<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   ----------
                                    FORM 10-K

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

                     For the Fiscal Year Ended June 30, 2000
                                       OR
          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                       Commission File Number ____________

                              MEDIANEWS GROUP, INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                                          <C>
                         Delaware                                                          22-2675173
(State or other jurisdiction of incorporation or organization)               (I.R.S. Employer Identification Number)

            1560 Broadway, Denver, Colorado                                                  80202
        (Address of principal executive offices)                                           (Zip Code)
</TABLE>

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

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

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

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

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

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

<TABLE>
<CAPTION>
   Class of Voting Stock and Number of Shares Held by
          Non-Affiliates at September 26, 2000                            Market Value Held by Non-Affiliates
-----------------------------------------------------------     ------------------------------------------------------
<S>                                         <C>                 <C>
Class A                                     157,576 shares                           Unavailable
</TABLE>

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

<TABLE>
<CAPTION>
                                                                                  Number of Shares
                                                               -------------------------------------------------------
<S>                                                            <C>
                   Class A Common Stock                                              2,298,346
</TABLE>


     Documents Incorporated by Reference: NONE


(MEDIANEWS GROUP, INC. IS THE SUCCESSOR ISSUER TO GARDEN STATE NEWSPAPERS, INC.,
            PURSUANT TO RULE 15d-5 UNDER THE SECURITIES ACT OF 1933)



<PAGE>   2

                                     PART I

ITEM 1. BUSINESS

GENERAL

     MediaNews Group, Inc. ("MediaNews" or "the Company"), formally known as
Affiliated Newspapers Investments, Inc., is the successor issuer to Garden State
Newspapers, Inc. MediaNews and its predecessor companies were founded in March
1985 by William Dean Singleton and Richard B. Scudder. We are the seventh
largest newspaper company in the United States in terms of circulation, and upon
completion of the previously announced acquisition of the Connecticut Post, we
will control 43 market dominant daily and approximately 75 non-daily newspapers
in ten states (including suburban markets in close proximity to the San
Francisco Bay area, Los Angeles, Philadelphia, Omaha and Boston). Our principal
sources of revenue are print advertising and circulation sales. Other sources of
revenue include commercial printing and electronic advertising. Our newspapers,
including the Connecticut Post, had a combined daily and Sunday paid circulation
of approximately 1,816,000 and 1,973,000, respectively, as of March 31, 2000.

     We have grown primarily through strategic acquisitions and partnerships in
markets, which we believe, have above average growth potential and to a lesser
extent through internal growth. Our main acquisition focus is on newspaper
markets contiguous to our own, allowing us to realize certain operating
synergies. We refer to this strategy as clustering. A majority of our newspapers
are located in regional clusters, allowing them to achieve higher operating
margins through efficient use of labor and equipment and by providing
opportunities to sell advertising into other newspapers we own nearby. We
occasionally divest newspaper properties when they no longer fit our cluster
strategy and when we believe the value has been maximized. This strategy has
enabled us to reinvest sale proceeds in newspaper properties that are available
at attractive prices and can be clustered, allowing us to achieve greater
revenue and EBITDA growth in the future than we otherwise would have been able
to achieve.

     Our newspapers are geographically diverse and generally positioned in
markets with limited direct competition for local newspaper advertising with the
exception of The Denver Post, which currently competes with the Denver Rocky
Mountain News. However, we recently agreed to form the Denver Newspaper Agency
and operate these newspapers under the terms of a Joint Operating Agreement (See
Recent Company Developments). We believe our newspaper markets, taken as a
whole, have above average population and sales growth potential. Most suburban
and small city daily newspapers, such as a majority of the newspapers we own,
have leading or sole distribution in the market areas served by the newspaper.
Start-ups of new daily newspapers in suburban markets with pre-existing local
newspapers are rare. Suburban newspapers address the specific needs of the
community by publishing a broad spectrum of local news as well as
advertiser-specific editions, which television, because of its broader
geographic coverage, is unwilling or unable to provide. Thus, in many
communities the local newspaper provides a combination of social and economic
services in a way that only it can provide, making it attractive for both
consumers and advertisers.

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

INDUSTRY BACKGROUND

     Newspaper publishing is the oldest and largest segment of the media
industry. Due to their focus on local news, newspapers remain the dominant
medium for local advertising accounting for almost 47% of all local media
advertising expenditures in the United States in calendar year 1999. In calendar
year 1999, newspaper advertising expenditures in the United States reached an
all time high of approximately $46.3 billion, representing a compounded annual
growth rate of 6.4% since 1995. Newspapers continue to be viewed as the best
medium for retail advertising, which emphasizes the price of goods, in contrast
to television, which is generally used for image advertising.



                                       2
<PAGE>   3

INDUSTRY BACKGROUND (CONTINUED)

     Readers of daily and Sunday newspapers tend to be more highly educated and
have higher incomes than non-newspaper readers. For instance, 64% of college
graduates and 68% of households with income greater than $75,000 are reported to
read a daily newspaper. Management believes that newspapers continue to be the
most cost-effective means for advertisers to reach this highly targeted
demographic group.

     Total morning daily and Sunday circulation has increased nationally from
29.4 million and 54.7 million in 1980 to 46.0 million and 59.9 million in 1999,
respectively. Total reported daily circulation, including evening editions,
however, declined nationally from 62.2 million in 1980 to 56.0 million in 1999.
This decrease can be directly attributed to the national decline in the
circulation of evening newspapers which is reported to have decreased from 32.8
million in 1980 to 10.0 million in 1999. The decline in evening newspaper
circulation is the result of most evening newspapers inability to compete with
existing morning newspapers in the same market. Many evening newspapers have
converted to morning newspapers or ceased publishing altogether. Circulation
statistics for suburban daily newspapers are not published separately from
circulation statistics for daily newspapers as a whole. Reliable circulation
statistics for weekly newspapers are not available.

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

RECENT COMPANY DEVELOPMENTS

     DENVER NEWSPAPER AGENCY. On May 11, 2000, MediaNews and E.W. Scripps
Company ("Scripps"), owner of the Denver Rocky Mountain News, agreed to form the
Denver Newspaper Agency L.L.C. (the "Agency"), which will be owned 50% by
MediaNews and 50% by Scripps. The Agency will be responsible for all business
functions for The Denver Post and the Denver Rocky Mountain News, including
advertising and circulation sales, production and distribution. The news and
editorial functions at The Denver Post and the Denver Rocky Mountain News will
remain completely separate from the Agency. The Denver Post will continue to be
published each weekday morning and on Sunday.

     When the Agency is formed, MediaNews and Scripps will each contribute
substantially all of their operating assets used in the publication of The
Denver Post and the Denver Rocky Mountain News. Scripps will also pay MediaNews
a one time cash payment of $60.0 million to obtain its 50% share in the Agency.
The Agency will be governed by a four person board, with MediaNews and Scripps
each appointing two members and MediaNews appointing the chairman for the first
four year term.

     The Agency will be created under the provisions of the Newspaper
Preservation Act of 1970, which allows two newspapers to combine business
functions under a Joint Operating Agreement ("JOA") but requires the approval of
the U.S. Attorney General. On September 8, 2000 The Department of Justice,
Antitrust Division, issued a report to the Attorney General recommending
approval of the JOA without a hearing.

     ACQUISITIONS. We agreed to acquire substantially all the assets used in the
publication of the Connecticut Post, a morning newspaper published in
Bridgeport, Connecticut. The assets will be purchased for approximately $200.0
million in cash, net of working capital. The newspaper has daily and Sunday
circulation of approximately 79,000 and 90,000, respectively. Closing is
expected to occur on October 1, 2000. Proceeds from the Disposition Transaction
on June 30, 2000 (described below) and borrowings under our bank credit facility
will be used to fund the acquisition. Reinvesting the proceeds from the
Disposition Transaction allows us to defer, for federal income tax purposes, a
portion of the gain from the Disposition Transaction.

     The California Newspapers Partnership and Gannett have agreed to Gannett's
contribution of the Independent Journal, published in Marin, California to the
California Newspapers Partnership. The contribution is expected to be made as of
October 1, 2000. As a result of the contribution, MediaNews, Donrey and
Gannett's interest in the partnership will be adjusted to 54.23%, 26.28% and
19.49%, respectively. Up to the date of contribution, MediaNews will continue to
own a 58.8% interest. The Independent Journal will be operated in conjunction
with the ANG Newspaper group.

     ACQUISITION OF ADDITIONAL 20% OF THE DENVER POST CORPORATION COMMON STOCK
BY MEDIANEWS GROUP. On June 30, 1999, MediaNews acquired an additional 20% of
the outstanding common stock of the Denver Post Corporation (formerly known as
Denver Newspapers, Inc.) bringing its total ownership interest in the Denver
Post Corporation to 80%. In addition, MediaNews entered into certain other
agreements in connection with the Denver Post Corporation transaction including,
among others, rights of first offer, registration rights, and put and call
rights.



                                       3
<PAGE>   4

RECENT COMPANY DEVELOPMENTS (CONTINUED)

     CORPORATE REORGANIZATION. The redemption of certain outstanding
subordinated notes and the acquisition of an additional 20% of the Denver Post
Corporation, each as more fully described below, provided an opportunity to
simplify our corporate structure. Our corporate reorganization included the
following:

     o    In May 1999, in accordance with the Affiliated Newspapers Investments,
          Inc. shareholder agreement, we converted all previously outstanding
          tracking stock into Class A Common Stock.

     o    In June 1999, Affiliated Newspapers Investments, Inc., parent of
          Garden State Newspapers, Inc. and the Denver Post Corporation, changed
          its name to MediaNews Group, Inc. Our company was previously managed
          by an unconsolidated affiliate, which operated with the MediaNews
          Group, Inc. name; however, that corporation has changed its name and
          all services previously provided by it are now performed by MediaNews.

     o    The second phase of the reorganization, which occurred on June 30,
          1999, included the merger of Garden State Investments, Inc., into
          Garden State Newspapers, Inc., ("Garden State"). In addition, Garden
          State then dropped its directly owned newspaper operating divisions
          into newly formed corporations.

     o    The final phase of the reorganization was the merger of Garden State
          into MediaNews, with MediaNews the surviving corporation. The merger
          of Garden State into MediaNews was completed on September 1, 1999.

     As a result of the above, financial statements are now being filed under
the MediaNews Group, Inc. name as successor issuer to Garden State Newspapers,
Inc., and include the consolidated results of the Denver Post Corporation
beginning July 1, 1999.

RECENT ACQUISITIONS & DISPOSITIONS

     Fiscal 2000 Acquisitions:

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

     Effective October 31, 1999, we acquired substantially all of the assets
used in the publication of the Deming Headlight, a morning newspaper published
in Deming, New Mexico, for approximately $2.0 million cash.

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

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

     Fiscal 2000 Dispositions:

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

     Effective June 30, 2000, MediaNews Group, Inc., sold substantially all of
the assets used in the publication of The Express Times, in Easton Pennsylvania;
the Gloucester County Times, in Woodbury, New Jersey; Today's Sunbeam, in Salem,
New Jersey; the Bridgeton News, in Bridgeton, New Jersey and our North Jersey
weekly newspapers (the "Disposition Transaction") for $145.0 million in cash,
plus an adjustment for working capital of approximately $4.8 million. We
recognized a pre-tax gain on the sale of approximately $114.3 million, net of
selling expenses.



                                       4
<PAGE>   5

RECENT ACQUISITIONS & DISPOSITIONS (CONTINUED)

     Fiscal 1999 Acquisitions:

     On August 22, 1998, we acquired a 50% interest in Charleston Newspapers for
approximately $47.0 million. Charleston Newspapers is a joint venture, which
publishes the Charleston Gazette, (morning) and Charleston Daily Mail (evening),
six days a week and the Sunday Gazette-Mail, under the terms of a Joint
Operating Agreement. The acquisition included rights to the masthead of the
Charleston Daily Mail; thus, we are responsible for the editorial content of the
Charleston Daily Mail.

     Effective October 1, 1998, we acquired substantially all of the assets used
in the publication of the Daily Times, a morning newspaper published in
Farmington, New Mexico, for cash and discounted notes with the prior owners.

     On March 31, 1999, our wholly owned subsidiary, West Coast MediaNews LLC,
formed the California Newspaper Partnership with Donrey Newspapers LLC
("Donrey") and The Sun Company of San Bernardino California ("Gannett"). We
contributed ANG Newspapers, comprised of six daily newspapers published in the
San Francisco Bay area; San Gabriel Valley Newspapers, which, includes three
daily newspapers published in the Los Angeles area; and the Times-Standard, a
daily newspaper published in Eureka, California; and all the weekly publications
published by these daily newspapers in exchange for a 58.8% partnership
interest. Donrey contributed ten daily newspapers and two non-daily newspapers,
located in California, most of which are located in close proximity to our
California newspaper publications, in exchange for a 28.5% partnership interest.
Gannett contributed the San Bernardino County Sun in exchange for a 12.7%
partnership interest.

     Fiscal 1998 Acquisitions:

     On May 11, 1998, we acquired substantially all the assets used in the
publication of the Tri-City Weekly, a weekly newspaper published in Eureka,
California for approximately $2.6 million in cash plus a covenant not to compete
with the prior owners with a discounted value of approximately $0.5 million.

     On May 1, 1998, we acquired substantially all the assets used in the
publication of the Valley News Today, a morning newspaper published five times a
week in Shenandoah, Iowa, and seven weekly publications distributed primarily in
and around Shenandoah and Dennison, Iowa. These assets were purchased for
approximately $5.1 million in cash plus an adjustment for working capital and
covenant not to compete with the prior owners, with a discounted value of
approximately $0.6 million.

     On January 29, 1998, we acquired substantially all the assets used in the
publication of the Daily News, a daily newspaper published in the San Fernando
Valley of Los Angeles, California, for approximately $130.0 million, which
included working capital of approximately $2.0 million.

     On December 16, 1997, we acquired substantially all the assets used in the
publication of the Press-Telegram, a daily newspaper published in Long Beach,
California, for approximately $38.2 million in cash, plus an adjustment for
working capital.

     On July 31, 1997, we acquired substantially all the assets used in the
publication of The Sun, an evening newspaper published in Lowell, Massachusetts.
The assets were purchased for $49.0 million in cash plus a covenant not to
compete with the prior owners with a discounted value of approximately $11.8
million.

     Fiscal 1998 Disposition:

     On December 5, 1997, we sold substantially all the assets used in the
publication of the North Jersey Herald & News and sixteen weekly publications
for $43.0 million in cash plus an adjustment for working capital. We recognized
a pre-tax gain on the sale of approximately $31.8 million, net of selling
expenses.

OPERATING STRATEGY

     Our strategy is to increase revenues and cash flows through geographic
clustering and internal growth. The key components of our long-term internal
growth strategy are targeted marketing programs, local news leadership, high
quality editorial content and presentation, circulation growth, cost control,
and strategic investments in the delivery of news and advertising through the
internet, radio and television in addition to the printed newspaper. These
strategies are more fully described below.



                                       5
<PAGE>   6

OPERATING STRATEGY (CONTINUED)

     GEOGRAPHIC CLUSTERING. We have acquired and assembled newspapers, and may
     continue to acquire newspapers, in contiguous markets. We refer to this
     strategy as "clustering". Clustering enables us to realize operating
     efficiencies and economic synergies, such as the sharing of management,
     accounting, news, advertising and production functions. In addition, we
     seek to increase operating cash flows at acquired newspapers by reducing
     labor costs, page width of the newspapers, and overall improved cost
     management. Clustering also enables management to maximize revenues by
     selling advertising into newspapers owned by us in contiguous markets. As a
     result of clustering, we believe that our newspapers are able to obtain
     higher operating margins than they would otherwise be able to achieve on a
     stand-alone basis. The California Newspapers Partnership is an extension of
     this strategy.

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

     LOCAL NEWS LEADERSHIP. Our newspapers generally have the largest local news
     gathering resources in their markets. As a result of emphasizing local
     news, our newspapers generally are able to generate reader loyalty and
     create franchise value. Because of our provision of local news is a unique
     product in our markets, our newspapers satisfy the demands of both our
     readers and advertisers.

     HIGH QUALITY EDITORIAL CONTENT AND PRESENTATION. Our newspapers are
     committed to editorial excellence, by providing the proper mix of local and
     national news to effectively serve the needs of their local markets. Our
     newspapers often receive awards for excellence in various editorial
     categories in their respective regions and circulation categories. In
     fiscal year 2000, The Denver Post won a Pulitzer Prize for its editorial
     coverage. In addition, our newspapers are generally produced on modern
     offset presses and are designed to attract readers through attractive
     layouts and color enhancements.

     CIRCULATION GROWTH. We believe that circulation growth is essential to the
     creation of long-term franchise value at our newspapers. Accordingly, we
     have and will continue to make significant investments in telemarketing and
     promotional campaigns to increase circulation and readership. We have also
     established management incentive programs, which reward our publishers for
     circulation growth, at each of their daily newspapers. As a result of our
     commitment to circulation growth, we are one of the few newspaper groups,
     which has consistently grown circulation over the last several years,
     excluding the effects of acquisitions.

     COST CONTROL. We emphasize cost control with a particular focus on managing
     staffing requirements. At newspapers with collective bargaining units,
     management strives to enter into long-term agreements with minimal annual
     increases. In addition, we further control labor costs through investments
     in state-of-the-art production equipment that improves production quality
     and increases efficiency. We are equally focused on newsprint cost control.
     Each of our newspapers benefits from discounted newsprint costs we obtain
     as the seventh largest newspaper group in the United States. We purchase
     newsprint from several suppliers under arrangements resulting in what we
     believe are some of the most favorable newsprint prices in the industry. We
     have entered into fixed price newsprint contracts and newsprint swaps
     expiring over the next six months to eight years, as well as newsprint
     purchasing arrangements with certain of our other suppliers which delay the
     adverse effect of newsprint price increases. Based on expected newsprint
     utilization at MediaNews, approximately 49% of our annual newsprint
     consumption for fiscal 2001 will be covered by fixed price contracts and/or
     newsprint swaps.

     To further control newsprint costs while improving customer satisfaction,
     we became the first newspaper company in the United States to convert all
     of our newspapers to a 50-inch web width, which reduced the width of a
     single newspaper page to 12.5 inches from either 13.5 inch or 13.75 inch
     page widths. These conversions have permanently reduced our newsprint
     consumption in excess of 8% over levels prior to conversion.

     STRATEGIC INVESTMENTS. To take advantage of the increasing use of the World
     Wide Web and its advertising growth opportunities, MediaNews established
     MediaNews Technologies ("MNT") to develop and maintain websites for each of
     our daily newspapers. MNT has developed websites that provide an online
     editorial presence and full online classified services for each of our
     daily newspapers. We have also made strategic investments in AdOne,
     Employment Wizard and Mortgage Rate Watch to expand the online features
     provided to our customers as is more fully described below. Although we
     believe that providing an online product is important to broaden the reach
     of our newspapers and ultimately increase our revenues through value added
     services, we believe that almost all of our customers still prefer the
     newspaper in a printed form. By



                                       6
<PAGE>   7

OPERATING STRATEGY (CONTINUED)

     being the leading, and in certain instances the sole, provider of local
     news in most of our markets, we believe that our newspapers are well
     positioned to respond to and benefit from changes in the way in which
     advertising, news and information are delivered to customers in the future.
     Our online newspapers can be found at www.newschoice.com.

     We have also made strategic investments in other media beginning with our
     acquisition of two radio stations in Graham, Texas, which are operated in
     conjunction with our weekly newspaper published in Graham. In addition, we
     recently purchased the CBS television affiliate and a radio station in
     Anchorage, Alaska.

     In January 1999, MediaNews, the Hearst Corporation, E.W. Scripps, Donrey
     Media Group and Advance Publications each acquired a 20.0% interest in
     AdOne LLC, which was formed to acquire the assets of AdOne Classified
     Network, Inc. ("AdOne") and its consumer website, abracat.com, a fully
     searchable classified advertising database. In July 1999, Belo Corporation,
     Journal Register Company, Lee Enterprises, Media General, Morris
     Communications Corporation and Pulitzer, Inc. each made a equity investment
     in AdOne LLC, reducing our interest to 11.4%. AdOne now has classified
     listings from approximately 496 daily and weekly newspapers, which includes
     newspapers in 43 of the top 50 markets in the United States. At June 30,
     2000, AdOne's database averaged 13 million new classified ads each month.
     AdOne's abracat.com is also the classified content provider for Lycos, a
     portal/web search site. We believe AdOne is solidly positioned to play a
     leading role in the rapidly expanding online classified market place.

     In August 1999, we acquired an 80% interest in Employment Specialist, LLC.
     We re-launched the website under the name Employment Wizard in December
     1999. Employment Wizard is an internet based application tool that allows
     jobseekers and employers to search job opportunities and resumes for the
     best match. The resume and candidate search programs contain a list of
     27,000 job occupations along with a description of these occupations.
     Careful selection of the most applicable job title ensures that both the
     jobseeker and employer find an exact match. The database currently contains
     275,000 classified recruitment ads from participating newspapers, and
     62,000 resumes. By the end of October 2000, 72 newspapers will be using
     Employment Wizard as their internet employment vertical, 33 of which are
     not owned or controlled by MediaNews. Employment advertising represents an
     important revenue stream at our newspapers, and with the acquisition of
     Employment Wizard, we are able to integrate the best of newspaper and
     internet functionality for users and advertisers.

