##### Table of Contents



FORM 10-K
 
      MEDIANEWS GROUP, INC.
  Delaware
    
    76-0425553(State or other jurisdiction of incorporation or 
organization)
    
    (I.R.S. Employer Identification Number)101 W. Colfax, Denver, Colorado
(Address of principal executive offices)
    
    80202
(Zip Code)
  NONE
 NONE
 X
 X
 X X*
 X
  X
 X
    Documents Incorporated By Reference: None




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##### 



Table of Contents
 PagePart IItem 1.
    
    Business
    
    
    3Item 1A.
    
    Risk Factors
    
    
    12Item 1B.
    
    Unresolved Staff Comments
    
    
    15Item 2.
    
    Properties
    
    
    15Item 3.
    
    Legal Proceedings
    
    
    15Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    15Part IIItem 5.
    
    Market for the Registrants Common Equity and Related Stockholder Matters and
Issuer Purchases of Equity Securities
    
    
    16Item 6.
    
    Selected Financial Data
    
    
    17Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operation
    
    
    20Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    37Item 8.
    
    Financial Statements and Supplementary Data
    
    
    39Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    39Item 9A.
    
    Controls and Procedures
    
    
    39Item 9B.
    
    Other Information
    
    
    39Part IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    40Item 11.
    
    Executive Compensation
    
    
    41Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    51Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
    
    
    54Item 14.
    
    Principal Accountant Fees and Services
    
    
    55Part IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    57SignaturesSecond Amended and Restated Joint Operating AgreementSubsidiariesCertification Pursuant to Section 302Certification Pursuant to Section 302Certification Pursuant to Section 302Certification Pursuant to Section 906Certification Pursuant to Section 906
  2




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Item 1: Business
 General
   Connecticut Post
  3




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California
    
    MassachusettsDaily News,Los Angeles, CA
    
    The Sun,Lowell, MAPress-Telegram,Long Beach, CA
    
    The Berkshire Eagle,Pittsfield, MAThe Monterey County Herald,Monterey, CA(a)
    
    Sentinel & Enterprise,Fitchburg, MAThe Daily Breeze, Torrance, CA(a)
    
    North Adams Transcript,North Adams, MACalifornia Newspapers Partnership  54.23%-owned partnershipSan Gabriel Valley Newspaper Group, CA
    
    MichiganSan Gabriel Valley Tribune,West Covina, CA
    
    The Detroit News,Detroit, MI (JOA)(b)Pasadena Star-News,Pasadena, CAWhittier Daily News,Whittier, CA
    
    MinnesotaThe Sun,San Bernardino, CA
    
    Pioneer Press,St. Paul, MN(a)Inland Valley Daily Bulletin,Ontario, CAEast Bay Newspapers, San Francisco Bay Area, CA
    
    UtahContra Costa Times,Walnut Creek, CA
    
    The Salt Lake Tribune,Salt Lake City, UT (JOA)Oakland Tribune,Oakland, CATri-Valley Herald,Pleasanton, CAThe Daily Review,Hayward, CA
    
    VermontThe Argus,Fremont, CA
    
    Brattleboro Reformer,Brattleboro, VTAlameda Times-Star,Alameda, CA
    
    Bennington Banner,Bennington, VTSan Mateo County Times,San Mateo, CAMarin Independent Journal,Marin, CA
    
    West VirginiaEnterprise-Record,Chico, CA
    
    Charleston Daily Mail,Charleston, WV(b)Oroville Mercury-Register,Oroville, CATimes-Herald,Vallejo, CA
    
    Texas-New Mexico Newspapers Partnership - 59.4%-ownedTimes-Standard,Eureka, CA
    
    partnershipThe Reporter,Vacaville, CA
    
    TexasDaily Democrat,Woodland, CA
    
    El Paso Times,El Paso, TXThe Ukiah Daily Journal,Ukiah, CA
    
    New MexicoRedlands Daily Facts,Redlands, CA
    
    Las Cruces Sun-News,Las Cruces, NMLake County Record-Bee,Lakeport, CA
    
    The Daily Times,Farmington, NMRed Bluff Daily News,Red Bluff, CA
    
    Carlsbad Current-Argus,Carlsbad, NMSan Jose Mercury News,San Jose, CA
    
    Alamogordo Daily News,Alamogordo, NMSanta Cruz Sentinel, Santa Cruz, CA
    
    The Deming Headlight,Deming, NMPennsylvaniaYork Daily Record & The York Dispatch,York, PA (JOA)Colorado
    
    Lebanon Daily News,Lebanon, PAThe Denver Post,Denver, CO (JOA)
    
    The Evening Sun,Hanover, PAPrairie Mountain Publishing Company, CO- 50%-owned partnership
    
    Public Opinion,Chambersburg, PAThe Fort Morgan Times,Fort Morgan, COJournal-Advocate,Sterling, COLamar Daily News,Lamar, CODaily Camera, Boulder, COConnecticutConnecticut Post,Bridgeport, CTThe News-Times, Danbury, CT(a)
 
 (a)
    
    We manage these newspapers for The Hearst Corporation.(b)
    
    We are only responsible for editorial and news content. 4




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Industry Background
 (1)
 (1)
  Recent Transactions
 Acquisition (San Jose Mercury News, Contra Costa Times, The Monterey County Herald and
Pioneer Press)
 Contra Costa Times San Jose Mercury News Debt
 The Monterey County Herald Pioneer Press
 Acquisition (Torrance)
 Daily Breeze
 Hearst Stock Purchase Agreement
  
 (1)
    
    Source: Newspaper Association of America 5




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The Monterey County Herald, Pioneer Press Daily Breeze The Monterey County Herald, Pioneer Press Daily Breeze The Monterey County Herald Pioneer Press Daily Breeze The Monterey County Herald, Pioneer Press Daily Breeze
 Original Apartment Magazine Sale
 Original Apartment Magazine
 Acquisition (Santa Cruz)
 Santa Cruz Sentinel
 Management Agreement (Danbury)
 The
News-Times Connecticut Post The News-Times Connecticut Post The News-Times The News-Times
 Sale of Buildings
  Debt
  6




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Contra Costa Times San Jose Mercury News The Monterey County Herald Pioneer Press Contra Costa Times San Jose Mercury News
  Operating Strengths and Strategies
  Geographic Clusters and Partnerships. San Jose Mercury News, Contra Costa
Times, Santa Cruz Sentinel Daily Breeze
 New Revenue Streams. SMART Todays Mama ReConnection Hometown Values Fronteras SPACES www.SPACESmagazine.com
 Local News Leadership
 7




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Circulation Growth
 Cost Controls.
   Internet. i i
 8




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
    
    Ad Serving Technology and Network: MNGi and other NPC sites will move all ad serving
business to the Yahoo! ad network platform. Local newspaper sites and Yahoo! will have the
opportunity to cross-sell each others ad inventory.
    
    Search: MNGi and other NPC sites will integrate Yahoo! Web Search, Sponsored Search,
Content Match and Yahoo! Toolbar into each newspapers Web site.
    
    Content Integration: MNGi and other NPC sites will be treated as a trusted source in
Yahoo! News Search resulting in increased traffic to our sites. Local news content modules
will appear on critical section fronts of Yahoo! including the Front Page, Yahoo! Mail,
Finance, Sports, etc.
      www.medianewsgroup.com
 9




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Superior Management.
 Advertising and Circulation Revenues
  Retail National Classified Interactive
 Fiscal Years EndedJune 30,(1)2007
    
    2006
    
    2005Retail
    
    
    42
    %
    
    
    42
    %
    
    
    42
    %National
    
    
    7
    
    
    
    6
    
    
    
    6Classified
    
    
    25
    
    
    
    27
    
    
    
    26Interactive
    
    
    6
    
    
    
    5
    
    
    
    4Circulation
    
    
    16
    
    
    
    16
    
    
    
    17Other
    
    
    4
    
    
    
    4
    
    
    
    5100
    %
    
    
    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 JOAs (Salt Lake
City and Denver) net results in one line item, Income from Unconsolidated JOAs. The revenue
data for the JOAs we do not control (Salt Lake City, Denver, Charleston and Detroit) are
excluded from this summary (see further discussion under Managements Discussion and Analysis
of Financial Condition and Results of Operations  Critical Accounting Policies). Newsprint
  10




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Employee Relations
  Seasonality and Cyclicality
   Competition
    Regulation and Environmental Matters
  11




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Item 1A. Risk Factors
 Advertising Revenues  We depend on advertising revenues that are affected by a number of factors,
many of which are beyond our control.
  
    
    the health of the economy in the areas where our newspapers are distributed and in the
nation as a whole,
    
    the circulation of our newspapers,
    
    consolidation of retail advertisers within our markets,
    
    quality of our editorial content,
    
    the demographic makeup of the population where our newspapers are distributed,
    
    fluctuations in our competitors price of advertising, and
    
    the activities of our competitors, including increased competition from other
advertising mediums, including network television, cable and satellite television, the
Internet, radio, weekly newspapers and local magazines.
 Paid Circulation
  Newsprint
Costs  Increases in newsprint costs could adversely affect our financial results.
  12




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Competition
 Competition could have a material adverse effect on us.
  Full
Implementation of Operating Strategy and Asset Recoverability  Failure to implement our
operating strategy could have a material adverse effect on us.
  Senior Management
  Employee Benefits
  Self-Insurance and Deductibles on Workers Compensation Insurance
   Other Insurance Exposure, including Earthquake Coinsurance and Deductibles and Caps on General
Liability, Property and Other Insurance Lines
  13




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We are effectively controlled by two shareholder groups.
  We are not required to and may not comply with certain Board of Directors and Audit Committee
requirements of the Sarbanes-Oxley Act of 2002.
  Our business could suffer if we are unsuccessful in negotiating new collective bargaining
agreements.
  Substantial
Leverage  Our substantial indebtedness could have a material adverse effect on our
financial health and prevent us from fulfilling our obligations.
   
    
    require us to dedicate a substantial portion of our cash flow from operations to
payments on our indebtedness, thereby reducing the availability of our cash flow to fund
working capital, capital expenditures, investments and other general corporate
purposes,
    
    impair our ability to obtain additional financing for, among other things, working
capital, capital expenditures, acquisitions or other general corporate purposes, or
    
    limit our flexibility to adjust to changing business and market conditions, and make us
more vulnerable to a downturn in general economic conditions as compared to our competitors
that have a lower ratio of debt to cash flow.
  14




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Item 1B. Unresolved Staff Comments
  
 Item 2: Properties
  Alaska
    
    Minnesota
    
    Texas
    
    CaliforniaAnchorage
    
    St. Paul (a)
    
    El Paso
    
    Vacaville
    
    San JoseGraham
    
    Paradise
    
    Walnut CreekColorado
    
    New Mexico
    
    
    
    Hayward
    
    ConcordDenver
    
    Las Cruces
    
    Utah
    
    Pleasanton
    
    RichmondCarlsbad
    
    Salt Lake City
    
    Marin
    
    Monterey (a)Connecticut
    
    Farmington
    
    Murray
    
    Eureka
    
    West CovinaBridgeport
    
    Alamogordo
    
    
    
    Chico
    
    ValenciaDanbury (a)
    
    
    
    Vermont
    
    Vallejo
    
    San BernardinoPennsylvania
    
    Brattleboro
    
    Lakeport
    
    OntarioMassachusetts
    
    York
    
    Bennington
    
    WoodlandPittsfield
    
    Hanover
    
    
    
    UkiahNorth Adams
    
    LebanonLowell
    
    ChambersburgFitchburgDevens
 
  (a)
  
 Item 3: Legal Proceedings
  
 Item 4: Submission of Matters to a Vote of Security Holders
  15




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PART II
 
 Item 5: Market for Registrants Common Equity, Related Shareholder Matters and Issuer Purchases of
Equity Securities
     16




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Item 6: Selected Financial Data
   MediaNews Group, Inc. & SubsidiariesFiscal Years Ended June 30,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003(Dollars in thousands)INCOME STATEMENT DATA(a):RevenuesAdvertising
    
    $
    1,063,681
    
    
    $
    660,389
    
    
    $
    610,060
    
    
    $
    582,689
    
    
    $
    570,163Circulation
    
    
    210,702
    
    
    
    130,829
    
    
    
    129,344
    
    
    
    132,505
    
    
    
    137,445Other
    
    
    55,457
    
    
    
    44,658
    
    
    
    39,875
    
    
    
    38,635
    
    
    
    30,990Total Revenues
    
    
    1,329,840
    
    
    
    835,876
    
    
    
    779,279
    
    
    
    753,829
    
    
    
    738,598Income (Loss) from Unconsolidated JOAs
    
    
    (10,418
    )
    
    
    (23,298
    )
    
    
    23,291
    
    
    
    22,207
    
    
    
    25,227Cost of Sales
    
    
    421,343
    
    
    
    260,939
    
    
    
    242,653
    
    
    
    234,784
    
    
    
    221,888Selling, General and Administrative
    
    
    687,875
    
    
    
    417,602
    
    
    
    382,180
    
    
    
    366,636
    
    
    
    346,763Depreciation and Amortization
    
    
    68,670
    
    
    
    44,067
    
    
    
    40,598
    
    
    
    40,742
    
    
    
    40,553Interest Expense
    
    
    82,388
    
    
    
    55,564
    
    
    
    49,481
    
    
    
    57,036
    
    
    
    64,252Gain on Sale of Assets and Newspaper Properties
    
    
    66,156
    
    
    
    1,129
    
    
    
    114
    
    
    
    6,982
    
    
    
    28,797Minority Interest
    
    
    (59,557
    )
    
    
    (35,033
    )
    
    
    (29,334
    )
    
    
    (32,237
    )
    
    
    (34,088
    )Income Before Income Taxes
    
    
    53,788
    
    
    
    4,960
    
    
    
    59,970
    
    
    
    43,703
    
    
    
    69,253Net Income
    
    
    35,642
    
    
    
    1,077
    
    
    
    39,880
    
    
    
    26,737
    
    
    
    38,312Net Income Applicable to Common Stock
    
    
    19,731
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    CASH FLOW DATA:Capital Expenditures
    
    $
    31,636
    
    
    $
    47,501
    
    
    $
    51,312
    
    
    $
    36,483
    
    
    $
    20,669Cash Flows from:Operating Activities(b)
    
    
    144,864
    
    
    
    77,257
    
    
    
    92,944
    
    
    
    80,174
    
    
    
    89,759Investing Activities (including Capital Expenditures)
    
    
    (361,473
    )
    
    
    (64,454
    )
    
    
    (92,669
    )
    
    
    (20,534
    )
    
    
    (32,480
    )Financing Activities(b)
    
    
    225,270
    
    
    
    (16,641
    )
    
    
    (60,749
    )
    
    
    1,753
    
    
    
    (55,965
    )BALANCE SHEET DATA:Total Assets
    
    $
    2,595,309
    
    
    $
    1,439,566
    
    
    $
    1,365,772
    
    
    $
    1,383,149
    
    
    $
    1,348,038Long-Term Debt and Capital Leases
    
    
    1,124,633
    
    
    
    867,893
    
    
    
    877,569
    
    
    
    928,467
    
    
    
    904,554Other Long-Term Liabilities and Obligations and Defined Benefit and
Other Post Employment Benefit Plan Liabilities
    
    
    58,851
    
    
    
    40,557
    
    
    
    47,359
    
    
    
    40,429
    
    
    
    58,837Putable Common Stock
    
    
    33,165
    
    
    
    40,899
    
    
    
    48,556
    
    
    
    
    
    
    
    Total Shareholders Equity
    
    
    91,164
    
    
    
    59,520
    
    
    
    38,493
    
    
    
    61,006
    
    
    
    34,894NON-GAAP FINANCIAL DATA(c):Adjusted EBITDA
    
    $
    220,622
    
    
    $
    157,335
    
    
    $
    154,446
    
    
    $
    152,409
    
    
    $
    169,947Minority Interest in Adjusted EBITDA
    
    
    (80,004
    )
    
    
    (46,541
    )
    
    
    (41,152
    )
    
    
    (45,747
    )
    
    
    (49,089
    )Combined Adjusted EBITDA of Unconsolidated JOAs
    
    
    26,509
    
    
    
    27,909
    
    
    
    38,097
    
    
    
    39,842
    
    
    
    40,371EBITDA of Texas-New Mexico Newspapers Partnership and Prairie
Mountain Publishing Company(d)
    
    
    1,891
    
    
    
    5,681
    
    
    
    9,610
    
    
    
    10,108
    
    
    
    3,275Adjusted EBITDA Available to Company
    
    $
    169,018
    
    
    $
    144,384
    
    
    $
    161,001
    
    
    $
    156,612
    
    
    $
    164,504
 
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(a)
    
    Significant Transactions.The income statement data is impacted by the following significant
transactions.
 Acquisitions Fiscal Years 2003-2007Year
    
    Date
    
    Publication
    
    Location
    
    Description
    
    Purchase Price2007
    
    08/02/06
    
    San Jose Mercury News
    
    San Jose, CA
    
    Daily morning newspapers
    
    $736.8 millionContra Costa Times
    
    Walnut Creek, CA02/02/07
    
    Santa Cruz Sentinel
    
    Santa Cruz, CA
    
    Daily morning newspaper
    
    $45.0 millionSee Other Transactions (below) regarding the Daily Breeze(Torrance), The Monterey County Herald, St. Paul
Pioneer Pressand The News-Times(Danbury)2006
    
    08/03/05
    
    Detroit News
    
    Detroit, Michigan
    
    Daily morning newspaper (editorial only) and limited Detroit JOA partnership interest
    
    $25.0 millionSee Other Transactions (below) regarding the Prairie Mountain Publishing Company formation and Texas-New
Mexico Newspapers Partnership restructuring2005
    
    01/04/05
    
    The Park Record
    
    Park City, Utah
    
    Three times weekly newspaper
    
    $8.0 million2004
    
    01/05/04
    
    Grunion GazetteandDowntown Gazette
    
    Long Beach, California
    
    Weekly newspapers
    
    $9.0 millionSee Other Transactions regarding the York JOA restructuring2003
    
    01/31/03
    
    Paradise Post
    
    Paradise, California
    
    Three times weekly newspaper,plus commercial printing
    
    $13.0 million10/01/02
    
    The Reporter
    
    Vacaville, California
    
    Daily morning newspaper
    
    $30.9 million10/01/02
    
    Original ApartmentMagazine
    
    Los Angeles, California
    
    Free distribution apartment rentalmagazine
    
    $10.0 million,plus $4.9
million inearnouts
 Dispositions Fiscal Years 2003-2007Year2007
    
    On September 29, 2006, we sold, through the California Newspapers Partnership, the Original Apartment
Magazinefor $14.0 million. See Other Transactions regarding the Management Agreement in Connecticut.2006
    
    No dispositions. See Other Transactions regarding the Prairie Mountain Publishing Company formation and
Texas-New Mexico Newspapers Partnership restructuring.2005
    
    No dispositions.2004
    
    No significant dispositions. See Other Transactions regarding the Charleston JOA restructuring.2003
    
    No dispositions. See Other Transactions regarding the formation of Texas-New Mexico Newspapers Partnership.
 Other Transactions Fiscal Years 2003-2007Year
    

Description2007
    
    Effective December 15, 2006, The Hearst Corporation
(Hearst) acquired the Daily Breeze, a daily morning newspaper and three weekly newspapers in
Torrance, California for approximately $25.9 million.Effective August 2, 2006, Hearst acquired The
Monterey County Heraldand St. PaulPioneer Press (both daily morning newspapers) and related
publications and Web sites for $263.2 million.Pursuant to an agreement between us and Hearst,
Hearst agreed to make an equity investment in us and we have agreed to purchase from Hearst the
publications with a portion of the Hearst equity investment in us. The equity investment by Hearst
in us is subject to antitrust review by the Antitrust Division of the Department of Justice.
Also under the agreement with Hearst, during the period the publications are owned by Hearst, the
publications are managed by us. Because we have all the risks and rewards associated with ownership of
the Daily Breeze, The Monterey County Heraldand St. PaulPioneer Pressand retain all of the cash flows
generated by these newspapers as a management fee, we began consolidating the publications as of the
effective date of such newspapers acquisition by Hearst.Also, pursuant to the agreement between us and
Hearst, we agreed that at the election of us or Hearst, we will purchase the publications from
Hearst (plus Hearsts costs and costs of funds in respect of its purchase of such newspapers) if for
any reason Hearsts equity investment in us is not consummated.On March 30, 2007, we entered into an agreement with
Hearst regarding the management of The News-Times (Danbury, Connecticut) which was purchased by Hearst
on March 30, 2007 for $80.0 million. Under the agreement, we control the management of both the
Connecticut Post(owned by us) and The News-Times and are entitled to 73% of the combined profits and
losses of the two newspapers; however, we and Hearst retain ownership of the assets and liabilities of
the Connecticut Postand The News-Times, respectively. Profits and losses refer to net
income, adjusted so that each partner retains 100% of the periodic depreciation and amortization
recorded relating to its contributed assets. The partners also retain 100% of any related gain or
loss taken related to the disposition of its contributed assets. As a result of entering into
the management agreement, we began consolidating the results of The News-Timesand recording minority
interest for Hearsts 27% interest beginning March 30, 2007.
 
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##### Table of Contents



2006
    
    Effective February 1, 2006, we formed the Prairie Mountain Publishing Company (PMP) with E.W. Scripps
(Scripps). Upon formation of PMP, we contributed substantially all of the operating assets of Eastern Colorado
Publishing Company, comprised of several small daily and weekly newspapers, and Scripps contributed substantially
all of the operating assets of the Daily Cameraand the Colorado Daily, both published in Boulder, Colorado. In
addition to the assets contributed to PMP, we paid Scripps $20.4 million to obtain our 50% interest in PMP.

