                                 |                                                                                   |                                          | Provision for losses on accounts receivable                                                               |                                             |         | 9,632                |        |          |         | 10,213  |          |          |          | 10,916  |        
|                                                 |                                                                                   |                                          | Amortization of debt discount                                                                             |                                             |         | 1,231                |        |          |         | 2,145   |          |          |          | 2,755   |        
|                                                 |                                                                                   |                                          | Minority interest                                                                                         |                                             |         | 34,088               |        |          |         | 32,218  |          |          |          | 40,927  |        
|                                                 |                                                                                   |                                          | Proportionate share of net income from unconsolidated JOAs                                                |                                             |         | (68,638              | )      |          |         | (51,981 | )        |          |          | (13,201 | )      
|                                                 |                                                                                   |                                          | Equity investment (income) loss, net                                                                      |                                             |         | (3,709               | )      |          |         | (435    | )        |          |          | 1,412   |        
|                                                 |                                                                                   |                                          | Deferred income tax expense                                                                               |                                             |         | 25,362               |        |          |         | 1,178   |          |          |          | 12,467  |        
|                                                 |                                                                                   |                                          | Change in defined benefit plan assets, net of cash
contributions                                          |                                             |         | 31                   |        |          |         | 1,172   |          |          |          | (5,948  | )      
|                                                 |                                                                                   |                                          | Increase in estimated option repurchase price                                                             |                                             |         | 5,993                |        |          |         | 2,325   |          |          |          | 1,414   |        
|                                                 |                                                                                   |                                          | Unrealized loss on hedging activities, reclassified to
earnings from accumulated other comprehensive loss |                                             |         | 1,017                |        |          |         | 402     |          |          |          |        |        
|                                                 |                                                                                   |                                          | Gain on interest rate swaps                                                                               |                                             |         | (1,158               | )      |          |         | (2,951  | )        |          |          |        |        
|                                                 |                                                                                   |                                          | Change in operating assets and liabilities:                                                               |                                             |         |                      |        |          |         |         |          |          |          |         |        
|                                                 |                                                                                   |                                          |                                                                                                           | Accounts receivable                         |         |                      | (7,583 | )        |         |         | (4,161   | )        |          |         | (5,497  | )
|                                                 |                                                                                   |                                          |                                                                                                           | Inventories                                 |         |                      | (3,665 | )        |         |         | 4,349    |          |          |         | (4,876  | )
|                                                 |                                                                                   |                                          |                                                                                                           | Prepaid expenses and other assets           |         |                      | 2,910  |          |         |         | (433     | )        |          |         | 1,393   |  
|                                                 |                                                                                   |                                          |                                                                                                           | Accounts payable and accrued liabilities    |         |                      | 1,339  |          |         |         | (873     | )        |          |         | (21,956 | )
|                                                 |                                                                                   |                                          |                                                                                                           | Unearned income                             |         |                      | (401   | )        |         |         | 587      |          |          |         | (4,714  | )
|                                                 |                                                                                   |                                          |                                                                                                           | Change in other assets and liabilities, net |         |                      | (1,219 | )        |         |         | 72       |          |          |         | 10,146  |  
|                                                 |                                                                                   |                                          |                                                                                                           |                                             |         |                      |        |          |         |         |          |         
|                                                 |                                                                                   |                                          |                                                                                                           | NET CASH FLOWS FROM OPERATING ACTIVITIES    |         |                      | 57,838 |          |         |         | 57,592   |          |          |         | 43,678  |  
|                                                
|CASH FLOWS FROM INVESTING ACTIVITIES:            |                                                                                   |                                          |                                                                                                           |                                             |         |                      |        |          |         |         |          |         
|                                                 | Distributions from unconsolidated JOAs                                            |                                          |                                                                                                           | 83,621                                      |         |                      |        | 58,449   |         |         |          | 38,070   |         
|                                                 | Investment in unconsolidated JOAs                                                 |                                          |                                                                                                           |                                            |         |                      |        | (12,416  | )       |         |          |         |         
|                                                 | Distributions from non-JOA investments                                            |                                          |                                                                                                           | 4,360                                       |         |                      |        | 1,448    |         |         |          |         |         
|                                                 | Investments in non-JOA equity investments                                         |                                          |                                                                                                           | (1,592                                      | )       |                      |        | (2,280   | )       |         |          | (914     | )       
|                                                 | Sale of newspapers and other assets                                               |                                          |                                                                                                           | 1,314                                       |         |                      |        | 3,840    |         |         |          | 100,266  |         
|                                                 | Business acquisitions, net of cash acquired                                       |                                          |                                                                                                           | (53,006                                     | )       |                      |        | (3,277   | )       |         |          | (425,345 | )       
|                                                 | Cash contributed by partners for business acquisitions                            |                                          |                                                                                                           | 24,178                                      |         |                      |        |         |         |         |          |         |         
|                                                 | Purchase of machinery and equipment                                               |                                          |                                                                                                           | (20,669                                     | )       |                      |        | (11,323  | )       |         |          | (19,611  | )       
|                                                 |                                                                                   |                                          |                                                                                                           |                                             |         |                      |        |          |         |         |          |         
|                                                 |                                                                                   | NET CASH FLOWS FROM INVESTING ACTIVITIES |                                                                                                           |                                             | 38,206  |                      |        |          | 34,441  |         |          |          | (307,534 | )      
|                                                
|CASH FLOWS FROM FINANCING ACTIVITIES:            |                                                                                   |                                          |                                                                                                           |                                             |         |                      |        |          |         |         |          |         
|                                                 | Issuance of long-term debt                                                        |                                          |                                                                                                           | 113,143                                     |         |                      |        | 66,994   |         |         |          | 363,851  |         
|                                                 | Reduction of long-term debt and other liabilities                                 |                                          |                                                                                                           | (169,108                                    | )       |                      |        | (120,741 | )       |         |          | (197,731 | )       
|                                                 | Distributions paid to minority interest                                           |                                          |                                                                                                           | (38,765                                     | )       |                      |        | (43,406  | )       |         |          | (39,747  | )       
|                                                 |                                                                                   |                                          |                                                                                                           |                                             |         |                      |        |          |         |         |          |         
|                                                 |                                                                                   | NET CASH FLOWS FROM FINANCING ACTIVITIES |                                                                                                           |                                             | (94,730 | )                    |        |          | (97,153 | )       |          |          | 126,373  |        
|                                                 |                                                                                   |                                          |                                                                                                           |                                             |         |                      |        |          |         |         |          |         
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |                                                                                   |                                          | 1,314                                                                                                     |                                             |         |                      | (5,120 | )        |         |         | (137,483 | )       
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR   |                                                                                   |                                          | 2,029                                                                                                     |                                             |         |                      | 7,149  |          |         |         | 144,632  |         
|                                                 |                                                                                   |                                          |                                                                                                           |                                             |         |                      |        |          |         |         |          |         
|CASH AND CASH EQUIVALENTS AT END OF YEAR         |                                                                                   | $                                        | 3,343                                                                                                     |                                             |         | $                    | 2,029  |          |         | $       | 7,149    |         
|                                                 |                                                                                   |                                          |                                                                                                           |                                             |         |                      |        |          |         |         |          |         

See notes to consolidated financial statements

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MEDIANEWS GROUP,INC. AND 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 nine states. The Company also owns four radio
stations and one television station, the combined revenues of these
non-newspaper operations comprise less than 0.5% of the Companys consolidated
revenue and are not considered significant to the Companys operations.

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 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. The Company uses estimates, based on historical experience,
actuarial studies and other assumptions, as appropriate, to assess 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 (JOA) 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. Editorial control
and news at each of the individual newspapers, which are a party to a joint
operating agreement, 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, Pennsylvania,
Charleston, West Virginia, Salt Lake City, Utah, and Denver, Colorado,
respectively. The editorial and related expenses of The Denver Post, The Salt
Lake Tribuneand York Dispatchare incurred by the Company outside the related
JOA. The Charleston JOA, on the other hand, accounts for and pays the editorial
expenses for both newspapers within the JOA. The Company controls the York JOA
and accordingly consolidates its results. The editorial costs associated with
the York Daily Record, the other newspaper in the York JOA and the minority
partner, are not included in our results, since this newspaper is not owned by
MediaNews.

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. The
Company discontinued pro-rata consolidation upon adoption of EITF 00-1,
effective June 30, 2000. All periods conform to the current presentation.
Currently, the operating results from the Companys unconsolidated JOAs are

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

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

reported as a single net amount in the
accompanying financial statements in the line item Income from Unconsolidated JOAs. This line item includes:



| |  |  | The Companys proportionate share of net income from JOAs;                                                                                                                                                                                                                                                                                                          
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | 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 as the subscriber lists and goodwill are attributable to the
Companys earnings in the JOA; and
|
| |  |  | Editorial costs, miscellaneous publishing revenue, and other
charges incurred by the Companys subsidiaries directly attributable
to the JOAs providing editorial content and news for the Companys
newspapers published by the JOAs.                                                                                                                              

Investments in unconsolidated JOAs are included in the consolidated
balance sheet under the line item Investment in Unconsolidated JOAs, for the
JOAs the Company does not control. (See Note 3: Joint Operating Agencies for
further discussion.)

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 (for those investments in which the Company has less than 20% ownership,
the Company accounts for these under the equity method as the Company has seats
on the board and therefore has influence and ties to the entity beyond the
Companys invested capital):



| |  |  | PowerOne Media, LLC, a company that provides software tools and hosts
classified advertising for daily and weekly newspapers throughout the
United States (approximately 6.0% ownership interest and one seat on
board);                                                                                                                                                                                         
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Employment Specialists, LLC, (operating as CareerSite) an Internet
based employment classified advertising application (approximately 40%
ownership interest). It is currently anticipated that CareerSite will
merge with PowerOne on or around September 30, 2003. After the merger,
the Companys ownership in the combined entity is expected to be
approximately 16.0%;                                     
|
| |  |  | 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
held by Kearns-Tribune, LLC. In addition to its investment, the Company
is guarantor for 6.0% of up to $125.0 million in long-term debt owed by
Ponderay and due on April 12, 2006 (6.0% ownership interest and one seat
on board). See Recently Issued Accounting Standards, for further
discussion regarding the Companys guarantee; and
|
| |  |  | TexasNew Mexico Newspapers Partnership, a minority investment in
this partnership, which was formed on March 3, 2003 (33.8% ownership
interest). See Note 5: Acquisitions, Dispositions and Partnership
Formations for further discussion.                                                                                                                                                                      

These investments are included in the consolidated balance sheet as a
component of long-term assets under the caption Equity Investments.

45



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##### Table of Contents



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

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

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 8 to 15 years. Other
finite identified intangibles are being amortized over periods not exceeding 10
years.

Results for the years ended June 30, 2003 and 2002 are presented under
SFAS No. 142; however, in accordance with this standard, the results for the
year ended June 30, 2001 have not been restated. Had SFAS No. 142 been in
effect for the Companys fiscal year ended June 30, 2001, the Companys
reported net income would have been $40.0 million and net income per share
would have been $17.41.