     In July 1999, we invested in Mortgage Rate Watch,
     www.mortgageratewatch.com. Mortgage Rate Watch provides mortgage brokers
     with access to their target customer-home buyers and home owners seeking to
     refinance existing loans. Mortgage Rate Watch allows home owners and buyers
     to shop mortgage rates of area mortgage brokers online and analyze various
     loan structuring options. Once a broker has been selected the borrower is
     connected to the mortgage brokers website and can complete a loan
     application online. We are currently in the process of combining Mortgage
     Rate Watch with See It Buy It, which will provide us with a buyer and
     seller internet real estate vertical. See It Buy It provides realtors and
     others the service of video taping real estate, allowing potential buyers
     to view the video of real estate online through streaming video. See It Buy
     It also provides realtors with the ability to make custom brochures with
     clips from the videos. Upon completion of the combination of Mortgage Rate
     Watch and See It Buy It in October 2000, MediaNews will own 80% of the new
     entity.

     We may, from time to time, make strategic or targeted acquisitions and
dispositions. We continually review newspaper acquisition candidates that we
believe are under performing in terms of operating cash flows but have an
established history of strong readership, advertiser loyalty and are available
at attractive prices. Acquisitions will only be made in circumstances in which
we believe that the acquisition will contribute to our overall growth strategy
and reduce leverage in the short term. We will also continue to make small
investments in online and other electronic media companies that compliment our
existing newspapers or our other electronic media investments.



                                       7
<PAGE>   8

PAID CIRCULATION

     The following table sets forth paid circulation of each of our daily
newspapers:

<TABLE>
<CAPTION>
                                                                                        Paid Circulation at
                                                                                          March 31, 2000
                                                                              ----------------------------------------
                                                                                    Daily                Sunday
                                                                              ------------------    ------------------
<S>                                                                           <C>                   <C>
MediaNews Newspapers:
   Denver Post, CO.........................................................             413,730               558,560
   LA Daily News, CA.......................................................             200,798               212,484
   Long Beach Press-Telegram, CA...........................................             104,655               118,770
   Charleston Newspapers, WV...............................................              93,323                97,980
   York, PA................................................................              84,464                93,701
   Bridgeport, CT(1).......................................................              79,048                89,760
   Lowell, MA..............................................................              52,608                56,033
   Pittsfield, MA..........................................................              30,871                34,890
   Las Cruces, NM..........................................................              22,736                24,596
   Lebanon, PA.............................................................              21,355                21,304
   Hanover, PA.............................................................              21,093                21,381
   Fitchburg, MA...........................................................              18,107                18,551
   Council Bluffs, IA......................................................              17,474                21,841
   Farmington, NM..........................................................              17,414                19,057
   Eastern Colorado Publishing Company, CO.................................              12,982                    --
   Brattleboro, VT.........................................................              10,840                11,856
   North Adams, MA.........................................................               7,285                 8,205
   Bennington, VT..........................................................               7,851                    --
   Deming Headlight, NM....................................................               3,850                    --
                                                                                      ---------             ---------
     Subtotal..............................................................           1,220,484             1,408,969

California Newspapers Partnership:
   ANG Newspapers, CA......................................................             217,338               177,879
   San Gabriel Valley Newspaper Group, CA..................................             120,562               122,420
   San Bernardino, CA......................................................              77,672                85,089
   Ontario, CA.............................................................              67,982                74,838
   Chico/Oroville, CA......................................................              33,570                28,164
   Eureka, CA..............................................................              19,048                20,711
   Vallejo, CA.............................................................              20,723                22,130
   Woodland, CA............................................................               9,652                 9,905
   Lompoc, CA..............................................................               7,983                 8,155
   Ukiah, CA...............................................................               7,480                 7,723
   Red Bluff, CA...........................................................               6,996                    --
   Redlands, CA............................................................               6,985                 7,023
                                                                                      ---------             ---------
     Subtotal..............................................................             595,991               564,037

     Total.................................................................           1,816,475             1,973,006
                                                                                      =========             =========
</TABLE>

     (1) Closing scheduled for October 1, 2000.



                                       8
<PAGE>   9

NEWSPAPER PROPERTIES

     The following is a description of our newspapers and the markets in which
they circulate as of the date of this report. The map on the back cover reflects
our clustering strategy.

     DENVER. The Denver Post is our largest daily newspaper and, we believe, one
of the most respected newspapers in its region. On May 11, 2000, MediaNews and
E.W. Scripps, owner of the Denver Rocky Mountain News agreed to operate The
Denver Post and the Denver Rocky Mountain News under the terms of a joint
operating agreement (JOA), subject to approval from the United State Justice
Department. We currently expect the JOA to be approved in calendar year 2000.

     LOS ANGELES NEWSPAPER GROUP. The Los Angeles Newspaper Group ("LANG") is
located in Los Angeles County, California, and publishes nine daily newspapers.
The Los Angeles Newspaper Group consists of the Daily News, the Press-Telegram,
which are owned by MediaNews and newspapers owned by the California Newspapers
Partnership, which include the San Gabriel Valley Newspaper Group, San
Bernardino, Ontario, Redlands and Lompoc are described below under "California
Newspapers Partnership". These newspapers cover the San Fernando Valley region
of Los Angeles, Long Beach, Pasadena, West Covina, Whittier, San Bernardino,
Ontario, Redlands and Lompoc, California, respectively. The Los Angeles
Newspaper Group also publishes several weekly newspapers, in addition to those
published by the San Gabriel Valley Newspaper Group including the Star Watch, El
Economico and Vecinos Del Valle (Spanish language newspapers), which are
distributed in and around the Los Angeles Newspaper Group markets.

     CHARLESTON. Charleston Newspapers, is a joint venture which publishes
Charleston Daily Mail, Charleston Gazette and, on Sunday, the Charleston
Gazette-Mail in Charleston, West Virginia under the terms of a JOA. Under the
terms of the JOA, all operations, other than news and editorial are controlled
by the joint venture. We are responsible for maintaining the editorial staff and
producing the editorial content for the Charleston Daily Mail.

     YORK. York Newspaper Company, a partnership owned 57.5% by York Newspaper,
Inc. ("YNI"), a wholly owned subsidiary of MediaNews, publishes The York
Dispatch, the York Sunday News and The York Daily Record in York, Pennsylvania,
approximately 30 miles south of Harrisburg, Pennsylvania. These newspapers are
published under the terms of a JOA. Under the terms of the JOA, all operations,
other than news and editorial, are controlled by the partnership. YNI maintains
its own editorial staff and produces the editorial content of both The York
Dispatch and the York Sunday News. The York Newspaper Company also publishes the
Weekly Record each Tuesday.

     BRIDGEPORT. The Connecticut Post is located in Bridgeport, Connecticut, and
publishes a morning newspaper seven days a week and is distributed primarily in
Fairfield County, the most affluent county in the United States. The Connecticut
Post also publishes the Westport News, Fairfield Citizen-News, Darien
New-Review, and the Norwalk Citizen-News, weekly newspapers distributed in
Fairfield County and surrounding areas. We expect to complete the acquisition of
the Connecticut Post in October 2000.

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

     PITTSFIELD. The Berkshire Eagle is located in Pittsfield, Massachusetts,
approximately 30 miles southeast of Albany, New York, and publishes a morning
newspaper seven days a week. The Berkshire Eagle also publishes a weekly
newspaper, The Eagle Shopper, a broadsheet shopper circulated free to
non-subscribers in Berkshire County.

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

     LEBANON. The Lebanon Daily News is located in Lebanon, Pennsylvania,
approximately 35 miles northeast of York, Pennsylvania, and 30 miles east of
Harrisburg, Pennsylvania. The Lebanon Daily News publishes an evening newspaper
five days a week, and morning editions on Saturday and Sunday. The Lebanon Daily
News also publishes the Palm Advertiser, a weekly newspaper, which is
distributed in and around Lebanon, Pennsylvania.

     HANOVER. The Evening Sun is located in Hanover, Pennsylvania, approximately
20 miles southwest of York, Pennsylvania, and 40 miles south of Harrisburg,
Pennsylvania. The Evening Sun publishes an evening newspaper five days a week
and morning editions on Saturday and Sunday. The Evening Sun also publishes a
weekly newspaper, The Community Sun.



                                       9
<PAGE>   10

NEWSPAPER PROPERTIES (CONTINUED)

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

     COUNCIL BLUFFS. The Daily Nonpareil is located in Council Bluffs, Iowa,
which is adjacent to Omaha, Nebraska, on the Missouri River. The Daily Nonpareil
publishes an evening newspaper five days a week and morning editions on Saturday
and Sunday. The Daily Nonpareil also publishes The Valley News Today, a morning
paper published five days a week distributed in and around Shenandoah, Iowa. In
addition, The Daily Nonpareil also publishes nine weekly newspapers: The
Midlands Shopper Guide, Ad-Visor, Essex Independent, Dennison Bulletin, Dennison
Review, Meat Empire Saving Guide, Valley News Life, Weekly Time and Clarinda
Herald-Journal, which are distributed in the areas surrounding Council Bluffs,
Shenandoah, and Dennison, Iowa. We have announced our intentions to seek
strategic alternatives for Council Bluffs, which may include selling the
newspapers.

     FARMINGTON. The Daily Times is located in Farmington, New Mexico
approximately 160 miles northwest of Albuquerque, New Mexico and publishes a
morning newspaper seven days a week. The Daily Times also publishes San Juan Sun
and the Four Corners Business Journal, weekly newspapers.

     EASTERN COLORADO PUBLISHING COMPANY. Eastern Colorado publishes the Fort
Morgan Times, the Journal-Advocate and the Lamar Daily News, daily newspapers
published in Fort Morgan, Sterling and Lamar, Colorado. Each of these daily
newspapers also publishes a weekly newspaper, which includes the Morgan Times
Review, J.A. Shopper and the Tri-State Trader. These weekly newspapers are
distributed free in and around each of the daily newspaper's geographic markets.
Eastern Colorado also publishes the Akron News Reporter, Brush News-Tribune, The
Burlington Record, The Plains Dealer, The Estes Park Trail Gazette and Julesburg
Advocate, paid weekly newspapers distributed in Akron, Brush, Burlington, Estes
Park and Julesburg, Colorado.

     BRATTLEBORO. The Brattleboro Reformer is located in Brattleboro, Vermont,
approximately 65 miles east of Albany, New York, and publishes a morning
newspaper seven days a week. The Brattleboro Reformer also publishes The Town
Crier, a weekly shopper.

     NORTH ADAMS. The North Adams Transcript is located in North Adams,
Massachusetts, approximately 30 miles east of Albany, New York, and publishes an
evening newspaper six days a week.

     BENNINGTON. The Bennington Banner is located in Bennington, Vermont,
approximately 35 miles east of Albany, New York, and publishes a morning
newspaper seven days a week. The Bennington Banner also publishes the Manchester
Journal, a paid weekly newspaper distributed on Wednesdays in Manchester,
Vermont, and The Bennington Shopper, a free weekly shopper.

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

     GRAHAM. The Graham Leader is located in Graham, Texas, approximately 90
miles northwest of Fort Worth, Texas. The Graham Leader is a biweekly newspaper
with total paid circulation of approximately 9,000. The Graham Leader also
publishes the Lake Country Sun, the Lake Country Shopper, and The Olney
Enterprise each Thursday. In addition, the Jacksboro Gazette-News and The Jack
County Herald are weekly newspapers, which are published each Monday and
Thursday, respectively.



                                       10
<PAGE>   11

CALIFORNIA NEWSPAPERS PARTNERSHIP

     The California Newspapers Partnership includes the following newspaper
properties:

     ANG NEWSPAPERS. ANG Newspapers is headquartered in Oakland, California, and
publishes six morning newspapers. ANG Newspapers consists of the Oakland
Tribune, The Daily Review, Tri-Valley Herald, The Argus, Alameda Times-Star and
San Mateo County Times. All the newspapers except the San Mateo County Times
also publish a Sunday newspaper. These newspapers cover the city of Oakland,
California, and affluent suburban markets located immediately south, southeast
and southwest of Oakland in Alameda County and San Mateo County. ANG Newspapers
also publishes The Alameda Accent, San Bruno Herald, Daly City Record and
Brisbane Bee, Times Weekend, Millbrae Recorder-Progress, The Wave, The Pacifica
Tribune, The Milpitas Post, The Freemont Bulletin, The Berryessa Sun and The
Coastside Chronicle on Saturday.

     SAN GABRIEL VALLEY NEWSPAPER GROUP. The San Gabriel Valley Newspaper Group,
is located in West Covina, California, approximately 10 miles east of Los
Angeles California, and publishes three morning daily newspapers. The San
Gabriel Valley Newspaper Group consists of the Pasadena Star-News, San Gabriel
Valley Tribune, and Whittier Daily News. These newspapers cover the cities of
Pasadena, West Covina and Whittier, California. The San Gabriel Valley Newspaper
Group also publishes the Highlander Newspapers, Cheers, Class Force, Pasadena
Commerce, The Real Estate Weekly, The Star, Whittier Review, and The Shopper,
weekly newspapers distributed in and around these same cities.

     SAN BERNARDINO. The San Bernardino County Sun, is located next to and west
of Ontario. The San Bernardino County Sun publishes a morning newspaper seven
days a week.

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

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

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

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

     WOODLAND. The Daily Democrat is located in Woodland, California,
approximately 50 miles from Vallejo and 100 miles from Chico, California. The
Daily Democrat publishers an evening newspaper seven days a week.

     LOMPOC. The Lompoc Record is located in Lompoc, California, approximately
150 miles from Los Angeles, California and publishes an evening newspaper six
days a week (excludes Saturday).

     UKIAH. The Ukiah Daily Journal is located in Ukiah, California,
approximately 110 miles north of San Francisco and 140 miles south of Eureka,
California. The Ukiah Daily Journal publishes an evening newspaper six days a
week (excludes Saturday).

     RED BLUFF. The Daily News is located in Red Bluff, California,
approximately 40 miles north of Chico, California and publishes an evening
newspaper six days a week (excludes Sunday).

     REDLANDS. The Redlands Daily Facts is located in southern San Bernardino
County and publishes an evening newspaper six days a week (excludes Saturday).



                                       11
<PAGE>   12

ADVERTISING AND CIRCULATION REVENUES

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

     Advertising revenue includes RETAIL (local and national department stores,
specialty shops and other retailers), NATIONAL (national advertising accounts),
and CLASSIFIED advertising (employment, automotive, real estate and personals).
The contributions of Retail, National, Classified and Circulation revenue to
total revenues for fiscal years 2000, 1999, and 1998 were as follows:

<TABLE>
<CAPTION>
                                                     MediaNews Group,            Garden State Newspapers
                                                   Inc. & Subsidiaries             Inc. & Subsidiaries
                                                   ---------------------    -----------------------------------
                                                    Fiscal Year Ended          Fiscal Years Ended June 30,
                                                      June 30, 2000              1999                1998
                                                   ---------------------    ---------------     ---------------
<S>                                                <C>                      <C>                 <C>
     Retail.....................................                    39%                40%                 39%
     National...................................                     6                  4                   4
     Classified.................................                    36                 33                  33
     Circulation................................                    16                 20                  21
     Other......................................                     3                  3                   3
                                                                   ---                ---                 ---

                                                                   100%               100%                100%
                                                                   ===                ===                 ===
</TABLE>

NEWSPRINT

     Newsprint is one of the largest costs of producing a newspaper. We buy
newsprint from several suppliers under arrangements, resulting in what we
believe are some of the most favorable long-term newsprint prices in the
industry. In fiscal years 2000, 1999 and 1998, we consumed approximately
293,000, 140,000, and 103,000 tons of newsprint, respectively, and, during the
same periods, incurred newsprint expense of approximately $147.2 million, $75.1
million, and $56.3 million, respectively. Newsprint expense as a percentage of
revenue for fiscal year 2000, 1999 and 1998 was 15.7%, 12.8%, and 12.5%,
respectively. Newsprint expense in fiscal year 2000 increased primarily as a
result of the consolidation of The Denver Post and the inclusion of a full year
of the California Newspapers Partnership. Newsprint expense as a percentage of
revenue increased primarily as a result of The Denver Post. Metro newspapers in
competitive markets, such as The Denver Post, typically have lower circulation
rates and lower advertising rates per thousand distribution than our market
dominant suburban newspapers. See "Near Term Outlook" on page 25 for additional
information on of newsprint pricing.

EMPLOYEE RELATIONS

     We employ approximately 6,785 full-time and 2,154 part-time employees, of
which approximately 2,431 are unionized. There has never been a strike or work
stoppage against any of our newspapers during our ownership, and we believe that
our relations with our employees are generally good.

SEASONALITY

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

COMPETITION

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



                                       12
<PAGE>   13

COMPETITION (CONTINUED)

exception of Denver, we believe larger daily newspapers with circulation in our
newspaper markets generally do not compete in any meaningful way for local
advertising revenues, a newspaper's main source of revenues. Our daily
newspapers capture the largest share of local advertising as a result of their
direct coverage of the market. In addition, we believe advertisers generally
regard newspaper advertising as a more effective method of advertising
promotions and pricing as compared to television, which is generally used to
advertise image. We may from time to time compete with other companies, which
have greater financial resources than us.

     The Denver Post currently competes with the Denver Rocky Mountain News,
which is owned by the E. W. Scripps Company. Competition for newspaper
advertising in Denver is largely based upon circulation, reader demographics and
price. As previously discussed, we have agreed to operate The Denver Post with
the Denver Rocky Mountain News under the terms of a JOA, subject to approval
from the United States Department of Justice.

ELECTRONIC MEDIA

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

     Due to many issues associated with advertising on the World Wide Web, such
as fragmentation and lack of agreement or meaningful research on how to measure
viewers and penetration levels, we do not see advertisers making a significant
commitment to advertise on the World Wide Web in the near future. However, as
the issues mentioned above are resolved, advertising on the World Wide Web is
expected to grow to meaningful levels. Accordingly, we have invested and will
continue to invest in our on-line strategy, which should allow us to capture our
share of the advertising dollars spent on the World Wide Web.

     MediaNews Technologies ("MNT"), MediaNews' electronic publishing division,
is responsible for developing and maintaining a website for each of our daily
newspapers. In addition, MNT has and is continuing to develop strategic
alliances to enhance content, functionality and delivery, such as our
investments in AdOne, See It Buy It, and Employment Wizard. We believe the
design, functionality, and content of our websites has attracted viewers that
continually return to our website(s) for news and information, a key for
advertisers. All of our newspapers currently on-line can be located at
www.newschoice.com.

ITEM 2. PROPERTY

     Our production facilities are, in most cases, complete newspaper and office
facilities. The principal operating facilities owned by us are located in
Denver, Sterling, Fort Morgan and Lamar, Colorado; San Mateo, Union City, West
Covina, Long Beach, Woodland Hills, Valencia, Eureka, San Bernardino, Ontario,
Chico, Vallejo, Woodland, Lompoc, Ukiah, Fort Bragg, and Red Bluff, California;
Council Bluffs, Denison and Shenandoah, Iowa; York, Hanover and Lebanon,
Pennsylvania; Pittsfield, North Adams, Lowell, Ayer and Fitchburg,
Massachusetts; Las Cruces, Deming and Farmington, New Mexico; Bennington and
Brattleboro, Vermont; Graham, Texas; and Charleston, West Virginia. Certain
facilities located in Denver, Colorado; Oakland, Pasadena and Pleasanton,
California are operated under long-term leases.

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

ITEM 3. LEGAL PROCEEDINGS

     We are involved in a number of legal proceedings that have arisen in the
ordinary course of business. In our opinion, the outcome of these legal
proceedings will not have a material adverse impact on our financial position or
results of operations.

REGULATION AND ENVIRONMENTAL MATTERS

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



                                       13
<PAGE>   14

ITEM 3. LEGAL PROCEEDINGS (CONTINUED)

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

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

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

     None.


                                     PART II

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

     The Class A Common Stock is not registered and has no established trading
market and is not widely held. As of September 26, 2000, there were 27
shareholders of record.