Effective December 26, 2005, we contributed the assets of our four daily newspapers published in southern
Pennsylvania (The Evening Sun(Hanover), the Lebanon Daily Newsand our interest in the entity that publishes the
York Daily Recordand York Sunday News, which will continue to be published under the terms of a JOA agreement
along with The York Dispatch) and Gannett contributed assets of the Public Opinion, published in Chambersburg, PA
into the Texas-New Mexico Newspapers Partnership. As a result of the contributions (our ownership percentage went
from 33.8% to 59.4%) and amended and restated partnership agreement, we are now the controlling partner and
accordingly began consolidating the results of the Texas-New Mexico Newspapers Partnership effective December 26,
2005.2005
    
    In June 2005, we purchased the remaining 20% of The Denver Post Corporation which we did not own for $45.9 million.2004
    
    In May 2004, we restructured our interest in Charleston Newspapers (Charleston JOA). In exchange for $55.0
million (net of certain adjustments) and a limited partnership interest in a newly formed entity, Charleston
Newspapers Holdings, L.P., we contributed our general partnership interest in the Charleston JOA and the masthead
of the Charleston Daily Mailto Charleston Newspapers Holdings, L.P. Our limited partnership interest does not
entitle us to any share of the profits or losses of the limited partnership. We recorded a pre-tax gain of $8.0
million as a result of this transaction.Effective April 30, 2004, we restructured our interest in the York JOA through the exercise of our call option to
acquire the remaining interest in The York Newspaper Company and the masthead of the York Daily Recordfor
approximately $38.3 million.2003
    
    Effective March 3, 2003, we formed the Texas-New Mexico Newspapers Partnership with Gannett. We contributed
assets of our daily newspapers published in New Mexico (Las Cruces Sun-News, The Daily Times(Farmington),
Carlsbad Current-Argus, Alamogordo Daily Newsand The Deming Headlight) and Gannett contributed the El Paso Times.
Upon formation, we recognized in fiscal year 2003 a non-monetary pre-tax gain of $28.8 million and began
accounting for our 33.8% interest in the partnership under the equity method of accounting.
 (b)
    
    Prior Year Revision/Reclassification.For comparability certain prior year balances have been
reclassified to conform to current reporting classifications. In particular, the statements
of cash flows have been revised for the years ended June 30, 2006 and 2004 to reflect
distributions in excess of net income paid to minority interests in accordance with Statement
of Financial Standards (SFAS) No. 95, Statement of Cash Flows. For the years ended June 30,
2006 and 2004, the revision increased the reported net cash flows from operating activities
and decreased the reported net cash flows from financing activities by $5.7 million and
$3.7 million, respectively. There was no impact to the statements of cash flows for the years
ended June 30, 2005 and 2003.(c)
    
    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, the Texas-New Mexico Newspapers Partnership (beginning
December 26, 2005), The Denver Post Corporation (through June 10, 2005), and The York
Newspaper Company (through April 30, 2004), our less than 100% owned subsidiaries, as well as
the Connecticut newspapers (beginning March 30, 2007) (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 through May 7, 2004,
Charleston (Combined Adjusted EBITDA of Unconsolidated JOAs); and (iii) increasing Adjusted
EBITDA by our proportionate share of EBITDA from the Texas-New Mexico Newspapers Partnership
(through December 25, 2005) and our proportionate share of EBITDA of the Prairie Mountain
Publishing Company (beginning February 1, 2006) (see footnote e). See Managements
Discussion and Analysis of Financial Condition and Results of Operations  Reconciliation of
GAAP and Non-GAAP Financial Information.(d)
    
    EBITDA of Texas-New Mexico Newspapers Partnership and Prairie Mountain Publishing Company.
The Texas-New Mexico Newspapers Partnership and the Prairie Mountain Publishing Company
agreements require the partnerships to make distributions equal to the earnings of the
partnership before depreciation and amortization (EBITDA). From March 3, 2003 through
December 25, 2005, our 33.8% share of the EBITDA of Texas-New Mexico Newspapers Partnership
and beginning February 1, 2006, our 50% share of the EBITDA of Prairie Mountain Publishing
Company, have been included in Adjusted EBITDA Available to Company as they are an integral
part of our cash flow from operations defined by our debt covenants. Beginning December 26,
2005, we became the controlling partner of the Texas-New Mexico Newspapers Partnership at
which time we began consolidating its results. See Note 4: Investments in California
Newspapers Partnership and Texas-New Mexico Newspapers Partnership and Note 5: Acquisitions,
Dispositions and Other Transactions of the notes to the consolidated financial statements of
this Annual Report on Form 10-K for further discussion of the Texas-New Mexico Newspapers
Partnership restructuring and the Prairie Mountain Publishing Company formation.
 19




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##### Table of Contents



Item 7: Managements Discussion and Analysis of Financial Condition and Results of Operations
 Introduction
  Company Overview
    Critical Accounting Policies
    
    
    Our proportionate share of net income from JOAs,
    
    The amortization of subscriber lists created by the original purchase, as the subscriber
lists are attributable to our earnings in the JOAs, and
    
    Editorial costs, miscellaneous revenue received outside of the JOA, and other charges
incurred by our consolidated subsidiaries directly attributable to providing editorial content and
news for our newspapers party to a JOA.
 20




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##### Table of Contents



Operating Results
  Summary Historical Financial DataFiscal Years Ended June 30,2007 vs.
    
    
    2006 vs.2007
    
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005(Dollars in thousands)INCOME STATEMENT DATA:Total Revenues
    
    $
    1,329,840
    
    
    $
    835,876
    
    
    $
    779,279
    
    
    
    59.1
    %
    
    
    7.3
    %Income (Loss) from Unconsolidated JOAs
    
    
    (10,418
    )
    
    
    (23,298
    )
    
    
    23,291
    
    
    
    (c
    )
    
    
    (c
    )Cost of Sales
    
    
    421,343
    
    
    
    260,939
    
    
    
    242,653
    
    
    
    61.5
    
    
    
    7.5Selling, General and Administrative
    
    
    687,875
    
    
    
    417,602
    
    
    
    382,180
    
    
    
    64.7
    
    
    
    9.3Depreciation and Amortization
    
    
    68,670
    
    
    
    44,067
    
    
    
    40,598
    
    
    
    55.8
    
    
    
    8.5Interest Expense
    
    
    82,388
    
    
    
    55,564
    
    
    
    49,481
    
    
    
    48.3
    
    
    
    12.3Other (Income) Expense, Net
    
    
    11,223
    
    
    
    1,440
    
    
    
    8,669
    
    
    
    (c
    )
    
    
    (83.4
    )Total Costs and Expenses
    
    
    1,271,499
    
    
    
    779,612
    
    
    
    723,581
    
    
    
    63.1
    
    
    
    7.7Equity Investment Income (Loss), Net
    
    
    (734
    )
    
    
    5,898
    
    
    
    10,201
    
    
    
    (c
    )
    
    
    (42.2
    )Gain on Sale of Assets and Newspaper Properties
    
    
    66,156
    
    
    
    1,129
    
    
    
    114
    
    
    
    (c
    )
    
    
    (c
    )Minority Interest
    
    
    (59,557
    )
    
    
    (35,033
    )
    
    
    (29,334
    )
    
    
    70.0
    
    
    
    19.4Net Income
    
    
    35,642
    
    
    
    1,077
    
    
    
    39,880
    
    
    
    (c
    )
    
    
    (c
    )Net Income Applicable to Common Stock
    
    
    19,731
    
    
    
    
    
    
    
    
    
    
    
    (c
    )
    
    
    (c
    )CASH FLOW DATA:Cash Flows from:Operating Activities
    
    $
    144,864
    
    
    $
    77,257
    
    
    $
    92,944Investing Activities
    
    
    (361,473
    )
    
    
    (64,454
    )
    
    
    (92,669
    )Financing Activities
    
    
    225,270
    
    
    
    (16,641
    )
    
    
    (60,749
    )NON-GAAP FINANCIAL DATA(a):Adjusted EBITDA
    
    $
    220,622
    
    
    $
    157,335
    
    
    $
    154,446
    
    
    
    40.2
    %
    
    
    1.9
    %Minority Interest in Adjusted EBITDA
    
    
    (80,004
    )
    
    
    (46,541
    )
    
    
    (41,152
    )
    
    
    71.9
    
    
    
    13.1Combined Adjusted EBITDA of Unconsolidated JOAs
    
    
    26,509
    
    
    
    27,909
    
    
    
    38,097
    
    
    
    (5.0
    )
    
    
    (26.7
    )EBITDA of Texas-New Mexico Newspapers
Partnership and Prairie Mountain Publishing
Company(b)
    
    
    1,891
    
    
    
    5,681
    
    
    
    9,610
    
    
    
    (66.7
    )
    
    
    (40.9
    )Adjusted EBITDA Available to Company
    
    $
    169,018
    
    
    $
    144,384
    
    
    $
    161,001
    
    
    
    17.1
    %
    
    
    (10.3
    )%
 
 (a)
    
    Non-GAAP Financial Data.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, the
Texas-New Mexico Newspapers Partnership (beginning December 26, 2005) and The Denver Post
Corporation (through June 10, 2005), our less than 100% owned consolidated subsidiaries as
well as the Connecticut newspapers (beginning March 30, 2007) (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 and Salt Lake City (Combined Adjusted
EBITDA of Unconsolidated JOAs); and (iii) increasing Adjusted EBITDA by our proportionate
share of EBITDA from the Texas-New Mexico Newspapers Partnership (through December 25, 2005)
and our proportionate share of EBITDA of the Prairie Mountain Publishing Company (beginning
February 1, 2006) (see footnote b). See Managements Discussion and Analysis of Financial
Condition and Results of Operations  Reconciliation of GAAP and Non-GAAP Financial
Information.(b)
    
    EBITDA of The Texas-New Mexico Newspapers Partnership and Prairie Mountain Publishing
Company.The Texas-New Mexico Newspapers Partnership and Prairie Mountain Publishing Company
agreements require the partnership to make distributions equal to the earnings of the
partnership before depreciation and amortization (EBITDA). Through December 25, 2005, our
33.8% share of the EBITDA of Texas-New Mexico Newspapers Partnership and beginning February 1,
2006, our 50% share of the EBITDA of Prairie Mountain Publishing Company have been included in
Adjusted EBITDA Available to Company as they are an integral part of our cash flows from
operations as defined by our debt covenants. Beginning December 26, 2005, we became the
controlling partner of the Texas-New Mexico Newspapers Partnership at which time we began
consolidating its results. See Note 4: Investments in California Newspapers Partnership and
Texas-New Mexico Newspapers Partnership and Note 5: Acquisitions, Dispositions and Other
Transactions of the notes to the consolidated financial statements of this Annual Report on
Form 10-K for further discussion of the Texas-New Mexico Newspapers Partnership restructuring
and the Prairie Mountain Publishing Company formation.(c)
    
    Not meaningful.
 21




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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 Balance Sheet and Income Statement Display under the
Equity Method of Investments in Certain Partnerships and Other Unincorporated Joint Ventures,
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 meet our debt service and capital
expenditure requirements. Our JOA agreements in Denver and Salt Lake City do not restrict cash
distributions to the owners and in general our Denver and Salt Lake City JOAs make monthly
distributions. We use pro-rata consolidation to internally evaluate our performance and present it
here because our bank credit agreement and the indentures governing our senior subordinated notes
define cash flows 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 in Denver and Salt
Lake City using pro-rata consolidation, including the percentage change between periods. The
operations of the Charleston JOA and the Detroit JOA have not been included on a pro-rata
consolidation basis. See Notes 2 and 3 to the consolidated financial statements for additional
discussion of the GAAP accounting for our JOAs.
 THE INFORMATION IN THE FOLLOWING TABLE IS NOT PRESENTED IN ACCORDANCE WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND DOES NOT COMPLY WITH ARTICLE 11 OF
REGULATION S-X FOR PRO FORMA FINANCIAL DATA
 Summary Selected Non-GAAP Financial DataFiscal Years Ended June 30,2007
    
    
    2006
    
    
    2005
    
    
    2007 vs. 2006
    
    
    2006 vs. 2005(Dollars in thousands)PRO-RATA CONSOLIDATED INCOME STATEMENT DATA:Total Revenues
    
    $
    1,612,988
    
    
    $
    1,132,423
    
    
    $
    1,081,754
    
    
    
    42.4
    %
    
    
    4.7
    %Cost of Sales
    
    
    533,308
    
    
    
    381,763
    
    
    
    362,456
    
    
    
    39.7
    
    
    
    5.3Selling, General and Administrative
    
    
    832,549
    
    
    
    565,416
    
    
    
    526,755
    
    
    
    47.2
    
    
    
    7.3Depreciation and Amortization
    
    
    98,261
    
    
    
    92,261
    
    
    
    54,021
    
    
    
    6.5
    
    
    
    70.8Interest Expense
    
    
    84,699
    
    
    
    55,827
    
    
    
    49,679
    
    
    
    51.7
    
    
    
    12.4Other (Income) Expense, Net
    
    
    15,158
    
    
    
    4,190
    
    
    
    9,854
    
    
    
    (b
    )
    
    
    (57.5
    )Total Costs and Expenses
    
    
    1,563,975
    
    
    
    1,099,457
    
    
    
    1,002,765
    
    
    
    42.2
    
    
    
    9.6Gain on Sale of Assets and Newspaper Properties
    
    
    65,066
    
    
    
    1,129
    
    
    
    114
    
    
    
    (b
    )
    
    
    (b
    )Minority Interest
    
    
    (59,557
    )
    
    
    (35,033
    )
    
    
    (29,334
    )
    
    
    70.0
    
    
    
    19.4Net Income
    
    
    35,642
    
    
    
    1,077
    
    
    
    39,880
    
    
    
    (b
    )
    
    
    (b
    )CASH FLOW DATA (GAAP BASIS):Cash Flows from:Operating Activities
    
    $
    144,864
    
    
    $
    77,257
    
    
    $
    92,944Investing Activities
    
    
    (361,473
    )
    
    
    (64,454
    )
    
    
    (92,669
    )Financial Activities
    
    
    225,270
    
    
    
    (16,641
    )
    
    
    (60,749
    )PRO-RATA OTHER DATA(a):Adjusted EBITDA
    
    $
    247,131
    
    
    $
    185,244
    
    
    $
    192,543
    
    
    
    33.4
    %
    
    
    (3.8
    )%Minority Interest in Adjusted EBITDA
    
    
    (80,004
    )
    
    
    (46,541
    )
    
    
    (41,152
    )
    
    
    71.9
    
    
    
    13.1EBITDA of Texas-New Mexico Newspapers
Partnership and Prairie Mountain Publishing
Company
    
    
    1,891
    
    
    
    5,681
    
    
    
    9,610
    
    
    
    (66.7
    )
    
    
    (40.9
    )Adjusted EBITDA Available to Company
    
    $
    169,018
    
    
    $
    144,384
    
    
    $
    161,001
    
    
    
    17.1
    %
    
    
    (10.3
    )%
 
 (a)
    
    See footnote (a) under Managements Discussion and Analysis of Financial Condition and
Results of Operations  Operating Results for discussion of Adjusted EBITDA, EBITDA of
Texas-New Mexico Newspapers Partnership and Prairie Mountain Publishing Company and Adjusted
EBITDA Available to Company. The Minority Interest in Adjusted EBITDA shown is calculated the
same as described in footnote (b) under Managements Discussion and Analysis of Financial
Condition and Results of Operations  Operating Results. See Managements Discussion and
Analysis of Financial Condition and Results of Operations  Reconciliation of GAAP and
Non-GAAP Financial Information.(b)
    
    Not meaningful.
 22




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##### Table of Contents



Fiscal Year 2007 Executive Overview
   
    
    On August 2, 2006, we acquired the San Jose Mercury Newsand Contra Costa Timesand
began managing and consolidating The Monterey County Heraldand St. Paul Pioneer Pressfor
The Hearst Corporation (Hearst). Under the agreement with Hearst, we have all of the
economic risks and rewards associated with ownership of The Monterey County Heraldand St.
Paul Pioneer Pressand retain all of the cash flows generated by them as a management fee.
As a result, we began consolidating the financial statements of The Monterey County Herald
and St. Paul Pioneer Press, along with the San Jose Mercury Newsand Contra Costa Times,
beginning August 2, 2006.
    
    On August 2, 2006, we amended our bank credit facility to authorize a new $350.0 million
term loan C facility which was used, along with borrowings under the revolver portion of
our bank credit facility, to finance our share of the California Newspapers Partnerships
purchase of the San Jose Mercury Newsand Contra Costa Times.
    
    On September 29, 2006, we sold the Original Apartment Magazine.
    
    On December 15, 2006, we began managing for Hearst the Daily Breezeand three weekly
newspapers, published in Torrance, California. The accounting treatment of the Daily
Breezeis the same as the St. Paul Pioneer Pressand The Monterey County Heraldfor the
reasons previously described. As a result, we began consolidating the financial statements
of the Torrance publications beginning December 15, 2006.
    
    On February 2, 2007, the California Newspapers Partnership acquired the Santa Cruz
Sentinel.
    
    On March 30, 2007, we entered into an agreement with Hearst to manage The News-Times
(Danbury, Connecticut). Under the agreement, we manage and control both the Connecticut
Post(owned by us) and The News-Times(owned by Hearst) and are entitled to 73% of the
combined profits and losses generated by the two newspapers. As a result, we began
consolidating the operating results of The News-Timesand recording minority interest for
Hearsts 27% interest beginning March 30, 2007. With the exception of the $27.0 million
pre-tax nonmonetary gain on the sale of 27% of our interest in the Connecticut Post,this
transaction had an immaterial effect on the operating results discussed below.
    
    We sold office buildings in Long Beach and Woodland Hills, California for a combined
total of $49.0 million and recognized a $37.4 million pre-tax gain.
   23




---



##### Table of Contents




    
    In August 2005, we purchased The Detroit News, Inc. which included a limited partnership
interest in the Detroit JOA. Because of the partnership structure and our ownership
interest, we account for the preferred distributions using the cost method of accounting,
with a portion of the distributions accounted for in other operating revenues for amounts
paid to us for managing and providing the news and editorial content for The Detroit News.
    
    In September 2005, we amended our bank credit facility to refinance a portion of our
long-term debt and reduce certain interest rate margins charged under the bank credit
facility.
    
    Effective December 26, 2005, we restructured the Texas-New Mexico Newspapers Partnership
whereby we contributed to the partnership our Pennsylvania newspapers: The Evening Sun
(Hanover), the Lebanon Daily Newsand our interest in the partnership that publishes the
York Daily Recordand York Sunday News,which continues to operate under the terms of a
joint operating agreement with The York Dispatch.Gannett, our partner in the Texas-New
Mexico Newspapers Partnership, contributed the Public Opinionin Chambersburg,
Pennsylvania. As a result of the contributions and amendment and restatement of the
partnership agreement, the Texas-New Mexico Newspapers Partnership became a 59.4%-owned
consolidated subsidiary of ours. Prior to the partnership restructuring, this investment
was accounted for under the equity method of accounting.
    
    In February 2006, Prairie Mountain Publishing Company was formed after which time we no
longer consolidate the results of Eastern Colorado Publishing Company and account for our
investment in Prairie Mountain Publishing Company under the equity method of accounting.
We own 50% of Prairie Mountain Publishing Company.
  
    
    In January 2005, we purchased The Park Recordpublished in Park City, Utah.
    
    We took advantage of the lower interest rates available to us in both the bond and bank
financing markets by refinancing a portion of our long-term debt. We amended and refinanced
a portion of our bank credit facility in August 2004 to take advantage of lower borrowing
margins. We also retired $200.0 million of our 8 5/8% bonds in July 2004 with proceeds of
our January 2004 issuance of $150.0 million 6 3/8% bonds and cash on hand.
    
    In June 2005, we purchased the 20% of The Denver Post Corporation which we did not own
for approximately $45.9 million.
 Comparison of Fiscal Years Ended June 30, 2007 and 2006
 Revenues
 Advertising Revenues.
 Circulation Revenues.
 Income from Unconsolidated JOAs
  24




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##### Table of Contents



Cost of Sales
  Selling, General and Administrative
  Interest Expense
 Santa Cruz Sentinel San Jose Mercury News Contra Costa Times, .
 25




---



##### Table of Contents



Other (Income) Expense, Net
   Equity Investment Income, Net
  Minority Interest
 San Jose Mercury News Contra Costa Times, Santa Cruz Sentinel
 Gain on Sale of Assets
 Connecticut Post Connecticut Post
 Net Income
 The Monterey County Herald Pioneer Press Daily Breeze
 26




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##### Table of Contents



Comparison of Fiscal Years Ended June 30, 2006 and 2005
 Revenues
  Advertising Revenues.
 Circulation Revenues.
 Income from Unconsolidated JOAs
  Cost of Sales
 The Park Record
 Selling, General and Administrative
 The Park Record
 27




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##### Table of Contents



Interest Expense
  Other (Income) Expense, Net
   Equity Investment Income, Net
  Net Income
  Liquidity and Capital Resources
  28




---



##### Table of Contents



Cash Flow Activity
  San Jose Mercury News Contra Costa Times, Santa Cruz Sentinel Original
Apartment Magazine,
 Santa Cruz Sentinel Original Apartment Magazine ,
 Capital Expenditures
 Capital ExpendituresFiscal Year 2008 Plan
    
    
    Fiscal Year 2007 Actual(Dollars in thousands)Wholly-
    
    
    Non Wholly-
    
    
    Our Share of
    
    
    
    
    
    
    Wholly-
    
    
    Non Wholly-
    
    
    Our Share ofOwned
    
    
    Owned
    
    
    Unconsolidated
    
    
    
    
    
    
    Owned
    
    
    Owned
    
    
    UnconsolidatedSubsidiaries
    
    
    Subsidiaries
    
    
    JOAs
    
    
    Total
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    JOAs
    
    
    TotalTotal Capital Projects
    
    $
    16,845
    
    
    $
    16,076
    
    
    $
    21,548
    
    
    $
    54,469
    
    
    $
    16,621
    
    
    $
    15,015
    
    
    $
    46,379
    
    
    $
    78,015Less Minority
Partners Share
    
    
    
    
    
    
    (7,264
    )
    
    
    
    
    
    
    (7,264
    )
    
    
    
    
    
    
    (6,867
    )
    
    
    
    
    
    
    (6,867
    )$
    16,845
    
    
    $
    8,812
    
    
    $
    21,548
    
    
    $
    47,205
    
    
    $
    16,621
    
    
    $
    8,148
    
    
    $
    46,379
    
    
    $
    71,148
  The Salt Lake Tribune
 Liquidity
  29




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##### Table of Contents



The
Monterey County Herald The Monterey County Herald
    Distributions from Partnerships
  
    
    Through our wholly-owned subsidiary, Kearns-Tribune, LLC, we own a 58% interest in the
Salt Lake City JOA. Under the agreement, 58% of the Salt Lake City JOAs net income (subject
to certain small adjustments), less their working capital needs and other minor adjustments,
is paid to Kearns-Tribune, LLC and is distributed (generally) weekly.
    
    Through our wholly-owned subsidiary, The Denver Post Corporation, we own 50% of The
Denver Newspaper Agency, LLP. Under the Denver Newspaper Agency JOA agreement, the
partnership is required to distribute 50% of
 30




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##### Table of Contents



its monthly EBITDA (and other funds available for distribution), less working capital
required by the partnership and payments under its separate credit agreements, to The Denver
Post Corporation.
 
    
    Through our wholly-owned subsidiary, The Detroit News, Inc., we own a limited partnership
interest in Detroit Newspaper Partnership, L.P. Under the Detroit JOA agreement, the
partnership is required to make fixed preferred distributions to us monthly, as well as
reimburse us for our news and editorial costs. The fixed preferred distributions are as
follows: $5.0 million for years 2006 and 2007; $4.0 million for years 2008 and 2009; $3.0
million for years 2010 and 2011; $2.0 million for the year 2012; and $1.9 million for all
remaining years. Beginning in 2009, we may receive incremental distributions based on
profit growth of the Detroit JOA.
    
    Through our wholly-owned subsidiary, West Coast MediaNews LLC, we own a 54.23% interest
in the California Newspapers Partnership (CNP). Under the terms of the partnership
agreement, we are entitled to monthly distributions of the partnerships EBITDA in
proportion to our partnership interest, less working capital required and debt service
payments (total CNP debt, excluding the debt and capital lease we contributed to the
partnership, is $0.9 million at June 30, 2007 of which our share is $0.5 million).
    
    Through our wholly-owned subsidiary, New Mexico-Texas MediaNews LLC, we own a 59.4%
interest in the Texas-New Mexico Newspapers Partnership. Pursuant to the partnership
agreement, the partnership management committee is required to determine the amount of
earnings (before depreciation and amortization) or other partnership funds available for
distribution for each accounting period and distribute (generally monthly) 59.4% of such
funds to New Mexico-Texas MediaNews LLC.
    
    Through our wholly-owned subsidiary, Eastern Colorado Publishing Company, we own 50% of
the Prairie Mountain Publishing Company. Under the Prairie Mountain Publishing Company
partnership agreement, monthly distributions equal to 50% of EBITDA (and other funds
available for distribution), less working capital required by the partnership, are required
to be made to Eastern Colorado Publishing Company.
    