As a result of an indicator of impairment identified at the Companys
subsidiary, Alaska Broadcasting Company, during the quarter ended March 31,
2003, the Company tested the related carrying value of goodwill for impairment
under SFAS No. 142, Goodwill and Other Intangible Assets.Based on the
Companys evaluation, all of the recorded goodwill was determined to be
impaired. As a result, a write down of $1.8 million was recorded in other
(income) expense, net during the quarter ended March 31, 2003. In addition, as
required by SFAS No. 142, the Company performed an annual impairment test as of
July 1, 2003. There was no impairment of intangible assets noted as a result of
this test. Another impairment test will be performed July 1, 2004, unless
unexpected events or circumstances arise that require the Company to test for
impairment sooner.

Estimated amortization expense for the next five years is as follows at
June 30, 2003 (in thousands):

|     |  |   |        |  |  |  |  |  |  |  |  | 
|---- |  | - | ------ |  |  |  |  |  |  |  |  | 
|2004 |  | $ | 18,307 | 
|2005 |  |   | 13,024 | 
|2006 |  |   | 12,684 | 
|2007 |  |   | 11,884 | 
|2008 |  |   | 8,864  | 

Long-Lived Assets

Effective July 1, 2002, the Financial Accounting Standards Board issued
SFAS 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. The adoption of this standard on July 1, 2002 had no impact on the
Companys financial position or results of operations. 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 the 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
(revenues less cost of sales and selling, general and administrative expenses);
however, other valuation methods may be used. Subsequent to June 30, 2003, an
indicator of impairment was identified at one of the properties of the
California Newspapers Partnership. As a result, the Company determined that the
carrying value of an operating facility exceeds estimated realizable value
based on the expected proceeds from the impending sale of the related assets.
Accordingly, an impairment loss of $3.9 million was recorded in other (income)
expense, net for the year ended June 30, 2003 to adjust the long-lived assets
to the estimated realizable value of $2.0 million.

46



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##### Table of Contents



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

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

Debt Discount

Debt discount is amortized in a manner that results in a constant rate of
interest over the life of the related debt and is included as a component of
interest expense.

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.

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, 2003, 2002 and 2001, were approximately $0.5 million, $0.8 million and
$3.1 million, respectively.

Revenue Recognition

Advertising revenue is earned and recognized when advertisements are
published, inserted, aired or displayed and are net of provisions for estimated
rebates, credit and rate adjustments and discounts. Circulation revenue
includes single copy and home delivery subscription revenue. Single copy
revenue is earned and recognized based on the date the publication is delivered
to the single copy outlet, net of provisions for returns. Home delivery
subscription revenue is earned and recognized when the newspaper is delivered
to the customer or sold to a third party. Amounts received in advance of an
advertisement or newspaper delivery are deferred and recorded on the balance
sheet as a current liability to be recognized into income when the revenue has
been earned.

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. The individual operations have been aggregated into one
segment because management believes they have similar economic characteristics
and similar products, services, customers, production processes and
distribution methods. The Company believes that aggregating the operations into
one segment helps users understand the Companys performance and assess its
prospects.

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 were
recorded at fair value and changes in the value of such contracts, net of
income taxes, were reported in comprehensive income. During fiscal year 2003,
the interest rate swap agreement on the Companys variable rate debt expired,
and effective September 5, 2003, the Company terminated its newsprint swap
agreement. See Note 10: Hedging Activities for further discussion.
Comprehensive income for the Company also includes a minimum pension liability
adjustment related to two of the Companys pension plans and a pension plan at
one of the Companys unconsolidated JOAs. 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 not paid a dividend on its common stock and does not
currently plan to pay cash dividends on its common stock.

47



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##### Table of Contents



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

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

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 variable to fixed interest
rate swap agreement had been designated as cash flow hedges and recorded at
fair value, and changes in the value of such contracts, net of income taxes,
are reported in comprehensive income. At June 30, 2003, the Company had no
variable to fixed interest rate swap agreements, and subsequent to June 30,
2003, the Company terminated its newsprint swap agreement. The Company also has
fixed to variable interest rate swap agreements, which do not qualify for hedge
accounting, and therefore, changes in the fair value of these swap agreements
are recognized in other (income) expense, net. The net settlements made under
all of the Companys interest rate swap agreements are reflected in operations
as an adjustment to interest expense over the term of the related swap. Prior
to the termination of the newsprint swap agreement, the periodic net
settlements made were reflected in operations in the period the newsprint was
consumed. See Note 10: Hedging Activities for further discussion.

Recently Issued Accounting Standards

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. SFAS No. 146 is to be applied prospectively to exit or
disposal activities initiated after December 31, 2002. The Company has incurred
no such costs since the January 1, 2003 adoption of SFAS No. 146.

In November 2002, the FASB issued Interpretation No. 45, Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others(FIN No. 45), which addresses the
accounting for and disclosure of guarantees and requires certain guarantees to
be recorded at fair value. The initial recognition and initial measurement
provisions of FIN No. 45 are applicable on a prospective basis to guarantees
issued or modified after December 31, 2002; any previously issued guarantees
prior to the date of FIN No. 45s initial application should not be revised or
restated. FIN No. 45s disclosure requirements are effective for financial
statements of interim or annual periods ending after December 15, 2002 and are
applicable to all guarantees issued by the guarantor subject to FIN No. 45s
scope, including guarantees issued prior to the issuance of FIN No. 45. Through
its wholly-owned subsidiary Kearns-Tribune, LLC, the Company owns a 6.0%
interest in Ponderay Newsprint Company (Ponderay) and is also a guarantor, on
a several basis, on 6.0% of up to $125.0 million of Ponderays credit facility,
which is due April 12, 2006. Based on the Companys evaluation, this guarantee
falls under the disclosure provisions of FIN No. 45. The Company has no amounts
related to the guarantee recorded in its June 30, 2003 financial statements
because the guarantee existed prior to and has not been modified since December
31, 2002. The guarantee arose from Ponderays April 12, 2000 amended and
restated credit agreement that replaced a previous credit facility which had
been used to finance the construction of its newsprint mill. The guarantee
could be triggered by Ponderays failure to meet any or all of its bank
covenants, at which time the Company could be liable for its portion of the
guarantee. At June 30, 2003, the Companys share of the guarantee is $6.8
million. The debt is collateralized by a deed of trust on Ponderays real
property and a mortgage on all of Ponderays other assets.

In January 2003, the FASB issued Interpretation No. 46 Consolidation of
Variable Interest Entities(FIN No. 46). FIN No. 46 clarifies the application
of Accounting Research Bulletin No. 51, Consolidated Financial Statements, to
only certain entities in which equity investors do not have the characteristics
of a controlling financial interest or do not have sufficient equity at risk
for the entity to finance its activities without additional subordinated
financial support from other parties. FIN No. 46 applies immediately to
variable interest entities created after January 31, 2003, and to variable
interest entities obtained after that date. It applies at the end of the first
annual reporting period beginning after June 15, 2003, to variable interest
entities in which an enterprise holds a variable interest which was acquired
before February 1, 2003. Adoption of FIN No. 46 on July 1, 2003 will not
materially impact the Companys financial position or results of operations.

In April 2003, FASB issued Statement No. 149, Amendments of Statement 133
on Derivative Instruments and Hedging Activities(SFAS No. 149) which is
primarily effective for contracts entered into or modified after June 30, 2003.
The statement amends Statement No. 133, Accounting for Derivative Instruments
and Hedging Activities(SFAS No. 133) for certain decisions made by the FASB
as part of the Derivatives Implementation Group process and incorporates
clarifications of the definition of a derivative. Adoption of SFAS No. 149 will
not impact the Companys financial position and results of operations.

48



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##### Table of Contents



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

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

Recently Issued Accounting Standards (continued)

In May 2003, the FASB issued Statement No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity
(SFAS No. 150), which addresses how to classify and measure certain financial
instruments with characteristics of both liabilities (or assets in some
circumstances) and equity. SFAS No. 150s requirements apply to issuers
classification and measurement of freestanding financial instruments, including
those that comprise more than one option or forward contract. SFAS No. 150 is
effective for financial instruments entered into or modified after May 31,
2003, and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003. Adoption of SFAS No. 150 on July 1, 2003 will
not impact the Companys financial position and results of operations.

Note 3: Joint Operating Agencies

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, a partnership (DNA or the Denver
JOA), under the terms of a joint operating agreement. 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, while each maintained editorial control and responsibility for news and
editorial costs for each of their respective newspapers. 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 formation of the Denver JOA, the Company no longer consolidates the results
of The Denver Postafter January 23, 2001. In addition to the Companys
proportionate share of income from DNA, the editorial costs, publishing related
revenues, depreciation of editorial assets owned outside of the JOA, and other
direct costs of The Denver Postare included in the line item Income from
Unconsolidated JOAs. The Company continues to consolidate The Denver Post
Corporations subsidiary, Eastern Colorado Publishing Company (ECPC),
comprised of several small daily and weekly newspapers as ECPC was not
contributed to DNA.

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% ownership interest in the Newspaper Agency Corporation
(NAC or the Salt Lake JOA). NAC is the managing entity of a JOA agreement
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 Tribuneand the Deseret News, including advertising and
circulation sales, production and distribution; however, the NAC does not own
any of the fixed assets used in its operations. Instead, each partner owns the
fixed assets used in the operations of NAC as tenants in common, outside of the
JOA. Therefore, the related depreciation expense is also recorded outside of
the JOA. News and editorial costs 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 because The Salt Lake Tribunehas greater circulation than
The Deseret News. The Company records its proportionate share of the results of
NAC along with the operations of Kearns-Tribune, LLC, consisting principally of
editorial costs, publishing related revenues, amortization of intangibles,
depreciation of fixed assets, and other direct costs of The Salt Lake Tribune,
in the line item Income from Unconsolidated JOAs.

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 and paid within the Charleston JOA. As
a result, all editorial expenses of the three Charleston JOA publications are
included in the Companys proportionate share of income from Charleston
Newspapers, which is included in Income from Unconsolidated JOAs. Amortization
of intangibles and other direct costs associated with JOA incurred by
Charleston Publishing Company are also included in Income from Unconsolidated
JOAs.

Effective March 1990, York Newspapers, Inc. (YNI) entered into a JOA, York
Newspaper Company (YNC), with York Daily Record, Inc. (YDR), under which
YNC is responsible for all newspaper publishing operations, other than news and
editorial, including production, sales, distribution and administration. YNC
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 YNC
and is the controlling partner. The

49



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

Note 3: Joint Operating Agencies (continued)

operations of YNC are consolidated
with those of the Company, with a minority interest reflected for
YDRs interest in YNC. The operating results of YNC do
not include the editorial costs associated with the publication of
the York Daily Record, which is not owned by the Company.YNC made cash distributions to the Company in the amount of
$9.7 million, $8.5 million and $9.4 million in
fiscal years 2003, 2002 and 2001, respectively.