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



                                       14
<PAGE>   15

ITEM 6. SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                           MediaNews Group,
                                          Inc. & Subsidiaries          Garden State Newspapers, Inc. & Subsidiaries
                                          -------------------   ------------------------------------------------------------
                                           Fiscal Year Ended                     Fiscal Years Ended June 30,
                                             June 30, 2000           1999           1998            1997            1996
                                          -------------------   ------------    ------------    ------------    ------------
                                                                                   (Dollars in thousands)
<S>                                       <C>                   <C>             <C>             <C>             <C>
INCOME STATEMENT DATA(a),(c):
Revenues
   Advertising ...........................       $    770,476   $    440,734    $    345,169    $    255,238    $    209,201
   Circulation ...........................            148,217        113,515          93,620          51,264          42,770
   Other .................................             28,608         15,936          14,421          11,583           7,596
                                                 ------------   ------------    ------------    ------------    ------------
Total Revenues ...........................            947,301        570,185         453,210         318,085         259,567

Cost of Sales ............................            320,095        182,544         150,202         112,476         104,590
Selling, General and Administrative ......            441,832        253,506         197,872         130,458         105,125
Depreciation and Amortization ............             63,263         44,572          39,279          25,119          22,270
Interest Expense .........................             75,758         56,765          45,629          32,239          27,662
Equity Income in JOA .....................              3,481          2,582              --              --              --
Gain on Sale of Newspaper Properties .....            117,621             --          31,829          30,575           8,291
Minority Interest ........................             34,092         12,295           6,192           5,800           4,064
Income (Loss) Before Income Taxes
   And Extraordinary Items ...............            124,976         10,030          34,392          34,577            (752)
Net Income (Loss) ........................            130,383           (822)         29,600          24,739           1,260

OTHER FINANCIAL DATA:
Capital Expenditures .....................       $     25,505   $     13,005    $     11,397    $      9,973    $     16,480
Cash Flow from:
   Operating Activities ..................             96,181         61,891          63,441          39,040          13,067
   Investing Activities ..................            118,144        (70,670)       (208,740)       (149,794)         (1,501)
   Financing Activities ..................            (74,438)        10,332         137,633         115,699         (23,913)

EBITDA, net of minority interest(b) ......            141,077        116,042          98,115          68,590          44,722
EBITDA, from unconsolidated JOA ..........              4,881          3,279              --              --              --
                                                 ------------   ------------    ------------    ------------    ------------
Total EBITDA available ...................            145,958        119,321          98,115          68,590          44,722

BALANCE SHEET DATA:
Total Assets .............................       $  1,138,892   $    846,454    $    656,979    $    432,295    $    258,279
Long-Term Debt and Capital Leases,
   net of cash and Minority Interest
   in Long-Term Debt .....................            683,880        758,937         520,430         346,540         211,474
Other Long-Term Liabilities and
   Obligations ...........................             17,633          7,543           6,479           5,092           7,728
Total Shareholders' Equity (Deficit) .....                939       (150,901)         33,547           3,947         (20,792)
</TABLE>

----------
(Footnotes on the following page)



                                       15
<PAGE>   16

(Footnotes from proceeding page)


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

(I)           On August 31, 1995, we acquired substantially all the assets used
              in the publication of The Berkshire Eagle, Bennington Banner and
              Brattleboro Reformer, daily newspapers published in Pittsfield,
              Massachusetts; Bennington and Brattleboro, Vermont, respectively,
              for approximately $34.6 million. These newspapers contributed
              approximately $21.6 million of revenues in fiscal year 1996.

(II)          On March 10, 1996, we acquired substantially all the assets used
              in the publication of the San Mateo County Times, a daily
              newspaper, and five weekly newspapers published in San Mateo
              County, California, for approximately $15.0 million. These
              newspapers contributed approximately $4.0 million of revenue to
              the Company in fiscal 1996.

(III)         On May 1, 1996, we sold the common stock of the Johnstown Tribune
              Publishing Company, which publishes The Tribune-Democrat and two
              weekly newspapers, distributed in and around Johnstown,
              Pennsylvania, for $50.6 million. The sale resulted in a pre-tax
              gain of approximately $8.3 million. These newspapers contributed
              approximately $14.9 million of revenues in fiscal 1996 prior to
              its sale and approximately $17.4 million in fiscal 1995. In
              connection with the sale of the Johnstown Tribune Publishing
              Company described above, the Company acquired the North Adams
              Transcript and the Bridgeton News, daily newspapers published in
              North Adams, Massachusetts, and Bridgeton, New Jersey,
              respectively. These newspapers contributed revenue of
              approximately $1.2 million in fiscal 1996.

(IV)          On October 31, 1996, we acquired substantially all the assets used
              in the publication of the Pasadena Star-News, San Gabriel Valley
              Tribune, Whittier Daily News, Times-Standard and The Evening Sun,
              daily newspapers distributed primarily in Pasadena, West Covina,
              Whittier and Eureka, California, and Hanover, Pennsylvania,
              respectively, and seven weekly newspapers distributed in and
              around these same cities, for a total of approximately $130.0
              million. These newspapers contributed $45.9 million of revenue to
              in fiscal year 1997.

(V)           On February 13, 1997, we sold substantially all the assets used in
              the publication of the Potomac News and two weekly publications
              for $48.0 million in cash plus an adjustment for working capital.
              The Company recognized a pre-tax gain on the sale of approximately
              $30.6 million, net of selling expenses. These newspapers
              contributed approximately $7.5 million of revenues in fiscal year
              1997 prior to their sale and approximately $12.0 million in fiscal
              year 1996.

(VI)          On February 28, 1997, we acquired substantially all the assets
              used in the publication of the Sentinel & Enterprise, Lebanon
              Daily News and The Daily Nonpareil, daily newspapers located in
              Fitchburg and Leominster, Massachusetts; Lebanon, Pennsylvania;
              and Council Bluffs, Iowa, respectively, and five weekly newspapers
              distributed in and around the same cities, for a total of
              approximately $51.2 million in cash. These newspapers combined
              contributed approximately $7.9 million of revenue in fiscal year
              1997.

(VII)         On July 31, 1997, we acquired substantially all the assets used in
              the publication of The Sun, an evening newspaper published in
              Lowell, Massachusetts. The assets were purchased for approximately
              $60.8 million. The Sun contributed $22.3 million of revenue in
              fiscal 1998.

(VIII)        On December 5, 1997, we sold substantially all the assets used in
              the publication of the North Jersey Herald & News and sixteen
              weekly publications for $43.0 million in cash plus an adjustment
              for working capital. The Company recognized a pre-tax gain on the
              sale of approximately $31.8 million, net of selling expenses.
              These newspapers contributed $16.2 million of revenues prior to
              the sale and $36.2 million in fiscal year 1997.

(IX)          On December 16, 1997, we acquired substantially all the assets
              used in the publication of the Press-Telegram, a daily newspaper
              published in Long Beach, California, for approximately $38.2
              million in cash. Proceeds from the sale of the North Jersey Herald
              & News were used to fund the acquisition. This newspaper
              contributed approximately $22.7 million of revenue in fiscal year
              1998.

(X)           On January 29, 1998, we acquired substantially all the assets used
              in the publication of the Daily News, a daily newspaper published
              in the San Fernando Valley of Los Angeles, California, for
              approximately $130.0 million. This newspaper contributed
              approximately $36.9 million of revenue in fiscal year 1998.

(XI)          On May 1, 1998, we acquired substantially all the assets used in
              the publication of the Valley News Today, a morning newspaper
              published five times a week in Shenandoah Iowa, and seven weekly
              publications distributed primarily in Shenandoah and Dennison,
              Iowa. These assets were purchased for approximately $5.1 million
              in cash, plus covenants not to compete with a discounted value of
              $0.6 million. These newspapers contributed approximately $0.7
              million of revenue in fiscal year 1998.

(XII)         On May 11, 1998 we acquired substantially all the assets used in
              the publication of The Tri-City Weekly, a weekly newspaper
              published in Eureka, California for approximately $2.6 million in
              cash, plus a covenant not to compete with a discounted value of
              $0.5 million. This newspaper contributed approximately $0.4
              million of revenue in fiscal year 1998.

(XIII)        On August 22, 1998 we acquired for approximately $47.0 million, a
              50% interest in Charleston Newspapers, a joint venture, which
              publishes the Charleston Gazette (morning) and Charleston Daily
              Mail (evening), six days a week and the Sunday Gazette-Mail, under
              the terms of a JOA. This newspaper contributed approximately $16.0
              million of revenue in fiscal year 1999.

(XIV)         Effective October 1, 1998 we acquired substantially all of the
              assets used in the publication of the Daily Times, a morning
              newspaper published in Farmington, New Mexico for cash and
              discounted notes with the prior owners. This newspaper contributed
              approximately $5.0 million of revenue in fiscal year 1999.


(Footnotes continued on following page)



                                       16
<PAGE>   17
(Footnotes continued from proceeding page)


(XV)          On March 31, 1999, through our wholly owned subsidiary, West Coast
              MediaNews LLC, we formed the California Newspaper Partnership with
              Donrey Newspapers LLC ("Donrey") and the Sun Company of San
              Bernardino California ("Gannett"). We contributed ANG Newspapers,
              comprised of six daily newspapers published in the San Francisco
              Bay area; San Gabriel Valley Newspapers, which includes three
              daily newspapers published in the Los Angeles area; and the
              Times-Standard, a daily newspaper published in Eureka, California
              in exchange for a 58.8% partnership interest. The Donrey and
              Gannett newspapers contributed to the partnership, added
              approximately $31.6 million of revenue in fiscal year 1999.

(XVI)         In fiscal year 2000, MediaNews and Garden State merged with
              MediaNews as the surviving entity and the successor issuer to
              Garden State Newspapers, Inc. MediaNews owns 80% of the Denver
              Post Corporation, accordingly the Denver Post becomes part of the
              consolidated financial statements.

(XVII)        Effective July 31, 1999, the California Newspapers Partnership
              sold the assets of The Hemet News and Moreno Valley Times for
              pre-tax gain of approximately $3.3 million. These newspapers
              contributed approximately $0.4 million and $0.4 million to revenue
              in fiscal year 1999 and 2000, respectively.

(XVIII)       Effective October 1, 1999 and January 1, 2000, the California
              Newspapers Partnership, a subsidiary of MediaNews purchased a
              shopper in Ukiah, California and a weekly newspaper in Milpitas,
              California, respectively. The purchase price included cash and
              future payments under covenants not to compete. These weekly
              newspapers contributed approximately $1.4 million to revenue in
              fiscal year 2000.

(XIX)         Effective October 31, 1999, we acquired substantially all of the
              assets used in the publication of the Deming Headlight, a morning
              newspaper published in Deming, New Mexico, for approximately $2.0
              million cash.

(XX)          Effective March 1, 2000, we acquired substantially all the assets
              used in the publication of six weekly newspapers and three monthly
              publications, distributed in and around Ayer, Massachusetts. The
              purchase price of approximately $4.2 million, included cash, a
              note payable and future payments under covenants not to compete.
              These weekly newspapers contributed approximately $0.8 million to
              revenue in fiscal year 2000.

(XXI)         Effective May 26, 2000, we acquired the stock of Northern
              Television, Inc. KTVA, a CBS affiliate broadcasting in Anchorage,
              Alaska, for approximately $7.0 million in cash and assumed debt.
              KTVA contributed $0.3 million to revenue in fiscal year 2000.

(XXII)        Effective June 30, 2000, we sold substantially all of the assets
              used in the publication of The Express Times, in Easton
              Pennsylvania; the Gloucester County Times, in Woodbury, New
              Jersey; Today's Sunbeam, in Salem, New Jersey; The Bridgeton News,
              in Bridgeton, New Jersey and our North Jersey weekly newspapers
              for $145.0 million in cash, plus and adjustment for working
              capital. We recognized a pre-tax gain on the sale of approximately
              $114.3 million, net of selling expense. These newspapers
              contributed approximately $55.0 million and $53.3 million of
              revenue in fiscal years 2000 and 1999, respectively.

(b)  EBITDA, NET OF MINORITY INTEREST is calculated by deducting from total
     revenues: cost of sales, selling and general and administrative expense and
     minority interest in EBITDA from the California Newspapers Partnership,
     York Newspaper Company and the Denver Post Corporation. Although EBITDA,
     net of minority interest is not a measure of performance calculated in
     accordance with GAAP, we believe that EBITDA, net of minority interest is
     an indicator and measurement of its leverage capacity and debt service
     ability. EBITDA, net of minority interest should not be considered as a
     measure of profitability, liquidity or as an alternative to net income,
     cash flows generated by operating, investing or financing activities or
     other financial statement data presented in our Consolidated Financial
     Statements or any other GAAP measure as an indicator of our performance.

(c)  York Newspapers, Inc. and Charleston Publishing Company, subsidiaries of
     the Company, participate in joint operating agencies. A joint operating
     agency performs the production, sales, distribution and administrative
     functions for each subsidiary and another newspaper publishing company
     under joint operating agreements ("JOA"). The Company had previously
     included its pro-rata portion of the revenues and expenses generated by the
     operations of the JOA's on a line-by-line basis in its consolidated
     statements of operations. However, the Financial Accounting Standards Board
     issued EITF 00-1, effective for periods ending June 15, 2000, which
     prohibits the use of pro-rata consolidation except in the extractive and
     construction industries. EITF 00-1 also requires that all previously
     reported financial statements be reclassified to conform with the current
     year presentation. Accordingly, all prior year financial statements have
     been restated. See Note 3 to the Consolidated Financial Statements for
     additional discussion on the effect of no longer using pro-rata
     consolidation to account for the Company's JOA's.

                                       17
<PAGE>   18

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

INTRODUCTION

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

OVERVIEW

     We are in the business of owning and operating daily and weekly newspapers.
In addition, we own 3 small radio stations and a television station (CBS
affiliate) in Anchorage, Alaska; however the results of these operations are
insignificant to us, requesting less than one half of one percent of revenue.
Our newspapers derive their revenues primarily from advertising and circulation.
Our primary operating expenses (before depreciation and amortization) are
employee salaries, newsprint, marketing, and distribution.

     Since MediaNews' and its predecessor companies inception, we have made
several leveraged acquisitions. A majority of the value of the assets acquired
was allocated to intangible assets, principally subscriber accounts and
goodwill, which we believe are generally the most valuable assets of a
newspaper. As a result of the amortization expense associated with these
intangible assets, interest expense associated with acquisition indebtedness,
debt fees and make whole premiums, we had accumulated a significant deficit
since our inception. The current year operations and gain on the sale of
newspapers substantially eliminates this deficit.

BASIS OF PRESENTATION

     As a result of the reorganization previously discussed, the consolidated
financial statements dated June 30, 2000 include the consolidated results of
operations of MediaNews and its subsidiaries, which includes the Denver Post
Corporation and the operations of the company formerly known as Garden State
Newspapers, Inc. and subsidiaries ("Garden State"). The financial statement data
for June 30, 1999 and 1998, included in this Form 10-K, only includes Garden
State.

     Since July 1, 1997, we have completed several strategic transactions that
have significantly affected our financial condition and results of operations.
The following is a summary of these transactions.

     Fiscal 2000 Transactions

     Effective July 31, 1999, a subsidiary of our California Newspapers
Partnership, sold the assets of The Hemet News and Moreno Valley Times for a
pre-tax gain of approximately $3.3 million. A portion of the proceeds from the
sale were used to purchase the California Newspapers Partnership newspaper
assets described below. The remaining cash was distributed to the partners in
the California Newspapers Partnership.

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

     Effective October 31, 1999, we acquired substantially all of the assets
used in the publication of the Deming Headlight, a morning newspaper published
in Deming, New Mexico, for approximately $2.0 million cash.

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

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

     Effective June 30, 2000, we sold substantially all of the assets used in
the publication of The Express Times, in Easton Pennsylvania; the Gloucester
County Times, in Woodbury, New Jersey; Today's Sunbeam, in Salem, New Jersey;
the Bridgeton News, in Bridgeton, New Jersey and our North Jersey weekly
newspapers for $145.0 million in cash, plus an adjustment for working capital of
approximately $4.8 million. We recognized a pre-tax gain on the sale of
approximately $114.3 million, net of selling expenses.



                                       18
<PAGE>   19

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)

     Fiscal 1999 Transactions

     On August 22, 1998, we acquired a 50% interest in Charleston Newspapers for
approximately $47.0 million. Charleston Newspapers is a joint venture, which
publishes the Charleston Gazette, (morning) and Charleston Daily Mail (evening),
six days a week and the Sunday Gazette-Mail, under the terms of a JOA. The
acquisition included rights to the masthead of the Charleston Daily Mail; thus,
we are responsible for the editorial content of the Charleston Daily Mail.

     Effective October 1, 1998, we acquired substantially all of the assets used
in the publication of the Daily Times, a morning newspaper published in
Farmington, New Mexico, for cash and discounted notes with the prior owners.

     On March 31, 1999, through our wholly owned subsidiary, West Coast
MediaNews LLC, we formed the California Newspaper Partnership with Donrey
Newspapers LLC ("Donrey") and the Sun Company of San Bernardino California
("Gannett"). We contributed ANG Newspapers, comprised of six daily newspapers
published in the San Francisco Bay area; San Gabriel Valley Newspapers, which
includes three daily newspapers published in the Los Angeles area; and the
Times-Standard, a daily newspaper published in Eureka, California; and all the
weekly publications published by these daily newspapers in exchange for a 58.8%
partnership interest. Donrey contributed ten daily newspapers and two non-daily
newspapers, located in California, most of which are located in close proximity
to our newspaper publications, in exchange for a 28.5% partnership interest.
Gannett contributed the San Bernardino County Sun in exchange for a 12.7%
partnership interest.

     Fiscal 1998 Transactions

     On May 11, 1998, we acquired substantially all the assets used in the
publication of the Tri-City Weekly, a weekly newspaper published in Eureka,
California for approximately $2.6 million in cash plus a covenant not to compete
with the prior owners with a discounted value of approximately $0.5 million.

     On May 1, 1998, we acquired substantially all the assets used in the
publication of the Valley News Today, a morning newspaper published five times a
week in Shenandoah Iowa, and seven weekly publications distributed primarily in
and around Shenandoah and Dennison, Iowa. These assets were purchased for
approximately $5.1 million in cash plus an adjustment for working capital and
covenant not to compete with the prior owners, with a discounted value of
approximately $0.6 million.

     On January 29, 1998, we acquired substantially all the assets used in the
publication of the Daily News, a daily newspaper published in the San Fernando
Valley of Los Angeles, California, for approximately $130.0 million, which
included working capital of approximately $2.0 million.

     On December 16, 1997, we acquired substantially all the assets used in the
publication of the Press-Telegram, a daily newspaper published in Long Beach,
California, for approximately $38.2 million in cash, plus an adjustment for
working capital. Proceeds from the sale of the North Jersey Herald & News
(discussed below) were used to fund the acquisition.

     On July 31, 1997, we acquired substantially all the assets used in the
publication of The Sun, an evening newspaper published in Lowell, Massachusetts.
The assets were purchased for $49.0 million in cash plus a covenant not to
compete with the prior owners with a discounted value of approximately $11.8
million.

     On December 5, 1997, we sold substantially all the assets used in the
publication of the North Jersey Herald & News and sixteen weekly publications
for $43.0 million in cash plus an adjustment for working capital. We recognized
a pre-tax gain on the sale of approximately $31.8 million, net of selling
expenses.



                                       19
<PAGE>   20

RESULTS OF OPERATIONS

     Set forth below is certain summary historical financial data for fiscal
2000, 1999 and 1998, in each case including the percentage change between fiscal
years.

<TABLE>
<CAPTION>
                                           Summary Historical Financial Data
                                                (Dollars in thousands)
                                      MediaNews      Garden State     Garden State
                                    Group, Inc. &  Newspapers, Inc. Newspapers, Inc.
                                    Subsidiaries    & Subsidiaries   & Subsidiaries
                                    -------------  ---------------- ----------------
                                               Fiscal Years Ended June 30,                 Fiscal Years Ended June 30,
                                    -------------------------------------------------   ---------------------------------
                                         2000             1999              1998        2000 vs. 1999      1999 vs. 1998
                                    --------------   --------------    --------------   --------------     --------------
<S>                                 <C>              <C>               <C>              <C>                <C>
Total Revenues ..................   $      947,301   $      570,185    $      453,210             66.1%              25.8%

Cost of Sales ...................          320,095          182,544           150,202             75.4               21.5
Selling, General and
Administrative ..................          441,832          253,506           197,872             74.3               28.1
Depreciation and Amortization ...           63,263           44,572            39,279             41.9               13.5
Interest Expense ................           75,758           56,765            45,629             33.5               24.4
Other ...........................            8,387           13,055            11,473            (35.7)              13.8
                                    --------------   --------------    --------------   --------------     --------------
   Total Costs and Expenses .....          909,335          550,442           444,455             65.2               23.8

Equity income in JOA ............            3,481            2,582                --             34.8              100.0

Net Income (Loss) ...............   $      130,383   $         (822)   $       29,600              (a)             (102.8%)
</TABLE>

     (a)      Not meaningful

SUMMARY SUPPLEMENTAL PRO FORMA FINANCIAL DATA

     The following summary supplemental pro forma financial data presents the
results of operations of our investments in the York Newspapers Company and the
Charleston Newspapers, both operated under JOA's, using pro-rata consolidation
for all periods presented. Prior to the Financial Accounting Standards Board
issuing EITF 00-1, we presented the results of our JOA interests using pro-rata
consolidation. See Notes 2 and 3 of the Consolidated Financial Statements for
additional discussion.