    In March 2007, in connection with Hearsts acquisition of The News-Timesin Danbury,
Connecticut, we entered into a management agreement with Hearst regarding The News-Times.
Under the agreement, distributions are to be made monthly, and we are entitled to 73% of the
distributions, increased for management fees to be paid by Hearst to us, and adjusted so
that each partner retains 100% of the proceeds related to the disposition of its contributed
assets (if any dispositions occur during the period).
 Off-Balance Sheet Arrangements
  Contractual Obligations
  Less than
    
    
    
    
    
    
    
    
    
    
    More thanTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    5 Years(Dollars in thousands)Long-Term Debt
    
    $
    1,118,870
    
    
    $
    17,343
    
    
    $
    208,343
    
    
    $
    106,108
    
    
    $
    787,076Capital Lease Obligations, Net of
Imputed Interest
    
    
    5,763
    
    
    
    245
    
    
    
    579
    
    
    
    720
    
    
    
    4,219Operating Leases
    
    
    61,089
    
    
    
    11,207
    
    
    
    16,872
    
    
    
    10,462
    
    
    
    22,548Purchase Obligations(1)
    
    
    83,733
    
    
    
    42,608
    
    
    
    26,064
    
    
    
    3,507
    
    
    
    11,554Other Long-Term Liabilities Reflected on
the Balance Sheet under GAAP
    
    
    25,509
    
    
    
    
    
    
    
    1,991
    
    
    
    2,032
    
    
    
    21,486Total
    
    $
    1,294,964
    
    
    $
    71,403
    
    
    $
    253,849
    
    
    $
    122,829
    
    
    $
    846,883
 (1)
    
    Purchase obligations primarily include commitments to
purchase newsprint. One of our newsprint contracts requires us to
purchase newsprint at market. For purposes of this disclosure we used
the market price as of June 2007. It is difficult to predict the
price of newsprint over the term of the contract.
 31




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##### Table of Contents



Near Term Outlook
 Newsprint Prices
  Recently Issued Accounting Standards
  32




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##### Table of Contents



Reconciliation of GAAP and Non-GAAP Financial Information
  Reconciliation of Cash Flows from Operating Activities (GAAP measure) to Adjusted EBITDA (non-GAAP
measure).
 Years Ended June 30,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003(Dollars in thousands)NON-GAAP FINANCIAL DATA(a)Cash Flows from Operating Activities (GAAP measure)
    
    $
    144,864
    
    
    $
    77,257
    
    
    $
    92,944
    
    
    $
    80,174
    
    
    $
    89,759Net Change in Operating Assets and Liabilities
    
    
    (70,132
    )
    
    
    (4,132
    )
    
    
    25,678
    
    
    
    20,126
    
    
    
    8,619Distributions of Net Income Paid to Minority Interest
    
    
    57,851
    
    
    
    35,033
    
    
    
    28,167
    
    
    
    32,457
    
    
    
    38,765Distributions of Net Income from Unconsolidated JOAs
    
    
    (39,535
    )
    
    
    (44,120
    )
    
    
    (71,878
    )
    
    
    (66,828
    )
    
    
    (66,326
    )Distributions of Net Income from Equity Investments
    
    
    (1,723
    )
    
    
    (5,228
    )
    
    
    (9,511
    )
    
    
    (9,676
    )
    
    
    (4,360
    )Interest Expense
    
    
    82,388
    
    
    
    55,564
    
    
    
    49,481
    
    
    
    57,036
    
    
    
    64,252Bad Debt Expense
    
    
    (12,091
    )
    
    
    (9,893
    )
    
    
    (8,065
    )
    
    
    (7,405
    )
    
    
    (9,632
    )Pension Expense, Net of Cash Contributions
    
    
    4,205
    
    
    
    (2,427
    )
    
    
    (1,463
    )
    
    
    (1,082
    )
    
    
    (31
    )Direct Costs of the Unconsolidated JOAs, Incurred
Outside of the Unconsolidated JOAs(b)
    
    
    44,096
    
    
    
    46,318
    
    
    
    44,286
    
    
    
    42,352
    
    
    
    39,226Net Cash Related to Other (Income), Expense
    
    
    10,699
    
    
    
    8,963
    
    
    
    4,807
    
    
    
    5,255
    
    
    
    9,675Adjusted EBITDA
    
    
    220,622
    
    
    
    157,335
    
    
    
    154,446
    
    
    
    152,409
    
    
    
    169,947Minority Interest in Adjusted EBITDA
    
    
    (80,004
    )
    
    
    (46,541
    )
    
    
    (41,152
    )
    
    
    (45,747
    )
    
    
    (49,089
    )Combined Adjusted EBITDA of Unconsolidated JOAs
    
    
    26,509
    
    
    
    27,909
    
    
    
    38,097
    
    
    
    39,842
    
    
    
    40,371EBITDA of Texas-New Mexico Newspapers Partnership
and Prairie Mountain Publishing
Company(c)
    
    
    1,891
    
    
    
    5,681
    
    
    
    9,610
    
    
    
    10,108
    
    
    
    3,275Adjusted EBITDA Available to Company
    
    $
    169,018
    
    
    $
    144,384
    
    
    $
    161,001
    
    
    $
    156,612
    
    
    $
    164,504
 
  (a)
    
    Non-GAAP Financial Data.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, the
Texas-New Mexico Newspapers Partnership (beginning December 26, 2005), The Denver Post
Corporation (through June 10, 2005) and The York Newspaper Company (through April 30, 2004),
our less than 100% owned consolidated subsidiaries as well as the Connecticut newspapers
(beginning March 30, 2007) (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 through May 7, 2004, Charleston (Combined
Adjusted EBITDA of Unconsolidated JOAs); and (iii) increasing Adjusted EBITDA by our
proportionate share of EBITDA of the Texas-New Mexico Newspapers Partnership (through December
25, 2005) and our proportionate share of EBITDA of the Prairie Mountain Publishing Company
(beginning February 1, 2006) (see footnote (c)).(b)
    
    Direct Costs of Unconsolidated JOAs.Direct Costs of the Unconsolidated JOAs, Incurred
Outside of the Unconsolidated JOAs includes the editorial costs, publishing related revenues,
and other direct costs incurred outside of the JOAs by our consolidated subsidiaries
associated with The Salt Lake Tribune, The Denver Post, and through May 7, 2004, the
Charleston Daily Mail,but excludes depreciation and amortization and other expense not
related to continuing operations as these costs are not included in Adjusted EBITDA. See Note
3: Joint Operating Agencies in the footnotes to our consolidated financial statements for
further description and analysis of this adjustment.(c)
    
    The Texas-New Mexico Newspapers Partnership and Prairie Mountain Publishing Company.The
Texas-New Mexico Newspapers Partnership agreement, effective March 3, 2003, and the Prairie
Mountain Publishing Company agreement, effective February 1, 2006, require the partnerships to
make distributions equal to the earnings of the partnership before depreciation and
amortization (EBITDA). From March 3, 2003 through December 25, 2005, our 33.8% share of the
EBITDA of Texas-New Mexico Newspapers Partnership and, beginning February 1, 2006, our 50%
share of the EBITDA of Prairie Mountain Publishing Company have been included in Adjusted
EBITDA Available to Company as they are an integral part of our cash flows from operations as
defined by our debt covenants. Beginning December 26, 2005, we became the controlling partner
of the Texas-New Mexico Newspapers Partnership at which time we began consolidating its
results. See Note 4: Investments in California Newspapers Partnership and Texas-New Mexico
Newspapers Partnership and Note 5: Acquisitions, Dispositions and Other Transactions of the
notes to the consolidated financial statements of this Form 10-K for further discussion of the
Texas-New Mexico Newspapers Partnership restructuring and the Prairie Mountain Publishing
Company formation.
 33




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##### Table of Contents



Reconciliation of Cash Flows from Operating Activities (GAAP measure) to Adjusted EBITDA presented
on a pro-rata consolidated basis (non-GAAP measure).
 Years Ended June 30,2007
    
    
    2006
    
    
    2005(Dollars in thousands)NON-GAAP FINANCIAL DATA(a)Cash Flows from Operating Activities (GAAP measure)
    
    $
    144,864
    
    
    $
    77,257
    
    
    $
    92,944Net Change in Operating Assets and Liabilities
    
    
    (70,132
    )
    
    
    (4,132
    )
    
    
    25,678Distributions of Net Income Paid to Minority Interest
    
    
    57,851
    
    
    
    35,033
    
    
    
    28,167Distributions of Net Income from Unconsolidated JOAs
    
    
    (39,535
    )
    
    
    (44,120
    )
    
    
    (71,878
    )Distributions of Net Income from Equity Investments
    
    
    (1,723
    )
    
    
    (5,228
    )
    
    
    (9,511
    )Interest Expense
    
    
    82,388
    
    
    
    55,564
    
    
    
    49,481Bad Debt Expense
    
    
    (12,091
    )
    
    
    (9,893
    )
    
    
    (8,065
    )Pension Expense, Net of Cash Contributions
    
    
    4,205
    
    
    
    (2,427
    )
    
    
    (1,463
    )Direct Costs of the Unconsolidated JOAs, Incurred Outside of the JOAs(c)
    
    
    44,096
    
    
    
    46,318
    
    
    
    44,286Combined Adjusted EBITDA of Unconsolidated JOAs(b)
    
    
    26,509
    
    
    
    27,909
    
    
    
    38,097Net Cash Related to Other (Income), Expense
    
    
    10,699
    
    
    
    8,963
    
    
    
    4,807Adjusted EBITDA
    
    
    247,131
    
    
    
    185,244
    
    
    
    192,543Minority Interest in Adjusted EBITDA
    
    
    (80,004
    )
    
    
    (46,541
    )
    
    
    (41,152
    )EBITDA of Texas-New Mexico Newspapers Partnership and Prairie Mountain Publishing
Company(d)
    
    
    1,891
    
    
    
    5,681
    
    
    
    9,610Adjusted EBITDA Available to Company
    
    $
    169,018
    
    
    $
    144,384
    
    
    $
    161,001
 
  (a)
    
    Non-GAAP Financial Data.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 condensed 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 minority interest in the Adjusted EBITDA generated from the California Newspapers
Partnership and the Texas-New Mexico Newspapers Partnership (beginning December 26, 2005),
our less than 100% owned consolidated subsidiaries, as well as the Connecticut newspapers
(beginning March 30, 2007) (Minority Interest in Adjusted EBITDA); (ii) increasing Adjusted
EBITDA by our proportionate share of EBITDA of the Texas-New Mexico Newspapers Partnership
(through December 25, 2005) and our proportionate share of the EBITDA of the Prairie Mountain
Publishing Company (beginning February 1, 2006) (see footnote (d)). Note that pro-rata
consolidation already takes into account our proportionate share of the results from our
unconsolidated JOAs (Denver and Salt Lake City).(b)
    
    Combined Adjusted EBITDA of Unconsolidated JOAs.Calculated by deducting cost of sales and
SG&A expense from total revenues from the Unconsolidated JOAs Pro-Rata Adjustment column
presented under  Reconciliation of Income Statement Data presented on a historical GAAP
basis to Non-GAAP Income Statement Data presented on a pro-rata consolidation basis.(c)
    
    Direct Costs of the Unconsolidated JOAs Incurred Outside of the Unconsolidated JOA.
Includes the editorial costs, revenues received outside of the JOA, depreciation,
amortization, and other direct costs incurred outside of the JOAs by our consolidated
subsidiaries associated with The Salt Lake Tribuneand The Denver Post. See Note 1:
Significant Accounting Policies and Other Matters  Joint Operating Agencies and Note 3:
Denver and Salt Lake City Joint Operating Agencies in the notes to our condensed consolidated
financial statements for further description and analysis of this adjustment.(d)
    
    EBITDA of Texas-New Mexico Newspapers Partnership and Prairie Mountain Publishing Company.
The Texas-New Mexico Newspapers Partnership and Prairie Mountain Publishing Company
agreements require the partnerships to make distributions equal to the earnings of the
partnership before depreciation and amortization (EBITDA). Through December 25, 2005, our
33.8% share of the EBITDA of Texas-New Mexico Newspapers Partnership and beginning
February 1, 2006, our 50% share of Prairie Mountain Publishing Company, have been included in
Adjusted EBITDA Available to Company, as they are an integral part of our cash flows from
operations as defined by our debt covenants.
 34




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##### Table of Contents



Reconciliation of Income Statement Data presented on a historical GAAP basis to Non-GAAP Income
Statement Data presented on a pro-rata consolidation basis.
  Year Ended June 30, 2007Unconsolidated
    
    
    As Presented onAs Presented
    
    
    JOAs Pro-Rata
    
    
    a Pro-RataUnder GAAP
    
    
    Adjustment(1)
    
    
    BasisTotal Revenues
    
    $
    1,329,840
    
    
    $
    283,148
    
    
    $
    1,612,988Income from Unconsolidated JOAs
    
    
    (10,418
    )
    
    
    10,418
    
    
    
    Cost of Sales
    
    
    421,343
    
    
    
    111,965
    
    
    
    533,308Selling, General and Administrative
    
    
    687,875
    
    
    
    144,674
    
    
    
    832,549Depreciation and Amortization
    
    
    68,670
    
    
    
    29,591
    
    
    
    98,261Interest Expense
    
    
    82,388
    
    
    
    2,311
    
    
    
    84,699Other (Income) Expense, Net
    
    
    11,223
    
    
    
    3,935
    
    
    
    15,158Total Costs and Expenses
    
    
    1,271,499
    
    
    
    292,476
    
    
    
    1,563,975Gain on Sale of Assets and
Newspaper Properties
    
    
    66,156
    
    
    
    (1,090
    )
    
    
    65,066Minority Interest
    
    
    (59,557
    )
    
    
    
    
    
    
    (59,557
    )Net Income
    
    
    35,642
    
    
    
    
    
    
    
    35,642Adjusted EBITDA(2)
    
    $
    220,622
    
    
    $
    26,509
    
    
    $
    247,131
 Year Ended June 30, 2006Unconsolidated
    
    
    As Presented onAs Presented
    
    
    JOAs Pro-Rata
    
    
    a Pro-RataUnder GAAP
    
    
    Adjustment(1)
    
    
    BasisTotal Revenues
    
    $
    835,876
    
    
    $
    296,547
    
    
    $
    1,132,423Loss from Unconsolidated JOAs
    
    
    (23,298
    )
    
    
    23,298
    
    
    
    Cost of Sales
    
    
    260,939
    
    
    
    120,824
    
    
    
    381,763Selling, General and Administrative
    
    
    417,602
    
    
    
    147,814
    
    
    
    565,416Depreciation and Amortization
    
    
    44,067
    
    
    
    48,194
    
    
    
    92,261Interest Expense
    
    
    55,564
    
    
    
    263
    
    
    
    55,827Other (Income) Expense, Net
    
    
    1,440
    
    
    
    2,750
    
    
    
    4,190Total Costs and Expenses
    
    
    779,612
    
    
    
    319,845
    
    
    
    1,099,457Gain on Sale of Newspaper Properties
    
    
    1,129
    
    
    
    
    
    
    
    1,129Minority Interest
    
    
    (35,033
    )
    
    
    
    
    
    
    (35,033
    )Net Income
    
    
    1,077
    
    
    
    
    
    
    
    1,077Adjusted EBITDA(2)
    
    $
    157,335
    
    
    $
    27,909
    
    
    $
    185,244
 35




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##### Table of Contents



Year Ended June 30, 2005Unconsolidated
    
    
    As Presented onAs Presented
    
    
    JOAs Pro-Rata
    
    
    a Pro-RataUnder GAAP
    
    
    Adjustment(1)
    
    
    BasisTotal Revenues
    
    $
    779,279
    
    
    $
    302,475
    
    
    $
    1,081,754Income from Unconsolidated JOAs
    
    
    23,291
    
    
    
    (23,291
    )
    
    
    Cost of Sales
    
    
    242,653
    
    
    
    119,803
    
    
    
    362,456Selling, General and Administrative
    
    
    382,180
    
    
    
    144,575
    
    
    
    526,755Depreciation and Amortization
    
    
    40,598
    
    
    
    13,423
    
    
    
    54,021Interest Expense
    
    
    49,481
    
    
    
    198
    
    
    
    49,679Other (Income) Expense, Net
    
    
    8,669
    
    
    
    1,185
    
    
    
    9,854Total Costs and Expenses
    
    
    723,581
    
    
    
    279,184
    
    
    
    1,002,765Minority Interest
    
    
    (29,334
    )
    
    
    
    
    
    
    (29,334
    )Net Income
    
    
    39,880
    
    
    
    
    
    
    
    39,880Adjusted EBITDA(2)
    
    $
    154,446
    
    
    $
    38,097
    
    
    $
    192,543
 
 (1)
    
    Unconsolidated JOAs Pro-Rata Adjustment.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 the Salt Lake City JOA
is 58%, while our interest in the Denver Newspaper Agency is 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 Tribuneand The Denver Post. 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.(2)
    
    Adjusted EBITDA.Adjusted EBITDA is a non-GAAP measure.
 36




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##### Table of Contents



Item 7A: Quantitative and Qualitative Disclosures About Market Risk
   Interest Rate Sensitivity
Principal or Notional Amount by Expected Maturity
Average Interest or Swap Rate
 Fair ValueYears Ended June 30,
    
    
    
    
    
    
    
    
    
    
    20072008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    Thereafter
    
    
    Total
    
    
    (Liability)(Dollars in thousands)LiabilitiesLong-Term Debt including Current
PortionFixed Rate
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    447,156
    
    
    $
    447,156
    
    
    $
    382,900Average Interest Rate
    
    
    9.90
    %
    
    
    9.90
    %
    
    
    9.90
    %
    
    
    9.90
    %
    
    
    9.90
    %
    
    
    9.90
    %Variable Rate
    
    $
    14,973
    
    
    $
    29,973
    
    
    $
    174,754
    
    
    $
    98,817
    
    
    $
    3,500
    
    
    $
    329,000
    
    
    $
    651,017
    
    
    $
    651,017Average Interest Rate(c)
    
    
    7.39
    %
    
    
    7.39
    %
    
    
    7.39
    %
    
    
    7.39
    %
    
    
    7.39
    %
    
    
    7.39
    %Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,098,173
    (a)
 
 (a)
    
    The long-term debt (including current portion) of $1,098.2 million from the Market
Risk table above differs from total long-term debt of $1,118.9 million reported in Note
6: Long-Term Debt of the notes to the consolidated financial statements due to the
following (in millions):
 $
    1,098.2
    
    
    Balance per table above20.7
    
    
    (b)$
    1,118.9
    
    
    Total per Note 6: Long-Term Debt
 (b)
    
    Relates to various notes payable due through 2013. 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.(c)
    
    Reflects our September 17, 2007 amended credit facility, which, among other things,
increased borrowing margins. See Note 17: Subsequent Events of the notes to the
consolidated financial statements for further discussion.
 37




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##### Table of Contents



DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
 Private
Securities Litigation Reform Act of 1995.
 38




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##### Table of Contents



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
   
 Item 9B: Other Information
  39




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##### Table of Contents



PART III
 
 Item 10: Directors, Executive Officers and Corporate Governance
  Name
    

Age
    

TitleRichard B. Scudder
    
    
    94
    
    
    Chairman of the Board and DirectorWilliam Dean Singleton
    
    
    56
    
    
    Vice Chairman and Chief Executive Officer and DirectorJoseph J. Lodovic, IV
    
    
    46
    
    
    PresidentSteven B. Rossi
    
    
    58
    
    
    Executive Vice President and Chief Operating OfficerAnthony F. Tierno
    
    
    62
    
    
    Senior Vice President of OperationsMichael R. Petrak
    
    
    49
    
    
    Senior Vice President MarketingStephen M. Hesse
    
    
    59
    
    
    Senior Vice President CirculationDavid J. Butler
    
    
    57
    
    
    Vice President NewsRonald A. Mayo
    
    
    46
    
    
    Vice President and Chief Financial OfficerJames L. McDougald
    
    
    54
    
    
    TreasurerMichael J. Koren
    
    
    40
    
    
    Vice President and ControllerCharles M. Kamen
    
    
    59
    
    
    Vice President Human ResourcesDavid M. Bessen
    
    
    53
    
    
    Vice President and Chief Information OfficerPatricia Robinson
    
    
    65
    
    
    SecretaryJean L. Scudder
    
    
    53
    
    
    DirectorHowell E. Begle, Jr.
    
    
    63
    
    
    Director
 .
 Business Experience
 Richard B. Scudder
 William Dean Singleton The Denver Post The Salt Lake Tribune
 Joseph J. Lodovic, IV
 Steven B. Rossi
 Anthony F. Tierno
 Michael R. Petrak Idaho Statesman
 40




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##### Table of Contents



Stephen M. Hesse
 David J. Butler The Detroit News. Daily News
 Ronald A. Mayo
 James L. McDougald
 Michael J. Koren
 Charles M. Kamen
 David M. Bessen
 Patricia Robinson
 Jean L. Scudder
 Howell E. Begle, Jr.
 Audit Committee Financial Expert
  Code of Ethics
  
 Item 11: Executive Compensation
 Compensation Discussion and Analysis
 Overview
  41




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##### Table of Contents



Compensation Objectives
 Performance
 
    
    An annual cash bonus that is based on an assessment of the executives performance
against pre-determined quantitative and qualitative measures within the context of the
Companys overall performance;
    
    equity incentive compensation in the form of RSUs, the value of which is contingent
upon the long-term performance of MediaNews; and
    
    a supplemental retirement plan, under which company contributions are dependent upon
the achievement of Company performance objectives.
  Retention.
 
    
    the extended vesting terms on our RSU Plan, requiring a minimum of 20 years of
service or a combined age and service equal to 72 years, with five years as a plan
participant;
    
    our supplemental retirement plan, under which company contributions vest over 10
years with zero vesting in the first three years; and
    
    our retiree medical program which requires three years of participation combined
with the executives age and years of service equal 70 before becoming eligible for the
benefit;
 Implementing Our Objectives
 Determining Compensation.
 
    
    key financial measurements such as revenue growth, operating profit growth,
operating margins, and cash flow from operating activities;
    
    strategic objectives such as acquisitions, dispositions, joint ventures,
partnerships and technological innovation;
    
    achieving specific operational goals for the Company or a particular group of
newspapers by the named executive, including attracting and retaining both circulation
and advertising customers, improving productivity, process simplification, and managing
enterprise risk; and
 42




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##### Table of Contents




    
    achieving goals within their organizational structure such as clustering and
consolidation of operations to improve cost management and grow revenues.
  Forms of Compensation
 Employment and Other Agreements
   43




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##### Table of Contents



44




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##### Table of Contents



Salary
  Annual Bonus
 MBO Plan.
 August 2, 2006 Acquisition Bonuses. Contra Costa Times San Jose Mercury News The
Monterey County Herald Pioneer Press
 Other Compensation
 Career Restricted Stock Unit Plan (RSU Plan).
 
    
    the earlier of (x) the completion of 20 years of continuous service with us or our
affiliates or (y) attainment of age 67 while still employed by us or our affiliates; or
    
    the date on which the participant (a) has completed at least five years of participation
in the RSU Plan and (b) has a combined age and years of continuous service with us or our
affiliates of at least 72.
   45




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##### Table of Contents



Supplemental Executive Retirement Plan.
 
    
    Deferred Compensation.The deferred compensation component allows participants to defer
a portion (up to 100%) of their salary and bonuses on a pre-tax basis. There is no company
match on these deferrals. Deferred amounts are credited with a return based on notional
investment elections made by the individual participants from among a menu of funds offered
under the plan. All of the available investment funds are generally available to the
investing public. Amounts deferred by the participant are always fully vested. Deferrals
are paid out upon termination of employment, and at the election of the participant are
paid in the form of a lump sum or installment payments.
    