The following table presents the summarized results of the Companys
unconsolidated JOAs, along with related balance sheet data, on a combined basis. NAC data has been presented separately, as
beginning in fiscal year 2003, it is a significant subsidiary of the Company as
defined by Rule 3-09 of Regulation S-X. The NAC and Other Unconsolidated JOA
information is presented at 100%, with the other partners share of income from
the related JOAs subsequently eliminated. The editorial costs, publishing
related revenues, depreciation, amortization, and other direct costs incurred
outside of the JOAs by our consolidated subsidiaries associated with The Salt
Lake Tribune, The Denver Post, and the Charleston Daily Mailare included in
the line Associated Revenues and Expenses. The minority interest associated
with The Denver Posthas not been reflected in the table below.

|                                                   |                          |   |                          |        |                |   |              |         |                |   |         |        |  |   |              |  | 
|-------------------------------------------------- | ------------------------ | - | ------------------------ | ------ | -------------- | - | ------------ | ------- | -------------- | - | ------- | ------ |  | - | ------------ |  | 
|                                                   |                          |   | Year Ended June 30, 2003
|                                                   |                          |   |                         
|                                                   |                          |   |                          |        |                |   |              |         |                |   |         |        |  |   | Total Income
|                                                   |                          |   | Newspaper                |        | Other          |   | Associated   |         | from          
|                                                   |                          |   | Agency                   |        | Unconsolidated |   | Revenues     |         | Unconsolidated
|                                                   |                          |   | Corporation              |        | JOAs           |   | and Expenses |         | JOAs          
|                                                   |                          |   |                          |        |                |   |              |         |               
|                                                   |                          |   | (In thousands)          
|Income Statement Data:                             |                          |   |                          |        |                |   |              |         |                |   |         |        |  |   |              | 
|Total revenues                                     |                          | $ | 128,636                  |        |                | $ | 458,068      |         |                | $ | 690     |        |  |   |              | 
|                                                  
|Cost of sales                                      |                          |   | 29,620                   |        |                |   | 151,926      |         |                |   | 31,523  |        |  |   |              | 
|Selling, general and administrative                |                          |   | 46,672                   |        |                |   | 207,914      |         |                |   | 8,393   |        |  |   |              | 
|Depreciation and amortization                      |                          |   |                         |        |                |   | 23,361       |         |                |   | 4,132   |        |  |   |              | 
|Other                                              |                          |   | 65                       |        |                |   | 196          |         |                |   | 53      |        |  |   |              | 
|Gain on sale of assets                             |                          |   |                         |        |                |   | (1,715       | )       |                |   |        |        |  |   |              | 
|                                                   |                          |   |                          |        |                |   |              |         |                |   |         |        |  |   |              | 
|                                                   | Total costs and expenses |   |                          | 76,357 |                |   |              | 381,682 |                |   |         | 44,101 |  |   |              |  | 
|                                                   |                          |   |                          |        |                |   |              |         |                |   |         |        |  |   |              | 
|Net income (loss)                                  |                          |   | 52,279                   |        |                |   | 76,386       |         |                |   | (43,411 | )      |  |   |              | 
|Partners share of income from unconsolidated JOAs |                          |   | (21,834                  | )      |                |   | (38,193      | )       |                |   |        |        |  |   |              | 
|                                                   |                          |   |                          |        |                |   |              |         |                |   |         |        |  |   |              | 
|Income from unconsolidated JOAs                    |                          | $ | 30,445                   |        |                | $ | 38,193       |         |                | $ | (43,411 | )      |  | $ | 25,227       | 
|                                                   |                          |   |                          |        |                |   |              |         |                |   |         |        |  |   |              | 

|                                                   |                          |   |                          |        |                |   |              |         |                |   |         |        |  |   |              |  | 
|-------------------------------------------------- | ------------------------ | - | ------------------------ | ------ | -------------- | - | ------------ | ------- | -------------- | - | ------- | ------ |  | - | ------------ |  | 
|                                                   |                          |   | Year Ended June 30, 2002
|                                                   |                          |   |                         
|                                                   |                          |   |                          |        |                |   |              |         |                |   |         |        |  |   | Total Income
|                                                   |                          |   | Newspaper                |        | Other          |   | Associated   |         | from          
|                                                   |                          |   | Agency                   |        | Unconsolidated |   | Revenues     |         | Unconsolidated
|                                                   |                          |   | Corporation              |        | JOAs           |   | and Expenses |         | JOAs          
|                                                   |                          |   |                          |        |                |   |              |         |               
|                                                   |                          |   | (In thousands)          
|Income Statement Data:                             |                          |   |                          |        |                |   |              |         |                |   |         |        |  |   |              | 
|Total revenues                                     |                          | $ | 127,743                  |        |                | $ | 447,358      |         |                | $ | 974     |        |  |   |              | 
|                                                  
|Cost of sales                                      |                          |   | 32,055                   |        |                |   | 169,144      |         |                |   | 30,765  |        |  |   |              | 
|Selling, general and administrative                |                          |   | 43,317                   |        |                |   | 196,536      |         |                |   | 5,576   |        |  |   |              | 
|Depreciation and amortization                      |                          |   |                         |        |                |   | 26,994       |         |                |   | 4,253   |        |  |   |              | 
|Other                                              |                          |   |                         |        |                |   | 11,790       |         |                |   | 3,591   |        |  |   |              | 
|                                                   |                          |   |                          |        |                |   |              |         |                |   |         |        |  |   |              | 
|                                                   | Total costs and expenses |   |                          | 75,372 |                |   |              | 404,464 |                |   |         | 44,185 |  |   |              |  | 
|                                                   |                          |   |                          |        |                |   |              |         |                |   |         |        |  |   |              | 
|Net income (loss)                                  |                          |   | 52,371                   |        |                |   | 42,894       |         |                |   | (43,211 | )      |  |   |              | 
|Partners share of income from unconsolidated JOAs |                          |   | (21,837                  | )      |                |   | (21,447      | )       |                |   |        |        |  |   |              | 
|                                                   |                          |   |                          |        |                |   |              |         |                |   |         |        |  |   |              | 
|Income from unconsolidated JOAs                    |                          | $ | 30,534                   |        |                | $ | 21,447       |         |                | $ | (43,211 | )      |  | $ | 8,770        | 
|                                                   |                          |   |                          |        |                |   |              |         |                |   |         |        |  |   |              | 

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

Note 3: Joint Operating Agreements (continued)

|                                                   |                          |   |                          |        |                |   |              |         |                |   |         |        |  |   |              |   | 
|-------------------------------------------------- | ------------------------ | - | ------------------------ | ------ | -------------- | - | ------------ | ------- | -------------- | - | ------- | ------ |  | - | ------------ | - | 
|                                                   |                          |   | Year Ended June 30, 2001
|                                                   |                          |   |                         
|                                                   |                          |   |                          |        |                |   |              |         |                |   |         |        |  |   | Total Income
|                                                   |                          |   | Newspaper                |        | Other          |   | Associated   |         | from          
|                                                   |                          |   | Agency                   |        | Unconsolidated |   | Revenues     |         | Unconsolidated
|                                                   |                          |   | Corporation              |        | JOAs           |   | and Expenses |         | JOAs          
|                                                   |                          |   |                          |        |                |   |              |         |               
|                                                   |                          |   | (In thousands)          
|Income Statement Data:                             |                          |   |                          |        |                |   |              |         |                |   |         |        |  |   |              |  
|Total revenues                                     |                          | $ | 62,568                   |        |                | $ | 216,438      |         |                | $ | 820     |        |  |   |              |  
|Cost of sales                                      |                          |   | 17,066                   |        |                |   | 93,348       |         |                |   | 14,659  |        |  |   |              |  
|Selling, general and administrative                |                          |   | 21,460                   |        |                |   | 99,986       |         |                |   | (2,476  | )      |  |   |              |  
|Depreciation and amortization                      |                          |   |                         |        |                |   | 12,086       |         |                |   | 4,745   |        |  |   |              |  
|Other                                              |                          |   | 43                       |        |                |   | 12,600       |         |                |   | 295     |        |  |   |              |  
|                                                   |                          |   |                          |        |                |   |              |         |                |   |         |        |  |   |              |  
|                                                   | Total costs and expenses |   |                          | 38,569 |                |   |              | 218,020 |                |   |         | 17,223 |  |   |              |   | 
|                                                   |                          |   |                          |        |                |   |              |         |                |   |         |        |  |   |              |  
|Net income (loss)                                  |                          |   | 23,999                   |        |                |   | (1,582       | )       |                |   | (16,403 | )      |  |   |              |  
|Partners share of income from unconsolidated JOAs |                          |   | (10,007                  | )      |                |   | 791          |         |                |   |        |        |  |   |              |  
|                                                   |                          |   |                          |        |                |   |              |         |                |   |         |        |  |   |              |  
|Income from unconsolidated JOAs                    |                          | $ | 13,992                   |        |                | $ | (791         | )       |                | $ | (16,403 | )      |  | $ | (3,202       | )
|                                                   |                          |   |                          |        |                |   |              |         |                |   |         |        |  |   |              |  

|                        |  |                |        |                |  |             |         |                |  |   |        |  |  |   |         | 
|----------------------- |  | -------------- | ------ | -------------- |  | ----------- | ------- | -------------- |  | - | ------ |  |  | - | ------- | 
|                        |  | June 30, 2003  |        | June 30, 2002 
|                        |  |                |        |               
|                        |  | Newspaper      |        | Other          |  | Newspaper   |         | Other         
|                        |  | Agency         |        | Unconsolidated |  | Agency      |         | Unconsolidated
|                        |  | Corporation    |        | JOAs           |  | Corporation |         | JOAs          
|                        |  |                |        |                |  |             |         |               
|                        |  | (In thousands)
|Balance Sheet Data:     |  |                |        |                |  |             |         |                |  |   |        |  |  |   |         | 
|Current assets          |  | $              | 15,060 |                |  | $           | 85,047  |                |  | $ | 15,443 |  |  | $ | 92,216  | 
|Non-current assets      |  |                | 18,970 |                |  |             | 194,489 |                |  |   | 15,935 |  |  |   | 223,483 | 
|Current liabilities     |  |                | 20,697 |                |  |             | 47,900  |                |  |   | 18,926 |  |  |   | 47,841  | 
|Non-current liabilities |  |                | 3,638  |                |  |             | 22,950  |                |  |   | 3,860  |  |  |   | 21,665  | 

Note 4: Investment in California Newspapers Partnership

On March 31, 1999, through its wholly-owned subsidiary, West Coast
MediaNews LLC, the Company formed the California Newspapers Partnership (CNP)
with Stephens Media Group (SMG), previously known as Donrey Newspapers LLC,
and The Sun Company of San Bernardino California (Gannett). MediaNews, SMG
and Gannetts interests in the California Newspapers Partnership are 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s 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 CNP as a distribution.
Approximately $2.1 million, $2.3 million and $2.7 million of principal and
interest payments were made in fiscal years 2003, 2002 and 2001, 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.

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

Note 4: Investment in California Newspapers Partnership (continued)

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 their
interests 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 has a separate right to put its interest in the partnership to the
other two partners at fair market value anytime after January 1, 2005. Upon
notification of the put and obtaining a valuation of the partnership interest,
the remaining partners have two years to complete the purchase. Gannett also
had a separate put right similar to SMGs; however, in connection with the
formation of the Texas-New Mexico Newspapers Partnership, Gannetts put right
in CNP was eliminated.