    THE INFORMATION IN THE FOLOWING TABLE IS NOT PRESENTED IN ACCORDANCE WITH
  GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND DOES NOT COMPLY WITH ARTICLE 11
                               OF REGULATION S-X


<TABLE>
<CAPTION>
                                                    Pro-Forma Data
                                                (Dollars in thousands)
                                      MediaNews      Garden State     Garden State
                                    Group, Inc. &  Newspapers, Inc. Newspapers, Inc.
                                    Subsidiaries    & Subsidiaries   & Subsidiaries
                                    -------------  ---------------- ----------------
                                               Fiscal Years Ended June 30,                 Fiscal Years Ended June 30,
                                    -------------------------------------------------   ---------------------------------
                                         2000             1999              1998        2000 vs. 1999      1999 vs. 1998
                                    --------------   --------------    --------------   --------------     --------------
<S>                                 <C>              <C>               <C>              <C>                <C>

Total Revenues ..................   $      948,664   $      568,637    $      436,726             66.8%              30.2%

Cost of Sales ...................          322,272          183,845           145,418             75.3               26.4
Selling, General and
Administrative ..................          444,481          254,923           193,193             74.4               32.0
Depreciation and Amortization ...           63,820           44,825            38,857             42.4               15.4
Interest Expense ................           75,489           56,479            45,311             33.7               24.6
Other ...........................            8,706           13,014            11,384            (33.1)              14.3
                                    --------------   --------------    --------------   --------------     --------------
   Total Costs and Expenses .....          914,768          553,086           434,163             65.4               27.4

Net Income (Loss) ...............   $      130,383   $         (822)   $       29,600              (a)             (102.8%)
</TABLE>

     (a)      Not meaningful



                                       20
<PAGE>   21

COMPARISON OF FISCAL YEARS ENDED JUNE 30, 2000 AND 1999

REVENUES

     Revenues increased $377.1 million or 66.1% in the fiscal year 2000 as
compared to fiscal year 1999. The increase in revenue was primarily attributable
to the October 1, 1998 acquisition of the Daily Times published in Farmington,
New Mexico; the consolidation of the Denver Post, and including a full year of
operations of the California Newspapers Partnership ("CNP") as compared to three
months of CNP operations in fiscal year 1999. Excluding the acquisition of the
Daily Times, the consolidation of The Denver Post and the effects of CNP, our
remaining newspaper operations ("same newspaper basis") had a 5.4% increase in
operating revenues in fiscal year 2000. Advertising revenues at existing
newspapers increased by approximately 6.5%, driven by continued growth in all
advertising categories.

COST OF SALES

     Cost of sales increased $137.6 million or 75.4% in fiscal year 2000
compared to fiscal year 1999. The aforementioned acquisition, consolidation of
the Denver Post and CNP caused the majority of the cost of sales increase in
fiscal year 2000. Excluding these transactions, cost of sales decreased 2.5%.

SELLING, GENERAL AND ADMINISTRATIVE

     Selling, general and administrative ("SG&A") expenses increased $188.3
million or 74.3% in fiscal year 2000 as compared to fiscal year 1999. The
acquisition discussed above, consolidation of the Denver Post and CNP caused the
majority of the SG&A expense increase in fiscal year 2000. Excluding these
transactions, SG&A expense increased approximately 10.5%. Excluding corporate,
SG&A expense increased approximately 8.0%. The increase in SG&A at the
newspapers is primarily associated with increases in advertising and circulation
expenditures, which are primarily related to ongoing efforts to increase
advertising lineage and total paid circulation. Increases in the number of
online content and sales staff at each newspaper has also contributed to the
increase in newspaper SG&A. We have also increased our spending at corporate in
the current fiscal year, as we continue to develop our internet sales, improve
and maintain our newspaper websites, increase the number of internet vertical
products being sold by the newspapers (including the consolidation of Employment
Wizard startup costs), and support the addition of CNP. While SG&A expense has
increased as a result of CNP, the increase is more than offset by management
fees paid to us by CNP, the effect of which is reflected as a reduction in
minority interest expense.

DEPRECIATION AND AMORTIZATION

     Depreciation and amortization increased $18.7 million in fiscal year 2000
as compared to the same period of fiscal year 1999. The aforementioned
acquisition, consolidation of the Denver Post and CNP caused the majority of the
increase in depreciation and amortization expense.

INTEREST EXPENSE

     Interest expense increased $19.0 million in fiscal year 2000 as compared to
the same period of fiscal year 1999. Interest expense increased as a result of a
$259.4 million increase in average debt outstanding, primarily associated with
acquisitions, debt repurchase and the inclusion of debt related to the Denver
Post and MediaNews (f.k.a. Affiliated Newspapers Investments, Inc.), which was
not previously part of Garden State's consolidation debt. The increase in
average debt was offset by a 43 basis point reduction in the weighted average
interest rate of all debt outstanding.

OTHER EXPENSE

     Adjusted other expense increased approximately $1.7 million in the fiscal
year 2000 after excluding a $1.5 million loss on the sale of land and building
formerly used in the operations of ANG Newspapers, as compared to the same
period in fiscal year 1999 after excluding $7.8 million of debt issuance costs
incurred in conjunction with our $200.0 million bond offering and a new $350.0
bank credit facility in fiscal year 1999. The current year increase was caused
primarily by the recognition of losses on our equity investment in AdOne (a non
cash loss), legal fees associated with corporate reorganization and an increase
in other long-term liabilities associated with the accretion of the cost to
repurchase an option held by a third party to acquire one of our newspapers. The
holder of the option cannot exercise the option prior to January 2003 and may
hold the option until 2010.



                                       21
<PAGE>   22

COMPARISON OF FISCAL YEARS ENDED JUNE 30, 2000 AND 1999 (CONTINUED)

EQUITY INCOME IN JOA

     The equity in income in JOA is our share of the net income from the
operations of the Charleston Newspapers JOA. The increase in equity in income in
JOA is due primarily to the inclusion of a full year of operations in fiscal
year 2000, compared to ten months in fiscal year 1999. In addition, the year
over year operation of the Charleston Newspaper JOA improved in fiscal year
2000.

NET INCOME

     We reported adjusted net income of approximately $15.6 million for fiscal
year 2000, after excluding our share of the gains on sales of newspaper
properties of approximately $116.3 million and a $1.5 million loss on the sale
of land and buildings in CNP, compared to an adjusted net income of $14.0
million in fiscal year 1999, after excluding the extraordinary loss of $6.4
million and $8.4 million of debt issuance cost as described above. The increase
in adjusted net income is primarily attributable to a $12.1 million increase in
operating profit, net of minority interest in operating profit, a $9.9 million
reduction in income tax expense as a result of recognizing the benefit of net
operating losses previously subject to valuation allowances and a $0.9 million
increase in equity income in the Charleston Newspapers JOA. These increases in
income were partially offset by a $19.0 million increase in interest expense and
a $2.2 million increase in adjusted other expense previously discussed.

COMPARISON OF FISCAL YEARS ENDED JUNE 30, 1999 AND 1998

REVENUES

     Revenues increased $117.0 million or 25.8% in fiscal year 1999 as compared
to fiscal year 1998. The increase in revenue was primarily attributable to the
July 31, 1997 acquisition of The Sun; the December 16, 1997 acquisition of the
Press-Telegram; the January 29, 1998 acquisition of the Daily News; the October
1, 1998 acquisition of the Daily Times; and the March 31, 1999 formation of CNP.
The increase in revenue was partially offset by the sale of the North Jersey
Herald & News on December 5, 1997. Excluding the acquisition and disposition
transactions, the Company's remaining newspaper operations ("same newspaper
basis") combined posted a $8.5 million increase in operating revenues for fiscal
year 1999. The increase in operating revenue was driven by a 4.3% increase in
advertising revenue from continued growth in classified, retail, national and
preprint advertising.

COST OF SALES

     Cost of sales increased $32.3 million or 21.5% in fiscal year 1999 compared
to fiscal 1998. The aforementioned acquisitions caused the majority of the
increase in cost of sales in fiscal year 1999. On a same newspaper basis, cost
of sales decreased approximately $0.5 million or approximately 0.4% due to lower
newsprint prices. Excluding the effects of newsprint, cost of sales increased by
$1.7 million or 2.5%.

SELLING, GENERAL AND ADMINISTRATIVE

     SG&A expenses increased $55.6 million or 28.1% in fiscal year 1999 as
compared to fiscal year 1998. The aforementioned acquisitions caused the
majority of the increase in SG&A. On a same newspaper basis, SG&A expense
increased $7.0 million or 4.5%. The increase in SG&A expense is associated with
increases in advertising expenditures, which were primarily related to ongoing
efforts to increase advertising lineage combined with an increase in corporate
overhead primarily associated with our continuing investment in our online
newspaper products and content. Excluding corporate overhead and management
fees, SG&A at existing newspapers increased $5.2 million or 3.4%.

DEPRECIATION AND AMORTIZATION

     Depreciation and amortization increased $5.3 million in fiscal year 1999 as
compared to the same period of fiscal year 1998. The aforementioned acquisitions
and CNP caused the majority of the increase in depreciation and amortization
expense.

INTEREST EXPENSE

     Interest expense increased $11.1 million in fiscal year 1999 as compared to
the same period of fiscal year 1998. Interest expense increased primarily as a
result of a $149.2 million increase in average debt outstanding, the majority of
which is associated with acquisitions, debt repurchase premiums and debt
expenses. The increase in average debt was offset by a 55 basis point reduction
in the weighted average cost of debt, primarily associated with our refinancing
activity.



                                       22
<PAGE>   23

COMPARISON OF FISCAL YEARS ENDED JUNE 30, 1999 AND 1998 (CONTINUED)

OTHER EXPENSE

     Other expense increased $1.6 million in fiscal year 1999 as compared to
fiscal year 1998. The increase is attributable to the Company incurring $7.8
million of debt issuance costs in fiscal year 1999, associated with the issuance
of $200.0 million of 8.625% Senior Subordinated Notes and a $350.0 million bank
credit facility in fiscal 1999 as compared to fiscal year 1998 debt issuance
costs of $7.3 million. Fiscal year 1998 debt issuance cost was associated with
the $300.0 million of 8.75% Senior Subordinated Notes issued in October 1997.
Fiscal year 1999 expense also increased approximately $1.7 million, as a result
of fees and expenses incurred to establish CNP and certain legal costs
associated with settling lawsuits.

EXTRAORDINARY LOSS

     In fiscal year 1999, we repurchased $100.0 million face value of our 12%
Senior Subordinated Secured Notes and Shareholder Notes at a premium of
approximately $10.8 million. The premiums, net of income taxes, were recorded as
an extraordinary loss. Based on our borrowing rates, the repurchase
significantly reduces our total future interest expense as these notes were at
rates substantially above market.

NET INCOME

     We recorded adjusted net income of approximately $13.3 million in fiscal
year 1999, after excluding the extraordinary loss of $6.4 million (net of taxes)
and $7.7 million of debt issuance costs as described above, compared to fiscal
year 1998 adjusted net income of $5.1 million after excluding the gain on sale
of newspapers and $7.3 million of debt issuance costs as described above. The
increase in adjusted net income of $8.2 million is primarily attributable to a
$23.8 million increase in operating profit and a $2.6 million increase in equity
in income from the Charleston JOA, offset by a $6.1 million minority interest
charge and the previously discussed $11.1 million increase in interest expense.

LIQUIDITY AND CAPITAL RESOURCES

     Our sources of liquidity are, existing cash and other working capital, cash
flow provided from operating activities and the borrowing capacity under our
credit agreement. Our operations, consistent with the newspaper industry,
require little investment in inventory, as less than 30 days of newsprint is
generally maintained on hand. We may, from time to time, increase our newsprint
inventories in anticipation of price increases. In general, our receivables have
been collected on a timely basis.

JUNE 30, 2000 COMPARED TO JUNE 30, 1999

     Net cash flows from operating activities were approximately $96.2 million
and $61.9 million for years ended June 30, 2000 and 1999, respectively. The
$34.3 million increase in cash flow from operating activities was primarily the
result of the $51.2 million increase in EBITDA for the year ended June 30, 2000,
compared to the same period of the prior year. The increase in EBITDA was
partially offset by a $0.7 million change in operating assets and liabilities,
excluding interest and income taxes payable, due to timing differences, $12.4
million increase in cash interest paid, a $2.2 million increase in other expense
related to operations and a $1.0 million increase in income taxes paid.

     Net cash flows from investing activities were $118.1 million and ($70.7)
million for the ended June 30, 2000 and 1999, respectively. The $188.8 million
increase was primarily the result of our spending a net $59.7 million on
acquisitions in fiscal year 1999 compared to a net $139.7 million in proceeds
from purchasing and selling newspaper properties in fiscal year 2000. The
decrease in net acquisition spending was partially offset, by a $12.5 million
increase in capital spending primarily associated with the completion of year
2000 projects, land acquisitions and building improvements associated with the
ANG Newspaper relocation, web width reduction at CNP and the addition of a press
line at the Denver Post, which was built, in conjunction with a long-term
contract to print and deliver the New York Times. The new press line at the
Denver Post was financed under a sale lease back agreement. A substantial
portion of the current year increase in capital spending relates to CNP and the
Denver Post. In addition, while 100% of capital spending for CNP is included in
the statement of cash flows while 41.2% was funded by the minority partners
through a reduction in distributions paid to minority partners. Distributions
from the Charleston Newspapers JOA also increased $1.9 million.



                                       23
<PAGE>   24

LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)

Net cash flows from financing activities were ($74.4) million and $10.3 million
for the years ended June 30, 2000 and 1999, respectively. The reduction of
approximately $84.7 million was primarily attributable to our paying down a net
$33.3 million of long-term debt and other liabilities in fiscal 2000, compared
to a net borrowing of $226.3 million in fiscal 1999. The majority of the 1999
borrowings were made in conjunction with the previously discussed acquisitions
and to fund debt repurchases in our 1999 fiscal fourth quarter. Fiscal year 1999
also included $18.6 million of borrowings and disbursements used for debt
prepayment premiums and issuance cost. We also paid a $183.6 million dividend
paid to MediaNews to fund the repurchase of MediaNews' debt prior to the
reorganization previously discussed. We also increased distributions to our
minority interest partners by $25.4 million in fiscal year 2000.

JUNE 30, 1999 COMPARED TO JUNE 30, 1998

     Net cash flows from operating activities were approximately $61.9 million
and $63.4 million for fiscal years ended June 30, 1999 and 1998, respectively.
The $1.5 million decrease in cash flow from operating activities was primarily
the result of a $29.0 million increase in operating profit, excluding
depreciation and amortization expense in fiscal year 1999, compared to the prior
year, and a $10.4 million decrease in cash tax expense. These increases were
offset by a $29.5 million decrease in the change in operating assets and
liabilities and a $9.9 million increase in cash interest expense.

     Net cash flows from investing activities were ($70.7) million and ($208.7)
million for fiscal years ended June 30, 1999 and 1998, respectively. The $138.0
million change was primarily the result of our spending a net $59.7 million on
acquisitions in fiscal year 1999 compared to $197.3 million in fiscal year 1998.
Distribution from the Charleston Newspapers JOA of $2.0 million also contributed
to the change.

     Net cash flows from financing activities were $10.3 million and $137.6
million for fiscal years ended June 30, 1999 and 1998, respectively. The change
of approximately $127.3 million was primarily attributable to our paying a
$183.6 million dividend to our parent, which was used to repurchase their Senior
Discount Debentures. We also increased the payments to our minority partners by
$8.3 million. These uses of funds were offset by a $76.0 million increase in net
borrowings in fiscal year 1999, compared to fiscal year 1998. A $11.3 million
increase in debt issuance and repurchase premium also contributed to the change.

CAPITAL EXPENDITURES

     We have a capital expenditure plan (not including business acquisitions),
which includes normal maintenance capital expenditures of approximately $7.0
million and other projects totaling approximately $14.0 million for fiscal 2001.
Approximately $3.5 million of these expenditures will be paid by minority
partners. Non-maintenance expenditures during fiscal 2001, include computer
hardware and software upgrades for editorial, classified and circulation
systems, some of which are necessary to capitalize on clustering efficiencies,
building a new printing plant to consolidate certain printing in New England,
new phone systems and production and mailroom equipment. Management reviews the
capital expenditure plan periodically and modifies it as required to meet our
current business needs. Capital expenditures related to these projects are
expected to be funded either through available cash or borrowings under our bank
credit agreement.

LIQUIDITY

     Based upon current and expected future operating results, we believe that
we will have sufficient cash flows from operations to fund scheduled payment of
principal and interest and to meet anticipated capital expenditure and working
capital requirements for at least the next twelve months. In addition to cash
flows from operations, we have approximately $60.0 million available under our
bank credit facility after funding the acquisition of the Connecticut Post,
which should be more than sufficient to fund unanticipated needs.

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



                                       24
<PAGE>   25

NEAR TERM OUTLOOK

OPERATING RESULTS

     The operating results of MediaNews are expected to decline in the first
half of fiscal year 2001, as compared to the same period of the prior year. The
decline is primarily the result of strategic decisions made in the second half
of fiscal year 2000, in conjunction with the pending JOA transaction, which
substantially increased operating expenses at The Denver Post. The increased
spending in Denver primarily relates to increased newsprint and distribution
costs associated with aggressive circulation growth plans, which were initiated
prior to the announcement of the JOA and continue to date. Increased spending
associated with newsprint volumes is being compounded by significantly higher
newsprint prices. Because the JOA has yet to be implemented and due to the
circulation reporting lag, there is little incremental revenue associated with
increased volumes. We believe this current increase in spending at The Denver
Post, is a one-time investment in the future of our newspaper operations in the
Denver market.

NEWSPRINT PRICES

     North American newsprint suppliers have implemented a $50 per metric ton
price increase for 30 pound newsprint effective September 1, 2000. After the
price increase, North American 30 pound newsprint will average $610 per metric
ton for large newsprint buyers. To minimize the influence of newsprint price
fluctuations, we have entered into fixed price newsprint contracts and newsprint
swap agreements, which expire over the next six months to eight years. The
weighted average price for newsprint under both the fixed price newsprint
contracts and newsprint swaps for fiscal year 2001 is $563 per metric ton.
Approximately 49% of our fiscal year 2001 newsprint consumption is expected to
be purchased under fixed price agreements.

RECENTLY ISSUED ACCOUNTING STANDARDS

     The Financial Accounting Standards Board issued FAS No. 133 - Accounting
for Derivative Instruments and Hedging Activities. The standard, which must be
adopted by July 1, 2000, will not have a material effect on our financial
position or its results of operations. Under the new standard, newsprint forward
contracts will be recorded at fair value and changes in the value of the
contracts will be initially reported as a separate component of comprehensive
income and reclassified into earnings when the newsprint is consumed.

     The Emerging Issues Task Force reached a consensus on Issue 00-2 -
Accounting for Web Site Development Costs at its March 2000 meeting. The
consensus requires capitalization of certain costs incurred in the development
of internet sites. We currently capitalizes the cost of computer hardware and
software used in the operation of its internet sites; however, all other
development costs, such as graphics and other design costs, have been expensed
as incurred. We will adopt Issue 00-2 effective beginning of July 1, 2000. The
effect on our results of operations is expected to be immaterial.

MARKET RISK

<TABLE>
<CAPTION>
                                                                       Interest Rate Sensitivity
                                                                 Principal Amount by Expected Maturity
                                                                          Year Ended June 30,
                                                                        (Dollars in thousands)
                                   2001         2002         2003         2004         2005      Thereafter      Total       2000
                                ----------   ----------   ----------   ----------   ----------   ----------   ----------  ----------
<S>                             <C>          <C>          <C>          <C>          <C>          <C>          <C>         <C>
LIABILITIES
Long-Term Debt, including
   Current Portion

Fixed Rate ...................          --           --           --           --           --   $  443,000   $  443,000  $  443,000
Average Interest Rate ........       10.59%       10.59%       10.59%       10.59%       10.59%       10.59%

Variable Rate ................          --           --           --   $   31,950   $  100,000   $  100,000   $  231,950  $  231,950
Average Interest Rate ........        8.31%        8.31%        8.31%        8.31%        8.31%        8.31%
</TABLE>



                                       25
<PAGE>   26

                           FORWARD-LOOKING STATEMENTS

     This 10-K includes "Forward-Looking Statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. All
statements other than statements of historical facts included in this 10-K,
including without limitation, certain statements under "Management's Discussion
and Analysis of Financial Condition and Results of Operations," "Business" and
statements located elsewhere herein regarding our financial position and
operating strategy, may constitute forward-looking statements.

     Although we believe that the expectations reflected in such forward-looking
statements are reasonable, we can give no assurance that such expectations will
prove to be correct. Important factors that could cause actual results to differ
materially from our expectations ("Cautionary Statements") include the
following: (1) costs or difficulties related to the integration of businesses
acquired by us (including clustering) may be greater than expected; (2)
unanticipated increases may occur in financing and other costs, such as
newsprint or labor costs; (3) general economic or business conditions, either
nationally or in the regions in which we conduct business, may be less favorable
than expected; and (4) competition, including from other newspapers, other
traditional forms of advertising and newer forms made possible by the internet
and otherwise. All subsequent written and oral forward-looking statements
attributable to us or persons acting on our behalf are expressly qualified in
their entirety by the cautionary statements.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The response to this item is filed as a separate part of this report (see
page 33).