    Supplemental Retirement.The supplemental retirement component consists of company
contributions. These contributions are made solely at the discretion of the Company, but
only if our actual profits attain budgeted profit goals for the fiscal year.Company
contributions are subject to ratable vesting, generally over ten years from the date of
participation in the plan. Earnings on such company contributions to this plan accrue at
the same rate of interest as paid on our bank revolving credit facility. These amounts are
subject to the same payout election as the elective deferred compensation amounts discussed
above. No company contributions were made for fiscal 2007 as we did not attain the
budgeted profit goals for the year.In addition, prior to the adoption of the SERP plan Mr. Tierno participated in another
nonqualified deferred compensation plan we sponsor which is offered to certain of the
publishers of our newspapers. The deferrals include a company match, in which Mr. Tierno is
fully vested. Deferred amounts are credited with a return based on notional investment
elections made by the individual participants from among a menu of funds offered under the
plan. All of the available investment funds are generally available to the investing
public. Deferrals are paid out upon termination of employment, and at the election of the
participant are in the form of a lump sum or installment payment.
    
    Retiree Medical.As a component of the SERP, the MediaNews Group, Inc. Retiree Medical
Benefits Plan provides for full health care coverage during retirement for certain of our
eligible corporate executives and their spouses. In order to be eligible for benefits under
this plan, an executive must have a combined age and years of service of 70, with at least
three years of participation in the plan.
 Other Compensation.
 46




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##### Table of Contents



COMPENSATION TABLES
 SUMMARY COMPENSATION TABLE
 Change inPension Valueand Non-QualifiedNon-Equity
    
    
    DeferredStock
    
    
    Incentive Plan
    
    
    Compensation
    
    
    All OtherName and Principal
    
    
    Fiscal
    
    
    Salary(a)
    
    
    Bonus(b)
    
    
    Awards(c)
    
    
    Compensation(d)
    
    
    Earnings(e)
    
    
    Compensation(f)
    
    
    TotalPosition
    
    
    Year
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)W. Dean Singleton, Vice
Chairman and
CEO
    
    
    
    2007
    
    
    
    
    1,061,250
    
    
    
    
    
    
    
    
    
    309,736
    
    
    
    
    100,000
    
    
    
    
    1,842
    
    
    
    
    180,489
    
    
    
    
    1,653,317Joseph J. Lodovic, IV
President
    
    
    
    2007
    
    
    
    
    722,100
    
    
    
    
    1,000,000
    
    
    
    
    190,696
    
    
    
    
    100,000
    
    
    
    
    1,267
    
    
    
    
    105,213
    
    
    
    
    2,119,276Steven B. Rossi,
Executive Vice
President

and COO
    
    
    
    2007
    
    
    
    
    499,585
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    120,000
    
    
    
    
    
    
    
    
    
    68,432
    
    
    
    
    688,017Anthony F. Tierno,
Senior Vice President

of
Operations
    
    
    
    2007
    
    
    
    
    385,149
    
    
    
    
    50,000
    
    
    
    
    302,040
    
    
    
    
    60,000
    
    
    
    
    147
    
    
    
    
    36,401
    
    
    
    
    833,737Ronald A. Mayo, Vice
President and CFO
    
    
    
    2007
    
    
    
    
    287,100
    
    
    
    
    225,000
    
    
    
    
    24,733
    
    
    
    
    100,000
    
    
    
    
    449
    
    
    
    
    24,897
    
    
    
    
    662,179Gerald E. Grilly,
former Executive Vice

President
and COO (*)
    
    
    
    2007
    
    
    
    
    104,167
    
    
    
    
    150,000
    
    
    
    
    10,836
    
    
    
    
    
    
    
    
    
    129
    
    
    
    
    1,499,794
    
    
    
    
    1,764,926
 
        47




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##### Table of Contents



GRANTS
OF PLAN-BASED AWARDS  FY 2007
 MBO Plan and Performance-Based Bonus Under Employment Agreements
 Name
    
    
    Estimated Future Payouts Under Non-Equity Incentive Plan AwardsThreshold ($)
    
    
    
    Target ($)
    
    
    Maximum ($)W. Dean Singleton
    
    
    
    100,000
    
    
    
    
    450,000
    
    
    
    
    500,000Joseph J. Lodovic, IV
    
    
    
    100,000
    
    
    
    
    350,000
    
    
    
    
    400,000Steven B. Rossi
    
    
    
    18,750
    
    
    
    
    250,000
    
    
    
    
    250,000Anthony F. Tierno
    
    
    
    15,000
    
    
    
    
    150,000
    
    
    
    
    150,000Ronald A. Mayo
    
    
    
    20,000
    
    
    
    
    100,000
    
    
    
    
    100,000Gerald E. Grilly
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 RSU Plan
 All Other StockAwards:
    
    
    Grant DateNumber of Shares of
    
    
    Fair Value ofName
    
    
    Grant Date
    
    
    Stock or Units
    
    
    Award(a)(#)
    
    
    ($)W. Dean Singleton
    
    
    August 28, 2006
    
    
    
    2,000
    
    
    
    
    484,000Joseph J. Lodovic, IV
    
    
    August 28, 2006
    
    
    
    1,250
    
    
    
    
    302,500Steven B. Rossi
    
    
    NA
    
    
    
    
    
    
    
    
    Anthony F. Tierno
    
    
    August 28, 2006
    
    
    
    450
    
    
    
    
    108,900Ronald A. Mayo
    
    
    August 28, 2006
    
    
    
    300
    
    
    
    
    72,600Gerald E. Grilly
    
    
    NA
    
    
    
    
    
    
    
    
    
   OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2007
 Stock Awards  RSU PlanNumber of Shares or
    
    
    Market Value of SharesUnits of Stock That
    
    
    or Units of Stock ThatHave Not Vested
    
    
    Have Not Vested(a)Name
    
    
    (#)
    
    
    ($)W. Dean Singleton
    
    
    
    3,613
    
    
    
    
    451,625Joseph J. Lodovic, IV
    
    
    
    2,218
    
    
    
    
    277,250Steven B. Rossi
    
    
    
    
    
    
    
    
    Anthony F. Tierno
    
    
    
    4,040
    
    
    
    
    505,000Ronald A. Mayo
    
    
    
    515
    
    
    
    
    64,375Gerald E. Grilly(b)
    
    
    
    
    
    
    
    
    
 (a)
    
    All of these awards were granted under our RSU Plan, either in
fiscal 2006 or 2007. We are a privately held company and, as such, the
amount reported above as year-end market value of RSUs that have not
vested was calculated under the valuation formula contained in the RSU
plan document.(b)
    
    A portion of Mr. Grillys RSUs became vested and the rest were
forfeited as a result of the termination of his employment.
 48




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##### Table of Contents



OPTION EXERCISES AND STOCK VESTED  Fiscal Year 2007Stock AwardsName
    
    
    Number of Shares
    
    
    Value Realized onAcquired on Vesting (#)
    
    
    Vesting ($)Gerald E. Grilly(a)
    
    
    
    218
    
    
    
    
    73,538
 (a)
    
    Reflects the portion of Mr. Grillys RSUs that vested upon his
termination of employment, as provided under the RSU Plan. The Value
Realized on Vesting was calculated as of the measurement date under the
plan applicable to his termination of employment using the methodology in
the RSU plan document. No other named executives became vested in any
RSUs during fiscal 2007.
 NONQUALIFIED
DEFERRED COMPENSATION  Fiscal Year 2007
 Executive
    
    
    Registrant
    
    
    Aggregate
    
    
    Aggregate
    
    
    AggregateContributions in
    
    
    Contributions in
    
    
    Earnings in
    
    
    Withdrawals/
    
    
    Balance at LastName
    
    
    Last FY(a)
    
    
    Last FY(b)
    
    
    Last FY(c)
    
    
    Distributions
    
    
    FYE(d)($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)W. Dean Singleton
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,097
    
    
    
    
    
    
    
    
    
    147,617Joseph J. Lodovic, IV
    
    
    
    
    
    
    
    
    14,651
    
    
    
    
    17,734
    
    
    
    
    
    
    
    
    
    177,862Steven B. Rossi
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Anthony F. Tierno
    
    
    
    58,089
    
    
    
    
    4,953
    
    
    
    
    156,202
    
    
    
    
    
    
    
    
    
    1,096,348Ronald A. Mayo
    
    
    
    3,049
    
    
    
    
    1,626
    
    
    
    
    14,441
    
    
    
    
    
    
    
    
    
    115,831Gerald E. Grilly
    
    
    
    6,250
    
    
    
    
    
    
    
    
    
    13,922
    
    
    
    
    (498,991
    )
    
    
    
    
 (a)
    
    All of these amounts are included as salary in the Summary Compensation Table.(b)
    
    Includes contributions to the named executives salary accounts to make up for contribution
limitations on employer 401(K) matching contributions.(c)
    
    Includes amounts shown in the Summary Compensation Table in the column labeled Change in Pension
Value and on-Qualified Deferred Compensation Earnings.(d)
    
    Includes the following amounts shown in the Summary Compensation Table: Mr. Singleton $1,842; Mr.
Lodovic $1,267; Mr. Tierno $58,236; and Mr. Mayo $3,498.
  Potential Payments Upon Termination
  Employment Agreements
  Career Restricted Stock Unit Plan (RSU Plan).
  49




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##### Table of Contents



(1)
 Continuation
    
    
    
    
    
    
    
    Acceleratedof Medical /
    
    
    
    
    
    
    
    Vesting ofWelfare
    
    
    Accelerated
    
    
    Employer Portion
    
    
    Death andCash
    
    
    Benefits
    
    
    Vesting of
    
    
    of Deferred
    
    
    Long-Term
    
    
    
    
    
    
    
    TotalSeverance
    
    
    (present
    
    
    Equity
    
    
    Compensation
    
    
    Disability
    
    
    Excise Tax
    
    
    TerminationPayment (2)
    
    
    value) (3)
    
    
    Awards (4)
    
    
    Award (5)
    
    
    Benefits(6) & (7)
    
    
    Gross-Up
    
    
    Benefits($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)W. Dean SingletonVoluntary Resignation
    
    
    
    
    
    
    
    
    342,283
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    342,283Retirement
    
    
    
    
    
    
    
    
    342,283
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    342,283Death
    
    
    
    
    
    
    
    
    189,047
    
    
    
    
    180,650
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    369,697Disability
    
    
    
    
    
    
    
    
    342,283
    
    
    
    
    180,650
    
    
    
    
    
    
    
    
    
    1,047,568
    
    
    
    
    
    
    
    
    
    1.570,501Involuntary or Good Reason

Termination
    
    
    
    3,926,155
    
    
    
    
    342,283
    
    
    
    
    180,650
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,407,324
    
    
    
    
    6,856,412Involuntary or Good Reason
Termination, Change of Control
    
    
    
    5,022,528
    
    
    
    
    342,283
    
    
    
    
    451,625
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,079,565
    
    
    
    
    8,896,001Joseph J. Lodovic, IVVoluntary Resignation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Retirement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Death
    
    
    
    
    
    
    
    
    
    
    
    
    
    110,900
    
    
    
    
    37,958
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    148,858Disability
    
    
    
    
    
    
    
    
    
    
    
    
    
    110,900
    
    
    
    
    37,958
    
    
    
    
    1,047,568
    
    
    
    
    
    
    
    
    
    1,196,426Involuntary or Good Reason
Termination
    
    
    
    2,845,483
    
    
    
    
    
    
    
    
    
    110,900
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,744,709
    
    
    
    
    4,701,092Involuntary or Good Reason
Termination, Change of Control
    
    
    
    3,649,440
    
    
    
    
    
    
    
    
    
    277,250
    
    
    
    
    37,958
    
    
    
    
    
    
    
    
    
    2,237,656
    
    
    
    
    6,202,304Steven B. RossiVoluntary Resignation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Retirement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Death
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Disability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,047,568
    
    
    
    
    
    
    
    
    
    1,047,568Involuntary or Good Reason
Termination
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Change of Control
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Anthony F. TiernoVoluntary Resignation
    
    
    
    
    
    
    
    
    205,588
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    205,588Retirement
    
    
    
    
    
    
    
    
    205,588
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    205,588Death
    
    
    
    
    
    
    
    
    121,530
    
    
    
    
    202,000
    
    
    
    
    
    
    
    
    
    1,993,064
    
    
    
    
    
    
    
    
    
    2,316,594Disability
    
    
    
    
    
    
    
    
    205,588
    
    
    
    
    202,000
    
    
    
    
    
    
    
    
    
    519,674
    
    
    
    
    
    
    
    
    
    927,262Involuntary or Good Reason
Termination
    
    
    
    
    
    
    
    
    205,588
    
    
    
    
    202,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    407,588Change of Control
    
    
    
    
    
    
    
    
    205,588
    
    
    
    
    505,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    710,588Ronald A. MayoVoluntary Resignation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Retirement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Death
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,306
    
    
    
    
    17,165
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,471Disability
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,306
    
    
    
    
    17,165
    
    
    
    
    1,047,568
    
    
    
    
    
    
    
    
    
    1,079,039Involuntary or Good Reason
Termination
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,306
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,306Change of Control
    
    
    
    
    
    
    
    
    
    
    
    
    
    64,375
    
    
    
    
    17,165
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    81,540
 (1)
    
    Assumes the executives termination in each specified scenario, or the change of
control, occurred on June 30, 2007, which is the last day of our fiscal year. The table
does not include payments the executive would be entitled to receive under broad-based
plans, such as our 401(k) plan. The table does not include the vested portion of the
aggregate account balance reported in the Nonqualified Deferred Compensation table above,
but does include the portion of such account balance which is subject to accelerated
vesting upon the applicable trigger event.(2)
    
    Reflects the cash severance payment required by Messrs. Singletons and Lodovics
employment agreements, assuming their employment was terminated on June 30, 2007. We
assumed 5% salary increases through the term of the agreements, and that the maximum
eligible bonuses would be paid.
  50




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##### Table of Contents



(3)
    
    Reflects the vested post-retirement benefits as of June 30, 2007 for the named
executives. Only Messrs. Singleton and Tierno are vested in such benefits as of June 30,
2007.(4)
    
    Reflects the value of RSUs whose vesting is accelerated on the termination of
employment, based on the fair market value (as determined under the RSU Plan) on June 30,
2007. The total payout associated with the RSUs would be the combination of previously
vested amounts and the accelerated vesting shown in the table above.(5)
    
    Reflects the value of the employer portion of deferred compensation awards whose
vesting is accelerated on the termination of employment, based on the fair market value on
June 30, 2007. The total payout associated with the deferred compensation balances would be
the combination of employee deferrals and earnings thereon (always 100% vested), previously
vested employer contribution amounts and earnings thereon, and the accelerated vesting
shown in the table above.(6)
    
    We offer long-term disability benefits to certain of our executive officers, including
the named executives. The estimated benefits presented above (calculated as of June 30,
2007) represent the present value the long-term disability payments over the shorter of the
length of time until the named executive becomes eligible for social security benefits or
the actuarially determined expected length of long-term disability.(7)
    
    We have split dollar life insurance policies on behalf of Mr. Tierno. Upon Mr. Tiernos
death, we would receive $872,980 in proceeds, and Mr. Tiernos estate would receive a
payment of $1,993,064.
 Board of Directors  Compensation
  Compensation Committee Interlocks and Insider Participation
  Compensation Committee Report
    
 Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Shareholder
Matters
  51




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##### Table of Contents



Amount and Nature of
    
    Percentage ofBeneficial Ownership(a)
    
    Ownership ofClass A Common Stock
    
    Class A Common StockWilliam Dean Singleton(b),(c),(l),(m)
    
    
    254,858.9900
    
    
    
    11.19
    %Howell E. Begle, Jr.(b),(d),(l),(m)
    
    
    786,426.5100
    
    
    
    34.54
    %Patricia Robinson(b),(e),(l),(m)
    
    
    786,426.5100
    
    
    
    34.54
    %Joseph J. Lodovic, IV(b),(f)
    
    
    58,199.0000
    
    
    
    2.56
    %Jean L. Scudder(g),(k)
    
    
    384,065.1200
    
    
    
    16.87
    %Charles Scudder(h),(k)
    
    
    260,321.3750
    
    
    
    11.43
    %Elizabeth H. Difani(h),(i),(k)
    
    
    197,573.4575
    
    
    
    8.68
    %Carolyn Miller(h),(j),(k)
    
    
    177,825.5475
    
    
    
    7.81
    %All directors and executives as a group(n)
    
    
    2,119,270.0000
    
    
    
    93.08
    %
 
 (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 table 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.(c)
    
    These shares are held by a revocable trust for the benefit of the children of Mr. Singleton
(the Singleton 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 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 123,743.745 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, and
daughter, Nina 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 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 held 132,299.6658 shares as trustee and/or custodian for certain of her children.
Sole voting power with respect to all 219,073.4575 shares was held by Ms. Scudder pursuant to
the Scudder Family Voting Trust Agreement. See note (g) above. After the July 13, 2007
repurchase of 21,500 shares held by Ms. Difani, Ms. Difani holds 110,799.6658 shares as
trustee and/or custodian for certain of her children, and sole voting power with respect to
197,573.4575 shares is held by Ms. Scudder.(j)
    
    Ms. Miller holds 118,550.365 shares as trustee for certain of her 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 at June 30,
2007 except Mr. Singleton, Ms. Scudder, Mr. Begle, Ms. Robinson and Mr. Lodovic.
 52




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##### Table of Contents



Scudder Family Voting Trust Agreement for MediaNews
  Singleton Family Voting Trust Agreement for MediaNews
  MediaNews Shareholders Agreement
   53




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##### Table of Contents



Equity Compensation Plan Information
  (a)
    
    
    (b)
    
    
    (c)Number of securities remainingNumber of securities to
    
    
    Weighted-average
    
    
    available for the future issuancebe issued upon exercise
    
    
    exercise price of
    
    
    under equity compensationof outstanding options,
    
    
    outstanding options,
    
    
    plans (excluding securities re-Plan Category
    
    
    warrants and rights
    
    
    warrants and rights
    
    
    flected in column (a))Equity compensation
plans approved by
security holders
    
    
    
    - 0 -
    
    
    
    $
    - 0 -
    
    
    
    
    137,581Equity compensation
plans not approved
by security holders
    
    
    
    - 0 -
    
    
    
    $
    - 0 -
    
    
    
    
    - 0 -
 
 Item 13: Certain Relationships and Related Transactions, and Director Independence
 Director Independence
  Certain Relationships and Related Transactions
   
    
    California Newspapers
Partnership  the management agreement provides for annual
management fees of $5.4 million, subject to annual adjustments based on actual costs and
the operating performance of CNP;
    
    Texas-New Mexico Newspapers Partnership provides annual management fees of $75,000,
subject to annual adjustments; and
    
    Connecticut Newspapers
 the management agreement provides management fees of $792,000
annually, subject to annual adjustments.
  54




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Approval of Transactions with Related Persons.
 
 Item 14: Principal Accountant Fees and Services
   Years Ended June 30,2007
    
    
    2006(Dollars in thousands)Audit Fees(a)
    
    $
    1,438
    
    
    $
    618Audit-Related Fees(b)
    
    
    23
    
    
    
    20Total(c)
    
    $
    1,461
    
    
    $
    638
 
 (a)
    
    Fees for professional services rendered by the auditors for the audit of our annual
financial statements and the review of our quarterly financial statements included in the
Companys filings with the Securities Exchange Commission. For fiscal year 2007, the amount includes
approximately $658,000 attributable to the audit of historical
acquiree financial statements required under Rule 3-05 of
Regulation S-X of the Securities and Exchange Commission.(b)
    
    Fees for professional services which principally include services in connection with due
diligence and consultation related to mergers and acquisitions, internal control reviews,
attest services not required by statute or regulation, and consultation concerning financial
accounting and reporting standards.(c)
    
    There were no tax or other
fees paid to Ernst & Young LLP in either year.
 55




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AVAILABLE INFORMATION
  http://www.sec.gov
 www.medianewsgroup.com
 56




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##### Table of Contents



PART IV
 
 Item 15: Exhibits and Financial Statement Schedules
 (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
Registered Public Accounting Firm is filed as a part of this Report (see page 58).2.
    
    Financial Statement ScheduleThe financial statement schedule contained in the accompanying Index to Consolidated
Financial Statements and Schedule Covered by Report of Independent Registered Public
Accounting Firm is filed as a part of this Report (see page 58).3.
    
    ExhibitsThe exhibits listed in the accompanying Index to exhibits are filed as a part of this
Annual Report (see page 58).
 57




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##### Table of Contents



MEDIANEWS GROUP, INC.
 Index to Consolidated Financial Statements and Schedule
Covered by Report of Independent Registered Public Accounting Firm
  PageReport of Independent Registered Public Accounting Firm
    
    
    59Consolidated Balance Sheets as of June 30, 2007 and 2006
    
    
    60Consolidated Statements of Operations for the Fiscal Years Ended June 30, 2007, 2006 and 2005
    
    
    62Consolidated Statements of Changes in Shareholders Equity for the Fiscal Years Ended June
30, 2007, 2006 and 2005
    
    
    63Consolidated Statements of Cash Flows for the Fiscal Years Ended June 30, 2007, 2006 and 2005
    
    
    64Notes to Consolidated Financial Statements
    
    
    65Newspaper Agency Company, LLC
    
    
    95Report of Independent Registered Accounting Firm
    
    
    97Balance Sheet June 30, 2007
    
    
    98Statement of Earnings and Members Equity for the Fiscal Year Ended June 30, 2007
    
    
    99Statement of Cash Flows for the Fiscal Year Ended June 30, 2007
    
    
    100Notes to Financial Statements
    
    
    101Newspaper Agency Corporation
    
    
    114Report of Independent Registered Public Accounting Firm
    
    
    116Balance Sheets as of June 30, 2006 (Unaudited), December 31, 2005
and 2004
    
    
    117Statements of Earnings and Retained Earnings (Accumulated Deficit) for
the Six Months Ended June 30, 2006 (Unaudited) and for the Years
Ended December 31, 2005 and 2004
    
    
    119Statements of Cash Flows for the Six Months Ended June 30, 2006
(Unaudited) and for the Years Ended December 31, 2005 and 2004
    
    
    120Notes to Financial Statements
    
    
    121
  Schedule II Valuation and Qualifying Accounts
    
    
    139
  58




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    Employers
Accounting for Defined Benefit Pension and Other Postretirement Plans  an amendment of FASB
Statements No. 87, 88, 106 and 132(R)
 /s/ ERNST & YOUNG LLPErnst & Young LLP
 
 59




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MEDIANEWS GROUP, INC. & SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 June 30,2007
    
    
    2006(Dollars in thousands)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    9,085
    
    
    $
    424Trade accounts receivable, less allowance for doubtful
accounts of $13,800 and $9,282, at June 30, 2007 and 2006,
respectively
    
    
    159,037
    
    
    
    93,705Other receivables
    
    
    15,899
    
    
    
    12,327Inventories of newsprint and supplies
    
    
    22,781
    
    
    
    21,289Prepaid expenses and other assets
    
    
    23,743
    
    
    
    11,954Income taxes receivable
    
    
    8,925
    
    
    
    TOTAL CURRENT ASSETS
    
    
    239,470
    
    
    
    139,699PROPERTY, PLANT AND EQUIPMENTLand
    
    
    73,983
    
    
    
    41,871Buildings and improvements
    
    
    205,035
    
    
    
    131,336Machinery and equipment
    
    
    501,846
    
    
    
    397,949Construction in progress
    
    
    11,942
    
    
    
    57,657TOTAL PROPERTY, PLANT AND EQUIPMENT
    
    
    792,806
    
    
    
    628,813Less accumulated depreciation and amortization
    
    
    (272,773
    )
    
    
    (249,588
    )NET PROPERTY, PLANT AND EQUIPMENT
    
    
    520,033
    
    
    
    379,225OTHER ASSETSInvestment in unconsolidated JOAs (Denver and Salt Lake City)
    
    
    253,613
    
    
    
    228,925Equity investments
    
    
    48,141
    
    
    
    54,457Subscriber
accounts, less accumulated amortization of $173,232 and $161,776 at June 30, 2007 and 2006,
respectively
    