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 partners share of earnings,
net of distributions since inception. CNP made cash distributions to the
Company in the amount of $35.3 million, $41.7 million and $37.4 million in
fiscal years 2003, 2002 and 2001, respectively.

Note 5: Acquisitions, Dispositions and Partnership Formations

Acquisitions

Fiscal 2003

Effective January 31, 2003, CNP acquired substantially all of the
operating assets used in the publication of the Paradise Post,a newspaper
published three times weekly in Paradise, California, plus related publications
and a large commercial printing business. The purchase price of approximately
$13.0 million consisted of $11.75 million of cash and estimated transaction
costs, net of working capital, plus future payments under covenants not to
compete with a discounted value of approximately $1.2 million. Contributions
from the partners in CNP were used to fund the acquisition. The Companys cash
portion of the acquisition was approximately $6.4 million and was funded with
borrowings under the Companys bank credit facility. Approximately $7.2 million
of the purchase price was attributable to tangible assets (primarily fixed
assets), $1.3 million was attributable to identifiable intangible assets ($0.1
million, subscriber lists; $1.2 million, covenants not to compete) and $4.5
million was recorded as goodwill. Paradise is in close proximity to the
Companys newspaper operations in Chico, California.

Effective October 1, 2002, CNP acquired substantially all of the operating
assets used in the publication of the Original Apartment Magazine,a free
distribution apartment rental magazine. The Original Apartment Magazineis
published every two weeks in three different zones: Los Angeles/San Fernando,
Orange County, and the Inland Empire and had monthly distribution of
approximately 296,000 at the date of acquisition. The purchase price was $10.0
million, plus an additional earnout of up to $6.0 million dependent on future
operating performance. Contributions from the partners in CNP were used to fund
the acquisition. The Companys cash portion of the acquisition was $5.4 million
and was funded with borrowings under the Companys bank credit facility.
Approximately $0.3 million of the purchase price was attributable to tangible
assets (primarily fixed assets), $3.5 million was attributable to identifiable
intangible assets ($1.0 million, mastheads; $2.3 million, subscriber lists;
$0.2 million, covenants not to compete) and $6.2 million was recorded as
goodwill. Original Apartment Magazineis operated in conjunction with the Los
Angeles Newspaper Group.

Effective October 1, 2002, CNP acquired 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. At the date of purchase, the newspaper had daily and Sunday paid
circulation of approximately 18,000 and 20,000, respectively. The purchase
price of $30.9 million included $30.0 million of cash and estimated transaction
costs, net of working capital, plus future payments under a covenant not to
compete with a discounted value of $0.9 million. Contributions from the
partners in CNP were used to fund the acquisition. The Companys cash portion
of the acquisition was $16.3 million and was funded with borrowings under the
Companys bank credit facility. Approximately $3.5 million of the purchase
price was attributable to tangible assets (primarily fixed assets), $6.8
million was attributable to identifiable intangible assets ($0.8 million,
mastheads; $5.1 million, subscriber lists; $0.9 million,

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

Note 5: Acquisitions, Dispositions and Partnership Formations (continued)

Acquisitions (continued)

Fiscal 2003 (continued)

covenants not to compete) and $20.6 million was recorded as goodwill. Vacaville
is in close proximity to the Companys newspaper operations in Vallejo and the
Alameda Newspapers Group, in California.

Fiscal 2002

There were no significant acquisitions in fiscal year 2002.

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.

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.

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%
ownership interest in NAC. NAC is operated under the terms of a JOA agreement
between Kearns-Tribune, LLC and the Deseret News Publishing Company (See Note
3). This acquisition was funded with proceeds from the sale of Council Bluffs
discussed in Dispositions, the Scripps payment to acquire a 50% interest in
the Denver JOA (See Note 3) and bank borrowings.

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.

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. The acquisition was funded with proceeds of approximately $145.0
million from the sale of newspapers on June 30, 2000 and borrowings under the
Companys bank credit facility.

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. As a result of the Marin contribution, the partners interests
were adjusted to their current values (See Note 4: Investment in California
Newspapers Partnership).

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

Note 5: Acquisitions, Dispositions and Partnership Formations (continued)

Dispositions

There were no dispositions in fiscal years 2003 and 2002.

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.

Partnership Formations

Fiscal 2003

Effective March 3, 2003, MediaNews and Gannett Co., Inc. (Gannett)
formed the Texas-New Mexico Newspapers Partnership. MediaNews contributed
substantially all the assets and operating liabilities of the Las Cruces
Sun-News, The Daily Times(Farmington), Carlsbad Current-Argus, Alamogordo
Daily News,and The Deming Highlight,as well as all the weekly and other
publications published by these daily newspapers, in exchange for a 33.8%
interest in the Texas-New Mexico Newspapers Partnership. Gannett contributed
the El Paso Times,located in El Paso, Texas, in exchange for its 66.2%
controlling partnership interest. As a result, effective March 3, 2003,
MediaNews no longer consolidates the operations of the entities it contributed
to the partnership and began accounting for its share of the operations of the
Texas-New Mexico Newspapers Partnership under the equity method of accounting.
The formation of the partnership was a non-monetary transaction. The Companys
contribution to the Texas-New Mexico Newspapers Partnership was treated as two
separate, but simultaneous events: (1) a sale, whereby for accounting purposes,
the Company sold to Gannett a 66.2% interest in its New Mexico properties,
resulting in a non-monetary gain of approximately $27.4 million (pursuant to
EITF 01-2, Interpretations of APB Opinion No. 29), and (2) the acquisition of a
33.8% interest in the partnership. Except for the non-monetary recognized gain,
the formation of the Texas-New Mexico Newspapers Partnership did not have a
significant impact on the Companys results.

Fiscal 2002

There were no partnership formations in fiscal year 2002.

Fiscal 2001

Effective January 23, 2001, MediaNews and Scripps completed the formation
of the Denver Newspaper Agency as discussed in Note 3: Joint Operating
Agencies.

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

Note 6: Long-Term Debt

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

|                                           |  |        |    |   |         |                |         |      |         |   |         | 
|------------------------------------------ |  | ------ | -- | - | ------- | -------------- | ------- | ---- | ------- | - | ------- | 
|                                           |  |        |    |   |         | 2003           |         | 2002
|                                           |  |        |    |   |         |                |         |     
|                                           |  |        |    |   |         | (In thousands)
|Bank Term Loan (A and B)                   |  |        | (I | ) |         | $              | 247,000 |      |         | $ | 150,000 | 
|Bank Credit Facility                       |  | (II)   |    |   | 129,900 |                |         |      | 210,400 |  
|Various Notes, payable through 2013        |  | (III)  |    |   | 15,678  |                |         |      | 20,805  |  
|8.75% Senior Subordinated Notes, due 2009  |  | (IV)   |    |   | 300,180 |                |         |      | 300,164 |  
|8.625% Senior Subordinated Notes, due 2011 |  |        | (V | ) |         |                | 199,327 |      |         |   | 199,270 | 
|York Newspaper Companys Debt              |  | (VI)   |    |   | 5,455   |                |         |      | 6,321   |  
|9.0% Subordinated Promissory Note          |  | (VII)  |    |   |        |                |         |      | 62,970  |  
|                                           |  |        |    |   |         |                |         |      |         |   |         | 
|                                           |  |        |    |   |         |                | 897,540 |      |         |   | 949,930 | 
|Less current portion of long-term debt     |  | (VIII) |    |   | 2,990   |                |         |      | 7,548   |  
|                                           |  |        |    |   |         |                |         |      |         |   |         | 
|                                           |  |        |    |   |         | $              | 894,550 |      |         | $ | 942,382 | 
|                                           |  |        |    |   |         |                |         |      |         |   |         | 



| | I.  |  | On January 2, 2001, the Company amended its credit agreement to
provide for a $125.0 million Term Loan A (subsequently increased to
$150.0 million, on February 8, 2001), in addition to its existing
$350.0 million bank credit facility (discussed in Item II below). On
May 14, 2003, the Company again amended the credit agreement to add a
$97.0 million Term Loan B, which funded in June 2003 and reduced the
amount available under the bank credit facility to $253.0 million.
Proceeds from Term Loan B were used to redeem the 9.0% Promissory Note
(discussed in Item VII below); the remaining proceeds were used to pay
down amounts outstanding under the bank credit facility. In
conjunction with the Term Loan B, the Company also amended its bank
credit agreement to temporarily increase (until July 1, 2004) the
consolidated debt to operating cash flow ratio covenant and decrease
the pro forma debt service covenant in the event the Company exercises
its call option to purchase the 42.5% of York Newspaper Company it
does not own. The consolidated debt to operating cash flow covenant
was also increased to take into account that the borrowings under Term
Loan B are included in consolidated debt, while the 9.0% Promissory
Note that was prepaid was excluded from the bank credit agreements
definition of consolidated debt. Borrowings under the Term Loan A 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 A borrowing margins for Eurodollar and prime can vary from 2.375%
to 1.5% and 1.125% to 0.25%, respectively. As of June 30, 2003, the
Term Loan As Eurodollar and prime borrowing margins were set at
2.125% and 0.875%, respectively. Term Loan B borrowing margins for
Eurodollar and prime vary from 2.5% to 2.75% and 1.25% to 1.5%,
respectively. As of June 30, 2003, Term Loan Bs Eurodollar and prime
borrowing margins were set at 2.75% and 1.5%. Term Loan A 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. No principal payments are required on Term Loan B until December
31, 2006, at which time all outstanding principal and interest are due
and payable. Interest payments are currently required monthly on both
Term Loans A and B.
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | II. |  | On June 30, 1999, the Company entered into a seven year bank credit
facility, which provides for borrowings up to $350.0 million (reduced to $253.0
million with the funding of the May 14, 2003 amendment discussed in Item I
above and further below), including $15.0 million that can be used for standby
letters of credit. 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, 2003 were set at 1.75% and 0.5%
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 if the interest rate
contract exceeds three months quarterly. 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
previously required a mandatory $75.0 million reduction in the credit
commitment under the revolver on September 30, 2003 and quarterly reductions of
$25.0 million beginning December 31, 2003, with a final reduction on June 30,
2006. However, effective with the May 14, 2003 amendment, the Company
accelerated the September 30, 2003 $75.0 million and the December 31, 2003
$25.0                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

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

Note 6: Long-Term Debt (continued)



| |      |  | million commitment reductions to be effective with the May 14, 2003
amendment, up to the $97.0 million that was funded under Term Loan B.
Our amended bank credit facility with these reductions was $253.0
million, as previously noted. The bank credit facility and the term
loans are secured by a pledge of capital stock of the Company and its
subsidiaries. The bank credit facility and the term loans 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, including 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 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 7.0%. The notes bearing
interest at below market rates have been discounted at rates ranging
from 7.0% to 12.0%, which reflects the prevailing rate at the date of
acquisition. The majority of these notes and other debt obligations
are unsecured obligations of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| | IV.  |  | 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 loans. The 8.75%
Senior Subordinated Notes are general unsecured obligations of the
Company ranking equal in 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.
|
| | V.   |  | In March 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 loans. 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 equal in
right of payment with the existing 8.75% Senior Subordinated Notes.                                                                                                                                                                                                                                                                                                                                                                
|
| | VI.  |  | At June 30, 2003,York Newspaper Company has a revolving credit note
and a term bank loan totaling $3.8 million, which require monthly
payments through October 2005. York Newspaper Company also has a
promissory note, with a balance of $1.6 million at June 30, 2003,
which requires monthly payments through October 2025. The obligations
are secured by the assets of York Newspaper Company and are
non-recourse to MediaNews. The Company owns 57.5% of York Newspaper
Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | VII. |  | 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. In June 2003, the
Company paid $64.8 million to settle in full the Promissory Note, including all
the related accrued interest. The repayment of the Promissory Note was made
with proceeds from Term Loan B as previously discussed. While the Promissory
Note was paid off, a related option remains outstanding. The option entitles
the holder to purchase the assets used in the publication of one of the
Companys newspaper properties, which the option holder can exercise or put to
the Company based on a predetermined formula anytime after January 31, 2003.
The option repurchase price is currently valued at $14.9 million, and is
recorded as a component of other long-term liabilities. If the option were put
to the Company, the Company expects to fund the payment with available
borrowings from its bank credit facility. As a result, in accordance                                        

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

Note 6: Long-Term Debt (continued)



| |       |  | with SFAS No. 6, Classification of Short-Term Obligations Expected to
Be Refinanced,the option repurchase price remains classified in the
Companys balance sheet as long-term. See additional discussion of this
option agreement in Note 11: Commitments and Contingencies.                                                                                                                                                   
| | ----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | VIII. |  | The $48.75 million due in fiscal year 2004 on Term Loan A is not
included in the current portion of the long-term debt because the
Company plans to fund the payments 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,
these amounts remain classified in the Companys balance sheet as
long-term debt.