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

     None



                                       26
<PAGE>   27

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Set forth below are the names, ages and titles as of June 30, 2000, and a
brief account of the business experience of each person who is a director,
executive officer or other significant employee of the Company.

<TABLE>
<CAPTION>
   NAME                                            AGE       TITLE
   -------------------------------------------     ---       --------------------------------------------------------------
<S>                                                <C>       <C>
   Richard B. Scudder........................       87       Chairman of the Board and Director
   William Dean Singleton....................       49       Vice Chairman, President, Chief Executive Officer and Director
   Joseph J. Lodovic, IV.....................       39       Executive Vice President and Chief Financial Officer
   Anthony F. Tierno.........................       55       Executive Vice President and Chief Operating Officer
   E. Michael Fluker.........................       63       Senior Vice President, Administration
   Ronald A. Mayo............................       38       Vice President Finance/Controller
   Michael C. Bush...........................       45       Vice President Operations
   James L. McDougald........................       46       Treasurer
   Jean Scudder..............................       46       Director
   Howell E. Begle, Jr.......................       56       Director
</TABLE>

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

BUSINESS EXPERIENCE

     RICHARD B. SCUDDER has served as Chairman of the Board and a Director of
MediaNews since 1985.

     WILLIAM DEAN SINGLETON has served as Vice Chairman, President, Chief
Executive Officer and a Director of MediaNews since 1985.

     JOSEPH J. LODOVIC, IV, has served as Executive Vice President and Chief
Financial Officer of MediaNews since November 1993. Prior thereto, he served as
Vice President and Treasurer of MediaNews from 1989 to 1993. Mr. Lodovic has
been with MediaNews since 1987.

     ANTHONY F. TIERNO has served as Executive Vice President and Chief
Operating Officer of MediaNews since November 1993. Prior thereto, he served as
Vice President of MediaNews' eastern United States operations from 1987 to 1993.
Mr. Tierno has been with MediaNews since its inception in 1985.

     E. MICHAEL FLUKER has served as Senior Vice President, Administration, for
MediaNews since November 1993. Prior thereto, he served as Executive Vice
President and Chief Financial Officer of MediaNews from 1989 to November 1993.

     RONALD A. MAYO has served as Vice President Finance and Controller since
September 1994. From 1984 to 1994, Mr. Mayo was employed by Ernst & Young LLP,
most recently as a Senior Manager.

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

     JAMES L. MCDOUGALD has served as Treasurer since September 1994. Prior
thereto, he was Controller for MediaNews from 1988 to 1994.

     JEAN SCUDDER has served as a Director of MediaNews since July 1998. Ms.
Scudder is the daughter of Richard B. Scudder.

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



                                       27
<PAGE>   28

ITEM 11. EXECUTIVE COMPENSATION

     Our business and affairs, prior to the reorganization in fiscal year 2000
were managed by an affiliate pursuant to the terms of a management agreement.
The affiliate allocated its expenses as management fees to us and other
affiliates based on the amount of time and resources devoted to each company.
See "Certain Relationships and Related Transactions -- Management Services".
Messrs. Singleton and Lodovic have significant additional compensation, which
has been allocated to other affiliates and therefore does not appear in 1998 and
1999 compensation. The following table sets forth the cash compensation paid or
payable to Mr. Singleton and any executive officer whose direct or allocated
cash compensation exceeded $100,000 for services rendered to the Company in
fiscal 2000.

<TABLE>
<CAPTION>
                                                                     Annual Compensation               All Other
   Name and Principal Position                 Fiscal Year        Salary            Bonus            Compensation
   ---------------------------------------     -----------      ----------       -----------         ------------
<S>                                            <C>              <C>              <C>                 <C>
   William Dean Singleton(a)                      2000          $  748,500       $   350,000         $     50,566
   Vice Chairman, President and                   1999             360,000           100,000               23,400
   Chief Executive Officer...............         1998             360,000           250,000                7,394

   Joseph J. Lodovic IV(a), (b)                   2000          $  489,800       $   450,000          $     9,188
   Executive Vice President,                      1999             211,500           105,000                3,416
   Chief Financial Officer...............         1998             181,500           140,000                3,078

   Anthony F. Tierno                              2000          $  350,000       $   150,000         $     12,215
   Executive Vice President                       1999             275,880            80,000               13,702
   & Chief Operating Officer.............         1998             225,000            60,000               10,310

                                                  2000          $  180,000        $   22,500         $     10,100
   Michael C. Bush                                1999             164,810            40,000               10,591
   Vice President Operations.............         1998             133,050            35,000                7,049

   Ronald A. Mayo(c)
   Vice President Finance/Controller.....         2000          $  176,100        $   50,000          $     5,087
</TABLE>

----------
     (a)  Fiscal year 1999 and 1998 represents compensation paid directly by
          Garden State or allocated to Garden State as management fees. In
          fiscal year 2000, 1999 and 1998, these officers also received
          significant compensation that was charged to other affiliates.

     (b)  Mr. Lodovic's fiscal year 2000 bonus includes a bonus earned in
          accordance with his employment agreement discussed below and a bonus
          that was earned as of December 1999, under a plan that was in effect
          prior to his employment agreement. Future bonuses are earned in
          accordance with the employment agreement.

     (c)  Mr. Mayo's compensation did not qualify for inclusion in fiscal year
          1999 and 1998.

EMPLOYMENT AGREEMENTS

     None of our executive officers have an employment agreement with us except
Messrs. Singleton and Lodovic. Under the terms of Mr. Singleton's Employment
Agreement, which was amended and renewed effective March 15, 2000 ("Mr.
Singleton's Employment Agreement"), Mr. Singleton is entitled to receive cash
compensation at an annual rate of not less than $771,000, subject to annual
adjustment of not less than 5% by the board of directors. In addition, Mr.
Singleton is entitled to receive a bonus of up to $200,000 for each fiscal year
based on a comparison of our actual profits to budgeted profits during such
fiscal year. Other discretionary bonuses may be paid which are not part of his
Employment Agreement, if approved by the board of directors. Mr. Singleton's
employment agreement expires on December 31, 2009, but will be automatically
renewed for successive one-year terms unless Mr. Singleton gives notice
terminating the Employment Agreement at least 120 days prior to the expiration
of the existing term. Mr. Singleton's Employment Agreement contains a five-year
non-compete covenant for all counties and geographical areas in which newspapers
are owned or circulated by us or its subsidiaries (currently or in the future).
Under the terms of Mr. Lodovic's Employment Agreement with us, which was entered
into effective March 15, 2000, Mr. Lodovic is entitled to receive cash
compensation at an annual rate of not less than $504,600, subject to annual
adjustment of not less than 5% by the board of directors. In addition, Mr.
Lodovic is also entitled to receive a bonus of up to $200,000 for each fiscal
year based on a comparison of our actual profits of the Company to budgeted
profits during such year. Other discretionary bonuses may also be paid which are
not part of his employment agreement, if approved by the board of directors. Mr.
Lodovic's employment agreement expires by its terms on December 31, 2009. Mr.
Lodovic's Employment Agreement entitles him to participate in any stock options,
stock ownership or similar plan which we may adopt in the future relative to any
of our executives. It also entitles Mr. Lodovic, upon termination of his
employment under certain circumstances, to put to us at a price not to exceed
100% of the then fair market value all shares of any class of equity securities
which he owns. The price payable under the put is equal to a percentage of fair
market value, which increases up to 100% on December 31, 2009. We also have a
call under Mr. Lodovic's Employment Agreement to acquire such shares, upon
termination of his employment under certain circumstances, at a price not to
exceed 100% of their then fair market value. Neither the put nor the call can be
exercised if it causes a default under any credit agreement existing at that
time. Nor, can any stock be put until our leverage ratio, as defined, is below
3:1.



                                       28
<PAGE>   29

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

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

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

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

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


<TABLE>
<CAPTION>
                                                          Amount and Nature of       Percentage of
                                                         Beneficial Ownership(a)      Ownership of
                                                          Class A Common Stock    Class A Common Stock
                                                         -----------------------  --------------------
<S>                                                      <C>                      <C>
   William Dean Singleton(c), (l), (m)..............                  254,859                  11.00%
   Howell E. Begle, Jr. (b), (d), (l)...............               786,426.50                  33.99%
   Patricia Robinson(b), (e), (l)...................               786,426.50                  33.99%
   Joseph J. Lodovic, IV(f).........................                   58,199                   2.51%
   Jean L. Scudder(g), (k)..........................               384,125.12                  16.60%
   Charles Scudder(h), (k)..........................               260,321.37                  11.25%
   Elizabeth A. Difani(h), (i), (k).................               219,073.45                   9.47%
   Carolyn Miller(h), (j), (k)......................               177,825.56                   7.68%
   All directors and executives as a group(n).......                2,140,770                  92.50%
</TABLE>

----------

     (a)  Beneficial ownership is determined in accordance with the rules of the
          Commission. Except as indicated by footnote, the persons named in the
          tables above have sole voting and investment power with respect to all
          shares of capital stock indicated as beneficially owned by them. None
          of such shares is known by MediaNews to be shares with respect to
          which the beneficial owner has the right to acquire such shares.

     (b)  The address of each such person is: c/o Howell E. Begle, Jr., Trustee,
          901 15th Street, N.W., Suite 700, Washington, D.C. 20005. Mr. Begle is
          Of Counsel to the law firm of Verner, Liipfert, McPherson and Hand,
          Chartered, which law firm is counsel to the Company.

     (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. Mr. Singleton
          disclaims any beneficial ownership in the shares held in the Singleton
          Revocable Trust.

     (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.

(Footnotes continued on following page)



                                       29
<PAGE>   30

     (Footnotes continued from preceding page)

     (g)  Includes 123,743.75 shares of common stock held by a trust for the
          benefit of two of Ms. Scudder's nephews, for which trust Ms. Scudder
          serves as the sole trustee. Also includes 74,504 shares of common
          stock held for the benefit of Ms. Scudder's son, Benjamin Fulmer, for
          which Ms. Scudder also serves as the sole trustee. Does not include
          the shares held by Charles Scudder, Elizabeth Difani, as custodian for
          certain of her minor children, or Carolyn Miller, as custodian for
          certain of her minor children, with respect to which Ms. Scudder has
          sole voting power pursuant to the Scudder Family Voting Trust
          Agreement for MediaNews (the "Scudder Family Voting Trust Agreement").

     (h)  Sole voting power with respect to these shares is held by Ms. Scudder
          pursuant to the Scudder Family Voting Trust Agreement. See note (g)
          above.

     (i)  Ms. Difani holds these shares as custodian for certain of her minor
          children. 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.

     (j)  Ms. Miller holds those shares as custodian for certain of her minor
          children. 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.

     (k)  The address of each person is: c/o Jean L. Scudder, 193 Old Kents Hill
          Road, Readfield, Maine 04355.

     (l)  Indicates shared voting power.

     (m)  Indicates shared investment power.

     (n)  No directors or officers of MediaNews beneficially own any shares in
          MediaNews except Mr. Singleton, Ms. Scudder, Mr. Begle, Ms. Robinson
          and Mr. Lodovic. See note (d) and (f) above.

SCUDDER FAMILY VOTING TRUST AGREEMENT FOR MEDIANEWS

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

SINGLETON FAMILY VOTING TRUST AGREEMENT FOR MEDIANEWS

     The Singleton Irrevocable Trust, the Singleton Family Revocable Trust and
Joseph J. Lodovic, IV have entered into the Singleton Family Voting Trust
Agreement for MediaNews (the "Singleton Family Voting Trust Agreement for
MediaNews") in accordance with which all shares of Class A common stock of
MediaNews held by the Singleton Irrevocable Trust and Joseph J. Lodovic, IV were
transferred to the Singleton Family Voting Trust for MediaNews and the shares of
Class A common stock of the Company held by the Singleton Revocable Trust will
be transferred to the Singleton Family Voting Trust for MediaNews upon the death
or incapacity of Mr. Singleton. Under the Singleton Family Voting Trust
Agreement for MediaNews, the Singleton Trustee exercises all voting and
substantially all other rights to which such shareholders would otherwise be
entitled until January 31, 2010, subject to extension by written agreement of
one or more beneficiaries of the Singleton Family Voting Trust Agreement for
MediaNews.

MEDIANEWS SHAREHOLDERS' AGREEMENT

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



                                       30
<PAGE>   31

MEDIANEWS SHAREHOLDERS' AGREEMENT (CONTINUED)

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

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

MANAGEMENT SERVICES

     Prior to July 1, 1999, we had engaged an affiliate to operate and manage
the business and affairs of our newspapers under the terms of a management
agreement. However, as previously discussed, since July 1, 1999 these management
services have been performed directly by MediaNews. The affiliate, which is
owned entirely by Messrs. Singleton and Scudder, also managed other affiliated
newspapers. Pursuant to the management agreement, the affiliate allocated its
expenses as management fees to each company it manages based on the amount of
time and resources devoted to that company. The weighted average of the salary
allocations was then used to apportion general overhead of the affiliate, such
as office rent and related operating expenses.

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

     Prior to July 1, 1999, we reimbursed the affiliated management company for
expenses incurred directly by them on our behalf, which are not included in the
management fee. For fiscal 1999 and 1998, we paid approximately $3.2 million and
$2.8 million, respectively, in management fees. Management fees charged by the
affiliated have been included in selling, general and administrative expenses.
We believe that the management fees paid are not greater than the costs we would
expect to bear to obtain these services elsewhere or provide by ourselves.

     MediaNews entered into a management agreement with the California
Newspapers Partnership, providing us with a management fee of 1.25% of revenues
and thereby reducing the total corporate overhead of MediaNews.


                                     PART IV

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

     (a) Financial Statements

     1.  The list of financial statements contained in the accompanying Index to
         Consolidated Financial Statements and Schedules Covered by Report of
         Independent Auditors is filed as a part of this Report (see page 33).

     2.  Financial Statement Schedules

         The list of financial statement schedules contained in the accompanying
         Index to Consolidated Financial Statements and Schedules Covered by
         Report of Independent Auditors is filed as part of the Report (see page
         33).



                                       31
<PAGE>   32

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

     3.  Exhibits

         The Exhibits listed in the accompanying index to exhibits are filed as
         a part of this annual report. (See page 33).

     (b) Reports on Form 8-K

         The Company filed a Form 8-K on July 14, 2000, regarding the sale of
         substantially all the assets of The Express Times, The Gloucester
         County Times, Today's Sunbeam, the Bridgeton News and our New Jersey
         weekly newspapers to Penn Jersey Advance, Inc., and the proposed
         purchase of all assets of The Connecticut Post, from Thomson
         Newspapers, Inc., on October 1, 2000, which included the unaudited
         financial statements and unaudited pro forma financial information for
         the year end June 30, 1999 and the nine month period end March 31,
         2000.



                                       32
<PAGE>   33

                              MEDIANEWS GROUP, INC.
                         ITEMS 8, AND 14(a)(1) AND (2)

             INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE
                    COVERED BY REPORT OF INDEPENDENT AUDITORS

     The following financial statements of the registrant and its subsidiaries
required to be included in Items 8 and 14(a)(1) are listed below:


<TABLE>
<CAPTION>
                                                                                                                  PAGE
                                                                                                                  ----
<S>                                                                                                               <C>
Report of Independent Auditors..............................................................................       34
Consolidated Balance Sheets as of June 30, 2000 and 1999....................................................       35
Consolidated Statements of Operations for the Fiscal Years Ended June 30, 2000, 1999 and 1998...............       37
Consolidated Statements of Changes in Shareholders' Equity (Deficit) for the
Fiscal Years Ended June 30, 2000, 1999 and 1998.............................................................       38
Consolidated Statements of Cash Flows for the Fiscal Years Ended June 30, 2000, 1999 and 1998...............       39
Notes to Consolidated Financial Statements..................................................................       40
</TABLE>

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

<TABLE>
<S>                                                                                                               <C>
Schedule II         Valuation and Qualifying Accounts.......................................................       55
</TABLE>

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



                                       33
<PAGE>   34

                         REPORT OF INDEPENDENT AUDITORS


The Board of Directors
MediaNews Group, Inc.


     We have audited the accompanying consolidated balance sheets of MediaNews
Group, Inc. and subsidiaries (successor to Garden State Newspapers, Inc. and
subsidiaries) as of June 30, 2000 and 1999, and the related consolidated
statements of operations, changes in shareholders' equity (deficit), and cash
flows for each of the three years in the period ended June 30, 2000. Our audits
also included the financial statement schedule II. These financial statements
and schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.

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

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
MediaNews Group, Inc. and subsidiaries (successor to Garden State Newspapers,
Inc. and subsidiaries) at June 30, 1999 and 1998, and the consolidated results
of their operations and their cash flows for each of the three years in the
period ended June 30, 1999, in conformity with accepted accounting principles
generally accepted in the United States. Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly, in all material respects, the
information set forth therein.

     As discussed in Note 1 to the financial statements, the Company changed its
method of accounting for its joint operating agreement to comply with the
requirements of Emerging Issues Task Force Bulletin 00-1.



                               ERNST & YOUNG LLP

Denver, Colorado
September 15, 2000



                                       34
<PAGE>   35

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                      MediaNews Group,    Garden State Newspapers,
                                                                                     Inc. & Subsidiaries    Inc. & Subsidiaries
                                                                                     -------------------- ------------------------
                                                                                        June 30, 2000           June 30, 1999
                                                                                     -------------------- ------------------------
                                                                                                   (In thousands)
<S>                                                                                  <C>                    <C>
                               ASSETS
CURRENT ASSETS
   Cash and cash equivalents ......................................................  $            144,632   $              4,745
   Trade accounts receivable, less allowance for doubtful accounts
     of $9,910 and $8,334 at June 30, 2000 and 1999, respectively .................               103,429                 72,695
   Receivable from affiliates .....................................................                    --                  2,202
   Other receivables ..............................................................                 5,115                  2,576
   Inventories of newsprint and supplies ..........................................                19,708                  9,951
   Prepaid expenses and other assets ..............................................                 6,245                  4,791
   Income taxes receivable ........................................................                    --                  3,016
                                                                                     --------------------   --------------------
     TOTAL CURRENT ASSETS .........................................................               279,129                 99,976

PROPERTY, PLANT AND EQUIPMENT
   Land ...........................................................................                28,300                 25,917
   Buildings and improvements .....................................................               124,451                 94,394
   Machinery and equipment ........................................................               369,032                256,069
                                                                                     --------------------   --------------------
     TOTAL PROPERTY, PLANT AND EQUIPMENT ..........................................               521,783                376,380
   Less accumulated depreciation and amortization .................................               157,011                 83,930
                                                                                     --------------------   --------------------
     NET PROPERTY, PLANT AND EQUIPMENT ............................................               364,772                292,450

OTHER ASSETS
   Investment in JOA ..............................................................                10,499                 10,783
   Subscriber accounts, less accumulated amortization of $76,705 and $68,084 at
     June 30, 2000 and 1999, respectively .........................................               110,414                127,075
   Excess of cost over fair value of net assets acquired, less
     accumulated amortization of $34,917 and $26,319 at
     June 30, 2000 and 1999, respectively .........................................               317,575                286,022
   Covenants not to compete and other identifiable intangible
     assets, less accumulated amortization of $27,486 and
     $23,704 at June 30, 2000 and 1999, respectively ..............................                10,292                 16,175
   Net pension assets .............................................................                32,787                  4,902
   Other ..........................................................................                13,424                  9,071
                                                                                     --------------------   --------------------
     TOTAL OTHER ASSETS ...........................................................               494,991                454,028
                                                                                     --------------------   --------------------

TOTAL ASSETS ......................................................................  $          1,138,892   $            846,454
                                                                                     ====================   ====================
</TABLE>



                 See notes to consolidated financial statements.



                                       35
<PAGE>   36

<TABLE>
<CAPTION>
                                                                                       MediaNews Group,    Garden State Newspapers,
                                                                                     Inc. & Subsidiaries      Inc. & Subsidiaries
                                                                                     -------------------   ------------------------
                                                                                        June 30, 2000            June 30, 1999
                                                                                     -------------------   ------------------------
                                                                                             (In thousands, except share data)
<S>                                                                                  <C>                   <C>
                    LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
   Trade accounts payable .......................................................... $            24,409   $                  8,417
   Accrued employee compensation ...................................................              23,355                     15,612
   Accrued interest ................................................................              17,594                     11,639
   Other accrued liabilities .......................................................              16,879                     20,186
   Unearned income .................................................................              25,632                     19,627
   Income taxes ....................................................................               3,232                         --
   Current portion of long-term debt and obligations under capital leases...........              18,611                      8,555
                                                                                     -------------------   ------------------------
 TOTAL CURRENT LIABILITIES .........................................................             129,712                     84,036

OBLIGATIONS UNDER CAPITAL LEASES ...................................................              16,538                      7,416

LONG-TERM DEBT .....................................................................             811,659                    750,581

OTHER LIABILITIES ..................................................................              17,633                      7,543

DEFERRED INCOME TAXES ..............................................................              27,345                     18,370

MINORITY INTEREST ..................................................................             135,066                    129,409

SHAREHOLDERS' EQUITY (DEFICIT)
   Common stock, par value $0.001 and $1.00 per share; at June 30, 2000 and
     1999, respectively; 3,000,000 and 1,000 shares authorized and 2,298,346 and
     1,000 shares issued and outstanding at June 30, 2000 and 1999,
     respectively ..................................................................                   2                          1
   Additional paid-in capital ......................................................               3,631                         --
   Deficit .........................................................................                (694)                  (150,902)
Common stock in treasury, at cost, 16,000 shares at June 30, 2000 ..................              (2,000)                        --
                                                                                     -------------------   ------------------------
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) ...............................................                 939                   (150,901)
                                                                                     -------------------   ------------------------


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) ............................... $         1,138,892   $                846,454
                                                                                     ===================   ========================
</TABLE>



                 See notes to consolidated financial statements.