    
    68,395
    
    
    
    39,365Excess of cost over fair value of net assets acquired
    
    
    842,353
    
    
    
    424,161Newspaper mastheads
    
    
    380,669
    
    
    
    101,829Advertiser lists, covenants not to compete and other
identifiable intangible assets, less accumulated
amortization of $52,611 and $34,506 at June 30, 2007 and
2006, respectively
    
    
    192,211
    
    
    
    15,656Other
    
    
    50,424
    
    
    
    56,249TOTAL OTHER ASSETS
    
    
    1,835,806
    
    
    
    920,642TOTAL ASSETS
    
    $
    2,595,309
    
    
    $
    1,439,566
  60




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##### Table of Contents



MEDIANEWS GROUP, INC. & SUBSIDIARIES
 CONSOLIDATED BALANCE SHEETS
 June 30,2007
    
    
    2006(Dollars in thousands, except share data)LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESTrade accounts payable
    
    $
    70,152
    
    
    $
    19,526Accrued employee compensation
    
    
    49,782
    
    
    
    33,299Accrued interest
    
    
    18,322
    
    
    
    11,690Other accrued liabilities
    
    
    60,852
    
    
    
    19,486Unearned income
    
    
    55,921
    
    
    
    31,715Income taxes payable
    
    
    
    
    
    
    4,193Current portion of long-term debt and obligations under capital leases
    
    
    17,588
    
    
    
    4,133TOTAL CURRENT LIABILITIES
    
    
    272,617
    
    
    
    124,042OBLIGATIONS UNDER CAPITAL LEASES
    
    
    5,518
    
    
    
    5,763LONG-TERM DEBT
    
    
    1,101,527
    
    
    
    857,997DEFINED BENEFIT AND OTHER POST EMPLOYMENT BENEFIT PLAN LIABILITIES
    
    
    33,342
    
    
    
    23,704OTHER LIABILITIES
    
    
    25,509
    
    
    
    16,853DEFERRED INCOME TAXES, NET
    
    
    119,890
    
    
    
    103,349MINORITY INTEREST
    
    
    606,052
    
    
    
    207,439PUTABLE COMMON STOCK
    
    
    33,165
    
    
    
    40,899ST. PAUL, MONTEREY AND TORRANCE PURCHASE PRICE (HEARST)
    
    
    306,525
    
    
    
    SHAREHOLDERS EQUITYCommon stock, par value $0.001; 3,150,000 shares authorized:
2,314,346 shares issued and 2,298,346 shares outstanding
    
    
    2
    
    
    
    2Additional paid-in capital
    
    
    
    
    
    
    Accumulated other comprehensive loss, net of taxes:Unrealized loss on hedging
    
    
    (420
    )
    
    
    (1,588
    )Pension and other post-employment benefit liabilities
    
    
    (16,921
    )
    
    
    (19,932
    )Retained earnings
    
    
    110,503
    
    
    
    83,038Common stock in treasury, at cost, 16,000 shares
    
    
    (2,000
    )
    
    
    (2,000
    )TOTAL SHAREHOLDERS EQUITY
    
    
    91,164
    
    
    
    59,520TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    2,595,309
    
    
    $
    1,439,566
  61




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MEDIANEWS GROUP, INC. & SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 Years Ended June 30,2007
    
    
    2006
    
    
    2005(Dollars in thousands, except share data)REVENUESAdvertising
    
    $
    1,063,681
    
    
    $
    660,389
    
    
    $
    610,060Circulation
    
    
    210,702
    
    
    
    130,829
    
    
    
    129,344Other
    
    
    55,457
    
    
    
    44,658
    
    
    
    39,875TOTAL REVENUES
    
    
    1,329,840
    
    
    
    835,876
    
    
    
    779,279INCOME (LOSS) FROM UNCONSOLIDATED
JOAS (DENVER AND SALT LAKE CITY)
    
    
    (10,418
    )
    
    
    (23,298
    )
    
    
    23,291COSTS AND EXPENSESCost of sales
    
    
    421,343
    
    
    
    260,939
    
    
    
    242,653Selling, general and administrative
    
    
    687,875
    
    
    
    417,602
    
    
    
    382,180Depreciation and amortization
    
    
    68,670
    
    
    
    44,067
    
    
    
    40,598Interest expense
    
    
    82,388
    
    
    
    55,564
    
    
    
    49,481Other (income) expense, net
    
    
    11,223
    
    
    
    1,440
    
    
    
    8,669TOTAL COSTS AND EXPENSES
    
    
    1,271,499
    
    
    
    779,612
    
    
    
    723,581EQUITY INVESTMENT INCOME (LOSS), NET
    
    
    (734
    )
    
    
    5,898
    
    
    
    10,201GAIN ON SALE OF ASSETS AND NEWSPAPER
PROPERTY TRANSACTIONS, NET
    
    
    66,156
    
    
    
    1,129
    
    
    
    114MINORITY INTEREST
    
    
    (59,557
    )
    
    
    (35,033
    )
    
    
    (29,334
    )INCOME BEFORE INCOME TAXES
    
    
    53,788
    
    
    
    4,960
    
    
    
    59,970INCOME TAX EXPENSE
    
    
    (18,146
    )
    
    
    (3,883
    )
    
    
    (20,090
    )NET INCOME
    
    
    35,642
    
    
    
    1,077
    
    
    
    39,880ACCRETION RELATED TO ST. PAUL,
MONTEREY AND TORRANCE PURCHASE PRICE
(NOTE 5)
    
    
    (15,911
    )
    
    
    
    
    
    
    NET INCOME APPLICABLE TO COMMON STOCK
    
    $
    19,731
    
    
    $
    1,077
    
    
    $
    39,880
  62




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MEDIANEWS GROUP, INC. & SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
 AccumulatedAdditional
    
    
    Other
    
    
    
    
    
    
    Common
    
    
    TotalCommon
    
    
    Paid-In
    
    
    Comprehensive
    
    
    Retained
    
    
    Stock in
    
    
    ShareholdersStock
    
    
    Capital
    
    
    Loss
    
    
    Earnings
    
    
    Treasury
    
    
    Equity(Dollars in thousands)BALANCE AT JUNE 30, 2004
    
    $
    2
    
    
    $
    3,631
    
    
    $
    (19,976
    )
    
    $
    79,349
    
    
    $
    (2,000
    )
    
    $
    61,006Adjustment for putable
common stock
    
    
    
    
    
    
    (3,631
    )
    
    
    
    
    
    
    (44,925
    )
    
    
    
    
    
    
    (48,556
    )Comprehensive income:Unrealized loss on
hedging activities, net
of tax benefit of $426
    
    
    
    
    
    
    
    
    
    
    (697
    )
    
    
    
    
    
    
    
    
    
    
    (697
    )Unrealized loss on
hedging activities,
reclassified to
earnings, net of tax
benefit of $348
    
    
    
    
    
    
    
    
    
    
    456
    
    
    
    
    
    
    
    
    
    
    
    456Minimum pension liability
adjustment, net of tax
benefit of $10,168
    
    
    
    
    
    
    
    
    
    
    (13,596
    )
    
    
    
    
    
    
    
    
    
    
    (13,596
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,880
    
    
    
    
    
    
    
    39,880Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (26,043
    )BALANCE AT JUNE 30, 2005
    
    
    2
    
    
    
    
    
    
    
    (33,813
    )
    
    
    74,304
    
    
    
    (2,000
    )
    
    
    38,493Adjustment for putable
common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,657
    
    
    
    
    
    
    
    7,657Comprehensive income:Unrealized gain on
hedging activities, net
of tax benefit of $153
    
    
    
    
    
    
    
    
    
    
    286
    
    
    
    
    
    
    
    
    
    
    
    286Unrealized loss on
hedging activities,
reclassified to
earnings, net of tax
benefit of $348
    
    
    
    
    
    
    
    
    
    
    456
    
    
    
    
    
    
    
    
    
    
    
    456Minimum pension liability
adjustment, net of tax
expense of $9,310
    
    
    
    
    
    
    
    
    
    
    11,551
    
    
    
    
    
    
    
    
    
    
    
    11,551Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,077
    
    
    
    
    
    
    
    1,077Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,370BALANCE AT JUNE 30, 2006
    
    
    2
    
    
    
    
    
    
    
    (21,520
    )
    
    
    83,038
    
    
    
    (2,000
    )
    
    
    59,520Adjustment for putable
common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,734
    
    
    
    
    
    
    
    7,734Accretion related to St.
Paul, Monterey and
Torrance Purchase Price
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,911
    )
    
    
    
    
    
    
    (15,911
    )Pension and
postretirement
adjustment related to
adoption of SFAS No.
158, net of tax benefit of $1,136
    
    
    
    
    
    
    
    
    
    
    (1,634
    )
    
    
    
    
    
    
    
    
    
    
    (1,634
    )Comprehensive income:Unrealized gain on
hedging activities, net
of tax benefit of $474
    
    
    
    
    
    
    
    
    
    
    712
    
    
    
    
    
    
    
    
    
    
    
    712Unrealized loss on
hedging activities,
reclassified to
earnings, net of tax
benefit of $348
    
    
    
    
    
    
    
    
    
    
    456
    
    
    
    
    
    
    
    
    
    
    
    456Pension adjustment, net
of tax expense of $3,228
    
    
    
    
    
    
    
    
    
    
    4,645
    
    
    
    
    
    
    
    
    
    
    
    4,645Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,642
    
    
    
    
    
    
    
    35,642Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,455BALANCE AT JUNE 30, 2007
    
    $
    2
    
    
    $
    
    
    
    $
    (17,341
    )
    
    $
    110,503
    
    
    $
    (2,000
    )
    
    $
    91,164
  63




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MEDIANEWS GROUP, INC. & SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Years Ended June 30,2007
    
    
    2006
    
    
    2005(Dollars in thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    35,642
    
    
    $
    1,077
    
    
    $
    39,880Adjustments to reconcile net income to net cash provided by operating
activities:Depreciation
    
    
    36,549
    
    
    
    43,248
    
    
    
    25,834Amortization
    
    
    35,750
    
    
    
    20,901
    
    
    
    18,953Loss on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    9,236Net loss (gain) on sale of assets and newspaper transactions
    
    
    (66,156
    )
    
    
    (1,097
    )
    
    
    437Provision for losses on accounts receivable
    
    
    12,091
    
    
    
    9,893
    
    
    
    8,065Amortization of debt discount
    
    
    819
    
    
    
    935
    
    
    
    1,051Minority interest
    
    
    59,557
    
    
    
    35,033
    
    
    
    29,334Distributions of net income paid to minority interest
    
    
    (57,851
    )
    
    
    (35,033
    )
    
    
    (28,167
    )Proportionate share of net income from unconsolidated JOAs
    
    
    (39,535
    )
    
    
    (44,120
    )
    
    
    (71,878
    )Distributions of net income from unconsolidated JOAs(a)
    
    
    39,535
    
    
    
    44,120
    
    
    
    71,878Equity investment (income) loss, net
    
    
    734
    
    
    
    (5,898
    )
    
    
    (10,201
    )Distributions of net income from equity investments(b)
    
    
    1,723
    
    
    
    5,228
    
    
    
    9,511Deferred income tax expense (benefit)
    
    
    26,230
    
    
    
    (4,545
    )
    
    
    17,728Change in defined benefit plan liabilities, net of cash contributions
    
    
    (4,205
    )
    
    
    2,427
    
    
    
    1,463Change in estimated option repurchase price
    
    
    (6,607
    )
    
    
    500
    
    
    
    (5,306
    )Unrealized loss on hedging activities, reclassified to earnings from
accumulated other comprehensive loss
    
    
    456
    
    
    
    456
    
    
    
    804Change in operating assets and liabilities:Accounts receivable
    
    
    (15,145
    )
    
    
    (18,564
    )
    
    
    (13,356
    )Inventories
    
    
    9,821
    
    
    
    4,026
    
    
    
    (7,632
    )Prepaid expenses and other assets
    
    
    (4,921
    )
    
    
    4,599
    
    
    
    (4,301
    )Accounts payable and accrued liabilities
    
    
    66,799
    
    
    
    10,406
    
    
    
    6,374Unearned income
    
    
    5,381
    
    
    
    2,881
    
    
    
    173Change in other assets and liabilities, net
    
    
    8,197
    
    
    
    784
    
    
    
    (6,936
    )NET CASH FLOWS FROM OPERATING ACTIVITIES
    
    
    144,864
    
    
    
    77,257
    
    
    
    92,944CASH FLOWS FROM INVESTING ACTIVITIES:Investments in Detroit and other investments, net of return of capital
    
    
    773
    
    
    
    (43,991
    )
    
    
    (250
    )Proceeds from the sale of newspapers and other assets
    
    
    58,195
    
    
    
    746
    
    
    
    483Business acquisitions, net of cash acquired
    
    
    (452,540
    )
    
    
    (3,110
    )
    
    
    (58,607
    )Cash contributed by partners for business acquisitions
    
    
    21,085
    
    
    
    
    
    
    
    Business dispositions
    
    
    14,000
    
    
    
    
    
    
    
    Distributions in excess of net income from JOAs(a)
    
    
    25,635
    
    
    
    28,148
    
    
    
    15,531Distributions in excess of net income from equity investments(b)
    
    
    3,015
    
    
    
    1,254
    
    
    
    1,486Capital expenditures
    
    
    (31,636
    )
    
    
    (47,501
    )
    
    
    (51,312
    )NET CASH FLOWS FROM INVESTING ACTIVITIES
    
    
    (361,473
    )
    
    
    (64,454
    )
    
    
    (92,669
    )CASH FLOWS FROM FINANCING ACTIVITIES:Issuance of long-term debt, net of issuance costs
    
    
    495,653
    
    
    
    66,350
    
    
    
    464,250Reduction of long-term debt and other liabilities
    
    
    (245,092
    )
    
    
    (77,242
    )
    
    
    (516,375
    )Distributions in excess of net income to minority interests
    
    
    (25,291
    )
    
    
    (5,749
    )
    
    
    Repurchase premiums and related costs associated with long-term debt
    
    
    
    
    
    
    
    
    
    
    (8,624
    )NET CASH FLOWS FROM FINANCING ACTIVITIES
    
    
    225,270
    
    
    
    (16,641
    )
    
    
    (60,749
    )INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    8,661
    
    
    
    (3,838
    )
    
    
    (60,474
    )CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
    
    
    424
    
    
    
    4,262
    
    
    
    64,736CASH AND CASH EQUIVALENTS AT END OF YEAR
    
    $
    9,085
    
    
    $
    424
    
    
    $
    4,262(a) Total distributions from unconsolidated JOAs were $65.2 million, $72.3
million and $87.4 million for fiscal years 2007, 2006 and 2005, respectively.(b) Total distributions from equity investments were $4.7 million, $6.5
million and $11.0 million for fiscal years 2007, 2006 and 2005, respectively.

Supplemental schedule of noncash investing activities:Business acquisitions (St. Paul, Monterey and Torrance)
    
    $
    (290,614
    )
    
    $
    
    
    
    $
    Business partners share of acquisitions (San Jose and Contra Costa)
    
    $
    (340,120
    )
    
    
    
    
    
    
    Investment in Salt Lake Newspaper Production Facilities, LLC
    
    $
    (45,469
    )
    
    
    
    
    
    
    Danbury transaction
    
    $
    (81,596
    )
    
    
    
    
    
    
    
  64




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##### Table of Contents



MEDIANEWS GROUP, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1: Basis of Presentation
  Note 2: Significant Accounting Policies and Other Matters
  Use of Estimates
  Principles of Consolidation
  Revisions/Reclassifications
  Joint Operating Agencies
  65




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##### Table of Contents




    
    The Companys proportionate share of net income from JOAs,
    
    The amortization of subscriber lists created by the original purchase, as the subscriber
lists are attributable to the Companys earnings in the JOAs, and
    
    Editorial costs, miscellaneous revenue received outside of the JOA, and other charges
incurred by the Companys consolidated subsidiaries directly attributable to the JOAs
providing editorial content and news for the Companys newspapers party to the JOAs.
   Charleston Daily Mail
 The York
Dispatch
 Cash and Cash Equivalents
  Trade Accounts Receivable
  Inventories
  Investments
  66




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##### Table of Contents




    
    Prairie Mountain Publishing Company, partnership that publishes the former Eastern
Colorado Publishing Company newspapers (comprised of several small daily and weekly
newspapers) and the Daily Cameraand Colorado Daily, both published in Boulder, Colorado
(50% ownership interest).
    
    CIPS Marketing Group, Inc., a total market coverage delivery service in Los Angeles (50%
ownership interest),
    
    Gallup Independent Company, publisher of the Gallup Independentin Gallup, New Mexico
(approximately 38% ownership interest),
    
    Ponderay Newsprint Company, a minority investment in a newsprint mill held by the
Companys subsidiary, Kearns-Tribune, LLC (6.0% ownership interest and one seat on the
board).
    
    Texas-New Mexico Newspapers Partnership through December 25, 2005, which was formed on
March 3, 2003 (the Company held a minority interest of 33.8% through December 25, 2005).
Effective December 26, 2005, as a result of contributions to the partnership and an
amendment and restatement of the partnership agreement, the Company owns 59.4% of the
partnership and consolidates its results after such date. See Note 4: Investments in
California Newspapers Partnership and Texas-New Mexico Newspapers Partnership for further
discussion.
    
    Hometown Values, acquired in July 2005, advertising coupon magazine for small local
businesses mailed to 18 different targeted community zones along the Wasatch front in Utah
(50% ownership interest).
  Property, Plant and Equipment
  Goodwill and Other Intangible Assets and Impairment Testing
 Goodwill and Other Intangible Assets
   2008
    
    $
    32,4672009
    
    
    27,3862010
    
    
    24,0902011
    
    
    23,6292012
    
    
    22,933
 Accounting for the Impairment or Disposal of Long-Lived Assets
 67




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##### Table of Contents



Debt Discount
  Income Taxes
  Revenue Recognition
  Disclosures about Segments of an Enterprise and Related Information
  68




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##### Table of Contents



Comprehensive Income
 Accounting for Derivative Instruments and Hedging Activities
 Stock Based Compensation
 Share Based Payments
 Dividends
  Employees
  Recently Issued Accounting Standards
 Employers Accounting for Defined Benefit Pension and Other Postretirement
Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R)
 
    
    recognize in its statement of financial position an asset for a defined benefit
postretirement plans overfunded status or a liability for a plans underfunded status;
    
    measure a defined benefit postretirement plans assets and obligations that
determine its funded status as of the end of the employers fiscal year;
 69




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##### Table of Contents




    
    recognize changes in the funded status of a defined postretirement plan in
comprehensive income in the year in which the changes occur.
  Fair Value Measurements,
 The Fair Value Option for Financial Assets and Financial Liabilities,
 Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current
Year Financial Statements
 Accounting for Uncertainty in
Income Taxes
 Note 3: Joint Operating Agencies
 Denver JOA
 The Denver Post The Denver Post Rocky Mountain News, . Rocky Mountain News The Denver Post Rocky Mountain News,
 70




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##### Table of Contents



The Denver Post Rocky Mountain News. The Denver
Post
 Salt Lake City JOA
 The Salt Lake
Tribune Deseret Morning News The Salt Lake Tribune Deseret Morning News, The Salt Lake Tribune Deseret Morning News. The Salt Lake Tribune
 York JOA
 York Daily Record The York Dispatch York Sunday News, The York Dispatch York Daily Record York Sunday News
 York Daily Record The York Dispatch The York
Dispatch
 71




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##### Table of Contents



Charleston JOA


Charleston Daily Mail Charleston Daily Mail Charleston Daily Mail
 Detroit JOA
 The Detroit News The
Detroit News The Detroit News
  Unconsolidated JOA Summarized Results
 The Salt Lake Tribune The Denver Post The Denver Post
 72




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##### Table of Contents



Year Ended June 30, 2007SLNPF andSalt Lake
    
    
    
    
    
    
    
    
    
    
    Total IncomeCity
    
    
    
    
    
    
    Associated
    
    
    fromJOA
    
    
    Denver
    
    
    Revenues and
    
    
    UnconsolidatedConsolidated
    
    
    JOA
    
    
    Expenses
    
    
    JOAs(Dollars in thousands)Income Statement Data:Total revenues
    
    $
    154,566
    
    
    $
    386,350
    
    
    $
    222Cost of sales
    
    
    32,560
    
    
    
    121,477
    
    
    
    32,341Selling, general and administrative
    
    
    56,813
    
    
    
    199,491
    
    
    
    11,977Depreciation and amortization
    
    
    5,913
    
    
    
    45,065
    
    
    
    3,629Other
    
    
    3,186
    
    
    
    8,051
    
    
    
    2,228Total costs and expenses
    
    
    98,472
    
    
    
    374,084
    
    
    
    50,175Net income
    
    
    56,094
    
    
    
    12,266
    
    
    
    (49,953
    )Partners share of income from
unconsolidated JOAs
    
    
    (22,692
    )
    
    
    (6,133
    )
    
    
    Income (loss) from unconsolidated
JOAs
    
    $
    33,402
    
    
    $
    6,133
    
    
    $
    (49,953
    )
    
    $
    (10,418
    )Year Ended June 30, 2006Total IncomeAssociated
    
    
    fromSalt Lake
    
    
    Denver
    
    
    Revenues and
    
    
    UnconsolidatedCity JOA
    
    
    JOA
    
    
    Expenses
    
    
    JOAs(Dollars in thousands)Income Statement Data:Total revenues
    
    $
    149,041
    
    
    $
    419,055
    
    
    $
    484Cost of sales
    
    
    34,222
    
    
    
    132,893
    
    
    
    34,530Selling, general and administrative
    
    
    55,017
    
    
    
    207,263
    
    
    
    12,272Depreciation and amortization
    
    
    
    
    
    
    56,225
    
    
    
    20,082Other
    
    
    2,643
    
    
    
    922
    
    
    
    1,019Total costs and expenses
    
    
    91,882
    
    
    
    397,303
    
    
    
    67,903Net income
    
    
    57,159
    
    
    
    21,752
    
    
    
    (67,419
    )Partners share of income from
unconsolidated JOAs
    
    
    (23,914
    )
    
    
    (10,876
    )
    
    
    Income (loss) from unconsolidated
JOAs
    
    $
    33,245
    
    
    $
    10,876
    
    
    $
    (67,419
    )
    
    $
    (23,298
    )
 73




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##### Table of Contents



Year Ended June 30, 2005Total IncomeAssociated
    
    
    fromSalt Lake
    
    
    
    
    
    
    Revenues and
    
    
    UnconsolidatedCity JOA
    
    
    Denver JOA
    
    
    Expenses
    
    
    JOAs(Dollars in thousands)Income Statement Data:Total revenues
    
    $
    146,904
    
    
    $
    433,183
    
    
    $
    527Cost of sales
    
    
    32,440
    
    
    
    134,488
    
    
    
    33,744Selling, general and administrative
    
    
    53,638
    
    
    
    204,792
    
    
    
    11,069Depreciation and amortization
    
    
    
    
    
    
    18,468
    
    
    
    4,189Other
    
    
    2,485
    
    
    
    (341
    )
    
    
    112Total costs and expenses
    
    
    88,563
    
    
    
    357,407
    
    
    
    49,114Net income
    
    
    58,341
    
    
    
    75,776
    
    
    
    (48,587
    )Partners share of income from
unconsolidated JOAs
    
    
    (24,351
    )
    
    
    (37,888
    )
    
    
    Income (loss) from unconsolidated
JOAs
    
    $
    33,990
    
    
    $
    37,888
    
    
    $
    (48,587
    )
    
    $
    23,291June 30, 2007
    
    
    June 30, 2006SLNPF andSalt
LakeCity JOA
    
    
    