Maturities of long-term debt as of June 30, 2003, for the five fiscal
years ending June 30, 2008 and thereafter, are shown below (in thousands).

|           |  |   |         | 
|---------- |  | - | ------- | 
|2004       |  | $ | 2,990   | 
|2005       |  |   | 118,812 | 
|2006       |  |   | 145,115 | 
|2007       |  |   | 121,179 | 
|2008       |  |   | 1,444   | 
|Thereafter |  |   | 508,000 | 
|           |  |   |         | 
|           |  | $ | 897,540 | 
|           |  |   |         | 

Interest paid during the fiscal years ended June 30, 2003, 2002, and 2001
was approximately $64.8 million, $75.6 million and $76.8 million, respectively.
An immaterial amount of interest was capitalized during the fiscal year 2003,
and no interest was capitalized during fiscal years 2002 and 2001.

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 $5.7 million as of June 30, 2003.

The fair market value of the 8.625% Senior Subordinated Notes and the
8.75% Senior Subordinated Notes at June 30, 2003 was approximately $206.0
million and $309.0 million, respectively. The carrying value of the Companys
bank 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.

At times the Company has entered into interest rate swap agreements to
reduce its exposure to the uncertainty of short-term interest rate fluctuations
associated with its outstanding bank debt. At June 30, 2003, the Company had no
interest rate swap agreements on its variable rate debt. On February 28, 2002,
the Company entered into several interest rate swap agreements which expire in
January and July 2004, and had 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 current assets or liabilities. These fixed
to variable interest rate swaps do not qualify for hedge accounting, and
therefore, changes in their fair value are recognized in other (income)
expense, net in the period of change. As a result of marking these derivative
instruments to market, a gain of approximately $1.2 million and $3.0 million
was recognized in other (income) expense, net for the years ended June 30, 2003
and 2002, respectively. The net cash settlements of these interest rate swap
agreements had the effect of decreasing interest expense by $2.6 million for
the years ended June 30, 2003, as compared to the prior year when the Companys
interest rate swap agreements had the effect of increasing interest expense by
$2.4 million. 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 realized a gain of $0.9 million.

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##### Table of Contents



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

Note 7: 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:

|                                 |  |                |        |      |  |   |        |  
|-------------------------------- |  | -------------- | ------ | ---- |  | - | ------ | -
|                                 |  | 2003           |        | 2002
|                                 |  |                |        |     
|                                 |  | (In thousands)
|Building and equipment           |  | $              | 6,950  |      |  | $ | 6,934  |  
|Accumulated amortization         |  |                | (3,237 | )    |  |   | (3,005 | )
|                                 |  |                |        |      |  |   |        |  
|Assets under capital leases, net |  | $              | 3,713  |      |  | $ | 3,929  |  
|                                 |  |                |        |      |  |   |        |  

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 $5.2 million, $4.5 million and $6.2
million for the fiscal years ended June 30, 2003, 2002, and 2001, respectively.
Contingent rentals are not significant. Future minimum payments on capital and
operating leases are as follows at June 30, 2003:

|                                           |  |                |        |           |  |   |        | 
|------------------------------------------ |  | -------------- | ------ | --------- |  | - | ------ | 
|                                           |  | Capital        |        | Operating
|                                           |  | Leases         |        | Leases   
|                                           |  |                |        |          
|                                           |  | (In thousands)
|2004                                       |  | $              | 937    |           |  | $ | 4,968  | 
|2005                                       |  |                | 937    |           |  |   | 4,471  | 
|2006                                       |  |                | 933    |           |  |   | 3,649  | 
|2007                                       |  |                | 931    |           |  |   | 3,072  | 
|2008                                       |  |                | 931    |           |  |   | 2,760  | 
|Thereafter                                 |  |                | 10,240 |           |  |   | 2,532  | 
|                                           |  |                |        |           |  |   |        | 
|Total minimum lease payments               |  |                | 14,909 |           |  | $ | 21,452 | 
|                                           |  |                |        |           |  |   |        | 
|Less amount representing interest          |  |                | (7,895 | )         |  |   |        | 
|                                           |  |                |        |           |  |   |        | 
|Present value of net future lease payments |  | $              | 7,014  |           |  |   |        | 
|                                           |  |                |        |           |  |   |        | 

Note 8: Employee Benefit Plans

Pension Plans

In conjunction with the fiscal year 1998 acquisitions of The Sunin
Lowell, Massachusetts and the Daily Newsin Los Angeles, California, 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. In December 1997, the Company
combined The Sunspension plan with the frozen pension plan of its subsidiary,
New England Newspapers, Inc.

The Denver Postsponsors two non-contributory 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s 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. The transfer of obligations and related assets occurred during fiscal
years 2002 and 2001.

58



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##### Table of Contents



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

Note 8: Employee Benefit Plans (continued)

Pension Plans (continued)

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.

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, 2003, 2002, and
2001, was approximately $3.6 million, $2.4 million, and $3.6 million,
respectively.

In March 2003, the Company assumed obligations associated with a
post-retirement health care plan that provides certain former Kearns-Tribune,
LLC employees with subsidized medical coverage upon retirement in return for a
$1.6 million payment from the former owner of Kearns-Tribune, LLC.

Deferred Compensation Plan

During fiscal year 2003, the Company adopted the non-qualified MediaNews
Group Supplemental Executive Retirement Plan, or the 2003 Plan. This plan has
been offered to certain of the Companys eligible corporate executives. The
2003 Plan allows participants to defer a portion of their compensation,
including bonuses if any on a pre-tax basis. There is no Company match on these
deferrals; however, the deferrals earn a return based on notional investment
elections made by the individual participants. In addition, the Company may at
its discretion, elect to make contributions to the participants accounts based
on a comparison of the Companys actual profits to budgeted profits during each
fiscal year. Any such contribution is subject to vesting, over a period of ten
years from the date of participation in the plan. No vesting occurs until the
participant has completed three full years in the plan, after which
time, the participant is 30% vested; the remaining vesting occurs over a period of seven years at 10% per year.

In addition to the 2003 Plan, the Company sponsors another non-qualified
plan, the Publisher Plan. Under the Publisher Plan, certain eligible
executives of the Company (principally newspaper publishers) may elect to defer
a portion of their compensation, including any bonuses, on a pre-tax basis. The
Company matches up to 100% of the deferred bonuses if certain performance
criteria are achieved. The Company match is subject to vesting, over a period
of ten years from the date of participation in the plan, and is subject to
early withdrawal penalties. No vesting occurs until the participant has
completed five full years in the plan, after which time, the
participant is 50% vested; the remaining vesting occurs over a period
of five years at 10% per year. The deferrals earn a return based on notional
investment elections made by the individual participants.

These deferred compensation obligations are recorded in the Companys
consolidated balance sheets as a component of the financial statement line item
Other Liabilities at the vested value of the deferred compensation plus the
applicable return on investment, and amounted to $1.2 million and $2.7 million
as of June 30, 2003 and 2002, respectively. The Company in some cases has
invested a portion of employee contributions in cash surrender value life
insurance policies. The Companys investments in cash surrender value life
insurance policies are recorded in the Companys consolidated balance sheets as
a component of the financial statement line item Other Assets and amounted to
$0.4 million and $1.5 million as of June 30, 2003 and 2002, respectively. The
obligations and related assets decreased in 2003 from 2002 primarily due to
certain former publishers cashing out of the Publisher Plan.

59



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

Note 8: Employee Benefit Plans (continued)

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, 2003 and 2002. The tables also provide the components of
net periodic pension cost associated with those plans for fiscal years ended
2003 and 2002.