                                       36
<PAGE>   37

                      CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                     MediaNews Group,     Garden State Newspapers,
                                                    Inc. & Subsidiaries     Inc. & Subsidiaries
                                                    Year Ended June 30,  Fiscal Years Ended June 30,
                                                    -------------------  ---------------------------
                                                           2000              1999           1998
                                                    -------------------  ------------   ------------
                                                                     (In thousands)
<S>                                                 <C>                  <C>            <C>
REVENUES
   Advertising ...................................  $           770,476  $    440,734   $    345,169
   Circulation ...................................              148,217       113,515         93,620
   Other .........................................               28,608        15,936         14,421
                                                    -------------------  ------------   ------------
     TOTAL REVENUES ..............................              947,301       570,185        453,210

COSTS AND EXPENSES
   Cost of sales .................................              320,095       182,544        150,202
   Selling, general and administrative ...........              441,832       253,506        197,872
   Depreciation and amortization .................               63,263        44,572         39,279
   Interest expense ..............................               75,758        56,765         45,629
   Other (net) ...................................                8,387        13,055         11,473
                                                    -------------------  ------------   ------------
     TOTAL COSTS AND EXPENSES ....................              909,335       550,442        444,455

EQUITY INCOME IN JOA .............................                3,481         2,582             --

GAIN ON SALE OF NEWSPAPER PROPERTIES .............              117,621            --         31,829

MINORITY INTEREST ................................               34,092        12,295          6,192
                                                    -------------------  ------------   ------------

INCOME BEFORE INCOME TAXES
   AND EXTRAORDINARY LOSS ........................              124,976        10,030         34,392
INCOME TAX BENEFIT (EXPENSE) .....................                5,407        (4,474)        (4,792)
                                                    -------------------  ------------   ------------

INCOME BEFORE EXTRAORDINARY LOSS .................              130,383         5,556         29,600

EXTRAORDINARY LOSS
   (net of taxes of $4,409 as of June 30, 1999) ..                   --        (6,378)            --
                                                    -------------------  ------------   ------------

NET INCOME (LOSS) ................................  $           130,383  $       (822)  $     29,600
                                                    ===================  ============   ============
</TABLE>

<TABLE>
<CAPTION>
NET INCOME (LOSS) PER COMMON SHARE:                                        Pro Forma      Pro Forma
                                                                         ------------   ------------
<S>                                                 <C>                  <C>            <C>
Net income (loss) before extraordinary loss ......  $             56.40  $       3.48   $      18.55
Extraordinary loss ...............................                   --         (3.99)            --
                                                    -------------------  ------------   ------------
Net income (loss) per common share ...............  $             56.40  $       (.51)  $      18.55
                                                    ===================  ============   ============
Weighted average number of
  shares outstanding basic and diluted ...........            2,311,679     1,596,022      1,596,022
                                                    ===================  ============   ============
</TABLE>



                 See notes to consolidated financial statements



                                       37
<PAGE>   38

      CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
                                                                                                               TOTAL
                                    COMMON          ADDITIONAL                             TREASURY         SHAREHOLDERS'
                                     STOCK        PAID-IN CAPITAL        (DEFICIT)           STOCK         EQUITY (DEFICIT)
                                ----------------  ----------------   ----------------   ----------------   ----------------
                                                                      (In thousands)
<S>                             <C>               <C>                <C>                <C>                <C>
BALANCE AT JUNE 30, 1997 .....  $              1  $         78,570   $        (74,624)  $             --   $          3,947
   Net Income ................                --                --             29,600                 --             29,600
                                ----------------  ----------------   ----------------   ----------------   ----------------
BALANCE AT JUNE 30, 1998 .....                 1            78,570            (45,024)                --             33,547
   Loss ......................                --                --               (822)                --               (822)
   Dividends to Parent .......                --           (78,570)          (105,056)                --           (183,626)
                                ----------------  ----------------   ----------------   ----------------   ----------------
BALANCE AT JUNE 30, 1999 .....                 1                --           (150,902)                --           (150,901)
   Garden State merger with
     MediaNews ...............                 1             3,631             19,825                 --             23,457
   Treasury Stock ............                --                --                 --             (2,000)            (2,000)
   Net Income ................                --                --            130,383                 --            130,383
                                ----------------  ----------------   ----------------   ----------------   ----------------
BALANCE AT JUNE 30, 2000 .....  $              2  $          3,631   $           (694)  $         (2,000)  $            939
                                ================  ================   ================   ================   ================
</TABLE>



                 See notes to consolidated financial statements



                                       38
<PAGE>   39

                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                           MediaNews Group,      Garden State Newspapers,
                                                         Inc. & Subsidiaries       Inc. & Subsidiaries
                                                         Year Ended June 30,   Fiscal Years Ended June 30,
                                                         -------------------   ---------------------------
                                                                 2000              1999           1998
                                                         -------------------   ------------   ------------
                                                                         (In thousands)
<S>                                                      <C>                   <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss) ..................................  $           130,383   $       (822)  $     29,600
   Adjustments to reconcile net income (loss) to net
     cash provided by operating activities:
     Depreciation .....................................               33,497         18,247         17,032
     Amortization .....................................               29,766         26,325         22,194
     Gain on sale of newspaper assets .................             (116,839)           (87)       (31,429)
     Provision for losses on accounts receivable ......               10,859          7,559          4,728
     Amortization of debt discount ....................                3,811          4,147          2,937
     Debt issue cost and repurchase premiums ..........                   --         18,620          7,287
     Minority interests ...............................               34,092         12,295          6,192
     Equity investment in JOA .........................               (3,481)        (2,582)            --
     Deferred income tax (benefit) expense ............              (12,299)         4,138         (1,520)
     Deferred pension assets ..........................               (2,802)          (606)            --
     Change in operating assets and liabilities:
       Accounts receivable ............................              (16,277)       (17,259)         1,071
       Inventories ....................................                 (203)          (170)         3,862
       Prepaid expenses and other assets ..............                1,100         (1,370)         1,989
       Accounts payable and accrued liabilities .......               (1,315)        (1,399)        (6,305)
       Unearned income ................................               (2,689)          (273)          (408)
       Change in other assets and liabilities, net ....                8,578         (4,872)         6,211
                                                         -------------------   ------------   ------------
NET CASH FLOWS FROM OPERATING ACTIVITIES ..............               96,181         61,891         63,441

CASH FLOWS FROM INVESTING ACTIVITIES:
   Distributions from equity investment in JOA ........                3,900          2,000             --
   Sale of newspaper property and other assets ........              153,000          1,334         43,030
   Business acquisitions ..............................              (13,251)       (60,999)      (240,373)
   Purchase of machinery and equipment ................              (25,505)       (13,005)       (11,397)
                                                         -------------------   ------------   ------------
NET CASH FLOWS FROM INVESTING ACTIVITIES ..............              118,144        (70,670)      (208,740)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Issuance of long-term debt .........................               60,838        469,793        490,988
   Reduction of long-term debt and other liabilities ..              (94,158)      (243,513)      (340,670)
   Dividends paid to parent ...........................                   --       (183,626)            --
   Distributions paid to minority interest ............              (39,118)       (13,702)        (5,398)
   Debt issuance cost and repurchase premiums .........                   --        (18,620)        (7,287)
   Repurchase of common stock .........................               (2,000)            --             --
                                                         -------------------   ------------   ------------
NET CASH FLOWS FROM FINANCING ACTIVITIES ..............              (74,438)        10,332        137,633
                                                         -------------------   ------------   ------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ......              139,887          1,553         (7,666)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR ........                4,745          3,192         10,858
                                                         -------------------   ------------   ------------

CASH AND CASH EQUIVALENTS AT END OF YEAR ..............  $           144,632   $      4,745   $      3,192
                                                         ===================   ============   ============
</TABLE>



                 See notes to consolidated financial statements



                                       39
<PAGE>   40

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: REORGANIZATION AND BASIS OF PRESENTATION

     As a result of a corporate reorganization, as is more fully described
below, MediaNews Group, Inc. (the "Company" or "MediaNews") formerly known as
Affiliated Newspapers Investments, Inc., became the successor issuer to Garden
State Newspapers, Inc., pursuant to Rule 15d-5, under the Securities Act of
1933.

REORGANIZATION

     o    In June 1999, Affiliated Newspapers Investments, Inc., parent of
          Garden State Newspapers, Inc., changed its name to MediaNews Group,
          Inc.

     o    On June 30, 1999, MediaNews purchased an additional 20% interest in
          the Denver Post Corporation ("Denver Post"), bringing its total
          ownership interest in the Denver Post to 80%. In addition, the Denver
          Post Shareholder Agreement was modified, giving MediaNews control of
          the Denver Post board of directors. Accordingly, the Denver Post
          became a consolidated subsidiary of MediaNews.

     o    On September 1, 1999, Garden State Newspapers, Inc. was merged into
          MediaNews, with MediaNews as the surviving corporation.

BASIS OF PRESENTATION

     As a result of the reorganization described above, the consolidated
financial statements dated June 30, 2000, included the consolidated results of
operations of MediaNews and its subsidiaries, which includes the Denver Post
Corporation and the operations of the company formerly known as Garden State
Newspapers, Inc. and subsidiaries ("Garden State"). The financial statement data
for June 30, 1999 and the years ended June 30, 1999 and 1998, included in this
10-K, only includes Garden State. All significant intercompany accounts and
transactions were eliminated upon consolidation.

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS

PRINCIPLES OF CONSOLIDATION

     The June 30, 2000 consolidated financial statements include the accounts of
MediaNews and its subsidiaries. All inter-company accounts have been eliminated.

RECLASSIFICATION

     Certain prior year balances have been reclassified in order to conform to
current reporting classifications.

JOINT OPERATING AGENCIES

     York Newspapers, Inc. and Charleston Publishing Company, subsidiaries of
the Company, participate in joint operating agencies in York, PA and Charleston,
WV. A joint operating agency performs the production, sales, distribution and
administrative functions for two or more newspapers in the same market under the
terms of a joint operating agreement ("JOA"). Editorial control continues to be
separate and outside of a joint operating agency. The Company had previously
included its pro-rata portion of the revenues and expenses generated by the
operations of its JOA's on a line-by-line basis in its consolidated statements
of operations, in addition to the editorial expenses related to its newspapers
operated under the JOA. However, the Financial Accounting Standards Board issued
EITF 00-1, (Balance Sheet and Income Statement Display under the Equity Method
of Investments in Certain Partnerships and Other Unincorporated Joint Ventures)
effective for periods ending after June 15, 2000, which prohibits the use of
pro-rata consolidation except in the extractive and construction industries.
EITF 00-1 also requires that all previously reported financial statements be
reclassified to conform with the current year presentation. See Note 3 for
additional discussion on the effect of no longer using pro-rata consolidation to
account for the Company's JOA's.

CASH AND CASH EQUIVALENTS

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



                                       40
<PAGE>   41

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS (CONTINUED)

INVENTORIES

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

PROPERTY, PLANT, AND EQUIPMENT

     Property, plant, and equipment are recorded at cost. Buildings and
machinery and equipment are depreciated using the straight-line method over the
expected useful lives of individual assets.

INTANGIBLE ASSETS

     Intangible assets acquired are recorded at their estimated fair values as
of the date of acquisition. The excess of cost over fair value of net assets
acquired is being amortized using the straight-line method over a period of 40
years. Subscriber accounts are amortized using the straight-line method over
periods ranging from 6 to 15 years, with a weighted average remaining life based
on the dates of acquisitions of 9 years. Other intangibles recognized are being
amortized using the straight-line method, generally over periods not exceeding
10 years.

LONG-LIVED ASSETS

     The carrying value of long-lived assets is reviewed annually; if at any
time the facts or circumstances at any of the Company's individual newspaper
operations indicate impairment of long-lived asset values, as a result of a
continual decline in performance or as a result of fundamental changes in a
newspaper's market, a determination is made as to whether the carrying value of
the newspaper's long-lived assets exceeds estimated realizable value. For
purposes of this determination, estimated realizable value is evaluated based on
values placed on comparable newspaper properties, generally based on a multiple
of revenue and operating profit (before depreciation and amortization).

DEBT DISCOUNT

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

INCOME TAXES

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

ADVERTISING COSTS

     The Company expenses all advertising cost as incurred. Advertising costs
included in the Consolidated Statement of Operations for the fiscal year ended
June 30, 2000, were approximately $7.4 million.

USE OF ESTIMATES

     The preparation of financial statements in accordance with generally
accepted accounting principles at times requires the use of estimates and
assumptions that affect the reported amount of assets, liabilities, revenues and
expenses. Actual results could differ from these estimates.

REVENUE RECOGNITION

     Advertising revenue is recognized when advertisements are published or
aired. Subscription revenue is recognized on a pro-rata basis over the term of
the subscription.



                                       41
<PAGE>   42

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS (CONTINUED)

EARNINGS PER SHARE

     Earnings per share for fiscal years 1999 and 1998, have been restated to
give effect to the merger of Garden State into MediaNews as if the merger
occurred effective July 1, 1997. The pro forma weighted average outstanding
shares at June 30, 1999 and 1998 are based on the historical number of shares of
tracking stock issued by MediaNews, which are attributable to Garden State and
its subsidiaries.

DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION

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

RECENTLY ISSUED ACCOUNTING STANDARDS

     The Financial Accounting Standards Board issued FAS No. 133 - Accounting
for Derivative Instruments and Hedging Activities. The standard, which must be
adopted by July 1, 2000, will not have a material effect on the Company's
financial position or its results of operations. Under the new standard,
newsprint forward contracts will be recorded at fair value and changes in the
value of the contracts will be initially reported as a separate component of
comprehensive income and reclassified into earnings when the newsprint is
consumed.

     The Emerging Issues Task Force reached a consensus on Issue 00-2 -
Accounting for Web Site Development Costs at its March 2000 meeting. The
consensus requires capitalization of certain costs incurred in the development
of internet sites. The Company currently capitalizes the cost of computer
hardware and software used in the operation of its internet sites; however, all
other development costs, such as graphics and other design costs, have been
expensed as incurred. The Company will adopt Issue 00-2 effective beginning of
July 1, 2000. The effect on the Company's results of operations is expected to
be immaterial.

NOTE 3: JOINT OPERATING AGREEMENTS

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

     In September 1996, the Company signed a call/put agreement under which YNI
can purchase YDR's interest in the agency or YDR can put its interest in the
Agency to YNI. The base call and put price is $32.0 million and $25.0 million,
respectively, and is adjusted annually based on changes in the consumer price
index (not to exceed 2-1/2%). The call option may be exercised on January 1,
2004 and expires on January 1, 2005. The put may be exercised at any time after
the expiration of the call through June 30, 2008.

     On August 22, 1998, Charleston Publishing Company, a wholly owned
subsidiary of MediaNews, acquired a 50% interest in Charleston Newspapers, a
joint venture, which publishes the Charleston Gazette (morning) and Charleston
Daily Mail (evening) six days a week and the Sunday Gazette-Mail, under the
terms of a JOA. The acquisition included rights to the masthead of the
Charleston Daily Mail; thus, the Company is responsible for the editorial
content of the Charleston Daily Mail. The Company's 50% interest in the joint
venture and the intangible assets acquired have been recorded at their estimated
fair market value as of the date of acquisition. The excess of cost over fair
market value of net assets acquired and intangible assets related to subscriber
lists are being amortized on a straight line basis over 40 and 8 years,
respectively. The amortization of these intangible assets is not included in the
results of operations of the Charleston Newspapers JOA as they are owned
separately by MediaNews. The Company accounts for its investment in Charleston
Newspapers using the equity method of accounting.



                                       42
<PAGE>   43

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3: JOINT OPERATING AGREEMENTS (CONTINUED)

     The Company's equity investment in Charleston Newspapers totaled
approximately $10.5 million and $10.8 million at June 30, 2000 and 1999,
respectively. Charleston Newspapers and/or the Agency made cash distributions to
the Company in the amount of $14.5 million, $10.9 million and $7.3 million in
fiscal years 2000, 1999 and 1998, respectively.

     The Company is not currently responsible for any liabilities of the Agency
or Charleston Newspapers, contingent or otherwise. Management believes that the
Agency and Charleston Newspapers are well capitalized and do not anticipate the
Agency or Charleston Newspapers requiring any capital contributions in the near
future.

NOTE 4: INVESTMENT IN PARTNERSHIPS

     On March 31, 1999, through our wholly owned subsidiary, West Coast
MediaNews LLC, we formed the California Newspaper Partnership with Donrey
Newspapers LLC ("Donrey") and The Sun Company of San Bernardino California
("Gannett"). We contributed ANG Newspapers, comprised of six daily newspapers
published in the San Francisco Bay area; San Gabriel Valley Newspapers, which
includes three daily newspapers published in the Los Angeles area; and the
Times-Standard, a daily newspaper published in Eureka, California; and all the
weekly publications published by these daily newspapers in exchange for a 58.8%
partnership interest. Donrey contributed ten daily newspapers and two non-daily
newspapers, located in California, most of which are located in close proximity
to our California newspaper publications, in exchange for a 28.5% partnership
interest. Gannett contributed the San Bernardino County Sun in exchange for a
12.7% partnership interest. Effective October 1, 2000, Gannett agreed to
contribute the Marin County Independent Journal (see additional discussion in
Recent Events).

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

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

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

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

     The minority interest liability reflects the fair market value of the net
assets contributed to the California Newspapers Partnership by Donrey and
Gannett, plus minority interest earnings, net of distributions. The California
Newspaper Partnership made cash distributions to the Company in the amount of
$41.3 and $10.3 million in fiscal year 2000 and 1999, respectively.



                                       43
<PAGE>   44

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5: ACQUISITIONS AND DISPOSITIONS

ACQUISITIONS

     Fiscal 2000

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

     Effective October 31, 1999, the Company acquired substantially all of the
assets used in the publication of the Deming Headlight, a morning newspaper
published in Deming, New Mexico, for approximately $2.0 million cash. The
newspaper has daily paid circulation of approximately 3,850.

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

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

     These acquisitions have been accounted for as purchases; accordingly, the
consolidated financial statements include the operations of the acquired
operations from the date of each acquisition. The assets acquired and the
liabilities assumed have been recorded at their estimated fair market value. The
estimated fair market value of assets acquired reflects management's current
best estimate; however, are subject to change in the final allocation of
purchase price. The excess of cost over fair market value of net assets
acquired, intangible assets related to subscriber lists and FCC licenses are
being amortized on a straight line basis over 40 years, 15 years, and the
remaining life of the FCC licenses, respectively.

     Fiscal 1999

     On August 22, 1998, the Company acquired a 50% interest in Charleston
Newspapers for approximately $47.0 million. Charleston Newspapers is a joint
venture, which publishes the Charleston Gazette, (morning) and Charleston Daily
Mail (evening), six days a week and the Sunday Gazette-Mail, under the terms of
a Joint Operating Agreement (JOA). (See Note 3)

     Effective October 1, 1998, the Company acquired substantially all of the
assets used in the publication of the Daily Times, a morning newspaper published
in Farmington, New Mexico, for cash and discounted notes with the prior owners.

     On March 31, 1999, one of the Company's subsidiaries, West Coast MediaNews
LLC, formed the California Newspaper Partnership with Donrey Newspapers LLC
("Donrey") and the Sun Company of San Bernardino, California ("Gannett"). See
Note 4.

     Fiscal 1998

     On May 11, 1998, the Company acquired substantially all the assets used in
the publication of the Tri-City Weekly, a weekly newspaper published in Eureka,
California for approximately $2.6 million in cash plus a covenant not to compete
with the prior owners with a discounted value of approximately $0.5 million.

     On May 1, 1998, the Company acquired substantially all the assets used in
the publication of the Valley News Today, a morning newspaper published five
times a week in Shenandoah, Iowa and seven weekly publications distributed
primarily in Shenandoah and Dennison, Iowa. These assets were purchased for
approximately $5.1 million in cash plus an adjustment for working capital and
covenant not to compete with the prior owners, with a discounted value of
approximately $0.6 million.

     On January 29, 1998, the Company acquired substantially all the assets used
in the publication of the Daily News, a daily newspaper published in the San
Fernando Valley region of Los Angeles, California and a weekly newspaper
distributed in the same area, for approximately $130.0 million, which included
working capital of approximately $2.0 million.