    
    
    
    Salt Lake CityConsolidated
    
    
    Denver JOA
    
    
    JOA
    
    
    Denver JOA(Dollars in thousands)Balance Sheet Data:Current assets
    
    $
    19,868
    
    
    $
    55,363
    
    
    $
    15,800
    
    
    $
    64,352Non-current assets
    
    
    92,857
    
    
    
    186,720
    
    
    
    14,589
    
    
    
    221,399Current liabilities
    
    
    17,651
    
    
    
    42,856
    
    
    
    24,589
    
    
    
    50,396Non-current liabilities(1)
    
    
    7,427
    
    
    
    135,881
    
    
    
    7,043
    
    
    
    135,069
 (1)
    
    The June 30, 2006 amount for the Denver JOA includes the Denver JOA synthetic lease
(related to the construction
of a new office building) which was terminated in the second quarter of the Companys fiscal
year 2007. The Denver JOA operates on a calendar year-end basis and is not required to
adopt the requirements of SFAS No. 158 until December 31, 2007. Had the Denver JOA adopted
the requirements of SFAS No. 158 on December 31, 2006, the cumulative effect would have been
to increase non-current liabilities by approximately
$19.5 million. The Salt Lake City JOA did adopt
SFAS No. 158 as of June 30, 2007; the impact of
adoption was to increase non-current liabilities by approximately
$2.8 million.
  Note 4: Investments in California Newspapers Partnership and Texas-New Mexico Newspapers Partnership
 California Newspapers Partnership
  74




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##### Table of Contents



Texas-New Mexico Newspapers Partnership
 Las Cruces Sun-News, The Daily Times Carlsbad
Current-Argus, Alamogordo Daily News The Deming Highlight El Paso Times Public Opinion The Evening Sun , Lebanon Daily News York Daily Record York Sunday News The York
Dispatch
 Exchanges of Non-Monetary Assets),
 75




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##### Table of Contents



Note 5: Acquisitions, Dispositions and Other Transactions
 Fiscal Year 2007
 Acquisition
(San Jose Mercury News, Contra Costa Times, The Monterey County
Herald and Pioneer Press)
 Contra Costa Times San Jose Mercury News
 The Monterey County Herald Pioneer Press
 Acquisition (Torrance)
 Daily Breeze Daily Breeze
 Hearst Stock Purchase Agreement
 The Monterey County Herald, Pioneer Press Daily Breeze
 76




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##### Table of Contents



The Monterey County Herald, Pioneer Press Daily Breeze The Monterey County Herald Pioneer Press Daily Breeze The Monterey County Herald, Pioneer
Press Daily Breeze
 San Jose Mercury News Contra Costa
Times The Monterey County Herald Pioneer Press
 San Jose Mercury News Contra Costa Times The Monterey County Herald Pioneer Press
 Year Ended June 30,2007
    
    
    2006(Dollars in Thousands)Operating Revenue
    
    $
    1,381,846
    
    
    $
    1,404,059Net Income
    
    $
    38,118
    
    
    $
    17,775Net Income Applicable to Common Stock
    
    $
    20,802
    
    
    $
    1,276
 Original Apartment Magazine Sale
 Original Apartment
Magazine
 Acquisition (Santa Cruz)
 Santa Cruz
Sentinel Santa
Cruz Sentinel
 Management Agreement (Danbury)
 The News-Times Connecticut Post
 77




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##### Table of Contents



The News-Times Connecticut Post The News-Times The
News-Times Exchanges of Non-Monetary
Assets Connecticut
Post The News-Times
 Fiscal Year 2006
 Prairie Mountain Publishing Company Partnership Formation
 Daily
Camera Colorado Daily Exchanges of Nonmonetary Assets
 Texas-New Mexico Newspapers Partnership Restructuring and The Detroit News Acquisition
 The Detroit News
 Fiscal Year 2005
 Acquisition (The Park Record)
 The Park Record,
 78




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##### Table of Contents



Other
   Note 6: Long-Term Debt
  June 30,2007
    
    
    2006(Dollars in thousands)Bank Credit Facility (Revolving Portion)
    
    (I)
    
    $
    60,200
    
    
    $
    146,550Bank Term Loan A
    
    (I)
    
    
    100,000
    
    
    
    100,000Bank Term Loan B
    
    (I)
    
    
    144,317
    
    
    
    145,790Bank Term Loan C
    
    (I)
    
    
    346,500
    
    
    
    Various Notes, payable through 2013
    
    (II)
    
    
    20,697
    
    
    
    22,7706.875% Senior Subordinated Notes, due 2013
    
    (III)
    
    
    298,154
    
    
    
    297,9256.375% Senior Subordinated Notes, due 2014
    
    (IV)
    
    
    149,002
    
    
    
    148,8881,118,870
    
    
    
    861,923Less current portion of long-term debt
    
    
    
    
    (17,343
    )
    
    
    (3,926
    )$
    1,101,527
    
    
    $
    857,997
 
 I.
    
    On December 30, 2003, the Company refinanced its bank credit facility (the Credit
Facility). The Credit Facility (prior to being amended as
discussed below) provided for borrowings of up to $600.0 million,
consisting of a $350.0 million revolving credit facility and a $250.0 million term loan B
facility.On September 17, 2007, the Company amended the December 30, 2003 Credit Facility to, among
other things, increase the consolidated total leverage ratio and the ratio of consolidated
senior debt to consolidated operating cash flow (effective June 30, 2007) and lower the
ratio of consolidated operating cash flow to consolidated fixed charges for the quarters
ending September 30 and December 31, 2007. As a result of the amendment, all borrowing
margins for all loan tranches of the Credit Facility were increased by 50 basis points. The
Company also voluntarily reduced the revolver under the Credit Facility from $350.0 million
to $235.0 million effective October 1, 2007 (See
Note 17: Subsequent Events).Prior amendments to the December 30, 2003 Credit Facility include the following:
 
    
    On August 30, 2004, the Company entered into an amendment and restatement of the
Credit Facility which refinanced term loan B with a $100.0 million term loan A and
a $148.8 million term loan C.
    
    On September 8, 2005, the Company amended the Credit Facility in order to reduce
borrowing margins. The amendment provided for a $147.3 million term loan B, which
was used to refinance term loan C discussed above.
 79




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##### Table of Contents




    
    On August 2, 2006, the Company amended the Credit Facility. The amendment
authorized a new $350.0 million term loan C facility and approved the purchase of the
Contra Costa Times, San Jose Mercury News, The Monterey County Heraldand the St. Paul
Pioneer Pressby the Company. The $350.0 million
term loan C facility was borrowed on August 2, 2006 and used, along with
revolving credit facility borrowings of $56.3 million, to fund
the Companys portion of the purchase price for the Contra Costa Timesand the San Jose Mercury
News(See Note 5: Acquisitions, Dispositions and Other Transactions) and the related
fees to amend the Credit Facility.
 The following is a summary description of the December 30, 2003 Credit Facility.Prior to the maturity date of the revolving facility, borrowings under the revolving
facility are permitted to be borrowed, repaid and reborrowed without premium or penalty
(other than customary breakage costs). Amounts repaid under the term loans A, B and C
are not available for reborrowing. The Credit Facility is guaranteed by the Companys
subsidiaries (with certain exceptions) and secured by first priority liens and security
interests in all of the capital stock (or other ownership interests) of each of the
Companys and the guarantors subsidiaries (with certain exceptions) and its interest in the
Texas-New Mexico Newspapers Partnership. The Company also has pledged its interest in the
Denver JOA to secure the bank credit facility (subject to certain limitations). The Credit
Facility contains 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, make capital contributions, create liens on assets, make investments, make
acquisitions and engage in mergers or consolidations. In addition, the Credit Facility
requires compliance with certain financial ratios, including a maximum consolidated debt to
consolidated operating cash flow ratio, a maximum consolidated senior debt to consolidated
operating cash flow ratio and a minimum consolidated operating cash flow to consolidated
fixed charges ratio. At June 30, 2007, the Company was in compliance with all amended Credit
Facility covenants. Borrowings under the Credit Facility bear interest at rates based upon,
at the Companys option, either 1) the base rate (the higher of (a) the Federal Funds Rate
plus 1/2 of 1% and (b) Bank of Americas prime rate) or 2) Eurodollar rate plus a spread based
on the Companys leverage ratio. At June 30, 2007, Eurodollar borrowing margins varied from
0.75% to 1.25% and base rate borrowing margins were 0% on the revolver portion of the Credit
Facility. At June 30, 2007, borrowing margins on term loan A were set at 1.25% and 0.00%
for Eurodollar and base rate borrowings, respectively. Term loan A requires quarterly
principal payments as follows: $5.0 million beginning in March 2008 through December 2008;
$7.5 million from March 2009 through December 2009; and $12.5 million from March 2010
through September 2010, with the remaining balance due at maturity on December 30, 2010.
Term loan B bears interest based upon, at the Companys option, Eurodollar or base rates,
plus a borrowing margin of 1.25% or 0.25%, respectively. Term loan B requires quarterly
principal payments as follows: $0.4 million through December 2009, increasing to $35.2
million from March through September 2010, with the remaining balance due at maturity on
December 30, 2010. At June 30, 2007, Term loan C bears interest based upon, at the
Companys option, Eurodollar, plus a borrowing margin of 1.75%, or base rate, plus a
borrowing margin of .75%. Term loan C requires quarterly principal payments as follows:
$0.875 million through June 2012; and $82.25 million from June 2012 through March 2013, with
the remaining balance due at maturity on August 2, 2013. See Note 17: Subsequent Events
for changes in borrowing margins to the bank credit facility as a result of the
September 17, 2007 amendment.In addition to interest, the Company pays an annual commitment fee of 0.25% to 0.375% on the
unused portion of the commitment based on the Companys leverage ratio. The annual
commitment fee is currently set at 0.375%. Prior to the September 2007 amendment discussed
above, at June 30, 2007, the Company had $272.7 million available under the Credit Facility
for future borrowings, net of $17.1 million in outstanding letters of credit. However, the
total amount the Company can borrow at any point in time may be reduced by limits imposed by
the financial covenants of its various debt agreements. The Company incurred debt issuance
costs of $3.8 million related to the December 31, 2003 $600.0 million Credit Facility, and
another $4.9 million related to the amendments to the facility, which, for the August 2,
2006 amendment, included $1.0 million for the lender to backstop the commitment for the
borrowing. These debt issuance costs have been capitalized as a deferred charge, and are
being amortized on a straight-line basis over the term of the Credit Facility as a component
of amortization expense.As a result of the September 17, 2007 amendment to the Credit Facility, all the interest
rates described above increased 50 basis points effective with the date of the amendment.
After giving effect to the voluntary October 1,
2007 reduction to the revolver, the amount available under the revolving portion of the
Credit Facility, net of letters of credit, was $157.7 million at June 30, 2007.
 80




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##### Table of Contents



II.
    
    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 8.5% to 10.5%,
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.III.
    
    On November 25, 2003, the Company completed the sale of $300.0 million of its 6.875%
Senior Subordinated Notes due 2013 (or 6.875% Notes). Proceeds from the sale of the
6.875% Notes were reduced by an original issue discount of $2.6 million and debt issuance
costs of $6.0 million. The Company reduced the principal amount of the 6.875% Notes by the
amount of the original issue discount and is amortizing the discount as a component of
interest expense using the effective interest method. The debt issuance costs have been
capitalized as a deferred charge, and are being amortized on a straight-line basis over the
term of the 6.875% Notes as a component of amortization expense. The indebtedness
evidenced by the 6.875% Notes is subordinated and junior in right of payment to obligations
under the bank credit facility and related term loans. No principal payments are required
on the 6.875% Notes until October 1, 2013, at which time all outstanding principal and
interest is due and payable. Semi-annual interest payments are due and payable on October
1 and April 1 of each year. The 6.875% Notes are general unsecured obligations of the
Company ranking equal in right of payment with the 6.375% Notes.IV.
    
    On January 26, 2004, the Company completed the sale of $150.0 million of its 6.375%
Senior Subordinated Notes due 2014 (or 6.375% Notes). Proceeds from the sale of the
6.375% Notes were reduced by an original issue discount of $1.4 million and debt issuance
costs of $1.8 million. The principal amount of the 6.375% Notes has been reduced by the
amount of the original issuance discount, which is being amortized as a component of
interest expense using the effective interest method. The debt issuance costs have been
capitalized as a deferred charge and are being amortized on a straight-line basis over the
term of the 6.375% Notes as a component of amortization expense. The indebtedness evidenced
by the 6.375% Notes is subordinated and junior in right of payment to obligations under the
Credit Facility and related term loans. No principal payments are required until April 1,
2014, at which time all outstanding principal and interest is due and payable. Semi-annual
interest payments are due and payable on January 1 and July 1 of each year. The 6.375%
Notes are general unsecured obligations of the Company ranking equal in right of payment
with the 6.875% Notes.
  As ofJune 30, 20072008
    
    $
    17,3432009
    
    
    31,8812010
    
    
    176,4622011
    
    
    100,6472012
    
    
    5,461Thereafter
    
    
    787,076$
    1,118,870
    81




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##### Table of Contents



Note 7: Leases
  2007
    
    
    2006(Dollars in thousands)Building and equipment
    
    $
    6,406
    
    
    $
    6,406Accumulated amortization
    
    
    (4,095
    )
    
    
    (3,882
    )Assets under capital leases, net
    
    $
    2,311
    
    
    $
    2,524
   Capital
    
    
    OperatingLeases
    
    
    Leases(Dollars in thousands)2008
    
    $
    867
    
    
    $
    11,2072009
    
    
    867
    
    
    
    9,6432010
    
    
    867
    
    
    
    7,2292011
    
    
    867
    
    
    
    5,4222012
    
    
    867
    
    
    
    5,040Thereafter
    
    
    6,068
    
    
    
    22,548Total minimum lease payments
    
    
    10,403
    
    
    $
    61,089Less amount representing interest
    
    
    (4,640
    )Present value of net future lease payments
    
    $
    5,763
 Note 8: Employee Benefit Plans
 Pension and Post-Retirement Plans
 The Sun Daily News The Sun Daily News The Sun
 The Denver Post The Denver Post
 82




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The Denver Post The Denver Post The
Denver Post
 Daily News The
Denver Post The Denver Post
 San Jose Mercury News Pioneer Press San Jose Mercury News Pioneer Press San Jose Mercury News
       83




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##### Table of Contents



Pension Plans
    
    
    Other Benefits2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005(Dollars in thousands)Change in Benefit ObligationBenefit Obligation at Beginning
of Year
    
    $
    102,360
    
    
    $
    111,182
    
    
    $
    98,188
    
    
    $
    9,992
    
    
    $
    4,880
    
    
    $
    5,495Service Cost
    
    
    2,395
    
    
    
    1,125
    
    
    
    1,038
    
    
    
    478
    
    
    
    557
    
    
    
    434Interest Cost
    
    
    15,785
    
    
    
    5,679
    
    
    
    5,927
    
    
    
    655
    
    
    
    295
    
    
    
    327Acquisition
    
    
    178,859
    
    
    
    
    
    
    
    
    
    
    
    1,204
    
    
    
    
    
    
    
    Amendments
    
    
    
    
    
    
    160
    
    
    
    (720
    )
    
    
    
    
    
    
    49
    
    
    
    (128
    )Other Adjustments
    
    
    
    
    
    
    307
    
    
    
    
    
    
    
    
    
    
    
    2,032
    
    
    
    Actuarial Loss (Gain)
    
    
    (892
    )
    
    
    (10,257
    )
    
    
    12,561
    
    
    
    (1,291
    )
    
    
    2,715
    
    
    
    (650
    )Benefits Paid
    
    
    (14,371
    )
    
    
    (5,836
    )
    
    
    (5,812
    )
    
    
    (834
    )
    
    
    (536
    )
    
    
    (598
    )Benefit Obligation at End of Year
    
    $
    284,136
    
    
    $
    102,360
    
    
    $
    111,182
    
    
    $
    10,204
    
    
    $
    9,992
    
    
    $
    4,880Change in Plan AssetsFair Value of Plan Assets at Beginning of
Year
    
    $
    85,993
    
    
    $
    82,580
    
    
    $
    81,387
    
    
    $
    
    
    
    $
    
    
    
    $
    Actual Return on Plan Assets
    
    
    37,209
    
    
    
    7,304
    
    
    
    4,949
    
    
    
    
    
    
    
    
    
    
    
    Acquisition
    
    
    147,202
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Company Contributions
    
    
    7,151
    
    
    
    1,945
    
    
    
    2,056
    
    
    
    834
    
    
    
    536
    
    
    
    598Benefits Paid
    
    
    (14,371
    )
    
    
    (5,836
    )
    
    
    (5,812
    )
    
    
    (834
    )
    
    
    (536
    )
    
    
    (598
    )Fair Value of Plan Assets at End of Year
    
    $
    263,184
    
    
    $
    85,993
    
    
    $
    82,580
    
    
    $
    
    
    
    $
    
    
    
    $
    Reconciliation of Funded StatusFunded Status
    
    $
    (20,952
    )
    
    $
    (16,367
    )
    
    $
    (28,602
    )
    
    $
    (10,204
    )
    
    $
    (9,992
    )
    
    $
    (4,880
    )Unrecognized Net Loss(3)
    
    
    N/A
    
    
    
    34,770
    
    
    
    48,893
    
    
    
    
    
    
    
    2,953
    
    
    
    397Unrecognized Prior Service Cost(3)
    
    
    N/A
    
    
    
    2,929
    
    
    
    3,494
    
    
    
    
    
    
    
    (136
    )
    
    
    (149
    )Net Amount Recognized at End
of Year
    
    $
    (20,952
    )
    
    $
    21,332
    
    
    $
    23,785
    
    
    $
    (10,204
    )
    
    $
    (7,175
    )
    
    $
    (4,632
    )Assumptions as of June 30Discount Rate
    
    
    6.25
    %
    
    
    6.25
    %
    
    
    5.25
    %
    
    
    6.25
    %
    
    
    6.25
    %
    
    
    5.25
    %Expected Return on Plan Assets
    
    
    8.00
    %
    
    
    8.00
    %
    
    
    8.00
    %
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/ARate of Compensation Increase(2)
    
    
    3.00
    %
    
    
    3.00
    %
    
    
    3.00
    %
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/AComponents of Net Periodic CostService Cost
    
    $
    2,395
    
    
    $
    1,125
    
    
    $
    1,038
    
    
    $
    478
    
    
    $
    557
    
    
    $
    434Interest Cost
    
    
    15,785
    
    
    
    5,679
    
    
    
    5,927
    
    
    
    655
    
    
    
    295
    
    
    
    326Expected Return on Plan Assets
    
    
    (17,375
    )
    
    
    (6,466
    )
    
    
    (6,369
    )
    
    
    
    
    
    
    
    
    
    
    Amortization of Deferral
    
    
    278
    
    
    
    416
    
    
    
    440
    
    
    
    (13
    )
    
    
    (13
    )
    
    
    (6
    )Recognized Net Actuarial Loss
    
    
    1,919
    
    
    
    2,990
    
    
    
    2,040
    
    
    
    126
    
    
    
    31
    
    
    
    70Curtailment Loss and Special Termination
Benefits
    
    
    
    
    
    
    347
    
    
    
    443
    
    
    
    
    
    
    
    49
    
    
    
    27Net Periodic Cost
    
    $
    3,002
    
    
    $
    4,091
    
    
    $
    3,519
    
    
    $
    1,246
    
    
    $
    919
    
    
    $
    851Amounts Recognized in Accumulated Other
Comprehensive Income (pre-tax and excluding
JOA):Net Actuarial (Gain) Loss
    
    $
    12,125
    
    
    
    N/A
    
    
    
    N/A
    
    
    $
    1,536
    
    
    
    N/A
    
    
    
    N/APrior Service Cost
    
    
    2,650
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    (123
    )
    
    
    N/A
    
    
    
    N/ATotal
    
    $
    14,775
    
    
    
    N/A
    
    
    
    N/A
    
    
    $
    1,413
    
    
    
    N/A
    
    
    
    N/AAmounts Recognized in the Consolidated Balance
Sheets Consist of:Noncurrent Assets
    
    $
    3,062
    
    
    $
    11,783
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Current Liabilities
    
    
    (42
    )
    
    
    
    
    
    
    
    
    
    
    (834
    )
    
    
    
    
    
    
    Noncurrent Liabilities
    
    
    (23,972
    )
    
    
    (16,530
    )
    
    
    (27,545
    )
    
    
    (9,370
    )
    
    
    (7,174
    )
    
    
    (4,632
    )Intangible Asset(3)
    
    
    N/A
    
    
    
    26
    
    
    
    3,271
    
    
    
    
    
    
    
    
    
    
    
    Accumulated Other Comprehensive
Loss(3) (1)
    
    
    N/A
    
    
    
    26,053
    
    
    
    48,059
    
    
    
    N/A
    
    
    
    
    
    
    
    Pension Asset (Liability)
    
    $
    (20,952
    )
    
    $
    21,332
    
    
    $
    23,785
    
    
    $
    (10,204
    )
    
    $
    (7,174
    )
    
    $
    (4,632
    )
 
 (1)
    
    The Companys share of the accumulated other comprehensive loss from pension and
postretirement plans from the Denver and Salt Lake JOAs (which are
unconsolidated  See Note 3: Joint Operating Agencies for further
discussion) are
included as a component of the Companys accumulated comprehensive loss in the Companys
consolidated balance sheet; however, because the Company does not consolidate the related
pension plans, information from those plans are excluded from the above table. Also,
accumulated other comprehensive loss as shown here differs from the accumulated other
comprehensive loss as reflected in the consolidated balance sheets and consolidated
statements of changes in shareholders equity as the consolidated statements reflect the
amounts net of tax.(2)
    
    For all except one plan which assumes 3.5%.(3)
    
    With the fiscal year 2007 adoption of SFAS No. 158, these amounts are now included in
the consolidated financial statements as liabilities.
 84




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##### Table of Contents



June 302007
    
    
    2006Accumulated Benefit Obligation
    
    $
    119,134
    
    
    $
    73,093Projected Benefit Obligation
    
    
    122,245
    
    
    
    72,574Fair Value of Plan Assets
    
    
    98,232
    
    
    
    56,044
  Pension
    
    
    Other BenefitsAmortization of Net Actuarial (Gain)/Loss
    
    $
    1,248
    
    
    $
    74Amortization of Prior Service Cost
    
    
    278
    
    
    
    (13
    )Total
    
    $
    1,526
    
    
    $
    61
  Pension Plans
    
    
    Other Benefits2008
    
    $
    15,338
    
    
    $
    8342009
    
    
    15,881
    
    
    
    8662010
    
    
    16,469
    
    
    
    8942011
    
    
    17,148
    
    
    
    9072012
    
    
    18,139
    
    
    
    9182013  2017
    
    
    100,325
    
    
    
    4,557
  Target

    
    Plan AssetsAllocations

    
    Years Ended June 30,2008

    
    2007

    
    2006Asset Category:Equity securities
    
    
    70.0
    %
    
    
    68.7
    %
    
    
    70.0
    %Debt securities
    
    
    20.0
    
    
    
    28.3
    
    
    
    19.3Other
    
    
    10.0
    
    
    
    3.0
    
    
    
    10.7Total
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
  85




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The Denver Post Pioneer Press
   1-Percentage
    
    
    1-PercentagePoint Increase
    
    
    Point DecreaseEffect on total of service and interest cost components
    
    $
    97
    
    
    $
    81Effect on postretirement benefit obligation
    
    $
    793
    
    
    $
    689
  Deferred Compensation Plan
  Other Retirement Plans
  86




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Note 9: Income Taxes
  Years Ended June 30,2007
    