|                                |                                                          |  |   |                                             |   |                |   |            |   |      |   |        |   |  |   |        |   | 
|------------------------------- | -------------------------------------------------------- |  | - | ------------------------------------------- | - | -------------- | - | ---------- | - | ---- | - | ------ | - |  | - | ------ | - | 
|                                |                                                          |  |   | Pension Plans                               |   | Other Benefits
|                                |                                                          |  |   |                                             |   |               
|                                |                                                          |  |   | 2003                                        |   | 2002           |   | 2003       |   | 2002
|                                |                                                          |  |   |                                             |   |                |   |            |   |     
|                                |                                                          |  |   | (In thousands, except for assumptions data)
|Change in Benefit Obligation    |                                                          |  |   |                                             |   |                |   |            |   |      |   |        |   |  |   |       
|                                | Benefit Obligation at Beginning of Year                  |  | $ | 83,429                                      |   |                | $ | 82,111     |   |      | $ | 2,951  |   |  | $ | 3,524  |  
|                                | Service Cost                                             |  |   | 947                                         |   |                |   | 916        |   |      |   |       |   |  |   |       |  
|                                | Interest Cost                                            |  |   | 5,912                                       |   |                |   | 5,958      |   |      |   | 211    |   |  |   | 166    |  
|                                | Amendments                                               |  |   |                                            |   |                |   | 1,271      |   |      |   |       |   |  |   |       |  
|                                | Actuarial Loss (Gain)                                    |  |   | 9,169                                       |   |                |   | (853       | ) |      |   | 1,333  |   |  |   | 703    |  
|                                | Transfer to Denver Newspaper Agency                      |  |   |                                            |   |                |   |           |   |      |   |       |   |  |   | (1,167 | )
|                                | Assumption of Kearns-Tribune Post-Retirement Health
Plan |  |   |                                            |   |                |   |           |   |      |   | 1,526  |   |  |   |       |  
|                                | Benefits Paid                                            |  |   | (5,625                                      | ) |                |   | (5,974     | ) |      |   | (460   | ) |  |   | (275   | )
|                                |                                                          |  |   |                                             |   |                |   |            |   |      |   |        |   |  |   |       
|                                | Benefit Obligation at End of Year                        |  | $ | 93,832                                      |   |                | $ | 83,429     |   |      | $ | 5,561  |   |  | $ | 2,951  |  
|                                |                                                          |  |   |                                             |   |                |   |            |   |      |   |        |   |  |   |       
|Change in Plan Assets           |                                                          |  |   |                                             |   |                |   |            |   |      |   |        |   |  |   |       
|                                | Fair Value of Plan Assets at Beginning of Year           |  | $ | 81,755                                      |   |                | $ | 110,778    |   |      | $ |       |   |  | $ |       |  
|                                | Actual Return on Plan Assets                             |  |   | 1,754                                       |   |                |   | (6,358     | ) |      |   |       |   |  |   |       |  
|                                | Company Contributions                                    |  |   | 60                                          |   |                |   |           |   |      |   | 460    |   |  |   | 275    |  
|                                | Transfer to Denver Newspaper Agency                      |  |   |                                            |   |                |   | (16,691    | ) |      |   |       |   |  |   |       |  
|                                | Benefits Paid                                            |  |   | (5,625                                      | ) |                |   | (5,974     | ) |      |   | (460   | ) |  |   | (275   | )
|                                |                                                          |  |   |                                             |   |                |   |            |   |      |   |        |   |  |   |       
|                                | Fair Value of Plan Assets at End of Year                 |  | $ | 77,944                                      |   |                | $ | 81,755     |   |      | $ |       |   |  | $ |       |  
|                                |                                                          |  |   |                                             |   |                |   |            |   |      |   |        |   |  |   |       
|Reconciliation of Funded Status |                                                          |  |   |                                             |   |                |   |            |   |      |   |        |   |  |   |       
|                                | Funded Status                                            |  | $ | (15,888                                     | ) |                | $ | (1,674     | ) |      | $ | (5,561 | ) |  | $ | (2,951 | )
|                                | Unrecognized Net Actuarial Loss                          |  |   | 37,442                                      |   |                |   | 22,802     |   |      |   | 1,426  |   |  |   | 94     |  
|                                | Unrecognized Prior Service Cost                          |  |   | 4,774                                       |   |                |   | 5,232      |   |      |   | (2     | ) |  |   | (5     | )
|                                |                                                          |  |   |                                             |   |                |   |            |   |      |   |        |   |  |   |       
|                                | Net Prepaid (Accrued) Cost                               |  | $ | 26,328                                      |   |                | $ | 26,360     |   |      | $ | (4,137 | ) |  | $ | (2,862 | )
|                                |                                                          |  |   |                                             |   |                |   |            |   |      |   |        |   |  |   |       
|Assumptions as of June 30       |                                                          |  |   |                                             |   |                |   |            |   |      |   |        |   |  |   |       
|                                | Discount Rate                                            |  |   | 6.25                                        | % |                |   | 7.5        | % |      |   | 6.25   | % |  |   | 7.5    | %
|                                | Expected Return on Plan Assets                           |  |   | 9.0                                         | % |                |   | 9.0% - 9.5 | % |      |   |       |   |  |   |       |  
|                                | Rate of Compensation Increase                            |  |   | 3.0                                         | % |                |   | 3.0        | % |      |   |       |   |  |   |       |  
|Components of Net Periodic Cost |                                                          |  |   |                                             |   |                |   |            |   |      |   |        |   |  |   |       
|                                | Service Cost                                             |  | $ | 947                                         |   |                | $ | 916        |   |      | $ |       |   |  | $ |       |  
|                                | Interest Cost                                            |  |   | 5,912                                       |   |                |   | 5,958      |   |      |   | 211    |   |  |   | 166    |  
|                                | Expected Return on Plan Assets                           |  |   | (7,734                                      | ) |                |   | (10,881    | ) |      |   |       |   |  |   |       |  
|                                | Amortization of Deferral                                 |  |   | 458                                         |   |                |   | 424        |   |      |   | (2     | ) |  |   | (34    | )
|                                | Recognized Net Actuarial Gain                            |  |   | 508                                         |   |                |   |           |   |      |   |       |   |  |   |       |  
|                                | Settlement and Other Loss                                |  |   |                                            |   |                |   | 3,850      |   |      |   |       |   |  |   |       |  
|                                |                                                          |  |   |                                             |   |                |   |            |   |      |   |        |   |  |   |       
|                                | Net Periodic Cost                                        |  | $ | 91                                          |   |                | $ | 267        |   |      | $ | 209    |   |  | $ | 132    |  
|                                |                                                          |  |   |                                             |   |                |   |            |   |      |   |        |   |  |   |       

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

Note 8: Employee Benefit Plans (continued)

|                                                                                                                                    |                                      |  |               |         |                |  |      |         |      |  |   |        |   |  |   |        |  
|----------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------ |  | ------------- | ------- | -------------- |  | ---- | ------- | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                                                                                    |                                      |  | Pension Plans |         | Other Benefits
|                                                                                                                                    |                                      |  |               |         |               
|                                                                                                                                    |                                      |  | 2003          |         | 2002           |  | 2003 |         | 2002
|                                                                                                                                    |                                      |  |               |         |                |  |      |         |     
|Amounts of Recognized in the Consolidated Balance
Sheets Consist of:                                                                |                                      |  |               |         |                |  |      |         |      |  |   |        |   |  |   |       
|                                                                                                                                    | Prepaid Benefit Cost                 |  | $             | 24,890  |                |  | $    | 27,625  |      |  | $ |       |   |  | $ |       |  
|                                                                                                                                    | Accrued Benefit Cost                 |  |               | (21,270 | )              |  |      | (14,761 | )    |  |   | (4,137 | ) |  |   | (2,862 | )
|                                                                                                                                    | Intangible Asset                     |  |               | 442     |                |  |      | 481     |      |  |   |       |   |  |   |       |  
|                                                                                                                                    | Accumulated Other Comprehensive Loss |  |               | 22,266  | (1)            |  |      | 13,015  |      |  |   |       |   |  |   |       |  
|                                                                                                                                    |                                      |  |               |         |                |  |      |         |      |  |   |        |   |  |  
|                                                                                                                                    | Net Prepaid (Accrued) Cost           |  | $             | 26,328  |                |  | $    | 26,360  |      |  | $ | (4,137 | ) |  | $ | (2,862 | )
|                                                                                                                                    |                                      |  |               |         |                |  |      |         |      |  |   |        |   |  |  
|Separate Disclosure for Pension Plans with
Accumulated Benefit Obligation and Projected
Benefit Obligation in Excess of Plan Assets |                                      |  |               |         |                |  |      |         |      |  |   |        |   |  |   |       
|                                                                                                                                    | Projected Benefit Obligation         |  | $             | 55,002  |                |  | $    | 47,866  |      |  |   | N/A    |   |  |   | N/A    |  
|                                                                                                                                    | Accumulated Benefit Obligation       |  | $             | 54,652  |                |  | $    | 47,633  |      |  |   | N/A    |   |  |   | N/A    |  
|                                                                                                                                    | Fair Value of Plan Assets            |  | $             | 38,302  |                |  | $    | 40,583  |      |  |   | N/A    |   |  |   | N/A    |  



---

|(1) |  | The Companys share of minimum pension liability at one of the
Companys unconsolidated JOAs is included as a component of accumulated
other comprehensive loss in the Companys consolidated balance sheet;
however, because the Company does not consolidate the related pension
plan, the obligation has been excluded from the table.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The assumptions used in determining the Companys pension and
postretirement benefit obligation can 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 preceding table, which 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 and a decrease in the assumed discount rate, which creates a
minimum pension liability that is reflected in 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 and interest cost components |  | $              | 18,000  |                |  | $ | 17,000  | 
|Effect on postretirement benefit obligation             |  | $              | 468,079 |                |  | $ | 407,830 | 

The July 1, 2003 assumed trend rate for the increases in health care costs
for its two post-retirement plans was 11% trending down over five years to an
ultimate rate of 5%. 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 9: Income Taxes

The income tax provision (benefit) for each of the three years ended June
30, 2003, 2002 and 2001, consists of the following:

|                        |         |   |                |        |      |   |        |        |   |   |        |        | 
|----------------------- | ------- | - | -------------- | ------ | ---- | - | ------ | ------ | - | - | ------ | ------ | 
|                        |         |   | 2003           |        | 2002 |   | 2001  
|                        |         |   |                |        |      |   |       
|                        |         |   | (In thousands)
|Current:                |         |   |                |        |      |   |        |        |   |   |        |       
|                        | State   |   | $              | 553    |      |   | $      | 1,295  |   |   | $      | 1,370  | 
|                        | Federal |   |                | 1,112  |      |   |        | (4,955 | ) |   |        | 207    | 
|Deferred:               |         |   |                |        |      |   |        |        |   |   |        |       
|                        | State   |   |                | 7,854  |      |   |        | (5,726 | ) |   |        | 1,682  | 
|                        | Federal |   |                | 17,508 |      |   |        | 6,904  |   |   |        | 10,785 | 
|                        |         |   |                |        |      |   |        |        |   |   |        |       
|Net provision (benefit) |         | $ | 27,027         |        |      | $ | (2,482 | )      |   | $ | 14,044 |       
|                        |         |   |                |        |      |   |        |        |   |   |        |       

61



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

Note 9: Income Taxes (continued)

A reconciliation between the actual income tax expense (benefit) for
financial statement purposes and income taxes computed by applying the
statutory Federal income tax rate to financial statement income before income
taxes for the years ended June 30, 2003, 2002 and 2001 is as follows:

|                                       |            |                                                                                             |    |      |    |      |     |      |     |   |    |   |    |  
|-------------------------------------- | ---------- | ------------------------------------------------------------------------------------------- | -- | ---- | -- | ---- | --- | ---- | --- | - | -- | - | -- | -
|                                       |            |                                                                                             |    | 2003 |    | 2002 |     | 2001
|                                       |            |                                                                                             |    |      |    |      |     |     
|Statutory federal income tax rate      |            |                                                                                             | 35 | %    |    |      | 35  | %    |     |   | 35 | %
|                                       | Effect of: |                                                                                             |    |      |    |      |     |      |     |   |    |   |   
|                                       |            | State income tax net of federal benefit                                                     |    |      | 8  |      |     |      | (11 | ) |    |   | 5  |  
|                                       |            | Utilization of net operating losses                                                         |    |      |   |      |     |      | (55 | ) |    |   |   |  
|                                       |            | Book/tax basis difference associated with
acquisitions
and non-deductible acquisition costs |    |      | 1  |      |     |      | 7   |   |    |   | 6  |  
|                                       |            | 1031 exchange                                                                               |    |      |   |      |     |      |    |   |    |   | (7 | )
|                                       |            | Minority interests                                                                          |    |      | 1  |      |     |      | (4  | ) |    |   | 3  |  
|                                       |            | Change in valuation allowance                                                               |    |      | (7 | )    |     |      |    |   |    |   |   |  
|                                       |            | Dividends received deduction                                                                |    |      | (1 | )    |     |      |    |   |    |   | (5 | )
|                                       |            | Other, net                                                                                  |    |      | 2  |      |     |      | 3   |   |    |   | (1 | )
|                                       |            |                                                                                             |    |      |    |      |     |      |     |   |    |  
|Financial statement effective tax rate |            |                                                                                             | 39 | %    |    |      | (25 | )%   |     |   | 36 | %
|                                       |            |                                                                                             |    |      |    |      |     |      |     |   |    |  