                                       44
<PAGE>   45

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5: ACQUISITIONS AND DISPOSITIONS (CONTINUED)

     On December 16, 1997, the Company acquired substantially all the assets
used in the publication of the Press-Telegram, a daily newspaper published in
Long Beach, California and two weekly newspapers distributed in and around Long
Beach, for approximately $38.2 million in cash, plus an adjustment for working
capital. Proceeds from the sale of the North Jersey Herald & News (discussed
below) were used to fund the acquisition.

     On July 31, 1997, the Company acquired substantially all the assets used in
the publication of The Sun, an evening newspaper published in Lowell,
Massachusetts. The assets were purchased for $49.0 million in cash plus a
covenant not to compete with the prior owners with a discounted value of
approximately $11.8 million.

DISPOSITIONS

     Fiscal 2000

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

     Effective June 30, 2000, the Company sold substantially all of the assets
used in the publication of The Express Times, in Easton, Pennsylvania; the
Gloucester County Times, in Woodbury, New Jersey; Today's Sunbeam, in Salem, New
Jersey; the Bridgeton News, in Bridgeton, New Jersey and the North Jersey weekly
newspapers (the "Disposition Transaction") for $145.0 million in cash, plus an
adjustment for working capita of approximately $4.8 million. The Company
recognized a pre-tax gain on the sale of approximately $114.3, net of selling
expenses.

     Fiscal 1998

     On December 5, 1997, the Company sold substantially all the assets used in
the publication of the North Jersey Herald & News and sixteen weekly
publications for $43.0 million in cash plus an adjustment for working capital.
The Company recognized a pre-tax gain on the sale of approximately $31.8
million, net of selling expenses.

NOTE 6: LONG-TERM DEBT

LONG-TERM DEBT

     MediaNews assumed all debt, which was previously issued by Garden State,
when the two companies were merged in September 1999.

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

<TABLE>
<CAPTION>
                                                              MediaNews Group,     Garden State Newspapers
                                                            Inc. & Subsidiaries      Inc. & Subsidiaries
                                                            -------------------    -----------------------
                                                               June 30, 2000             June 30, 1999
                                                            -------------------    -----------------------
                                                                             (In thousands)
<S>                                                         <C>                    <C>
   Bank Credit Facility............................    (I)  $           231,950    $               164,450
   Various Notes, payable through December, 2002...   (II)               31,121                     32,650
   8.75% Senior Subordinated Notes, due 2009.......  (III)              300,204                    300,269
   8.625% Senior Subordinated Notes, due 2011......   (IV)              199,171                    199,106
   9.00% Subordinated Promissory Note..............    (V)               58,258                     53,999
   York Newspaper Company's debt...................   (VI)                7,901                      8,615
                                                            -------------------    -----------------------
                                                                        828,605                    759,089
   Less current portion of long-term debt..........                      16,946                      8,508
                                                            -------------------    -----------------------
                                                            $           811,659    $               750,581
                                                            ===================    =======================
</TABLE>



                                       45
<PAGE>   46

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LONG-TERM DEBT (CONTINUED)

     I.        On June 30, 1999, the Company entered into a seven year, amended
               and restated Bank Credit Facility ("Bank Credit Facility"), which
               provides for borrowings up to $350.0 million, including $15.0
               million that can be used for standby letters of credit.
               Borrowings under the Bank Credit Facility bear interest at rates
               based upon, at the Company's option, Eurodollar or prime rates
               plus a spread based on MediaNews' leverage ratio. Borrowing
               margins for prime and Eurodollar borrowings vary from 0.875% to
               0.125% and 2.125% to 1.00%, respectively. Interest on prime
               borrowings is payable quarterly in arrears. Interest on
               Eurodollar borrowings is due at the end of each interest rate
               contract or quarterly, if the interest rate contract exceeds
               three months. In addition to interest, the Company pays an annual
               commitment fee of 0.5% to 0.25% on the unused portion of the
               commitment based on the Company's leverage ratio. In conjunction
               with the Bank Credit Facility, the Company paid $3.0 million of
               fees and expenses, of which Garden State charged $2.2 million of
               debt issuance cost to other expense in fiscal year 1999. The
               remaining debt issuance costs were charged to the Denver Post in
               conjunction with its borrowings under the Bank Credit Facility as
               discussed below. The Bank Credit Facility requires a mandatory
               $75.0 million reduction in the credit commitment on September 30,
               2003 and quarterly reductions of $25.0 million beginning December
               31, 2003, with a final reduction on June 30, 2006. The Bank
               Credit Facility is secured by a pledge of capital stock of the
               Company's subsidiaries.

               As of June 30, 1999, Garden State had borrowed approximately
               $164.5 million under the Bank Credit Facility and MediaNews
               borrowed approximately $100.4 million under a special provision
               of the Bank Credit Facility, which provided MediaNews with a loan
               to purchase an additional 20% interest in the Denver Post and
               refinance their debt. As a result of refinancing the Denver Post
               debt, the Denver Post entered into a note payable with MediaNews.
               The borrowings under this loan are secured by stock of the Denver
               Post. As of June 30, 2000 the Denver Post had $64.0 million
               outstanding under its note with MediaNews. The Bank Credit
               Facility contains a number of covenants that, among other things,
               restrict our ability and our subsidiaries' ability to dispose of
               assets, incur additional indebtedness, pay dividends or make
               capital contributions, create liens on assets, make investments,
               make acquisitions, engage in mergers or consolidations. In
               addition, the Bank Credit Facility requires compliance with
               certain cash flow ratios, senior debt to operating cash flow,
               operating cash flow to pro forma debt service and operating cash
               flow to fixed charges.

     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% to 6%.
               The notes bearing interest at below market rates were discounted
               at rates ranging from 9% to 12.0%. The majority of these notes
               and other debt obligations are unsecured obligations of the
               Company.

     III.      In October 1997 and February 1998, Garden State issued in the
               aggregate $300.0 million of Senior Subordinated Notes due 2009.
               These notes bear interest at 8.75% payable semi-annually, in
               arrears, on April 1 and October 1. The 8.75% Senior Subordinated
               Notes were issued at a slight premium, resulting in net proceeds
               to the Company of approximately $300.0 million, excluding related
               debt issuance cost. Interest accruing on the 8.75% Senior
               Subordinated Notes is payable semi-annually in arrears on October
               1 and April 1. No principal payments are required until October
               1, 2009, at which time the outstanding principal amount is due
               and payable. The 8.75% Senior Subordinated Notes are subordinated
               and junior in right of payment to obligations under the current
               Bank Credit Facility. The 8.75% Senior Subordinated Notes are
               general unsecured obligations of the Company ranking pari passu
               in right of payment with the 8.625% Senior Subordinated Notes and
               all other future senior subordinated indebtedness of the Company
               and senior in right of payment to all existing and future
               subordinated indebtedness of the Company, which is made expressly
               junior thereto.

     IV.       In the third quarter of fiscal year 1999, Garden State issued
               $200.0 million of 8.625% Senior Subordinated Notes due 2011.
               Interest accruing on the 8.625% Senior Subordinated Notes is
               payable semi-annually, in arrears on January 1 and July 1. The
               indebtedness evidenced by the 8.625% Senior Subordinated Notes
               are subordinated and junior in right of payment to obligations



                                       46
<PAGE>   47

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LONG-TERM DEBT (CONTINUED)

               under the current Bank Credit Facility. No principal payments are
               required until July 1, 2011, at which time all outstanding
               principal and interest is due and payable. The 8.625% Senior
               Subordinated Notes are general unsecured obligations of the
               Company ranking pari passu in right of payment with the existing
               8.75% Senior Subordinated Notes.

     V.        The Company entered into a subordinated note purchase agreement
               pursuant to which it issued a $47.6 million, 9.0% Subordinated
               Promissory Note (the "Promissory Note") due January 31, 2010.
               Interest accruing on the Promissory Note is payable quarterly,
               provided that on each interest payment date occurring on or prior
               to December 31, 2002, we may elect to defer payment of any or all
               accrued and unpaid interest. However, in calendar years 2000,
               2001 and 2002, we must pay the lesser of $3.0 million or all
               accrued and unpaid interest due in such year. The Promissory Note
               is subordinated and junior in right of payment to the Bank Credit
               Facility and senior subordinated debt. No scheduled principal
               payments are required until January 31, 2010, at which time the
               outstanding principal amount is due and payable.

     VI.       York Newspaper Company has a revolving credit note and a term
               bank loan totaling $6.2 million at June 30, 2000, which are due
               and payable on October 11, 2000. York Newspaper Company also has
               a $1.7 million promissory note, which requires monthly payments
               through October 2025. The obligations are secured by the assets
               of York Newspaper Company and are non-recourse to MediaNews.

     Maturities of long-term debt as of June 30, 2000, for the five fiscal years
ending June 30, 2005 and thereafter, are shown below.

<TABLE>
<CAPTION>
                                                                              June 30,
                                                                          --------------
                                                                          (In thousands)
<S>                                                                       <C>
              2001................................................         $     16,946
              2002................................................                8,637
              2003................................................               10,192
              2004................................................               39,085
              2005................................................              107,018
              Thereafter..........................................              646,727
                                                                           ------------
                                                                           $    828,605
                                                                           ============
</TABLE>

     Interest paid during the fiscal years ended June 30, 2000, 1999 and 1998
was approximately $66.0 million, $53.6 million and $37.6 million, respectively.
Approximately $0.3 million of interest was capitalized during the fiscal year
ended June 30, 2000.

     Letters of credit have been issued in favor of an insurance company
providing workers compensation insurance coverage to the Company and its
subsidiaries totaling approximately $1.0 million as of June 30, 2000. In
addition, the Company issued approximately $1.4 million of additional letters of
credit in support of its obligations under non-compete agreements entered into
in connection with the August 31, 1995, acquisition.

     The fair market value of the 8.625% Senior Subordinated Notes and the 8.75%
Senior Subordinated Notes at June 30, 2000 was approximately $176.0 million and
$267.0 million, respectively. The carrying value of the Company's long-term
debt, which has interest rates tied to prime or LIBOR, approximates the fair
value of such financial instruments. Management cannot practicably estimate the
fair value of the remaining long-term debt because of the lack of quoted market
prices for these types of securities and its inability to estimate its fair
value without incurring the excessive costs of obtaining an appraisal. The
carrying amount represents its original issue price net of remaining original
issue discounts, if applicable.

DEBT REFINANCING

     In fiscal year 1999, Garden State repurchased its 12% Senior Subordinated
Secured Notes ("12% Notes") due 2004. The Company paid approximately $8.9
million in repurchase premiums and consent payments associated with the early
extinguishments of this debt, which has been recorded as an extraordinary loss,
net of income tax benefits.



                                       47
<PAGE>   48

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LONG-TERM DEBT (CONTINUED)

     On June 17, 1999, the Company repurchased notes payable to certain
shareholders of MediaNews for $5.1 million. These notes had been discounted at
13.5% and were scheduled to mature on June 30, 2006. The early redemption of
these notes resulted in an extraordinary loss of approximately $1.9 million.

     On March 16, 1999, Garden State issued $200.0 million of 8.625% Senior
Subordinated Notes due 2011. Proceeds from the sale of these notes, along with
borrowing under the Bank Credit Facility, were used to repay existing bank debt,
repurchase notes payable to MediaNews shareholders and pay a dividend to
MediaNews. The dividend was paid to MediaNews in order to fund MediaNews'
repurchase of its Senior Discount Debentures. In conjunction with the issuance
of the 8.625% Senior Subordinated Notes, the Company paid approximately $5.6
million of debt issuance cost, which were charged to expense in fiscal year
1999. These costs have been included in other expense in the accompanying
Consolidated Statement of Operations.

     On October 1, 1997 and February 12, 1998, Garden State issued $250.0
million and $50.0 million, respectively, of 8.75% Senior Subordinated Notes due
2009. In conjunction with the issuance of the 8.75% Senior Subordinated Notes,
the Company paid approximately $7.3 million of fees and expenses. The Company
charged the $7.3 million of debt issuance cost to fiscal year 1998 expense.

NOTE 7: LEASES

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

<TABLE>
<CAPTION>
                                            MediaNews Group,    Garden State Newspapers,
                                          Inc. & Subsidiaries      Inc. & Subsidiaries
                                          -------------------   ------------------------
                                             June 30, 2000            June 30, 1999
                                          -------------------   ------------------------
                                                         (In thousands)
<S>                                       <C>                   <C>
    Building ...........................  $             6,934   $                  6,934
    Machinery and equipment ............               17,481                         --
    Accumulated amortization ...........               (8,851)                    (2,273)
                                          -------------------   ------------------------
    Assets under capital leases, net ...  $            15,564   $                  4,661
                                          ===================   ========================
</TABLE>

     The Company and its subsidiaries also leases certain facilities and
equipment under operating leases, some of which contain renewal or escalation
clauses. Rent expense was approximately $8.3 million, $2.6 million and $2.3
million for the fiscal years ended June 30, 2000, 1999 and 1998, respectively.
Contingent rentals are not significant. Future minimum payments on capital and
operating leases are as follows:

<TABLE>
<CAPTION>
                                                              Capital       Operating
    Fiscal Years Ending                                       Leases          Leases
    -------------------                                     -----------    ------------
                                                                   (In thousands)
<S>                                                         <C>            <C>
    2001..................................................  $     3,276    $      6,586
    2002..................................................        2,936           5,673
    2003..................................................        2,666           4,975
    2004..................................................        2,694           4,540
    2005..................................................        2,334           1,803
    Thereafter............................................       18,472           5,491
                                                            -----------    ------------
    Total minimum lease payments..........................       32,378    $     29,068
                                                                           ============
    Less amount representing interest.....................       14,253
                                                            -----------
    Present value of net future lease payments............  $    18,125
                                                            ===========
</TABLE>



                                       48
<PAGE>   49

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8: EMPLOYEE BENEFIT PLANS

PENSION PLANS

     In conjunction with the July 31, 1997 and the January 29, 1998
acquisitions, the Company assumed overfunded non-contributory defined benefit
pension plans, which covered substantially all the employees at the acquired
newspapers. Shortly after the January 29, 1998 acquisition, the Company elected
to freeze the plan assumed in conjunction with that acquisition. Accordingly,
all current service cost under that plan has been terminated. Participants in
the plan assumed in conjunction with the July 31, 1997 acquisition continue to
accrue benefits associated with current services, based on years of service and
estimated compensation prior to retirement.

     The Denver Post also sponsors two noncontributory defined benefit pension
plans which cover substantially all their employees other than certain union
employees covered by multi-employer pension plans under collective bargaining
agreements. The plan covering salaried and management employees provides
benefits based on employees' years of service and compensation during the years
immediately preceding retirement. The plan covering certain union employees
provides benefits of stated amounts based on length of service. The Denver Post
also sponsors post-retirement health care and life insurance plans that provide
certain union employees and their spouses with varying amounts of subsidized
medical coverage upon retirement and, in some instances, continued life
insurance benefits until age 65, if the employee retires prior to age 65.

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



                                       49
<PAGE>   50

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8: EMPLOYEE BENEFIT PLANS (CONTINUED)

     The components of net periodic pension and other defined benefit plans for
the Company as of June 30 each year are as follows:

<TABLE>
<CAPTION>
                                                                              Pension Plans                       Other Benefits
                                                            -----------------------------------------------    -------------------
                                                              MediaNews Group,     Garden State Newspapers,      MediaNews Group,
                                                            Inc. & Subsidiaries       Inc. & Subsidiaries      Inc. & Subsidiaries
                                                            -------------------    ------------------------    -------------------
                                                                    2000                     1999                      2000
                                                            -------------------    ------------------------    -------------------
<S>                                                         <C>                    <C>                         <C>
CHANGE IN BENEFIT OBLIGATION
  Benefit Obligation at Beginning of Year ................  $            86,067    $                 45,027    $             3,261
  Service Cost ...........................................                2,113                         190                     45
  Interest Cost ..........................................                6,237                       3,054                    236
  Amendments .............................................                  791                          --                     --
  Actuarial (loss) gain ..................................               (5,756)                     (1,399)                  (211)
  Benefits Paid ..........................................               (5,253)                     (2,749)                  (219)
                                                            -------------------    ------------------------    -------------------
  Benefit Obligation at End of Year ......................  $            84,199    $                 44,123    $             3,112
                                                            ===================    ========================    ===================

CHANGE IN PLAN ASSETS
  Fair Value of Plan Assets at Beginning of
  Year ...................................................  $           122,560    $                 48,464    $                --
  Actual Return on Plan Assets ...........................               15,300                       3,471                     --
  Company Contributions ..................................                   --                          --                    219
  Benefits Paid ..........................................               (5,253)                     (2,749)                  (219)
                                                            -------------------    ------------------------    -------------------
  Fair value of Plan Assets at End of Year................  $           132,607    $                 49,186    $                --
                                                            ===================    ========================    ===================

  Funded Status ..........................................  $            48,408    $                  5,063    $            (3,112)
  Unrecognized Net Actuarial (gain)/loss .................              (19,285)                       (161)                (1,542)
  Unrecognized Prior Service Cost ........................                3,664                          --                    (13)
                                                            -------------------    ------------------------    -------------------
  Prepaid (Accrual) Benefit Cost .........................  $            32,787    $                  4,902    $            (4,667)
                                                            ===================    ========================    ===================

ASSUMPTIONS AS OF JUNE 30
  Discount Rate ..........................................                  8.0%                       7.50%                   8.0%
  Expected Return on Plan Assets .........................          8.0% - 10.0%                 8.0% - 8.5%                    --
  Rate of Compensation Increase ..........................                  5.0%                        4.0%                    --

COMPONENTS OF NET PERIODIC BENEFIT COST
  Service Cost ...........................................  $             2,113    $                    189    $                45
  Interest Cost ..........................................                6,237                       3,054                    235
  Expected Return on Plan Assets .........................              (11,139)                     (3,849)                    --
  Amortization of Deferral ...............................                  (13)                         --                   (170)
                                                            -------------------    ------------------------    -------------------
  Net Periodic (Benefit) Cost ............................  $            (2,802)   $                   (606)   $               110
                                                            ===================    ========================    ===================
</TABLE>


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

<TABLE>
<CAPTION>
                                                            1-Percentage      1-Percentage
                                                           Point Increase    Point Decrease
                                                           --------------    --------------
<S>                                                        <C>               <C>
Effect on total of service & interest cost components....  $       28,000    $     (28,000)
Effect on postretirement benefit obligation..............  $      280,000    $    (280,000)
</TABLE>


     The July 1, 2000 assumed health care trend rate was 5.0%. The Company's
policy is to fund the cost of providing postretirement health care and life
insurance benefits when they are entitled to be received.



                                       50
<PAGE>   51

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8: EMPLOYEE BENEFIT PLANS (CONTINUED)

OTHER RETIREMENT PLANS

     The Company and several of its newspaper properties participate in
retirement/savings plans and, in addition, contribute to several multi-employer
plans on behalf of certain union-represented employee groups. The majority of
the Company's full-time employees are covered by one of these plans. Total
expense for these plans for the companies presented in each fiscal years ended
June 30, 2000, 1999 and 1998, was approximately $4.5 million, $1.9 million, and
$2.2 million, respectively.

     One of the Company's subsidiaries has also accrued $1.0 million for early
retirement incentives, which consist of supplemental retirement benefits for
certain employees who retire between the age of sixty-two and sixty-five. The
supplemental retirement benefits consist of cash payments to supplement the
retiree's pension.