    
    2006
    
    
    2005(Dollars in thousands)Current:State
    
    $
    (606
    )
    
    $
    1,249
    
    
    $
    1,331Federal
    
    
    (7,478
    )
    
    
    7,179
    
    
    
    1,031Deferred:State
    
    
    1,243
    
    
    
    (19
    )
    
    
    1,167Federal
    
    
    24,987
    
    
    
    (4,526
    )
    
    
    16,561Net provision
    
    $
    18,146
    
    
    $
    3,883
    
    
    $
    20,090
  Years Ended June 30,2007

    
    2006

    
    2005Statutory federal income tax rate
    
    
    35
    %
    
    
    35
    %
    
    
    35
    %Effect of:State income tax net of federal benefit
    
    
    1
    
    
    
    16
    
    
    
    3Dividends received deduction
    
    
    
    
    
    
    (4
    )
    
    
    (4
    )Book/tax basis difference associated
with acquisitions and non-deductible
acquisition costs
    
    
    
    
    
    
    12
    
    
    
    Nontaxable proceeds of life insurance
    
    
    (4
    )Expenses not deductible for tax purposes
    
    
    1
    
    
    
    12
    
    
    
    1Other, net
    
    
    1
    
    
    
    7
    
    
    
    (1
    )Financial statement effective tax rate
    
    
    34
    %
    
    
    78
    %
    
    
    34
    %
 87




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##### Table of Contents



June 30,2007
    
    
    2006(Dollars in thousands)Deferred tax assets:Net operating losses and other credits
    
    $
    27,903
    
    
    $
    19,529Deferred employee compensation
    
    
    12,443
    
    
    
    11,994Notes payable
    
    
    5,972
    
    
    
    4,883Pensions
    
    
    8,382
    
    
    
    1,760Option accrual
    
    
    
    
    
    
    1,371Bad debts
    
    
    3,807
    
    
    
    2,643Other
    
    
    9,571
    
    
    
    1,61568,078
    
    
    
    43,745Valuation allowance
    
    
    (3,137
    )
    
    
    (3,822
    )Deferred tax assets
    
    
    64,941
    
    
    
    39,923Deferred tax liabilities:Fixed assets
    
    
    29,498
    
    
    
    30,306Intangibles
    
    
    101,449
    
    
    
    75,019Partnership interests and equity investments
    
    
    52,648
    
    
    
    37,947Option accrual
    
    
    1,236
    
    
    
    Deferred tax liabilities
    
    
    184,831
    
    
    
    143,272Net deferred tax liabilities
    
    $
    119,890
    
    
    $
    103,349
      88




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##### Table of Contents



Note 10: Hedging Activities
   Note 11: Commitments and Contingencies
 Commitments
    89




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The Monterey County Herald The Monterey County
Herald
 The Monterey County Herald, Pioneer
Press Daily Breeze The Monterey County
Herald, Pioneer Press Daily Breeze
 Contingencies
 The
Salt Lake Tribune The Salt Lake Tribune). The Salt Lake Tribune.
  90




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The Salt Lake Tribune
 The Salt Lake Tribune.
  Other
 The York Dispatch
    Pioneer Press Star Tribune, Pioneer Press Star Tribune Star Tribune
  91




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##### Table of Contents



Note 12: Related Party Transactions
      Contra Costa Times San
Jose Mercury News
  Connecticut Post News-Times
 The Park Record
    92




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##### Table of Contents



Note 13: Other (Income) Expense, Net
  Years Ended June 30,2007
    
    
    2006
    
    
    2005(In millions)Change in estimated option repurchase price
    
    $
    (6.6
    )
    
    $
    
    
    
    $
    (5.8
    )Receipt of life insurance proceeds(1)
    
    
    (6.6
    )
    
    
    
    
    
    
    Hedging, net
    
    
    0.8
    
    
    
    0.8
    
    
    
    0.4Litigation and settlement(2)
    
    
    17.8
    
    
    
    1.3
    
    
    
    0.8Debt redemption premiums and write-off of
deferred debt costs
    
    
    
    
    
    
    
    
    
    
    9.2Preferred return on Detroit JOA investment
    
    
    (1.7
    )
    
    
    (2.0
    )
    
    
    Other
    
    
    7.5
    
    
    
    1.3
    
    
    
    4.1$
    11.2
    
    
    $
    1.4
    
    
    $
    8.7
 (1)
    
    In October 2006, the Company received life insurance proceeds of
$5.0 million, plus interest and reimbursement of the policys premiums since the
insureds death, for a total payment of $6.6 million.(2)
    
    Includes legal fees and settlement costs associated with Salt Lake
ownership issues and other fees associated with the Par Ridder litigation discussed
in Note 11: Commitments and Contingencies.
 Note 14: Workforce Reductions and Other Restructuring
 Accounting for Costs Associated with Exit or Disposal Activities Recognition of Liabilities in Connection with a Purchase Business Combination,
 Note 15: Career Restricted Stock Unit Plan
   
    
    the earlier of (x) the completion of 20 years of continuous service with the Company or
its affiliates or (y) attainment of age 67 while still employed by the Company or its
affiliates; or
 93




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##### Table of Contents




    
    the date on which the participant (a) has completed at least five years of participation
in the RSU Plan and (b) has either 20 years of service with the
Company or a combined age and years of service with the Company
and or affiliates of at least 72.
     Note 16: Sale of Buildings
  Note 17: Subsequent Events
 Treasury Stock
  Amendment to Credit Agreement
  94




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F i n a n c i a l  S t a t e m e n t s
 
 95




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##### Table of Contents



Contents
 Report of Independent Registered Public Accounting Firm
    
    
    97Financial StatementsBalance Sheet
    
    
    98Statement of Income and Members Equity
    
    
    99Statement of Cash Flows
    
    
    100Notes to Financial Statements
    
    
    101
 96




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##### Table of Contents



Employers Accounting for
Defined Benefit Pension and Other Postretirement Plans
 /s/ Ernst & Young LLP 
 97




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##### Table of Contents



AssetsCurrent assets:Cash and cash equivalents
    
    $
    529,870Receivables:Trade accounts:Advertising
    
    
    15,174,214Circulation
    
    
    988,409Members
    
    
    225,173Other
    
    
    412,827Less allowance for doubtful receivables
    
    
    (1,160,155
    )Net receivables
    
    
    15,640,468Inventories
    
    
    2,182,668Prepaid expenses
    
    
    1,707,024Total current assets
    
    
    20,060,030Cash value of life insurance, net
    
    
    291,305Net prepaid pension costs
    
    
    6,838,306Other assets
    
    
    87,735Total other assets
    
    
    7,217,346Total assets
    
    $
    27,277,376Liabilities and members equityCurrent liabilities:Accounts payable
    
    $
    3,000,558Accrued salaries and benefits
    
    
    4,050,878Deferred subscription and advertising revenue
    
    
    5,008,265Other liabilities
    
    
    916,242Total current liabilities
    
    
    12,975,943Postretirement and postemployment benefit liabilities
    
    
    6,629,400Total liabilities
    
    
    19,605,343Members equity:Members equity
    
    
    7,309,536Undistributed earnings
    
    
    3,149,904Accumulated other comprehensive loss
    
    
    (2,787,407
    )Total members equity
    
    
    7,672,033Total liabilities and members equity
    
    $
    27,277,376
 See accompanying notes.
 98




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Revenues, net of commissions, rebates, and discounts:Advertising
    
    $
    126,174,604Circulation
    
    
    28,206,616Commercial printing revenue
    
    
    2,438,687Other
    
    
    631,885157,451,792Operating expenses:Cost of goods sold
    
    
    63,153,231Selling, general, and administrative
    
    
    30,219,468Related party equipment and building rental
    
    
    12,253,028Total operating expenses
    
    
    105,625,727Net income
    
    
    51,826,065Contribution of Newspaper Agency Corporation net assets
from Members (including cash of $10,000)
    
    
    504,699Conversion of LIFO to FIFO inventory method
    
    
    1,162,446Conversion of net payable due to Principals of Newspaper Agency
Corporation
    
    
    7,943,845Member distributions
    
    
    (50,977,615
    )Accumulated other comprehensive loss
    
    
    (2,787,407
    )Members equity at end of year
    
    $
    7,672,033
 See accompanying notes.
 99




---



##### Table of Contents



Operating activitiesNet income
    
    $
    51,826,065Adjustments to reconcile net income to net cash
provided by operating activities:Provision for losses on receivables
    
    
    1,028,157Changes in operating assets and liabilities (net of assets
contributed by Newspaper Agency Corporation):Advertising receivables
    
    
    (1,702,314
    )Circulation receivables
    
    
    (485,163
    )Member receivables
    
    
    1,284,749Other receivables
    
    
    44,820Inventories
    
    
    101,746Prepaid expenses
    
    
    (722,397
    )Cash value of life insurance, net
    
    
    (8,392
    )Net prepaid pension costs
    
    
    362,648Deposits
    
    
    (11,700
    )Accounts payable
    
    
    725,316Accrued salaries and benefits
    
    
    (186,016
    )Deferred subscription and advertising revenue
    
    
    (400,815
    )Other liabilities
    
    
    (281,001
    )Postretirement and postemployment benefit liabilities
    
    
    (298,352
    )Net cash provided by operating activities
    
    
    51,277,351Investing activitiesChange in restricted cash
    
    
    220,134Net cash provided by investing activities
    
    
    220,134Financing activitiesCash contributed by Principals
    
    
    10,000Member distributions
    
    
    (50,977,615
    )Net cash used in financing activities
    
    
    (50,967,615
    )Net increase in cash and cash equivalents
    
    
    529,870Cash and cash equivalents at beginning of year
    
    
    Cash and cash equivalents at end of year
    
    $
    529,870
 See accompanying notes.
 100




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##### Table of Contents



1. Organization and Business
  The Salt Lake Tribune The Deseret Morning News
   101




---



##### Table of Contents



1. Organization and Business (continued)
 Business Formation
   102




---



##### Table of Contents



1. Organization and Business (continued)
  Cash
    
    $
    10,000Restricted cash
    
    
    220,134Net receivables
    
    
    15,810,717Inventories
    
    
    1,121,968Prepaid expenses
    
    
    984,627Current assets
    
    
    18,147,446Prepaid pension costs
    
    
    9,115,919Other
    
    
    358,948Total assets contributed
    
    
    27,622,313Accounts payable
    
    
    (2,275,244
    )Accrued salaries and expenses
    
    
    (4,236,894
    )Deferred revenue
    
    
    (5,409,080
    )Current liabilities
    
    
    (11,921,218
    )Due to owners
    
    
    (7,943,845
    )Other liabilities
    
    
    (1,197,243
    )Postretirement and postemployment benefit liability
    
    
    (6,055,308
    )Net liabilities assumed
    
    
    (27,117,614
    )Net assets contributed by NAC, Inc. and Principals
    
    $
    504,699
 2. Summary of Significant Accounting Policies and Other Matters
 Cash Equivalents
  Trade Accounts Receivable
  103




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##### Table of Contents



2. Summary of Significant Accounting Policies and Other Matters (continued)
   Inventories
   Newsprint
    
    $
    1,486,451Supplies and parts
    
    
    696,217$
    2,182,668
 Revenue Recognition
 Revenue Recognition Revenue Arrangements with Multiple Deliverables
 104




---



##### Table of Contents



2. Summary of Significant Accounting Policies and Other Matters (continued)
  Advertising Costs
  Income Taxes
  Use of Estimates
  Employee Labor Arrangements
  105




---



##### Table of Contents



2. Summary of Significant Accounting Policies and Other Matters (continued)
 New Accounting Pronouncements
 Employers Accounting for Defined
Benefit Pension and Other Postretirement Plans
 Accounting for Uncertainty in Income
Taxes
 Accumulated
Other Comprehensive Income
  3. Related-Party Transactions and Balances
  Current receivables from Members (balance sheet):Kearns-Tribune, LLC
    
    $
    177,752Deseret News Publishing Company
    
    
    47,421$
    225,173
  106




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##### Table of Contents



4. Employee Benefit Plans
 Pension Plan
  Employers Accounting for Pensions
   107




---



##### Table of Contents



4. Employee Benefit Plans (continued)
  Benefit obligation at beginning of year
    
    $
    28,214,887Service cost
    
    
    897,739Interest cost
    
    
    1,525,110Actuarial gain
    
    
    (3,418,144
    )Benefits paid
    
    
    (3,764,343
    )Benefit obligation at end of year
    
    
    23,455,249Fair value of plan assets at beginning of year
    
    
    29,515,678Actual return on plan assets
    
    
    4,542,220Benefits paid
    
    
    (3,764,343
    )Fair value of plan assets at end of year
    
    
    30,293,555Funded status of Plan
    
    $
    6,838,306
 Weighted-average assumption as of June 30:Discount rate
    
    
    6.50
    %Expected return on plan assets
    
    
    8.00Rate of compensation increase
    
    
    4.50
  Service cost
    
    $
    897,739Interest cost
    
    
    1,525,110Expected return on assets
    
    
    (2,392,263
    )Net actuarial loss recognition
    
    
    333,062Net periodic pension expense
    
    $
    363,648
 108




---



##### Table of Contents



4. Employee Benefit Plans (continued)
  Equity securities
    
    
    78.04
    %Debt securities
    
    
    20.54Other
    
    
    1.42100.00
    %
   During the year ended June 30:2008
    
    $
    2,049,4652009
    
    
    2,006,4992010
    
    
    2,060,3392011
    
    
    2,227,3282012
    
    
    2,278,7382013 through 2017
    
    
    11,727,237
 Postretirement Health Plan
  109




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##### Table of Contents



4. Employee Benefit Plans (continued)
  Benefit obligation at beginning of year
    
    $
    7,264,132Interest cost
    
    
    385,416Actuarial gain
    
    
    (698,481
    )Benefits paid
    
    
    (624,602
    )Benefit obligation at end of year
    
    
    6,326,465Fair value of plan assets at beginning of year
    
    
    Employer contributions
    
    
    624,602Benefits paid
    
    
    (624,602
    )Fair value of plan assets at end of year
    
    
    Funded status of Plan
    
    $
    (6,326,465
    )Weighted-average assumption as of June 30:Discount rate
    
    
    6.5%
   Interest cost
    
    $
    385,416Amortization of unrecognized actuarial loss
    
    
    58,913Net benefit cost
    
    $
    444,329
 110




---



##### Table of Contents



4. Employee Benefit Plans (continued)
  1-Percentage
    
    
    1-PercentagePoint
    
    
    PointIncrease
    
    
    DecreaseEffect on total service and interest cost components
    
    $
    27,210
    
    
    $
    24,359Effect on accumulated benefits obligation
    
    
    436,482
    
    
    
    392,448
  Net of Part DSubsidy
    
    
    GrossDuring the year ended June 30:2008
    
    $
    674,956
    
    
    $
    745,7732009
    
    
    670,622
    
    
    
    742,9512010
    
    
    667,064
    
    
    
    739,8402011
    
    
    654,236
    
    
    
    727,0942012
    
    
    634,427
    
    
    
    706,5782013 through 2017
    
    
    2,841,319
    
    
    
    3,163,018
  111




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##### Table of Contents



4. Employee Benefit Plans (continued)
 Postemployment Plan
  Other Plans
   5. Commitments
  112




---



##### Table of Contents



5. Commitments (continued)
  RelatedParties
    
    
    Other
    
    
    TotalYear ended June 30:2008
    
    $
    12,117,000
    
    
    $
    326,000
    
    
    $
    12,443,0002009
    
    
    11,880,000
    
    
    
    171,000
    
    
    
    12,051,0002010
    
    
    10,631,000
    
    
    
    
    
    
    
    10,631,0002011
    
    
    10,058,000
    
    
    
    
    
    
    
    10,058,0002012
    
    
    10,058,000
    
    
    
    
    
    
    
    10,058,000Thereafter
    
    
    34,499,000
    
    
    
    
    
    
    
    34,499,000$
    89,243,000
    
    
    $
    497,000
    
    
    $
    89,740,000
  6. Contingencies
   113




---



##### Table of Contents



Financial Statements
 
 114




---



##### Table of Contents



Contents
 Report of Independent Registered Public Accounting Firm
    
    
    116Financial StatementsBalance Sheets
    
    
    117Statements of Earnings and Retained Earnings (Accumulated Deficit)
    
    
    119Statements of Cash Flows
    
    
    120Notes to Financial Statements
    
    
    121
 115




---



##### Table of Contents



116




---



##### Table of Contents



June 30
    
    
    December 312006
    
    
    2005
    
    
    2004(Unaudited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    10,000
    
    
    $
    218,857
    
    
    $
    221,766Restricted cash
    
    
    220,134
    
    
    
    643,960
    
    
    
    634,056Receivables:Trade accounts:Advertising
    
    
    13,630,299
    
    
    
    16,140,178
    
    
    
    14,381,370Circulation
    
    
    1,043,831
    
    
    
    1,137,060
    
    
    
    1,137,446Principals
    
    
    1,509,922
    
    
    
    1,894,399
    
    
    
    5,935,900Related parties
    
    
    94,317
    
    
    
    
    
    
    
    Other
    
    
    363,330
    
    
    
    726,651
    
    
    
    385,318Less allowance for doubtful receivables
    
    
    (830,982
    )
    
    
    (523,867
    )
    
    
    (460,070
    )Net receivables
    
    
    15,810,717
    
    
    
    19,374,421
    
    
    
    21,379,964Inventories
    
    
    1,121,968
    
    
    
    1,711,516
    
    
    
    2,121,184Excess compensation to Principals
    
    
    1,187,335
    
    
    
    
    
    
    
    Prepaid expenses
    
    
    984,627
    
    
    
    893,842
    
    
    
    862,646Total current assets
    
    
    19,334,781
    
    
    
    22,842,596
    
    
    
    25,219,616Cash value of life insurance, net
    
    
    282,913
    
    
    
    282,913
    
    
    
    276,008Net prepaid pension costs
    
    
    9,115,919
    
    
    
    9,463,088
    
    
    
    10,014,616Other assets
    
    
    76,035
    
    
    
    81,986
    
    
    
    80,647Total other assets
    
    
    9,474,867
    
    
    
    9,827,987
    
    
    
    10,371,271Total assets
    
    $
    28,809,648
    
    
    $
    32,670,583
    
    
    $
    35,590,887
 See accompanying notes.
 117




---



##### Table of Contents



June 30
    
    
    December 312006
    
    
    2005
    
    
    2004(Unaudited)Liabilities and stockholders equityCurrent liabilities:Accounts payable
    
    $
    2,275,244
    
    
    $
    2,639,110
    
    
    $
    2,559,756Accrued salaries and benefits
    
    
    4,236,894
    
    
    
    4,078,367
    
    
    
    3,703,527Deferred subscription and advertising revenue
    
    
    5,409,080
    
    
    
    5,301,143
    
    
    
    4,222,016Compensation to Principals
    
    
    
    
    
    
    2,460,808
    
    
    
    7,861,445Other liabilities
    
    
    1,197,243
    
    
    
    1,652,954
    
    
    
    1,459,743Total current liabilities
    
    
    13,118,461
    
    
    
    16,132,382
    
    
    
    19,806,487Postretirement and postemployment benefit
liabilities
    
    
    6,055,308
    
    
    
    6,277,887
    
    
    
    6,351,818Compensation to Principals associated with
net prepaid pension costs
    
    
    9,131,180
    
    
    
    9,131,180
    
    
    
    9,663,753Total liabilities
    
    
    28,304,949
    
    
    
    31,541,449
    
    
    
    35,822,058Stockholders equity:Common stock, $100 par value/100 shares
authorized, issued, and outstanding
    
    
    10,000
    
    
    
    10,000
    
    
    
    10,000Retained earnings (deficit)
    
    
    494,699
    
    
    
    1,119,134
    
    
    
    (241,171
    )Total stockholders equity (deficit)
    
    
    504,699
    
    
    
    1,129,134
    
    
    
    (231,171
    )Total liabilities and stockholders equity
    
    $
    28,809,648
    
    
    $
    32,670,583
    
    
    $
    35,590,887
 See accompanying notes.
 118




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##### Table of Contents



Six MonthsEndedJune 30
    
    
    Years Ended December 312006
    
    
    2005
    
    
    2004(Unaudited)Revenues, net of commissions, rebates,
and discounts:Advertising
    
    $
    59,084,223
    
    
    $
    118,426,359
    
    
    $
    114,706,635Circulation
    
    
    13,860,891
    
    
    
    28,234,440
    
    
    
    28,079,362Other
    
    
    1,316,267
    
    
    
    2,681,585
    
    
    
    2,462,46774,261,381
    
    
    
    149,342,384
    
    
    
    145,248,464Cost and expenses:Cost of sales
    
    
    30,466,503
    
    
    
    59,297,917
    
    
    
    58,227,662Selling, general, and administrative
    
    
    16,503,710
    
    
    
    30,169,618
    
    
    
    30,327,987Principals compensation
    
    
    26,010,112
    
    
    
    57,787,611
    
    
    
    54,724,07272,980,325
    
    
    
    147,255,146
    
    
    
    143,279,721Earnings before income taxes
    
    
    1,281,056
    
    
    
    2,087,238
    
    
    
    1,968,743Income tax expense
    
    
    (305,491
    )
    
    
    (726,933
    )
    
    
    (766,987
    )Net earnings
    
    
    975,565
    
    
    
    1,360,305
    
    
    
    1,201,756(Accumulated deficit) retained earnings at
beginning of year
    
    
    1,119,134
    
    
    
    (241,171
    )
    
    
    9,782,073Distributions of retained earnings to Principals
    
    
    (1,600,000
    )
    
    
    
    
    
    
    (11,225,000
    )Retained earnings (accumulated deficit)
at end of year
    
    $
    494,699
    
    
    $
    1,119,134
    
    
    $
    (241,171
    )
 See accompanying notes.
 119




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##### Table of Contents



Six MonthsEndedJune 30
    
    
    Years Ended December 312006
    
    
    2005
    
    
    2004(Unaudited)Operating activitiesNet earnings
    
    $
    975,565
    
    
    $
    1,360,305
    
    
    $
    1,201,756Adjustments to reconcile net earnings to net cash
provided by operating activities:Provision for losses on receivables
    
    
    752,448
    
    
    
    1,195,337
    
    
    
    976,334Changes in operating assets and liabilities:Advertising receivables
    
    
    2,323,950
    
    
    
    (2,373,480
    )
    
    
    (1,799,895
    )Circulation receivables
    
    
    (166,175
    )
    
    
    (516,482
    )
    
    
    (351,670
    )Receivable from Principals
    
    
    384,477
    
    
    
    4,041,501
    
    
    
    (1,958,909
    )Other receivables
    
    
    269,004
    
    
    
    (341,333
    )
    
    
    (32,764
    )Inventories
    
    
    589,548
    
    
    
    409,668
    
    
    
    (167,615
    )Excess compensation to Principals
    
    
    (1,187,335
    )
    
    
    
    
    
    
    Prepaid expenses
    
    
    (90,785
    )
    
    
    (31,196
    )
    
    
    (269,298
    )Cash value of life insurance, net
    
    
    
    
    
    
    (6,905
    )
    
    
    66,615Net prepaid pension costs
    
    
    347,169
    
    
    
    551,528
    
    
    
    610,986Other assets
    
    
    5,951
    
    
    
    (1,339
    )
    
    
    (57,297
    )Accounts payable
    
    
    (363,866
    )
    
    
    79,354
    
    
    
    (292,197
    )Accrued salaries and benefits
    
    
    158,527
    
    
    
    374,840
    
    
    
    639,675Deferred subscription and advertising revenue
    
    
    107,937
    
    
    
    1,079,127
    
    
    
    1,765,712Compensation to Principals
    
    
    (2,460,808
    )
    
    
    (5,400,637
    )
    