Components of the long-term deferred tax assets and liabilities as of June
30, 2003 and 2002 are as follows:

|                             |                                              |   |                |         |      |   |        |         |  
|---------------------------- | -------------------------------------------- | - | -------------- | ------- | ---- | - | ------ | ------- | -
|                             |                                              |   | 2003           |         | 2002
|                             |                                              |   |                |         |     
|                             |                                              |   | (In thousands)
|Deferred tax assets:         |                                              |   |                |         |      |   |        |        
|                             | Net operating losses and other credits       |   | $              | 34,676  |      |   | $      | 45,623  |  
|                             | Deferred employee compensation               |   |                | 4,659   |      |   |        | 3,636   |  
|                             | Notes payable                                |   |                | 7,227   |      |   |        | 6,393   |  
|                             | Hedging activities                           |   |                | 2,340   |      |   |        | 3,319   |  
|                             | Option accrual                               |   |                | 4,789   |      |   |        | 2,322   |  
|                             | Other                                        |   |                | 5,487   |      |   |        | 5,628   |  
|                             |                                              |   |                |         |      |   |        |        
|                             |                                              |   | 59,178         |         |      |   | 66,921 |        
|                             | Valuation allowance                          |   |                | (8,684  | )    |   |        | (13,325 | )
|                             |                                              |   |                |         |      |   |        |        
|                             | Deferred tax assets                          |   |                | 50,494  |      |   |        | 53,596  |  
|                            
|Deferred tax liabilities:    |                                              |   |                |         |      |   |        |        
|                             | Fixed assets                                 |   |                | 16,954  |      |   |        | 14,197  |  
|                             | Intangibles                                  |   |                | 27,939  |      |   |        | 22,560  |  
|                             | Partnership interests and equity investments |   |                | 81,797  |      |   |        | 68,037  |  
|                             | Pension assets                               |   |                | 1,649   |      |   |        | 5,092   |  
|                             |                                              |   |                |         |      |   |        |        
|                             | Deferred tax liabilities                     |   |                | 128,339 |      |   |        | 109,886 |  
|                             |                                              |   |                |         |      |   |        |        
|Net deferred tax liabilities |                                              | $ | 77,845         |         |      | $ | 56,290 |        
|                             |                                              |   |                |         |      |   |        |        

At June 30, 2003, the Company has approximately $69.3 million of net
operating loss carryforwards (NOLs) for federal 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 also has approximately $123.4 million of state NOLs and approximately
$4.1 million of state tax credits available to offset future state taxable
income. The state NOLs expire in 2004 through 2019; the state tax credits
expire beginning in 2007.

The Company projects it will generate taxable income sufficient to utilize
substantially all of the net operating loss carryovers before they expire;
however, because of several uncertainties surrounding its projections, and the
resulting uncertainty as to whether all of the net operating loss carryovers
will be used before they expire, the Company has established a valuation
allowance

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

Note 9: Income Taxes (continued)

at each period end based upon its estimate of net operating loss and state tax
credit carryovers that are more likely than not to expire unused.

The Company made net state and federal income tax payments of
approximately $0.6 million, $0.7 million, and $11.6 million during fiscal years
2003, 2002, and 2001, respectively.

Note 10: Hedging Activities

Under SFAS No. 133, the Companys newsprint and its variable to fixed
interest rate swap agreements were designated at contract inception as cash
flow hedges and recorded at fair value with changes in the value of such
contracts, net of income taxes, reported in comprehensive income. 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. In May 2003, Enron filed a
lawsuit against the Company in U.S. Bankruptcy Court in the Southern District
of New York seeking damages of $16.2 million and declaratory relief related to
the termination of the swap. The Company does not agree with Enrons claims and
intends to vigorously defend itself in this matter (See Note 11: Commitments
and Contingencies for further discussion). 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 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 and projected future 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 (income) expense, net over the original term of the swap agreement.
Approximately $0.8 million and $0.4 million was reclassified from accumulated
other comprehensive loss to earnings for the years ended June 30, 2003 and 2002
related to this terminated swap. The Company expects to reclassify $0.8 million
from accumulated other comprehensive loss to other (income) expense, net during
fiscal year 2004, related to this ineffective newsprint swap.

On July 14, 2003, Mirant, the counterparty to the Companys only other
newsprint hedge, declared bankruptcy. As a result, the Company no longer
considers the hedge effective due to an invalid counterparty and terminated the
swap effective September 5, 2003. The Company considers the date at which the
hedging instrument became ineffective to be the date Mirant filed bankruptcy
and discontinued hedge accounting at that time. The unrealized loss as of the
last date the hedge was determined to be effective will be recorded in
accumulated other comprehensive loss and will be amortized on a straight-line
basis and charged to other (income) expense, net beginning in fiscal year 2004
and continuing over the original term of the swap agreement.

See Note 6: Long-Term Debt for further discussion regarding the Companys
interest rate swaps.

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

Note 11: Commitments and Contingencies

Commitments

Newsprint fixed price contracts are used by the Company from time to time
to reduce its exposure to the uncertainty of future newsprint price
fluctuations. The Company participates in one fixed price contract, which
expires in June 2004. The Company currently has 10,800 metric tons, at an
average price of $602 per metric ton, covered by the fixed price contract. The
newsprint under the fixed price agreement is all used in the Companys JOA
operations. The Company currently has a contract to purchase 48,000 metric tons
a year, at a variable price based on the RISI (Resource Information Systems,
Inc.) price index for 30 pound newsprint. This contract expires in December
2009.

The Denver Post Shareholder Agreement provides Media General and MediaNews
with a put and a call option, respectively, on Media Generals 20% interest in
The Denver Post Corporation. The put is currently exercisable 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, if or when they are
exercised, is based on the appraised fair market value of the Denver Post
Corporation, less Permitted Debt of The Denver Post Corporation as defined in
The Denver Post Shareholder Agreement. MediaNews has one year to close on the
purchase from the date of any put notice.

In September 1996, the Company signed a call/put agreement under which YNI
can purchase YDRs interest in YNC or YDR can put its interest in YNC 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. The Company is currently evaluating its
option to call YDRs interest in YNC.

In fiscal year 1998, in exchange of $2.4 million, the Company granted an
option to a third party to purchase substantially all the assets used in the
publication of one of the Companys newspaper properties, which the third party
can exercise or put to the Company based on a predetermined formula. The option
repurchase price is currently valued at $14.9 million and is recorded as a
component of other long-term liabilities. Changes in the estimated option
repurchase price are recorded as a component of other (income) expense, net. If
the purchase option is put to the Company (the put became exercisable on
January 31, 2003 and expires in 2010), the option repurchase price is due and
payable in full.

As part of the employment agreement, one of the Companys employees has
the right, upon termination of his employment under certain circumstances, to
put all shares of any class of equity securities he owns to the Company, if the
shares have not been registered on a national or international securities
exchange. The Company also has the right to call all shares of any class of
equity securities this employee owns 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 at the time the put or call is exercised. The
price payable under the put is equal to a percentage of fair market value,
which increases up to 100% on December 31, 2009 (at June 30, 2003, the employee
is entitled to 65% of the 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 the Companys leverage ratio, as defined,
is below 3:1. As of June 30, 2003, the employee owns 58,199 shares of MediaNews
Class A Common Stock.

Contingencies

Prior to and since the acquisition of Kearns-Tribune, LLC (Kearns
Tribune) and The Salt Lake Tribunein January 2001, the Company has been
involved in various legal actions with Salt Lake Tribune Publishing Company
(SLTPC), the holder of an option (the Option Agreement) to acquire the
Tribune Assets (defined as all of the assets used, held for use or usable in
connection with the operation and publication of The Salt Lake Tribune).As of
the date of this report, the Company continues to be involved in litigation
with SLTPC, primarily concerning the option to purchase the Tribune Assets, the
option exercise price, and any damages related to the option exercise. The
following is a summary of the ongoing Kearns Tribune litigation:

On May 31, 2002, the United States District Court for the District of Utah
(District Court), issued an Order for Summary Judgment ruling that SLTPC held
a valid and enforceable option to purchase the Tribune Assets owned by Kearns
Tribune. However, the District Court also ruled that one of the key components
of the Tribune Assets, stock in the Newspaper Agency Corporation (NAC), was
subject to an anti-alienation provision contained in a Joint Operating
Agreement (JOA) between Kearns Tribune and Deseret News Publishing Company
(Deseret Publishing). The anti-alienation provision precludes the sale,
assignment or transfer of

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

Note 11: Commitments and Contingencies (continued)

Commitments (continued)

the NAC stock by either party to the JOA absent a waiver or modification of the
provision. Subsequent to the court ruling, Deseret Publishing notified SLTPC
that it would not waive or modify the anti-alienation provision or consent to
the sale or transfer of the NAC stock to SLTPC. 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. The United
States Court of Appeals for the Tenth Circuit affirmed the District Court
ruling that the stock of the NAC could not be transferred without the consent
of Deseret Publishing. However, the Tenth Circuit remanded to the District
Court for further proceedings on the issue of whether the Tribune Assets other
than the stock of the NAC could be sold and transferred to SLTPC and remedies
could be fashioned that addressed an exclusion of the NAC stock from the
transfer of the Tribune Assets. Potential remedies identified by the Tenth
Circuit included: 1) an order of specific performance transferring all the
Tribune Assets that can be transferred without triggering the share transfer
restriction; 2) damages to compensate SLTPC for the NAC stock not being
transferred; or 3) equitable relief if a damage award would be insufficient to
remedy the failure to transfer the NAC stock. In its opinion, the Tenth Circuit
also stated that the District Court could avoid equitable relief altogether and
simply award damages to SLTPC if it is found that Kearns Tribune is liable for
failing to perform under the Option Agreement.

Subsequent to the Tenth Circuits ruling, SLTPC filed a motion for partial
summary judgment seeking a ruling that, at the Closing specified in the Option
Agreement, the Company is obligated under the Option Agreement to transfer all
Tribune Assets except for the NAC stock. On June 25, 2003, the District Court
granted this motion. Based upon this ruling, the District Court also
reinstated claims by SLTPC against the Company and Deseret Publishing that a
2001 amendment of the JOA interfered with SLTPCs rights under the Option
Agreement. Regarding SLTPCs exercise of the option, still reserved for trial
is the question of whether, in an event those Tribune Assets (excluding the NAC
stock) are not transferred, SLTPC is entitled to an order that the Company
specifically perform under the Option Agreement and transfer those Tribune
Assets, or limited to a damages remedy. Also remaining for decision at trial
is the issue of what additional remedies SLTPC might be entitled to if all
Tribune Assets except for the NAC stock are transferred. The District Court has
indicated its intent that the Closing under the Option Agreement be held prior
to the November 3, 2003 trial date.