NOTE 9: INCOME TAXES

     The income tax provision (benefit) for each of the three years ended June
30, 2000, 1999 and 1998, consists of the following:

<TABLE>
<CAPTION>
                             MediaNews Group,      Garden State Newspapers,
                           Inc. & Subsidiaries       Inc. & Subsidiaries
                           -------------------   ---------------------------
                                   2000              1999           1998
                           -------------------   ------------   ------------
                                             (In thousands)
<S>                        <C>                   <C>            <C>
      Current:
        State ...........  $             5,820   $       (437)  $      2,592
        Federal .........                1,072         (3,633)         3,720
      Deferred:
        State ...........               (4,912)           984          1,062
        Federal .........               (7,387)         7,560         (2,582)
                           -------------------   ------------   ------------
      Net provision .....  $            (5,407)  $      4,474   $      4,792
                           ===================   ============   ============
</TABLE>

     A reconciliation between the actual income tax expense for financial
statement purposes and income taxes computed by applying the statutory Federal
income tax rate to financial statement earnings before income taxes for the
three years ended June 30, 2000, 1999 and 1998 is as follows:

<TABLE>
<CAPTION>
                                                           MediaNews Group,       Garden State Newspapers,
                                                         Inc. & Subsidiaries        Inc. & Subsidiaries
                                                         -------------------    ---------------------------
                                                                2000                1999           1998
                                                         -------------------    ------------   ------------
                                                                           (In thousands)
<S>                                                      <C>                    <C>            <C>
      Statutory Federal income tax rate ...............                   35%             35%            35%
       Effect of:
          State income tax net of federal benefit .....                    1               4              7
          Utilization of net operating losses .........                  (25)              1            (22)
          Book/tax basis difference associated with
            acquisitions and non-deductible
            acquisition costs .........................                   (1)              2              1
          1031 Exchange ...............................                  (14)             --             (6)
          Other, net ..................................                   --               3             (1)
                                                         -------------------    ------------   ------------
      Financial statement effective tax rate ..........                   (4)%            45%            14%
                                                         ===================    ============   ============
</TABLE>



                                       51
<PAGE>   52

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9: INCOME TAXES (CONTINUED)

     Components of the long-term deferred tax assets and liabilities as of June
30, 2000 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                    MediaNews Group,    Garden State Newspapers,
                                                  Inc. & Subsidiaries     Inc. & Subsidiaries
                                                         2000                     1999
                                                  -------------------   ------------------------
                                                                   (In thousands)
<S>                                               <C>                   <C>
     Deferred tax assets:
     Net operating losses and other credits ....  $            33,204   $                 19,340
     Deferred employee compensation ............                4,137                      2,971
     Notes payable .............................                5,418                      5,903
     Other .....................................                2,253                      6,666
                                                  -------------------   ------------------------
                                                               45,012                     34,880

     Valuation allowance .......................               (8,000)                    (9,200)
                                                  -------------------   ------------------------
     Deferred tax assets .......................               37,012                     25,680

     Deferred tax liabilities:
     Fixed assets ..............................               30,442                     14,018
     Intangibles ...............................               18,357                     20,148
     Partnership interests .....................                5,286                      8,934
     Pension assets ............................               10,254                        350
     Other .....................................                   18                        600
                                                  -------------------   ------------------------
     Deferred tax liabilities ..................               64,357                     44,050
                                                  -------------------   ------------------------

     Net deferred tax liabilities ..............  $            27,345   $                 18,370
                                                  ===================   ========================
</TABLE>

     In fiscal year 2000, the Company generated Federal taxable income that was
offset by operating loss carryforwards. However, since the Federal tax laws do
not allow the Company to completely offset taxable income with loss
carryforwards, the Company did incur alternative minimum tax, which can be
carried forward as a credit to future taxes payable.

     The increase in the net deferred tax liability is primarily the result of
consolidating the operations of the Denver Post Corporation in fiscal year 2000.
MediaNews recognized a current year tax benefit primarily as a result of
reduction in the deferred tax valuation allowances for the former Garden State
and MediaNews. The deferred tax valuation allowance was reduced as a result of
utilizing NOL's to offset the gain on the Disposition Transaction and the
anticipated taxable gain on the $60.0 million payment to be made by E. W.
Scripps in conjunction with the formation of the Denver JOA. The NOL's being
utilized in these transactions were previously subject to valuation allowances
because of the uncertainty of their use before expiration.

     At June 30, 2000, the Company has approximately $87 million of net
operating loss carryforwards for tax reporting purposes available to offset its
future taxable income, which expire in 2005 through 2019 and $3 million of
alternative minimum tax credit carryforwards.

     The Company made state and federal income tax payments of approximately
$1.0 million, $0.1 million and $9.0 million during fiscal years 2000, 1999 and
1998, respectively.



                                       52
<PAGE>   53

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10: RELATED PARTY TRANSACTIONS

     Prior to fiscal year 2000, an unconsolidated affiliate provided management
services to the Company and its subsidiaries. Management fees charged by the
affiliate for fiscal years June 30, 1999 and 1998 were $3.2 million and $2.8
million, respectively. Management fees have been included in selling, general
and administrative expense. Effective July 1, 1999, MediaNews began providing
these services directly.

NOTE 11: COMMITMENTS AND CONTINGENCIES

     MediaNews has entered into newsprint swap hedge agreements covering 75,000
metric tons of newsprint, which expire over the next seven to eight years.
MediaNews uses the agreements to reduce the Company's exposure to the
uncertainty of future newsprint price fluctuations. Settlements are made on a
monthly or quarterly basis, and vary based on the difference between the fixed
contract price and the price as published in the Paper Trader (also known as the
RISI index). The weighted average fixed price of newsprint under the agreements
is $592 per metric ton. MediaNews accounts for amounts received or paid under
these agreements as an adjustment to newsprint expense. MediaNews also
participates in fixed price contracts, which expire over the next six months to
eight years. Under these contracts, the Company currently purchases 116,000
metric tons of newsprint at a weighted average price of approximately $541 per
metric ton.

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

     In fiscal year 1998, in exchange for $2.4 million, the Company granted a
option to a third party to purchase substantially all the assets used in the
publication of a certain newspaper beginning in 2003 and expiring in 2010 at the
newspaper's fair market value. The holder of the option can also require the
Company to repurchase the option anytime beginning in 2003 through 2010, based
on a fixed formula. As of June 30, 2000, the estimated cost of repurchasing the
option is approximately $26.0 million. The estimated cost of repurchasing this
option is being accreted over the life of the option agreement. If the option
holder has not exercised the option by the twelfth anniversary of the option
grant, the Company must repurchase the option based on the same fixed formula.

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

NOTE 12: TREASURY STOCK

     On April 7, 2000, the Company repurchased 16,000 shares of its common stock
at $125.0 per share, for a total purchase price of $2.0 million. The repurchased
shares represent less than 1.0% of the Company's outstanding shares and are held
in treasury.

NOTE 13: RECENT EVENTS

     On May 11, 2000, MediaNews and E.W. Scripps Company ("Scripps"), owner of
the Denver Rocky Mountain News, agreed to form the Denver Newspaper Agency
L.L.C. (the "Agency"), which will be owned 50% by MediaNews and 50% by Scripps.
The Agency, to be operated under a joint operating agreement, will be
responsible for all business functions for the Denver Rocky Mountain News and
The Denver Post, including advertising and circulation sales, production and
distribution. News and editorial functions at The Denver Post and the Denver
Rocky Mountain News will remain completely separate from the Agency. The
formation of the Agency requires the approval of the United States Department of
Justice. On September 8, 2000, the Department of Justice, Antitrust Division
issued a report to the Attorney General recommending approval of the agreement
without a hearing.



                                       53
<PAGE>   54

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13: RECENT EVENTS (CONTINUED)

     Upon formation of the Agency, MediaNews and Scripps will each contribute
substantially all of their operating assets used in the publication of The
Denver Post and the Denver Rocky Mountain News. Scripps will also pay MediaNews
a one time cash payment of $60.0 million to reach its 50% share in the Agency.
The Agency will be governed by a four person board, with MediaNews and Scripps
each appointing two members.

     The Company agreed to acquire substantially all the assets used in the
publication of the Connecticut Post, a morning newspaper published in
Bridgeport, Connecticut. The assets will be purchased for approximately $200.0
million in cash, net of working capital. The newspaper has daily and Sunday
circulation of approximately 79,000 and 90,000, respectively. Closing is
expected to occur on October 1, 2000. Proceeds from the Disposition Transaction
on June 30, 2000 and borrowings under the Company's Bank Credit Facility will be
used to fund the acquisition. Reinvesting the proceeds from the Disposition
Transaction allows the Company to defer, for federal income tax purposes, a
portion of the gain from the Disposition Transaction.

     The California Newspapers Partnership and Gannett have agreed to Gannett's
contribution of the Independent Journal, published in Marin, California, to the
California Newspapers Partnership. The contribution is expected to be made as of
October 1, 2000. As a result of the contribution, MediaNews, Donrey and
Gannett's interest in the partnership will be 54.23%, 26.28% and 19.49%,
respectively, effective with the contribution. Until such contribution,
MediaNews will continue to hold a 58.5% interest in the partnership. The
Independent Journal will be operated in conjunction with the ANG Newspaper
Group.



                                       54
<PAGE>   55




                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                 FISCAL YEARS ENDED JUNE 30, 2000, 1999 AND 1998
                                 (in thousands)


<TABLE>
<CAPTION>
                                              Balance at    Additions                                      Balance at
                                             Beginning of  Charged to      Net          Acquisitions         End of
                                                Period     Expense Net  Deductions   (Dispositions), Net     Period
                                             ------------  -----------  ----------   -------------------   ----------
<S>                                          <C>           <C>          <C>          <C>                   <C>
MEDIANEWS GROUP, INC. AND SUBSIDIARIES
YEAR ENDED JUNE 30, 2000
  Reserves and allowances
   deducted from asset accounts:

Allowance for doubtful
   Accounts ...............................  $      8,334  $    10,859  $   11,531   $         2,248       $    9,910


GARDEN STATE NEWSPAPERS, INC.
YEAR ENDED JUNE 30, 1999
  Reserves and allowances
   deducted from asset accounts:

Allowance for doubtful
   Accounts ...............................  $      6,370  $     8,149  $    6,842   $           657       $    8,334


GARDEN STATE NEWSPAPERS, INC.
YEAR ENDED JUNE 30, 1998
  Reserves and allowances
   deducted from asset accounts:

Allowance for doubtful
   Accounts ...............................  $      4,350  $     4,728  $    3,735   $         1,027       $    6,370
</TABLE>



                 See notes to consolidated financial statements.



                                       55
<PAGE>   56

     EXHIBIT
     NUMBER      DESCRIPTION

     4.1*        -Form of Indenture dated as of March 16, 1999 (the "Indenture")
                  between Garden State Newspapers, Inc., as Issuer, and The Bank
                  of New York, as Trustee

     4.2*        -Form of Garden State Newspapers, Inc.'s 8-5/8% Senior
                  Subordinated Notes due 2011, Series A (contained in the
                  Indenture filed as Exhibit 4.1)

     4.3*        -Form of Garden State Newspapers, Inc.'s 8-5/8% Senior
                  Subordinated Notes due 2011, Series B, the "Exchange Note"
                  (contained in the Indenture filed as Exhibit 4.1)

     5.0*        -Opinion of Verner, Liipfert, Bernhard, McPherson & Hand

     10.1*       -$350.0 million amended and restated credit agreement dated as
                  of June 30, 1999 among Garden State Newspapers, Inc., the
                  Banks listed therein, the Guarantors listed therein and the
                  various agents listed therein and Which is herein referred to
                  as the new credit agreement

     10.2*       -Employment agreement dated March 15, 2000 between MediaNews
                  Services and Joseph J. Lodovic, IV

     10.3*       -Employment Agreement dated March 15, 2000, between MediaNews
                  Services and William Dean Singleton

     10.4*       -Joint Operating Agreement dated January 13, 1989, among York
                  Daily Record, Inc., York Newspapers, Inc., and The York
                  Newspapers Company

     10.5*       -Consulting Agreement dated November 16, 1993, between J. Allan
                  Meath and Garden State Newspapers, Inc.

     10.6*       -Asset Purchase Agreement dated July 31, 1995, by and among EPC
                  Holding, Inc., The Eagle Publishing Company, Reformer
                  Publishing Corporation, Middletown Press Publishing
                  Corporation, and Eagle Street Realty Trust, as Sellers, and
                  New England Newspapers, Inc., Brattleboro Publishing Company,
                  Connecticut Newspapers, Inc. and Pittsfield Publications,
                  Inc., as Purchasers

     10.7*       -Asset Purchase Agreement dated July 31, 1995, by and among
                  Banner Publishing Corporation and Eagle Street Realty Trust,
                  as Sellers, and New England Newspapers, Inc. and North Eastern
                  Publishing Company, as Purchasers

     10.8*       -Asset Purchase Agreement by and among Lowell Sun Publishing
                  Company and Lowell Sun Realty Company (Sellers), Garden State
                  Newspapers, Inc. (Purchaser), and John H. Costello, Jr.,
                  Alexander S. Costello, Thomas F. Costello, Charlotte E.
                  LaPierre and Dana Biadi (Guarantors), relating to the
                  Acquisition of The Sun and The Sunday Sun dated July 31, 1997

     10.9*       -Asset Purchase and Sale Agreement by and between Tower Media,
                  Inc., as Seller; Jack Kent Cooke Incorporated, as Guarantor;
                  and Garden State Newspapers, Inc., as Purchaser, dated as of
                  December 1, 1997

     10.10*      -Indenture dated as of October 1, 1997, between Garden State
                  Newspapers, Inc. and The Bank of New York, as Trustee, for the
                  issuance of up to $300,000,000 of Series A & B 8-3/4% Senior
                  Subordinated Notes due 2009

     10.11*      -Subordinated Note Purchase Agreement between Garden State
                  Newspapers, Inc. and Greenco, Inc. dated as of January 30,
                  1998

     10.12*      -Note Purchase Agreement dated February 6, 1998, by and among
                  Garden State Newspapers, Inc. and the Initial Purchasers of
                  $50,000,000 of 8-3/4 Notes due 2009

     10.13*      -Purchase Agreement dated March 10, 1999, by and among Garden
                  State Newspapers, Inc. and the Initial Purchasers of
                  $200,000,000 of 8-5/8% Notes due 2011

     10.14*      -Partnership Agreement of California Newspapers Partnership, a
                  Delaware General Partnership, by and among West Coast
                  MediaNews LLC, Donrey Newspapers LLC, the Sun Company of San
                  Bernardino, California and MediaWest-SBC, Inc. dated March 31,
                  1999

     10.15*      -Contribution Agreement dated March 3, 1999 by and among Garden
                  State Newspapers, Inc., Alameda Newspapers, Inc., V&P
                  Publishing, Inc., Internet Media Publishing, Inc., DR
                  Partners, MediaWest-SBC, Inc. and The Sun Company of San
                  Bernardino, California

     10.16*      -Third Amended and Restated Shareholders' Agreement dated as of
                  June 30, 1999 among the shareholders of Denver Newspapers,
                  Inc.

     10.17*      -Tax Agreement dated as of June 30, 1999 among the Shareholders
                  of Denver Newspapers, Inc. (now known as The Denver Post
                  Corporation)

     10.18*      -Asset Purchase Agreement dated June 30, 2000 between Penn
                  Jersey Advance, Inc. and MediaNews Group, Inc. and its wholly
                  owned subsidiaries, Long Beach Publishing Company, Easton
                  Publishing Company, South Jersey Newspapers Company and
                  Internet Media Publishing, Inc.

     10.19*      -Asset Purchase Agreement dated as of July 10, 2000 among
                  Thomson Newspapers, Inc., Thomson Newspapers Licensing
                  Corporation, TN Customer Holding LLC and MediaNews Group, Inc.

     12.1*       -Computation of Ratio Earnings to Fixed Charges

     21.1        -Subsidiaries of Registrant

     27          -Financial Data Schedule

                 *Previously Filed



                                       56
<PAGE>   57

SIGNATURES

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



                                            MEDIANEWS GROUP, INC.


Date: September 26, 2000               By: /s/ Joseph J. Lodovic, IV
                                          ----------------------------
                                          Joseph J. Lodovic, IV
                                          Executive Vice President and
                                          Chief Financial Officer

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


<TABLE>
<CAPTION>
                 SIGNATURE                                         TITLE                                DATE
---------------------------------------------    -------------------------------------------    ---------------------
<S>                                            <C>                                              <C>


         /s/ William Dean Singleton              Vice Chairman, President, Chief Executive
---------------------------------------------  Officer and Director (Chief Executive Officer)    September 26, 2000
          (William Dean Singleton)


         /s/ Joseph J. Lodovic, IV                   Executive Vice President and Chief
---------------------------------------------    Financial Officer (Chief Financial Officer)     September 26, 2000
          (Joseph J. Lodovic, IV)


           /s/ Richard B. Scudder                                 Director                       September 26, 2000
---------------------------------------------
            (Richard B. Scudder)


              /s/ Jean Scudder                                    Director                       September 26, 2000
---------------------------------------------
               (Jean Scudder)


             /S/ Ronald A. Mayo                    Vice President Finance and Controller
---------------------------------------------          (Principal Accounting Officer)            September 26, 2000
              (Ronald A. Mayo)
</TABLE>



                                       57

<PAGE>   58

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
     EXHIBIT
     NUMBER      DESCRIPTION
     --------    -----------
<S>              <C>
     4.1*        -Form of Indenture dated as of March 16, 1999 (the "Indenture")
                  between Garden State Newspapers, Inc., as Issuer, and The Bank
                  of New York, as Trustee

     4.2*        -Form of Garden State Newspapers, Inc.'s 8-5/8% Senior
                  Subordinated Notes due 2011, Series A (contained in the
                  Indenture filed as Exhibit 4.1)

     4.3*        -Form of Garden State Newspapers, Inc.'s 8-5/8% Senior
                  Subordinated Notes due 2011, Series B, the "Exchange Note"
                  (contained in the Indenture filed as Exhibit 4.1)

     5.0*        -Opinion of Verner, Liipfert, Bernhard, McPherson & Hand

     10.1*       -$350.0 million amended and restated credit agreement dated as
                  of June 30, 1999 among Garden State Newspapers, Inc., the
                  Banks listed therein, the Guarantors listed therein and the
                  various agents listed therein and Which is herein referred to
                  as the new credit agreement

     10.2*       -Employment agreement dated March 15, 2000 between MediaNews
                  Services and Joseph J. Lodovic, IV

     10.3*       -Employment Agreement dated March 15, 2000, between MediaNews
                  Services and William Dean Singleton

     10.4*       -Joint Operating Agreement dated January 13, 1989, among York
                  Daily Record, Inc., York Newspapers, Inc., and The York
                  Newspapers Company

     10.5*       -Consulting Agreement dated November 16, 1993, between J. Allan
                  Meath and Garden State Newspapers, Inc.

     10.6*       -Asset Purchase Agreement dated July 31, 1995, by and among EPC
                  Holding, Inc., The Eagle Publishing Company, Reformer
                  Publishing Corporation, Middletown Press Publishing
                  Corporation, and Eagle Street Realty Trust, as Sellers, and
                  New England Newspapers, Inc., Brattleboro Publishing Company,
                  Connecticut Newspapers, Inc. and Pittsfield Publications,
                  Inc., as Purchasers

     10.7*       -Asset Purchase Agreement dated July 31, 1995, by and among
                  Banner Publishing Corporation and Eagle Street Realty Trust,
                  as Sellers, and New England Newspapers, Inc. and North Eastern
                  Publishing Company, as Purchasers

     10.8*       -Asset Purchase Agreement by and among Lowell Sun Publishing
                  Company and Lowell Sun Realty Company (Sellers), Garden State
                  Newspapers, Inc. (Purchaser), and John H. Costello, Jr.,
                  Alexander S. Costello, Thomas F. Costello, Charlotte E.
                  LaPierre and Dana Biadi (Guarantors), relating to the
                  Acquisition of The Sun and The Sunday Sun dated July 31, 1997

     10.9*       -Asset Purchase and Sale Agreement by and between Tower Media,
                  Inc., as Seller; Jack Kent Cooke Incorporated, as Guarantor;
                  and Garden State Newspapers, Inc., as Purchaser, dated as of
                  December 1, 1997

     10.10*      -Indenture dated as of October 1, 1997, between Garden State
                  Newspapers, Inc. and The Bank of New York, as Trustee, for the
                  issuance of up to $300,000,000 of Series A & B 8-3/4% Senior
                  Subordinated Notes due 2009

     10.11*      -Subordinated Note Purchase Agreement between Garden State
                  Newspapers, Inc. and Greenco, Inc. dated as of January 30,
                  1998

     10.12*      -Note Purchase Agreement dated February 6, 1998, by and among
                  Garden State Newspapers, Inc. and the Initial Purchasers of
                  $50,000,000 of 8-3/4 Notes due 2009

     10.13*      -Purchase Agreement dated March 10, 1999, by and among Garden
                  State Newspapers, Inc. and the Initial Purchasers of
                  $200,000,000 of 8-5/8% Notes due 2011

     10.14*      -Partnership Agreement of California Newspapers Partnership, a
                  Delaware General Partnership, by and among West Coast
                  MediaNews LLC, Donrey Newspapers LLC, the Sun Company of San
                  Bernardino, California and MediaWest-SBC, Inc. dated March 31,
                  1999

     10.15*      -Contribution Agreement dated March 3, 1999 by and among Garden
                  State Newspapers, Inc., Alameda Newspapers, Inc., V&P
                  Publishing, Inc., Internet Media Publishing, Inc., DR
                  Partners, MediaWest-SBC, Inc. and The Sun Company of San
                  Bernardino, California

     10.16*      -Third Amended and Restated Shareholders' Agreement dated as of
                  June 30, 1999 among the shareholders of Denver Newspapers,
                  Inc.

     10.17*      -Tax Agreement dated as of June 30, 1999 among the Shareholders
                  of Denver Newspapers, Inc. (now known as The Denver Post
                  Corporation)

     10.18*      -Asset Purchase Agreement dated June 30, 2000 between Penn
                  Jersey Advance, Inc. and MediaNews Group, Inc. and its wholly
                  owned subsidiaries, Long Beach Publishing Company, Easton
                  Publishing Company, South Jersey Newspapers Company and
                  Internet Media Publishing, Inc.

     10.19*      -Asset Purchase Agreement dated as of July 10, 2000 among
                  Thomson Newspapers, Inc., Thomson Newspapers Licensing
                  Corporation, TN Customer Holding LLC and MediaNews Group, Inc.

     12.1*       -Computation of Ratio Earnings to Fixed Charges

     21.1        -Subsidiaries of Registrant

     27          -Financial Data Schedule
</TABLE>

                 *Previously Filed