    
    7,820,617Income taxes payable
    
    
    
    
    
    
    
    
    
    
    (1,222,366
    )Other liabilities
    
    
    (455,711
    )
    
    
    193,211
    
    
    
    1,128,071Postretirement and postemployment
benefit liabilities
    
    
    (222,579
    )
    
    
    (73,931
    )
    
    
    2,684,836Compensation to Principals associated
with net prepaid pension costs
    
    
    
    
    
    
    (532,573
    )
    
    
    (589,604
    )Net cash provided by operating activities
    
    
    967,317
    
    
    
    6,995
    
    
    
    10,152,987Investing activitiesChange in restricted cash
    
    
    423,826
    
    
    
    (9,904
    )
    
    
    (634,056
    )Net cash used in investing activities
    
    
    423,826
    
    
    
    (9,904
    )
    
    
    (634,056
    )Financing activitiesDistributions to Principals from retained earnings
    
    
    (1,600,000
    )
    
    
    
    
    
    
    (11,225,000
    )Net cash used in financing activities
    
    
    (1,600,000
    )
    
    
    
    
    
    
    (11,225,000
    )Net decrease in cash and cash equivalents
    
    
    (208,857
    )
    
    
    (2,909
    )
    
    
    (1,706,069
    )Cash and cash equivalents at beginning of year
    
    
    218,857
    
    
    
    221,766
    
    
    
    1,927,835Cash and cash equivalents at end of year
    
    $
    10,000
    
    
    $
    218,857
    
    
    $
    221,766
 See accompanying notes.
 120




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##### Table of Contents



1. Organization and Business
  The Salt Lake
Tribune The Deseret Morning News
 The
Salt Lake Tribune The Deseret Morning News
 121




---



##### Table of Contents



2. Summary of Significant Accounting Policies and Other Matters
 Cash Equivalents
  Trade Accounts Receivable
   Inventories
  122




---



##### Table of Contents



2. Summary of Significant Accounting Policies and Other Matters (continued)
  June 30
    
    Years Ended December 312006
    
    2005
    
    2004(Unaudited)Newsprint
    
    $
    702,389
    
    
    $
    1,363,639
    
    
    $
    1,716,947Supplies and parts
    
    
    419,579
    
    
    
    347,877
    
    
    
    404,237$
    1,121,968
    
    
    $
    1,711,516
    
    
    $
    2,121,184
  Revenue Recognition
 Revenue Recognition Revenue Arrangements with Multiple Deliverables
  123




---



##### Table of Contents



2. Summary of Significant Accounting Policies and Other Matters (continued)
 Advertising Costs
  Income Taxes
   Use of Estimates
  124




---



##### Table of Contents



2. Summary of Significant Accounting Policies and Other Matters (continued)
 Employee Labor Arrangements
  3. Related-Party Transactions and Balances
  June 30
    
    Years Ended December 312006
    
    2005
    
    2004(Unaudited)Current receivables from Principals
(balance sheets):Kearns-Tribune, LLC
    
    $
    626,442
    
    
    $
    734,007
    
    
    $
    3,409,517Deseret News Publishing Company
    
    
    883,480
    
    
    
    1,160,392
    
    
    
    2,526,383$
    1,509,922
    
    
    $
    1,894,399
    
    
    $
    5,935,900(Excess compensation)/compensation to
Principals (balance sheets):Kearns-Tribune, LLC
    
    $
    (613,104
    )
    
    $
    1,499,898
    
    
    $
    4,623,705Deseret News Publishing Company
    
    
    (574,231
    )
    
    
    960,910
    
    
    
    3,237,740$
    (1,187,335
    )
    
    $
    2,460,808
    
    
    $
    7,861,445Compensation to Principals associated
with net prepaid pension costs
(balance sheets):Kearns-Tribune, LLC
    
    $
    5,296,084
    
    
    $
    5,296,084
    
    
    $
    5,604,977Deseret News Publishing Company
    
    
    3,835,096
    
    
    
    3,835,096
    
    
    
    4,058,776$
    9,131,180
    
    
    $
    9,131,180
    
    
    $
    9,663,753
 125




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##### Table of Contents



3. Related-Party Transactions and Balances (continued)
 June 30
    
    Years Ended December 312006
    
    2005
    
    2004(Unaudited)Principals compensation (statements
of earnings):Kearns-Tribune, LLC
    
    $
    15,134,253
    
    
    $
    33,617,398
    
    
    $
    31,926,046Deseret News Publishing Company
    
    
    10,875,859
    
    
    
    24,170,213
    
    
    
    22,798,026$
    26,010,112
    
    
    $
    57,787,611
    
    
    $
    54,724,072
  4. Employee Benefit Plans
 Pension Plan
  126




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##### Table of Contents



4. Employee Benefit Plans (continued)
  2005
    
    2004Benefit obligation at beginning of year
    
    $
    27,269,459
    
    
    $
    25,966,828Service cost
    
    
    1,000,616
    
    
    
    1,222,817Interest cost
    
    
    1,569,395
    
    
    
    1,621,182Actuarial loss
    
    
    1,695,586
    
    
    
    1,294,825Benefits paid
    
    
    (2,270,134
    )
    
    
    (2,836,193
    )Benefit obligation at end of year
    
    $
    29,264,922
    
    
    $
    27,269,459Fair value of plan assets at beginning of year
    
    $
    31,233,536
    
    
    $
    32,616,453Actual return on plan assets
    
    
    1,533,067
    
    
    
    2,248,276Benefits paid
    
    
    (2,270,134
    )
    
    
    (2,836,193
    )Transfers to retiree health care plan
    
    
    
    
    
    
    (795,000
    )Fair value of plan assets at end of year
    
    $
    30,496,469
    
    
    $
    31,233,536Funded status of plan
    
    $
    1,231,547
    
    
    $
    3,964,077Unrecognized net loss
    
    
    8,231,541
    
    
    
    6,050,539Net prepaid benefit cost
    
    $
    9,463,088
    
    
    $
    10,014,616
 Weighted-average assumption as of December 31:Discount rate
    
    
    5.50
    %
    
    
    6.00
    %Expected return on plan assets
    
    
    8.00
    
    
    
    8.00Rate of compensation increase
    
    
    3.50
    
    
    
    4.00
 127




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4. Employee Benefit Plans (continued)
  June 30
    
    Years Ended December 312006
    
    2005
    
    2004(Unaudited)Service cost
    
    $
    498,842
    
    
    $
    1,000,616
    
    
    $
    1,222,817Interest cost
    
    
    751,996
    
    
    
    1,569,395
    
    
    
    1,621,182Expected return on assets
    
    
    (1,175,157
    )
    
    
    (2,389,481
    )
    
    
    (2,574,303
    )Net actuarial loss recognition
    
    
    270,388
    
    
    
    370,997
    
    
    
    106,218Transition asset recognition
    
    
    
    
    
    
    
    
    
    
    (559,927
    )Net periodic pension expense (benefit)
    
    $
    346,069
    
    
    $
    551,527
    
    
    $
    (184,013
    )
  2005
    
    2004Equity securities
    
    
    72.56
    %
    
    
    67.20
    %Debt securities
    
    
    25.64
    
    
    
    30.53Other
    
    
    1.80
    
    
    
    2.27100.00
    %
    
    
    100.00
    %
  128




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4. Employee Benefit Plans (continued)
  During the year ended December 31:2006
    
    $
    1,297,2422007
    
    
    2,102,1632008
    
    
    1,858,8372009
    
    
    2,349,7632010
    
    
    2,517,1742011 through 2015
    
    
    15,311,950
 129




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##### Table of Contents



4. Employee Benefit Plans (continued)
 Postretirement Health Plan
  2005
    
    2004Benefit obligation at beginning of year
    
    $
    8,309,491
    
    
    $
    11,467,588Service cost
    
    
    
    
    
    
    104,633Interest cost
    
    
    514,467
    
    
    
    594,360Actuarial gain
    
    
    (645,087
    )
    
    
    (350,724
    )Benefits paid
    
    
    (734,982
    )
    
    
    (799,181
    )Amendment
    
    
    
    
    
    
    353,098Curtailment
    
    
    
    
    
    
    (3,060,283
    )Benefit obligation at end of year
    
    $
    7,443,889
    
    
    $
    8,309,491Fair value of plan assets at beginning of year
    
    $
    
    
    
    $
    Transfers from defined benefit pension plan
    
    
    
    
    
    
    795,000Employer contributions
    
    
    734,982
    
    
    
    4,181Benefits paid
    
    
    (734,982
    )
    
    
    (799,181
    )Fair value of plan assets at end of year
    
    $
    
    
    
    $
    Funded status of plan
    
    $
    (7,443,889
    )
    
    $
    (8,309,491
    )Unrecognized actuarial loss
    
    
    1,615,274
    
    
    
    2,483,438Accrued postretirement cost
    
    $
    (5,828,615
    )
    
    $
    (5,826,053
    )
 Weighted-average assumption as of December 31:Discount rate
    
    
    5.50
    %
    
    
    6.00
    %
 130




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4. Employee Benefit Plans (continued)
 Employers Accounting for Postretirement Benefits
Other Than Pensions
   June 30
    
    Years Ended December 312006
    
    2005
    
    2004(Unaudited)Service cost
    
    $
    
    
    
    $
    
    
    
    $
    104,633Interest cost
    
    
    194,287
    
    
    
    514,467
    
    
    
    594,360Amortization
of unrecognized actuarial loss
    
    
    44,779
    
    
    
    223,078
    
    
    
    136,617Amortization of prior service cost
    
    
    
    
    
    
    
    
    
    
    (297,768
    )Amortization of net transition obligation
    
    
    
    
    
    
    
    
    
    
    400,000Net benefit cost
    
    $
    239,066
    
    
    $
    737,545
    
    
    $
    937,842
  1-Percentage
    
    1-PercentagePoint
    
    PointIncrease
    
    DecreaseEffect on total service and interest cost components
    
    $
    38,138
    
    
    $
    33,997Effect on accumulated benefits obligation
    
    
    550,765
    
    
    
    493,016
 131




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4. Employee Benefit Plans (continued)
  Net of Part DSubsidy
    
    
    GrossDuring the year ended December 31:2006
    
    $
    730,525
    
    
    $
    822,7062007
    
    
    741,398
    
    
    
    837,1192008
    
    
    730,054
    
    
    
    830,4502009
    
    
    714,340
    
    
    
    819,0872010
    
    
    705,267
    
    
    
    811,6882011 through 2015
    
    
    3,131,109
    
    
    
    3,667,607
  Other Plans
  132




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4. Employee Benefit Plans (continued)
  5. Commitments
   Year ended December 31:2006
    
    $
    573,4622007
    
    
    264,8162008
    
    
    116,1842009
    
    
    20,373$
    974,835
   133




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6. Contingencies
   7. Subsequent Event
  134




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SIGNATURES
   MEDIANEWS GROUP, INC.Date: September 28, 2007
    By:
    /S/Ronald A. MayoRonald A. MayoVice President and Chief Financial Officer  SIGNATURE
    
    TITLE
    
    DATE/S/ Richard B. Scudder
    
    Chairman and Director
    
    September 28, 2007(Richard B. Scudder)/S/ Jean L. Scudder
    
    Director
    
    September 28, 2007(Jean L. Scudder)/S/Howell E. Begle, Jr.
    
    Director
    
    September 28, 2007(Howell E. Begle, Jr.)/S/William Dean Singleton
    
    Vice Chairman, Chief Executive Officer(William Dean Singleton)
    
    and Director (Chief Executive Officer)
    
    September 28, 2007/S/ Joseph J. Lodovic, IV
    
    President(Joseph J. Lodovic, IV)
    
    
    
    September 28, 2007/S/ Ronald A. Mayo
    
    Vice President and Chief Financial
Officer
    
    September 28, 2007(Ronald A. Mayo)/S/ Michael J. Koren
    
    Vice President and Controller(Michael J. Koren)
    
    (Principal Accounting Officer)
    
    September 28, 2007
 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
  135




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EXHIBIT INDEX
 Exhibits2.1    
    Stock and Asset Purchase Agreement dated as of April 26, 2006, between MediaNews Group,
Inc. and The McClatchy Company (incorporated by reference to Exhibit 99.1 to the
registrants Form 8-K filed May 1, 2006)2.2    
    Stock and Asset Purchase Agreement dated as of April 26, 2006, between The Hearst
Corporation and The McClatchy Company (incorporated by reference to Exhibit 99.2 to the
registrants Form 8-K filed May 1, 2006)3.1    
    Third Amended and Restated Certificate of Incorporation (incorporated by reference to
Exhibit 3.1 to the registrants June 30, 2005 Form 10-K)3.2    
    Amended and Restated Bylaws of MediaNews Group, Inc. (incorporated by reference to
Exhibit 3.2 to the registrants June 30, 2005 Form 10-K)4.1    
    Registration Rights Agreement dated May 20, 1994, between Affiliated Newspapers
Investments, Inc. (the predecessor to the registrant) and BT Securities Corporation
(incorporated by reference to Exhibit 4.3 to Form S-1/A of Affiliated Newspapers
Investments, Inc., filed May 6, 1994 (File No. 33-75158))4.2    
    Indenture dated as of November 25, 2003 between MediaNews Group, Inc., as Issuer, and The
Bank of New York, as Trustee (incorporated by reference to Exhibit 4.4 to the registrants
Form 8-K filed January 14, 2004)4.3    
    Form of MediaNews Group, Inc.s 6 7/8% Senior Subordinated Notes due 2013 (contained in
the Indenture filed as Exhibit 4.4 to the registrants Form 8-K filed January 14, 2004)4.4    
    Indenture dated as of January 26, 2004 between MediaNews Group, Inc., as Issuer, and The
Bank of New York, as Trustee (incorporated by reference to Exhibit 4.4 to the registrants
From 10-Q for the period ended December 31, 2003)4.5    
    Form of MediaNews Group, Inc.s 6 3/8% Senior Subordinated Notes due 2014 (contained in
the Indenture filed as Exhibit 4.4 to the registrants Form 10-Q for the period ended
December 31, 2003)10.1    
    Credit Agreement dated as of December 30, 2003 by and among MediaNews Group, Inc., the
guarantors named therein, the lenders named therein, and Bank of America, N.A., as
administrative agent (the Credit Agreement) (incorporated by reference to Exhibit 10.1 to
the registrants Form 8-K filed January 14, 2004)10.2    
    First Amendment to Credit Agreement, dated as of January 20, 2004, by and among MediaNews
Group, Inc., the guarantors named therein, the lenders named therein and Bank of America,
N.A., as administrative agent (incorporated by reference to Exhibit 10.12 to the
registrants Form S-4 filed February 23, 2004)10.3    
    Second Amendment to Credit Agreement, dated as of April 16, 2004, by and among MediaNews
Group, Inc., the guarantors named therein, the lenders named therein and Bank of America,
N.A., as administrative agent (incorporated by reference to Exhibit 10.3 to the registrants
June 30, 2004 Form 10-K)10.4    
    Third Amendment to Credit Agreement, dated as of August 30, 2004, by and among MediaNews
Group, Inc., the guarantors named therein, the lenders named therein and Bank of America,
N.A., as administrative agent (incorporated by reference to Exhibit 10.4 to the registrants
June 30, 2004 Form 10-K)10.5    
    Fourth Amendment to Credit Agreement, dated as of September 8, 2005, by and among
MediaNews Group, Inc., the guarantors named therein, the lenders named therein and Bank of
America, N.A., as administrative agent (incorporated by reference to Exhibit 10.5 to the
registrants June 30, 2005 Form 10-K)10.6    
    Fifth amendment to Credit Agreement dated as of June 28, 2006, by and among MediaNews
Group, Inc., the guarantors party thereto, the lenders named therein and Bank of America,
N.A., as administrative agent (incorporated by reference to Exhibit
10.6 to the registrants June 30, 2006 Form 10-K)10.7    
    Sixth Amendment to Credit Agreement dated as of August 2, 2006, by and among MediaNews
Group, Inc., the guarantors party thereto, the lenders named therein and Bank of America,
N.A., as administrative agent (incorporated by reference to Exhibit 99.2 to the registrants
Form 8-K filed August 8, 2006)
 136




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EXHIBIT INDEX (continued)
 Exhibits (continued)10.8
    
    Amended and Restated Shareholders Agreement of MediaNews Group, Inc. by and among
MediaNews Group, Inc. and the shareholders named therein, effective as of January 31, 2000,
and amended and restated as of March 16, 2004 (incorporated by reference to Exhibit 10.7 to
the registrants Form S-4/A (File No. 333-113028),
filed March 18, 2004)10.9
    
    Amendment to the Amended and Restated Shareholders Agreement of MediaNews Group, Inc.
dated as of June 30, 2005, by and among MediaNews Group, Inc. and the shareholders named
therein, effective as of January 31, 2000, and amended and restated as of March 16, 2004
(incorporated by reference to Exhibit 10.7 to the
registrants June 30, 2005 Form 10-K)10.10
    
    Employment Agreement dated July 1, 2005 between MediaNews and William Dean Singleton
(incorporated by reference to Exhibit 99.2 to the registrants Form 8-K filed July 5, 2005)10.11
    
    Employment Agreement dated July 1, 2005 between MediaNews and Joseph J. Lodovic IV
(incorporated by reference to Exhibit 99.3 to the registrants Form 8-K filed July 5, 2005)10.12
    
    Second Amended and Restated Joint Operating Agreement, dated as of June 30, 2007 by and
between York Partnership Holdings, LLC, The York Newspaper Company, York Newspapers
Holdings, L.P. and York Dispatch Publishing Company, LLC10.13
    
    Singleton Family Voting Trust Agreement for MediaNews Group, Inc. dated January 31, 2000
(incorporated by reference to Exhibit 10.21 to the registrants Form 10-Q for the period
ended March 31, 2000)10.14
    
    Scudder Family Voting Trust Agreement for MediaNews Group, Inc. dated January 31, 2000
(incorporated by reference to Exhibit 10.22 to the registrants Form 10-Q for the period
ended March 31, 2000)10.15
    
    Amendment and Restatement of Agreement, by and between Kearns-Tribune, LLC and Deseret
News Publishing Company, dated as of July 1, 2006 (incorporated by reference to
Exhibit 10.15 to the registrants June 30, 2006 Form 10-K)10.16
    
    Limited Liability Company Operating Agreement of Newspaper Agency Company, LLC dated as
of July 1, 2006 (incorporated by reference to Exhibit 10.16 to the registrants June 30,
2006 Form 10-K)10.17
    
    Option Purchase Agreement between Garden State Newspapers, Inc., the predecessor of
MediaNews Group, Inc., and Greenco, Inc., dated as of January 30, 1998 (incorporated by
reference to Exhibit 10.13 to the registrants Form S-4 filed February 23, 2004)10.18
    
    Joint Operating Agreement by and between The Denver Post Corporation, Eastern Colorado
Production Facilities, Inc., The Denver Newspaper Agency LLP and The Denver Publishing
Company, dated as of May 11, 2000 (incorporated by reference to Exhibit 10.14 to the
registrants Form S-4 filed February 23, 2004)10.19
    
    First Amendment to the Joint Operating Agreement by and among The Denver Post
Corporation, Eastern Colorado Production Facilities, Inc., The Denver Newspaper Agency LLP
and The Denver Publishing Company, dated January 22, 2001 (incorporated by reference to
Exhibit 10.15 to the registrants Form S-4 filed February 23, 2004)10.20
    
    Limited Liability Partnership Agreement of The Denver Newspaper Agency LLP dated as of
January 22, 2001 (incorporated by reference to Exhibit 10.16 to the registrants Form S-4
filed February 23, 2004)10.21
    
    Second Amended and Restated Partnership Agreement for Texas-New Mexico Newspapers
Partnership, a Delaware general partnership, by and among Gannett Texas L.P. and Northwest
New Mexico Publishing Company (incorporated by reference to Exhibit 10.21 to the
registrants June 30, 2006 Form 10-K)10.22
    
    Third Amended and Restated Partnership Agreement for California Newspapers Partnership,
a Delaware General Partnership, by and among West Coast MediaNews LLC; Stephens California
Media; The Sun Company of San Bernardino, California; California Newspapers, Inc.; Media
WestSBC, Inc. and Media WestCNI, Inc., dated as of August 2, 2006 (incorporated by
reference to Exhibit 10.22 to the registrants June 30, 2006 Form 10-K)
 137




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EXHIBIT INDEX (continued)
 Exhibits (continued)10.23
    
    Purchase Agreement, dated as of April 30, 2004, between Buckner News Alliance, Inc.,
MediaNews Group, Inc., York Newspapers Holdings, LLC, MediaNews Group Interactive and York
Daily Record LLC and related side letter (incorporated by reference to Exhibit 10.20 to the
registrants June 30, 2004 Form 10-K)10.24
    
    Master Restructuring and Purchase Agreement, dated as of May 7, 2004, among Daily
Gazette Company, MediaNews Group, Inc., Charleston Publishing Company and Charleston
Newspapers (incorporated by reference to Exhibit 10.21 to the registrants June 30, 2004
Form 10-K)10.25
    
    Stock Purchase Agreement dated January 4, 2005, by and among MediaNews Group, Inc., as
purchaser, and The Singleton Family Revocable Trust and Peter Bernhard, as sellers
(incorporated by reference to Exhibit 10.1 to the registrants Form 10-Q for the period
ended December 31, 2004)10.26
    
    MediaNews Group, Inc. Career RSU Plan (incorporated by reference to Exhibit 99.1 to the
registrants Form 8-K filed July 5, 2005)10.27
    
    Shareholder Agreement dated as of July 1, 2005, as amended as of September 22, 2005, by
and among MediaNews Group, Inc. and Joseph J. Lodovic, IV (incorporated by reference to
Exhibit 10.24 to the registrants June 30, 2005 Form 10-K)10.28
    
    Agreement dated April 26, 2006 between MediaNews Group, Inc., Gannett Co., Inc., and
Stephens Group, Inc. (incorporated by reference to Exhibit 99.4 to the registrants Form 8-K
filed May 1, 2006)10.29
    
    Stock Purchase Agreement dated as of August 2, 2006, as amended May 1, 2007, between
MediaNews Group, Inc. and The Hearst Corporation (incorporated by reference to Exhibit 99.1
to the registrants Form 8-K filed August 8, 2006, and Exhibit 99.1 to the registrants
Form 8-K filed May 4, 2007)21.1
    
    Subsidiaries of MediaNews Group, Inc.31.1
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.3
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 200232.2
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
 138




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MEDIANEWS GROUP, INC. AND SUBSIDIARIES
SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS
FISCAL YEARS ENDED JUNE 30, 2006, 2005 AND 2004
 Balance at
    
    Additions
    
    
    
    
    
    AcquisitionsBeginning of
    
    Charged to
    
    Net
    
    (Dispositions),
    
    Balance atPeriod
    
    Expense, Net
    
    Deductions
    
    Net
    
    End of Period(In thousands)YEAR ENDED JUNE 30, 2007Reserves and allowances deducted from asset accounts:Allowance for doubtful accounts
    
    $
    9,282
    
    
    $
    12,091
    
    
    $
    (12,013
    )
    
    $
    4,440
    
    
    $
    13,800YEAR ENDED JUNE 30, 2006Reserves and allowances deducted from asset accounts:Allowance for doubtful accounts
    
    $
    6,901
    
    
    $
    9,893
    
    
    $
    (8,091
    )
    
    $
    579
    
    
    $
    9,282YEAR ENDED JUNE 30, 2005Reserves and allowances deducted from asset accounts:Allowance for doubtful accounts
    
    $
    7,625
    
    
    $
    8,065
    
    
    $
    (8,874
    )
    
    $
    85
    
    
    $
    6,901
 See notes to consolidated financial statements.
 139