Another issue in dispute is the exercise price should SLTPC acquire the
Tribune Assets. The terms of the Option Agreement specify an appraisal process
for determination of the fair market value of the Tribune Assets. In this
appraisal process, each party engaged an appraisal firm to value the Tribune
Assets at their fair market value. The Companys appraisal valued the Tribune
Assets at $380.0 million, whereas SLTPCs appraisal valued the Tribune Assets
at $218.0 million. Because the Companys and SLTPCs appraisals were more than
10% apart, the appraisers appointed by the Company and SLTPC were required to
jointly select a third appraiser. Under the terms of the Option Agreement, the
final option purchase price is based on the average of the third appraisal
valuation with the closer of the first two appraisals. On June 11, 2003, the
third appraiser issued its final report valuing the Tribune Assets at $331.0
million. Since the third appraisers valuation is closer to the Companys
appraisal, under the Option Agreement those two appraisals were averaged
together for an exercise price of $355.5 million for the Tribune Assets. After
the third appraisers final report was issued, SLTPC filed a lawsuit in the
District Court challenging the valuation performed by the third appraiser and
seeking to set aside the third appraisal and the $355.5 exercise price. On
August 28, 2003, the District Court dismissed this lawsuit, on the grounds that
the appraisal process constituted an arbitration under the Federal Arbitration
Act (FAA) and that any challenge must therefore be made under the procedures
set forth in the FAA. The available grounds for challenging an arbitration
under the FAA include fraud, corruption, or bias on the part of the arbitrator,
the arbitrator exceeding his powers, or a result that was reached in manifest
disregard of controlling law. SLTPC has filed a motion seeking under these FAA
procedures to set aside the appraisal process and the $355.5 million exercise
price; a hearing on the motion is scheduled for September 29, 2003.

With respect to the November 3, 2003 trial, in addition to the issues
regarding the exercise of the option as discussed above, SLTPCs pending claims
against the Company and Kearns Tribune include claims for damages for breach of
contract and breach of contractual duties (in the event some or all of the
Tribune Assets are not transferred to SLTPC) and for interference with contract
(arising out of the amendment of the JOA in 2001). The Company and Kearns
Tribune continue to have pending counterclaims against SLTPC which include
claims for damages for breaches of contract and interference with contract.
Additionally, the Company and Kearns Tribune have pending counter claims for
declaratory judgment, but no damage claims against Deseret Publishing. Deseret
Publishing has claims against SLTPC for damages, and claims that do not seek
damages against the Company and Kearns Tribune as to the meaning and
enforceability of the Option, Management and Joint Operating Agreements. As
noted above, it is anticipated that if there are any claims, for damages or
otherwise, arising out of a Closing prior to trial, those will be included in
the November 3 trial.

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

Note 11: Commitments and Contingencies (continued)

Commitments (continued)

In January 2002, certain controlling members of SLTPC filed a separate
lawsuit in Colorado State Court in Denver in their individual capacities. The
lawsuit names all the same defendants, arises from same underlying facts, and
seeks overlapping equitable relief and compensatory and punitive damages as the
original federal case filed in Utah in the District Court. 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 the defendants motion to stay the
Colorado action until the Utah federal court action has been resolved. In
January 2003, the Colorado plaintiffs filed a motion to have the stay lifted,
which was denied by the Colorado court. Thus, the Colorado action remains
stayed until completion of the Utah case.

The Company is not in a position at this time to comment on the likely
outcome of this litigation. However, the Company does not believe that the
litigation will have a materially adverse impact on its financial condition,
results of operations, or liquidity. Approximately $3.7 million, $3.4 million
and $0.6 million, respectively, was recorded in other (income) expense, net for
the year ended June 30, 2003, 2002 and 2001, related to the cost of defending
these lawsuits. 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 damages relating to the Companys alleged
breach of a newsprint agreement between the vendor and the Company. In April
2003, a jury verdict was rendered against the Company for $2.7 million. An
accrual for the judgment is included in accrued liabilities and other (income)
expense, net. In an effort to avoid appeal, the Company is in settlement
discussions with the plaintiff. The Company expects to settle at an amount
significantly less than the jury award.

MediaNews terminated a newsprint swap with Enron North America Corp.
(Enron) effective February 6, 2002. Enron has informed MediaNews that it
disagrees with MediaNews method of determining the amount due with respect to
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
of the swap. In May 2003, Enron filed a lawsuit in U.S. Bankruptcy Court for
the Southern District of New York against the Company seeking damages of $16.2
million and declaratory relief. MediaNews does not agree with Enrons claims
and intends to vigorously defend itself in this matter. 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.

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 12: 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 Revocable Trust
benefits Mr. Singletons children. The amount advanced as of June 30, 2003 and
2002 was $1.5 million and $1.4 million, respectively. No further advances were
made subsequent to July 2002. Advances will be repaid when the policy is
surrendered or earlier at Mr. Singletons option. No interest is charged on
these advances.

MediaNews uses Hughes Hubbard & Reed LLP as one of its legal counsel. Mr.
Howell Begle, a board member of MediaNews is Of Counsel to Hughes Hubbard &
Reed LLP.

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.

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

Note 13: Other (Income) Expense, Net

Included in other (income) expense, net are the following items:

|                                          |  |                      |      |      |  |      |      |   |  |   |      | 
|----------------------------------------- |  | -------------------- | ---- | ---- |  | ---- | ---- | - |  | - | ---- | 
|                                          |  | Years Ended June 30,
|                                          |  |                     
|                                          |  | 2003                 |      | 2002 |  | 2001
|                                          |  |                      |      |      |  |     
|                                          |  | (In millions)       
|Estimated option repurchase price         |  | $                    | 5.5  |      |  | $    | 1.8  |   |  | $ | 0.9  | 
|Severance and restructuring               |  |                      | 1.0  |      |  |      | 1.4  |   |  |   | 0.5  | 
|Lawsuit settlement-newsprint vendor       |  |                      | 2.7  |      |  |      |     |   |  |   |     | 
|Impairment loss                           |  |                      | 5.7  |      |  |      |     |   |  |   |     | 
|Hedging, net                              |  |                      | (1.2 | )    |  |      | (2.5 | ) |  |   |     | 
|Bank fees                                 |  |                      | 0.5  |      |  |      | 0.7  |   |  |   | 1.3  | 
|Salt Lake ownership litigation            |  |                      | 3.7  |      |  |      | 3.4  |   |  |   | 0.6  | 
|Denver JOA formation and transition costs |  |                      |     |      |  |      | 3.0  |   |  |   | 7.7  | 
|Other                                     |  |                      | 1.6  |      |  |      | 3.1  |   |  |   | 2.2  | 
|                                          |  |                      |      |      |  |      |      |   |  |   |      | 
|                                          |  | $                    | 19.5 |      |  | $    | 10.9 |   |  | $ | 13.2 | 
|                                          |  |                      |      |      |  |      |      |   |  |   |      | 

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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.                                                                                                                                                                                                                                                                     
|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.                                                                                                                                                                                                                                               

68



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|        |  |                                                                                                                                        
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                        
|No.     |  | Description                                                                                                                            
|        |  |                                                                                                                                        
|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.
|10.24*  |  | -Amendment No. 3 dated March 17, 2003, to Credit Agreement, dated as of May 12, 1999, as amended and
restated as of January 2, 2001.   
|10.25*  |  | -Amendment No. 4 dated May 15, 2003, 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                                                                                                            
|31.1    |  | -Certification of William Dean Singleton                                                                                               
|31.2    |  | -Certification of Joseph J. Lodovic, IV                                                                                                
|31.3    |  | -Certification of Ronald A. Mayo                                                                                                       
|32.1    |  | -Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.               
|32.2    |  | -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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##### Table of Contents






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 26, 2003 | 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/ Richard B. Scudder
(Richard B. Scudder)         |  | Chairman and Director                                                         |  | September 26, 2003
|                                                   
|/S/ Jean Scudder
(Jean Scudder)                     |  | Director                                                                      |  | September 26, 2003
|                                                   
|/S/ Howell Begle
(Howell Begle)                     |  | Director                                                                      |  | September 26, 2003
|                                                   
|/S/ William Dean Singleton
(William Dean Singleton) |  | Vice Chairman, Chief Executive Officer
and Director (Chief Executive Officer) |  | September 26, 2003
|                                                   
|/S/ Joseph J. Lodovic, IV
(Joseph J. Lodovic, IV)   |  | President                                                                     |  | September 26, 2003
|                                                   
|/S/ Ronald A. Mayo
(Ronald A. Mayo)                 |  | Vice President and Chief Financial Officer                                    |  | September 26, 2003
|                                                   
|/S/ Michael J. Koren
(Michael J. Koren)             |  | Vice President and Controller
(Principal Accounting Officer)                  |  | September 26, 2003

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.

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##### Table of Contents






MEDIANEWS GROUP, INC. AND SUBSIDIARIES
SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS
FISCAL YEARS ENDED JUNE 30, 2003, 2002 AND 2001

|                                                      |                                 |  |                     |        |                   |  |            |        |                     |  |        |         |   |  |   |       |   |  |            |        | 
|----------------------------------------------------- | ------------------------------- |  | ------------------- | ------ | ----------------- |  | ---------- | ------ | ------------------- |  | ------ | ------- | - |  | - | ----- | - |  | ---------- | ------ | 
|                                                      |                                 |  |                     |        |                   |  |            |        |                     |  |        |         |   |  |   |       |   |  | Balance at
|                                                      |                                 |  | Balance at          |        | Additions Charged |  | Net        |        | Acquisitions        |  | End of
|                                                      |                                 |  | Beginning of Period |        | to Expense, Net   |  | Deductions |        | (Dispositions), Net |  | Period
|                                                      |                                 |  |                     |        |                   |  |            |        |                     |  |       
|                                                      |                                 |  | (In thousands)     
|YEAR ENDED JUNE 30, 2003                              |                                 |  |                     |        |                   |  |            |        |                     |  |        |         |   |  |   |       |   |  |            |       
|Reserves and allowances deducted from
asset accounts: |                                 |  |                     |        |                   |  |            |        |                     |  |        |         |   |  |   |       |   |  |            |       
|                                                      | Allowance for doubtful accounts |  | $                   | 10,669 |                   |  | $          | 9,632  |                     |  | $      | (10,694 | ) |  | $ | (214  | ) |  | $          | 9,393  | 
|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 | 

See notes to consolidated financial statements.

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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.                                                                                                                                                                                                                                                                     
|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.                                                                                                                                                                                                                                               





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##### Table of Contents



|        |  |                                                                                                                                        
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                        
|No.     |  | Description                                                                                                                            
|        |  |                                                                                                                                        
|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.
|10.24*  |  | -Amendment No. 3 dated March 17, 2003, to Credit Agreement, dated as of May 12, 1999, as amended and
restated as of January 2, 2001.   
|10.25*  |  | -Amendment No. 4 dated May 15, 2003, 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                                                                                                            
|31.1    |  | -Certification of William Dean Singleton                                                                                               
|31.2    |  | -Certification of Joseph J. Lodovic, IV                                                                                                
|31.3    |  | -Certification of Ronald A. Mayo                                                                                                       
|32.1    |  | -Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.               
|32.2    |  | -Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.               
|        |  | *Previously Filed